Leadership Through the Lens of Expectancy Theories: Lessons and Developmental Trajectories

Abstract

Strategic decision-making is inherently linked to uncertain future outcomes, which is why managerial expectations are so important for corporate governance. Long-term strategic goals require organisations to anticipate and respond effectively to future market and macroeconomic conditions. In recent decades, accelerated globalisation, technological disruption and recurring financial crises have emphasised the critical role of economic expectations in leadership and planning. This paper explores how different types of expectations — static, naïve, extrapolative, adaptive and rational, as well as combinations of these — inform strategic leadership decisions, paying particular attention to their subjective nature and mechanisms of influence. The expectation–model–reality relationship is emphasised, with a focus on feedback, learning, and cognitive biases. The paper also examines how economic expectation models align with leadership theories in management literature, offering insights into how leaders can navigate complexity through informed expectation frameworks.