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Confirmation Seminar 10/05/2011

The relationship between servant leadership and job satisfaction:

The mediating role of decision making process and the moderating role of structure.

Nathan Eva

Supervisors: Dr. Sen Sendjaya Dr. Daniel Prajogo

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Purpose and Significance

• Literature has largely ignored the black box between leadership and job satisfaction, looking at the relationship without any mediating or moderating factors.

– (Cerit, 2009; Griffith, 2004; Laub, 1999; Miears, 2004)

• This study will examine the mediating role of leaders' decision making style in the relationship between servant leadership and job satisfaction.

• It will also examine the impact of organisational structure on this relationship.

• Finally, we will explore why and how the decision making patterns of servant leaders may change due to the structure of the organisation.

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Literature Review

• This research draws its theoretical origins from empowerment literature.

• Empowered employees are more satisfied with their employment.

– (Menon, 2001; Ugboro & Obeng, 2000)

• Relational-style leaders have been found to increase job satisfaction.

– (Castaneda & Nahavandi, 1991; Kim & Joigaratnam, 2010)

• SL is associated with many positive organisational attributes including strong moral base, motivation and superior profitable returns.

– (Graham, 1991; De Cremer, 2006; Van Dierendonck & Nuijten, 2010)

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Dimensions of Servant Leadership

Moral

Altruistic

Spiritual

+ Authentic

Relational

Transformational

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SL/DMP Relationship

• Drawing on the Upper Echelons theory, leaders choose their own decision making process.

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

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

– (Black & Gregersen, 1997)

• As seen in the SL literature, servant leaders are more inclined to undertake an involved process of decision making.

– (Russell, 2001; Taylor et al., 2007)

Hypothesis 1: There is a positive association between servant leadership and leader involvement in the decision making process.

Hypothesis 2: There is a negative association between servant leadership and leader dominance in the decision making process

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DMP/JS Relationship

• The structural element of empowerment.– (Menon, 2001; Tymon, 1988)

• CEOs who are more involved in the decision making process will make better decisions.

– (Black & Gregersen, 1997; Solansky et al., 2008)

• An involved style of decision making is likely to foster higher employee job satisfaction.

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

Hypothesis 3: There is a positive association between leader involvement in the decision making process and job satisfaction of employees.

Hypothesis 4: There is a negative association between leader dominance in the decision making process and job satisfaction of employees.

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Mediation Model

Job Satisfaction

Dominance

Involvement

Servant Leadership

H3H1

H2 H4

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Moderated SL/DMP Relationship

• Leaders intentions do not always equal implementation. Often the decision making process may be hindered by the constraints of organisational structure.

– (Walter & Bruch, 2010)

• Organisational structure has been largely ignored in leadership research.

– (Porter & McLaughlin, 2006; Walter & Bruch, 2010)

• This study will look at the structural factors of centralisation & formalisation.

– (Atwater, 1995; House, 1991; Walter & Bruch, 2010)

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Formalisation

• Formalisation reduces the need for leadership; instead rules and regulations guide employee behaviour.

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

• It reduces the potential to exercise leadership.– (Bass & Riggio, 2006; Shamir & Howell, 1999; Wright & Pandey, 2010)

• Given highly formalised procedures, servant leaders may be less involved in the decision making process.

Hypothesis 5: Formalisation moderates the relationship between servant leadership and leader involvement whereby that the more formalised the organisation the less positive the relationship between servant leadership and leader involvement in the decision making process.

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Centralisation

• Follower-centred leaders, such as SL, need open organisations in which to flourish.

– (Davis, Eisenhardt & Bingham, 2009)

• In a company which is highly centralised, leaders are constraint by the hierarchical decision making process.

– (Walter & Bruch, 2010)

• Servant leaders may be inclined to undertake a dominant decision making style.

Hypothesis 6: Centralisation moderates the relationship between servant leadership and leader dominance whereby the more centralised the organisation the more positive the relationship between servant leadership and leader dominance in the decision making process.

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Moderation Model

H5

H6

Dominance

Involvement

Servant Leadership

Formalisation

Centralisation

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Methodology

• In order to fully answer the research problems a mixed methods approach must be undertaken.

– (Creswell & Plano Clark, 2007; Dial, 2006; Yukl, 1989)

• The source of evidence will be single respondent mail surveys and semi-structured interviews.

– (Lee, 1999; Miller, 1991; Yin, 2009)

• All scales used in the survey are derived from previous studies to ensure reliability and validity.

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

– Job Satisfaction> (Moyes & Redd, 2008)

– Decision Making Process> (Black & Gregersen, 1997)

– Structure> (Walter & Bruch, 2010)

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Methodology – Sample Items

• 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.

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Methodology – Quantitative

• The quantitative sample will consist of middle managers who rate the leadership style and decision making process of their CEO.

• Medium to large Australian firms, randomly selected from Dun & Bradstreet mailing list.

• The interaction effects are difficult to detect when the sample size is small, therefore a rather large sample size is needed.

– (Maxwell, 2000)

• The literature shows that leadership effect sizes have been relatively low (0.05-0.25).

– (Bocarnea & Dimitrova, 2010; Cerit, 2009)

• Previous studies have used sample sizes ranging from 60-400.– (e.g. Black & Gregersen, 1997; Bocarnea & Dimitrova, 2010; Carmeli et al., 2008)

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Methodology – Quantitative

• In order to use Structural Equation Modelling a sample of 200 is needed.

– (Hair et al., 2009)

• Theoretically, it is suggested that the sample size should be 200-250.

– (Hair et al., 2009; Maxwell, 2000)

• Due to typically low Australian response rates (10%), 2500 surveys will be sent out and follow-ups will be made.

• Once collected, the data will be screed, and checks for scale validly and reliability will be made.

• Relationship analysis with SEM for the mediating relationship and regression for the moderating.

– (Hair et al., 2009; Pallant, 2007; Tabachnick & Fidell, 2006)

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Methodology – Qualitative

• The sample will consist of middle managers and their CEO’s.• Randomly selected from Dun & Bradstreet mailing list. • The interviews will be pared to shed light on discrepancies in

perceptions of SL behaviours and the leader’s DMP and to what extent they impact job satisfaction.

• Previous studies have used sample sizes ranging from 3-15.– (Ebner & O’Connell, 2010; Sendjaya, et al., 2008)

• Therefore, 10-14 paired semi-structured interviews will occur.• All interview will be verbatim transcribed.• Content (template) analysis on the basis of the servant

leadership dimensions– (Crabtree & Miller, 1999; Holsti, 1969; Sommer & Sommer, 1991)

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Timeline

2010 2011 2012 2013

ActivityJun-Aug Sept-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun

Literature Review

Methodology

Ethics Approval

Data Collection (Survey)

Data Collection (Interviews)

Data Analysis

Results

Discussion

Conclusion

Introduction

Revisions& Submission

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Thank you

• Questions?

• Suggestions?

• Comments?

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References

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Black, J. S., & Gregersen, H. B. (1997). Participative Decision-Making: An Integration of Multiple Dimensions. Human Relations, 50(7), 859-878.

Bocarnea, M. C. & Dimitrova, M. (2010) Testing servant leadership theory with Bulgarian students. International Journal of Leadership Studies, 5(3), 255-268.

Castaneda, M., & Nahavandi, A. (1991). Link of Manager Behavior to Supervisor Performance Rating and Subordinate Satisfaction. Group & Organization Studies, 16(4), 357.

Carmeli, A., Sheaffer, Z., & Halevi, M. Y. (2009). Does participatory decision-making in top management teams enhance decision effectiveness and firm performance? Personnel Review, 38(6), 696-714.

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References

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References

Kim, K., & Jogaratnam, G. (2010). Effects of Individual and Organizational Factors on Job Satisfaction and Intent to Stay in the Hotel and Restaurant Industry. Journal of Human Resources in Hospitality & Tourism, 9(3), 318-339.

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References

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References

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.

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