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M@n@gement

2013/3 (Vol. 16)

  • Pages : 160
  • DOI : 10.3917/mana.163.0264
  • Éditeur : AIMS

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INTRODUCTION

1

Crises are recurring events in human history. Some are less severe; others change legislations, world politics, our perception of the status quo, and people’s lives. The recent crisis, the worst financial and economic one since the Great Depression (Barkin et al., 2010), dramatically changed people’s lives leaving them fearing for their jobs, struggling with unemployment and losing faith in the status quo, including political and business leadership. Given the scarcity of opportunities to study the effects of crises, particularly of this magnitude, the credit crunch provided a unique opportunity to study the effects of leadership and trust on employees.

2

Crises are inherently characterized by time pressure, demanding swift leadership decision making (Mumford, Friedrich, Caughron, & Byrne, 2007; Pearson & Clair, 1998). Leaders have a special role in turbulent times. Followers look to their leaders for actions, solutions to the crisis, and for explanations that will help them to interpret and respond to perceived threats and uncertainties (Madera & Smith, 2009). The leader becomes a rock in stormy waters, a source of comfort that is able to provide support during stressful periods (Collins & Feeney, 2000). Indeed, it has been argued that the onset of a crisis influences the perception of effective leadership (Beyer & Browning, 1999; Hunt, Boal, & Dodge, 1999; Klein & House, 1995; Popper & Zakkai, 1994; Weber, 1978). Roberts (1985), for instance, found that the same person may be perceived very differently across varying contexts. One superintendent who had previously been considered “ruthless [… and…] authoritarian” (p1041) was rated charismatic and effective following her successful efforts to save a school district from bankruptcy. Despite drastic measures demanding immense sacrifices, follower perception of the superintendent shifted from negative to positive due to her strong leadership in these critical times.

3

While this desire for strong leadership in a crisis has not always yielded positive results, such as during Adolf Hitler’s time in power, it persists and is more present today than in the last sixty years. This article therefore tries to identify the role of trust in leadership during stable and turbulent times, disentangling the specific mechanisms involved in a leader’s influence on followers, a point recently raised requiring additional investigation (De Cremer & van Knippenberg, 2005; Ferrin & Dirks, 2003). Given the importance of leadership in stable and turbulent times and the need to further our understanding regarding the effective maintenance of dyadic relationships, such as between the follower and the leader (cf. Collins & Feeney, 2000), coupled with the rare opportunities and ensuing scarcity of research (Madera & Smith, 2009) studying these processes in such contrasting contexts, this paper further advances our understanding of the underlying processes. One major contribution of this paper is that its findings, rather than being drawn from a laboratory experiment, are based on real-life data collected during one of the major crises of the last century.

CONCEPTS AND HYPOTHESES DEVELOPMENT

4

Trust has been defined in numerous ways: some definitions focus on the rational benefits of trust (e.g., Gamson, 1968), others on the psychological aspects of trust such as the accepted vulnerability accompanying a trusting relationship. In other words, whether the trusted person will act in favor of and not abuse the vulnerable state of the trustor (the person trusting them) (Mayer, Davis, & Schoorman, 1995; Rousseau, Sitkin, Burt, & Camerer, 1998). Amongst all definitions and findings, the consensus pinpoints trust as a state in which the trusting person will be treated fairly and the relationship will be beneficial rather than abusive (Colquitt, Scott, & LePine, 2007; Cunningham, 2000; Ferres, Travaglione, & Connell, 2002; Laschinger & Finegan, 2005; Ring & Van de Ven, 1994; Rousseau, et al., 1998). Although applicable to all types of relationships, this is even more pronounced in an organizational context, specifically in the relationship between leader and follower in which the leader possesses great power over the follower (French & Raven, 1959).

Trust as a Key in Leadership

5

It is therefore not surprising that trust has consistently been found to play a major role in leadership effectiveness, prompting Colin Powell, former U.S. Secretary of State, to refer to it as the “essence of leadership” (Harari & Brewer, 2004). Its role is highlighted by findings showing that trust is an antecedent of follower motivation, efficacy, and performance (Dirks, 1999). Studies have shown that follower trust in the leader translates directly into better performance (Brashear, Boles, Bellenger, & Brooks, 2003; Colquitt, Scott, & LePine, 2007; Dirks & Ferrin, 2002; MacKenzie, Podsakoff, & Rich, 2001; Rich, 1997).

6

However, leadership also functions as an antecedent of trust. Participative leadership (Huang, Iun, Liu, & Gong, 2009) and the willingness to involve followers in decision making (Brower, Schoorman, & Tan, 2000) directly affect follower trust in their leader. Brower et al. (2000) point out that a leader’s actions, such as delegating tasks, may trigger a reciprocal response on behalf of followers. The act of delegation may be perceived by followers as a sign of trust in their abilities and the leader’s willingness to share power, and as such, as a source for follower trust in the leader in return (Brower, et al., 2000). Leaders who are willing to go the extra mile and act for the good of the collective, such as accepting necessary pay cuts to ensure collective survival (De Cremer & van Knippenberg, 2005), while also offering support and rewarding followers (Brower, et al., 2000; MacKenzie, et al., 2001), profit from increased levels of trust.

7

The approach to studying the effects and relationships has been twofold, with some studies exploring the mediating role of trust for overall leadership constructs such as transformational and transactional leadership (Bartram & Casimir, 2007; Clapp-Smith, Vogelgesang, & Avey, 2009; MacKenzie, et al., 2001; Pillai, Schriesheim, & Williams, 1999; Pillai, Williams, Lowe, & Jung, 2003; Tsai, Chen, & Cheng, 2009), and others investigating it from a dimensional perspective (De Cremer & van Knippenberg, 2005). The present article also adopts a dimensional approach to disentangle the relationships between four leadership dimensions that have consistently been shown to be crucial to leadership effectiveness – rewarding and feedback, team-building, tenacity, and empathy; all of which will be explored throughout this article.

The significance of leadership for followers across periods

8

Leadership comes in many forms and so do the theories that attempt to capture effective leadership. Transformational and servant leadership have been among the most dominant and widely researched theories, sharing the common notion that a leader needs to focus on the well-being of followers and reward follower investment that contributes to the advancement of organizational life. Although an in-depth discussion of the two theories is beyond the scope of this article, the fundamental principles are that leaders have various tools at their disposal. These range from a simple exchange of rewards for performance, as in transactional leadership (Bass, 1985, 1990), to leader feedback, empathy behaviors, and the focus on creating a collaborative environment or a community as defined by servant and transformational leadership (Bass, 1985, 1990; Spears, 1998). With the array of leadership behaviors being so great, it is crucial to focus on specifics for the advancement and better understanding of the underlying processes that steer leadership effectiveness. Indeed, Collins and Feeney (2000) pointed out that there still is a great need to gain greater understanding of the processes determining the maintenance of good dyadic relationships, such as those between leaders and followers. This holds particularly true across contexts and regarding the prevailing scarcity of crisis research focusing on leadership (Madera & Smith, 2009).

9

Both transformational and servant leadership theories argue for multi-faceted leadership and make a distinction between a rational exchange, such as in transactional leadership, and leadership that focuses on the person per se. Given their frequent application to influence follower outcomes, rewards are an important element of leadership. Followers not only show greater levels of trust if leaders reward their inputs fairly and reliably (Bass, Avolio, Jung, & Berson, 2003; MacKenzie et al., 2001; Podsakoff, Bommer, Podsakoff, & MacKenzie, 2006), but they also perceive it as feedback on their performance (George, 1995; MacKenzie et al., 2001). Indeed, the relationship between reward and trust is also based on a sense of dependability and reliability, with leaders reinforcing agreed performance guidelines through rewards, thus providing followers with a clear idea of their performance expectations (Moorman & Grover, 2009). Many leadership behaviors, however, are independent of tangible exchanges – as is, for instance, emotional intelligence. Recent studies have suggested that the ability to detect emotions in followers is positively related to follower outcomes (Byron, 2007; De Cremer & van Knippenberg, 2005; Kellett, Humphrey & Sleeth, 2006; Spears, 1998).

10

For a better understanding of the possible processes, attachment theory serves to disentangle the advantage of behaviors such as emotional intelligence or the creation of safe environments - behaviors that have at their focus human needs, such as creating a stable, cooperative, and secure environment, or protecting the team and its decisions. Attachment theory argues that an individual seeks a caretaker who is capable of providing support and care. Developed to explain an infant’s need for attachment to a parent who offers stability and a safe haven, particularly in times of great distress and uncertainty (Bowlby, 1982; Bretherton, 1985), the attachment process is suggested to be operational throughout life and not ending with infancy (Bowlby, 1988). Indeed, Collins and Feeney (2000) compare the need for security and contact with significant others who are able to provide safety and comfort during turbulent times to that of children seeking a stronghold in their parents. For the individual to choose whom to turn towards for a safe haven, trust in the source is a crucial prerequisite (Collins & Feeney, 2000).

11

Madera and Smith (2009) point out that followers are particularly drawn towards strong leadership during turbulent times, hoping to find indications on what to expect. This increase in support-seeking gains importance during more turbulent times, as Collins and Feeney (2000) found for individuals who reported progressively greater needs for support when facing greater levels of stress. In turn, the sources of support became more effective in providing care and comfort in situations that presented a greater threat to the individual careseeker, leaving the latter to experience positive personal effects, such as improved moods. It is likely that similar effects occur for other variables such as motivation. Interestingly, however, recent research found that these positive effects may not generally be attributed to leadership, but to specific behaviors. For instance, Williams and colleagues showed that authentic leaders are perceived as no more effective during crises than during stable periods. Authentic leaders live ethical values on a daily basis and expect similar behavior from their followers (Williams, Pillai, Deptula, & Lowe, 2012), and as such their impact regarding the need for attachment is independent of the situation. Leaders who live the values, walk the talk, and are effective in their daily leadership differ from those who will provide a safe haven when life turns stressful and appears threatening to one’s survival. Feeney (2004) makes an important point by arguing that the caregiver is not a permanent force, but emerges when needs be. Similar to a lifeguard, the leader emerges as a safe haven, a stabilizing force, when followers are in need for support and protection. The remainder of the time, i.e. during times of stability, the leader prepares an environment that allows for immediate support mechanisms to kick in when things turn bad.

12

Kets de Vries, Vrignaud, and Florent-Treacy (2004) built on the conceptualization of a relationship similar to that of a parent with a child, arguing that psychodynamic processes influence a leader’s ability to be effective. Kets de Vries and Engellau (2008) point out that individuals yearn for attachment to another person, a feeling of belonging to a stable group to feel secure and experience levels of self-belief. Using their psychodynamic construct, four leadership dimensions were chosen to capture the essence of the above concepts: reward and feedback behaviors, leadership behaviors that build a stable and safe environment, emotional intelligence, and the leader’s willingness to protect and defend the team from external attacks and criticisms.

The four leadership dimensions, trust, and work effort

13

Leadership plays an important role for follower behaviors that go beyond the agreed contractual work, in other words ones that imply extra follower efforts. As Podsakoff and colleagues state, leadership behaviors are key to effectiveness. Indeed, they argue that their influence on followers is the multiple of other organizational policies (Podsakoff, MacKenzie, & Bommer, 1996). The effects of leadership do not, however, occur in isolation, but are embedded within contextual and relational factors such as trust. Indeed, trust is a crucial antecedent for people’s extra effort behaviors, including risk-taking (Mayer, et al., 1995), civic engagement (Kramer, 1999), and innovative behaviors (Beyer & Browning, 1999). The interaction of leadership and trust may be illustrated by the importance of an environment promoting both cooperation and room for potential failure, and as such, lessen any potential disadvantages if a follower engages in risk-taking (e.g., Frost, Fiedler, & Anderson, 1983; Tyler, 2002; Van den Bossche, Gijselaers, Segers, & Kirschner, 2006; Whitener, Brodt, Korsgaard, & Werner, 1998). Yet, establishing an environment allowing for collaboration and trust may be the primary responsibility of a leader (Britt & Dickinson, 2006). As Segal, Rohall, Jones, and Manos (1999) reported, an unanticipated development may lead to a decrease in trust. They report that during the deployment on the same assignment of two American missile units, one unit’s deployment arrived earlier than previously announced leading to a decrease in trust. The other unit was deployed as agreed and their subsequent level of trust was not negatively affected.

14

Many have therefore highlighted the increasing importance of investigating the role of trust in the relationship between leadership and its effects (Bartram & Casimir, 2007; Ferrin & Dirks, 2003). Kark & Van Dijk (2007) argued that our research focus needs to shift increasingly to the underlying psychological mechanisms involved in the leader’s ability to heighten follower motivation. Indeed, an increasing number of studies investigate the role trust plays for specific leadership behaviors. Huang et al. (2009), for instance, reported the mediating effect of trust in the leader for participative leadership effects on task performance. Similarly, Clapp-Smith (2009) showed a partially mediating relationship for sales. Individual trust in the leader is, however, not confined to leader behaviors that are primarily focused on the individual follower but also those that concentrate on the collective. De Cremer and van Knippenberg (2005) showed that leaders who emphasized the collective over their personal gain were able to positively affect follower cooperation when trusted. Casimir and colleagues argue that despite the existing evidence, more research is needed to understand the exact mechanisms, particularly within different contexts (Casimir, Waldman, Bartram, & Yang, 2006). This is a task this article is attempting to take on by further investigating both the processes and the related changes across stable and turbulent times.

15

Leaders have indeed been suggested to be the main source of trust, both individually and collectively (Creed & Miles, 1996). One leadership behavior that connects the two units is rewarding, as it may be used to emphasize the individual and the collective effort (e.g., Karau & Williams, 1997). Although its operation and effects have been heavily debated over the years (Bass, 1990; Deci, Ryan, & Koestner, 1999; Jung & Avolio, 2000; Maddock & Fulton, 1998; Masi & Cooke, 2000), its positive effects on follower outcomes have consistently been shown when it is contingent on performance and employed as a reliable benefit for followers’ own efforts (Bass, Avolio, Jung, & Berson, 2003; MacKenzie, et al., 2001). However, using early findings from behavioral psychology and assuming that rewards are instruments reinforcing desired behaviors (e.g., Skinner, 1953) allows rewards to be viewed similarly to verbal feedback and praise. The latter has been shown to be positively related to motivation (Cameron & Pierce, 2002; Deci, et al., 1999).

16

Drawing on the evidence and a suggestion of Blau (1964), who saw good leadership as a relationship representing an end-in-itself rather than a means to further ends (in other words, a relationship in which followers perceive the leader’s behaviors as a genuine act to create a beneficial relationship), it may be argued that independent of the leadership dimension, trust is the essential element for affecting follower work effort through leadership. Indeed, when considering leadership within the context of attachment theory, we will find great similarities with Blau’s assumption. Leaders who consider the relationship with the follower not as a means but as a relationship they have to honor will see many positives unfold. Their ability to positively affect followers through the latter’s belief in the relationship itself as a safe, trustworthy haven will produce increased follower outcomes such as improved psychological well-being and motivation (Collins & Feeney, 2000; DeLongis, Folkman, & Lazarus, 1988; Kets de Vries & Engellau, 2008; Spears, 1998).

17

H 1: The effects of reward, team-building, tenacity, and emotional intelligence on follower work effort will be mediated through trust in the leader.

The four leadership dimensions, trust, and self-efficacy

18

The ability to affect followers’ self-efficacy levels is another important task of leadership. Self-efficacy is a prerequisite for motivation, representing the belief in one’s abilities to perform a task (Bandura, 1982, 1993, 1997; Bandura & Cervone, 1986). Self-efficacy determines to what extent an individual will apply personal, such as cognitive, resources to the success of a task (Bandura, 1997). Jex and Bliese (1999), for instance, showed that the higher the level of self-efficacy, the greater the probability that people will persevere despite encountering difficulties. Although a trait inherent by each individual to a greater or smaller extent (Bandura, 1986; S. Y. Lee, Hoerr, Weatherspoon, & Schiffman, 2007), self-efficacy may be increased by leaders who adopt certain leadership styles (Bandura & Cervone, 1986; Gist, 1987; H. J. Klein, Wesson, Hollenbeck, & Alge, 1999; van Mierlo, Rutte, & Vermut, 2006; Wright, 2004). Klein et al. (1999) pointed out that leaders who offer support and developmental opportunities are about as effective at positively affecting follower self-efficacy as leaders who show confidence in their followers’ abilities (Foti & Miner, 2003). There is also evidence that performance-contingent rewards, like work effort, influence follower self-efficacy, particularly when we consider that piece-rate conditions have a greater effect on self-efficacy than delayed bonus pay structures which lack a clear link with performance (Schunk, 1983b). The latter finding supports the notion of the use rewards as reinforcement tools (Bandura, 1986; Cameron & Pierce, 2002; T. W. Lee, Locke, & Phan, 1997; Locke, 1968; Skinner, 1953) to positively affect self-efficacy. In line with this, delivering performance feedback that not only corresponds to performance levels but also occurs within an appropriate time-frame for allowing cognitive associations with individual or team performance also increases follower self-efficacy (Bandura & Cervone, 1986; Cook & Dixon, 2006; Schunk, 1983a, 1983b; Shea & Howell, 1999, 2000).

19

In sum, as argued by MacKenzie et al. (2001), performance-contingent rewards may be similar to positive supervisory feedback. However, the role of trust is crucial, as it will be detrimental if followers suspect that rewards and feedback are being used as instruments of manipulation. Rewards and feedback need, in contrast, to be perceived as genuine ways of communicating the belief that the follower is able and capable of achieving a task (Brashear, et al., 2003). As Laschinger and Finegan (2005) point out, feedback is simply another form of leader-follower exchange. As such, it requires trust to reach its full potential and not be perceived as manipulative. Previous findings that trust indeed mediates the effects of feedback on performance (Earley, 1986) support the notion that self-efficacy is similarly influenced, particularly when we consider the relationship between self-efficacy and performance (Stajkovic & Luthans, 1998). As such, the level of trust is a significant mediator in the relationship between reward and feedback and follower self-efficacy.

20

Chen and Bliese (2002) pointed out that follower self-efficacy at lower-management levels is greatly dependent on emotionally intelligent leadership. Because emotionally intelligent leaders possess significant tools to positively affect followers (Wong & Law, 2002), it needs to be established if emotionally intelligent leadership per se is the key to increasing self-efficacy, or whether it is a question of trust. Results from previous studies show that trust is an important antecedent for follower outcomes (e.g., Brashear, et al., 2003; Dirks, 2000; Dirks & Ferrin, 2001; Flaherty, 2000; Rich, 1997), although limited findings are available for the relationship between trust and self-efficacy (e.g., Yang & Mossholder, 2010). However, providing care regularly rather than on an adhoc basis equips followers with a better ability to deal with daily burdens and feel more capable succeeding in their tasks (Collins & Feeney, 2000). And indeed, the more insecure the attachment to another person, the more the individual will experience pessimistic beliefs about potential risks and subsequently experience a need to seek support (Wallace & Vaux, 1993). The mediating role of trust in the relationship between leadership and self-efficacy therefore remains an important area of investigation.

21

H 2: The effects of reward, team-building, tenacity, and emotional intelligence on follower self-efficacy will be mediated through trust in the leader.

Crisis as a determinant for leadership effectiveness

22

Crisis is a frequent occurrence in human history. Although they may sometimes be of minor magnitude, certain crises, such as the recent one, majorly impact society and its leadership. Lord and Maher (1993) suggested that rather than being merely context-specific, leadership effectiveness depends on the leader’s fit with the anticipation of followers, or as they stated “[b] ased on a perceiver-oriented view of leadership, we expect that leaders could function better in any context if they fit with the commonly held prototypes of followers, [thus] categorized more easily as leaders, thereby enhancing their social power and ability to influence others” (p50). Studies have indeed found that leadership effectiveness differs across crisis and non-crisis situations. Roberts (1985) tells the story of a superintendent in the Midwest of the United States, who, having previously been attributed negative characteristics, was later seen as a highly effective leader. Given that the superintendent did not change her leadership, this difference in effectiveness may be explained within the context of follower perception as described by Lord and Maher (1993). We had the opportunity to investigate leadership across two different situations, and more importantly, from the follower perspective.

23

Beyer and Browning’s (1999) report on Robert Noyce, founder of Intel, highlights the importance of particular leadership styles during crisis. Through his engaging, involving, and emotionally intelligent leadership style, Noyce successfully led the US semiconductor industry through its most turbulent times when facing strong competition from cheaper Asian rivals. Following the crisis, Noyce’s successor, Bill Spencer, was able to continue the leadership using a more management-based leadership style, with a greater focus on task than on people. This example demonstrates the importance of people-focused leadership during crisis.

24

A major contribution of this article is its focus on trust as a mediator. Similar to Casimir et al.’s (2006) call for more research into the mediating role of trust between leadership and culture, more research is needed on its mediating role between leadership and follower outcomes across stable and turbulent contexts (Collins & Feeney, 2000; Jung, Yammarino, and Lee, 2009; Madera & Smith, 2009).

25

H 3: Crisis yields different leadership behaviors to influence follower outcomes than stable times.

26

H 4: The mediating effect of trust for leadership effectiveness differs between stable and turbulent times.

METHOD

Study 1

Survey Data Collection

27

Data for the first study was collected in the United Kingdom before the Lehman Brothers collapse in mid-September 2008. A sample of 207 employees from the banking and consultancy sectors in London enrolled in a leadership course and with a minimum of one-year full-time work experience, took part in the study. All participants were either in full- or part-time employment during data collection, but all had been in full-time employment with their respective organizations for a minimum of one year prior to data collection. The participants had been working in still stable and flourishing economic conditions that were to be so severely altered by the major incidents commencing with the September 2008 collapse. Mean age of participants was 21.9 years (sd = 1.2) with 47.3 per cent male and 52.7 per cent female. Of those, 51.2 per cent worked under the same supervisor for less than one year, 47.3 per cent for one year, and 1.4 per cent more than one year. 49.3 per cent and 50.7 per cent of leaders were male and female respectively.

Measures

28

Leadership. Leadership was measured using an amended four dimensional instrument developed by Kets de Vries, Vrignaud, and Florent-Treacy (2004). The Global Leadership Life Inventory was developed to capture the psychodynamic facets of leadership currently not measured elsewhere and originally comprised twelve dimensions incorporating both behaviors and personality dimensions. Kets de Vries et al. (2004) argue that psychodynamic facets refer to those leadership dimensions, explaining interpersonal elements deriving from such relationships as the parent-child relationship and transferring them onto the leader-follower relationship. As the original measure captures a plethora of different leadership facets, the choice of the four dimensions is derived from the conceptual background of the research. As previously argued, various calls have been made to further our understanding of the underlying processes that render a leader effective. In order to do so, three dimensions were chosen which fit with attachment theory. In order to throw the emotional bond into relief, leadership reward behaviors were also chosen to disentangle their significance across contexts, particularly contexts of great significance regarding the stability and security they provide for employees.

29

Leadership was measured on a seven-point Likert scale, with anchor points being Strongly Disagree and Strongly Agree. The respective dimensional conceptualizations (Kets de Vries et al., 2004, p. 479-480) and Cronbach alphas (in parentheses) are as follows:

30

Reward and Feedback (? =.90): Setting up the appropriate reward structures and giving constructive feedback to encourage the kind of behavior that is expected from employees. Reward and Feedback comprised seven items such as ‘compensation of performance is fair’ and ‘individual receives regular feedback’.

31

Team-Building (? =.85): Creating team players and focusing on team effectiveness by instilling a co-operative atmosphere, building collaborative interaction and encouraging constructive conflict. Team Building comprised six items such as ‘resolves conflicts among team members’ and ‘puts collective interest before personal goals’.

32

Tenacity (? =.79): Encouraging tenacity and courage in employees by setting a personal example in taking reasonable risks and defending approaches. Tenacity comprised five items such as ‘is not easily discouraged’ and ‘defends principles’.

33

Emotional Intelligence (? =.92): Fostering trust in the organization by creating, primarily through example, an emotionally intelligent workforce whose members know themselves and know how to deal respectfully and understandingly with others. Emotional Intelligence comprised seven items such as ‘reads others’ feelings’ and ‘puts people at ease’.

Mediator and Independent Variables

34

Individual trust (? =.92): To assess the level of individual follower trust in the leader, a scale from Jung and Avolio (2000) was used. This three-item scale was previously adapted from Podsakoff, MacKenzie, Moorman, and Fetter (1990) and was measured on a five-point Likert scale with anchor points being Strongly Disagree and Strongly Agree.

35

Self-Efficacy (? =.67): Self-efficacy was measured using a five-item five-point Likert scale developed by Jex and Bliese (1999) on the basis of Jones’s (1986) efficacy scale. Items were rated from Strongly Disagree to Strongly Agree with the frame of reference for all items being the follower’s perception of individual within-job abilities.

36

Work effort. (? =.66): Motivation was measured using two items from Van De Ven and Ferry (1980) measuring the motivation to improve performance at work within the last three months. All items were rated on a five-point Likert scale ranging from None to Very Much for the two items.

Data Analysis

37

The Preacher and Hayes (2004, 2008; Preacher, Rucker, & Hayes, 2007) macro for SPSS 19 was used to test both simple, indirect, and mediation effects, as it allows the estimation of indirect effects “with a normal theory approach and a bootstrap approach to obtaining confidence intervals, as well as the traditional approach advocated by Baron and Kenny (1986)” (p.717). Mediation and indirect effect differ in so far as the former does not assume an initial total effect between the independent and the dependent variable (Preacher & Hayes, 2004).

38

Their macro addresses two shortcomings of the Baron and Kenny (1986) method identified by Holmbeck (2002), namely an over-estimation of the significance level of the mediation effect in small samples and an underestimation of the significance level in large samples. Preacher and Hayes (2004) further suggest that testing for a non-existing difference between total and direct effect between IV and DV in place of subsequent regressions will directly address the aspect of mediation. It has also been suggested that Baron and Kenny’s (1986) test suffers from low statistical power in small samples yielding non-significant results (MacKinnon, Krull, & Lockwood, 2000), which has been overcome by Preacher and Hayes’s (2004) macro.

39

Finally, their macro allows for bootstrapping, providing further evidence of the existence of an indirect effect given that the range between lower and upper 95 % confidence intervals excludes zero. Its biggest advantage is that while the Sobel test requires “the unrealistic assumption of normality of the sampling distribution of the indirect effect […] bootstrapping of indirect effects is the most trustworthy inferential method” (A.F. Hayes, personnal communication, January 8, 2009).

Results

40

Descriptive statistics and inter-correlations are provided in Table 1. An inspection of the correlations indicates no multicollinearity; as such each dimension measures a different construct of leadership.

Table 1 - Descriptive Statistics and Study Variable Intercorrelations

Note. N = 207; working sample collected before crisis

Assessing Common Method Variance

41

In order to assess that no common method variance is present given the self-report nature of the data, the model was analyzed in AMOS. Following suggestions by Podsakoff et al. (2003) and MacKenzie, Podsakoff, and Fetter (1993), the model was examined twice – first with a first-order factor included in the model to examine a common method variance and second with no such factor. The comparison of standardized parameter estimates in the two models revealed no significant difference between the models.

Tests of Mediation – Work Effort

42

As can be seen in Table 2, all leadership dimensions are significantly positively related to follower work effort, indicating that leadership is an important antecedent of followers’ willingness to allocate greater levels of personal resources to increasing their work effort. Three of the four leadership dimensions, namely Reward and Feedback, Tenacity, and Emotional Intelligence, have an indirect effect on follower work effort partly supporting Hypothesis 1. This was supported by the c-prime results as well as Sobel tests and confidence intervals for each model. Thus, the level of follower work effort is affected by what the leader does; however, this effect depends on the level of trust each follower holds in the leader.

Tests of Mediation – Self-Efficacy

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Tables 2 and 3 show that all four leadership dimensions are significantly positively related to trust in the leader, indicating the importance of all four leadership dimensions for the level of trust experienced by followers in their direct supervisor.

44

Table 3 presents the results for Hypothesis 2. Three of the leadership dimensions, namely Team-Building, Tenacity, and Emotional Intelligence, have no direct effect on follower self-efficacy. Conversely, Reward and Feedback has a significant direct effect on follower self-efficacy (ß = 0.13, p = 0.001). None of the four leadership dimensions, however, has an indirect effect on follower self-efficacy through trust in the leader; therefore Hypothesis 2 is not supported.

Discussion of Before Crisis Sample

45

Setting clear performance standards, which are rewarded fairly and on time, is essential to creating trust amongst followers. As most people work in some sort of group in today’s work environment, the effective leader is also able to resolve conflicts among individual members, creating a collaborative environment in which people feel valued and appreciated. The effective leader is able to achieve all of these and more through his empathic skills, his attention to individuals, and also his ability to stand up for

Table 2 - Regression Results for Simple Mediation – Work Effort

Note: n=207, working sample before crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL=upper limit.

Table 3 - Regression Results for Simple Mediation – Self-efficacy

Note: n=207, working sample before crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL=upper limit.

46

Decisions made within the group and, if necessary, stand up for his own principles if he thinks that it is necessary to get the group and the organization ahead. Taken together, the common thread is the ability of the leader to understand other people’s emotions and needs and the ability to react and respond accordingly. Kets de Vries (1988) pointed towards the importance of establishing a parent-child like relationship between leader and follower. In a similar vein, creating a safe environment and showing enthusiasm for the group and the task, combined with the ability to understand how much the individual is able to shoulder, will lead to followers feeling greater levels of trust and motivation.

47

As Bowlby (1988) stated, the need for a trusting, safe relationship does not end with infancy. Indeed, the results, and in particular the role of trust for the relationships between leadership behaviors and the two follower outcomes, support the assumption that people in the later stages of life flourish most when acting and living in a relationship that allows them to make mistakes and when perceiving themselves in safe hands with a caretaker. Collins and Feeney (2000) pointed out that the social aspects within a dyadic relationship are still in need of further clarification. We now have further clarification that social processes occur 1) in a trusting relationship and 2) within a leader-follower relationship given particular leadership behaviors; but with limitations regarding follower outcomes.

48

Nevertheless, similarly to a parent who rewards a child for fulfilling particular requirements and achieving successes, adults strive for acceptance and acknowledgment. The ability to use rewards and feedback in ways that strengthen the individual’s perception that their contribution is important and makes a difference, and that their effort is appreciated, allows the leader to establish higher levels of work effort as well as trust. Trust is created because on a rational-exchange level the leader will fulfill his part of the contract and the likelihood of being exploited is minimized. But rewards and feedback are also signs of respect and carry a deep psychological meaning regarding their perceived value when given by a person considered trustworthy and of a human rather than a purely managerial nature. The reward is therefore a social exchange instrument in situations where the leader is trusted as someone who will do good for the other party and not only exchange commodities. As Collins & Feeney (2000) stated, it is small acts by the caregiver that transform daily burdens into manageable tasks. Through the provision of frequent feedback on the employee’s ability, the leader instills a greater sense of self-efficacy.

Study 2

Survey Data Collection

49

Data for the second study were collected at a multimedia company in London, United Kingdom, three months after the collapse of Lehman Brothers in September 2008. The study was conducted after management agreed to take part and to roll out the survey via an online questionnaire to employees. Participation was voluntary and no incentives were offered or given by either the research or management team. 90 full-time employees with a mean age of 33.4 years (sd = 7.812) with 44.4 per cent being male and 55.6 per cent female participated. Their leaders were 60.0 per cent male and 40.0 per cent female. 25.6 per cent of participants had been working with the same manager for a period of less than a year, 46.7 per cent between one and three years, 20 per cent three to five years, and 7.8 per cent for a period of more than five years. As in the first study, data was collected for the four leadership dimensions and self-efficacy and work effort. Data was analyzed using the same macro by Preacher and Hayes (2004; 2008) (Preacher, Rucker, & Hayes, 2007).

Measures

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All measures are identical to Study 1. The Cronbach alphas for the respective scales are: Rewarding and Feedback – ? =.90; Team-Building – ? =.89; Tenacity – ? =.89; Emotional Intelligence – ? =.92; Individual trust– ? =.90; Self-Efficacy. – ? =.67; Work effort. – ? =.74.

Results

51

As in study 1, table 4 shows that the different scales measure different constructs.

Table 4 - Descriptive Statistics and Study Variable Intercorrelations

Note. N = 90; Working sample collected during crisis

Assessing Common Method Variance

52

In order to assess that no common method variance was present given the self-report nature of the data, the model was analyzed in AMOS. Following suggestions by Podsakoff et al. (2003) and MacKenzie, Podsakoff, and Fetter (1993), the model was examined twice – first with a first-order factor included in the model to examine a common method variance and second with no such factor. The comparison of standardized parameter estimates in the two models showed no significant difference between the models.

Tests of Mediation – Work Effort

53

Table 5 shows that two of the four leadership dimensions, namely reward and feedback and tenacity, are indirectly related to follower work effort. As such, the influence of reward and feedback and tenacity depends on whether followers trust their direct leader. Hypothesis 2 is therefore partially and Hypothesis 3 and 4 fully supported.

Tests of Mediation – Self-Efficacy

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Tables 5 and 6 show that all four leadership dimensions are, similar to in study 1, significantly positively related to trust in the leader, indicating the importance of leadership for the level of trust in crisis as well as non-crisis situations. The behaviors of the leader are therefore crucial elements for people’s level of trust in their leader.

55

Table 5 presents the results concerning the role of trust in the leader as a mediator in the relationship between the four leadership dimensions and follower self-efficacy. Of the four leadership dimensions, only reward and feedback indirectly positively affects follower self-efficacy, through trust in the leader. Hypotheses 2, 3 and 4 are therefore partially supported.

Table 5 - Regression Results for Simple Mediation – Work Effort

Note: n=90, working sample during crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL=upper limit.

Table 6 - Regression Results for Simple Mediation – Self-efficacy

Note: n=90, working sample during crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL=upper limit.

56

Tests of Context: Crisis vs. Non-Crisis – Controlling for Age and Length with Manager

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In order to ensure that differences or similarities regarding the investigated relationships were indeed due to the context and not the period employees had been working with their manager or age of employees, we controlled for these two variables. Based on a study by Casimir et al. (2006) the controls were conducted post the initial analyses. It is noteworthy that Casimir et al. (2006) did not find a correlation between time with the manager and trust. As for the main analyses, the Preacher and Hayes macro (2004; 2008) was used. Their macro offers the option to include covariates. As can be seen in Tables 7a-d, neither age nor time spent working under the same leader significantly altered the results. It is also noteworthy that in the sample collected during the crisis, length spent working with the same leader was significantly positively related to follower self-efficacy in each of the four analyses. However, the influence of time was not shown to be substantial enough to change the role of trust in the relationships between the leadership dimensions and self-efficacy. Nonetheless, this relationship is interesting and should be investigated in future studies. The only other two noteworthy changes are the fact that controlling for age and period spent with manager changed the direct relationship between reward and feedback and self-efficacy from non-significant to significant. The converse picture emerged for the direct relationship between team-building and work effort, changing from significant to non-significant when controlling for age and time with manager. However, none of the results for the mediation analyses changed significantly, thus supporting Hypothesis 3 of a context-specific difference regarding the role trust in the direct leader plays in the relationship between leadership and follower self-efficacy and work effort.

Table 7a - Regression Results for Simple Mediation Controlling for Age and Length Worked with Manager – Work Effort

Note: n = 90, working sample collected during crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL = upper limit.

Table 7b - Regression Results for Simple Mediation Controlling for Age and Length Worked with Manager – Self-efficacy

Note: n = 90, working sample collected during crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL = upper limit.

Table 7c - Regression Results for Simple Mediation Controlling for Age and Length Worked with Manager – Work Effort

Note: n = 207, working sample collected before crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL = upper limit.

Table 7d - Regression Results for Simple Mediation Controlling for Age and Length Worked with Manager – Self-efficacy

Note: n = 207, working sample collected before crisis. Unstandardized regression coefficients are reported. Bootstrap sample size = 1,000. LL = lower limit; CI = confidence interval; UL = upper limit.

DISCUSSION OF DURING CRISIS SAMPLE AND GENERAL DISCUSSION

58

The findings from Study 2 point toward the possibility that leadership plays a smaller role for follower outcomes than previously assumed (e.g., Beyer & Browning, 1999; Roberts, 1985). Attachment theory argues that people seek a safe haven in times of stress and uncertainty (Bowlby, 1982, 1988; Collins & Feeney, 2000). Conversely, Williams et al. (2012) found no positive effect of crisis on authentic leadership. The findings from Study 2 suggest a twofold picture with particular leadership behaviors gaining importance during times of turbulence, while others lose some of their importance. Interestingly, emotional intelligence, a leadership behavior that comprises listening and attempting to understand others’ emotions (Byron, 2007; Kellett, Humphrey & Sleeth, 2006) falls short of influencing employees’ willingness to work harder or their belief system in themselves. Conversely, rewarding and providing feedback and defending collectively made decisions against external influences increase work effort and the former also increases employee self-efficacy. Regarding its effect on self-efficacy during crisis, its strength may lie in being aware of where the individual employee is standing regarding required performance standards (George, 1995; MacKenzie et al., 2001; Moorman & Grover, 2009). Given the situation following the most severe financial and economic crisis since the Great Depression, the importance of knowing whether one was performing in line with performance requirements was rendered more important for one’s belief system than whether one was working in a collective environment or with a leader who was willing to take the time to listen. The belief system may even incorporate a competitive advantage i.e. receiving feedback and rewards over other team members when fearing for one’s professional future. Madera and Smith (2009) pointed out that followers look to their leaders for cues to interpret a crisis. It is possible that rewards and feedback are part of these cues that help individuals to interpret their own personal chances of surviving the crisis by gauging whether or not they are in line with what their leader expects them to do.

59

It is similarly possible to appeal to employee’s willingness to make greater personal investment by increasing their work efforts. Additionally, followers increase their work efforts during turbulent times if they perceive their leader to be fighting for decisions, willing to take personal risks, and reliable when decisions are made. Indeed, leaders are important sources of anxiety-reduction and sense-making (Yukl & Howell, 1999). Leaders able to stand strong and provide a safe haven are able to provide the necessary support sought by careseekers during stressful times (Collins & Feeney, 2000).

60

Generally the differences between the two studies are significant. Having controlled for the possibility of an age effect or the influence of a prolonged relationship between leader and follower, the influence of context sheds much light on the differences of leadership effectiveness. Leaders during times of stability overall have greater potential to influence followers than during turbulent times, particularly during crises of such great magnitude as the recent financial crash.

Practical Implications

61

The findings have a number of important practical implications for leaders. Leaders who are aware that trust is an important part of their leadership will be able to increase their leadership potential. However, the fact that during periods of great uncertainty, as represented by the current crisis, their impact is rather limited and the role of trust as a mediator for their impact on follower outcomes decreases significantly, will guide leaders to adapt their leadership and their expectations of outcomes accordingly. The findings showed that it is not always the leader who is able to affect followers. Leaders remain important sources of follower outcomes in both stable and turbulent times, but the way they are able to affect their followers changes across contexts, with some leadership behaviors gaining in importance while others become less relevant for followers.

Limitations and Future Research

62

Although the study has provided further insight into the underlying mechanisms of leadership and its influence on followers, particularly during two different contexts, future research needs to investigate other potential variables that may limit the influence of followers during crisis. I am hopeful that a crisis of this magnitude will not occur again soon, but researchers should investigate other leadership behaviors, variables, and mediators. A second limitation of the current studies is that the findings are based on two separate samples. Although the populations are highly similar, future research projects should, if possible, attempt to collect data and conduct studies from the same sample. As crises are unpredictable events, it proves difficult to conduct a longitudinal study, which is why future research should adopt an experimental design to shed some further light on the role of leadership, trust, and other variables across different contexts of stability.

63

As mentioned, future research should also address the influence of time spent working with the same leader on follower self-efficacy. The current article offers some insight, but future research should address this relationship further, including other variables. Finally, the question of stress needs to be investigated to determine its influence on self-efficacy; that is, to what extent self-efficacy changes due to stress factors. In sum, the study provides ground for a number of future research areas, particularly on factors lying beyond the leader’s control, which appear to be responsible for people working harder and feeling more confident about their own abilities.

CONCLUSION

64

Crises are recurring events in the history of men, with some less severe than others. Previous studies have shown that different situations require different leadership behaviors (e.g., Beyer & Browning, 1999; Madera & Smith, 2009). The current research adds further insight into how the effects of leadership behaviors change across stable and turbulent times, particularly when viewing them in the context of trust. The current results provide a number of new insights into the mediating role of trust in leadership, and will hopefully stimulate further research into the role that trust plays for these variables, across sectors and situations.


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Résumé

English

This paper examines the mediating role of trust for leadership effectiveness in a crisis and a non-crisis context. Data from employees was collected before and after the collapse of Lehman Brothers leading to the most severe crisis since the Great Depression. The findings indicate significant differences in the role played by trust for the relationships between leadership and follower self-efficacy and work effort. Trust was found to play a greater role during times of stability than during times of high uncertainty, providing a great number of questions for future research.

Key words

  • trust
  • mediator
  • crisis
  • leadership
  • efficacy
  • effort

Plan de l'article

  1. INTRODUCTION
  2. CONCEPTS AND HYPOTHESES DEVELOPMENT
    1. Trust as a Key in Leadership
    2. The significance of leadership for followers across periods
    3. The four leadership dimensions, trust, and work effort
    4. The four leadership dimensions, trust, and self-efficacy
    5. Crisis as a determinant for leadership effectiveness
  3. METHOD
    1. Study 1
      1. Survey Data Collection
      2. Measures
        1. Mediator and Independent Variables
      3. Data Analysis
      4. Results
      5. Assessing Common Method Variance
      6. Tests of Mediation – Work Effort
      7. Tests of Mediation – Self-Efficacy
      8. Discussion of Before Crisis Sample
    2. Study 2
      1. Survey Data Collection
      2. Measures
      3. Results
      4. Assessing Common Method Variance
      5. Tests of Mediation – Work Effort
      6. Tests of Mediation – Self-Efficacy
  4. DISCUSSION OF DURING CRISIS SAMPLE AND GENERAL DISCUSSION
    1. Practical Implications
    2. Limitations and Future Research
  5. CONCLUSION

Pour citer cet article

C. HAsel Markus, « A question of context: the influence of trust on leadership effectiveness during crisis », M@n@gement, 3/2013 (Vol. 16), p. 264-293.

URL : http://www.cairn.info/revue-management-2013-3-page-264.htm
DOI : 10.3917/mana.163.0264


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