Book Review: Leadership and Management in the 21st Century: Business Challenges of the Future, edited by Cary L Cooper £24.99 Oxford University Press

What sort of management style will work best for the growing business in the next decade? The Hollywood model where a group of self-employed professionals come together to make a film and depart when it's completed? Or the investment trust where investors choose the management? Or the university model where academics are given a platform and a basis for study and will probably be expected to develop money-making ventures as well?

These three models are put forward by The Independent's own Hamish McRae - one of 22 authors, leading management academics, economists and industrialists - who are brought together by the redoubtable Professor Cary Cooper to explore changing management and leadership styles in the 21st century.

Just how powerfully are we influenced by new trends, new challenges, or conventional styles; or do we still prefer the autocratic type, the bureaucrat, the bean counter or the owner-manager who likes consensus? If there is one thing that will distinguish 21st century organisations from those of the past, according to Sir Michael Bicham of the University of the Arts, it will be their creativity and innovation. This applys especially to niche companies and smaller businesses generally.

For global companies, the key question must be: what kind of leaders are going to be needed in the future? A banker, Prabhu Guptara of UBS, sees global markets biased towards mega corporations, but also towards an enormous number of niche players, represented by entrepreneurs able to move fast to exploit windows of opportunity before big corporates move in if they are not blind or uninterested.

Bias towards the mega and the niche, he believes, will have one serious consequence: stripping out the middle-sized company through mergers and acquisitions, as has happened in banking and many other industries. But why should this lead to the decline of the middle classes and the professions, as he predicts?

Professor Keith Grint of Lancaster University Management School makes the salutary point that the authoritarian and absolutist models of political and business leadership have gradually changed from tyrannies to participation democracies, but questions whether less hierarchical, virtual organisations relying on sophisticated technology and more educated workers need traditional modes of leadership.

Hamish McRae goes further, suggesting the key challenge is managing human capital, both for global businesses and indeed any organisation managing people from diverse cultures and diversified groups - consultants, interim managers and contract workers - brought in as and when required by the core permanent staff.

Two Canadian contributors, Gary Latham and Cynthia McCauly from the University of Toronto, urge tomorrow's leaders to recognise that an understanding of historical, social and policy issues calls for a liberal arts degree rather than an undergraduate degree in business.

Thirty years ago leadership was seen as one of the most observed and least understood phenomena on earth. Little appears to have changed: there are still no preferred models of corporate organisation. The paradox of the 21st century is neatly drawn by Sir Howard Davies, the former CBI Director General and Head of the Financial Services Authority, now Director of the London School of Economics. Only a few years ago, he writes, the most racy telecommunications technology was the fax. The internet and e-mail were distant fantasies. The idyll of working from home is as far away as ever as commuting numbers continue to rise.

Davies lists five interesting trends, the diversity of the workplace, more flexible working patterns, a more flattened hierarchy, a more market-based approach to career planning and age discrimination.

The successful companies will be those, as Val Gooding of Bupa argues, where strategy is based on change and continuous improvement, constant research among customers and trust in employees to think and act on their feet. Employees' expectations are changing. They are more interested in work-life balance, policies, social responsibility, diversity, ethics and in the environment. "People want to identify with the values of their organisation and to feel proud of what it stands for." The role of management, as Geoff Armstrong of the Chartered Institute of Personnel Development argues, is to deliver business performance. Delivering sustainable performances is and will be the only game in town. As Peter Drucker wrote in 2002, there is no such thing as a tax or a marketing decision. There are only business decisions.