Good CEOs Create Organizational Slack and Bad CEOs Create Organizational Stress

Organizational slack is excess of resources over the current requirement. Organizational stress is over worked organizational resources. Men break down and machines break down in organizations under the management of bad CEOs, whose ambition and greed do not match their capabilities of finding opportunities and managing their utilization to create profits for the organization.

Good CEOs create slack by working effectively and efficiently. Effective working creates markets for the products of the companies and profits for the organization. Improving efficiency reduces resource use and creates the slack for the organization. This slack can be utilized for the growth of the organization in the existing products or new products. When a successful organization launches a product the market welcomes it with anticipation and thus less marketing expenditure is required.

When companies are managed by bad CEOs, the effectiveness and efficiency goes down. The existing products do not do well in the market. When new products are launched the market is lukewarm. Bad CEOs force their stressed human resources to exert more and get more orders. The result is increased stress. The contribution of CEO himself will not be up to the mark. His or her incremental contribution to the performance of the organization is below expectation of all the employees of the organization as a whole.

Dysfunctional leadership creates high stress in work place.

Dysfunctional leadership symptoms and early warning signs:


Dictatorial Leadership
Ineffective Meetings
Domination of Personal Agendas
Highly Stressful Workplace

Dictatorial Leadership: A manager that does not allow disagreements out of insecurity or arrogance, creates a fear based decision environment that limits collaboration and creativity in finding solutions to everyday business problems.

Ineffective Meetings: Argumentative and heated cross-divisions meetings with discussions and language focusing on point-scoring and buck-passing rather than sharing responsibility and collaborating to solve the problem

Personal Agendas: Recruitments, selections and promotions are based on internal political agenda, for example hiring friends to guarantee personal loyalty at the expense of highly performing and more-qualified employees.

Highly Stressful Workplace: Employees are stressed and unhappy. There is a high rate of absenteeism and a high employee turnover rate.

https://www.iim-edu.org/thinktank/publications/executive-journal/dysfunctional-leadership-dysfunctional-organizations-paper/index.htm