Firm environment, leader behaviors, and leadership effectiveness: An interactive model

Abstract

Based on the value-based leadership(VBL) theory and the preliminary findings obtained from an empirical study of Chinese business leaders, we propose a new model addressing the dynamic relationships among firm environment, VBL behaviors and leadership effectiveness; and test the model using data collected from 95 firms. Results show that VBL behaviors help improve leadership effectiveness when the company faces intense external competition, even though intensive competition is naturally negative to leadership effectiveness. Value-based leadership can help firms to survive through extremely tough circumstances.