Enacting Leadership Legitimacy under Terms of Limited Formal and Informal Power in a Heterarchical Network of Organizations

Abstract

Previous research provides important insights into leadership in inter-organizational networks but says little about how organizations can establish themselves as leaders in heterarchical networks where power is decentralized. We draw on a longitudinal single case study of a German banking cooperative and develop a process model explaining how an organization can create and sustain leadership legitimacy under terms of limited formal and informal power in a heterarchical network. The model advances the understanding of leadership legitimacy in organizational networks in different ways and suggests a new understanding of leadership enacted by formal and informal leaders.