Measurement

The assumption that there is, or at least could be, a simple and uncontentious way of measuring success is one that researchers have been slow to relinquish, no doubt because it makes their task that much harder (Smith and Peterson 1988, p.72).

Social science measures are contentious for many reasons, not least being there are always numerous ways of conceptualising and then measuring phenomena of interest, and these are often related to some underlying theory chosen to illuminate the research problem at hand. Moreover, as Dainty and Anderson (1996) note, ‘hard measures’ like financial targets, output, profit, share price, market share are problematic in not being directly attributable to individuals, nor allowing easy comparison across companies and industries. In this thesis, quantitative measures relied upon data obtained via a manager questionnaire and a work unit member questionnaire (s. 4.4.1).

The independent variables of leader skill proficiency. The main independent variable is leader skill proficiency, which was measured initially by a total of 59 clustered items rated by subordinates on a Likert type summated scale (Phillips 1971; Zikmund 1997; Cavana, Delahaye and Sekaran 2001). The resulting

instrument is discussed further in the next section. It is reproduced as part of the matched questionnaires in appendices one and two.

The broad variable of leader skill proficiency was broken down into more specific scale measures. The design range of original scales and associated measures is incorporated as Appendix C. The original scales were subjected to factor analyses to produce new scales, nominated as interactive, interformative, and strategic influence leader skills (s. 5.2). The new scales allowed interval level measurement due to number of items and response categories, and instructions to respondents, in accord with current convention (Bryman and Cramer 1999).

Dependent variables. There are four main dependent variables.

Leader effectiveness and work unit performance. The first two are leader effectiveness and work unit performance. These were also measured on Likert type scales rated by members concerning several sub-factors in the work unit context: job satisfaction, job commitment, morale, team spirit, task efficiency and goal achievement, and overall work unit performance (Appendix C).

Individual success. Individual success is a third dependent variable. A tripartite measure was achieved by asking managers their age, remuneration, and organisational level. Remuneration was defined as the total compensation package earned by a manager in annual dollar terms. Organisational level was calculated as the manager’s level divided by the total number of hierarchical levels. The highest level was ascribed as one. This comprises an index that neutralises age bias and manages the mathematics of the financial part of the equation. The formula is:

1) Organisational Level = z ratio 2) Age = y years and months

3) Annual Remuneration = A$ x ÷ 10,000

4) Individual Success Index (ISI) = (x ÷ 10,000) divided by (z multiplied by y)

In casting the questionnaire responses into SPSS terms, this formula translates to: (q. 77/10000) / ((q76a/q.76b) x (q82a + q82b/12))

A manager is more successful as the ISI increases. This indicator has no theoretical limits, but research data establish a floor and ceiling.

Company business success. Company business success is the last major dependent variable. Return on capital (ROK) ratio was adopted as a measure of company success (Hill and Jones 1998), along with percentage revenue increase (RI). Both ROK and RI were collected for the preceding year and as an average for the past five years. The formula is:

1) ROK (past year) = x % 2) ROK (5 year average) = y % 3) RI (past year) = w %

4) RI (5 year average) = z %

5) Company Business Success Index (CBSI) = X+Y+W+Z ÷ 4 = CBSI %

Operationalisation procedures. Data collected from the work unit member questionnaire were used to calculate mean responses for each scale variable. These means were then transposed as scores to the corresponding manager. New variables for the managers were created as appropriate by the SPSS computation and recoding procedures. For example, take the division of managers into more or less effective categories, which was necessary for description and analyses reported in chapter five. For each work unit, the mean of leader effectiveness scores was calculated. Each mean was then transposed as the score for leader effectiveness to the relevant manager. (These two steps in the procedure were employed for all other scale measures). All the scores of leader effectiveness were then split at the mean via recoding to create the two groups of more effective and less effective managers. The variable values of individual success, on the other hand, were directly calculated from data each manager provided on age, remuneration, and relative organisation level using the above formula. A consolidated database was developed from responses to both questionnaires.

Important measurement issues. Issues of same source bias and response scale tautologies among skill and outcome measures are important (Lowe, Kroek and Sivasubramanium 1996; Hooijberg and Choi 2000). These are addressed in several ways. There is a physical separation of measures within the questionnaire format. This involves a visual barrier between questionnaire items measuring skills as independent variables and those measuring effectiveness outcomes as dependent variables. This is reinforced by clear instructions to respondents within each section of the questionnaire. Additionally, scale terminology differs between skills and outcomes to further emphasise to respondents the distinct nature of each. Similarly, although leader effectiveness and work unit performance are measured by items within the same questionnaire section, these items are grouped separately and terminological differences underline their distinction. Finally, leader skill is measured by work unit member responses, whereas individual success and company business success are measured separately by manager responses. These procedures reduce

rather than eliminate measurement problems. Construct validation of measures is demonstrated via hypothesis testing (s. 5.6).

A significant methodological premise underlies interpretation of the ‘do not know’ response of the Likert scale relating to leader skills, as measured by averaged work unit member responses concerning their manager, and only their manager. The Symbolic Interactionist theory developed here emphasises the crucial importance of followers to bestowing and preserving the leadership mantle on managers (ss. 3.2

and 3.3). Theoretically, a manager’s leader skills are re-cognised by subordinates,

and hence constituted continuously (or not) in interactional processes with them as followers. Contrary to arguments by Kerr and Schriesheim (1974) and Conger (1998), the collectively agreed perception of followers is the behavioural reality, yet this depends upon the extent of a manager’s management of that reality (s. 3.3.2).

Consistent with this, where work unit members declared a lack of knowledge of how well their manager leads in any respect, this was considered a lack of leader skill of the manager, an inability to demonstrate leadership in that particular. Notably, this is also consistent with notions of ingroups and outgroups evidenced in LMX research. It was accordingly scored zero. Similar reasoning underlies application of the work unit empirical mean for items where there is a missing value. Of course, many interpretations can be construed here, including ignorance of work unit member(s) concerned, or reluctance to record an evaluation for various reasons. The one proffered is theory based, and it was supported by clear instructions to respondents concerning the survey instrument, its skills focus, and issues of confidentiality. As usual in survey research, the ‘do not know’ response is a source of unknown error in thesis findings, and it is an important measurement issue.

The preceding theoretical argument cannot be applied to the Likert scale ‘no response’ category in determining both leader effectiveness and, even more so, work unit performance, as followers are not evaluating leader skills, and there are clearly other factors involved. Whilst, within current theory, leader skill is inextricably a matter of followers’ collective definition of the situation, there are many acceptable measures of effectiveness. Here, a ‘do not know’ response was scored as the scale average. The scale average was also applied for ‘do not know’ responses and missing values concerning the survey of managers.