ABSTRACT
In this chapter, we will review dominant theories about the psychology of leadership and discuss how to apply these theories in understanding what counts as good leadership in mergers and acquisitions. We will discuss transformational and transactional leadership styles, and their implications for employees and organizations that are experiencing mergers and acquisitions. We discuss related approaches that conceptualise leadership in terms of style, while also conceptualising leadership in terms of context, such as the leader-member exchange theory and contingency theory of leadership. We will then discuss theories about how the personality of a leader is relevant to their work as a leader, and evaluate the so-called dark and bright sides of various personality traits, including considering how they can help or be a hindrance in mergers or acquisitions. We will discuss personality in terms of standard perspectives such as the Big Five theory (e.g. extraversion, agreeableness, openness to experience) and also in terms of perspectives focusing on “pathological” personality traits such as narcissism, hubris, and Machiavellianism. We will discuss evidence that even these “bad” traits can have advantages as well as disadvantages. We will then discuss information processing approaches, comparing novice and expert leaders, and discussing why experience helps leaders transition from using knowledge or expertise in a simple, case-by-case way, to using it in a more generalizable manner that allows more complex problem-solving with employees. This then raises the question of how relevant expertise among all employees (not just managers) is to the success of mergers and acquisitions, and therefore how important organizational learning among employees is, which will be discussed in Chapter 8, which follows.
