PhD - Mid Candidature Review

www.monash.edu.au

Mid-Candidature Review 11/05/2011

The relationship between servant leadership and job satisfaction:

The moderating roles of the decision making process and organisational structure.

Nathan Eva

Supervisors: Dr. Sen Sendjaya Dr. Daniel Prajogo

www.monash.edu.au

2

Servant Leadership and Job Satisfaction

• There is a clear link between servant leadership and employee job satisfaction.

– (Cerit, 2009; Jaramilo et al., 2009)

• Literature has largely ignored the black box between leadership and job satisfaction.

– (Griffith, 2004; Laub, 1999; Miears, 2004)

• Empowered employees are more satisfied with their employment.

– (Jiang, Li-Yun & Law, 2011; Ugboro & Obeng, 2000)

• Empowerment is drawn from three distinct areas:– Leadership;– Motivational; and– Structural. – (Menon, 2001; Tymon, 1988)

www.monash.edu.au

3

Decision Making Process and Job Satisfaction

• Drawing upon the Upper Echelon theory, leaders choose their own decision making style.

– (Hambrick & Mason, 1984; Hambrick, 2007)

• Two contrasting styles of decision making: Involved and Dominant.

– (Black & Gregersen, 1997)

• Leaders who are more involved in the decision making process can better engage their employees.

– (Castaneda & Nahavandi, 1991; Kezar, 2001; Weisbord, 2004; Williams, 1998)

• Employees who feel engaged have higher levels of job satisfaction as well as lifting their performance.

– (Gardell, 1977; Kearney & Hays, 1994; Parnell & Menefee, 1995)

www.monash.edu.au

4

Decision Making Process: Involvement and Dominance

Hypothesis 1: The level of leader involvement in the decision making process positively moderates the relationship between servant leadership and job satisfaction whereby the more a servant leader is involved in the decision making process, the higher levels of elicited employee job satisfaction.

Hypothesis 2: The level of leader dominance in the decision making process negatively moderates the relationship between servant leadership and job satisfaction whereby the more a servant leader is dominant in the decision making process, the lower levels of elicited employee job satisfaction.

Hypothesis 3: The positive relationship between servant leadership and job satisfaction will be moderated by both involvement and dominance such that the positive relationship between servant leadership and job satisfaction will be stronger when involvement is high and dominance is low.

www.monash.edu.au

5

Organisational Structure and Job Satisfaction

• Structural variables of Formalisation and Centralisation. – (Provan & Skinner, 1989)

• High levels of formalisation and centralisation have constantly been proven to reduce job satisfaction amongst employees.

– (Aiken & Hage, 1966; Lambert et al., 2006; Pool, 1997; Walter & Bruch, 2010)

• As a servant leader’s greatest strength is their interactions with their employees, the higher levels of structure in an organisation will lower the impact servant leadership has on employees and therefore their job satisfaction.

– (Andersen, 2009; Cunningham, 2004; Wright & Pandey, 2010)

www.monash.edu.au

6

Organisational Structure:Formalisation and Centralisation

Hypothesis 4: The level of organisation formalisation negatively moderates the relationship between servant leadership and job satisfaction whereby the more formalised the organisation the lower levels of elicited employee job satisfaction.

Hypothesis 5: The level of organisation centralisation negatively moderates the relationship between servant leadership and job satisfaction whereby the more centralisation the organisation the lower levels of elicited employee job satisfaction.

Hypothesis 6: The positive relationship between servant leadership and job satisfaction will be moderated by both formalisation and centralisation such that the positive relationship between servant leadership and job satisfaction will be stronger when formalisation and centralisation are low.

www.monash.edu.au

7

DMP, Organisational Structureand Job Satisfaction

• Combines the leadership, motivational and structural approaches to empowerment.

– (Menon, 2001; Tymon, 1988)

• Having low levels of formalisation in an organisation can increase leader involvement in the DMP as employees look to the leader, not to the manual to make decisions.

– (Howell & Dorfman, 1981; Shamir & Howell, 1999; Wright & Pandey, 2010)

• Higher levels of centralisation in an organisation leads to a lack of flexibility, thus leaders will tend to make the decisions independently creating institutionalised dominance thus decreasing job satisfaction.

– (Black & Gregersen, 1997; Davis et al., 2009;)

www.monash.edu.au

8

Decision Making Process and Organisational Structure

Hypothesis 7: The positive relationship between servant leadership and job satisfaction will be moderated by both involvement and formalisation such that the relationship between servant leadership and job satisfaction will be strongest when involvement is high and formalisation is low.

Hypothesis 8: The positive relationship between servant leadership and job satisfaction will be negatively moderated by both dominance and centralisation such that the relationship between servant leadership and job satisfaction will be weakest when dominance and centralisation are high.

www.monash.edu.au

9

Methodology

• There have been reservations in behavioural research of using a solitary data collection method.

– (Brutus & Duniewicz, 2012; Dial, 2006; Yukl, 1989)

• Therefore, this study will draw upon both experiments and surveys.

– (Van Ginkel & Van Knippenberg, 2012; Van Knippenberg & Van Knippenberg, 2005)

• Experiments were used to draw causal conclusions before the organisational survey was undertaken.

– (Rus et al., 2010)

• Further bolsters confidence in the findings.– (Denzin, 1989; Rus, et al., 2012)

www.monash.edu.au

10

Study 1 – Experiment

• 2 x 2 x 2 x 2 between-subjects design.– (Charness, Gneezy & Kuhn, 2012)

• 16 differing vignette case studies.• Pilot studies confirmed the manipulations.• Sample yielded 975 respondents which exceeds the

minimum of 40 per cell.– (Myers and Hansen, 2011)

• Post hoc analysis of the power exceeds 0.80 threshold.– (Tharenou et al., 2007)

www.monash.edu.au

11

Study 2 – Organisational Survey

• Sample comprised of middle managers who rated the leadership and decision making style of their CEO/GM/MD.

• Further, the respondents rated their job satisfaction and the level of organisational structure within their organisation.

• 1,500 questionnaires were mailed out.• 336 questionnaires were returned (22.4%), well above the

200-250 recommended. – (Hair et al., 2010; Maxwell, 2000)

www.monash.edu.au

12

H1 & 2

Decision Making Process – Study 1

High Low3

3.2

3.4

3.6

3.8

High Dominance

Low Dominance

Involvement

Job

Satis

facti

onHigh Low

3

3.2

3.4

3.6

Involvement

Dominance

Level of DMP

Job

Satis

facti

on

H3

Dominance

Involvement High Low

High 3.32 3.63

Low 3.25 3.21

Decision Making Process High Low

Involvement 3.47 3.23

Dominance 3.29 3.42

www.monash.edu.au

13

H1

Decision Making Process – Study 2

low high

3

3.5

4

4.5

5

low Involvement

high Involvement

Servant Leadership

Jo

b S

aits

fac

tion

(Aiken & West, 1991; Dawson & Richter, 2008)

www.monash.edu.au

14

H4 & 5

Organisational Structure – Study 1

H6

High Low3

3.2

3.4

3.6Formalisation

Centralisation

Organisational Structure

Job

Sat

isfa

ctio

n

High Low2.8

3

3.2

3.4

3.6

3.8High Formalisation

Low Formalisation

CentralisationJo

b S

atis

fact

ion

Formalisation

Centralisation High Low

High 3.05 3.22

Low 3.48 3.68

Organisational Structure High Low

Formalisation 3.26 3.44

Centralisation 3.13 3.58

www.monash.edu.au

15

H6

Organisational Structure – Study 2


Low High3

3.5

4

4.5

5

(1) Low Form Low Cent

(2) High Form Low Cent

(3) Low Form High Cent

(4) High Form High Cent

Servant Leadership

Job

Satis

facti

on

www.monash.edu.au

16

DMP & Organisational Structure – Study 1

H7 H8

High Low2.8

3

3.2

3.4

3.6

3.8High Formalisation

Low Formalisation

Leader Involvement in the Decision Making Process

High Low2.8

3

3.2

3.4

3.6

3.8High CentralisationLow Centralisation

Leader Dominance in the Decision Making Process

Centralisation

Dominance High Low

High 3.00 3.58

Low 3.27 3.35

Involvement

Formalisation

High Low

High 3.38 3.57

Low 3.15 3.32

www.monash.edu.au

17

H7



Low High3

3.5

4

4.5

5

(1) Low Inv Low Form

(2) High Inv Low Form

(3) Low Inv High Form

(4) High Inv High Form

Servant Leadership

Job

Satis

facti

on

www.monash.edu.au

18

H8



Low High2.5

3

3.5

4

4.5

5

(1) Low Dom Low Cent

(2) High Dom Low Cent

(3) Low Dom High Cent

(4) High Dom High Cent

Servant Leadership

Job

Satis

facti

on

www.monash.edu.au

19

Preliminary Discussion

• First and foremost it reiterates the strong relationship servant leadership has with job satisfaction.

• Creates context for the servant leader job satisfaction relationship.

• High levels of involvement in the decision making process strengthen the relationship between servant leadership and job satisfaction.

• Low levels of organisational structure strengthen the relationship between servant leadership and job satisfaction.

www.monash.edu.au

20

Preliminary Discussion

• Under the condition of high involvement, high levels of formalisation was found to positively impact the relationship between servant leadership and job satisfaction as well as the hypothesised high involvement low formalisation interaction.

• The relationship between servant leadership and job satisfaction was weakest when dominance and centralisation were low not when they were high as hypothesised.

• However, the servant leadership job satisfaction relationship was strongest when dominance was low and centralisation was high.

www.monash.edu.au

21

Timeline

Activity January February March April May June July August September October November December

2012

Literature Review

General Discussion

Conclusion

Revisions

2013Revisions

Submission

Writing of Journal Articles

www.monash.edu.au

22

Thank You

• Questions?

• Suggestions?

• Comments?

www.monash.edu.au

23

References

Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting results. Newbury Park, CA.: Sage.

Aiken, M., & Hage, J. (1966). Organizational alienation: A comparative analysis. American Sociological Review, 31(4), 497-507.

Andersen, J. A. (2009). When a servant-leader comes knocking. Leadership & Organization Development Journal, 30(1), 4.

Black, J. S., & Gregersen, H. B. (1997). Particpative decision-making: An integration of multiple dimensions. Human Relations, 50(7), 859-878.

Brutus, S., & Duniewicz, K. (2012). The many heels of achilles: An analysis of self-reported limitations in leadership research. The Leadership Quarterly, 23(1), 202-212.

Castaneda, M., & Nahavandi, A. (1991). Link of manager behavior to supervisor performance rating and subordinate satisfaction. Group & Organization Studies, 16(4), 357.

Cerit, Y. (2009). The effects of servant leadership behaviours of school principals on teachers' job satisfaction. Educational Management Administration & Leadership, 37(5), 600-623.

Charness, G., Gneezy, U., & Kuhn, M. A. (2012). Experimental methods: Between-subject and within-subject design. Journal of Economic Behavior & Organization, 81(1), 1-8.

Cunningham, R. (2004). Servant leadership - an introduction. Global Virtue Ethics Review, 5(3), 2.

Davis, J. P., Eisenhardt, K. M., & Bingham, C. B. (2009). Optimal structure, market dynamism, and the strategy of simple rules. Administrative Science Quarterly, 54(3), 413-452.

Dawson, J. F., & Richter, A. W. (2006). Probing three-way interactions in moderated multiple regression: Development and application of a slope difference test. Journal of Applied Psychology, 91(4), 917-926.

www.monash.edu.au

24

References

Denzin, N. K. (1989). The research act: A theoretical introduction to sociological methods (3rd ed.). Englewood Cliffs, N.J.: Prentice Hall.

Dial, D. (2006). Students' perceptions of leadership and the ways in which leadership influences the development of student leaders. Master's thesis, Louisiana State University.

Gardell, B. (1977). Autonomy and participation at work. Human Relations, 30(6), 515-533.

Griffith, J. (2004). Relation of principal transformational leadership to school staff job satisfaction, staff turnover, and school performance. Journal of Educational Administration, 42(3), 333-356.

Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Upper Saddle River, N.J.: Pearson Prentice Hall.

Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of Management Review, 32(2), 334-343.

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193-206.

Howell, J. P., & Dorfman, P. W. (1981). Substitutes for leadership: A test of a construct. Academy of Management Journal, 24(4), 714-728.

Jaramillo, F., Grisaffe, D. B., Chonko, L. B., & Roberts, J. A. (2009). Examining the impact of servant leadership on sales force performance. Journal of Personal Selling & Sales Management, 29(3), 257-275.

Jiang, J. Y., Li-Yun, S., & Law, K. S. (2011). Job satisfaction and organization structure as moderators of the effects of empowerment on organizational citizenship behaviour: A self-consistency and social exchange perspective. International Journal of Management, 28(3), 675-693.

www.monash.edu.au

25

References

Kearney, R. C., & Hays, S. W. (1994). Labor-management relations and participative decision making: Toward a new paradigm. Public Administration Review, 54(1), 44-51.

Kezar, A. (2001). Investigating organizational fit in a participatory leadership environment. Journal of Higher Education Policy & Management, 23(1), 85-101.

Lambert, E., Hogan, N., & Allen, R. (2006). Correlates of correctional officer job stress: The impact of organizational structure. American Journal of Criminal Justice, 30(2), 227-246.

Laub, J. (1999). Assessing the servant organisation: Development of the servant organizational leadership assessment (sola) instrument. Unpublished doctorial dissertation, Florida Atlantic University, Boca Raton, FL.

Maxwell, S. E. (2000). Sample size and multiple regression analysis. Psychological Methods, 5(4), 434-458.

Mayer, B. W., Dale, K., & Fox, M. L. (2011). Processes for developing simulation self-esteem. Business Education Innovation Journal, 3(1), 65-76.

Menon, S. T. (2001). Employee empowerment: An integrative psychological approach. Applied Psychology: An International Review, 50(1), 153-180.

Miears, L. D. (2004). Servant-leadership and job satisfaction: A correlational study in Texas education agency region x public schools. Ed.D. 3148083, Texas A&M University - Commerce, United States -- Texas.

Moyes, G. D., & Redd, T. C. (2008). Empirical analysis of factors influencing the level of job satisfaction of Caucasian and Hispanic accounting professionals. International Business & Economics Research Journal 7(10), 21-42.

Myers, A., & Hansen, C. H. (2011). Experimental psychology (7th ed.). Belmont, CA: Wadsworth Publishing.

www.monash.edu.au

26

References

Parnell, J. A., & Menefee, M. (1995). The business strategy-employee involvement contingency: The impact of strategy-participation fit on performance. American Business Review, 13(2), 90.

Pool, S. W. (1997). The relationship of job satisfaction with substitutes of leadership, leadership behavior, and work motivation. Journal of Psychology, 131, 271-283.

Provan, K. G., & Skinner, S. J. (1989). Interorganizational dependence and control as predictors of opportunism in dealer-supplier relations. Academy of Management Journal, 32(1), 202-212.

Rus, D., Van Knippenberg, D., & Wisse, B. (2010). Leader self-definition and leader self-serving behavior. The Leadership Quarterly, 21(3), 509-529.

Rus, D., Van Knippenberg, D., & Wisse, B. (2012). Leader power and self-serving behavior: The moderating role of accountability. The Leadership Quarterly, 23(1), 13-26.

Sendjaya, S., Sarros, J. C., & Santora, J. C. (2008). Defining and measuring servant leadership behaviour in organizations. Journal of Management Studies, 45(2), 402-424.

Shamir, B., & Howell, J. M. (1999). Organizational and contextual influences on the emergence and effectiveness of charismatic leadership. The Leadership Quarterly, 10(2), 257-283.

Tharenou, P., Donohue, R., & Cooper, B. (2007). Management research methods. Port Melbourne, VIC: Cambridge University Press.

Tymon, W. G. J. (1988). An empirical investigation of a cognitive model of empowerment. doctoral dissertation, Temple University, Philadelphia.

Ugboro, I. O., & Obeng, K. (2000). Top management leadership, employee empowerment, job satisfaction, and customer satisfaction in tqm organizations: An empirical study. Journal of Quality Management, 5(2), 247-272.

www.monash.edu.au

27

References

Van Dierendonck, D. (2011). Servant leadership: A review and synthesis. Journal of Management, 37(4), 1228-1261.

Van Dierendonck, D., & Nuijten, I. (2011). The servant leadership survey: Development and validation of a multidimensional measure. Journal of Business Psychology, 26(3), 249-267.

Van Knippenberg, B., & Van Knippenberg, D. (2005). Leader self-sacrifice and leadership effectiveness: The moderating role of leader prototypicality. Journal of Applied Psychology, 90(1), 25-37.

Van Quaquebeke, N., Van Knippenberg, D., & Eckloff, T. (2011). Individual differences in the leader categorization to openness to influence relationship. Group Processes & Intergroup Relations, 14(5), 605-622.

Walter, F., & Bruch, H. (2010). Structural impacts on the occurrence and effectiveness of transformational leadership: An empirical study at the organizational level of analysis. Leadership Quarterly, 21(5), 765-782.

Weisbord, M. R. (2004). Productive workplaces revisited: Dignity, meaning, and community in the 21st century (2 ed.). San Francisco: Jossey-Bass

Williams, T. (1998). Job satisfaction in teams. International Journal of Human Resource Management, 9(5), 782-799.

Wright, B. E., & Pandey, S. K. (2010). Transformational leadership in the public sector: Does structure matter? Journal of Public Administration Research and Theory, 20(1), 75-89.

Yukl, G. (1989). Managerial leadership: A review of theory and research. Journal of Management, 15(2), 251-289.

www.monash.edu.au

28

Experiment Scales

• Job Satisfaction– (Moyes & Redd, 2008)

• Age• Gender• Degree• Major• Current Year of Study

www.monash.edu.au

29

Survey Scales

• Servant Leadership– (Sendjaya et al., 2008)

• Decision Making Process (Involvement/Dominance)– (Mayer et al., 2011)

• Organisational Structure (Formalisation/Centralisation)– (Provan & Skinner, 1989)

• Job Satisfaction– (Moyes & Redd, 2008)

• Size (number of employees)• Tenure under the leader• Age• Gender

www.monash.edu.au

30

Sample Questions

• Servant Leadership– Leads by personal example

• Involvement – My CEO participates in most strategic decision making meetings

• Dominance – My CEO is reluctant to compromise their decisions with others’

views.• Centralisation

– Even small matters have to be referred to someone higher up for a final answer

• Formalisation– The company has a large number of written rules and policies

www.monash.edu.au

31

Experiment Manipulations

• Servant Leadership– “Your supervisor constantly listened to your opinions, often going out of her way to

help you resolve problems, even if it disadvantaged her. Over the journey your supervisor has acted as a mentor being very open and honest, helping you through different and varied situations.

• High Involvement Low Dominance– “In these discussions your supervisor was always present and active. From your

interactions, you noticed that your supervisor listened intently, was well informed of all the situations inside and outside of the company.”

• High Dominance Low Involvement – “…your supervisor empowered your team to run your own meetings; however she

was quite dominant in every decision. From your interactions, you noticed she would only appreciate views that were aligned with her own, always pushed to have her decisions implemented and was reluctant to compromise on her position.”

www.monash.edu.au

32

Experiment Manipulations

• High Formalisation– “You were handed a rules and procedure manual and were told that every

question you had about your job could be found in there. Once you looked inside, you found a clear job description telling you what you needed to do for each job rotation and guidelines to follow if any issue arose.”

• High Centralisation– “…you were told by one of the workers that “you’ll learn quickly, that in this

company you can’t use your own discretion – you do what they tell you”. Thinking back, you realise that many of the decisions you have made, had to be approved by your supervisor...”