Efficiency of Leaders in Micro, Small and Medium-sized Enterprises within the Leszno Subregion in Poland in the Light of the Globe Project
DR PIOTR DZIKOWSKI
Poznan University College of Business POLAND
Abstract: The main purpose of this paper is to present the diagnosis of efficiency of leaders in micro, small and medium-sized enterprises in the Leszno subregion in Poland. The secondary objec-tive is to compare results obtained in the Project GLOBE with the results received in this re-search to find the most efficient leadership practices. The survey was conducted on the basis of 360 degrees method (Lepsinger, Lucia, 1997) with the use of the effective leadership competency model (Goldsmith, Greenberg, Robertson, Hu-Chan, 2003). Leaders represent fairy high levels of both autonomous and self-protective leadership. The average level of efficiency of leadership competencies is very low. The highest level of employees’ satisfaction (23.95%) concerns the leading change competency whereas only 9.56% of respondents are satisfied with the efficiency of encouraging constructive dialogue competency.
Key Words: leadership, leader, competencies, SME, GLOBE
As the result of globalization processes leaders need to acquire new skills to help their companies survive. Only organizations, which use the knowledge and invest in increasing their intellectual capital, have a chance of success. In micro, small and medium com- panies founders often play the role of the leader. They influence the behavior of both subordinate leaders and subordinates. The key personal leadership com- petencies set include the following competencies: the ability to lead a change (Kotter, 1990), encouraging constructive dialogue (Gobillot, 2006), appreciating global diversity (Goldsmith, Greenberg, Robertson, Hu-Chan, 2003), achieving personal mastery (Covey, 2004), demonstrating integrity (Bennis, Goleman, O’Toole, 2009). The most important team leadership competencies are: building partnerships and alliances (Ibarra, Hunter, 2007), sharing leadership (Buck- ingham, Coffman 2001), creating the shared vision (Conger, 2003), (Nanus, 2007), developing people (Kanter, 1989), empowering people (Kouzes, Posner, 2007). Whereas the highly required strategic leader- ship competencies are: thinking globally (Goldsmith, Greenberg, Robertson, Hu-Chan, 2003), maintaining a competitive advantage (Buckingham and Hoffman, 2001), developing technological savvy (Nirenberg, 2007), ensuring customer satisfaction (MacRae, 2002), anticipating opportunities (Bennis, 2003).
However societal cultural values and practices af- fect what leaders do (House, Wright & Aditya, 1997). Leadership affects organizational form, culture, and practices (Schein, 2004). Societal cultural values and practices also affect organizational culture and prac- tices (House, Wright, & Aditya, 1997). Organizational culture and practices affect what leaders do (Schein, 2004). Over time, global culturally endorsed implicit leadership styles (CLTs) are developed in each cul- ture in response to both societal and organizational culture and practices (Lord & Maher, 1991). Strategic organizational contingencies (size, technology, and environment) affect organizational form, culture and practices and leader behaviors (Newman & Nadler, 1988). Relationships between strategic organizational contingencies and organizational form, culture and practices will be moderated by cultural forces. Leader acceptance is a function of the interaction between CLTs and leader attributes and behaviors. Leader ef- fectiveness is a function of the interaction between leader attributes and behaviors and organizational contingences. Leader acceptance influences leader effectiveness. Leader effectiveness influences leader acceptance (Project GLOBE, 1999, p.20).
The survey was conducted on the basis of 360 degrees method (Lepsinger, Lucia 2007: 30-37) with the use of the effective leadership competency model (Goldsmith, Greenberg, Robertson, Hu-Chan 2007: 400-404). The study was performed within 6 months between December 2007 and May 2008. The research was divided into three parts. In the first part employ- ees were asked to fill the Observer Sheet. They were randomly selected on the basis of records of Central Statistical Office in Kościan (Wielkopolska). It con- sists of a register of all micro, small and medium- sized enterprises operating in the region of Leszno. The region includes the city of Leszno with 8190 micro-enterprises, 387 small enterprises, 124 medium and 15 large companies and the Leszno district with 7785 micro enterprises, 272 small, 72 medium and 4 large (Office Statistics, 2008). An additional criterion checked each time before sending the sheet was the size of the company (at least 5 people, but not more than 249 people) and the size of the team led by the assessed person (minimum 5 people). The researcher received 248 correctly filled questionnaires out of 700 distributed so the response rate was 35.4%. The research included 96 superiors. Next part of the study was based on the interviews with the 16 carefully selected leaders. The interviews concerned the ap- plication methods and practices related to leadership behaviors, attitudes and activities. Finally 2 leaders were selected and carefully analyzed on the back- ground of their businesses. 36.29% of surveys were from employees of micro enterprises, who assessed the competence of 27.08% rated superiors. 42.74% of surveys were from employees of small businesses, who assessed the competence of 47.92% rated supe- riors. 20.97% of surveys were from medium-sized enterprises for workers who assessed the competence of 25.00% rated superiors. Metric study was presented in Table 1.
Source: own compilation.
In summary, 106 employees (42.74%) of people surveyed are employees of small enterprises who eval- uated the efficiency of 46 direct supervisors (47.92%).
The GLOBE is a network of 170 social scientists and management scholars from 61 cultures throughout the world, working in a coordinated long-term effort to examine the interrelationships between societal cul- ture, organizational culture and practices, and organi- zational leadership. The survey involved 17000 middle managers including 600 managers from Poland.
All surveyed managers work in three sectors: telecommunications, food processing and financial and have at least one supervisor and one subordinate. GLOBE combined trait and behavioral descriptors to reflect relevance to leadership effectiveness. These items were measured on a 7-point scale from a low of “This behavior or characteristic greatly inhibits a person from being an outstanding leader” to a high of “This behavior or characteristic greatly contributes to a person being an outstanding leader.” Respondents reflected on a given definition of effective leadership as the ability of an individual to motivate, encourage, and enable others to contribute to the success of the organization of which they are members.
III. LEADER EFFECTIVENES
Figure 1 presents how satisfied employees of micro, small and medium-sized enterprises are with the way their supervisors act. The presented response rate means the percentage of people who answered 5 – highly satisfied to all questions within a given competence. If the results are presented differently, this means that workers answered less than 5 (respectively: 1 – Highly dissatisfied, 2 – Dissatisfied, 3 – Neither satisfied nor dissatisfied, 4 – Satisfied). The analysis does not include cases where there are no answers.
The highest level of employees’ satisfaction concern the leading change competency (23.95%), maintaining a competitive advantage competency (22.98%) and devel- oping technological savvy competency (22.78%). Let’s analyze the structure of these competencies. The table 1 shows all behaviors, actions and attitudes related to the leading change competency. 28.93% of employees think their superiors see a change as an opportunity, not a problem. Such an attitude is often rooted in negative experiences, which has a person trying to introduce radical changes. According to the surveyed employees only 25.22% of their superiors emphasize their openness to change, questioning the current system when change is needed. Whereas 22.95% leaders are concerned as people who demonstrate flexibility when required. In consequence 17.20% leaders can effectively translate create ideas (originated from the others) into business results.
According to 32.50% of employees their supervi- sors are highly effective in holding people accountable for their results, but 25.42% of them agree that they eliminate waste and reduce unneeded cost effectively. 15.13% of respondents are satisfied with the way their leaders inspire them towards better work. The lack of positive communication results in 81.08% of employees who are dissatisfied with the quantity of long term achievements. Furthermore, 78.77% of people surveyed claim that their leaders are not able to motivate them enough to provide products and services that help their companies have a clear competitive advantage. The table 2 includes the described results.
The satisfaction level of employees of micro, small and medium-sized enterprises
Source: own compilation.
17.77% of employees surveyed are convinced that their leaders are highly effective in developing a sense of technological competency. Table 3 shows all behav- iors, actions and attitudes related to this competency.
32.14% of employees are satisfied with the way their leaders acquire the technological knowledge needed to succeed in tomorrow’s world. Neverthe- less, there are 83.96 % of people convinced that their leaders cannot successfully recruit people with needed technological expertise. Without ability of employing technical oriented people it is not able effectively to manage the use of technology to increase productivity.
19.39% of satisfied respondents say that their leaders are competent at it.
The leader effectiveness is the lowest at devel- oping people (15.77%), appreciating global diver- sity (15.19%) and encouraging constructive dialogue (9.56%) competencies.
90.44% of employees think their superiors do not encourage them to take the dialogue which means that employees at different levels of organization are
discouraged by their superiors to contribute their ideas, speak, and talk about the opportunities, concerns and problems. The table 4 includes behaviors, actions and attitudes of the encouraging constructive dialogue competency.
13.82% of workers find that their superiors effectively listen to them. The low level of this skill deprives the leaders of valuable sources of information, which are highly required to better understand and solve the problems faced by the employees and the organization. An important element of such a dialogue is the ability to avoid defensive attitudes, positively recognized by 5.26% surveyed workers. 94.17% of workers claim that their supervi- sors never ask how they could improve. Furthermore 11.02% subordinates agree that their leaders strive to understand the other person’s frame of reference. Ac- cording to 87.78% subordinates the lack of inspiration and courage results in the low level of organizational innovations and status quo.
According to 15.19% of subordinates their leaders appreciate diversity at their workplace.
Behaviors, actions and attitudes of the maintaining a leading change competency
Source: own compilation.
Behaviors, actions and attitudes of the maintaining a competitive advantage competency
Source: own compilation.
Behaviors, actions and attitudes of the developing technological savvy competency
Source: own compilation.
The table 5 contains a set of actions included in the competency of the appreciation of diversity. 22.22% of people agree that their leaders embrace the value of such elements as culture, race, sex and age. 17.17% of respondents say that their superiors actively expand their knowledge of other cultures. However 92.23% of people stress that their superiors do not help them appre- ciate the value of diversity. 11.88% of respondents are satisfied with the ways of motivating them and 15.83% of surveyed people agree that their leaders recognize effectively the value of diverse views and opinions.
84.23% of workers do not see the actions of their superiors associated with the development potential of their subordinates. The table 6 consists of the struc- ture of the developing people competency. 90.09% of subordinates say that they do not get any develop- mental feedback in a timely manner from their lead- ers. Whereas 89.47% of surveyed people claim their superiors do not provide effective coaching. According to 84.03% of respondents their leaders do not ensure that they receive the training they need to succeed.
19,83% of subordinates agree their leaders can recognize their achievements. 23,77% of respondents are satisfied with the way leaders treat them. However low respect for the others have very negative impact on the quality of mutual cooperation (Kanter, 1989).
Behaviors, actions and attitudes of the encouraging constructive dialogue competency
Source: own compilation.
Behaviors, actions and attitudes of the appreciating diversity competency
Source: own compilation.
Behaviors, actions and attitudes of the developing people competency
Source: own compilation.
The table 7 includes the set of the most effec- tive behaviors, actions and attitudes (80 percentile). 40.68% of respondents are highly satisfied with the “courageously „stand up” for what she/he believes in” attitude included in demonstrates integrity competency.
According to 32.52% of subordinates their leaders give them the freedom they need to do their job well (empowering people competency) and 32.50% of em- ployees agree that their leaders hold them accountable for their results (maintaining competitive advantage competency). The forth efficient behavior is a part of developing technological savvy competency. 32.14 % of surveyed % subordinates claim their superiors strive to acquire the technological knowledge needed to succeed in tomorrow’s world. 30.00% of people are highly satisfied with the way their leaders invest in the ongoing personal development which is included in achieving personal mastery competency.
The most effective behaviors, actions and attitudes (80 percentile)
Source: own compilation.
IV. POLISH CLT PROFILE (PROJECT GLOBE)
The overall profile of a Polish organizational leader based on globally endorsed leadership dimensions is displayed in the table 8. According to GLOBE, char- ismatic/value-based leadership (leader is visionary, inspirational, self-sacrificing, performance oriented) is seen as most desirable. The aggregate score for univer- sal positive leader attributes for Poland, summarized in Charismatic/Value-Based Leadership dimension, is relatively low (5.67). This is interpreted as only slightly contributing to outstanding leadership.
Leadership and organizations The Globe Study of 62 Societies, Sage Publications, Inc, California, 2004, p.137, 685, 713.
The first order dimensions for Charismatic/Value- Based Leadership display Visionary (6.03) as the prioritized dimension in considering effective leader- ship in Poland. Considering the lack of societal values and the high uncertainty regards the economy and society, the ability of leaders to formulate a vision on the organizational level is critical for the followers in the organization.
Team-Oriented (leader is collaborative, team inte- grator, diplomatic) is generally desirable. In the East European cluster it was higher than the group mean (5.88). However Poland is evolving towards a more individualistic society so in such a society it is not high or critically important to effective organizational leadership.
Involving others in making and implementing decisions, according to GLOBE, universally contrib- utes to effective leadership. However, Poland’s score on this dimension is low (5.04). Within the Eastern European cluster, the Poland’s score equals to the group mean (5.08). However first order dimensions explain contribution to Participative orientation. One is the high Autocratic score (reverse score) and it did not contribute to effective leadership. The other is Non-Participative (reverse score). Its relative value inhibiting from effective leadership is high. Hence, participation did not play an important role in defining effective leadership in Poland.
The humane oriented style is also very low in Po- land (4.56) and it may be interpreted as having limited impact on outstanding leadership. It is lower than the Eastern European cluster mean (4.76). In a transitional economy dominated by survival behaviors, with high corruption and bureaucracy, humanistic values exist in a limited number of companies that emphasize socially responsible philosophies.
This self-protective dimension corresponds to universal negative leadership attributes and focuses on ensuring the safety and security of the individual, but concerning Poland, this culture-sensitive impediment slightly negatively contributes to effective leadership. The Self-Protective score for Poland (4.34) placed the country in the A band and is higher than the Eastern Eu- ropean mean (3.67). Since this is the reversed score, the negative impact on the universal CLT is quite visible.
The second order dimension, Autonomous, displays independent and individualistic leadership. Many Pol- ish business leaders emphasize their uniqueness and their autonomous performance. The score on this CLT (3.52) placed the country very high. The first-order dimension score (Autonomous) explained this CLT as inhibiting outstanding leadership. In the Eastern European cluster Poland is lower than the group mean (4.20).
Global Culturally Endorsed Implicit Leadership (CLT) Dimensions: Poland in Cross-cultural Space
Source: House R.J., Hanges P.J., Javidan M., Dorfman P.W., Gupta V., (2004), Culture, leadership, and Organizations
An outstanding leader in Poland is one who com- bines Charismatic/Value Oriented leadership with fairly high levels of Autonomous leadership, and is also capable of Self-Protective behaviors. The overall level of effectiveness of leadership is very low. Lead- ing change competency (23.95%) is the highest scored competency whereas the lowest one is encouraging constructive dialogue competency (9.56%). The most efficient behaviors are part of the Charismatic/Value- based style (courageously „stand up” for what she/ he believes in, gives people the freedom they need to do their job well, holds people accountable for their results, and clearly identifies priorities). However Polish efficient leaders are also autonomous (strives to acquire the technological knowledge needed to suc- ceed in tomorrow’s world, invests in ongoing personal development) and self-protective (demonstrates self-confidence as a leader). Subordinates actually do not participate in the decisive processes. Their leaders treat them rather as a tool to achieve companies’ goals (low marks: encouraging constructive dialog, developing people, appreciating diversity). The diagnosed atti- tudes and behaviors originated from national culture. The study found that a leader alone is the carrier of the change and has a significant impact on creating an organizational culture. However, only a few Pol- ish managers appreciate the importance of leadership competence. The lack of an inspirational support for people’s innovation decreases their commitment and engagement. The important role in this process plays leaders who develop ideas to meet the needs of the new environment. Most leaders cannot organize business processes from the ultimate customer perspective. Some leaders recognize the impact of new technolo- gies and seek to acquire basic technical knowledge to success in the world of Internet. Much worse is the effective use of it in order to increase productivity and effective recruitment of people having the required technical expertise. Due to the fact that most of the companies surveyed encompasses only the region of Poland, or more frequently the local market, the major- ity of surveyed workers feel that their superiors do not recognize the impact of globalization on business and industry, in which they operate. In this way they limit the development of their companies very much. Keep- ing people on the short-term actions is the most popular attitude among leaders. Most of their decisions concern the achievement of immediate profits. Investments in the future play minor role. These attitudes are part of Polish cultural dimension. Polish Future Orientation dimension is rather low so as uncertainly avoidance. It means that both Polish employees and managers are very flexibly and do not plan a lot. Furthermore In- group Collectivism and Power Distance are very high, so managers who ask people to participate in decisive processes too often are seen as weak.
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DR PIOTR DZIKOWSKI Poznań University College of Business ul. Niedziałkowskiego 18 61-579 Poznań, POLAND