Introduction

Many organisations view leadership as a source of competitive advantage and are investing in its development (McCall, 1998). According to McCauley et al (1998), he defined leadership development as increasing the collective capacity of organisational members to engage effectively in leadership roles and development. This involves building the capacity for groups of people to learn their way out of unpredicted problems (Dixon, 1993). One primary reason organisations invest in training and development for employees and staffs is to enhance and protect their human capital (Lepak and Snell, 1999). Leadership roles refer to those that come with and without formal authority, whereas management development focuses on performance in formal managerial roles. Leadership processes are those that generally enable groups of people to work together in meaningful ways, whereas management processes are considered to be position- and organization-specific (Keys & Wolfe, 1988). Leadership development involves building the capacity for groups of people to learn their way out of problems that could not have been predicted (Dixon, 1993), or that arise from the disintegration of traditional organizational structures and the associated loss of sense making (Weick, 1993). In this sense capacity is thought to be similar to the notion of cognitive and behavioural complexity in that expanded capacity provides for better individual and collective adaptability across a wide range of situations (Hooijberg, Bullis, & Hunt, 1999). A leadership development approach is oriented toward building capacity in anticipation of unforeseen challenges (i.e., development).

According to Henderson (2006), there are reports that some 77 per cent of CEO’s of major corporations surveyed by KPMG and the World Economic Forum in 2005 said that higher ethical behaviour was ‘‘vital to profitability’’.

Leadership is viewed as a key determinant of organisational effectiveness (Yukl, 1999). Its developments in organisations are intended to improve performance management, to facilitate corporate socialization, or enhance productivity. Leadership is all about understanding the organisation’s competitive environment, identifying the capabilities needed to compete and taking appropriate and necessary actions to transform the organisation’s environment in favourable ways.