OF MOTIVES AND MANAGEMENT...In the following I will first review, in brief, relevant literature on...

OF MOTIVES AND MANAGEMENT

A MEASURED MONOGRAPH

Dissertation

zur Erlangung des Doktorgrades

des Fachbereichs Humanwissenschaften

der Universität Osnabrück

vorgelegt

von

Stacie Chantel Charlene Stahnke

aus

Miami, Florida, USA

Osnabrück, 2012

DEDICATION

To Mattie B. Burden,

for teaching me all the

essentials of life

in such a brief amount of time.

ACKNOWLEDGEMENTS

"The Master leads

by emptying people's minds

and filling their cores,

by weakening their ambition

and toughening their resolve." ~ Lao Tzu

It is said that a Zen Master once declared that any person you encounter could

be your Master, if you let them. If you understand what it is that person and that

encounter is meant to teach you. With age I have still just merely begun to

understand the wisdom in that statement. There are many people who have helped

me stay motivated and focused along this journey, while at the same time not letting

me lose sight of what is really important, and I would like to express my gratitude,

my appreciation, and my thankfulness for the different roles they have played in my

life.

To begin I would like to thank Ruth Wageman. Ruth supported me from the

first time we met. I was a young consultant, full of energy and ideas, but faced with

great opposition. In all of my endeavors Ruth was and is there to offer me

encouragement and guidance. Alongside Ruth several others would eventually

support the realization of my initial idea. I would like to thank Elizabeth for all of

her patience and logistic support, working as a liaison, administrator, and even

friend, once we met during my research visit to Boston. I would like to thank Deb,

Ruth Malloy, Signe, Mary, and Jim for their insights and early morning breakfasts

to offer me perspectives when I thought I had hit a dead end. I would like to thank

Steve for his willingness to help me structure my data and I would like to thank

Maricely for her patience with my repeated database requests.

During my university experience there have also been several people who

have been great motivators for me. Firstly my student assistant, Daniel, who

supported me in so many different areas: in the classroom, in my research, and in

normal administrative duties. If it were not for him, I would have been much less

organized and structured. He consistently showed ardor towards my newest

research interests, and most importantly we both, with our quirky personalities,

always found common ground and so were able to maintain a pleasant and

productive work atmosphere. I would also like to thank David G. Winter. I enjoyed

our exchanging ideas for new research topics. His enthusiasm for my research

interests has been my prime motivator in continuing my inter- and multidisciplinary

work. And lastly I would like to thank my Osnabrück academic family. The entire

staff has been supportive and has shown great interest in my work. I would like to

thank Miguel for taking time out of his busy schedule to look at my analyses and

offer me specific feedback and programming help. And great gratitude is in order

for my advisor, Julius Kuhl, who has been more than supportive, offered me great

freedom, gave me the benefit of the doubt, and most importantly showed as much

ardency for my work as I do.

In conclusion I would like to express my indebtedness to people in my private

sphere who have reinforced, sustained, and supported me unconditionally. To

everyone close to me, whether it was keeping me calm before a presentation, simply

listening to my doubts and then laughing about them, or helping me discover my

creative side again, thank you!

Osnabrück, August 2012

Contents I

CONTENTS

1 ABSTRACT 2

2 INTRODUCTION 4

2.1 MOTIVES AND MOTIVATION 5

2.1.1 Implicit motives and behavior. 7

2.1.2 Implicit vs. explicit motives and behavior. 10

2.2 LEADERSHIP IN THE SOCIAL SCIENCES 12

2.2.1 Motives and managerial success. 15

2.2.2 Leadership competence and performance. 18

2.2.3 Leadership and organizational climate. 26

2.3 PRESENT RESEARCH 31

3 STUDY 1 - MOTIVES AND ADVANCEMENT IN FAMILY BUSINESSES 35

3.1 METHOD 41

3.1.1 Sample. 41

3.1.2 Procedure. 43

3.1.3 Measures. 43

3.1.4 Operationalization. 46

3.2 RESULTS 48

3.3 DISCUSSION 57

4 STUDY 2 - EFFECTS OF EXPLICIT AND IMPLICIT MOTIVES ON COMPETENCE 63

4.1 METHOD 70

4.1.1 Sample. 70

4.1.2 Procedure. 71

4.1.3 Measures. 72


4.2 RESULTS 80

4.2.1 Case 1. 80

4.2.2 Case 2. 83

4.2.3 Case 3. 91

4.3 DISCUSSION 97

4.3.1 Case 1. 97

4.3.2 Case 2. 100

4.3.3 Case 3. 105

4.3.4 Limitations and general conclusions. 110

Contents II

5 STUDY 3 - EFFECTS OF IMPLICIT MOTIVES, EXPLICIT MOTIVES, AND LEADERSHIP STYLES ON

ORGANIZATIONAL CLIMATE 112

5.1 METHOD 117

5.1.1 Sample. 117

5.1.2 Procedure. 118

5.1.3 Measures. 119


5.2 RESULTS 123

5.2.1 Actual organizational climate as perceived by subordinates. 123

5.2.2 Ideal organizational climate as desired by managers. 127

5.3 DISCUSSION 134

6 GENERAL DISCUSSION 148

6.1 LIMITATIONS AND FUTURE DIRECTIONS 152

6.2. CONCLUSION 157

7 REFERENCES 158

8 APPENDIX A - DESCRIPTIVE STATISTICS 177

9 APPENDIX B - CORRELATION TABLES 185

10 APPENDIX C - REGRESSION TABLES 245

Contents III

Tables

Table 1......................................................................................................................................................... 49

Table 2......................................................................................................................................................... 50

Table 3......................................................................................................................................................... 52

Table 4......................................................................................................................................................... 54

Table 5......................................................................................................................................................... 56

Table 6......................................................................................................................................................... 99

Table 7....................................................................................................................................................... 104

Table 8....................................................................................................................................................... 109

Table 9....................................................................................................................................................... 124

Table 10..................................................................................................................................................... 125

Table 11..................................................................................................................................................... 125

Table 12..................................................................................................................................................... 126

Table 13..................................................................................................................................................... 126

Table 14..................................................................................................................................................... 127

Table 15..................................................................................................................................................... 128

Table 16..................................................................................................................................................... 128

Table 17..................................................................................................................................................... 129

Table 18..................................................................................................................................................... 129

Table 19..................................................................................................................................................... 130

Table 20..................................................................................................................................................... 131

Table 21a................................................................................................................................................... 139

Table 21b................................................................................................................................................... 140

Table 22a................................................................................................................................................... 144

Table 22b................................................................................................................................................... 145

Contents IV

Figures

FIGURE 1........................................................................................................................................................36

FIGURE 2........................................................................................................................................................53

FIGURE 3........................................................................................................................................................55

FIGURE 4........................................................................................................................................................57

FIGURE 5........................................................................................................................................................86

FIGURE 6........................................................................................................................................................87

FIGURE 7........................................................................................................................................................87

FIGURE 8........................................................................................................................................................88

FIGURE 9........................................................................................................................................................89

FIGURE 10 ......................................................................................................................................................89

FIGURE 11 ......................................................................................................................................................95

FIGURE 12 ......................................................................................................................................................95

FIGURE 13 ......................................................................................................................................................96

FIGURE 14. ...................................................................................................................................................133

Abstract 2

1 Abstract

It has been established that specific implicit motive profiles predict job performance

and career progression. However, it has not been a topic of examination to

distinguish the role implicit motives play in developing certain leadership behaviors

that, in turn, lead to job performance and success. My hypotheses were that, firstly,

the ownership structure of organizations will play a distinct role in establishing the

implicit motives that lead to managerial progression and, secondly, implicit motives

will better predict long-term (general) leadership behaviors whereas explicit motives

will better predict situation-specific leadership behaviors. In Study 1 the effects of

three types of organizations as well as the effects of executive level/responsibility

on the implicit motive profiles of managers were assessed. The types of

organizations were family-owned and -led, foreign-owned and family-led, as well as

publicly-owned and -led after previous family ownership. Data collection took place

between the years 2004 and 2010. It could be demonstrated that an organization's

ownership structure was significantly correlated with the implicit motives of

managers, while executive level/responsibility was not. In Study 2 implicit and

explicit motives were tested as predictors of competency scores in three separate

cases. Case 1 consisted of data from one pharmaceutical company based in Spain;

Case 2 encompassed data from 13 different companies in several industries and

countries; and Case 3 included data for one global services and technology company

with headquarters in the US. Data were collected between the years 2002 and 2010.

The results yielded were inconsistent across cases. Unexpectedly, both implicit and

explicit motives were predictive of competency scores. Beside the main effects,

interaction effects of implicit motives and congruity between implicit and explicit

Abstract 3

motives were considered. I also included implicit motives of the CEO, as scored in

the letter to the shareholder, as well as the congruence of manager implicit motives

with CEO implicit motives into these analyses. Effects of these variables were also

inconsistent across cases. Study 3 extended previous investigations to explore the

effects of implicit and explicit motives as well as leadership styles on organizational

climate. Organizational climate was observed from two perspectives: actual climate

as perceived by subordinates and ideal climate as desired by managers. Based on

management data collected in the years 2000 through 2008 for four companies in

the agriculture, mining, telecommunications and transportation sectors, findings

indicated that only leadership styles consistently accounted for changes in

organizational climate. However, ideal desired climate could also be partially

explained by managers’ explicit motives in some cases. As expected, implicit

motives did not predict organizational climate in any of the analyses.

Introduction 4

2 Introduction

Motivation, which as McClelland (1987) wrote helps to explain ‘the why’

behind behavior, has been studied over the years in attempts to determine the key

factors leading to a successful career. McClelland laid the groundwork for studies

carried out over the last six decades which have investigated motivation and

productivity in the work place (e.g., McClelland, 1961; McClelland, 1962; Miron &

McClelland, 1979). The majority of the subsequent studies following this line of

exploration focused on leadership traits and behavior, specifically, and how they

affect different aspects of organizational behavior and performance. For example,

Andrews (1967) researched parallels between managers' motive profiles and the

collective values promoted within the organizations, in which the managers worked,

in order to recognize patterns of success. In addition, McClelland (1973, 1998)

established the case for competency assessment–defined here as criterion sampling

based on job analysis–as a predictor of future job performance and success.

According to McClelland (1973) competence assessment should include

motivational aspects in order to attain a broader picture of a person's actions and

reactions that is not limited to specific circumstances. Furthermore, with the use of

competence assessment performance can be objectively differentiated between

outstanding and average. There have also been many studies to investigate links

between motives, leadership styles, and organizational climate (e.g., Litwin &

Stringer, 1968; Spreier, Fontaine, & Malloy, 2006). Such studies showed what

features of leadership styles and organizational climate made work environments

most effective. These findings can prove insightful to companies, as effective work

Introduction 5

environments can, in turn, have major leverage effects on company results. Hence,

with the present research I intended to, on the one hand, deepen the understanding

of the underlying connections between motivational systems and leadership

behavior, and, on the other hand, broaden findings to differing organizational

contexts.

In the following I will first review, in brief, relevant literature on motives and

leadership. I will also explicate various measures and perspectives of leadership

traits and behaviors that were investigated in the present research and demonstrate

their importance in both motivational as well as organizational psychology. In

conclusion, I will illustrate my incorporation and extension of past studies into this

present research.

2.1 Motives and Motivation

McClelland (1987) defined motives as needs or desires that cause an

individual to act and motivation as an aroused motive. Two uniquely independent

motivational systems were distinguished by McClelland and his colleagues

(deCharms, Morrison, Reitman, & McClelland, 1955; McClelland, Koestner, &

Weinberger, 1989): implicit motives and explicit motives. Implicit motives are a

construct that exercises functions of energizing, directing, or organizing a series of

responses (actions) which are aimed at arriving at a goal (McClelland, 1971).

Implicit motives are not consciously accessible; rather through affective learning

experiences responses are better selected in order to attain the desired result more

quickly and efficiently thereby satisfying a need (McClelland, 1987; Schultheiss &

Brunstein, 2005). Due to their affective nature, implicit motives are more likely to

be aroused in task experiences and can be better observed with the help of longer-

Introduction 6

term behavior (McClelland, 1987; McClelland et al., 1989). Moreover, implicit

motives are more likely to predict non-declarative measures of motivation, i.e.,

measures unaffected by an individual’s conscious intentions, than declarative

measures of motivation, i.e., those dependent upon an individual’s belief and/or

value system, self-reflection, etc. (Schultheiss & Pang, 2007). On the contrary,

explicit motives, which are commonly called values or self-attributed motives, are

described as goals, plans, or wishes that a person becomes committed to through

organized thought and then pursues. Explicit motives are consciously available and

thereby more easily modifiable (McClelland et al., 1989). They can be understood

as cognitive information processes that portray desirable end-states of behavior and

consequently influence a cognitive decision-making process (Hofer, Busch, Bond,

Li, & Law, 2010). They are more likely to be elicited by specific social experiences

or demands and recognized in situational circumstances (McClelland et al., 1989).

Three implicit motives have been the subject of the majority of implicit

motive research: need for achievement (n Ach), defined as an individual's desire for

autonomous skill mastery, need for affiliation (n Aff), defined as an individual's

desire for harmonious and positive relationships with others, and need for power (n

Pow), defined as an individual's desire to have impact on and influence others or the

world at large. These three implicit motives have been found to offer profound

insights into work performance as well as to deliver solid predictive validity of the

same (e.g., McClelland & Boyatzis, 1982; McClelland & Franz, 1992; Schultheiss,

Liening, & Schad, 2008). These three concepts have also been the subject of studies

involving explicit motives: value of achievement (v Ach), value of affiliation (v

Aff), and value of power (v Pow). The above definitions should be adjusted for

Introduction 7

explicit motives in that implicit motives are needs/wants/desires, whereas explicit

motives are goals, plans or wishes.

Since implicit motives cannot be consciously accessed, individuals must write

stories which are then coded for thematic content (McClelland et al, 1989;

Schultheiss & Pang, 2007). The Picture Story Exercise (PSE), which contains four,

six, or eight pictures that depict people acting in various social situations, is used to

determine a person’s implicit motive profile. Explicit motives, contrastingly, are

conscious goals and values closely associated with a person’s self-concept.

Consequently they can be assessed using self-report instruments such as

questionnaires (McClelland et al, 1989; Schultheiss, Yankova, Dirlikov, & Schad,

2009).

As McClelland (1987) noted, motivation has been studied across every

conceivable scientific field. Motives are merely one determinant of (human)

behavior; however the subject has been at the center of scores of behavior theories.

Most scientists would argue that knowing an individual's motive profile, alone,

would not deliver sufficient information to predict an individual's actions. At the

same time many investigations have been undertaken to understand how and to

what extent motives lead to certain behaviors. In the following section, an overview

of past studies on motivation and its expression in behavior will be provided.

2.1.1 Implicit motives and behavior.

At this point I would like to highlight some of the general behavior findings.

This overview does not claim to be exhaustive, rather is meant to capture the variety

of behavioral aspects researched over several decades. N Ach has undoubtedly been

Introduction 8

at the focus of the majority of implicit motive experiments in behavior. In general,

McClelland (1985) explained that individuals with a pronounced n Ach will work

harder on tasks with moderate challenges than on tasks that are extremely easy or

extremely hard. In doing so, the achievement incentive is maximized. In examining

behavior in children, McClelland (1966) observed that individuals with high n Ach

take moderate risks while individuals with low n Ach tend to act toward an extreme

direction, either very safe or very uncertain undertakings. French (1966b) tested the

relationships between contexts, motivation, and performance on a simple task. She

showed that an individual's n Ach score could shift by manipulating the

experimental condition in which the test is taken; greater performance variance can

be accorded to motivation scores than to experimental conditions; and lastly an

individual's motivation level from setting to setting correlates the most when

environmental factors remain similar. Atkinson and Reitman (1966), who also

examined the connection between n Ach and performance, found that the

relationship between n Ach and performance is significantly positive when feelings

of pride and accomplishment can be expected to accompany task fulfillment. These

results were negated, however, in the case that other motives were simultaneously

aroused.

Implicit motive n Aff has also received great attention. French (1966a)

examined n Ach as well as n Aff and discovered task-relevant feedback for test

subjects with a pronounced n Ach and emotional feedback for test subjects with a

pronounced n Aff improves performance. Reverse feedback selection did not lead to

higher performance. Lansing and Heyns (1959) found that individuals high in n Aff,

in comparison to those low in n Aff, write more letters, visit friends more often, and

Introduction 9

make more phone calls. Boyatzis (1972)1 confirmed the telephone finding as well.

Similarly, Constantian (1981) conducted an experiment in which undergraduate

students carried pagers with them 24 hours a day for several days. At random times,

the students received a page and were asked to record their activities at the time of

the page in a journal. Constantian found that those students, who had a more

pronounced n Aff, were more likely to be writing letters or interacting with others

than students with low n Aff (as cited in McClelland, 1987). Yet another study

found that individuals high in n Aff are less likely to speak negatively of others

indicating a desire of such individuals to avoid conflict (McClelland, Constantian,

Pilon, & Stone, 1982).

A number of studies have been conducted in order to identify and understand

n Pow expression in behavior. Due to the colloquial usage and connotation of the

word power, one is easily tempted to assume that a typical outlet of n Pow behavior

is through aggressive, angry, or even violent actions. However, McClelland (1975)

showed that individuals high in n Pow do not necessarily act in an aggressive

manner more so than individuals low in n Pow. Moreover, Winter (1973)

demonstrated that the outlet of aggression is highly correlated with the values

stemming from an individual's socioeconomic background. McClelland (1987)

emphasized that most individuals seek outlets to express their n Pow that are

societally acceptable. For example, both McClelland (1975) and Winter found that

individuals high in n Pow possess prestigious objects in order to feel powerful. And

McClelland (1987) described several studies that point to different areas of

expression such as: influential/prestigious occupations, conspicuous, exceptional, or

1 I would like to offer many thanks to Richard Boyatzis for e-mailing me his dissertation and

corresponding with me on its contents to answer all of my questions.

Introduction 10

attention-seeking behavior within groups, risk-taking in many settings such as

sports, competitive activities, physical risks, etc., and alcohol consumption.

2.1.2 Implicit vs. explicit motives and behavior.

deCharms et al. (1955) were the first to delineate the two different

motivational systems. The authors collected and presented data from several

different studies on the achievement motive. deCharms and his colleagues

demonstrated that people with high n Ach set their own internal standards of

excellence which led them to excel in task situations. Furthermore the authors

concluded that n Ach was better qualified in predicting performance in both men

and women. People with a high v Ach were more likely to hold expert authority in

high regard, were more willing to conform, and disesteemed unsuccessful people.

McClelland (1985) found that if explicit motives diverge from implicit

motives, then the outlet, by which the implicit motive is realized or acted out, will

differ from the outlet in the case of complete congruence between implicit and

explicit motives. Using n Aff McClelland showed that of the three predictors–

implicit motives, explicit motives, and skill level–n Aff was the most substantial

predictor of variance in a person’s affiliative behavior. He concluded that having

the necessary skills to perform actions in concordance with one’s explicit motives

will not compulsorily lead a person to carrying out these actions, unless the

underlying implicit motive(s) would also be satisfied as a result. However,

McClelland was not able to clearly show that a certain likelihood to act can be

calculated when skill level, implicit, and explicit motives are known. McClelland et

al. (1989) also reviewed past literature and reasoned that taking both implicit and

Introduction 11

explicit motives into consideration in studies increases the ability to predict

behavior. This reassessment of previous studies makes clear that it is necessary to

take both implicit and explicit motives into account in order to better predict and

understand actual behavior.

2.1.2 Motives and biopsychology.

Motives have also been widely researched in the field of biopsychology.

Studies include a range of subjects from the relationship between motives and

memory (e.g., McClelland, 1995; Woike, 2008) to the relationships between

motives and hormones (e.g., Schultheiss et al., 2005; Stanton & Schultheiss, 2007)

as well as the links between motives and emotion recognition/interpretation via

facial expressions (e.g., Schultheiss et al., 2008; Schultheiss & Hale, 2007) to name

just a few.

While most of these studies are only tangent to the subject of motives and

management behavior at a distance, one study in particular is essential in explaining

and understanding some of the results presented in subsequent sections. Kuhl and

Kazén (2008) examined the degree to which information related to different social

needs, defined in their investigation as n Aff and n Pow, can be linked to

hemispheric laterality. The authors hypothesized that n Aff would be related to right

hemispheric processing which is defined as holistic, while n Pow would be related

to left hemispheric processing which is defined as instrumental planning. In four

separate experiments the authors investigated their line of thought and presented

results that reinforced their proposition that the pursuit of power-related goals is

supported by left hemispheric instrumental planning, and the pursuit of affiliation-

Introduction 12

related goals is supported by right hemispheric holistic processing. The activation of

different parts of the brain depending on the type of goal being sought, i.e., which

implicit motive has been triggered, could prove quite insightful in exploring reasons

underlying motive expression in behavior.

In the following section I will define leadership and briefly describe research

that has been conducted over several decades in the social sciences. Additionally I

will present relevant literature connecting motivation to leadership.

2.2 Leadership in the Social Sciences

Bass (1981) stated that leadership is a universal human phenomenon and that

the study of leadership is an ancient art (p. 5). He demonstrated the difficulty in

providing just one definition of leadership by listing its copious functions: e.g.,

leadership as the art of inducing compliance, as the exercise of influence, as act or

behavior, as a power relation, as an instrument of goal achievement, as a

differentiated role, etc. (pp. 7-14). Hence, according to Bass the definition of

leadership is adjusted according to the role of the leader. Hogan, Curphy, and

Hogan (1994) defined leadership as an art of persuasion that compels people to

abstain from pursuing individual goals in order to successfully achieve common or

collective goals for the well-being of the group. These are just two examples of the

profuse attempts in the literature to define leadership. For the present research it is

perhaps more important to make a distinction between the different theories of

leadership and next elucidate ad rem empirical findings than to simply deliver one

guiding definition for the term leadership.

Introduction 13

House and Aditya (1997) summarized the chief research paradigms in

leadership literature as: the leadership trait paradigm, the leader behavior paradigm,

contingency theories, Leader Member Exchange Theory, Implicit Leadership

Theory, and Neocharismatic Theory. According to House and Aditya, the aim of the

leadership trait paradigm is to recognize the individual characteristics that

distinguish a leader from a non-leader. A focus on leaders' behaviors in order to

identify a pattern of behavior specific to leaders is at the center of attention of the

leader behavior paradigm. Five theories constituting the contingency theories-

Fiedler's Contingency Theory of Leadership, the Path-Goal Theory of Leader

Effectiveness, Life Cycle Theory, the Cognitive Resource Theory, and the Decision

Process Theory- were developed to add consistency and/or minimize conflicting

findings originating in the leader behavior paradigm.

Leader Member Exchange concentrates on the relationship dynamics of

superiors and subordinates. Similarly, Implicit Leadership Theory takes up the

evaluations and perceptions of leaders as well as their underlying cognitive

processes. Lastly, Neocharismatic Theory, as reported by House and Aditya,

integrates and extends several theories related to Value Based Theory of

Leadership, visionary theories, charismatic and transformational (transactional)

leadership. It would go beyond the scope of this work to describe, in detail, each of

these. Nevertheless, it is important to establish their main foci before explicating the

leadership theories that are the topic of the present work- the leadership trait and

behavioral paradigms.

House and Aditya (1997) stated that research in the field of leadership traits

and behavior was largely atheoretical. Their review of the behavior paradigm was

brief and mostly critical; however they identified the broad classes of leader

Introduction 14

behaviors found in task-oriented and person-oriented behaviors as major empirical

contributions. With the revival of trait theory in the 1970s and the rectification of

previous shortcomings, the authors, likewise, listed four trait theoretical

perspectives–McClelland's Achievement Motivation Theory, Leadership Motive

Pattern Theory, Theory of Charismatic Leadership, and leader sensitivity and

flexibility constructs–as adding a theoretical framework as well as substantial

empirical evidence to the theory. The authors concluded that there are

distinguishing traits of successful leaders; the effectiveness of these traits differs

from situation to situation; and traits vary in their degree of influence on behavior

depending on the available margin for individual dispositions. However in a meta-

analysis, Lord, De Vader, and Alliger (1986) argued that much of the research on

the relationship between personality traits and leadership had been misinterpreted

and over-generalized. The authors concluded that personality traits are more highly

and more consistently related to leadership perceptions than indicated in the

literature until then. Nevertheless, Lord and his colleagues emphasized that

relationships with leadership performance or particular leadership behaviors that

lead to superior performance cannot be inferred from their analyses.

Winter (1987) wrote that "motivation focuses on the broad classes of people's

goals and goal-directed actions, and so it is a component of personality that is

especially important to the relations between leaders and followers" (p. 197). Thus,

a more comprehensive examination of the leadership trait and behavior paradigms

and how they relate to motivation can be found in the subsequent sections.

Empirical observations in motivation theory as they relate to the present research in

the areas of career success, role competence, and organizational context, will be

discussed.

Introduction 15

2.2.1 Motives and managerial success.

Many authors have researched potential links between implicit motives and

career paths. McClelland and Boyatzis (1982) investigated 262 male managers at a

telecommunications company at two points in time over the course of 16 years. The

managers were surveyed on their implicit motive profiles as well as objective

criteria such as acquired level of management and number of direct subordinates.

Activity inhibition (AI), which the authors defined as an indirect measure of a

manager’s control over motivational impulses, was also assessed. Management

success was defined as the level of management reached using a management

classification system based on the original system in place at the surveyed

company. From this study emerged a new factor, a certain implicit motive profile

for which the authors coined the term Leadership Motive Pattern (LMP). LMP is

defined as high n Pow, low n Aff, and high AI. The study found that for non-

technical functional areas LMP was predictive for the success of senior managers.

Jacobs and McClelland (1994) replicated the findings of McClelland and Boyatzis

and extended their study to include women as well. Entry-level managers, of which

211 were male and 180 were female, were participants in the Management

Continuity Study (MCS). MCS was a longitudinal assessment over the course of 9

years. The same company was investigated as by McClelland and Boyatzis.

Participants who left the company as well as those who stayed with the company

were included in the study. Jacobs and McClelland found that LMP, as a predictor

of the management success of men, predicted the management success of female

managers as well.

Introduction 16

Cornelius and Lane (1984) investigated 21 managers and 18 curriculum

directors (16 women, 23 men) working at a mid-sized language instruction

company. The authors found that LMP was strongly positively related to the size of

the center at which the employee worked. Cornelius and Lane also showed a

tendency that managers with high n Pow were more likely to become managers at

the larger more prestigious centers. In yet another study concerning LMP, Winter

(1991) used the same sample as McClelland and Boyatzis (1982). He argued that

while AI exhibits consistent predictive validity, the theoretical basis for it is

deficient. The author instead developed a scoring system for a variable he termed

"responsibility". Responsibility, as a scorable variable of PSE stories, has five

categories: moral-legal standard, obligation, concern for others, concern about

consequences, and self-judgment. 244 men still with the company 16 years after the

start of MCS were the subject of the investigation. Winter replicated McClelland

and Boyatzis' results by showing that n Pow and responsibility were predictive of

managerial success. It should be noted the author stated that the role low n Aff and

high AI play is comparable to high responsibility.

Researchers have also explored the role of motives in leaders in public office.

For example, Donley and Winter (1970) coded the inaugural addresses of US

presidents elected to office between the years of 1905 and 1969 for n Ach and n

Pow. The authors showed that inaugural addresses could be scored reliably for

motives and that motive scores were significantly correlated with the innovation,

power, and general success of the presidents as judged by historians and political

scientists. Winter (1987) scored the first inaugural address of each US president

from Washington through Reagan for n Ach, n Aff, and n Pow imagery. His major

findings were that presidential greatness/performance, as assessed by scholars of

Introduction 17

American history, was significantly positively related to the president's motive

profile and was significantly negatively related to the congruence of the president's

motives with that of society's at the time of election. Spangler and House (1991)

also investigated the 39 US presidents from Washington to Reagan. They used the

motive scores from Winter (1987) in order to test for relationships between LMP

and presidential effectiveness. The authors used five measures of

effectiveness/performance: presidential action, perceived greatness, social

performance, economic performance, and international relations performance. Their

results showed variance in the degree of predictability of implicit motives for these

performance variables. Spangler and House also demonstrated that AI is positively

related to performance, so that the authors argued the case for considering AI in

future research as well.

This section offered a summarization of some of the most important studies in

the specific area of motivational psychology and leadership. Motives and career

success are subjects that have been studied for several decades. What makes a

leader effective continues to be a current topic across countries, cultures, and

academic fields. In the next section, I turn my attention away from leadership traits

toward one aspect of leadership behavior, leadership competence. I offer an

overview of leadership competence, and I illustrate the job analysis process

necessary to determine leadership competence for given roles.

Introduction 18

2.2.2 Leadership competence and performance.

Any analysis of human factors involves an observation of human behavior

patterns. White (1959) defined competence as "an organism's capacity to interact

effectively with its environment" (p. 297). His theory evolved out of a time period

in which psychologists disapproved of or disagreed with explanations of motivation

theory based on drive and instinct. He differentiated between competence in its

dictionary meaning of achievement or capacity and a competence motivation, which

White coined effectance motivation. He proposed that an individual, when not

engrossed in satisfying more primal needs, seeks to attain a feeling of efficacy in

reacting to the surrounding environment.

Elliot, McGregor, and Thrash (2004) broadened White's definition to an innate

desire for competence, in general, instead of an innate desire for effectance,

specifically, and referred to White's effectance motivation as just one dimension of

a multi-dimensional competence motive. The authors differentiated between certain

types of competence–task-referential, past-referential, or other-referential–which

designate the reference point used in order to determine ability or to recognize

improvement. Need for competence, as Elliot and colleagues labeled it, integrated

the research of two separate lines of analyses represented by the works of White

(effectance) and McClelland (n Ach). Elliot and Dweck (2005) went a step further

and asserted that need for competence lies at the core of achievement motivation, so

that n Ach would be better identified as need for competence. In contrast, Koestner

and McClelland (1990) made a distinction between implicit and explicit competence

motivation. The authors characterized implicit competence motivation as

comparable to n Ach, with actions that ultimate in a feeling of satisfaction at goal

Introduction 19

achievement, and therefore best assessed by n Ach. On the other hand, explicit

competence motivation is derived, according to the authors, from situational

circumstances that are more than likely coupled with feelings of mental stress and

anxiety.

The present research, however, focused not on competence as a broad motive

that can be observed in all people, rather on competence in the workplace. Kanfer

and Ackerman (2005) defined competence in an occupational context as the

capacity to or display of achieving tasks in such a way that is approved by the

organization. The authors suggested that there are personal as well as situational

influences on work competence. Moreover they established abilities, knowledge and

skills, motivation, personality, and self-concept as personal determinants of work

competence, whereas work role demands, work-related goals, and

organizational/work setting culture as situational pressures. In organizational best

practice, work competences, also called competencies, are defined according to

exactly these situational influences as suggested by Kanfer and Ackerman. Spencer

and Spencer (1993) defined competencies more specifically as follows:

A competency is an underlying characteristic of an individual that is causally

related to criterion-referenced effective and/or superior performance in a job or

situation. Underlying characteristic means the competency is a fairly deep and

enduring part of a person's personality and can predict behavior in a wide

variety of situations and job tasks. Causally related means that a competency

causes or predicts behavior and performance. Criterion-referenced means that

the competency actually predicts who does something well or poorly, as

measured on a specific criterion or standard (p. 9).

Introduction 20

Spencer and Spencer (1993) named five types of competency characteristics:

motives, traits, self-concept, knowledge, and skill. Motives are implicit motives as

defined by McClelland (1987) and as investigated in the present research; traits are

personal characteristics; self-concept represents an individual's value system;

knowledge refers to information an individual possesses on specific content; and

skill is performance ability. In the present research, I examined in what way motives

(implicit motives) and self-concept (explicit motives) relate to competencies.

Competencies, as measured in the present research, are assessed by conducting

Behavioral Event Interviews (BEIs; Klemp & McClelland, 1986). BEIs are a form

of the more generally-termed "structured" interview. Cronshaw and Wiesner (1989)

defined structuring as any attempt to improve the reliability and construct validity of

an interview. Many researchers (e.g., Flanagan, 1954; Goodale, 1989; Janz, 1989;

Kinicki, Lockwood, Hom, & Griffeth, 1990; Orpen, 1985) made the case for

structuring the employment interview along the lines of past behavior in order to

better and more consistently assess or anticipate how the interviewee will act in

future similar situations. Flanagan (1954) described a method that was coined the

critical incident technique (CIT), by which observable behaviors that foster

problem-solving capabilities in designated scenarios are catalogued. This procedure

as such was not novel; however, the aim of using the technique in order to promote

assessments of actions or behaviors, that can be similarly evaluated by several

individuals independently of one another, was state of the art at the time of his

publication. In the years following Flanagan's article, the term CIT was used

especially to represent a type of job analysis, in which interview questions were

oriented specifically toward targeted job behaviors.

Introduction 21

Latham and his colleagues conducted several studies testing varying methods

for appraisals derived from Flanagan's (1954) technique. Latham, Wexley, and

Rand (1975) employed CIT and conducted interviews with wood dealers and

foresters in order to identify behaviors that differentiate effective from ineffective

wood producers (logging supervisors), as measured by cost-related data.

Comparable incidents, which were attained through the interview process, were

arranged into 78 subcategories and then further grouped into eight clusters with

each cluster representing one dimension of behavior for evaluating producers'

performance. These behaviors were next formulated into a questionnaire format

using a five-point Likert-type scale (range always to never). Dealers and foresters

then independently assessed 300 producers once a month over the course of three

consecutive months. Latham et al. (1975) were able to show stable intraobserver

and interobserver reliabilities for the producer ratings across the qualitative

behavioral observation scales, whereby the interobserver reliability provided lower

coefficients. Furthermore, the authors established that their behavioral criteria did

distinguish performance level.

In a next step, Latham and Wexley (1977) used the behavioral ratings of

Latham et al. (1975) in order to develop quantitative behavioral observation scales.

Employing factor analysis, the authors were able to reduce the number of

questionnaire items without reducing reliability strength. On the contrary,

intraobservation ratings achieved slightly higher reliability coefficients, and

intercorrelation strength concerning relevance could be replicated. In using this

procedure, Latham and Wexley were able to better select those items that

contributed most significantly to the observation scales.

Introduction 22

Latham, Fay, and Saari (1979) replicated this procedure and its reliability

strength on a population of foremen. The authors demonstrated satisfactory

interobserver reliability, construct validity (relevance), as well as internal

consistency of the scales. Moreover, Latham et al. (1979) made the case, similarly

to McClelland (1973), for (1) using scales that are closely related to the appraised

role, (2) utilizing the scales to specify what behaviors are necessary to perform the

job, and (3) identifying behaviors that differentiate between successful and

unsuccessful performance.

These studies represent the foundation on which the situational interview

(Latham, Saari, Pursell, & Campion, 1980) and the patterned behavior description

interview (Janz, 1982, 1989; Orpen, 1985) techniques were built. Motowidlo et al.

(1992) expanded on these interview methods and introduced the structured

behavioral interview. The authors investigated in five studies their new procedure

which is based on the two above-mentioned predecessors with the major differences

being in the interviewer asking the same questions across all interviewees but at the

same time being allowed to use her or his own discretion in the follow-up or

probing questions in order to gain more information on the interviewees' description

of activities and behavior. With this technique an interview is conducted, and its

content is based on CIT. Critical incidents are prompted using standardized

questions, and interviewers ask probing questions at their discretion in order to

expand on further details. At the end of the interview, interviewers review their

notes and rate interviewees on behavioral dimension scales. Motowidlo et al.

exhibited in their five studies solid reliability, criterion-related as well as construct

validity for the structured behavioral interview, and the authors were able to show

Introduction 23

that higher validity could be attained by proper training of interviewers which led to

standardized execution of the technique.

This standardization can be achieved and is the principal purpose of the BEI.

The BEI process also originates from the above-described studies and is based on

CIT as well. The objective of this interview technique is to gain as much detailed

information on an interviewee's behavior as possible. In comparison to the interview

techniques described above, BEIs are transcribed and then coded for competency

scales and levels instead of, for example, using a questionnaire or relying simply on

interviewers' notes. An interviewer should come prepared to the interview by

knowing who the interviewee will be, by memorizing the most important questions,

and by making proper arrangements for an interview that can take up to four hours.

In a best practice scenario an interview is recorded so that it can be transcribed later.

Spencer and Spencer (1993) listed five important steps in the BEI procedure:

introduction, job responsibilities, behavioral events, characteristics needed to do the

job, and conclusion. In the introduction, the interviewer should seek to establish a

relaxed atmosphere and gain the interviewee's trust, so that the interviewee is

willing to participate and answer each question openly and candidly in a detailed

manner. Also permission should be requested to record the interview while

emphasizing the confidentiality of everything discussed. It is also important to

explain the interview format, so that the interviewee's answers are usable for

ensuing coding. For example, for material to be codable it must be in the first

person. Further, actions and thoughts must be described concisely; descriptions

open for interpretation are not coded. After the introduction and a thorough

explanation, it is important for the interviewer to ask questions pertaining to the

specific job responsibilities of the interviewee, in order to gain a perspective on

Introduction 24

reporting lines as well as actual job content of everyday tasks. The next step is the

most important part of the process, behavioral events. Spencer and Spencer

indicated that at least four to six critical incidents should be described accurately,

explicitly, and precisely, so that the exact role and actions of the interviewee as well

as her or his thoughts, emotions, and desires surrounding the situation are clearly

illuminated. Following this, the interviewee should be asked what characteristics are

necessary to do her or his job, in order to elicit further critical incidents that were

perhaps not previously mentioned as well as to provide an amicable atmosphere in

which the interviewee feels appreciated for her or his expertise. Lastly, the

interviewer should conclude the interview by expressing gratitude toward the

interviewee for her or his valuable time and information.

BEIs and competencies are heavily intertwined, as BEIs represent the

beginning of a process of sampling critical incidents, defining competencies,

developing competency models (sets of competencies), and consequently surveying

competencies. Campion et al. (2011) describe best practices for competency

modeling which are based on practical experiences. The authors list several areas, in

which competency models can be useful, such as hiring, training, developing,

managing, evaluating, compensating, and retaining employees. According to

Campion et al., it is essential that competency models are embedded in the

organizational context, including an organization's goals, objectives, language, and

practices. Additionally it is crucial to utilize rigorous job analysis methods, which

should take into consideration past, present, and future job requirements. BEIs,

when conducted methodologically as described by Spencer and Spencer (1993),

fulfill these demands.

Introduction 25

Briscoe and Hall (1999) also examined the use of competency models in

organizations. The authors reported a rising tendency toward employing an

executive competencies approach among the 31 North American companies that

they investigated. Three approaches in defining competencies could be identified in

these organizations: research-based competency approach (differentiating

outstanding from average performers within the company and described as most

methodologically rigorous by the authors); strategy-based competency approach

(driven by the strategic directions and goals of an organization); and values-based

competency approach (built on the values of the organization and/or values of the

top executives in an organization). While the authors lauded these three approaches

for their proven effectiveness in the examined organizations, they also cautioned

that these approaches can become too complex and overly detailed in practice.

In this section I explicated the difference between competence as a motive and

competence as leadership behaviors. Furthermore, the evolvement of the processes

applied in determining, classifying, and evaluating these leadership behaviors was

detailed. The BEI procedure can be employed to develop competency models, to

assess, develop, and/or select candidates for specific roles, to plan succession, to

evaluate performance, to conduct (executive) coachings, and in several other areas

of human resource (HR) management. Coding competencies from BEIs provides a

reliable and valid assessment of employees in a variety of functions and is an

objective as well as predictive measure of managerial success and improved

performance (cf. McClelland, 1998; Motowidlo et al., 1992; Spencer & Spencer,

1993). In the next section, the focus changes slightly from directly surveyed

behaviors to perceived behaviors.

Introduction 26

2.2.3 Leadership and organizational climate.

Ideally, leadership focuses on a variety of skills that collate and optimize

individual goals and motivational responses into finely honed self-sustaining high

productivity drive. Hence the question is how do leaders achieve the type of

behavior needed to meet company targets among subordinates. Based on the nature

of formation of individual goals and individual reaction to motivational feedback

there are styles of leadership. Leadership styles can be defined as typical behaviors

and personal characteristics used in various managerial situations (Wolff & Schoell,

2009a). Goleman (2000) presented quantitative research that demonstrated not only

what leadership behaviors are essential for yielding positive results but also in

which situations they are to be applied. Goleman outlined six leadership styles,

which he credited to Litwin and Stringer's (1968) work, and he stressed that these

styles be employed flexibly in alignment with external demands and subordinates’

personal circumstances. The six leadership styles are coercive, authoritative,

affiliative, democratic, pacesetting, and coaching.

The coercive style demands immediate compliance and is based on short-term

directions as well as close monitoring. Negative feedback as well as negative

consequences are used to motivate subordinates. The authoritative style has a long-

term focus and relies heavily on dialogue with others in order to communicate a

perspective or vision. Employees are motivated through long-term goals that

promote the vision, balanced feedback on achievement of milestones, as well as

reassurance that long-term goals are in the best interest of the company.

The affiliative style is demonstrated by a drive to create and maintain harmony

within the team. Subordinates are motivated by the great efforts a manager expends

Introduction 27

to cultivate and maintain personal relationships with them as well as the manager’s

general avoidance of negative performance feedback.

The democratic leadership style addresses commitment and consensus, in that

employees are encouraged to follow their own direction and resolve their conflicts

constructively. Motivation is promoted through the amount of participation granted

to employees in meetings, recognition for positive performance as well as a lack of

criticism for lower performance.

The pacesetting style focuses on results at a high standard of excellence. Such

managers lead by model and set themselves as the standard so that they are reluctant

to delegate tasks.

The coaching style calls for managers to determine together with subordinates

their strengths and weaknesses and to assign specific tasks in order to meet the

subordinates’ development needs. Employees are motivated by ongoing support and

feedback. Situation-appropriate application of each style is integral to getting results

and maintaining positive employee attitudes (Goleman, 2000).

Leaders do not operate in a vacuum and, hence, leadership cannot be defined

without specifying the organizational climate in which they need to maneuver and

strategize. Organizational climate is defined for the purposes of the present research

as the work environment as facilitated by its leaders and as perceived by its

employees (Wolff & Schoell, 2009b). Reichers and Schneider (1990) argued that

the idea of organizational climate is a way to help people make sense of their

environments, and the climate construct is an effort to describe the environment that

affects the behavior of people in organizations. Guion (1973) gave priority to

assessing the environmental factors in a work situation that lead to well-being and

productivity. The author stressed that the instruments generally used to measure

Introduction 28

organizational climate are actually measuring perceived organizational climate–the

perception of the person answering the questions. According to James and Jones

(1974), perception can be defined as “an internal representation of external objects

and is subject to influence by several individual differences” (p. 1102). In his essay,

Schneider (1975) argued that the importance of organizational climate lies in its aid

to better understand employee behavior. The author also supported the idea of

climate as perceptions. He stated that “[…] climate perceptions are psychologically

meaningful molar descriptions that people can agree characterize a system’s

practices and procedures. By its practices and procedures a system may create many

climates (p. 474).” In Guion’s opinion, the subject of perception does not make the

instrument less useful, however it becomes necessary to question what future states

or behaviors can be predicted from it. Glick (1985) addressed all of the above-

mentioned authors in his work and demanded that the focus of organizational

climate be on organizational units of analysis describing the organizational context

of individuals' actions, rather than limiting the debate to points of view on an

individual level, in order to improve validity and reliability of organizational

climate measures.

Goleman (2000) described six organizational climate dimensions which are

based on Litwin and Stringer's (1968) study and meet what Glick (1985) called for.

The six climate dimensions are the subject of the present research: flexibility,

responsibility, standards, rewards, clarity, and team commitment. Wolff and Schoell

(2009b) defined these dimensions as follows. Flexibility is a measure of the

constraints imposed by rules, policies, and procedures in the workplace.

Responsibility is a measure of the extent of accountability employees enjoy in

making decisions and judgments. Standards is a measure of the importance

Introduction 29

delegated to achieving challenging yet attainable targets. Rewards is a measure of

recognition which is perceived to be clearly related to performance level. Clarity is

a measure of understanding expectations on individual performance and how these

expectations contribute to the broader vision of the organization. Team commitment

is a measure of both pride for belonging to the organization as well as trust in other

team members to work toward the common goal. Goleman explained that all six

leadership styles have a measurable effect on each aspect of climate. And in turn,

climate has a leverage effect on key company performance indicators.

Real corporate structures are organized in terms of managerial command and

control hierarchies which are responsible for team performance. It makes sense then

that several studies have sought to establish the link between leadership and

climate. Litwin and Stringer's (1968) study is the cornerstone for all successive

research on the subject. The authors assessed the interactions between implicit

motives, leadership styles, and organizational climate. Litwin and Stringer defined

organizational climate as a set of expectancies and incentives that directly or

indirectly embody perceived attributes of an environment by the individuals in the

environment. In an experimental study, three groups simulating organizations over

the course of two weeks were formed, in which sex, age, number of organization

members, composition of individual implicit motive profiles within each group, and

task assignments were held constant. Each organization had a president who

stringently employed one leadership style. The leadership styles implemented were

to mirror, and thereby arouse, typical characteristics of the three implicit motives

measured: n Ach, n Aff, and n Pow. The following results were reported.

In the achieving organization, a high level of achievement motivation was

created; innovative performance and productivity were high; and job satisfaction as

Introduction 30

well as perceived efficiency was high. In the friendly and harmonious organization,

a high level of affiliation motivation could be elicited. Achievement and power

motivation were aroused in separate phases within the n Aff experimental condition

but never reached a dominant level; innovative performance was moderate and

productivity was low; job satisfaction was very high, whereas perceived efficiency

reached only a moderate level. In the authoritarian climate, a high level of power

motivation was stimulated; innovative and organizational performance was low;

and job satisfaction was low as well. The most important finding from this study for

the present research is that distinctly different organizational climates were created

in less than eight days by manipulating leadership styles which were distinctly

based on the three implicit motives.

McClelland and Burnham (1976) measured the implicit motives of several

managers from different US corporations who were participating in management

workshops. The authors reported that the managers leading high-performing teams

demonstrated an LMP profile. Moreover, the managers leading teams with higher

morale were rated higher on the democratic or coaching leadership styles. In

contrast, managers leading teams with lower morale scored higher on the coercive

and authoritative leadership styles. Spreier et al. (2006) assessed the implicit motive

and leadership style profiles of 21 senior managers at IBM. Spreier et al. observed a

growing tendency of strong n Ach in managers which had positive effects such as

heightened creativity, greater innovation and higher productivity within their teams.

Yet in extreme cases, in which n Ach dominated the other motives, managers

exhibited behavior that destroyed trust, dismantled morale, and ultimately led to

unproductive work environments. The authors recommended that managers firstly

learn to be conscious of their implicit motives and how they affect their leadership

Introduction 31

styles. In a next step managers should work to direct their energy into different

behaviors that are more conducive to sustaining a high level of motivation and

productivity among subordinates.

In a study of leaders working in the financial services sector in London, it was

illustrated that the leaders, who created the most motivating and high-performing

climates, regularly employed at least four of the above-defined leadership styles,

especially authoritative, affiliative, democratic, and coaching. These styles have in

common that they draw from a longer-term approach and are engaging. In contrast,

the majority of the leaders creating de-motivating climates were relying heavily on

two or less leadership styles, typically coercive or pacesetting ("In leadership",

2008).

While these studies provided empirical evidence for the relationship between

motives, leadership styles, and climates, they did not investigate these relationships

directly. Instead, distinguishing characteristics across varying team performance

levels were identified. The present research seeks to explore these links in a more

comprehensive model in order to gain deeper insights into how these different

variables interact and relate.

2.3 Present Research

In the present research, I sought to establish the differentiating weight that can

be attributed specifically to implicit and explicit motives in the areas of career

success, job performance, and organizational climate. Managers have the greatest

leverage effect in leading a team or an entire company to positive business

performance. So it is important that in determining what makes a manager

Introduction 32

successful, the focus is not only turned outward to objective measures such as

company results or performance management figures. Individuals are much more

complex in nature, so that the examination of personal characteristics, by what

means these are rewarded, to what extent they facilitate certain behavior, and how

they are subjectively experienced may lead to a more effective process of raising

awareness and changing leadership behavior. I expected that implicit motives would

predict longer-term career success (Study 1) and exhibit greater importance in

predicting task-oriented performance (Study 2), whereas explicit motives would

display greater importance in predicting situation-specific practices (Study 3).

Although their results were not necessarily limited to the following observations,

the aforementioned studies of the preceding sections, in contrast, analyzed

motivational factors as well as measures of leadership behaviors as they relate to

career success, performance, and organizational climate, which were defined and

assessed with variation across the different studies. Yet these studies focused on

outcomes, such as management success, improved performance, or team morale,

while neglecting to clearly test the relationship of leadership traits and behaviors.

In order to test my hypotheses, I led three independent analyses. From my

previous work as a management consultant, I knew that certain data were available

for examining my hypotheses in professional, managerial, and real world settings.

A part of my job description included database administration for the German-

speaking markets of Germany, Austria, and Switzerland. I reached out to my

former employer and, after both parties signed a contractual agreement, I was given

limited access to the client database encompassing thousands of managers.

Management data were supplied in such a way that personal identification of

individual managers was not possible.

Introduction 33

However company, industry/sector, and demographical information were

included where applicable or possible. Only managers that had complete data on

implicit motives could be included in the present research. Moreover, data on

implicit and explicit motives (all three studies), competency assessments (Study 2),

as well as leadership styles and organizational climate (Study 3) were required for

the analyses. In Study 1, the organization for which a manager worked also became

a selection criterion.

In the subsequent sections I will present my methods and results. Study 1

focused on implicit motives. For the first time, family businesses were the focal

point of investigation within this context. Family businesses were selected

specifically for their ownership distribution. With this choice, it was possible to

compare three types of ownership structure (family-owned and -led, foreign-owned

and family-led, and publicly-owned and -led [after previous family ownership]). In

a first step, relationships of implicit and explicit motives with three measures of

advancement (number of subordinates, job level at time of survey, and number of

promotions in the last five years) were attained. In a next step I assessed the

individual effects of implicit motives, the individual effects of executive

responsibility, as well as the joint effects of implicit motives and executive

responsibility on career advancement of managers in family businesses.

In Studies 2 and 3 I sought to determine the amount of unique information that

implicit and explicit motives account for in different measures of leadership

behavior. In Study 2 I investigated the relative importance of implicit and explicit

motives in predicting competency scores. In this study data for 15 companies across

several different industries were analyzed. The participants included specialist as

well as top executive functions. In Study 3 I examined implicit and explicit motives

Introduction 34

as well as leadership styles as predictor variables for organizational climate. Four

companies operating in four different industries were analyzed. Participants ranged

all management levels. I will conclude with a general discussion of all three studies.

Study 1 35

3 Study 1 - Motives and Advancement in Family Businesses

In this first study, a subject that has been examined quite extensively is taken

up once more, the relation between motives and career success. An excellent testing

ground for leadership theories is the study of managerial progression in a well-

defined ownership environment. This reduces the genericness of the problem and

enables the researcher to discover connections that might otherwise be too obscure

in studies concerning only one type of organizational structure. For the purpose of a

specific inquiry, I turn my attention in Study 1 to the advancement of managers with

a focus on family businesses.

Family businesses are, for the purposes of this study, broadly defined as

businesses whose founding families still have an active role in ownership structure

and/or operations. As Griffeth, Allen, and Barrett (2006) outlined, family businesses

represent a subject matter that was largely overlooked in academic research until the

1980s. Attention towards family businesses has grown further over the last decade.

The authors noted that family businesses can be found in every industry and that

some statistics contribute 45% to 70% of GDP and employment to family

businesses in several countries. Cabrera-Suárez (2005) reported conservative

estimates that the fraction of businesses whose ownership or management lies in

family possession is between 65% and 80% worldwide. With family businesses

displaying such significant economic activity, then it becomes clear the necessity of

studying family businesses separately.

Family businesses also deserve an isolated examination due to their unique

agency situation. Generally, Principal-Agent-Theory (PAT) refers to the problems

arriving out of asymmetric information. PAT in corporations more specifically

Study 1 36

refers to employers' attempts to offer appropriate incentives, so that employees act

in a way that is in the interest of the organization (Prendergast, 1999). In a publicly-

traded corporation, shareholders are the employers (principals) while executives are

the employees (agents). Since stockholders, managers, bondholders, and society

have very different interests and incentives, conflicts of interest arise which create

costs for the organization, so-called agency costs (Damodaran, 2001, Chapter 1).

Figure 1 depicts the flow of interests and incentives in an ideal world.

Figure 1. A summary of wealth maximization in an ideal world in which markets

are unbiased and timely. Adapted from A. Damodaran, Corporate finance: Theory

and practice, p. 16. Copyright 2001 by John Wiley & Sons, Inc.

In an ideal world information is, as soon as it exists, immediately integrated

into market prices, and markets are efficient. Under these conditions it is possible

for stockholder wealth, firm value, and societal wealth to be maximized. The real

Because stockholders have absolute power to hire and fire managers.....

Managers set aside their interests and maximize stock prices.....

Because markets are efficient...

Stockholder wealth is maximized...

Because lenders are fully protected from stockholder actions...

Firm value is maximized...

Because there are no costs created for society...

Societal wealth is maximized...

Stockholders hire managers to run their firms for them.....

Study 1 37

world, however, does not have much in common with an ideal world. The specific

case of family businesses presents different issues. In a family-owned and -led

business, there are little to no discrepancies, as the principal(s) is at the same time

the agent(s). And in a family-owned business in which management is not

(necessarily) members of the owning family, agency problems arise. In a family

business, the owning family has a great interest in guaranteeing the successful

perpetuation of the business, as the business represents the owning family's main or

sole source of income that cannot be substituted without incurring great losses.

Miller, Le Breton-Miller, and Scholnick (2008) showed that small family

businesses pursue long-term preservation and invest great efforts in developing the

business and markets. At the same time, their results cannot be generalized as their

focus was on owner-founded and -managed businesses of the first generation.

Conditions differ greatly among large, publicly-traded family businesses or family

businesses that are in their second or higher generation. In contrast a manager, who

is not a member of the owning family, does not share the same interests as the

owning family. This is due in part to the fact that the job can be replaced with

limited risks and costs. In agency theory, it is assumed that these differences in

interests lead to different behaviors and/or goals, and that, with the help of

incentives, these behaviors and goals can be aligned in such a way that the interests

of both principals and agents can be satisfied. Nicholson (2008) argued that, while

agency theory supplies a strong explanation for individuals' behaviors in contractual

relationships, the theory is too narrow in its assumptions of rational self-interests as

well as underlying motives of principals and agents to aptly explain behavior in

family firms.

Study 1 38

As Vallejo (2009) pointed out, the owning family has great influence on most

situational and psychological conditions underlying organizational behavior. Vallejo

investigated 90 family firms on the commitment of non-family employees. He

discovered that the investigated firms showed strong principal-steward relationships

between owning/managing families and their non-family employees. The author

characterized these relationships as establishing trust, empowering workers and

promoting high participation. Bernhard and O'Driscoll (2011) also studied the

effects of leadership on non-family employees in family businesses. The authors

focused on psychological ownership–a feeling of ownership for the organization–

and three leadership style environments–transformational leadership (mentor- or

coach-like behavior), transactional leadership (goal-setting and task-related

guidance), and passive leadership (lack of involvement). The authors surveyed 52

small family-owned businesses in southwest Germany. They found that

transformational and transactional leadership had positive relationships with

psychological ownership for the organization and job while passive leadership

demonstrated a negative relationship. Bernhard and O'Driscoll also showed that

psychological ownership mediates the effects of the three leadership styles on

organizational outcomes, thereby, as they stated, providing further evidence for the

importance of psychological ownership.

Miller and Le Breton-Miller (2005) presented results on a study of 46

successful and 24 struggling family-controlled businesses which the authors carried

out in order to determine the differentiating factors of success. The authors

discovered four priorities, termed "the 4 Cs": continuity, community, connections,

and command. Continuity refers to the desire for longer-term continuity of the

business. Community is the fostering of a caring culture of committed and

Study 1 39

motivated people. Connections indicates the development of relationships outside of

the company. Command expresses the flexibility to make courageous and adaptive

decisions. The authors emphasized the need for managers to be able to make bold

decisions and to have the room to take calculated risks. Miller and Le Breton-Miller

reported that successful family-controlled businesses exploited and capitalized on

situations in which they beat competitors in innovating and utilizing opportunities.

And the ability to act depends, at least in part, on the extent to which the fourth C,

command, is a definitive part of the culture.

Miron and McClelland (1979) examined the personal qualities of individuals

that predict entrepreneurial success. In three separate programs, achievement

motivation trainings were administered to minority entrepreneurs in different

regions of the United States of America. The trainings were carried out by one

company and were similar for all three programs. Four key performance figures–

monthly sales, monthly profits, monthly personal income, and number of

employees–were compared for a time period between 12 and 18 months prior to as

well as after the trainings. The authors demonstrated across all three programs that

achievement motivation training significantly improved small business

performance. Moreover, in a cost-benefit analysis Miron and McClelland showed

that increased tax flows from the participating businesses accrued by the

government offset the initial costs that the government incurred in providing the

trainings. As Fama (1980) stated, entrepreneurs are often noted for their risk-

bearing characteristics. In consideration of the observation that individuals high in n

Ach seek moderate risks (McClelland, 1966) these results are quite comprehensible.

One of the first and most important studies on manager motivation and

company type was carried out by Andrews (1967). The author investigated two

Study 1 40

organizations. One organization he characterized as achievement-oriented, the other

as power-oriented. He purported that the implicit motives of managers would

coincide with the orientation of the company. His results showed tendencies that

supported this line of reasoning. I transferred Andrews' type of analysis to family

businesses, as the existing literature on family businesses has, to date, not integrated

motivation theory and focuses mainly on succession planning or differing effects of

leadership on non-family employees. Moreover, most of these studies are based on

very small family businesses.

Following in the same vein of Miller and Le Breton-Miller (2005) as well as

Miron and McClelland (1979), in successful family-owned and -led businesses

achievement is the most expressed and important orientation within the

organization. As the company grows, achievement orientation potentially remains

the dominant motivation until ownership structure changes. Several studies (e.g.,

Beehr, Drexler, & Faulkner, 1997; Cabrera-Suárez, 2005; Griffeth et al., 2006;

Miller et al., 2008) have shown that a changing environment or size alone are not

necessarily enough to reform management practices in a family business. When a

company's owner(s) diverges from its management, i.e., self-interest is no longer

company-interest, leaders' roles shift as well. In this type of environment, successful

leaders cannot complete all tasks individually, rather are required to delegate tasks,

empowering others to work capably, and to act more in a decision-making role

thereby rai

OF MOTIVES AND MANAGEMENT...In the following I will first review, in brief, relevant literature on...

Documents

Transcript of OF MOTIVES AND MANAGEMENT...In the following I will first review, in brief, relevant literature on...