Traditionally, leaders play an extremely important role in the organizational performance. They unite people working within the organization and lead them toward the achievement of the strategic organizational goals. In such a context, many specialists (Anonymous, 1998) believe that the leader power is extremely important for the overall success of the organizational performance because a powerful leader can be more successful due to his or her ability to lead people. On the other hand, the strong, powerful leadership may be potentially dangerous, especially if the leader power is not limited. In this respect, the organizational system of checks and balances normally comes into play. In fact, the system of checks and balances prevents a leader of an organization from becoming a tyrant, a leader, whose actions and power are not controlled either by the organization through some committees or by another powerful person who may have the authority to limit the power of the leader or object decision being taken by the leader.
In such a situation, it is extremely important to find the balance between the leader power and the organizational system of checks and balances. Obviously, excessive, unlimited leader power leads to the formation of the authoritarian leadership style which is not always effective. The development of the organizational system of checks and balances can undermine the position of the leader within the organization because the system of checks and balances implies the existence of opposition or counter-power to the leader power to maintain the organization in balance (Sim and Killough, 1998). The excessive development of checks and balances can undermine the leader power that also leads to negative effects on organizational performance.
Thus, it is important to balance the leader power and the organizational checks and balances.