Abstract
CEOs have been argued to play a critical role for organizational performance. However, CEOs cannot achieve success singlehandedly. They rely on other organizational members to execute and implement their agenda and to contribute to organizational success. In the present research, we propose that CEOs serve as identity leaders of their organization who are able to enhance organizational performance by representing and cultivating a sense of shared collective identity (“us”) with those they lead. One way for leaders to do so is through the use of we-referencing (as opposed to I-referencing) language. We examine this idea in a pre-registered study of organizations listed in the DAX (i.e., leading German stock index) between 2000 and 2016, assessing the impact of CEOs’ use of we- and I-referencing language in letters to the stakeholders (N = 378) on objective indicators of organizational financial performance. In line with hypotheses, results show a positive relationship between CEOs’ use of we-referencing language and key indicators of financial performance: return on assets and sales per employee (while there was no evidence of an association with return on sales). At the same time, results indicate that the use of I-referencing language was unrelated to organizational performance. These findings advance the literature on strategic leadership and on the social identity approach to leadership by suggesting that CEOs’ thinking and acting in collective terms is associated with greater organizational financial performance.
Highlights
CEOs have been argued to play a critical role for organizational performance
Using collective pronouns is a sign of a person’s own identification with a social group (Mael and Ashforth 1992; Rousseau 1998). This idea is underscored by the fact that the most widely used organizational identification scale—developed in the seminal work by Mael and Ashforth (1992)—includes the item: “When I speak about [group under study], I usually say ‘we’ rather than ‘they’”. In line with these ideas, we argue that there is likely to be a dual process at play such that leaders’ use of we-referencing language serves both (a) to be an indication of, and signal, the leader’s own social identification with the collective (Mael and Ashforth 1992; Rousseau 1998) and (b) to create a shared sense of identity among those they lead and to clarify who we are, what we stand for, and who we want to be in the future (Haslam et al 2011; Huettermann et al 2017; Riantoputra 2010)
On the basis of social identity theorizing, we propose that CEOs’ use of we-referencing language in these letters both is indicative of their own identification as well as stimulates a sense of shared identity that encourages other members of the organization to identify both with the CEO and with the organization as a whole (Brewer and Gardner 1996; Platow et al 2006; Riantoputra 2010; Rousseau 1998; van Dick et al 2007)
Summary
CEOs have been argued to play a critical role for organizational performance. CEOs cannot achieve success singlehandedly. Results indicate that the use of I-referencing language was unrelated to organizational performance These findings advance the literature on strategic leadership and on the social identity approach to leadership by suggesting that CEOs’ thinking and acting in collective terms is associated with greater organizational financial performance. One answer, suggested by social identity theorizing, is by cultivating a sense of shared social identity—a shared sense of “us”— among organizational members (Haslam et al 2011; Steffens et al 2014b) This is argued to encourage the internalization of group membership (Haslam et al 2003) by those followers in ways that restructure their perceptions and behavior so as to align them with the interests and goals of the group and lead them to contribute to the achievement of shared group goals (Ellemers et al 2004; Turner 1991). The present study addresses Hambrick’s (2007) call for the strategic leadership literature not to “glorif[y] elites” (p. 341) by focusing on the characteristics that set leaders apart from their followers but rather to advance the understanding of what enables strategic leaders to connect to followers
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