Effect of the long-term versus short-term employment contracts on executive leadership styles, tasks and behaviour

Full text

(1)EFFECT OF THE LONG-TERM VERSUS SHORT-TERM EMPLOYMENT CONTRACTS ON EXECUTIVE LEADERSHIP STYLES, TASKS AND BEHAVIOUR. by Lesenyego Winston Joseph Matlhape. Thesis submitted in partial fulfilment of the requirements of the degree of Doctor Philosophiae (D. Phil) in Leadership Performance and Change Faculty of Management University of Johannesburg. Supervisor: Dr. L.J. Naudé. Johannesburg November 2012. i.

(2) Abstract Executive behaviour is a captivating socioeconomic phenomenon. Four executiverelated matters attracted the researcher’s interest: (a) What, indeed, is executive effectiveness?; (b) What specific executive behaviours, tasks, attributes, styles of leadership or other considerations make trendsetting executives effective?; (c) In what respects do executives who hold long-term (up-to-retirement) employment contracts differ from their fellow-executives who have opted for short-term contracts, with regard to matters such as remuneration, executive capability, executive migration, and psychosocial dynamics in the workplace?; and (d) How do executives from the public and private sectors differ in their executive job performance and what can they learn from each other with regard to executive effectiveness? Employment patterns of senior executives in many organisations change as their conditions of employment vary. In South Africa, the King report of 1994 questioned the wisdom of granting executive leaders of institutions and organisations contract terms of indefinite length. The researcher considered length of employment contract term as a critical matter. Would a reduction of stipulated duration of terms of employment in executive contracts promote executive effectiveness, result in higher productivity and restrict opportunities for deliberate corporate misconduct? In the study, the researcher intended to explore the effects of length of contract term on executive performance by comparing executives with long-term (up-to-retirement) employment contracts with executives who have opted for short-term employment contracts. The perceived differences will be apparent in criteria of effective executive leadership such as daily executive behaviours, executive tasks, and executive leadership styles. South African organisations and institutions have formulated different policies on the matter of the ideal length of an employment contract term. Government departments, state-owned enterprises and parastatal institutions enter into fixed-term contracts with their executive leadership. While some business enterprises implement fixedterm employment contracts, executive leaders in private-sector companies favoured long-term employment contracts, or employment up to retirement. The length of term of employment contract is a sensitive issue. How desirable is increased executive ii.

(3) migration within and between the private and public sectors and how will changes from contracts with indefinite contract terms to contracts with restricted short-term duration, and vice versa, influence executive effectiveness? A survey on the influence of employment contracts that were offered to executives of organisations was undertaken. Terms and conditions of executive employment were examined to better understand what factors influenced the job performance and effectiveness of executives. Various types of executive employment contracts were looked at while benefits, remuneration and other forms of compensation were also reviewed. Three matters of interest need to be considered: What expectations do executive leaders in organisations have about their job performance, what outlooks do the select band of people that appointed them have about their job performance, and to what extent do executives meet these expectations? In conceiving the prospective study, the researcher defined two target populations: executives from the public and private sector. Two subpopulations within each of the populations were also targeted: executives from the two sectors and that held either long- or short-term contracts. An estimated sample size of 125 respondents, evenly distributed among the four subsamples, was envisaged. An electronic location and introduction method was introduced to recruit potential participants. The procedure, eventually, attracted 128 executives from the private and public sectors. The study suffered a setback when only eight executives with long-term contracts, from the public sector responded to the invitation to participate. The consequence of this unexpected event was that the researcher had to restrict the study to a comparison of 76 executives who held long-term contracts and 52 executives with short-term employments contracts. Three measuring instruments were applied. The Multifactor Leadership Questionnaire is an established psychometric instrument that measures 12 leadership styles. The researcher, for the purposes of the study, constructed an Executive Leadership Questionnaire that included 29 executive behaviours as well as 29 executive tasks. The 29 behaviours were included in an Executive Behaviours Questionnaire. The remaining 29 items formed the Executive Tasks Questionnaire. A subsequent principal component analysis of the two sets of items produced eight latent attributes. The two new Executive Behaviours were Inspiring Subordinates and iii.

(4) Interpersonal Sensitivity. Analysis of the Executive Tasks Questionnaire yielded six latent attributes: Executive Capability, Future-Oriented Action, Other-Directedness, Up- and Downward Communication, Coaching and Motivating Subordinates, and Regular Organization Evaluation. Some psychometric properties of the two measuring instruments and the eight latent attributes were computed and reported in the thesis. The researcher recommended that the response options of the 58 original executive behaviours and tasks be redesigned to eliminate the restriction of range of individual scores that the current versions seem to produce. The data set comprised the 12 MLQ Leadership Styles, two Executive Behaviours and six Executive Tasks. The 20 dependent variable were subjected to analysis of variance with a completely randomized three-factor design even though the poor response from the participants of one subsample prevented the researcher’s original intention of random subsampling. This distortion obviously affected the research results. Statistical manipulation of the 20 dependent variables with the respective primary, secondary and tertiary independent variables of Length of Contract Term, Gender and Age Cohort Group detected several noteworthy and unique one-, twoand three-way interactions that yielded psychosocial dynamisms that differentiated between executives with long- or short-term employment contracts, the two genders, and the age categories of 21-40 years, 41-50 years, and > 50 years in which executives fell. The three age categories, respectively, provided novel scientific information on convergence and divergence in attribute group means of executive performance that permitted the researcher to study patterns of developmental among executives. The psychodynamics of younger executives were linked to maturation-consolidation.. The group means on leadership attributes among. executives in the intermediate age group diverged markedly and pointed to important differences between males and females who held either long- or short-term contracts. Although the results were exciting and promising, small sample sizes of the order of 2, 3 and 5 compromised the outcomes. The findings, nevertheless, ought to encourage potential doctoral students to direct their future research at analysis of the three independent variables interacting with the eight new constructs and support from other appropriate measuring instruments. A stepwise discriminant iv.

(5) analysis singled out the attributes Other-Directedness, Management by Exception – Passive, Satisfaction with Leadership, Coaching and Motivating Subordinates, as well as Individualized Consideration which correctly predicted the group membership of 70.3% of the executives with either long-or short-term employment contracts. The researcher frankly commented on the shortcomings of the study but also pointed to future research projects on executive leadership. For example, a comprehensive study of female executives, modelled on the design of the current investigation without its shortcomings, ought to produce further psychosocial dynamisms in the search for better understanding of executive effectiveness. The researcher suggested that prospective researchers, in particular, attend to the essentials of diligent planning of their research in the early stages of a prospective study, as well as meticulous and considerate sampling. The format of the dissertation was adapted to improve the flow of information and deliberate interventions during the seven phases of the research strategy. A further side-effect was the improved integration of existing scientific information, sampling and research methods and procedures as well as inclusion of a researcher’s resolve.. v.

(6) Acknowledgements. It was Marcel Proust who said “Let us be grateful to the people who make us happy They are the charming gardeners Who make our souls blossom! I wish to acknowledge my late father, my role model and mentor, Thomas Goitumecoe and my mother, my spiritual tutor , Abigail Sipho for the way they brought me up, graciously, and also for giving me an education and always motivated me to be the best I can. As it was John F Kennedy who reminded us that as we express our gratitude, We must never forget that the highest appreciation is not to utter words, but to live by them. I am most grateful to Professor de la Rey and Dr Louis Naude my joint supervisors for their. guidance during the. process of research and. writing the thesis. I also wish to thank Celice Lison for her support during this project. I wish to acknowledge my sisters, Matshidisho (Tshidi), Dolly, Maria (Dinonyane), Mokwena, Thokozile, Zola and Mamoeti, and my nieces Tshidi (Junior) and Keamogetswe for their general support in everything vi.

(7) I undertake to do. You have been a wonderful and loving support throughout my life.. I am proud of your efforts to keep the family. together. Remembering also my late brothers Molapisi, Selebano and Matlhape(Fish). “Lo ntshile ke le esi.” I would be acknowledgement if. remise in my. I omitted to mention my brothers-in-law namely. Martin Tetwayo, Desmond Motshwanaesi and Nzimeni Zandile and those who have passed on Tshidi Hail Mogoera, Steve Joshua and Molale Philip Tlhapuletsa – whose small acts of kindness is worth more than the grandest intention! To my sons Keabecoe, Kitso and Tiro for being there when I need them. I have tried to show you the way and that is the least I could do. Commit to working hard in this life. And remember you can do anything, but do not undertake everything! To my nephews and nieces, Itumeleng Mogoera, Kamogelo Tlhapuletsa, Mpho Gaobepe, Simphiwe Tetwayo, the Joshua’s: Makhete , Papi and Hlaudi and Emang and Nkagisang Motshwanaesi, and the Zandile’s, Lulama, Lungiwe and Sindiswa – the sky is the limit – perform your way to success. Only hard work can guarantee success. Remember God has given us a gift of 86 400 seconds today. What have you done with yours – and in saying that, let us never forget to show appreciation for everything we have been given, for the love of family and community – these are worth more than any gold, diamonds or silver!. vii.

(8) To Dumang-Dumang, Tiro, Babete, Andre and Melodi. the clan has. embraced you and will try to help you understand. Always remember that you have inherited the best qualities. To George Letebele and Buti Matlhako I say keep it up. To Keletso and Mamonaheng I say keep on track and also keep Gomolemo and Lesego on course. To Faith who was there when the project was conceived and she supported it, thank you. To my Tumaini Kabila and other friends Maleho Seane, Molehabang Phayane, Mokitlane Makofane, Mokgatla Nakedi, Mahlomola Ronny Makgari, Keabetswe Motlhoioa, Oupa Mokgobo Sebudi, , Thami Moikangwa, Lawrence Sehume, Champ Ntuli,. Diliza Mji, Livo. Tsimatsima, Classen Lekhetho, Falithenjwa Bless and those that have passed on Juda Ntaje, Joel Nthebolang Tlhakung, Oupa Pule, Themba Khuzwayo, Sello Rampana and Canto Mokgobo for making my youth and adult life. very exciting, and full of. rewarding and enlighting. experiences. Remember “Tumaini Kabila- Kwendakwa maendeleyo.” I now understand what Ralph Waldo Emerson meant when he said “I awoke this morning with devout thanksgiving for my friends, the old and the new! Thank you I am truly blessed having you as my friends To my late uncle Samuel Matlhako who was the first one to recognise my academic abilities and encouraged me to pursue academia. Also in remembrance of uncle Muntu Xulu who taught me the importance of embracing the African culture and heritage. I also dedicate this work to my two living aunts Motlagomang Mocumi and Mokhaitha Matlhako and two others who have passed on Moditsana Motsumi and Mokwena Ntshweu and their families. viii.

(9) From my elders I have learnt the following: The six most important words : I admit I made a mistake. The five most important words : You did a good job The four most important words : What is your opinion? The three most important words : If you please The two most important words : Thank you The one most important word : we The least important word : I Lastly, to Ntsoaki Ruth Mashaba, thanks for coming back into my life. Your words of encouragements have not gone unnoticed. Finally to my late grand-mother Maria Dinonyane Matlhape who said to me “Ngwana ngwanake o ikoketse ka thuto le ditiro.” And let me end with the words of Benjamin Disraeli who said “I feel a very unusual sensation – if it is not indigestion, I think it must be gratitude!” Thank you very much Lesenyego Winston Joseph Matlhape. ix.

(10) Contents. Abstract …………………………….…………………………………. Page. ii. Affidavit. vi. Acknowledgement ……………………………….……………………….... vii. List of Contents ………………………………………………………..... List of Tables……………………….……………………………………........... x- xvi xvii - xix. List of Figures …………………………………………………………………. xix. Bibliography ……………………………………………………………………. 255. Appendix A……………………………………………………………………. 264. Appendix B……………………………………………………………………. 275. Appendix C……………………………………………………………………. 280. TABLE OF CONTENTS CHAPTER 1 INTRODUCTION. 1. 1.1. Introductory Remarks. 1. 1.2. Changing Trends in Employment. 2. 1.3. Researcher’s Resolve. 3. 1.4. The Consequences of Counterproductive Work Behaviour. 7. 1.5. Conclusions. 8. CHAPTER 2 LITERATURE SURVEY. 10. 2.1. Introduction. 10. 2.2. Overview of Literature. 11. 2.3. Conclusions. 18. CHAPTER 3 JUSTIFYING THE RESEARCH. 20 x.

(11) 3.1. Background Information. 20. 3.2. Formulation of a Problem Statement. 21. 3.3 3.4. Thesis Statement Research Questions. 22 22. 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20. Practical Questions Scientific Objectives Research Objectives Expansion of Scientific Knowledge Value of Proposed Research Arguments Supporting the Study Changes in Organisations Knowledge Gained Research Protocol and Ethics Samples of Convenience Previous Incumbents Measuring Instrument Pilot Study Replication of Study Statistical Analysis Concluding Remarks. 24 27 29 32 32 34 36 37 37 38 38 39 39 39 39 40. CHAPTER 4 LEADERSHIP THEORY AND PRACTICE. 41. 4.1. Introduction. 41. 4.2. Executive Tenure. 41. 4.3 4.3.1. Major Leadership Models and Theories Trait approach. 43 43. 4.3.2 4.3.3 4.3.4 4.3.5 4.4 4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.5 4.6 4.6.1 4.6.2 4.6.3 4.6.4 4.6.5 4.6.6. The contingency approach Situational theory Advantages of situational leadership style Path-Goal theory of leadership Transformational Leadership Style and Theory Idealised Influence (Attribution or Charismatic Leadership) Idealised Influence (Behaviours) Individualised Consideration Intellectual Stimulation Inspirational Motivation (Behaviour) Transactional Leadership Behaviour of Leaders in Organisations Cost-Cutting Focusing on growth Training leaders for growth Budget setting and growth Leading by example Communicating with stakeholders. 46 48 49 50 51 51 52 52 52 52 53 53 54 54 55 55 55 55 xi.

(12) 4.7 4.7.1 4.7.2 4.7.3 4.7.4 4.7.5 4.7.6 4.8 4.8.1 4.8.2 4.8.3 4.8.4 4.8.5 4.8.6 4.8.7 4.8.8 4.8.9 4.8.10 4.8.11 4.8.12 4.8.13 4.8.14 4.8.15 4.8.16 4.9 4.9.1 4.9.2 4.9.2.1 4.9.2.2 4.9.3 4.10 4.10.1 4.10.2 4.10.3 4.10.4 4.11 4.12 4.13. Management and Leadership The task of setting objectives, development strategies and plans Thinking through the vision and values of the organisation The task of developing future leadership Ceremonial executive leadership functions Delegation of responsibility Management functions Competencies of Executive Leaders Character Personal capability Behaviour in analysing and solving problems Innovation and creativity Practicing self-development Focus on results Establishing flexible goals Take responsibility for outcomes/initiatives Interpersonal skills Communication Inspiring and motivating others to perform Building relationships Developing others Risk taking Leading organisational change Vision The Executive Leader’s Tasks, Functions and Responsibilities Functions of the chief executive officer and executive team The executive leader’s behaviour Creating capabilities Accountability The effectiveness of executive leadership Building Effectiveness Through Creating Value for Shareholders Shareholder value and effectiveness Market value demonstrates effectiveness Book value of equity Intrinsic value and economic profit Effectiveness Through Service Delivery Level 5 Leadership and Effectiveness Conclusions. 56 56 56 57 57 57 58 64 65 65 65 65 66 66 66 66 67 67 67 67 68 68 69 69 69 70 71 71 72 73 79 79 80 80 80 81 81 82. CHAPTER 5 EMPLOYMENT CONTRACTS. 83. 5.1. Introduction. 83. 5.2. The Reciprocal Nature of Employment Contracts. 83. 5.2.1 5.2.2. Employer and employee rights and duties Basic Conditions of Employment Act (1997). 83 84. 5.3. Employment Contracts. 87 xii.

(13) 5.3.1 5.3.2 5.3.3 5.3.4 5.3.5 5.3.6 5.3.7 5.3.8 5.3.9 5.3.10 5.3.11 5.3.12 5.4. Definition of an employment contract Types of employment contracts Executive employment contracts Typologies of executive contracts Terms of executive contracts Executive compensation and benefits Elements of an executive contract Description of the job, duties, responsibilities and authority Termination clauses Restrictive covenants for executives Other restrictive covenants (agreements) for executives Period of employment Conclusions. 87 88 88 90 91 92 93 94 94 95 95 96. CHAPTER 6 RESEARCH STRATEGY. 98. 6.1 Introduction 6.2 Flow-Chart of the Research Strategy 6.3 The Conception Phase 6.3.1 Thesis statement 6.3.2 Researcher’s resolve 6.3.3 Literature survey 6.4 Substantiating the Research 6.4.1 Formulating the research question 6.4.2 Formulating the practical question 6.4.3 Statement of scientific objectives 6.4.4 Statement of research objectives 6.4.5 Purpose of the study 6.4.6 Ethical considerations 6.4.7 Quality control 6.4.8 Benchmarking the study 6.5 Making The Prospective Study Operational 6.5.1 Developing the research strategy 6.5.2 Selecting the measuring instruments 6.5.3 Demarcating the target population 6.5.4 Calculating the initial sample size 6.5.5 First-Phase sampling 6.5.6 Locating, contacting and enrolling participants 6.5.7 Assessing the initial sample response 6.5.8 Second-Phase sampling 6.5.9 Redefining the target population 6.5.10 Revisiting the scientific objectives 6.5.11 Construction and evaluation of new measuring instruments 6.6 Conducting the Research 6.6.1 Electronic testing procedure 6.6.2 Data capturing 6.6.3 Statistical design. 98 98 100 100 101 101 102 102 102 102 103 103 103 104 104 105 105 105 106 106 107 108 109 110 110 110 110 111 111 111 112 xiii.

(14) 6.7 Data Analysis 6.7.1 Principal-Component analysis 6.7.2 Pearson product-moment correlation 6.7.3 Estimation of test reliability 6.7.4 Descriptive statistics 6.7.5 Univariate frequency table 6.7.6 Cross-Tabulation 6.7.7 Two-Way factorial analysis of variance 6.7.8 Stepwise discriminant analysis 6.7.9 Effect size 6.7.10 Fisher’s LSD test 6.8 Dissemination of Information 6.9 Writing the Thesis 6.10 Biographical Characteristics of the Sample and Generalizing 6.11 Presentation of Statistical Calculations and Data Analysis 6.12 Terminating the Research 6.13 Final Conclusions 6.14 Recommendations 6.15 Revisiting the Researcher’s Resolve 6.16 Conclusions. 112 113 114 115 117 118 119 120 127 130 131 132 132 132 133 133 134 134 134 134. CHAPTER 7 MEASUREMENT AND PSYCHOMETRIC ASSESSMENT OF EXECUTIVE JOB PERFORMANCE. 136. 7.1 7.2 7.3 7.4 7.4.1 7.4.2 7.4.3 7.4.4 7.4.5 7.4.6 7.4.7 7.5. 7.5.1 7.5.2 7.5.3 7.5.4 7.5.5 7.5.6 7.5.7 7.6 7.6.1 7.6.2 7.6.3. 136 137 138 138 139 139 140 142 144 145 145 146 146 146 147 149 149 150 150 150 150 151 151. Introduction Executive Leadership Questionnaire Purpose of Questionnaire Construction Construction of the Executive Tasks Questionnaire Item configuration Total score-item correlations Psychometric properties of the new measuring instrument Latent principal-components structure Errors of measurement Reliability estimates Validity assessment Construction of the Executive Behaviours Questionnaire Item configuration Total score-item correlation Psychometric properties of the new measuring instrument Latent principal-components structure Errors of measurement Reliability estimates Validity assessment Inclusion of the Multifactor Leadership Questionnaire Item configuration Leadership styles evaluated by the MLQ Errors of measurement. xiv.

(15) 7.6.4 Reliability estimates 7.6.5 Validity assessment 7.7 Conclusion. 152 152 153. CHAPTER 8 BIOGRAPHICAL COMPOSITION OF THE SAMPLE. 154. 8.1 8.2 8.3 8.4. 154 154 158 158. Introduction Biographical Characteristics Conclusions Generalizing of Results. CHAPTER 9 PRESENTATION AND ANALYSIS OF DATA. 160. 9.1 Introduction 9.2 Descriptive Statistics 9.3 Pearson Correlation Matrices 9.4 Three-way Analysis of variance 9.4.1 Executive Behaviour I: Inspiring Subordinates 9.4.2 Executive Behaviour II: Interpersonal Sensitivity 9.4.3 Executive Task I: Executive Capability 9.4.4 Executive Task II: Future-Oriented Actions 9.4.5 Executive Task III: Other-Directedness 9.4.6 Executive Task IV: Up-and-Downward Communication 9.4.7 Executive Task V: Coaching and Motivating Subordinates 9.4.8 Executive Task VI: Regular Organisation Evaluation 9.4.9 Leadership Style I: Idealised Influence (Attributed) 9.4.10 Leadership Style 2: Idealised Influence (Behaviour) 9.4.11 Leadership Style 3: Inspirational Motivation 9.4.12 Leadership Style 4: Intellectual Stimulation 9.4.13 Leadership Style 5: Individualized Consideration 9.4.14 Leadership Style 6: Contingent Reward 9.4.15 Leadership Style 7: Management by Exception (Active) 9.4.16 Leadership Style 8: Management by Exception (Passive) 9.4.17 Leadership Style 9: Laissez-Fair Leadership 9.4.18 Leadership Outcome 10: Extra Effort 9.4.19 Leadership Outcome 11: Effectiveness 9.4.20 Leadership Outcome 12: Satisfaction 9.5 Stepwise Discriminant Analysis 9.6 Effect Size 9.7 Conclusions. 160 160 162 162 163 166 169 176 179 182 185 188 196 199 202 205 208 214 217 219 222 225 228 230 233 237 238. CHAPTER 10 RECOMMENDATIONS AND CONCLUSION. 240. 10.1 10.2 10.3 10.4. 240 240 242 242. Terminating the Study Study Topic and Objectives Limitations of the Study Conclusions. xv.

(16) 10.4.1 Research strategy 10.4.2 New psychometric tests 10.4.3 Executive effectiveness 10.4.4 Role of age in executive effectiveness 10.4.5 Transformational and Transactional Leadership 10.4.6 Representation of the sample 10.4.7 Scarcity of private sector research 10.4.8 Research on contracts, tenures and typologies 10.4.9 Personal experiences and growth 10.5 Recommendations 10.5.1 Recommendation 1 10.5.2 Recommendation 2 10.5.3 Recommendation 3 10.5.4 Recommendation 4 10.5.5 Recommendation 5 10.5.6 Recommendation 6 10.5.7 Representative sampling 10.6 Revisiting the Researcher’s Resolve 10.7 Terminating the Study. 243 243 245 245 246 248 248 248 249 250 250 250 251 251 252 252 252 253 254. xvi.

(17) List of Tables. Table 4.1 Table 4.2 Table 4.3 Table 6.1. Table 8.1. Managerial Roles …………………………………………………....... Management Contrasted with Leadership ……………………….. The Competencies of an Effective Leader ……………………….. Cross-Tabulation of the Independent Variables Length of Contract Term by Number of Years of Experience ……………… Listing of Individual Scores on the First Dependent Variable………………………………………………………………….. Listing of Individual Scores on the First Dependent Variable, According to the Categories of the Independent Variables Contract Term, Gender, and Age and Cohort Group ………….. Listing of Individual Scores on the Interaction Contract Term x Gender, Contract Term x Age Cohort Group, and Gender x Age Cohort Group …………………………………………………… Example of Printout with Results of Multivariate Factorial Analysis of Variance …………………………………………............ The Variance-Covariance Matrix …………………………………… Inversion of the Variance-Covariance Matrix By Expansion with an Identity Matrix ……………………………………………… Total Score-Item Correlation of the Executive Tasks Questionnaire ……………………………………............................. Calculations of the Principal Component Analysis of Executive Task............................................................................... Rotated Component Matrix of Executive Task Questionnaire…. Total Score-Item Correlations of Executive Behaviours Questionnaire ………………………………………………................. Calculations of Principal Component Analysis of Executive Tasks Questionnaire ………………………………………………….. Rotated Principal-Component Matrix of Executive Behaviours Questionnaire ………………………………………………………….. Errors of Measurement and Reliability Coefficients of the 12 MLQ Subscales and Principal Components IV, V, and VI of the Executive Tasks Questionnaire …………………………………… Gender Composition of the Realised Sample……………………. Table 8.2. Age and Executive Contract Length/Period............................. Table 6.2 Table 6.3. Table 6.4. Table 6.5 Table 6.6 Table 6.7 Table 7.1 Table 7.2 Table 7.3 Table 7.4 Table 7.5 Table 7.6 Table 7.7. Page 60 61 73 119 120. 122. 125 125 128 129 139 140 141 146 147 148. 152 154 155 xvii.

(18) Table 8.3 Table 8.4 Table 9.1 Table 9.2 Table 9.3 Table 9.4. Table 9.5 Table 9.6 Table 9.7 Table 9.8 Table 9.9 Table 9.10. Table 9.11 Table 9.12 Table 9.13 Table 9.14 Table 9.15 Table 9.16. Table 9.17 Table 9.18 Table 9.19 Table 9.20 Table 9.21 Table 9.22. Race and Length of Executive Employment Contract................. Type and Length of Executive Employment Contract................. Factorial Analysis of Variance for the Variable Inspiring Subordinates ………………………................................................. Factorial Analysis of Variance for the Variable Interpersonal Sensitivity....................................................................................... Factorial Analysis of Variance for the Variable Executive Capability…………………………………………………................... Descriptive and Multiple Comparison Statistics for the ThreeWay Analysis of Variance for the Variable Executive Capability………………………………………………………………… Factorial Analysis of Variance for the Variable Future-Oriented Actions............................................................................................. Factorial Analysis of Variance for the Variable OtherDirectedness.................................................................................... Factorial Analysis of Variance for the Variable Up-and-Down Communication............................................................................... Factorial Analysis of Variance for the Variable Coaching and Motivating Subordinates................................................................. Factorial Analysis of Variance for the Variable Regular Organization Evaluation................................................................. Descriptive and Multiple Comparison Statistics for the ThreeWay Analysis of Variance for the variable Regular Organization Evaluation …………………………………………… Factorial Analysis of Variance for the Leadership Style Idealised Influence (Attributed)..................................................... Factorial Analysis of Variance for the Variable Idealised Influence (Behaviour)...................................................................... Factorial Analysis of Variance for the Variable Inspirational Motivation......................................................................................... Factorial Analysis of Variance for the Variable Intellectual Stimulation....................................................................................... Factorial Analysis of Variance for the Variable Individualised Consideration................................................................................... Descriptive and Multiple Comparison Statistics for the ThreeWay Analysis of Variance for the Variable Individualized Consideration................................................................................... Factorial Analysis of Variance for the Variable Contingent Reward.............................................................................................. Factorial Analysis of Variance for the Variable Management by Exception-Active.................................................................. Factorial Analysis of Variance for the Variable Management by Exception-Passive........................................................................... Factorial Analysis of Variance for the Variable Laissez-Faire Leadership........................................................................................ Factorial Analysis of Variance for the Variable Extra Effort........ Factorial Analysis of Variance for the Variable Effectiveness….. 156 157 164 167 170. 174 176 179 183 186 189. 194 196 200 203 206 209. 213 215 217 220 223 225 228 xviii.

(19) Table 9.23 Table 9.24 Table 9.25. Table9.26. Factorial Analysis of Variance for the Variable Satisfaction..... Stepwise Discriminant Analysis of Contract Term and Select Dependent Variables...................................................................... Classification Results of the Prediction of the Group Membership of Executive with Long- And Short –Term Contracts......................................................................................... Estimates of Effect Size.................................................................. 231 234. 236 237. List of Figures M The Traditional Functions of management …………………….... Competencies of an effective executive leader ……………….. Flow Chart of the Research Process.......................................... Length of Contract Term x Gender x Age Cohort Group Effects on Executive Capability ………………………………… Length of Contract Term x Gender x Age Cohort Group Effects on Regular Organisation Evaluation....................... Length of Contract Term x Gender x Age Cohort Group Effects on Individualized Consideration……………………… Standardised Canonical Discriminant Function Coefficients. Page 59 72 99. Appendix A. Questionnaire................................................................................. 265. Appendix B. Sections B1 – B5............................................................................. 267. Appendix C. Sections C1- C11............................................................................. 281. Figure 4.1 Figure 4.2 Figure 6.1 Figure 9.1 Figure 9.2 Figure 9.3 Figure 9.4. 173 193 212 235 255. Bibliography. List of Acronyms EBIT Earnings before interest and taxes MBWA Management by walking about CATI Computer Aided Technology, Inc NIPO Software company. xix.

(20) CHAPTER 1 INTRODUCTION 1.1. Introductory Remarks. The prospective study was grounded in four scientific interests of the researcher: (a) the phenomena of private and public sector executives: (b) indicators or definitions of executive effectiveness; (c) the measurement of executive effectiveness; and (d) the effect of varying lengths in term of employment contract on executives’ effectiveness. The researcher asserted that executives from the public and private sectors operate in independent but interdependent spheres of South Africa’s day-today statehood. Those employed in the public sector primarily formulate and implement government policies, enact laws, and also oversee the country’s administrative governance and judiciary systems. Their counterparts in the private sector are responsible for leading companies or organisations entrusted to them effectively and profitably, and do so by means of financing, buying and selling of goods and services. Top-level managers from the two sectors differ in three noteworthy respects: job content, job demand, and job characteristics. Four noteworthy scientific interests led the researcher to phrase preliminary thesis statements. What is executive effectiveness? Must the construct be defined and measured as a broad or narrow trait? How must one judge executive effectiveness or reproduce reliable, valid and plausible results: application of a single criterion, use of a composite criterion, or administration of multiple criteria? Are the criteria for judging executive effectiveness in the public service similar or dissimilar to criteria that are put into practice in the business sector? If the latter argument holds, in what respects do effective executives from the two sectors differ in assignment of executive tasks, behavioural response, and preferred leadership styles? Assuming that performance of executive jobs in the two sectors occurs independently but is nevertheless, interdependent, what are the common or shared traits of executive effectiveness and what traits are distinct of executives in one sector but not of their counterparts from the other sector? In other words, is executive effectiveness context-related or not? What human dynamics underlie executive effectiveness and ineffectiveness in the two sectors? Do variability in lengths of term of employment 1.

(21) contracts in any way effect executive effectiveness in the two sectors? Any attempt at scientific analysis of the phenomenon of executive effectiveness, evidently, is a challenge. 1.2. Changing Trends in Employment. The phenomenon of employment has changed over time. Present-day commercial and industrial employment patterns are totally different from what they were in the 1700s when the first steel mills began to operate in Britain and from those of the 1800s when gold was discovered in South Africa. Toffler (1972, pp. 18–20) typified the world of work as an ever-changing set-up. He reasoned that the economic era of permanent or static employment was over. He based his argument on the premise that flexibility would dominate the future world of work while permanent employment would also begin to disappear. He predicted that institutions and organisations would operate more flexibly and would possibly negotiate short-term employment contracts with their personnel. Toffler was convinced that the phenomenon of permanent employment was indeed irreconcilable with a non-permanent business world. Any person who seeks stability and permanence in the business world would find it elusive and difficult to accomplish (Mankiw, 2010, p. 257; Toffler, 1972, pp. 18–20). Lang and Bliese (2009, p. 411) set out the effect of change on employment patterns: As a result of the rapid emergence and globalization of new technologies, the occupational world is becoming progressively more dynamic and complex (Burke, Pierce, & Salas, 2006; Pulakos, Arad, Donovan, & Plamondon, 2000). Consequently, employees increasingly face changes in the nature of their work environments and need to keep pace with dynamic, global, and unpredictable markets. To address these developments, researchers have begun to examine how individuals respond to changes in complex environments. Some career consultants advised that “jobs” were increasingly becoming obsolete and that people, instead, would perform tasks on a project-by-project basis under short-term employment contracts (McMullin & Marshall, Eds., 2010, p. 23). The authors further stated that the software and related knowledge industries are evolving a new type of career that will profoundly affect the way in which people work and live. 2.

(22) Productivity, prosperity, employment and unemployment are interrelated. Mankiw (2010, p. 261) explained this interrelationship with Okun’s law that links a country’s rate of unemployment to its rate of real growth in gross domestic product (GDP): “Because employed workers help to produce goods and services and unemployed workers do not, increases in the unemployment rate should be associated with decreases in real GDP.” Growth or decline in a country’s prosperity, obviously, is a function of the productivity of its national workforce. Executives are essential costakeholders in productivity and in increasing or declining prosperity since they have to display job performance of excellence both in times of long-run economic growth as well as in “turbulent” socio-economic circumstances. In practice, executive job performance in institutions usually centres on five critical and interrelated matters: appointing new recruits or discharging current employees, either temporarily or permanently, recruiting top-level managers for positions where they can lead subordinates enthusiastically and assist them to acquire executive skills that advance executive effectiveness, agreeing on conditions of employment after solid negotiation, formal appointment based on fixed or varied term-of-tenure employment contracts, and sustained supply of top-managers for employment in the private and public sectors. Workers of all ranks regularly experience either instability due to changing economic cycles with subsequent reduction in or total loss of income or share considerably in financial gains during periods of prosperity. 1.3. Researcher’s Resolve. Four concerns, all topical, controversial and executive-related, currently dominate the recovery from the economic recession that started in late 2007 and that have not yet fully abated: executives’ employment tenure, their remuneration, effectiveness in managing public and private institutions, and willingness to practice good corporate governance. Against this background, the researcher resolved to examine the effect of the relationship between long- and short-term employment contracts on traits that are possible precursors for executive effectiveness, namely preferred leadership style, essential executive tasks to be carried out, and activation of typical executive behaviours. The term executive effectiveness implies effective production of desired end results. A leadership style as a preferred way of leading subordinates. The term 3.

(23) executive task refers to a difficult job that needs to be carried out while the term executive behaviour signifies an executive’s specific response to a stimulus. An existing measuring instrument and two devices that specifically were developed, constructed and psychometrically evaluated during the course of the study yielded 20 dependent variables for application in a quasi-experimental research design: the Multifactor Leadership Questionnaire assessed preference for one or more of twelve leadership styles, while the first of the new measurement devices assessed six executive tasks and the second yielded two executive behaviours. The investigation incorporated 6 independent variables, with contracted length of term of employment acting as primary, gender as secondary and age cohort group as tertiary executiverelated biographical variables. Since the three major independent variables were all categorical variables, the study initially mandated a quasi-experimental design with a 2 x 2 factorial format that called for a two-staged sampling of participants. During the first stage of sampling fairly large numbers of executives employed in either stateowned institutions and in private-sector companies would be identified. In the second round of sampling two representative subsamples from each of the two sectorial target groups of executives identified in the preceding phase, would be drawn according to length of employment contracts that were either fixed short-term or long-term employment contracts. Statistical calculations for the purposes of data analyses mainly required principal component analysis (as input in test construction and for psychometric evaluation), multivariate analysis of variance that would generate the main scientific outcomes for the prospective study, with subsequent stepwise discriminant analysis, in an attempt to verify the main findings of the investigation. The specified statistical interventions would permit the researcher to generate innovative research outcomes that described, compared, and explained in detail psychodynamic performance patterns among South African executives from the private and public sectors and that possibly might be attributed to the length of their tenure of executive employment contracts, derived from applications of the nineteen dependent variables. The current researcher assumed that executives with fixed short-term employment contracts predominantly would prefer transactional leadership styles while their executive counterparts with long-term employment contracts would mainly engage in transformational leadership practices.. 4.

(24) Since the prospective investigation intended to examine the effects of employment contracts on executive leadership styles, executive tasks and executive behaviours, a résumé of contractual employment in two sectors of South Africa’s existing economic context would be appropriate. Contract workers, often labelled part-time or contingent employees, provided their skills and expertise for set periods of time until contractual obligations have been met. Employees in this executive category chose where they wanted to work and mainly marketed their skills to maximise monetary reward. They typically were independent people that enjoyed challenges, and were quite capable of managing each new assignment they are given (Barley & Kunda, 2004, pp. 64-47; Drucker & Marciariello, 2004, p. 188). These employees were valued by their respective institutions for as long as their personal skills remained in demand, up to date and while they could still be profitably employed. Continuous skills development was crucial to prevent skills stagnation. One particular subsection that has predominantly influenced existing patterns and conditions of employment is the information and technology industry, also called the IT industry or multimedia sector. A survey conducted by the American Management Association found that 45% of US employers used contingent workers (Barley & Kunda, 2004, p. 37). The two authors, furthermore, maintained that in the year 1998, 57% of American firms used an employment intermediary and that 34% hired independent contractors. Most industries specifically employed contractors that were mainly tasked to maintain computer equipment, develop software, provide IT services and design Web pages. Informed experts attributed the advent of contract employment to developments in the information and telecommunication sector. In the 1980s and 1990s this industry grew exponentially, for example, refer to Mankiw (2010, p. 223). This macroeconomist discussed the role of labour and capital as sources of (economic) growth and pointed out that, in practice, technological progress improves the production function (p. 249), a process that he described as labour-augmenting technological progress (p. 223). Rapid industry-specific growth resulted in an emerging skills shortage that permitted multitalented experts to rapidly migrate between organisations. The IT experts and professionals, who were in high demand and were highly paid, preferred short-term employment contracts in order to maximise their income. Many companies needed 5.

(25) these experts for predetermined but limited periods of time to perform specific duties. This development led to the current state of affairs: a preference for offering shortterm contracts to professionals employed in the information and telecommunication sector. Several researchers, in the course of their scientific endeavours, encountered employees who had negotiated time-framed employment contracts in a variety of industrial sectors, or were employed in banks, retail businesses, railroad companies, universities, aerospace firms, motor vehicle manufacturers, hospitals, biotechnology firms, defence institutions, non-profit organisations and manufacturing concerns. These researchers concluded that high-tech start-up corporations were particularly inclined to hire contract workers, while small businesses also opted for employment of contract workers, especially for the rendering of IT services. The consensus was that firms had turned to contingent labour in response to an increasingly competitive economy characterized by shorter product cycles, rapid conversion to application of technology, shifting competencies, and rising labour costs (Barley & Kunda, 2004, p. 38). The virtual work environment has added to the complexity of employment by rapidly increasing the use of dedicated computer technology and software. Professionals in the computer industry had conditions of employment that differed from that of other employees. These workers did not operate from offices or premises. The virtual industry provided professionals with conditions of work that permitted them to operate without formal or customary conditions of employment. Preference for timeframed contract employment was attributed to (a) a desire to avoid the business politics of the permanent employment, (b) a willingness to take risks, and (c) a readiness to experiment with new types of professionalism based on independence and continual exposure to the market (Barley & Kunda, 2004, p. 72). Employees’ job assignments, accordingly, were flexible, thus allowing them to enter into either longor short-term employment contracts, according to their personal circumstances. The virtual environment provided professionals with an opportunity to work in a business environment where conditions were not uniform but flexible (Edwards & Wilson, 2004, pp. 7, 13–14). The employment contracts of executives in business or public enterprises hardly changed in an era where the contracts of many other categories of employees were 6.

(26) rapidly restructured. Executive contracts, especially in the Western world, were for several decades permanent and were only severed when executives did not deliver on their brief, or acted unlawful or immoral in their official positions in ways that warranted penalization or dismissal (Greenspan, 2008, p. 123). There are, of course, exceptions. The duration of employment contracts of executives in the government and public sectors, for example, are linked to the term of office of the legitimate government of-the-day. Periodic regime changes in a country inevitably resulted in mass severance of public sector executives’ contractual appointments. 1.4. The Consequences of Counterproductive Work Behaviour. Business leaders at the executive level are assured of permanent appointment as long as they manage their business effectively and profitably. When things go wrong, the board of directors or shareholders might decide to terminate the employment of an executive. With regard to executives in the public sector, continued employment normally depends on their ability to render effective service to citizens. Successive collapses of several trendsetting business organisations due to poor organisational governance and management resulted in a drastic rethink of the term of executive employment contracts. Dineen, Lewicki, and Tomlinson (2006, p. 622) commented on the nature, variation, extent and impact of research on organisational and social issues that were the consequences of large-scale financial scandals: A recent series of unprecedented accounting scandals at once-venerated corporations attests to the difficulty associated with promoting prosocial behavior and deterring counter-productive employee behavior (Loviscky, Treviño, & Jacobs, 2003). When employees engage in counter-productive behaviors, these behaviors can have devastating effects on the organization. For example, the monetary costs of deviant acts such as employee fraud and theft are estimated at over $50 billion annually (Sandberg, 2003). However, when employees engage in prosocial behaviors that exceed their prescribed duties, research has shown that organizations reap tremendous benefits in terms of organizational performance and customer satisfaction (Podsakoff, Ahearne, & Mackenzie, 1997).. 7.

(27) Globally, stakeholders in institutions and businesses became outspoken about good corporate governance and vigorously debated the ideal length-of-term when toplevel staff are appointed in enterprises. South Africa’s campaign for good corporate governance was not only influential but also well organised. The King Commission was invoked to examine and address corporate governance in South Africa. The Commission, in its subsequent report, reasoned that business executives ought to be offered short-term employment contracts of up to maximum of five years. Executive contracts had to be renewable whenever and wherever circumstances mandated it (King Report, 1994, p. 14), but in compliance with the requirements of good corporate governance. In South Africa and abroad, especially in Europe, the evolving practice of offering management executives short-term employment contracts has grown slowly but surely, and in some sectors even quite rapidly. State-owned enterprises in South Africa offer executive leaders employment contracts of up to, but not exceeding five years. In exceptional circumstances executives in state-owned enterprises have been given service contracts of up to seven years. As the practice of time-framed employment contracting expands, businesses and other organisations are forced to account for the issue of whether offering executives fixed-term employment contracts is optimal for the general management of an organisation or institution. The global economic crises that triggered the global recession in late 2007, affected American and European business organisations and duly prompted them to seriously consider offering their executive leadership limited fixed-term employment contracts. 1.5. Conclusions. The emerging scenario of rapid transformation in the practice of offering employees short-termed rather than fixed-termed employment contracts warranted the following question: “Taking cognizance of the ongoing quest for good corporate governance, does the practice of offering executives in the public and private sector fixed shortterm or restricted long-term employment contracts promote or hinder their effective executive and managerial job performance in the institution under consideration?” The prospective study intended to contribute toward a better understanding of the ramifications of this key question in stable and unstable economic circumstances. 8.

(28) Employment patterns of senior executives in many organisations change as their conditions of employment vary. Judge King of South Africa, in the first King Report (1994, p.5) mooted the idea that top leaders in organisations and institutions had to be contracted for limited periods of employment as executives. Most South African organisations, especially government institutions, such as state-owned enterprises and parastatals, introduced the concept of offering their executive leaders fixed-term contracts. In private sector enterprises, however, only a limited number of companies offered executives fixed-term employment contracts. Historically, executive leaders in institutions had entered into long-term or up-to-retirement employment contracts. Consensus on the benefits and disadvantages implicit in the implementation of fixed short-term contacts in private and state-owned organisations has not emerged so far while there was uncertainty about the effects of the subsequent migration of employees that were offered either permanent employment contracts or contracts that lasted up to retirement, compared to those who had negotiated fixed short-term employment contracts. Opponents argued that enforced migration equated unilateral change of conditions of employment which required compensation for those affected. The most outspoken debate came from a school of thought that stated that the shortterm executive employment contract had an impact on the leadership styles, tasks and behaviours of executives. Enforced migration of executives during economic downturn was a very sensitive matter. Mankiw (2010, p. 569) stated that the natural rate of unemployment was determined by rates of job separation and job finding, which in turn was determined by the process of job search and the rigidity of real wage. Policymakers, in targeting unemployment, had to alter the structure of labour markets. The relationships between unemployment, job search, job separation, job finding, job migration and economic prosperity were extremely brittle and this reality made a comprehensive scientific study quite urgent, particularly with regard to the contracting tenures of executives with capacity to effectively manage organisations and institutions in the private and public sector.. 9.

(29) CHAPTER 2 LITERATURE SURVEY 2.1. Introduction. The prospective study examined the effect of length of term of employment contract on the effectiveness of executive’s performance, as evident from their achievement of executive tasks, executive behaviours and preference for leadership styles. This delimitation implied that a term of contract would act as independent variable while executive tasks, executive behaviours and leadership styles would be invoked as dependent variables. The review of literature promoted the intended research in seven ways. It, first of all, provided a general review of relevant and ongoing research that currently was undertaken elsewhere in the world in the discipline of psychology, its subdiscipline of health psychology and in other supporting disciplines. Secondly, it permitted the current researcher to share and familiarize fellow-scientists and readers of the thesis with comprehensive information regarding the scope of the prospective study and improved understanding of the everyday context in which the pending study would be undertaken. Thirdly, the review assisted the researcher in tracking, locating and delineating critical research questions that he needed to examine in the forthcoming study. Fourthly, the literature search exposed the researcher to excellent textbooks, research reports, published scientific articles, theses and other outstanding sources of knowledge that are locally and internationally available in the study field on the chosen study topic of the dissertation. Fifthly, access to indigenous and overseas contributions of repute provided the researcher with an opportunity to benchmark his own scientific design and research interventions against excellent research done elsewhere by acknowledged scientific trendsetters. The prospective researcher, in the sixth place, discovered valuable guidelines on conducting research of quality and the effective use of methodology. Seventhly, the researcher became sensitive to the availability of primary and supporting secondary sources. Alertness also allowed the examiner to spot and discard trivial and irrelevant scientific information from dubious sources forthwith.. 10.

(30) 2.2. Overview of Literature. The main focus analysed employment contracts with specific reference to longterm contracts and terms and conditions of executive tenure. Todd (2001, pp.45, 40-47, 93-98) defined an employment contract as a reflection of rights and obligations as consequences of a bargain struck between the employer and employee.. In. a. historic perspective,. two. legal systems demarcated. the. characteristics of the South African law on employment contract: Roman law, specifically the Roman-Dutch law version thereof, and the English law as origin of the principles of contracts between masters and servants. This textbook referred to information on the contents of formal employment contracts, especially in the South African context. Reda (2002) published the Compensation Committee Handbook. He covered the subtopic compensation in terms of current issues, basic responsibilities, and maximizing of results. Rosenbloom’s (2001) The Handbook of Employee Benefits included an extensive overview of employee benefits. Berger and Berger (Eds. 1999) also published a comprehensive book on compensation: in this source Clouser provided an outline of principal terms covered in employment agreements (pp. 393-400). The prospective research investigated the phenomenon of executive leadership in government as well as parastatal institutions, and within organisations from the private sector. O’Roark (2000, p. ix) stated that the term executive was derived from the Latin expression ex + sequi which literally means to follow-up or to pursue. It basically refers to a person who gets things done. In the organisational context, an executive or a top manager is someone who is hired and paid to be a leader of the institution. Barnard (1968, p. 217) mentioned that the job of the executive are, first to provide the system of communication; second, to promote the securing of essential efforts; and, third, to formulate and define purpose. Basically this means an executive must be effective in his work. Drucker (1991b, pp. 358-360) pointed out that to “effect” and “to execute” were related terms that aided the executive to get the right things done. Hambrick and Fukutomi (1991) commented on strategic leadership, by presenting information on the interface between, on the one hand, executive tenure and, on the other hand, the matters of organisational strategy and performance. Drucker (1969, pp. 24-36) asserted that executive effectiveness could be learned by acquiring principles, such as ”knowing thy self”, “personal 11.

(31) contribution”, “by using personal strengths”, “by doing first things first”, “doing one thing at a time”, and “by decision-making”. O’Roark (2000, pp. 3-9), on the other hand, presumed that executive effectiveness is determined by certain qualities such as pursuing a vision, motivation and action. She also maintained that executive effectiveness is about noticing what is important for achieving success in the short run and over longer periods of time. Finkelstein, Hambrick, and Cannella (2009, p. 24) remarked that growth and personal development, succession planning, strategic thinking, risk taking, and mobilising of resources were some of the activities that attributed to executive effectiveness. Gebelein, Lee, Nelson-Neuhaus, and Sloan (1999, pp. 87, 229, 269, 311, & 349) identified executive tasks and functions in their textbook Successful Executive’s Handbook: Development Suggestion for Today’s Executives. The four authors suggested some attributes that depicted executive success. They listed leadership qualities like strategic thinking, thinking and planning, interpersonal skills, communication, motivation and self-management. Covey (2004) published a book titled The 8th Habit, as a sequel to his book The Seven Habits of Highly Effective People. The latter book examined the qualities of effective managers. The newer book, The 8th Habit explained progression from being effective leaders to being great leaders. With respect to executive compensation, Melbinger’s (2003) textbook Executive Compensation was considered as benchmark for the prospective study. This source provided in-depth coverage of a variety of executive contracts, options, potential tax implications for the company and employee, compliance with security laws, health and benefits plans, multinational executive employment, and the issue of executive compensation in the event of mergers and acquisitions of companies. Berger and Berger’s handbook (Eds., 1999, pp. 55, 79-91, 327-333) is considered as “a state-ofthe-art guide to compensation strategy and design”. The two authors examined activities such as compensation trends, job analysis, evaluation and documentation, the. conduct. compensation,. of the. compensation relation. surveys,. between. variable. corporate. compensation,. culture. and. executive. compensation,. international compensation and terms of executive contracts in the 21 st millennium. The merit of Chingo’s (2004, pp. 76-77, 201) textbook lay in explaining executive compensation in the new era of accountability as consequence of good corporate 12.

(32) governance. This book was also considered a benchmark for the prospective study. In turn, Davies and Egde’s (Eds. 2004) book Executive Compensation was typified as “the professional guide to current issues and practices”. It, too, was singled out as a benchmark of the prospective study. Dependent variables examined in the study were associated with the phenomenon of general leadership, and more specifically, with executive leadership. Several primary sources of knowledge, mainly textbooks, on important aspects of this topic were retrieved, as were sources on leadership in general. Daft (1999, 2008a, & 2008b) examined the new epoch of management in “turbulent time”. Further textbooks on this topic included Byham, Smith, and Paese (2000), Giuliani (2002), Kouzes and Posner (1995), Owen (2005), and McCoy (2007). Other general sources related to this topic assessed qualities of leadership. Kotter (1999) wrote a book titled What Real Leaders Do, Blanchard and Miller. (2004) published their textbook. titled The Secret. What Great Leaders Know - and Do, while Welch (2001) produced Jack Welch: What I’ve Learned Leading a Great Company and Great People. Zigarmi, Blanchard, O’ Connor and Edeburn (2005) published The Leader Within. Other relevant titles included The Trusted Leader by Galford and Drapeau (2002), Hesselbein, Goldsmith and Somerville’s (2002) Leading for Innovation, Leading At the Top, by Hook (2006), Pathways to Outstanding Leadership by Mumford (2006), The Naked Leader by Taylor (2003), Lead to Succeed by Turner (2002), as well as The Extraordinary Leader, by Zinger and Folkman (2002). Notable discussions on leadership were contained in Good to Great (2001) by Collins and The Daily Drucker (2004) by Drucker and Marciariello (2004), as well as in The Jack Welch Lexicon of Leadership, authorized by Krames. Trompenaars and Hamden-Turner described 21 leaders in the 21st century (2002) and how these innovative leaders managed the digital era. Drucker (1974) discussed the topic of management in terms of assignments, personalities and the eventual rise to top management. He published The Frontiers of Management (1986), with the subtitle Where Tomorrow’s Decisions are Being Shaped Today. Armstrong, (1994) examined the issue of “Howto –even- be- a –better- Manager”. McCauley, Moxley and Van Velsor (Eds., 1998, pp. 31-65) published the Handbook of Leadership Development, in which, in addition to other matters, they discussed the 360-degree approach as feedback procedure for rating managerial performance. 13.

(33) Bass and Avolio’s (1994, p. 3) publication investigated improved organisational effectiveness through transformational leadership. They explained relationships between transactional and transformational leadership. Transformational leaders motivate others to do more than they originally intended to and often even more than they thought possible. They tend to set more challenging expectations and typically achieve higher performances. In reality, transformational leadership is an extension of transactional leadership. The transactional leader emphasises the transaction or exchange that takes place amongst leaders, colleagues and followers in companies. This exchange is based on leader’s discussions with fellow-employees on what is required and specifying the conditions and rewards that these participants will receive if they fulfil job requirements. Transformational leaders, in contrast, do more with colleagues and followers than set up examples of exchanges agreements. They behave in ways that achieve superior results by employing one or more of the “Four Is”. Liao and Chuang (2007, pp. 1006-1016) did a multilevel, multisource study of building long-term service relationships. At the individual level, transformational leadership was positively linked to customer relationships while customers expressed their desire and intention to maintain a long-standing service-relationship. Transformational leaders attributed their success to application of the four “Is” referred to earlier in this paragraph: Idealised Influence, Inspirational Motivation, Intellectual Stimulation and Individualised Consideration. Kuhnert (in Bass & Avolio, 1994, p.10) noted that the process of delegation was used to develop transformational leadership in people. This leadership style was equated with team and organisational decision making, strategies for change and improvement, as well as with corporate reorganisation of human resources. Liao and Chuang (2007) interpreted the four “Is” as (a) charisma, or behaviours that promote trust among followers and result in identification with leaders, (b) inspirational motivation, or articulation of a compelling vision for the future that inspires followers, (c) intellectual stimulation, or encouraging followers to challenge assumptions, reframe problems and take risks, and (d) individualized consideration, or tending to each follower’s needs on a one-to-one basis.. Herold, Fedor, Caldwell and Liu (2008) conducted a. multilevel examination of the effects of transformational and change leadership on employee’s commitment to change. Lim and Ployhart (2004, pp. 610-611) studied the relationship between transformational leadership and the five-factor model as 14.

(34) well as team performance in typical and maximal contexts. In a typical context, efficiency and quality of team action during training was emphasized. In a context of maximum performance the follower knows that he or she is being evaluated, is instructed to produce, accepts maximal performance and also accepts that the task is of short duration if maximization of performance is to be achieved (p. 612). In practice only the context changes. The authors explained transactional leadership as contingent upon reinforcement since leader-follower relationships are based on a series of exchanges or bargains. Some concerns over and issues related to leadership were raised. Byham, Smith and Paese (2002, pp. 3, 15-18, 61-65) pointed to a growing shortage of leadership and reasoned for the development of acceleration pools to address their concern. The authors focused on identifying, developing and retaining leadership talent. Leaders of the future ought to embrace change, think globally and often have to manage people in less time with fewer resources. Daft (1999, pp. 36-41,102-104) noted the importance of learning leadership by learning to lead and by learning about leadership. He compared management and leadership, and discussed the trait, behavioural as well as dyadic approaches. His assessment also covered Fiedler’s contingency model, Hersey and Blanchard’s situational theories, the path-goal theory and Vroom-Jago’s contingency approaches to leadership. Daft referred to the role of leadership in terms of multiculturalism and work place diversity. Deschamps (2008, pp. 55-56, 93-94) concentrated on innovative leaders, highlighting different types and stages of innovation, for example, bottom-up/top-down, front-end/back-end-, and the different characteristics and styles leaders of innovation. Deschamps remarked that innovative leaders shared six attributes: mix of emotion and realism, acceptance of uncertainty, risks and failure, a high degree of passion for innovation and a desire to share innovative ideas with others, willingness to proactively search for ideas and experiment with them, the courage to stop unsuccessful projects and the knowledge to know when to persist and a talent of building, as wells as attracting and retaining innovators. Hesselbein, Goldsmith and Somerville (2002, pp.11-39, 73) focused on how innovative people should be led.. They elaborated on how to create an. environment which enhances innovation and leadership. Galford and Drapeau (2002, pp. 3-20) delineated some characteristics of a trusted leader and stated that trust is the most valuable asset of any organisation.. They believe that trust is 15.

(35) acquired where ever employees and leaders work towards common goals. They also identified the tools of building both personal and organisational trust. Owen (2005, pp. xviii, 52) approached the subject of leadership from a leadership skills perspective. He listed numerous skills which he believed are key requirements that enable leaders to be effective. These skills, he maintained, are essential tasks of a leader. He asserted that people value the following qualities of any leader at the top of an organisation: ability to motivate others, providing vision, honesty and integrity, decisiveness and the ability to handle crises. He corrected the leadership practice of leading subordinates from the middle of the organisation, with the focus on people, being positive and being professional. Zigarmi et al. (2005, pp. 21-23, 65-69, 151153) concentrated on leadership and change by outlining the individual’s perception, as leader, of change and learning more about oneself in leading others. Turner (2002, p. 35) mainly based his research on entrepreneurial leadership. He defined entrepreneurial leadership as “instilling confidence to think, behave and act with entrepreneurship in the interest of fully realising the intended purpose of the organisation to the benefit of all stakeholders.” He stated that ultimate mastering of the principles and practises of entrepreneurial leadership is a process that covers three. elements,. namely. personal. development,. team. effectiveness. and. organisational change. He adds essential characteristics of entrepreneurial leadership to the list: integrity, patience, enthusiasm, courage, communication, energy, support, attitude and reliance on teamwork. Turner also maintained that the foundation of business success is grounded in developing and practising entrepreneurial characteristics. Trompenaars and Hampden-Turner (2002, pp. 1319), in collaboration with their colleagues, proposed and ratified that the essence of leadership lay in the resolutions of dilemmas. By analysing the personal experiences of a diverse group of leaders, they were able to provide guidance and allow others to observe, evaluate and learn from their successful leadership behaviours. Giuliani (2002, pp. 29-34, 40-46, 52, 65, 98, 100, 300) emphasised what was practically possible when leading a large diverse organisation. He explained how leaders ought to behave when they face pressure. He believed that all leaders were influenced by people that they had admired and that personal experience was of paramount importance when dealing with problems. Taylor (2003, pp.19-23) attempted to elaborate on what constitutes success in leadership. He remarked that every 16.

No results found