Relationship between organizational leadership, culture and performance in family businesses - Dissertation Example

?Running Head: RESEARCH PROPOSAL Examining the Relationship between Organizational Leadership, Culture and Performance in family Businesses [University] Examining the Relationship between Organizational Leadership, Culture and Performance Introduction The family business is often viewed as an extension of the personality and goals of its founder (Heifetz et al., 2009). The merging of ownership and management into a single individual is a defining characteristic of the family firm and may ultimately account for the success or failure of the enterprise (Sorenson, 2000). However, there is a dearth of research regarding the extent to which the founder is able to embed strategic behaviors into family firm management and culture or the degree to which these behaviors impact the financial performance of these firms (Sorenson, 2000). Some effort has been made to examine the leadership styles of family firm leaders and the relationship of these styles to family and non-family members (Kellerman, 2008). Aldrich and Cliff (2003) suggested that entrepreneurial leadership attributes likely influenced family firm strategies, processes, and structures. Sorenson (2000) found that participative leaders achieved high performance in both the family and the business dimensions of the firm. The findings of the test hypotheses regarding performance outcomes in these studies were not conclusive regarding the effects of leadership styles on performance. Research on the leadership styles of the founder and their effect on family and non-family members may provide insight into family firm performance (Sharma, 2004). Purpose/Research Questions The purpose of this study is to examine the relationship between organizational leader’s thinking and behavioral styles, its culture, and financial performance. Three family firms will be selected for this study. Participants will include current owners, founders, and family member and non-family member managers and employees. The following research questions will be addressed: 1. What leadership behavior and orientations exist among owners and managers within the family firms? 2. What organizational cultural styles and orientations exist within the family firms? 3. Are there significant associations between leadership thinking and behavior, organizational culture and financial performance across family firms? Preliminary Literature Review The Family Firm Although family firms have played an integral role in world economies throughout history, research into family businesses did not begin to come into prominence until 1975 (Handler, 1989). Handler's attempt to integrate the field around a common purpose by defining a family firm as "an organization whose major operating decisions and plans for leadership succession are influenced by family members serving in management or on the board" (p. 262) is characteristic of such ventures in its difficulty to operationalize. Furthermore, Astrachan, Klein, and Smyrnios (2002) have defined family business along a continuum measuring the levels of family influence across the dimensions of power, experience, and culture. Their intent is to provide an objective and standardized measurement of family involvement allowing comparison along a broad spectrum of family businesses. Sharma (2002) developed a typology which creates 72 categories of family firms based on the possible levels of family and non-family involvement in seven areas as identified on a firm's stakeholder map. Her intent is to develop a mechanism for differentiating between family businesses along the continuum from the publicly traded international corporation to the mom and pop enterprise. Leadership Styles For this study leadership styles specifically refer to the thinking and behavioral styles of family firm leaders. Leadership styles are divided into three composite orientations with each orientation consisting of four styles each. The constructive orientation (achievement, self-actualizing, humanistic-encouraging, and affiliative) characterize thinking and behavior that contribute to satisfaction, healthy relationships, people skills, and task proficiency. The passive/defensive orientation (approval, conventional, dependent, and avoidance) characterize thinking and behavior that is self-protecting and promotes the fulfillment of security needs through interaction with people. The aggressive/defensive orientation (oppositional, power, competitive, and perfectionist) demonstrates thinking and behavior that is self-promoting and engages in the fulfillment of security needs through status, position, and task-related activities (Human Synergistics International, 2004; Heifetz et al., 2009) Bandura (1978) noted that although behavior is influenced by environment, it is environment as selectively perceived by the individual. An individual's cognitions about oneself and one's environment influence one's behavior. Thus, a continuous reciprocal relationship exists between one's behavior, thinking, and environment. It is through this relationship that behavior, thinking, and environment "serve as interlocking determinants of each other" (p. 346). Self-assessment instruments provide an individual with data that facilitate the self-observation and judgmental processes that are critical to the self regulation of behavior. In the organizational setting these processes are central to behavioral self-management, which has been linked to better time utilization, decreased dependence of subordinates on their managers, and other constructive behaviors (Luthans & Davis, 1979; Kellerman, 2008) Organizational Culture Organizational culture specifically refers to "the behavioral norms and expectations associated with the shared beliefs and values held by organizational members" (Cooke, 1989, p. 1). Schein (1992) provides a view of the operating cultures of organizations as a direct function of the assumptions and values shared by members. These assumptions and values are regarded as significant determinants of both individual and organizational effectiveness (Kellerman, 2008). This typology consists of three layers: artifacts (behaviors), espoused values, and underlying assumptions. Within the typology, the role of the founder is the primary force in cultural development. In general, assessment instruments measuring behavioral norms focus on the first level of this typology and those capturing espoused beliefs and values focus on the second (Ashkanasy, Broadfoot, & Falkus, 2000). Subsequent research into organizational culture suggests a more involved explanation of how culture is expressed. Cooke and Szumal (2000) propose a disconnect between the underlying assumptions and espoused values set forth by Schein and the behavioral norms and expectations within operating cultures. This is caused by the inevitable presence of practical and functional considerations in the workplace that do not reflect underlying assumptions and values. These organizational realities provide members with the cues they need to get things done and succeed on a daily basis, even though these signals may not align with the stated or espoused assumptions and values of leaders and founders. The behavioral norms and expectations within operating cultures are associated with one of two dimensions: the first is a people orientation versus a task orientation and the second is a distinction between security considerations versus satisfaction. Further empirical research has led to 12 sets of thinking and behavioral styles that are grouped into three general cultural orientations consistent with the people-task and security-satisfaction distinctions (Human Synergistics International, 2004). Cooke and Burack (1989) summarized these cultural orientations and their corresponding thinking and behavioral styles as corresponding to the three composite orientations of constructive, passive/defensive, and aggressive/defensive and their respective thinking and behavioral styles. These thinking and behavioral styles are present in both the individual and the organization. When measured in an individual, the extent to which each style is personally exhibited is assessed. When measured in an organization, the extent to which members believe that they are expected to exhibit each style is determined. Additional research indicates a correlation between thinking and behavioral styles and organizational outcomes and effectiveness (Human Synergistics International, 2002). Constructive styles promote communication, efficiency, and increased customer satisfaction, while defensive styles impede such communications in favor of maintaining one's appearance and playing to those in authority. Method This exploratory study will use a quantitative case study research strategy. More specifically, the case-survey method will be used to explore the critical factors of leadership style and organizational culture. The case-survey method facilitates cross-case analysis across a small number of cases. A case study research strategy is used to explore, describe, or explain real life events as they occur within the case or cases of interest (Yin, 2003). Within these real life contexts, the phenomenon of interest may be interdependent or enmeshed within the context of study. Sample A convenience sample of owners, founders, managers, and employees comprising three family businesses will participate in this study. Data Collection Data will be collected with the help of self administered questionnaires. The instruments will be developed by the researcher. These instruments will measure the three variables in family firms: organizational leadership thinking and behavior, its culture and financial performance. Prior to completing any of the instruments each participant will complete a Demographic Information Questionnaire. Furthermore, Leadership questionnaire will be administered to the owners and supervisors. Organizational culture questionnaire will be administered to all of the participants. A Company and Financial Information Questionnaire will be given to each owner. Prior to completing the any questionnaire each participant will be provided with a Participant Consent Form. This form will provide information regarding research purpose and research procedures. It will also explain the confidential nature of the study. Data Analysis In this study descriptive and inferential statistics will be used to describe the associations of the three variables in family firms: organizational leadership thinking and behavior, its culture, and financial performance. Timeline of Research Apr.. May Jun. Jul. Aug. Sept. Oct. Dec. Selection of Topic Done Literature review Study design Materials Data Collection Data Analysis Write-up Revisions Final Dissertation Ethics All the participants involved in this study will be informed about the nature and purpose of this study. They will also be made aware that only the principle researcher would have access to information that could identify individual respondents. All the participants will be informed that their participation in this study in completely voluntary and they can withdraw their participation at any stage. References Aldrich, H. E. & Cliff, J. E. (2003). The pervasive effects of family on entrepreneurship: Toward a family embeddedness perspective. Journal of Business Venturing, 18(5), 573-596. Ashkanasy, N. M., Broadfoot, L. E., & Falkus, S. (2000). Questionnaire measures of organizational culture. In N.M.Ashkanasy, C. P. M. Wilderom, & M. F. Peterson (Eds.), Handbook of organizational culture and climate (pp. 131-145). Thousand Oaks, CA: Sage. Astrachan, J. H., Klein, S. B., & Smymios, K. (2002). The F-PEC scale of family influence: A proposal for solving the family business definition problem. Family Business Review, 15(1),45-58. Bandura, A. (1978). The self system in reciprocal determinism. American Psychologist, 33(4),344-358. Cooke, R. A. & Burack, E. H. (1989). Measuring norms and expectations with the OCI. In Human Synergistics International (Ed.), Organizational culture inventory OCI: Leader's guide (pp. 11-22). Plymouth, MI: Human Synergistics International. Cooke, R. A. & Szumal, J. L. (2000). Using the organizational culture inventory to understand the operating cultures of organizations. In N.M.Ashkanasy, C. P. M. Wilderom, & M. F. Peterson (Eds.), Handbook of organizational culture and climate (pp. 147-162). Thousand Oaks, CA: Sage. Cooke, R. A. (1989). How to use the organizational culture inventory. In Human Synergistics International (Ed.), Organizational culture inventory OCI: Leader's guide (pp. 1-10). Plymouth, MI: Human Synergistics International. Handler, W. C. (1989). Methodological issues and considerations in studying family businesses. Family Business Review, 2(3),257-276. Heifetz, R., Grashow, A., & Linsky, M. (2009). The practice of adaptive leadership: Tools and tactics for changing your organization and world. Boston: Harvard Business Press. Human Synergistics International (2002). Organizational effectiveness inventory: Instrument evaluation. Plymouth, MI: Author. Human Synergistics International (2004). Life styles inventory LSI : Self-development guide. Plymouth, MI: Author. Kellerman, B. (2008). Followership: How followers are creating change and changing leaders. Boston: Harvard Business School Press. Luthans, F. & Davis, T. R. V. (1979). Behavioral self-management--the missing link in managerial effectiveness. Organizational Dynamics, 8(1), 42-60. Schein, E. H. (1992). Organizational culture and leadership. (2nd ed.) San Francisco: Jossey-Bass. Sharma, P. (2002). Stakeholder mapping technique: Toward the development of a family firm typology. Paper presented at the Academy of Management meetings, Denver, CO. Sharma, P. (2004). An overview of the field of family business studies: Current status and directions for the future. Family Business Review, 17(1), 1-36. Sorenson, R. L. (2000). The contribution of leadership style and practices to family and business success. Family Business Review, 13(3), 183-200. Yin, R. K. (2003). Case study research; designs and methods. (3rd ed.) Thousand Oaks, CA: Sage. Read More