Leadership Style, National Culture and Employee Satisfaction: Empirical Evidence from European R&D Companies
Independent thesis Advanced level (degree of Master (One Year))Student thesis
The purpose: Both academics and practitioners have demonstrated a keen interest in the topics of leadership style and employee performance within research and development (R&D) organisations. Much of the interest in these topics centres on claims that leadership style and local culture are linked to R&D performance. However, while the links between leadership and performance, leadership and culture, and work performance and employee satisfaction have been examined independently, few studies have investigated the association between all of these concepts. This study examines the relationship between leadership study and employee satisfaction in European R&D settings and provides empirical evidence that the leadership style is influenced by the national culture that is present. The paper presents a number of implications for theory and practice. Methodology: A quantitative study was carried out across a number of European R&D organisations, with the primary source of data obtained through the use of established surveys distributed to researchers and R&D leaders. Findings: Transformational leadership was found to be positively correlated with employee satisfaction in European R&D organisations and the scales of individualised consideration and inspirational motivation to exhibit the highest correlations with the researchers’ satisfaction among all of the leadership dimensions. Transactional leadership was found that does not support employee satisfaction, although the dimension of active management by exception contributes to researchers’ satisfaction. Leadership style and its individual dimensions were found to be dependent on the geographic location around Europe as a result of the effect of national culture. Whilst in Northern and Central European R&Ds transformational and transactional leaders have equal share, in the Southern European R&Ds the dominant leadership style was the transaction one, due to the higher power distance and the less flat structure in the society. In Southern European R&Ds the prevalent transformational dimension was idealised influence, while individualised consideration was the dominant one in Northern and Central European R&Ds. Research Implication: This study contributes to the body of knowledge on cross-national effects of leadership styles on employee satisfaction in European R&D organisations since the existing studies focus primarily on leadership style and performance. Practicality of the work: This work provides useful information about the effective leadership style, which brings satisfaction to researchers in European R&D organisations, and the prevalent leadership style in a given country as a result of the influence of national culture. Thus, it provides the knowledge required for a R&D organisation to set up appropriate training programs which will produce leaders who will be able get the best out of their researchers by ensuring high levels of employee satisfaction.
The current research work provides empirical evidence of the importance of transformational leadership on promoting employee satisfaction in R&D environments, which is in line with the existing studies in this field. Transformational leadership was found to be positively correlated with employee satisfaction and the scales of individualised consideration and inspirational motivation to exhibit the highest correlations with general satisfaction among all of the leadership dimensions. Transactional leadership was found not to promote employee satisfaction, although the dimension of management by exception (active) seems to contribute to all three scales of satisfaction. This result does not confirm the findings of studies which investigate the effect of transactional leadership on employee satisfaction in conventional organisations, however it is aligned with studies conducted in R&D organisations (Berson and Linton, 2005), and provides additional evidence that the complexity of such working environments results in different trends from the common ones. An attempt was also made to examine the effects of national culture on the leadership style, trying to focus on the main cultural differences observed between Northern/Central and Southern Europe. While in Northern and Central European R&Ds the number of transformational managers was found to be equal to the number of transactional ones, in the Southern Europe the transactional leadership style was found to be the dominant one, as a result of less flat structure and higher power distance in the society. The above result confirmed the conclusion, which was drawn by other studies conducted in other types of organisations, that the higher power distance the more prevalent the transactional leadership is (Whitley, 1997 and Chen 2001). However, in Northern and Central European R&Ds, transformational leadership was not identified as the prevalent leadership style as expected based on these studies. A most interesting observation was that the majority of managers believe that transactional leadership should be the style to follow even though the data clearly shows that it does not bring employee satisfaction. Investigation was also conducted on the individual dimensions of the transformational leadership style in order to find how they vary between the different geographic locations in Europe, as a result of the influence of the national culture. It was found that individualised consideration and inspirational motivation where the dominant dimensions in Northern and Central European R&Ds while idealised influence was the prominent one in the Southern European ones. The above results confirmed the findings of Tsai (2009) who pointed out that in hierarchical cultures charismatic leadership is the most prominent style. The authors believe that the current study will prove invaluable information to organisations, which consider setting up new R&D sites in the European region, related to the leadership style that the local managers should have in order to keep the employees satisfied. Moreover, it can provide guidance to R&D organisations as to whether or not they should establish or enhance the training given to new or existing managers in order to promote the desired leadership style, which will bring success to the organisation.
Place, publisher, year, edition, pages
2014. , 65 p.
R&D, leadership style, employee satisfaction, work performance, cross-national, transformational, transactional.
Business Administration Other Mechanical Engineering
IdentifiersURN: urn:nbn:se:bth-2913Local ID: oai:bth.se:arkivex85F36180C312B1A9C1257D5F0057BE17OAI: oai:DiVA.org:bth-2913DiVA: diva2:830208