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Inger N. Basker (Department of Strategy and Management, NHH Norwegian School of Economics, Bergen, Norway) Therese E. Sverdrup (Department of Strategy and Management, NHH Norwegian School of Economics, Bergen, Norway) Vidar Schei (Department of Strategy and Management, NHH Norwegian School of Economics, Bergen, Norway) Alexander M. Sandvik (Department of Strategy and Management, NHH Norwegian School of Economics, Bergen, Norway)
This paper examines the relationship between chief executive officers' (CEOs') leadership behaviors (consideration and initiating structure) and firm and individual performance (i.e. profitability, affective commitment and employees' willingness to change) in small and medium-sized firms (SMEs) that need to adapt to changing environments.Abstract
Purpose
Design/methodology/approach
Survey data was collected from SMEs (28 firms, 235 employees) in the accounting industry along with objective performance register data (profit and return on assets). The predicted model was tested with multilevel structural equations modeling (MSEM) using a maximum likelihood estimator.
Findings
The CEO leadership behavior of initiating structure was positively related to firms' profitability, while the CEO leadership behavior of consideration was positively related to employees' willingness to change and affective commitment.
Practical implications
Small accounting firms typically offer standard services that are now being replaced by digital solutions. These firms have an incentive to offer new services, such as business advisory services. Therefore, leaders should embrace the duality of consideration and initiating structure to gain employees' willingness to change and optimize overall firm performance.
Originality/value
The paper contributes to leadership literature by examining a novel context (CEO consideration and initiation of structure in SMEs in uncertain environments) using a combination of firm performance measures (e.g. objective outcomes at the firm level and employees' willingness to change as a new measure at the individual level). In addition, it reports a comprehensive test of the full model using MSEM, the findings of which demonstrate the importance of dual leadership behaviors for CEOs.
Keywords
- CEO leadership behavior
- Consideration and initiating structure
- Performance
- Willingness to change
- Affective commitment
- Multilevel structural equation modeling (MSEM)
Acknowledgements
This research was supported by the FOCUS (Future-Oriented Corporate Solutions) program at NHH Norwegian School of Economics. We want to thank Henny Marie Fløystad for her help in collecting the data. We are also grateful to Arne L. Kalleberg and Sven A. Haugland for insightful feedback. Thanks also to Jørgen Lund and Sandra Riise in Regnskap Norge for valuable support.
Citation
Basker, I.N., Sverdrup, T.E., Schei, V. and Sandvik, A.M. (2020), "Embracing the duality of consideration and initiating structure: CEO leadership behaviors and small firm performance", Leadership & Organization Development Journal, Vol. 41 No. 3, pp. 449-462. //doi.org/10.1108/LODJ-04-2019-0170
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited
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Definition (1): The initiating structure is the extent to which leaders define their roles and the group members ‘roles in attaining goals. Definition (2): The initiating structure indicates-“The level at which the task and achievement-oriented behaviors are articulated among school administrators (Hoy et al., 1991).”
Definition (3):
The initiating structure means the degree, to which a leader defines a leader and team member roles, begins actions, organizes group functions, and defines the way tasks are to be done by the group.
According to the Ohio State Leadership Studies in 1945, leader behavior has two dimensions such as consideration and initiating structure. The study suggested that leaders show two kinds of behaviors to ensure the achievement of the goal:
- People-oriented and
- Task-oriented
Here, we are discussing the second dimension of leader behavior. This style of leadership is task-oriented. In 1945, at Ohio State University, a team of researchers attempted to recognize the leaders’ observable behaviors rather than recognizing their personality traits. They developed a list of 1790 statements to achieve this. This list was shortened to 150 statements planned to measure 9 separate dimensions of leader behavior. These statements were applied to formulate the Leaders Behavior Description Questionnaire (LBDQ).
Some of the mentioned statements used for measuring this structure in the LBDQ are:
- Helping group members to be informed about what is expected of them
- Maintaining specific standards of performance
- Scheduling the tasks to be done
- Ensuring that group members follow standard rules and regulations