Effects of leader intelligence, personality and emotional intelligence on transformational leadership and managerial performance PDF

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The Leadership Quarterly 23 (2012) 443–455 Contents lists available at SciVerse ScienceDirect The Leadership Quarterly journal homepage: www.elsevier.com/locate/leaqua Effects of leader intelligence, personality and emotional intelligence on transformational leadership and managerial performance Fla...

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The Leadership Quarterly 23 (2012) 443–455

Contents lists available at SciVerse ScienceDirect

The Leadership Quarterly journal homepage: www.elsevier.com/locate/leaqua

Effects of leader intelligence, personality and emotional intelligence on transformational leadership and managerial performance Flavia Cavazotte a,⁎, Valter Moreno b, 1, Mateus Hickmann b, 2 a b

Pontifícia Universidade Católica do Rio de Janeiro, Rua Marquês de São Vicente, 225 Gávea, Rio de Janeiro, RJ, Brazil Faculdades Ibmec do Rio de Janeiro, Avenida Presidente Wilson, 118, Rio de Janeiro,RJ, Brazil

a r t i c l e

i n f o

Article history: Recieved 12 September 2011 Recieved in revised form 14 October 2011 Accepted 21 October 2011 Available online 1 December 2011 Keywords: Transformational leadership Leadership effectiveness Intelligence Personality Emotional intelligence

a b s t r a c t This study investigates the effects of intelligence, personality traits and emotional intelligence on transformational leadership and the effective performance of leaders in the organizational context. Data were collected from 134 midlevel managers from a large Brazilian company that operates in the energy sector. Our findings suggest that leadership effectiveness, as measured by the achievement of organizational outcomes, is a direct function of a leader's transformational behaviors, and is an indirect function of individual differences (experience, intelligence and conscientiousness) that work through transformational behaviors. A negative effect of neuroticism on leadership effectiveness was also observed. In addition, while emotional intelligence seemed to be statistically related to transformational leadership if considered in isolation, when ability and personality were controlled for, the effect became non-significant. We discuss implications for theory, research and practice. © 2011 Elsevier Inc. All rights reserved.

1. Introduction Transformational leadership theory has been an important field of inquiry in the organizational sciences, one that has attracted the attention of a large number of researchers (Gardner, Lowe, Moss, Mahoney, & Cogliser, 2010; Lowe & Gardner, 2001). Various studies have found a relationship between transformational leadership and the efficacy of organizations (Avolio, 1999; Avolio, Bass, & Jung, 1995; Dumdum, Lowe, & Avolio, 2002), and meta-analytic reviews have corroborated positive connections between transformational leadership of superiors and the performance of their subordinates (Judge & Piccolo, 2004; Lowe, Kroeck, & Sivasubramanian, 1996). However, despite the apparent relevance of transformational leadership for organizational outcomes, a smaller number of studies have empirically investigated the antecedents of transformational leadership (Lim & Ployhart, 2004). While previous research has indicated that intelligence and certain personality traits of leaders seem to be related to transformational leadership and leadership efficacy (e.g., Bono & Judge, 2004; Judge, Bono, Ilies, & Gerhardt, 2002), many doubts persist specifically regarding emotional intelligence (e.g., Antonakis, Ashkanasy, & Dasborough, 2009; Schulte, Ree, & Carretta, 2004). Moreover, studies testing the effects of emotional intelligence on leadership are rarely done effectively and simultaneously controlling for ability and personality or correcting for measurement error (Antonakis, Bendahan, Jacquart, & Lalive, 2010). Such restrictions of research designs are quite problematic because the results observed for the effects of new predictors can be highly distorted if there is no control for traits that have been shown to affect leadership, particularly when old and new factors are correlated. When based on biased coefficients, reports on the connections between emotional intelligence and transformational leadership fail to

⁎ Corresponding author. Tel.: +55 21 2138 9335. E-mail addresses: fl[email protected] (F. Cavazotte), [email protected] (V. Moreno), [email protected] (M. Hickmann). 1 Tel.: +55 21 45034096. 2 Tel.: +55 21 45034097. 1048-9843/$ – see front matter © 2011 Elsevier Inc. All rights reserved. doi:10.1016/j.leaqua.2011.10.003

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comply with evidence-based principles (Rousseau, 2006; Rynes, Giluk, & Brown, 2007), and therefore, their theoretical implications and practical recommendations are undermined. In this study, we investigate the effects of emotional intelligence on transformational leadership and on the effective performance of leaders in managing work units, while assessing the full breadth of individual differences supported as predictors of leadership by the literature, i.e., intelligence and the five-factor model. We also apply a widely used measure of emotional intelligence endorsed by publication in leading journals (Law, Wong, & Song, 2004; Wong & Law, 2002). This is done in a sample of practicing managers in a large Brazilian company that operates in the energy sector. Besides this, we also examine the role of transformational leadership in the relationship between individual differences and work performance, thereby assessing its effect as a mediating factor in the unfolding of the leadership process (Barrick, Mount, & Judge, 2001). 2. Transformational leadership and individual differences Transformational leaders, in contrast to transactional leaders, are seen as agents of social and organizational change (Bass, 1985; Bass, Avolio, Jung, & Berson, 2003). They are described as models for conduct and as being able to articulate a new and stimulating vision in their followers. In this way, they raise morale, inspire followers and motivate them toward greater achievements or conquests (Bass, 1985). Theories of transformational leadership (Avolio, 1999; Bass & Avolio, 1994) propose four dimensions inherent to the construct: idealized influence, often referred to as charisma, is related to the role played by the leader as a model for followers, prompting them to emulate the leader, follow the leader in all actions and adopt the leader's values and principles; motivational inspiration, describes leaders who have the ability to convey ambitious expectations to followers, inspiring them to reach objectives that result in important advances for the organization or for society; intellectual stimulation is exhibited by leaders able to question the status quo and appeal to the intelligence of their followers so as to promote thinking processes that favor creativity and innovation; and individualized consideration concerns leaders who develop an environment of personal support for their group, who understand and treat every follower as having distinctive characteristics, needs and desires. 2.1. Intelligence and transformational leadership Following Schmidt and Hunter (1998), we conceive intelligence as a broad mental capacity which, among other things, involves the ability to understand and think about complex ideas to deal with abstractions and solve problems, as well as to learn quickly (Schmidt & Hunter, 2000). Leadership scholars have emphasized that analytical and critical thinking skills can be an asset for assessing situational contexts, acquiring new knowledge and engaging in creative problem-solving (Mumford, Zaccaro, Connelly, & Marks, 2000) as well as strategic thinking (Sashkins, 1988). Reviews of the literature on intelligence and leadership suggest that the former is the personal characteristic having the greatest positive correlation with leadership (Zaccaro, Kemp, & Bader, 2004). In a meta-analysis of intelligence and leadership emergence and effectiveness, researchers have observed corrected correlations of 0.33 when both intelligence and leadership were objectively measured (Judge, Colbert, & Ilies, 2004). Although there are hardly any studies investigating the connections between intelligence and transformational leadership, skills such as those mentioned above could favor more effective communication and image-building strategies that fuel idealized influence (House, 1977) and could foster the talent to build more compelling visions that can inspire and motivate followers (Bass, 1985). Cognitive ability could also improve a leader's capacity to resourcefully engage followers' intellects in collective problem solving, another important facet of transformational leadership (Avolio, 1999; Bass & Avolio, 1994). Therefore, we introduce the following hypothesis: H1. The intelligence of a leader is positively related to transformational leadership. 2.2. Personality and transformational leadership Studies on the effect of leader personality on leadership outcomes are based on the premise that a certain set of characteristics is essential for an individual to exercise influence (Barrick & Mount, 1991; Bono & Judge, 2004; Judge, Piccolo, & Kosalka, 2009). The five-factor personality model was established as a taxonomy that parsimoniously and systematically combined a broad group of personality characteristics under the traits extraversion, agreeableness, conscientiousness, openness to experiences and neuroticism (Costa & McCrae, 1992; Goldberg, 1990), bringing renewed interest to the study of dispositions as predictors of leadership (Barrick & Mount, 1991). Judge et al. (2002) conducted a meta-analytic study in which the five-factor model explained 28% of the variability in leadership emergence and 15% in leadership effectiveness. Another meta-analysis specifically on the five factors and transformational leadership (Bono & Judge, 2004) observed positive correlations for extraversion (0.24), conscientiousness (0.13), openness (0.15) and agreeableness (0.14), and a negative correlation for neuroticism (−0.17). Therefore, in our study we tested the following hypotheses: H2. Extraversion of a leader is positively related to transformational leadership. H3. Conscientiousness of a leader is positively related to transformational leadership. H4. Openness to new experiences of a leader is positively related to transformational leadership.

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H5. Agreeableness of a leader is positively related to transformational leadership. H6. Neuroticism of a leader is negatively related to transformational leadership. 2.3. Emotional intelligence and transformational leadership Recently, emotional competencies have become a popular topic among leadership researchers (Gooty, Connelly, Griffith, & Gupta, 2010; Harms & Credé, 2010a). Mayer, Caruso, and Salovey (1999) maintain that emotional intelligence can be understood as cognitive intelligence applied to emotional questions. While intelligence concerns the ability that an individual possesses to assimilate information and knowledge and apply them in various contexts, emotional intelligence is related to the ability to perceive emotions, understand them and apply them to situations that arise (Salovey & Mayer, 1990). Although there is considerable debate in the literature regarding emotional intelligence as a construct and its relevance for leadership (e.g., Antonakis et al., 2009; Locke, 2005), Ashkanasy and Daus (2005) defend the notion that the more relational aspects there are in an activity, the more emotional intelligence will be required of the individual who will be put in charge. Thus, leaders who have the ability to perceive their emotions and understand their impacts on their actions and on those of others should have a greater probability of providing effective leadership (Day & Carroll, 2004). Meta-analytic studies have suggested that emotional intelligence is a more important predictor of personal success than personality traits (Van Rooy & Viswesvaran, 2004). In addition, quantitative reviews of the literature have observed a corrected correlation for emotional intelligence and transformational leadership of 0.12, confirming a low validity estimate when common method variance is discarded (Harms & Credé, 2010a). Therefore, we tested the following hypothesis: H7. Emotional intelligence of a leader is positively related to transformational leadership. 2.4. Transformational leadership as a mediator between individual differences and outcomes Even though studies investigating the relationship between transformational leadership and organizational outcomes provide support for their being related, few have focused on the influence of leaders' traits on organizational processes and outcomes (Barrick et al., 2001). However, indirect links may offer an explanation for why distal leader abilities and traits are important for reaching organizational outcomes. Given the empirical evidence that connects differences in ability (intelligence) and traits (personality dimensions) to both transformational leadership (Bono & Judge, 2004; Judge et al., 2004) and work outcomes (Barrick & Mount, 1991; Hunter, 1986; Hunter & Schmidt, 1996), it seems reasonable to expect that transformational leadership could be such a mediating factor, in particular because it has also been a consistent antecedent of leadership outcomes across different contexts (Dumdum et al., 2002; Judge & Piccolo, 2004). Likewise, there are theoretical arguments that support a process model through the mediation of transformational leadership. Because leadership is a rather complex phenomenon, a combination of multiple individual attributes could together promote effective leadership (Kirkpatrick & Locke, 1991; Zaccaro et al., 2004). In this sense, leader differences in intelligence and personality would operate as distal antecedents with direct effects on outcomes, but would have also indirect effects through their connections to proximal antecedents of outcomes, such as the capacity to inspire, stimulate, motivate and care for followers. As mentioned before, intelligence could facilitate the creation and presentation of convincing visions and facilitate inspirational motivation, since it promotes problem solving and solution generation capacities (Mumford et al., 2000). Followers could construe the assertiveness of extraversion and serenity of emotional stability as charismatic qualities, and creative and flexible thinking associated with openness could drive intellectual stimulation (Judge & Long, 2012). The greater dependability and tenacity often observed in conscientious individuals could promote their inspirational capabilities, while emotional intelligence could enhance a leader's sensitivity to emotional cues in reading the specific reactions of followers (Ashkanasy & Daus, 2005), thus allowing more effective responses to their individual needs. Therefore, we introduce the following hypothesis: H8a. Transformational leadership mediates the effect of the leader's intelligence on managerial performance. H8b. Transformational leadership mediates the effect of the leader's personality on managerial performance. H8c. Transformational leadership mediates the effect of the leader's emotional intelligence on managerial performance. 3. Methodology 3.1. Data collection and procedure The data analyzed in this study were collected from mid-level managers employed by a large Brazilian company in the energy sector. Nine variables were considered in the study: intelligence, the five personality traits (extraversion, conscientiousness, openness to new experiences, agreeableness and neuroticism), emotional intelligence, transformational leadership, and leader managerial performance. Data collection on the first seven variables was done by means of an electronic questionnaire to which all managers holding positions at similar hierarchical levels in three main units of the company were invited to respond. An access code was generated for each participant. Our final sample comprised 134 managers that represented 32% of the total population. The ages of the managers ranged

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from 29 to 73 years, with an average of 49.3 years. The mean time in managerial positions was 9.44 years. Eighty-five of them were men and 49 were women. Next, all direct subordinates of the managers that had been working with the leader for at least one year were invited to anonymously evaluate the leadership profile of their managers, with each one being given only the respective code of their manager to record in the completed questionnaire. The size of the teams ranged from 10 to 40 employees, with an average of 23.3 individuals. Half of the teams had between 19 and 28 members. Because the company estimates that about 25% of its staff could have been off duty during the data collection due to training, temporary transfers and other types of absences, the total number of available raters that fulfilled the above criteria varied from 6 to 26 members per team. Based on the available pool, our average response rate was 18%. In the final sample of 325 individuals, each manager was evaluated by a minimum of two and a maximum of five subordinates. Total confidentiality of answers was guaranteed for all participants, whether they were managers or their subordinates. Data on the performance of managers was provided by the company itself. 3.2. Measures The personality of managers was evaluated with the scale proposed by Goldberg (1999) for the five factors. The items were measured by means of a five-point Likert scale. The Cronbach alpha values calculated for each factor were: extraversion = 0.75; conscientiousness= 0.70; agreeableness= 0.70; openness to new experiences = 0.64; and neuroticism = 0.65. For the measurement of emotional intelligence, the scale developed by Wong and Law (2002) was used, which considers four sub-dimensions of the construct: (1) perception of one's own emotions; (2) perception of emotions of other individuals; (3) use of emotions; and (4) regulation or control of emotions. The items were evaluated on a five-point Likert scale. The Cronbach alpha obtained was 0.79. Intelligence of managers was evaluated using questions extracted from the GMAT (Graduate Management Admission Test), which assesses cognitive ability domains similar to those evaluated by the Wonderlic Personnel Test (WPT), and is widely used in selecting candidates for business administration graduate programs. Although the WPT is the most extensively validated intelligence test available (Judge et al., 2004; Rubin, Bartels, & Bommer, 2002), it was not possible to obtain a Portuguese language version (language of the respondents). The GMAT questions, in addition to being translated into Portuguese, were selected from publically available exams. Several studies have found that university admission tests are highly correlated with IQ, in particular correcting for non-linearity (Frey & Detterman, 2004), and seem to be good predictors of performance in graduate school (Kuncel, Credé, & Thomas, 2007; Oh, Schmidt, Shaffer, & Le, 2008). Correlations between the Wonderlic and the GMAT of 0.56 have been reported (Pesta & Poznanski, 2009), and reach 0.60 when corrected for unreliability in both measures. These observations suggest that the exam also assess the underlying intelligence of respondents (Ree, Earles, & Teachout, 1994), thus justifying their use as a proxy variable to link IQ to individual outcomes. The leadership traits of the managers were measured with the twenty questions that make up the transformational dimensi...