Behavioral Attributes Of Charismatic Leadership In Organizations - Research Paper Example

Behavioral Attributes Of Charismatic Leadership In Organizations Abstract (Summary) Purpose: This paper compares the transformational leadership style of women business owners and those women in the top position of organizations with women executives who are not in the top leadership position of organizations. Design/Methodology: A quantitative approach using a population and business owners and executives from the private sector of the American Management Association. Finding: The findings support the relationship between a woman owning a business or being in the top position and the increased use of transformational leadership behaviors. Research limitations/implications: The paper analyzes data collected in 1997 and the changes to the demographics may in fact be a limitation of the study. Originality/Value: The study focuses on the importance of contextual considerations in the study of women and their use of transformational leadership. Introduction and literature review Many studies have looked at women and their leadership behaviors. For each study that says women make more effective leaders, another says that they do not (Barbudo, et al., 2007). Understanding if the “context” in which leadership behaviors occur is a contributing variable to these different results may help explain the contradictions. Identifying the context in which women are more effective leaders is crucial to sorting through this seemingly contradictory evidence (Vecchio 2002, Eagly and Carli 2003). If organizations are better able to understand when women leaders are most effective, they may then be able to increase the numbers of women in the leadership ranks resulting in better organizational performance. Increasing the numbers of women in the workforce is important to organizations around the world. In particular, workforce diversity continues to be a focus for most large corporations. To determine current initiatives, a recent study found that globally, most large organizations (over $500m revenue) view diversity as a priority and implement initiatives to promote diversity in the workplace (Economist Intelligence Unit, 2009). Further, the majority of organizations target their “diversity and inclusion” effort at women. Nearly 80% of the organizations responding to the survey viewed women as one of the “most important groups to have in the organization’s talent pool” (Economist Intelligence Unit, 2009). Since women are viewed as the “most important” group for increased inclusion, how then do organizations attract and retain women while ensuring their effectiveness? Understanding how they lead successfully in different environments could contribute to increasing effectiveness, success and retention of women in organizations. Absent the diversity initiatives, the number of women in the highest level of organizations is increasing. Women-owned businesses are continuing to grow at an unprecedented rate. According to the U. S. Census Bureau, “the number of women owned businesses grew 20% between 1997 and 2000. For the past two decades, majority women-owned firms have continued to grow at two times the rate of all firms” (U. S. Department of Commerce, 2006). In addition, the contributions in sales of women-owned businesses have generated $1.9 trillion in sales and the number of individuals employed in women-owned businesses has passed 12.8 million (CFWBR, 2006). This growth, sales, and sustainability indicate a significant contribution to the U.S. economy. This growth is evidenced in the corner offices of large corporations as well. Women have taken the helm of brand name U.S. corporations resulting in them holding the position of CEO in six Fortune 500 firms (Fortune 2009). In Fortune’s “2008 Most Powerful Women” women are leading companies such as Wellpoint, Kraft Foods, Archer Daniel Midlands, PepsiCo and Xerox (Shambora, 2009). While some might say that these trends are long overdue, that does not mean they are well understood. One of the elements that may contribute to the professional advancement of women is that of leadership style. Leadership “is critical to the health of a group, organization or society” (Hollander, 1978). Therefore, understanding how women lead may help to explain the trend and support continued growth. What do we know about the leadership styles of women, whether they are business executives or business owners? Various research studies show, for example, that women tend to exhibit such behaviors as cooperation, collaboration, vision, relationship building, and empowerment (Loden, 1985; Bartol and Martin, 1986; Roueche, et al., 1989; Helgesen, 1990; Eagly and Johnson, 1990). The behaviors are typical of what some call “charismatic leadership” (Bass and Avolio, 1990), others refer to as “visionary leadership” behaviors (Bennis and Nanus, 1985; Kotter, 1990; Kouzes and Posner, 1987). Yet research aimed specifically at examining these transformational leadership behaviors in senior management positions generally shows no notable differences between women and men in behaviors or characteristics (Langly, 1994; Davidson, 1995; Ernst, 1997). If we are to attain a generalizable model of women as leaders, it is important to understand why these research results do not document the transformational-type of behaviors of women. The concept of business ownership may provide a clue to understanding this inconsistency. Much research has shown that entrepreneurs differ from managers in significant ways (Begley and Boyd; 1987; Stewart, 1995; Envick, 1996). The research literature is, however, confusing because most researchers do not distinguish consistently and clearly between entrepreneurs and business owners (Wells, 1994). This study proposes that one of the elements that may contribute to the significant growth of women-owned firms is that of leadership style. Therefore, understanding how women lead as business owners or in the top position (CEO or President) may help to explain the growth and also support continued growth that may be transferable to other settings. It may be that when women are business executives, but not business owners of organizations, they feel pressured to refrain from exhibiting the kinds of behaviors and characteristics that they might otherwise use and that would be seen as transformational. However, when women are business owners and “in charge,” they may feel more free to exhibit such behaviors and characteristics, such as collaboration, participation, and empowerment and enhanced communication (Tibus, 1998). While some studies find no differences between the genders (Davidson, 1995; Vecchio 2002), in other studies women appear to display and use behaviors characterizes as transformational in their interaction on the job to a much greater extent than do men (Loden, 1985; Eagly and Carli, 2003). This study examined the possibility that the factor of business ownership may account for these differences. The literature as it relates to women as leaders can be examined in three main research domains: transformational leadership theory, gender studies, and business ownership research. Transformational Leadership Theory - For the past two decades transformational leadership has provided a prominent approach for looking at ‘new’ leadership. (Dvir, et al., 2002). The early work on transformational leadership done by Burns (1978) analyzed political leadership to define two types of leaders: transactional and transformational. A transactional leader is focused on the economic exchanges between employee and boss, a “quid-pro-quo” concentrating on the external needs of the employee and exchanging the fulfillment of these needs for service. The transactional leader approaches “followers with an eye to exchanging one thing for another: jobs for votes, or subsidies for campaign contributions. Such transactions comprise the bulk of the relationships among leaders and followers” (p.4). While transactional relationships are about the give-and-take of the economic transaction, Burns claims the transformational leader “is concerned with the development of the individual and recognizes and looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower” (p.4). Building on the work of Burns, Bass (1985) created a model incorporating a continuum of leadership behaviors in an organizational setting that ranged from laissez faire, to transactional to transformational (1985). While Burns focused on leader behavior being either transactional or transformational, Bass made the distinction that both are necessary to a leader’s success and not mutually exclusive. Laissez faire is characterized by a hands-off approach. The transactional characteristics are consistent with Burns (1978) in that leaders take action only when performance or results do not conform to standards. Transaction based contingent rewards are then exchanged for performance. Transformational leadership requires different behaviors. “Transformational leaders stimulate followers and encourage them to transcend their own self-interests for a higher purpose, mission, or vision” (Howell and Avolio, 1993, p. 891). Bass’s Full Range Leadership Model (Figure 1, Kirkbride, 2006) begins with laissez-faire characterized as a “hands-off” leadership then moves upward to the transactional quid-pro-quo style then to the transformational focus on both the vision and follower. As the leadership behaviors become more transformational there is an increasing positive impact on performance. Figure 1. Full Range Leadership Model Other important studies of transformational leadership include works by Kouzes and Posner, Bennis and Nanus and Sashkin. Kouzes and Posner (1987 and 2003) have spent over 20 years identifying and analyzing leadership behaviors that are transformational in nature. Those behaviors include: challenging the process, inspiring a shared vision, enabling others to act, modeling the way, and encouraging the heart. Bennis and Nanus in their book “Leader” (1985) reported the results of a study of 90 leaders. They identify transformational leaders as those who: 1) demonstrate behaviors of creating a powerful vision that is 2) communicated and shared, that is 3) consistent with expectations they create and 4) maintains positive and optimistic attitudes. Sashkin (1987) expanded the theory with visionary leadership as a basis for the transformational leader creating the organization’s vision and gaining the support of the followers. Table I compares the key concept of these theories. Table I. Comparison of Transformational Leadership Theories Behaviors and Characteristics Bass Bemis/ Nanus Kouzes/ Posner Sashkin Communication X X X X Trust X X X Caring X X X X Creating Opportunities (Risk) X X X Self-Confidence X X X Empowerment X X X Vision X X X X Culture X X Assessment Instrument Multi-factor Leadership Questionnaire Leadership Behavior Questionnaire Leadership Practices Inventory The Leadership Profile Sashkin and Sashkin, 2003, adapted While each of these theorists has developed an approach to transformational leadership in somewhat different ways, the defined behaviors appear consistent (Sashkin and Sashkin, 2003). Many studies have been conducted using the Multifactor Leadership Questionnaire and have shown that the transformational leadership component of the full range leadership model is a predictor for increased organizational performance and effectiveness (Bass and Stogdill, 1990). The Kouzes and Posner Leadership Practices Inventory has been used in a variety of organization to better understand the transformational leader. Sashkin (1987) developed the Leadership Behavior Questionnaire (LBQ) and, then The Leadership Profile (TLP) in order to quantify and assess the aspects of visionary leadership. The LBQ was initially designed to quantify the qualitative work that Bennis had done while exploring “specific behaviors and consequences of those actions” (Sashkin, 1987). Later, personal characteristics and culture building were added. The TLP looks at all three aspects of leadership and measures both transactional and transformational behaviors as well as culture. Both instruments (TLP and LBQ) demonstrate high validity and reliability (Rosenbach et al., 1996; Sashkin, 2004; Sashkin, et al., 1995) and were used also in a wide variety of research studies. Transformation leadership research continues to show evidence of its effectiveness (Yukl, 1999). The effectiveness has been demonstrated in area such as subordinate satisfaction, motivation, and performance (Bass, 1998). Gender Studies - While there is a significant history for study of leadership, gender differences in leadership continues to evolve. As more women continue to join the executive ranks, (Catalyst, 2006) there is more interest in investigating what makes women effective leaders. It was not until 1990 that the literature began to tie together leadership styles with specific behaviors attributed to women (Jogulu and Wood, 2006). In the past, research was conducted based on the single continuum of “feminine” and “masculine” leadership styles (Loden, 1985). Loden (1985) developed two leadership models based on in-depth “expert” interviews of women and men in middle-management and senior-management positions. Based on how women approached their leadership roles and the identification of the actions they thought affected performances, Loden identified five key areas of difference between women and men (Table II). Table II. Loden’s Leadership Model Approach to Leadership Women Men Operating Style Cooperative Competitive Organizational Structure Team Hierarchy Basic Objective Quality Output Winning Problem Solving Style Intuitive/Rational Rational Key Characteristics Lower Control Empathetic Collaborative High Performance Standards High Control Strategic Unemotional Analytical Jacobs and McClelland (1994) revealed that women and men differ in the way they exercise power in their leadership. This study suggested that the motivation personality characteristics thought to predict managerial success are gender neutral. Yet, there were differences in how power was perceived by women and men. Women viewed their authority in a more complex and interconnected way, seeking to build consensus in their decision-making process. The authors interpreted this to mean that women see power as gained through relationships while men tended to view power as a hierarchical framework. (Jacobs and McClelland,1994). Women may in fact have a “feminine advantage” (Yukl, 2002). A meta-analysis (Eagly, Karau, and Makhijani, 2003) confirmed that women and men do indeed demonstrate different behaviors. The behaviors of women appear consistent with transformational leadership to a greater degree than are men leaders. Yet, earlier research using instruments designed to measure the presence of these behaviors does not support this expectation (Davidson, 1994; Langly, 1995; Ernst, 1997). More recent studies do show that women demonstrate a higher level transformational leadership in certain behaviors but the literature is contradictory. While the literature and research on leadership and gender provides evidence that women demonstrate certain behaviors more often than do men. These behaviors include: communication, vision, caring, collaboration, trust, democratic and participative decision making, and follower-centeredness (Roueche, Baker, and Rose, 1989; Jacobs and McClelland, 1994; Eagly and Johnson, 1990; Helgesen, 1990;). These behaviors are consistent with the behaviors of transformational leadership. Table III compares the behaviors associated with transformational leadership and the leadership behaviors that were evidenced in the literature on women as leaders. TABLE III. Transformational Leadership and Women’s Leadership Transformational Leadership Women’s Leadership Behavior or characteristic Researcher Behavior or characteristic Researcher Vision Bennis and Nanus, (1985); Kotter and Heskett, (1992); Kouszes and Posner, (1987); Sashkin, (1996). Vision Astin and Leland, (1991); Helgesen, (1990); Roueche, Baker and Rose, (1989). Respect for followers Bass, (1985); Bennis and Nanus, (1985); Conger and Kanungo, (1994); Kouzes and Posner, (1987); Sashkin, (1986) Caring and respect, democratic approach, relationship building, consensus Eagly and Johnson, (1990); Helgesen, (1990); Jacobs and McClelland, (1994); Roueche, Baker and Rose, (1989). Modeling Behavior, Consistency, Trust Bennis and Nanus, (1985); Kouszes and Posnter, (1997); Sashkin, (1996). Trust, collaboration, cooperation Astin and Leland, (1991); Loden, (1985); Roueche, Baker and Rose, (1989). Communication Sashkin, (1996). Communication Helgesen, (1990). Yet in a study of a professional organization, members holding senior level positions, were surveyed using The Leadership Profile instrument to understand the use of transactional and transformational leadership among male and female senior executives, no significant differences in overall behavior scores were found between women and men in transformational leadership (Ernst, 1997). Differences were found in the specific areas of transactional leadership and in transformational leadership scales of caring leadership and follower-centered leadership where women reported higher scores. In another project, the Multifactor Leadership Questionnaire (Bass, 1985) was used to research leadership behaviors of a sample of select national sports organizations. Once again no difference was found in the transformational leadership behavior scores of women and men (Langly, 1994). To explain the apparent lack of difference between men and women in research results of transformational leader’s behaviors, the literature has suggested a factor that may explain why women’s behaviors do not appear different from those of men. A meta-analysis on gender and leadership found that leadership style is affected by the context in which the leadership style is measured (Eagly and Johoannesen-Schmidt, 2003). This might support the study conclusion that “gender alone did not affect transactional and transformational leadership” (Barbuto Jr., et al., 2007). Behaviors of women and men who occupy the same leadership roles may appear very similar because clear guidelines typically exist for the conduct and behaviors of managers. Therefore, women and men may look very much alike in leadership behavior surveys if those women and men occupy the same or similar leadership roles. But, business ownership or control of an organization may be a situation or context in which women demonstrate transformational leadership behaviors to a greater degree than do men. The key question for this study was: When women are business owners and “in charge,” do they exhibit a greater degree of transformational behaviors and characteristics than do women business executives? Ownership Research - Context may help to explain the inconsistencies in research on transformational leadership and gender; in particular the context of having ownership or major control of an organization (Eagly and Johnson, 1990). Therefore, when women are business owners, they may exhibit transformational behaviors and characteristics to a greater degree than do women business executives or men, whether business executives or business owners. The literature and research on business owners is abundant with most of the literature also falling under the heading “entrepreneur.” Entrepreneurs’ are defined in a variety of ways, many of which include business owners. “Entrepreneurship” is one of the most widely researched business topics, yet little research has been done on “business owners”. Often business owners, regardless of how they became business owners, are included in the population or sample of the research on entrepreneurs. This does not appear to allow “business owner specific” issues to emerge. Further, since many definitions of entrepreneur are found in the literature, it is difficult to differentiate research of the population of entrepreneurs from that of all business owners (Steward, 1995; Wells, 1994). In studies that were gender specific, the female entrepreneur was described in the literature as highly motivated, initiating action and activity without direction, and having a high internal locus of control and achievement motivation (Bowen and Hirsch, 1986; Neider, 1987). The female entrepreneur displays high needs for self-fulfillment, a desire to achieve, and an interest in helping others. She demonstrates high levels of endurance (persistence), dominance (need to influence others to do what one wants), achievement, interception (need to analyze the motives of others and predict behavior accordingly) and autonomy (Neider, 1987; Schwartz, 1986). Similarly, a study of women entrepreneurs and managers, which looked at coping styles and self efficacy, found that such entrepreneurs scored significantly higher in both “problem-focused coping and emotion-focused coping” (Hanzel, 1995). In a study by Moore and Buttner (1997) women entrepreneurs demonstrated “interactive” leadership behaviors. Those interactive behaviors included the use of vision, teamwork and collaboration and the preference of personal power over hierarchy. While men were not included in this study, the behaviors of the women entrepreneurs appear consistent with those transformational behaviors previously discussed in this review. (Loden, 1985; Eagly and Johnson, 1990; Helgesen, 1990). The research comparing entrepreneurs (and in some cases business owners) to managers showed many differences between the two categories. These differences may be a result of the business owners’ ability to exhibit behaviors and characteristics that they might otherwise refrain from in another context. In a study of transformational leadership behaviors comparing women business owners to men business owners, there were no significant differences (Tibus, 1998). Therefore, consistent with the work of Eagly and Johnson (1990) the context of business ownership may be a factor in transformational leadership behaviors for women. Specifically, when women are business owners and “in charge” they may demonstrate higher levels of transformational leadership than they might as a business executive. Methodology Research design This study was designed specifically to investigate the factor of context. The overarching question addressed by this study was: Does business ownership account for the seeming contradictions presented in the literature regarding gender and leadership? Sample and data collection The source and sponsor for this research was the American Management Association (AMA), providing an existing database of survey responses. The data had been collected from a sample of randomly selected business executives and business owners from the AMA private sector members, Ernst (1997). The sample was comprised of randomly selected business executives and business owners from the AMA private sector members. The levels of the 8000 leaders sample ranged from the vice-president through president and CEO. The richness of this data, despite being several years old, made the use of the database appropriate for the research question. Since the data were collected, demographic changes in the overall population of AMA membership were not sizeable enough to invalidate the analysis. Instrumentation The instrument used for this research was The Leadership Profile (TLP) developed by Sashkin (1996) to measure transactional and transformational leadership. The TLP relies on leadership theories (Bandura, 1977; Bennis, 1984; Jaques, 1986; McClelland, 1975) which profile the most desirable qualities, characteristics, and traits of transformational leadership (Sashkin, 1995). This instrument consists of 50 statements that form ten separate sub-scales. TLP generates both an overall score and subscale scores of the behavior characteristics associated with transactional and transformational leadership. The ten sub-scales are presented in Table Table IV. The Leadership Profile Questionnaire: Sub-scales Scale Name Description Transactional Leadership 1 Capable Management Is the ability to manage the day-to-day activities of the business ensuring that workers had the right tools and knowledge to accomplish the task. 2 Reward Equity Is expressed by leaders who are able to identify the tangible wants and needs of workers and have met those needs when good performance was achieved. Transformational Leadership Characteristics Behaviors 3 Communicative Leadership Is demonstrated by the ability to get across, through a variety of mediums when necessary, the leader’s ideas. The ability to ‘focus on key issues, and see them clearly’ is central to the clear expression of ideas. The leader attends to the feelings of the recipient and provides effective feedback. 4 Credible Leadership Is closely linked with trust. It is the leader’s ability to develop trust through consistent actions and communications to all. 5 Caring Leadership Is the regard given to the feelings of self and others. The leader demonstrates constant expression of concern in daily and ongoing interactions. 6 Creative Leadership Is the visionary leader’s ability to create opportunities. By understanding the past and the future, leaders are able to minimize failure by ensuring that the opportunities are engineered for success and involving followers willing to help achieve the vision. 7 Confident Leadership Is demonstrated by self-assurances and the belief of leaders that they can make a difference. This confidence has a positive impact on the leader’s environment. 8 Follower-Centered Leadership Is used by the visionary leader to influence others to achieve outcomes. To be most effective, power and influence must be widely shared throughout the organization. 9 Visionary Leadership Creates a long-term focus for the organization. Cognitive complexity is evident in the leaders and they see how their vision will be achieved and how it will impact the organization overtime. Culture 10 Culture Building Leadership Is demonstrated by the leader who is able to “develop or inculcate values that strengthen organizational functioning” (Sashkin, 1996). Each respondent reported the extent to which each of the statements describes his or her behavior. A five-point Likert type scale is used for TLP. The possible responses are: very great extent, great extent, moderate extent, slight extent, and little or no extent. Results Of the 8000 of people surveyed, 1,525 responses were received. Descriptive statistics were used to summarize the demographic data. The t-tests determined the probability that the two means are the same (McMillan and Schumacher, 1993). The standard for significant difference for all t-tests is set at the alpha level of .05. To evaluate the data in terms of the research question, the data were sorted by gender, then further sorted and tested in terms of business ownership (Table V). Table V. Usable Respondent Data Women Business Owners Women Business Executives Men Business Owners Men Business Executives 119 572 134 677 T-tests were conducted, comparing the responses from women executives and women business owners. In particular, the overall scores, the cluster scores (i.e., in the areas of transactional leadership, transformational leadership behaviors, and transformational leadership characteristics) and each scale score was compared for the two groups (Table VI). Table VI. Women Business Executives and Women Business Owners – Overall and Cluster TLP Scores TLP Women Business Executive Mean Women Business Owner Mean Difference Standard Error t p-value TLP Scale Clusters Overall leadership scores 20.04 20.48 -0.438 0.205 -2.132 0.034* Transactional Leadership (scales 1-2) 20.12 20.47 -0.341 0.134 -1.600 0.111 Transformational Leadership Behaviors (scales 3-6) 20.25 20.65 -0.398 0.191 -2.086 0.038* Transformational Leadership Characteristics (scales 7-9) 19.36 19.90 -0.539 0.232 -2.232 0.021* Culture Building Leadership (scale 10) 21.30 21.27 0.031 0.228 0.136 0.891 *p Read More