USASBE2004proceedings-Buntzman

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MBA PERCEPTIONS OF ENTREPRENEURIAL

CEOS: A PILOT STUDY

By

Gabe Buntzman

And

Richard D. Parker

Western Kentucky University

Submitted to the Corporate Entrepreneurship track of the 2004 United States Association forSmall Business and Entrepreneurship Conference.

Contact:

Gabe Buntzman ([email protected])or

Richard D. Parker ([email protected])

Department of Management

Gordon Ford College of Business

Western Kentucky University1 Big Red Way

Bowling Green, KY 42101

Phone: 270-745-5329 (Buntzman)270-745-5325 (Parker)

Fax: 270-745-6376
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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MBA Perceptions of Entrepreneurial CEOs:

a Pilot Study

ABSTRACT

This paper examines perceptions of MBA students regarding the leadership behaviors of

entrepreneurial CEOs utilizing Hofstedes cultural dimensions research. This paper is a pilotstudy and calls for continued research on this specific topic. Seeking to determine why

entrepreneurial CEOs behave or exercise certain mannerisms, this study sought to determine how

a select group of MBA students perceived CEO behavior. MBA students from American and/orEuropean backgrounds were compared with students from non-Western backgrounds. The

researchers emphatically stress this is a pilot study only. It is the hope of the researchers that the

knowledge gained in this brief study may serve as the basis for future research in this area tobetter understand the perceptions of CEO behavior especially when considering factors of gender

and ethnicity.

INTRODUCTION

This small pilot study takes the form of a quasi-qualitative field experiment. It seeks an

answer to the questions "What do MBA students/prospective employees believe make anentrepreneurial CEO effective? Are there background characteristics of the MBAs themselves

that seem to influence what they see as effective and ineffective behaviors?"

These are questions worth asking. The process of hiring MBAs and other employees is

often very competitive, and knowing how these prospective employees perceive their would-be

leaders might help the latter in positioning themselves to make the best of their recruiting efforts.Perhaps more importantly, it is recognized that employees search out role models and are

socialized in organizations by interacting with others. This knowledge might give organizationsthe opportunity to reinforce the positive and dampen the negative inclinations espoused by their

subordinates. Finally, in today's global interdependent economy where workforce diversity is a

given, it may be useful to know whether there is a gender or cultural basis for differing views ofwhat makes for a successful entrepreneurial executive.

Theory.

Gender studies in management have had mixed results. Rarely do studies of leader

effectiveness find differences in leader effectiveness between men and women (Boldry, Wood &

Kashy, 2001, Kawakami & White, 2000, Altany, 1993). On the other hand, when it comes tostyles, women leaders are sometimes found to be more nurturing and supportive, more concerned

for relationships (Altany, 1993).

From cultural differences arise both opportunities and challenges for organizations. The

role of leadership within organizations and how cultural differences makes an impact regarding

leader-follower relations serves as a significant focus of study (Dorfman & Howell, 1997,Steiner, 1988).

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The Hofstede studies (1980) have, since their publication, served as a template to map out

some of these cultural differences to try to understand and manage them appropriately. Thebasic Hofstede dimensions are by now quite well known: individualistic/collectivist,

feminine/masculine; high/low power distance, high/low uncertainty avoidance;

Confucian/dynamic.

In this exploratory, small-scale study we hypothesized that perceptions of effective

entrepreneurial CEO characteristics in terms of Hofstede's cultural dimensions are associated

with both gender and ethnicity. Given that gender and cultural impacts on leadership have beenevaluated in previous studies (e.g. Kawakami & White, 2000, Boldry, Wood & Kashy, 2001 and

Steiner, 1988), it is our assertion that the associative impact on leadership perceptions, given

these factors is both valid and relevant to the study.

Also the concepts of power distance and charisma are relatively important in cultural

consideration. Studies have indicated that Western and non-Western cultures hold differentopinions and approaches regarding charisma and its relation to high and low power distances

between leaders and followers (Dorfman & Howell, 1997). These concepts hold significancewhen considering that MBA students represent a broad spectrum of multinational interests,

citizenships and values.

HYPOTHESES

Two sets of hypotheses are presented. The first set concerns gender as a basis for

perceptions of entrepreneurial CEO effectiveness. The second set concerns ethnicity as a basis

for perceptions of entrepreneurial CEO effectiveness.

Gender and perceptions.

The management literature makes clear that a wide variety of leadership styles may be

effective in different circumstances (e.g., House, 1971, Fiedler, 1967, Altany, 1999) and neithermen nor women can be expected to adhere to stereotypical behaviors. Nevertheless, as noted

above there is evidence that more women nurture and show consideration for employees as

compared to men (Kawakami & White, 2000, Boldry, Wood & Kashy, 2001). In terms of the

Hofstede dimensions we hypothesize that in comparing male and female MBA students:

H1a: Male MBA students on average cite more individualistic traits of effective

entrepreneurial CEOs.H1b: Female MBA students cite more collective traits of effective entrepreneurial CEOs.

In terms of Masculinity traits, i.e., achievement oriented, it is hypothesized that there is

no difference between men and women. That is to say, both are results oriented.H2a: There is no difference in the perceived masculinity trait of effective entrepreneurial

CEOs between men and women.

As regards femininity, the nurturing and caring element, research on leadership styles of

female managers indicate that there may be a greater tendency for women to exhibit caring and

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supportive behaviors (Rosener, 1990). Assuming they would expect these kinds of behaviors to

be modeled in their effective entrepreneurial CEOs leads to.

H2b: Female MBAs more often identify feminine Hofstede traits in effective

entrepreneurial CEOs.

As regard power distance, consistent with an individualistic orientation and the need,perhaps, for many entrepreneurs to act on their own (and consistent with H1 above),

H3a: male MBAs cite high power distance more than female MBAs as a trait associated

with effective entrepreneurial CEOs.Similarly, female MBAs, to the extent they are more group and egalitarian oriented might

perceive low power distance as a more effective trait of CEOs leading to

H3b: Female MBAs tend to cite low power distance as traits of effective entrepreneurialCEOs.

We do not offer any hypotheses regarding male/female differences in perceivedentrepreneurial CEO effectiveness based on high or low uncertainty avoidance or high or low

Confucianism/Dynamism.

Ethnicity and perceptions.

Many empirical studies have demonstrated the existence of the differences in cultural

values at the societal level including Hofstede (1980) and there has been no shortage of studiesthat have sought to apply the societal-level differences in values to specific situational/behavioral

contexts. We take the following propositions as axiomatic in formulating our hypotheses

concerning the relationship between ethnicity and perceptions of entrepreneurial CEOeffectiveness traits on the basis of prior work based on the Hofstede framework.

We offer the following hypotheses concerning the relationship between ethnicity and perceptions

of entrepreneurial CEO effectiveness traits based on the above propositions.

H4a: E-As (subjects from European, North American and European-derived societies)

perceive individualism to be a key trait of effective entrepreneurial CEOs.

H4b: Non-E-As perceive collectivism to be a key trait of effective entrepreneurial CEOs.

H5a: E-As perceive masculinity (achievement-orientation) to be a key trait of effectiveentrepreneurial CEOs.

H5b: Non-E-As perceive femininity (nurturing) to be a key trait of effective

entrepreneurial CEOs.H6a: E-As perceive low power distance (egalitarianism, power-sharing) to be a key trait

of effective entrepreneurial CEOs.

H6b: Non-E-As perceive high power distance (power-concentrating, aloofness) to be akey trait of effective entrepreneurial CEOs.

H7a: E-As perceive low uncertainty avoidance (risk-taking propensity) to be a key trait

of effective entrepreneurial CEOs.H7b: Non-E-As perceive high uncertainty avoidance (low risk-taking) to be a key trait of

effective entrepreneurial CEOs.

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H8a: E-As perceive dynamism (short time horizon, a sense of urgency) to be a key trait

of effective entrepreneurial CEOs.H8b: Non-E-As perceive a Confucian mind-set (willingness to be deliberate, patience,

respect for tradition) to be a key trait of effective entrepreneurial CEOs.

METHODSample.

Seventeen students in the first author's elective MBA class titled "CEOs and othermanagers." There were eight were males and nine females enrolled, nine E-As and eight from a

combination of Asia and Latin America. All of the subjects were employed either full or part-

time.

Data collection.

The class completed an assignment at the end of the course to answer the open-ended

question "What makes an effective entrepreneurial CEO?" The students prepared for theassignment in several ways. They read and discussed The Warren Buffet CEO by Robert P.

Miles (2001). The text is a set of biographical profiles of CEOs of companies that were acquiredby Berkshire Hathaway, the Buffet holding company. Each MBA student also read a self-

selected instructor-approved biography or autobiography of a business or social leader for a class

presentation and paper.

Finally, local entrepreneurial leaders were invited to the class primarily to discuss their

motivations, values, lifestyles and so on, with their business strategies and practices of secondaryinterest. Representative of the guest executives were a woman who had built her own consulting

firm after working successfully for a Fortune 500 firm in HRM and a manufacturingentrepreneur who started his own international business building custom material handling

equipment. While the instructor provided a set of leading questions for the interviews the

students were free to ask any of their own, within the bounds of decorum.

Data analysis.

The goal of the analysis was to identify frequency of the student-authors references to theHofstede values in their analyses of factors associated with effective entrepreneurial CEOs. This

was accomplished with a double-blind reviewed process by the second author using a coding

scheme jointly developed by the first and second authors. The first author coded themanuscripts as a control. The inter-coder correlations averaged 0.65 with seventy percent of the

correlations significant at p


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RESULTS

The one-tailed t-tests were generally not significant, a not-unexpected result given the

extremely small sample size. Interestingly, the majority of between-group differences, while not

significant, were in the expected directions. Tables recording examples of all expressions areavailable from the researchers by request.

Results for H1a: Male MBA students on average cite more individualistic traits ofeffective entrepreneurial CEOs and H1b: Female MBA students cite more collective traits of

effective entrepreneurial CEOs. For men the individualistic expressions exceeded the

collectivist expressions by 4.62 (sd 11.6) whereas for the women the collectivist expressionsmarginally exceeded the individualistic expressions (-0.67, sd 2.92). This difference approached

significance, (t=1.32, 15 df, p


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Results for H6a: E-As perceive low power distance (egalitarianism, power-sharing) to

be a key trait of effective entrepreneurial CEOs and for H6b. Non-E-As perceive high powerdistance (power-concentrating, aloofness) to be a key trait of effective entrepreneurial CEOs.

For E-As the citations of low power distance exceeded those for high power distance with a

mean value of -0.56 (sd 4.21) while for non-E-As the high power distance expressions exceeded

the low power distance expressions by a small amount, 0.63 (sd 3.29). This difference was notsignificant but was in the expected direction.

Results for H7a: E-As perceive low uncertainty avoidance (risk-taking propensity) to bea key trait of effective entrepreneurial CEOs and H7b: Non-E-As perceive high uncertainty

avoidance (low risk-taking) to be a key trait of effective entrepreneurial CEOs. For E-As the

citations of high uncertainty avoidance (risk aversion) exceeded those for low uncertaintyavoidance (risk-taking) with a mean difference of -0.44, sd 3.20. For the non-E-A subjects the

values tended slightly more toward risk-taking. These results were not in the expected direction.

Results for H8a: E-As perceive dynamism (short time horizon, a sense of urgency) to be

a key trait of effective entrepreneurial CEOs while H8b: Non-E-As perceive a Confucianmind-set (willingness to be deliberate, patience, respect for tradition) to be a key trait of effective

entrepreneurial CEOs. For E-As the citations of Confucianism exceeded those for dynamism,2.11 (sd 3.26). This was contrary to the direction expected. In the non-E-A group the Confucian

expressions exceeded the dynamism expressions by a slightly larger amount, 3.63 (sd 4.23).

This difference did not approach significance but was in the expected direction.

DISCUSSION

It would be less than prudent to offer an extensive discussion of the results of this small-

sample quasi-qualitative study when there have been so few statistically significant results

produced. Nevertheless, some observations may be cautiously tendered.

First, the majority of the data were in the expected direction. Being careful not to claim

support for the hypotheses, nevertheless there does seem to be support for future research of theproposition that a gender difference in the way that the Hofstede values are expressed does in

fact exist. If future research bears out the implications of this pilot study, the "ideal"

entrepreneurial CEOs for male subordinates might share the following characteristics: highindividualism, a high achievement (masculine) orientation and high power distance (social or

status difference) between himself and his subordinates.

In contrast the ideal entrepreneurial CEO for females might be someone who is morecollectivist (inclusive) in his or her orientation, more feminine (nurturing), and comfortable with

a lower power distance, i.e., more egalitarian. Similarly, if future research were to be consistentwith this pilot study the ideal entrepreneurial CEO for E-As would be individualistic, feministic,low power distant, conservative (high uncertainty avoiders) and deliberate (Confucian). Non-

EAs' ideal CEOs would be collectivist, feminine, high power distance, not especially risk averse

and deliberate (Confucian). Stepping back from the analysis a bit, it might be suggested thatthere is more in common between the views of the ideal entrepreneurial CEO between EAs and

non-EAs than there is between the views of men and women.

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PRACTICAL IMPLICATIONS

With the caveat once again that this pilot study "proves" nothing, the practical

implications if the research is upheld in the future include the following: men and women may

respond to leaders differently based on the latter's consistency with the former's expectations of

their boss's conformity to the "Hofstede ideals." Personnel managers, leaders, mentors andemployees all would want to take into account these disparities in structuring leadership

initiatives, management development programs, career paths and so forth. In managing

internationally diverse work forces, leaders of entrepreneurial organizations might do well totake into consideration how their employees might perceive them and perhaps modify their

behaviors accordingly. For example, the American CEO might try to temper his or her

individualistic and egalitarian style to fit the expectations of subordinates in other countries.

CONCLUSIONS

There is really only one conclusion to be drawn from this pilot study. More research on

the effects of gender and cultural differences on the perceptions of entrepreneurial CEOeffectiveness may be warranted. The limitations of a small sample size, combining Latin

American and Asian responses in the same group and only suggestive results must be noted.

SELECTED REFERENCES

Altany, D.R. 1993. If women ran industry. Industry Week, 242(18), September 20, 1993, 40-41.

Boldry, J., Wood, W. & Kashy, D.A. 2001. Gender stereotypes and the evaluation of men and

women in military training. Journal of Social Issues. 57(4), December, 689-705.

Dorfman, P.W. & Howell, J.P. 1997. Leadership in Western and Asian countries:Commonalities and differences in effective leadership processes across cultures.

Leadership Quarterly, 8(3), Fall, 233-264.

Fiedler, F.E. 1967. A theory of leadership effectiveness. New York: McGraw-Hill.

Hofstede, G. 1980. Culture's consequences: International differences in work related values.Beverly Hills, CA: Sage.

House, R.J. 1971. A path-goal theory of leader effectiveness. Administrative Science Quarterly,

16: 321-339.

Kawakami, C. & White, J.B. 2000. Mindful and masculine: Freeing women leaders from theconstraints of gender roles. Journal of Social Issues, 56(1), Spring, 49-63.

Rosener, J. 1990. Ways women lead. Harvard Business Review. November-December, 119-

125.

Steiner, D.D. 1988. Value perceptions in leader-member exchange. Journal of Social

Psychology, 128(5), October, 611-618.

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