Moving Strategic Leadership Further: An Analysis of Strategic Shared Leadership and Firm Performance

Supervisory theories of leadership have identified a trend towards less hierarchical leadership structures in organizations, which put the concept of shared leadership into focus. Accordingly, the strategic leadership of the organizations has also already started to adopt more horizontal decision-making processes and introduced strategic shared leadership. Strategic shared leadership defines the process of sharing strategic decisions at the top management level and becomes especially important in today's complex work setting. In this study, we theorize that a shared leadership approach needs to complement the strategic leadership of a firm by its top management to cope with an increasingly complex and uncertain work environment, and to exploit the advantages of a shared decision-making process in this context. To probe our theorizing, we derive a text-based measure of strategic shared leadership and identify how and under which conditions strategic shared leadership shapes firm performance. We analyze the 10-K annual reports of 7,668 publicly listed firms in the U.S. between 1994 and 2017. Results of regression analyses support our theorizing that strategic shared leadership increases firm performance and, furthermore, show that this effect is contingent upon internal and external characteristics of the firm. Precisely, high managerial ability and high market dynamism increase the strategic shared leadership-firm performance relationship.