Unit 2 - Are women better/Impact of transformation/leadership vs management PDF

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“Are Women Better Leaders than Men?” March 15, 2012, Harvard Business Review, by Jack Zenger & Joseph Folkman, from HBR Blog Network - "Impact of transformational CEOs on the performance of small- to medium-sized firms: Does organizational context matter?", Journal of Applied Psychology, Ling, Y., L...

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Unit: 02

Are Women Better Leaders than Men? By: Jack Zenger and Joseph Folkman 

The authors conducted a study of 7,280 leaders, which their organization evaluated in 2011.

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This dataset was generated with leaders from successful leaders in public, private, government, commercial, domestic, and international sectors.

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Based on this data, it was found that a majority of leaders (64%) are men. Additionally, the higher the level of management, the more men there were.

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In this group, 78% of the top managers were men, 67% of the senior executives reporting directly to the top manager were men, and 60% of the level directly below that were also men.

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However, in these studies, women scored higher than the men leaders in areas such as exhibiting integrity, developing others, building relationships, and engaging in self-development.

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Additionally, more women were rated by their peers and their bosses as better overall leaders than their male counterparts in every single management level (top manager, middle managers, etc.).

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The two traits where women outscored men to the highest degree were taking initiative and driving for results.

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Men outscored women significantly on only one category- the ability to develop a strategic perspective.

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The authors then asked women why they thought these results were discovered. They responded with things like “We need to work harder than men to prove ourselves.” And “We feel constant pressure to never make a mistake and to continually prove our value to the organization.”

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Based on their findings, the authors believe that managers and leaders should:  Look hard to find the talent they need in order to achieve exceptional results and make more people aware that women have impressive leadership skills.  Prevent discrimination

Theory and Hypotheses-CEO Transformational Leadership and Firm Performance in SMEs (Small and Medium Enterprises)  Good transformational leaders demonstrate four interdependent and mutually reinforcing attributes o Charisma o Inspirational Motivation o Intellectual Stimulation o Individualized Consideration  Transformational leaders are effective when they give followers motivation  The more stakeholder groups CEOs have to answer to, the more leadership constraints they face  Small firms have no incentive to employ outside directors as they may limit the CEO’s discretion  SME (Small and Medium Enterprises) CEO’s are involved with both the operations and the strategies whereas large firm CEO’s tend to evaluate the performance more than be directly involved (Operational managers are involved in large companies)  SMEs provide a particularly advantageous setting for transformational CEOs in enhancing firms performances  CEOs are more engaged in the implementation of the firm’s strategy with greater handon experience, so there is a greater opportunity to directly encourage and support thinking among all the firm’s employee’s  Employees in an SME are more likely to look to the CEO for clarification and reassurance  Hypothesis 1: In SMEs, CEO transformational leadership is positively related to firm performance

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Moderating Factors Although transformational CEOs in SMEs have extensive managerial discretion to influence firm performance, upper echelons theory and in particular theories about founding characteristics and CEO development suggest that to some extent this influence is contingent upon three factors: firm size, CEO founder status, and CEO tenure

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Firm Size Hypothesis 2: In SMEs, the positive relationship between CEO transformational leadership and firm performance is stronger for smaller firms

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Founder Status Hypothesis 3: In SMEs, the positive relationship between CEO transformational leadership and firm performance is stronger for founder CEOs

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CEO Tenure Hypothesis 4: In SMEs, the positive relationship between CEO transformational leadership and firm performance is stronger for CEOs with longer tenure

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Method- Sampling Strategy and Data 158 SMEs were used for this study (after taking out SMEs that incorrectly completed the survey or had less that half of their top management team respond) A survey was given to each CEO with a pre-paid postage envelope as well as to their top management team (TMT) 121 firms were used for the final sample o They averages 62 employees, $4.9 million in sales, and 24 years of age o Their TMTs averages 4.5 members (including the CEO) o Average participation rate of the TMTs was 83% o Average TMT tenure was 9.2 years o 91% of the members had served at least 3 years with the team o 92% had served at least 3 years with the company Measures-Transformational Leadership The study was measured using the Multifactor Leadership Questionnaire TMTs were asked how often the CEO engages in the four components of transformational leadership (charisma, inspirational motivation, intellectual stimulation, and individualized consideration) A one-way analysis of variance was performed o The reliabilities for the four dimensions of charisma, inspirational motivation, intellectual stimulation, and individualized consideration were .93, .92, .88, and .85, respectively. o The reliability for the overall transformational leadership scale was .90

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Firm Performance Sales growth was the focus of the measurement CEO’s were asked to compare their firms performance to that of major competitors

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Firm Size Was based on the number of full-time employees

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Founder Status Measured by the responses on the questionnaire o 68 CEOs answered yes, 53 CEOs answered no CEO Tenure On average, the CEOs in the sample had served 13 years in their position Covariates Prior firm performance was controlled The firms were categorized in the sample into four industries: manufacturing, scientific and technical services, construction, and others Environmental uncertainty was also a covariate

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Results There is support for Hypothesis 1, which predicted a main effect of CEO transformational leadership o With the covariates in the model, CEO transformational leadership was positively associated with both the objective and perceived measures of firm performance, and the change in R 2 was significant Hypothesis 2 was partially supported Hypothesis 3, regarding the moderating effects of founder status on the leadership– performance relationship, was supported for both measures of performance Hypothesis 4, which addressed the moderating effects of CEO tenure, was supported for both objective and perceived firm performance Discussion Previous studies on the impact of transformational CEOs on firm performance focused on large organizations, whereas this study focuses on SMEs (Small to medium enterprises) Contrary to researchers that generally have found transformational CEOs to have a null influence on firm performance in large firms this study found a significant association in SMEs The study found that transformational CEOs had a significant, direct effect on both objective and perceived time-lagged measures of firm performance From a theoretical perspective, the findings contribute to the debate among upper echelons theorists and population ecologists as to whether or not CEOs play a key role in impacting firm performance. The study found that CEO tenure played a moderating role by enhancing the impact of transformational leadership on firm performance, suggesting that the most influential transformational CEOs in SMEs are the more experienced one

Leadership vs. Management skills As managers and leaders, it is fundamental to make a clear-cut distinction between leadership skills versus management skills. According to John P Kotter: 3 main things that a manager does: 1) Plans and budgets  sets up time schedules  allocates resources 2) Organizes and staffs  staffs the structure  delegates authority  provides policies and procedures  creates systems 3) Controls and solves problems  keeps an eye on outcomes  detects variations in the plan  plans and organizations to correct such variations The essence of management is predictability and order—to produce short-term results—for customers, for stockholders, and so on. 3 main things that a leader does: 1) Establishes direction  Develops a vision  Develops a strategy for achieving such vision 2) Aligns people  Communicates the direction so that everyone involve understands and acts upon it 2) Motivates and inspires  Helps people to overcome barriers to change, by satisfying basic human needs The essence of leadership is change—to produce long-term results—like new breakthrough products, new markets, and so on. Difference between leadership skills and management skills: Leadership skills - deals mostly with change—the future state of affairs. Management skills - deals mostly with the status quo— the existing state of affairs.

To clarify, structures and systems are tools that managers use more, while culture and vision are tools that leaders tend to use more. Further, management deals more with the immediate future, while leadership deals for with the long-term future. Leadership Levels The higher up in the organization = the more you must behave as a leader The lower in the organization = the more you must behave as a manager Leadership, Management Roles are Complex Another distinction between leadership and management skills that is practical and useful is the distinction made by Marcus Buckingham. The roles of the manager and the roles of the leader are undeniably complex. He affirms the following:  

If you want to be a truly great manager, you must discover what is unique about each person you manage, and capitalize on it. If you want to be a truly great leader, you must discover what is universal about the people you lead, and capitalize on it.

Summary The leadership skills versus management skills distinction is critical if you are to lead and manage your organization properly, so that you may build a sustainable competitive advantage. Understanding this distinction will help you gain clarity with roles and responsibilities, with organizational design, and, most of all, with your management and leadership practice....