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How leadership style and decision-making impacts on organisation

performance at the different stages of the corporate lifecycle: A

study of South African organisations

A research report

presented to

The Graduate School of Business

University of Cape Town

in partial fulfilment

of the requirements for the

Master of Business Administration Degree

by

Chipo Chipidza

Supervisor:

Professor Kurt April

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Table of Contents

Table of Contents......................................................................................................................... 2

List of figures............................................................................................................................... 4

List of tables................................................................................................................................. 5

Acknowledgements...................................................................................................................... 6

Abstract ........................................................................................................................................ 7

1. Introduction.......................................................................................................................... 8

1.1 Background to the research................................................................................................ 8

1.2 The purpose and significance of the research .................................................................. 10

1.3 Limitations of the research............................................................................................... 10

2. Literature Review............................................................................................................... 13

2.1 The Adizes corporate lifecycle model ............................................................................. 13

2.2 The STARS model........................................................................................................... 15

2.3 Leadership style ............................................................................................................... 17

2.4 Measurement of leadership systems against organisations performance ....................... 23

2.5 Leadership effectiveness and organisational performance the arguments.................... 24

2.6 Summary of the literature review .................................................................................... 30

3. Research hypotheses/propositions ..................................................................................... 31

3.1 Learning objectives.......................................................................................................... 32

4. Methodology and approach................................................................................................ 33

4.1 Procedure ......................................................................................................................... 33

4.2 Exploratory research phase .............................................................................................. 37

4.3 Interviews......................................................................................................................... 39

4.4 Questionnaire survey ....................................................................................................... 43

4.5 Annual reports.................................................................................................................. 44

4.6 Literature review and desk research ................................................................................ 45

4.7 Explanatory research phase.............................................................................................. 45

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5. Research analysis, findings and discussion ....................................................................... 46

6. Critique and conclusion ......................................................................................................... 63

6.1 Generating a model to represent the South African context ............................................ 63

7. Bibliography and references .............................................................................................. 68

7.1 Books ............................................................................................................................... 68

7.2 Journals/Articles .............................................................................................................. 69

7.3 Websites........................................................................................................................... 73

8. Appendices......................................................................................................................... 74

Introduction Letter ................................................................................................................. 74

Questionnaire ......................................................................................................................... 75

Interview Questions ............................................................................................................... 79

Transcribed Interviews........................................................................................................... 80

END ..................................................................................................................................... 154

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List of figures

Figure 1: The Adizes Corporate Life Cycle

Figure 2: The STARS Model

Figure 3: Dimension of leadership style

Figure 4: Leadership domain

Figure 5: The Blake and Mouton Leadership Grid

Figure 6: The Continuum of leadership behaviour

Figure 7: Fielders contingency model

Figure 8: Summary of the literature Review

Figure 9: Triangulation in the research

Figure 10: The research process

Figure 11: Overview of different qualitative data gathered

Figure 12: Graphical representation of interview process

Figure 13: Response to survey question 12

Figure 14: Response to survey question 13

Figure 15: Response to survey question 14

Figure 16: Corporate life cycle stage map

Figure 17: The decision making network

Figure 18: The external network

Figure 19: The Internal network

Figure 20: The business network

Figure 21: The multi network casual loop

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List of tables

Table 1: Challenges and opportunities of transition types

Table 2: Three-step maturity model

Table 3: Factors instrumental in leadership effectiveness

Table 4: Characteristics of CEOs associated with success

Table 5: Characteristics of exploratory research

Table 6: Tactics of adding meaning

Table 7: Age of experience

Table 8: Company performance vs. corporate life stage

Table 9: Nurturing culture as promoted by communicator

Table 10: Chi squared test for questions 13 and 14

Table 11: Leadership styles emerging from the qualitative research

Table 12: Test 1

Table 13: Test 2

Table 14: Test 3

Table 15: Decision making challenges

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Acknowledgements

This research report as well as the MBA course as a whole could not have been completed

without the help and guidance of numerous people who provided guidance and support.

I would like to thank the executives who participated in the interviews amidst all their busy

schedules. I would also like to thank all those who took part in the survey and answered the

questionnaires honestly. It was a positive contribution to my learning.

I would also like to thank all the lecturers who too time to explain all the concepts that added to

my learning during the two years of this course.

I would like to thank all the people that contributed to this project. My manager, De Kock who

supported me throughout the course. My brother Matthew who listened to all the lamentations

during the exercise and provided a comforting word or two and offered a prayer to make it

better.

I would like to especially thank Shioke Thomas, whose wonderful support made it easier for

me to get to the finishing line.

To all those I have not mentioned by name, I appreciate all your support and encouragement.

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Abstract

A number of organisations have experienced unprecedented transformation towards the end of

the last millennium. Furthermore, technology and globalization have exposed many

organisations to intense competition making fast and effective decision-making necessary. In

the face of such fast-paced change and the need to make rapid and timely decisions,

organisations have had to employ highly competent people to deal with such complex and

highly competitive environment.

An impressive amount of research has been conducted on individual performance measurement

of individual capabilities. However, the link between these factors and corporate performance

is usually not apparent, according to the literature that was reviewed. This research tries to

establish a connection between leadership style and leadership decision-making, to illustrate

how the subject organisations are performing and then to justifiably attribute performance to

top leadership decision-making.

This research explores the theories and tests that present the argument on the link between

corporate life cycle stage, leadership style, leadership decision-making and organisational

performance.

Key words: corporate life stage, leadership style, leadership decision-making, organisational

performance.

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1. Introduction

1.1 Background to the research

In business, those who are the quickest to make the right decisions and implement them the

fastest are the ones that survive (Adizes 1999). This statement by one of the leading authorities

on corporate lifecycles suggests two things that change is constant in any organisation and

business environment and also that the decisions made by those in the driving seat are

important in taking these organisations through the different stages of change and ensuring

their success. The decisions made are often informed by the leadership style adopted by the

leader in question Kets de Vries (2006) asserts further that the leadership style of an individual

is informed by a complex consequence of the interplay of that persons inner theatre, his or her

competencies that have developed over time and the context in which he/she is operating.

A number of organisations have experienced unprecedented transformation towards the end of

the last millennium (Tirmizi, 2002). Furthermore, technology and globalization have exposed

many organisations to intense competition making fast and effective decision-making

necessary (Bawden, 1999; Bennis, 1997; Bloomberg, 1999; Drucker, 1996; Handy, 1998;

Kotter, 1999; Milne, 1998; Quinn & Spreitzer, 1997; Sproull, 1998; Ulrich et al., 1999). In the

face of such fast-paced change and the need to make rapid and timely decisions, it stands to

reason that different styles of leadership should be adopted at the different stages of

organisational change and growth by those responsible for steering these organisations

(Watkins 2003; Adizes 1999).

Nutt (2002) conducted a study of in excess of 400 decisions made in medium to large

companies in Canada, Europe and the United States of America. He interviewed key personnel

(including the managers responsible for the decision) two years after the decision had been

made. His findings were that most of the decisions made had failed, become undone or were

never implemented in the two years that were under study. This finding can be accepted as a

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confirmation for Kets de Vries (2006) assertion that aligning ideas and execution and

synchronizing vision and action is not the competence of most people.

In addition to recording the decisions made, Nutt (2002) also took note of the decision-making

process. The outcome of this study revealed that the best indication of success or failure was in

the social processes rather than cognitive ones (Vroom 2003). These social processes included

the extent of participation and involvement of key stakeholders in the formulation of solutions.

The study also revealed that there was an 80% succession rate for decisions that involved

participation to advance implementation. Nutts (2002) leadership decision-making research

illustrates that effective decision making is not only about the quality of the decision but also

about whether the decision will be supported and have commitment during implementation.

One can derive from this outcome that leadership style plays a significant role in the

advancement of an organisations success.

Companies operating in South Africa have not been exempt from the rapid growth and change

that the rest of the world has been experiencing. In addition to the global challenges, there are

enough local challenges to keep local companies on their toes (SACOB website, 2006). Such

challenges include interest rate increases, exchange rates and labour costs (SACOB website,

2006). In particular, for the textile industry, developments such as the recently introduced

Chinese import quotas present challenges that affect a companys competitive edge.

Amidst all the activity taking place in the marketplace, the question can then be asked: Does

the decision-making of an organisations leadership impact on effectiveness and organisational

performance at different corporate lifecycle stages? Furthermore, what are the factors that

inform the decision-making process? This research explores the theories and assertions on

leadership style, decision-making and organisational life cycles. The fieldwork engaged seeks

to test the hypothesis that is presented later in this report.

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1.2 The purpose and significance of the research

An impressive amount of research has been conducted on individual performance measurement

of individual capabilities. However, the link between these factors and corporate performance

is usually not apparent (Reichwald, Siebert and Mslein, 2004).

The purpose of this research was to establish a connection between leadership style and

leadership decision-making and ultimately to organisational performance. The research not

only looked at corporate performance, but also at the companys lifecycle stage according to

Adizes (1999) at the time of this study.

1.3 Limitations of the research

One of the major challenges encountered in the research was that of access to the top

executives. This challenge was highlighted in Easterby-Smith, Thorpe and Lowe (2002), where

it was stated that management research is made unique by the issue of access to the top

management. The initial specification was to interview only Chief Executive Officers.

However, due to the difficulty in setting up appointments, the scope was then widened to

include other senior executives that headed departments or business units within a company.

In addition to the challenge of accessibility, some of the fifteen companies that were initially

chosen to participate in the survey were not willing to participate. Furthermore, each company

had unique circumstances applying to it. As a result the challenges for leadership were

different. Reichwald, Siebert and Mslein (2004) list the following as predominant challenges

for leadership:

1. support integration and change in mergers and acquisitions

2. balance between centralisation and decentralisation

3. bridge between global stability and local flexibility

4. support sustained innovation and change

5. foster entrepreneurial spirit and learning

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6. support customer-orientation and boundary-spanning

7. drive business strategy and corporate development

This research demanded considerable flexibility in the evaluation. A number of issues emerged

from the interviews and informed the way forward with subsequent interviewees. As a result

the research made use of proven principles developed in grounded theory in order to generate

meaningful findings which in the end stood up to rigorous analysis (Malhotra, K.M., & Birks,

D.F. 2003).

Other specific limitations which must be noted when making any inference from the results of

this survey are as follows:

1. The time spent with the senior executives was not sufficient to make adequate follow-

ups on information offered in some of the responses.

2. The interview questions varied a little after the first three people were interviewed. This

was partly because of the effect of Grounded Theory and partly because feedback on

the questionnaire was received after some interviews had already been conducted. It

was not possible to revisit the interviews that had already been conducted. However,

the researcher was able to sift information from the open ended questions that answered

most of the questions that were added later. Since personal interpretation and not

absolute responses to specific questions was used, the results and inference may be

slightly flawed.

3. The software for the questionnaire did not implement the answer all questions

command that was selected by the researcher. As a result, some of the questions were

not answered and therefore the response total of 80 reduced to 71. This impacted on the

significance of the sample size and therefore the outcome of the tests applied was not

entirely reliable.

4. Some of the response categories had to be merged in order to eliminate the occurrence

of a sparsely populated frequency table when running the chi-square test. This means

that the scaling was reduced and may have affected the accuracy of the results.

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5. It was not possible to get annual reports from all of the companies interviewed because

some of them were not public companies. The researcher relied on the information

provided by the interviewee in this case.

6. Some of the respondents were not able to locate the survey as the link was broken when

it was delivered to their mailboxes.

7. Only 12 of the companies submitted email lists. This could distort the results.

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2. Literature Review

2.1 The Adizes corporate lifecycle model

According to the Adizes Corporate Lifecycle theory (1999) an organization goes through

various stages of growth and aging. Adizes (1999) explains that an organization goes through

various stages between courtship and death (as shown in Figure 1 below). The diagram below

depicts all the stages of organizational lifecycle according to this theory.

Figure 1

Adizes corporate lifecycle model

Source: www.chrisfoxinc.com/OrganisationalLifeCycles.htm

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According to Adizes (1998), there are four different roles, known as PAEI, that are needed for

an organisation to make an effective journey through the different life stages, and they are as

follows:

Performs and Purpose role

Administration role

Entrepreneur role

Integrating role

At each stage of the Adizes Lifecycle model, there exists a different inter-dependency of these

four roles. A business is faced with a set of different appropriate problems for each stage.

The ideal stage for an organisation to achieve is Prime. Prime is the stage that most

organisations strive to reach and stay at. It is a stage where all the four PAEI roles co-exist.

Adizes (1999) refers to the co-ordination of the four roles as a square dance. Each dancer (the

roles) has a unique style but these styles must be co-ordinated into one unified dance in order

to serve one ultimate goal i.e. strategic excellence. It is the effective co-ordination of these

different roles that informs leadership decision-making. Since the ultimate goal is always to

reach, stay at or go back to Prime, leadership decision-making has to always facilitate this

transition. Adizes (1999) points out that the leadership can speed up or even fast-track the

transition process to the desired Prime stage. Adizes (1999: 258) further states that during the

growing stages, people develop faith in the idea that new leadership can alter behaviour in

ways that cure problems. This illustrates the importance and direct link that leadership has in

the development of the PAEI roles.

The PAEI roles are explained as follows:

The Performs the Purpose role asks what needs the organisation has to fulfil in respect of its

clients. This role aims for effectiveness in the short-term and is dominant at most of the stages

after Courtship.

The Administration role brings short-term efficiency to the organisation and looks at

systematising and making the activities of the organisation routine. This brings about

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efficiency in the short-term. This role is dominant in the higher levels of the lifecycle. It starts

manifesting itself at the Adolescence stage and carries right through to Bureaucracy where it is

sometimes (if not often) the cause of death (Adizes 1999).

The Entrepreneur role is about being pro-active and making the organisation ready and

effective in the long run. This is characteristic at Courtship and then re-emerges at Go-Go

through to Prime.

The Integrating role looks at developing a culture of affinity and interdependency that aims to

achieve long-term efficiency. This is most prevalent at the Stable stage (Adizes, 1998:127;

from Company Analysis Group Four Project, 2006)

2.2 The STARS model

The STARS model was developed by Michael Watkins (2003) an Associate Professor of

Business Administration at the Harvard Business School. This model, like the Adizes model

(1999) outlines the different stages that a company goes through in its development and growth

(as illustrated in Figure 2 below). The STARS model depicts the stages as business situations

and emphasizes the need to match leadership strategy to the situation. Although this might be

similar to Adizes (1999) role concept, this appears to be a more streamlined approach to

leadership decision-making. Watkins (2003) does not stop at the mere evolution of the

company as a whole through different lifecycle stages but goes on to explain that any new

situation taking place in the different divisions of an organisation can represent any of the

situations in the model. For example the Start-up situation can be represented by the

implementation of a new software system in an organisation (managed by the Information

Technology Department) or the development of a new product (managed by the Research and

Development Department).

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Figure 2

The STARS model

Source: Watkins, M (2003)

The different situations present challenges and opportunities that must be managed in order to

achieve the desired objectives (Watkins, 2003). Table 1 below illustrates the different

challenges and opportunities that occur within different situations (transition types).

Table 1

Challenges and opportunities of transition types

Transition Type Challenges Opportunities Start up Building structures and systems

from scratch without a clear framework or boundaries. Welding together a cohesive high-performing team. Making do with limited resources.

You can do things right from the beginning. People are energised by the possibilities. There is no pre-existing rigidity in peoples thinking.

Turnaround Reenergising demoralised employees and other stakeholders. Handling time pressure and having a

Everyone recognizes that change is necessary. Affected constituencies

Crisis Cycle

Fail Shutdown/ Divestiture

Realignment

Sustaining Success

Start- Up

Turnaround Fail

Fail

Succeed

Succeed

Succeed

Recovery Cycle

Succeed

Growth Cycle

Fail

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quick and decisive impact. (such as suppliers who want the company to stay in business) may offer significant external support. A little success goes a long way.

Re- alignment Dealing with deeply ingrained cultural norms that no longer contribute to high performance. Convincing employees that change is necessary. Restructuring the top team and refocusing the organisation.

The organisation has significant pockets of strength. People want to continue to see themselves as successful.

Sustaining success Playing good defence by avoiding decisions that cause problems. Living in the shadow of a revered leader and dealing with a team he or she created. Finding ways to take the business to another level.

A strong team may already be in place. People are motivated to succeed. Foundations for continued success (such as the product pipeline) may be in place.

Source: stewart-associates.co.uk/leadership-models.aspx (2006)

Both the Adizes (1999) and STARS model (Watkins 2003) indicate that there exists a ready

platform on which a certain type of decision should be made. It may be concluded that such a

state will allow for self direction and a natural progression to the next required corporate

lifecycle stage. However, Adizes (1999) intimates that leadership decision-making is required

to make the next correct step forward. In addition to the decision itself, it is the process of

making that decision that facilitates success or failure in implementation (Vroom 2003),

therefore denoting the leadership style.

2.3 Leadership style

Yousef (1998) describes leadership style as an important aspect of leadership and concludes

that it has a consistent influence on the productivity and profitability of an organisation. In

support of this, Gebert and Steinkamp (1991) assert that the success of an organisation is very

closely linked to the leadership style used. Furthermore, McDonough and Barczak (1991)

reinforce this assertion in noting that the speed of product development is influenced by

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leadership style. It is safe to conclude then that leadership style has a significant role in the

development and growth of an organisation through its different lifecycle stages. Kets de Vries

(2006) presents leadership style as a three-dimensional concept. These dimensions are

illustrated as follows:

Figure 3

Dimensions of Leadership Style

Personal leadership Style:

The roles

Inner theater: Motivational

needs Traits Temperame

Competencies: Personal Cognitive Social

Source: Kets de Vries 2006

Kets de Vries (2006) asserts that leadership does not occur in isolation and that the interface

between the leader, follower and situation makes leadership complex. Incidentally this

interface gives rise to leadership style as illustrated below in Figure 4.

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Figure 4

The Leadership domain

LEADERSHIP

STYLE SITUATION Nature of the task Life stage of organization Organizational variables Corporate culture Nature of industry Socioeconomic/ political environment

LEADER Character type Values/attitudes/ beliefs Position Experience

FOLLOWERS Character type Values/ attitudes/ beliefs Group cohesiveness

Source: Kets de Vries 2006

Clarke (1997) classifies leadership style according to the culture climate measured according to

the level of task and relationship orientation. The explanation of this classification of

leadership is found in the research undertaken by Blake and Mouton (1978). The research led

to the creation of a leadership grid based on leaders concern for people (relationship) and

production (task). This study concluded that the best way to lead people is what they call the

9,9 way where the team leader leadership style sits. Blake and Moutons (1978) classifications

are similar to Likerts (1967) who classifies leadership styles as Exploitative Authoritative,

Benevolent Authoritative, Consultative and Participative. (Figure 5 illustrates the different

styles of leadership found in the study by Blake and Mouton, 1978).

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Figure 5

The Blake and Mouton Leadership Grid

Source: stewart-associates.co.uk/leadership-models.aspx (2006)

Tannenbaum and Schmidt (1973) on the other hand classify leadership style as a series of

behaviours on a continuum. This continuum spans from boss-centred leadership on the one

side and subordinate-centred leadership on the other. This theory further classifies leadership in

terms of the choices that managers make with regard to the level of involvement subordinates

should have in decision making (Stewart-Associates, 2006). The factors that inform this theory

suggest a situational approach to leadership. The choices are informed by the following three

factors:

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1. Forces in the manager The managers value system, leadership inclination

confidence in subordinates and security in uncertain situations.

2. Forces in the subordinate readiness to assume decision-making responsibility,

expectations and need for independence.

3. Forces in the situation effectiveness of the group, the problem at hand and the type

of organisation.

Figure 6 below illustrates Tannenbaum and Schmidts (1973) theory.

Figure 6

The Continuum of leadership behaviour

Area of freedom for Subordinates

Subordinate Centered Leadership

Boss Centered Leadership

Use of Authority by the Manager

Manager permits subordinates To function within limits defined by superior

Manager makes decision and announces it

Manager sales decision

Manager presents ideas and invites questions

Manager presents tentative decision subject to chan

Manager defines limits, asks group to

e

Manager presents problem, gets suggestions make a

g

Source: stewart-associates.co.uk/leadership-models.aspx (2006)

The first factor echoes with Kets de Vries (2006) idea on the leader being influenced by an

inner theatre which ultimately informs how he reacts in certain situations.

It is the researchers submission that the second factor may be alluding to the intellectual level

of the subordinate. This intellect may be a result of time (which often brings about experience)

or may have come about through academic acquisition. The researcher further submits that in

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the third factor, the aspect of organisational culture will influence the outcome of any problem-

solving exercise.

The third theory that this research will consider is Fielders Contingency Model (1967) as

illustrated in Figure 7. This model looks at leadership as responding to a situation that prevails

in order to achieve effective results. The deciding factors in this model are:

1. Leader-member relations the nature of the interpersonal relationship between leader

and follower. This is expressed on a scale from good to poor and has qualifying

modifiers attached as necessary (Stewart-Associates, 2006)

2. Task structure whether the task of the subordinate is structured or unstructured and

how much creative freedom is enjoyed by that subordinate in completing the task.

3. Position power whether the position enables the leader to influence the group

members and whether he can get them to accept his direction and comply accordingly.

Figure 7

Fielders contingency model

Source: stewart-associates.co.uk/leadership-models.aspx (2006)

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The descriptions advanced by these three different theories on leadership suggest classification

into three main categories: Cultural - Clarke, (1997) and Blake and Mouton (1978),

Behavioural - Tannenbaum and Schmidt (1973) and Situational - Fielder (1967). These three

classifications of leadership provided a sound platform on which to evaluate the different

companies that were be included in the sample. The questionnaire (included in the appendices)

that was developed was modelled on these classifications.

2.4 Measurement of leadership systems against organisations performance

Reichwald, Siebert and Mslein (2004: 194) developed a three-step maturity model of

leadership systems, which was derived from qualitative and quantitative results. This maturity

model allows for the classification of companies according to the degree of excellence obtained

by their leadership systems. The results of this maturity model can be illustrated as indicated in

Table 2:

Table 2

Three-step maturity model

Maturity level Corresponding characteristics Level 1 - early stage of developing leadership excellence

- low to no integration and synchronization of leadership systems and business systems

Level 2 - leaner leadership process - good integration and synchronization of leadership systems

and business systems

Level 3 - strong integration and synchronization of leadership systems and business systems

- good fit, balance and interaction between corporate strategy, structure and culture

Derived from Reichwald, Siebert and Mslein (2004: 194-195)

The companies that were classified as being at maturity level 3 demonstrated a significant level

of synchronisation of their leadership system with the business system. These companies had a

good fit, balance and interaction with their corporate strategy structure and culture. Reichwald,

Siebert and Mslein (2004: 195)

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2.5 Leadership effectiveness and organisational performance the

arguments

The parameters within which leadership and leadership effectiveness research has been

conducted can be described as narrow. Reichwald, Siebert & Mslein (2004) point out that

most research on leadership has focused mostly on outstanding leaders and their performance

behaviours and capabilities. Svensson & Wood (2005:522) observe that organisational

performance as affected by leadership effectiveness will vary over time and across contexts. In

spite of these studies having been conducted, the link between individual capabilities and

corporate performance is not obvious (Reichwald, Siebert and Mslein, 2004).

Linked to Watkins STARS model (2003) is the emphasis on the evaluation of the business

situation prevailing in a company before taking any action. The diagnosis is typically informed

by those that are closest to the problem but are often not in a position of authority (Watkins,

2003). As a result a participative approach to leadership as described by Nutt (2004) is required

in order to facilitate informed decisions and achieve success in implementation. On the

contrary, studies on the charismatic (transformational) style of leadership have revealed that

the single person approach can be just as effective as the participative (transactional) style

(Huang, Cheng and Chou, 2005). Charismatic leadership is focussed more on changing

subordinates needs in order to suit the task at hand while the transactional leadership sees and

treats subordinates needs as inherent (Huang, Cheng and Chou, 2005). These views suggest

that there may be value in concluding that leadership needs to adapt and adopt different stances

depending on the situation at hand. In support of this Neuberger (1990) suggests a discussion

of the perspective and environment in which leadership is found and not as an aggregation of

definitions seen in literature.

More evidence of this can be gleaned from Wood and Vilkinas (2003) study on the

characteristics that chief executive officers associated with their success. Their study highlights

the fact that changes in the corporate environment are influencing leadership style in order to

achieve effectiveness and success. In addition to the creation of the global village, the playing

field has changed for CEOs, and so their approach has had to change from dominance or

influence to relational dialogue Wood & Vilkinas (2003).

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The environment in which most CEOs have to operate has become a global arena and it can be

described as fiercely competitive (Wood & Vilkinas 2003). Competition is found in the

technologies that are applied in business processes. In addition, the educated workforce has

become highly mobile. As a result of all this, decision-making has had to be undertaken at

different levels calling for a need to adopt new attitudes and skills (Wood & Vilkinas 2003).

Most of the research papers reviewed cited that leadership effectiveness and organisational

performance is measured through the analysis of annual reports. This method limits the results

and outcome of the research to a narrow spectrum of the leaderships involvement (i.e., a

single financial year). It discards the consideration that organisations experience and require

different leadership styles at the different stages of their lifecycle (Adizes, 1999).

There are arguments for (Blake and Mouton, 1964; Fiedler, 1967; Yukl, 1998) and against

(Thomas, 1993; Jaffee, 2001; Andersen, 2000, 2002) the relationship between organisational

performance and leadership effectiveness. Svensson & Wood (2005) captured the two schools

of thought from the different academics in his assertion that the achievement in organisational

performance can be the result of prosperous leadership or at times be the result of leadership

that is poor and deficient.

The literature reviewed suggests that there are various relationships and external factors that

are presented as being instrumental in leadership effectiveness as illustrated in Table 3 below:

Table 3

Factors instrumental in leadership effectiveness

Factor Reference Leadership approach Reichwald, Siebert and Msleins, 2004

Context and environment Svensson & Wood (2005)

Time Svensson & Wood (2005)

Business situation Watkins (2003)

Corporate lifecycle stage Adizes (1999)

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One of the factors that are said to be instrumental in leadership effectiveness is that of

leadership approach. In Reichwald, Siebert and Msleins (2004) exploratory study, conducted

over a ten year ongoing period with 37 large multinationals, one of the observations was that

there are two general approaches to leadership i.e. the personal approach leadership through

interaction and the structural approach leadership through systems. Reichwald, Siebert and

Mslein (2004:185) go on to explain that these two concepts are at the ends of a continuum

according to Bleicher & Meyer (1976), Wunderer & Grunwald (1980), Neuberger (1990), Bass

(1990), Kanji & Moura e S (2001), Daft (2002) and Yukl (2002). These authors specify that

direct leadership just fills the gaps of structural leadership through its interaction with

employees. However Strange & Mumford (2002) state that the only way to motivate people is

through personal, direct leadership by interaction. These views are consolidated by Wunderer

& Grunwalds (1980: 62) definition of leadership as a goal-oriented and social impact to fulfil

common tasks in a structured work environment. Reichwald, Siebert and Mslein (2004: 185)

understand leadership excellence as a well-balanced interaction of consolidation and fluidity

of leadership and management structures in the process of strategic, structural and cultural

change. Their understanding goes on to look at leadership systems and their integration in the

context of the three influential factors: strategy, structure and culture.

Svensson & Wood (2005) present the factors of sustainability, skilfulness and business

practices as being influencers of leadership effectiveness. Their submission is that business

behaviour or serendipity in corporate decision-making or skilfulness influence the outcome of

leadership effectiveness in organisational performance. It is also based upon the assumption

that the leadership effectiveness in organisational performance is influenced by timely and

contextual considerations in corporate decision-making and business behaviour. This

argument is continued by Quazis (2001) assertion that issues of sustainable development may

be influencers of leadership effectiveness. Furthermore, sustainable competitive advantages

(e.g. Maximov & Gottschlich, 1993), achieved through the outcome of leadership could also

influence leadership effectiveness.

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Practitioners in the leadership field (Godfrey Owen, Rosabeth Moss Kantor and Cyrus

Freidheim) have expanded on the above arguments, and in most cases confirmed them.

Godfrey Owen, Deputy Chief Executive of Brathay, a people-development consultancy, points

out that strategic leaders are more directly influenced by the external environment. The ability

to read into that environment, devise an appropriate strategy and then put that strategy into

action is a key requirement. Meeting the requirement is underpinned by four key competencies:

intellect and confidence; empathy; energy and humility (Pollitt, 2005: 34). In keeping with the

notion of business practices, Pollitt (2005: 34) submits that leaders have to be able to look at

chaos and find pathways through itHaving recognised the pathway, strategic leaders need to

produce a plan that can be readily communicated and understood by people at all levels in the

organisation.

Godfrey Owen in Pollitt, (2005: 34) continues to assert that there are three pillars of

development in leadership which should rest on the bedrock of experience. It is important to

conceptualise this experience and extend its relevance across the broader horizons of strategic

leadership. In this way, we can use experience and self-awareness to develop strategic

judgement. The three pillars of development that are referred to are represented by:

i. the need to develop deep technical competence in ones professional discipline.

ii. the development of both intellectual agility and confidence to approach problems

from unexplored angles.

iii. the blending of the other two pillars with wisdom, experience and intuition to

match the individual leaders character and approach.

The first pillar seems to disagree with Vrooms (2003) observation that the development of

good decision making lies in social and not cognitive processes. Vrooms (2003) observation

would hold true in the face of multiple decision-making that has to be made due to the rapid

change and globalisation of the business environment (Wood and Vilkinas, 2003). The second

pillar is a logical progression from the first in the face of the global development and changes

in the business playing field that Wood and Vilkinas, (2003) talk about. The third pillar echoes

Tannenbaum and Shmidts (1973) continuum of leadership behaviour in which one of the

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factors pertains to forces in the manager It also seems to agree with Kets de Vries' (2006)

suggestion that one of the dimensions of leadership style is the presence of an inner theatre.

These pillars are important and should, according to Godfrey Owen (Pollit, 2005: 35), be built

around experience and self-awareness. This will ensure that making decisions under pressure,

clear vision and clarity are adopted by leaders. This will ultimately set them apart from the

crowd and place them on a path to becoming inspirational leaders. Castanias & Helfat (1991)

support the view that top management is a unique resource provided its contribution to the

sustained profitability of the enterprise is unique. In contrast to Godfrey Owens view (Pollit,

2005), Wood & Vilkinass (2003) study on characteristics that Chief Executive Officers

associated with their successes highlights that learning and self awareness did not feature in the

responses to identifying three characteristics that most contributed to the CEOs success. This

further illustrates and supports the sentiment that there is some confusion, discrepancies and

ambiguity in literature with regards to the supposed relationship or association between

leadership effectiveness and organisational performance (Svensson & Wood, 2005: 524). To

add to the confusion, Wood & Vilkinas (2003: 187) say that critical development experiences

such as crises, failures and achievements create lessons that generate new perspectives or skills

or a shift in character.

In the research paper presented by Wood & Vilkinas (2003), a set of characteristics associated

with success were identified for CEOs by theorists and empiricists (see Table 4 below):

Table 4

Characteristics of CEOs associated with success

Characteristics Reference (theoretical) References (empirical) Achievement orientation Achieves results and displays energy, passion and tenacity

Sense of purpose, visionary (Bennis, 1996b, 1997; Goffee & Jones, 2000) Bias towards action (Bennis, 1996b); Energy (Goffee & Jones, 2000)

Drive and ambition (Tait, 1996) Visionary (Tait, 1996) Envisioning, energising, designing and controlling and tenacity (Kets de Vries & Florent-Treacy, 2002)

Humanistic approach Believes in the potential and growth of others and good communication

Communication skills (Bennis, 1997) Humanistic approach (Bennis, 1996b)

Interpersonal skills (Tait, 1996)

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Positivism Takes responsibility for own thinking, thinks creatively and challenges others thinking

Positivism (Bennis, 1996b)

Inclusive Empowering style (Bennis, 1996a), including empathy (Goffee & Jones, 2000)

Empowering, rewarding and giving feedback, and team building(Kets de Vries & Florent-Treacy, 2002)

Participative and empowering style

Inspires trust (Rogers, 1995a) Emotional intelligence (Goleman, 1998, 2000) Self-esteem (Bennis, 1997)

Emotional intelligence (Barling et al., 2000; Kets de Vries & Florent-Treacy, 2002)

Integrity Clearly articulated values that translate into behaviour; congruent

Ethical (Bass & Steidlmeier, 1999; Messick & Bazerman, 1996) Integrity (Bass & Steidlmeier, 1999) Moral courage (Peak, 1997; Scarnati, 1999)

>Integrity (Tait, 1996)

Balanced approach Balances all aspects of life including work and non-work priorities

Balance in their lives (Bennis, 1996b) Life balance (Kets de Vries & Florent-Treacy, 2002)

Learning and self-Awareness Aware of strengths and limitations, learns from experience and makes decisions beyond self interest.

Self-awareness (Argysis, 1995; Bennis, 1997; Conger & Zin, 2000; Conger & Benjamin, 1999; Goffee & Jones, 2000) Emotional intelligence (Goleman, 1998, 2000) Intuitive (Goffee & Jones, 2000)

Reflective learner (Farkas & Wetaufer, 1996) Emotional intelligence (Barling et al., 2000; Kets de Vries & Florent-Treacy, 2002) Resilience to stress (Kets de Vries & Florent-Treacy, 2002)

External Focus Being aware of the environment external to the organisation

Outside stakeholder orientation and global mindset (Kets de Vries & Florent-Treacy, 2002)

Notes:this refers to relationship side of emotional intelligence, and this refers to the self-awareness side of emotional intelligence, References prior to 1996 were not included

Source: Wood & Vilkinas (2003: 1988)

The above characteristics are defined both theoretically and empirically. Incidentally the

theorists and empiricists conclusions on the subject are not at all disparate. The two groups

agreed that CEOs need to possess an achievement orientation and humanistic approach.

(Wood & Vilkinas, 2003: 189). However, the empiricists seem to argue for an additional

characteristic of external focus, while the theorists submit that CEOs should possess positivism

(Wood & Vilkinas, 2003).

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2.6 Summary of the literature review

It appears that there are varying theories that are advance on both leadership style and decision-

making process. A summary of the literature is below:

Figure 8

Summary of the literature Review

Corporate Life Stage

Adizes Watkins

Leadership style

Tannenbaum and Schmidt

Blake and Mouton Fielder

Source: Generated by the researcher

Characteristics of each life stage

Other theories

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3. Research hypotheses/propositions Strauss and Corbin (1998) describe a hypothesis as a hunch that is formulated from an initial

investigation of the phenomena in question. The description further outlines that a hypothesis

links two or more concepts and explains what, why, where and how of this phenomena

(Strauss and Corbin 1998: 135). The hypothesis that the author sought to prove is:

Organisational performance is dependent on the lifecycle stage within which an

organisation finds itself, as well as the decision-making by its leaders, who themselves have

appropriate leadership styles per lifecycle stage.

The researchers aim was to develop a framework on which the different aspects stated in this

hypothesis could be measured. In order to carry out an effective investigation, it was necessary

to break down the hypothesis in the following parts:

1. Organisational performance is dependant on the life cycle stage at which an

organisation is sitting.

2. Organisational performance is dependant on decision-making done by the leaders.

3. The decision-making process is informed by the leadership style of a leader.

4. The leadership style adopted by a leader is affected by the lifecycle stage at which an

organisation finds itself in.

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3.1 Learning objectives

The researcher has a keen interest in leadership as it pertains to the growth and development of

an enterprise. The researcher undertook and thoroughly enjoyed a course on communication,

leadership and learning prior to this research. In addition, the researcher has been exposed to

the exciting concepts on corporate lifecycles. This initial exposure to both these areas of study

left a number of unanswered questions which the researcher wanted to explore in this research.

One of the major questions was that of the link that might exist between styles of leadership,

the organisations lifecycle stage and the impact of decisions made on organisation

performance. The researcher intends to embark on a series of entrepreneurial ventures either

independently or as part of a large organisation. This research has provided a base for a sound

understanding in the dynamics and possible relationships between leadership decision-making,

leadership style and organisational lifecycle stage and performance.

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4. Methodology and approach Adizes corporate lifecycle model (Adizes 1999) and Watkins STARS model (2003) were

used as a framework to establish the lifecycle stage of each of the companies chosen. This

determination was done by asking the leaders the question after explaining both concepts to

them. The leadership style was then investigated and evaluated against theories such as Clarks

(1997) leadership styles and Tannenbaum and Schmidts (1973) continuum of leadership

behaviour (from Stewart-Associates 2006). Such investigation was made possible through the

use of a web-based survey. Each question in the questionnaire was formulated with the

objective of investigating a particular assertion in the literature or validating a particular

theory. The questionnaire had Type 1 and Type 2 questions. This classification was intended to

broadly tease out issues around leadership style, decision-making and corporate lifecycle stage.

4.1 Procedure

The process of proving the hypotheses above and ultimately the main hypothesis was

undertaken as follows:

1. Analysis of annual reports in order to understand

a. the organisations general performance

b. the general corporate culture

2. Analysis of data from a leadership style questionnaire which was administered

electronically. This questionnaire asked questions which investigated

a. their perception of the leadership style in the company

b. their perception of their leaders decision-making process

c. the general age of the company and its strategic focus ( meant to facilitate a

loose interpretation on the possible lifecycle stage of the organisation)

3. Interviewing relevant leaders around

a. the lifecycle stage of the organisation and

b. the perception of their own leadership style and how it affects their strategic

decision-making.

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4. Developing a leadership (model) against which to evaluate leadership. This was done

after considering results gathered through the process of triangulation involving

a. results from interview analysis done with Atlas.ti software

b. results from survey analysis done with Statistica 7.0 and

c. Inferences made from analysis of annual reports and

d. Inferences made from theories obtained from the literature review.

The research was based on qualitative and quantitative analysis derived from interviews,

questionnaires and content analysis of annual reports (where available). This multi-method

approach was necessary in order to facilitate triangulation (Saunders Lewis and Thornhill

2003). Triangulation is the use of different methods of collecting data in order to confirm that

the information at hand is telling you what you think it is telling you (Saunders Lewis and

Thornhill 2003). The purpose of triangulation is usually to acquire confirmation of findings

through convergence of different perspectives (Jack and Raturi, 2006). It is at the point of

convergence that reality is represented.

Although triangulation was originally used in social sciences and psychology (Smith, 1975), it

has been used to resolve difficulties in interpretation and theory building in management

studies (Jack and Raturi, 2006). There are three main reasons for using triangulation:

1. Completeness this recognises that using a single research method can have

fundamental flaws (McGrath (1982).

2. Contingency allows the researcher to explore new ways of approaching a

phenomenon (Jack and Raturi, 2006)

3. Confirmation improves the ability to draw conclusions from a study (Knafl and

Breitmeyer, 1989). The researcher was able to overcome fundamental biases that could

have arisen from a single method, single theory and single observer study because there

was a combination of multiple data sources.

This research made use of triangulation as illustrated in Figure 8 below

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Figure 9

Triangulation in this research

Tertiary data: Literature

Annual Reports

Secondary data: Employees (quantitative analysis)

Balanced conclusion And generation of appropriate model

Primary data: Senior Executives (qualitative

analysis)

Originated by: Chipidza (2006)

The most relevant methods for this research of those listed in the table above were Pilot

surveys and Qualitative interviews. Secondary data was also sourced from similar studies that

were conducted on this subject. This formulated an understanding based on the conclusions

made in those studies. Analysis of this secondary data contributed to the validation models and

facilitated the testing of hypotheses (Mouton, 2001). The secondary data partly informed the

questions that were asked in the qualitative interviews. The intention of the qualitative

interviews, together with the quantitative web-based survey, was to provide confirmation (or

otherwise) of conclusions made in the secondary data. The qualitative interviews were also a

source of information that broadened and in some cases narrowed the scope of the research.

Due to the explorative nature of this research, the research process was divided into three

phases as illustrated in Figure 7 below. Most of the steps in this diagram, although illustrated

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as occurring consecutively, had, in some cases, iterative loops and also took place

concurrently.

Exploratory Research

Primary Research

Data Analysis & Interpretation

Apply theoretical and self-developed frameworks

Apply theoretical and self-developed frameworks

Identify frameworks from academics and literature

Review with industry experts & decision makers

Litmus test validity frameworks on actual examples

Review with industry experts & decision makers

Input to Ranking Exercise and generation of model

Figure 10 Research Process

Source: Adapted from Mnnink (2005)

The research made use of the grounded theory strategy (Glaser & Strauss, 1967). Saunders

Lewis and Thornhill (2003: 93) explain this approach as a way of building theory through a

combination of induction and deduction. The differentiating factor of grounded theory from

most other research is that it is explicitly emergent (Miles & Huberman, 1994), and this

corresponded well with the exploratory nature of this research. The advantage of the grounded

theory method was that the researcher was able to modify the scope of study as the data was

collected. With the outcome having been unknown at the beginning, it was expected that the

direction would change as a result of the information gathered (Miles & Huberman, 1994).

However, although the direction did not change, the scope and depth of the research did change

slightly. For example, information gathered from earlier interviews influenced the addition of

questions that had not been included before. One such addition was the question that dealt with

age and experience. This was not included in the initial two interviews but was later included

after noticing that the first interviewees saw it as an important aspect. The aim was to

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understand the research situation and to discover the theory implicit in the data (Glaser, 1992;

from Mnnink, 2005). The choice to base the research on grounded theory was therefore valid.

4.2 Exploratory research phase

The research was undertaken using the exploratory and explanatory methods. Since

exploratory research involves three principal approaches i.e. talking to experts in the field,

examining of the literature and administering focus group interviews (Saunders Lewis and

Thornhill (2003), it was an appropriate method for this research. The method is useful in

establishing clarity of understanding on the phenomenon being researched (Saunders Lewis

and Thornhill 2003), i.e., leadership decision-making, leadership style and organisational

performance and corporate lifecycle stage. The flexibility and adaptability offered by this

method accommodated changes were brought about by new data that became available as the

research progressed. The characteristics of exploratory research, which are illustrated in Table

5 below, guided the researcher.

Table 5

Characteristics of exploratory research

Objectives

To provide insights into and understanding of the phenomena To understand (versus to measure)

Characteristics Information needed may be loosely defined Research process is flexible, unstructured, may evolve Samples are small Data analysis can be quantitative or qualitative

Findings/Results Can be used in their own right May feed into conclusive research May illuminate specific conclusive findings

Methods

Expert surveys Pilot surveys Secondary data Qualitative interviews

Source: Developed from Malhotra, N.K, & Birks, D.F. 2003: 63, Table 3.1

Exploratory research is a means to discover what is happening, seek new insights and ask

questions in order to assess phenomena in a new light (Ghauri, Grohnaug & Kristianslund,

1995). This exploratory phase was part of the primary research of this study. As suggested by

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Ghauri, Grohnaug & Kristianslund, (1995), acquired insights from the exploratory study were

used to undertake further, more comprehensive research.

The research was conducted on companies in the private sector. Most of them had their head

offices in Cape Town but some were based in Johannesburg. Originally the sample of was

supposed to be of 15 chief executive officers (CEOs). However due to the challenge in

accessing such senior executives as observed by Easterby-Smith, Thorpe and Lowe (2002), it

was necessary to find other senior executives that were in a leadership position. These senior

executives were from organisations from different industries in the private sector and one

academic institution. The original criterion for participation was that the senior executive had

to have been in that position for at least five years. The rationale behind this is to establish a

trend of decision-making over a measurable period of time. However, this waived in some

cases if the senior executive had been in a similar position of leadership prior to his present.

The following assumptions were made:

a. The company would have gone through at least two lifecycle stages within these five

years.

b. The senior executive a representative of the leadership within the company.

In-depth interviews were conducted with these senior executives as in April, Bosma and

Deglon (2003) and Reichwald, Siebert and Mslein (2004). The list of senior executives

interviewed is as follows:

1. Mr Stan Leslie - Old Mutual

2. Mr Terence Singh - Nedbank/BOE

3. Mike Jackson - PPS Insurance

4. Mr Leon Vermaak - Telesure

5. Mr Clinton Dallas - Chevron South Africa

6. Mr Andre Van Niekerk - Juta Law

7. Professor Frank Horwitz - UCT GSB

8. Mr Philip Kravitz - Cape Union Mart

9. Mr David Robins - Pick n Pay

10. Mr Simon Susman - Woolworths

11. Mr Dennis Pollack - Foschini

12. Ms Estelle Morkel - Pep Stores

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13. Ms Glenda Younge - Juta Academic

14. Mr Marcus Banga Pep Stores

15. Mr Ralph Mupita Old Mutual

In addition to these interviews, 10 predetermined respondents were to be picked from each of

the 15 companies. However only 12 companies submitted lists in the end. The criteria for the

respondents were:

3 from the Executive Committee

4 from Senior Management

3 from middle management.

An effort was made to pick those that reported directly or indirectly to the senior executive

interviewed. Emails were sent to the identified respondents from the office of the senior

executive and copied to the researcher.

Part of the exploratory research included content analysis of annual reports as in April, Bosma

and Deglon (2003) and Reichwald, Siebert and Mslein (2004). In addition any published

information that could be found on the leadership systems of the organisations involved was

analysed. Contrary to the research by Wood & Vilkinas (2003), the organisations performance

was not be a criterion for selection. The reasoning behind this decision was that it was not the

performance of the company that was under research but the leadership effectiveness (borne by

the style) and subsequent organisational performance whether good or bad. The length of time

that the senior executive had spent in a leadership position was therefore more important in

establishing a decision-making trend that affected the performance of the organisation.

4.3 Interviews

Easterby-Smith, Thorpe & Lowe (1991: 74) argue that interviews are appropriate when it is

necessary to understand the constructs that the interviewees use as a basis for their opinions

and beliefs about a particular matter or situation. This method of data collection is further

recommended by these authors as being most appropriate for exploratory study. The interviews

were semi-structured and convergent as described in Figure 8. The researcher had to stick

within a time limit of 45 minutes at the most.

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Figure 11 Overview of different qualitative data gathering methods

Source: Rao, S., Perry, C., 2003: Table 2.

Grounded Theory indicates that the explanations emerge gradually from the data as the study

progresses. Therefore, as Grounded Theory was the underlying strategy for this research, the

interviews began open-ended and later become more structured and probing. The questions

asked in the latter interviews were more specific and elaborate (Dick, 2005). The process of

these interviews resembles the process illustrated in Figure 9.

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Figure 12

Graphical representation of interview process that was based on Grounded Theory

Seek Exceptions

Agreement Disagreement

Seek Explanations

Better Understanding

this generates

Overlap

Interview Response II

Interview Response I

Seek Exceptions

Agreement Disagreement

Seek Explanations

Better Understanding

this generates

Overlap

Interview Response II

Interview Response I

Source: Developed from Dick (2005)

The interviews were recorded on a dictaphone to avoid distractions and loss of information.

Glaser (1992) recommends against recording or taking notes during an interview or other data-

collection sessions. The interviews were transcribed to facilitate rigorous qualitative analysis.

The Atlas.ti software programme was used to categorise and compile the information. In order

to add meaning and to test or confirm findings, the researcher used the research tactics

developed by Miles & Huberman (1994) as shown below in Table 6.

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Table 6

Tactics on adding meaning

Tactic Explanation

Noting Patterns Identifying themes from a seemingly senseless/abstract collection of empirical data.

Clustering Grouping and conceptualizing the data; bundling the variables or themes identified

earlier.

Making Contrasts/

Comparisons

A technique that provides yet another layer of meaning to the data.

Noting Relations

Between Variables

Trying to decipher the relationship between different variables.

E.g. Does a foreign architect increase the level of modernity in a building? Do

traditional building forms necessarily mean traditional building materials?

Building a Logical

Chain of Evidence

This tactic essentially involves linking up the earlier ordered groups of data to reach

some supposition. The causal links must make sense in order for them to be viable.

Making Conceptual/

Theoretical Coherence

Building theory by connecting the organized data with theoretical constructs from

sources outside the primary research. The theories may be from literature review and

may conflict as well as support findings from the data.

Checking for

Representativeness

Take a broad enough sample that can accurately portray a trend. This can be done by

increasing the number of case studies, looking for contrasting cases (discussed

below), and careful selection of the sampling frame.

Checking for

Researcher Effects

Two different types of effects: the distorting effect an outsider interviewer has on

the insider interviewee; and the distorting effect an insider interviewee has on the

outsider interviewer.

Weighting the

Evidence

Understanding that different some data sources are stronger or weaker than others.

The objective is to maximize the use of the strong ones and minimize reliance on

those that are weak. E.g. data collected later and after repeated contact is stronger

than those collected early during entry. The strategy is to keep a good log of data

quality issues.

Checking the Meaning

of Outliers

Investigating deeper into outliers. These cases usually provide evidence that

strengthens an original conclusion.

Using Extreme Cases Questioning informants that may have a strong bias.

Following-Up

Surprises

Findings that deviate from your suppositions but offer new perspectives on your

research. These surprises should be followed up by looking at how they could lead

to a new theory or a revised theory.

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Looking for Negative

Evidence

Looking for data that opposes your conclusions.

Making If-Then Tests Trying to draw causal relationship between findings and suppositions.

Getting Feedback from

Informants

Feeding back findings to informants for verification. This allows informants to

confirm the accuracy of the information that is being collected and recorded. May be

carried out at the end or during the data collection process itself.

Source: Miles & Huberman (1994)

4.4 Questionnaire survey

A web-based questionnaire was designed and sent to the respondents (see Appendix 1).

According to Saunders, Lewis & Thornhill (1997: 281), exploratory research does not work

well with questionnaires. However, a questionnaire in this case was used as a diagnostic tool to

assess the alignment of sentiments between the leadership and staff on the researched

variables. The GSB Research survey software was used. The questionnaire for the web-based

survey was deliberately constructed to be completed within a maximum of 15 minutes. The

researcher consulted with some of the potential respondents on the length of the questionnaire.

The feedback was that a long questionnaire would not receive attention.

Once the survey was closed the responses from the survey were downloaded and saved as an

Excel file for ease of analysis. Statistica 7.0 was used to perform all the data analysis. The

excel spreadsheet was imported into Statistica and three main tests were carried out:

1. Item Reliability

2. Chi-square

3. Box Plot mapping this was done to graphically represent the comparison between the

data sets that were chosen. In this instance it was a selection of the Type 1 questions

against a selection of the Type 2 questions. In some cases the same type questions were

tested against each other where it was possible and necessary to do so.

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4.5 Annual reports

Content analysis (April, Bosma and Deglon, 2003), was employed on annual reports. In cases

where the current report did not have a 5 year review, the researcher sought the other reports

that would allow for an analysis of five years. The information was then used in conjunction

with that obtained from the interviews and the survey. The researcher was able to generate

information on the performance of the different organisations as illustrated in the diagrams

below.

Turnover trend for Woolworths

Turnover for Foschini

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4.6 Literature review and desk research

The researcher conducted an extensive review of all the available literature. The researcher was

able to get information from, books, journals other publications as well as the internet. All

materials collected were critically reviewed as it was not possible to identify the literature that

would turn out to be relevant (Dick, 2005).

4.7 Explanatory research phase

An explanatory study is one that constructs a causal relationship between two variables

(Saunders, Lewis and Thornhill, 2003). The attention is on studying a situation so that an

explanation can be derived on the relationship between two variables. The performance trend

(organisational performance) derived from the five-year history was the situation upon which

the research was trying to establish a causal relationship with leadership style (or leadership

effectiveness). In addition the performance history assisted in trying to establish the lifecycle

stages that the companies may have gone through in the last five years.

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5. Research analysis, findings and discussion The research findings from both the quantitative and qualitative samples are discussed

interchangeably. This has been done to allow for a seamless discussion and cross referencing

of results.

In keeping with Miles and Hubermans (1994) Tactics on adding meaning, the Atlas.ti 4.2

software facilitated the process of noting patterns and clustering themes. The analysis

generated 374 themes (Codes) which were clustered under ten main themes (Code Families).

The main themes that were generated were as follows:

1. Age and Experience

2. Challenges of Leadership

3. Company Performance

4. Corporate Culture

5. Corporate Leadership Style

6. Personal Leadership Style

7. Business Challenges

8. Decision-Making Challenges

9. Corporate Life Stage

10. Macro Environment

It can be concluded from this exercise that the above themes are the most important for leaders

in South Africa. A list of all the cluster themes and the sub-themes is contained in Appendix

The web-based survey had 80 respondents out of a possible 120 which is a 67% response rate.

Coomber (1997) notes that response rates from on-line questionnaires are likely to be low as

the respondent has to sometimes take extra time to locate and complete the questionnaire. This

was indeed the case in this research as noted in the limitations section.

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Once the main themes were teased out of the qualitative survey, quantitative analysis was used

to test and cross examine the validity of the qualitative findings. The Chi-square test was used

to check if there was any association between selected questions. This association would then

confirm or reject the hypothesis that was advanced in the proposal. Due to the size of the

sample (80 respondents) it was necessary to merge some of the categories to avoid a sparsely

populated table.

An item reliability test was done in order to check if the question were in fact testing what they

were intended to test. To verify this, each question was classified as either a Type 1 or Type 2

question. These questions were then clustered and a test was run on Statistica 7.0 to find out

what the Cronbachs alpha value was. Cronbachs alpha is a coefficient of reliability which

measures how well the variables measure a single one-dimensional latent construct (UCLA,

2006). In this case the constructs in question are Leadership Decision-making Style and

Corporate Life Stage. The tables below show the results that were generated for both Type 1

and Type 2 questions.

Type 1 Questions

Summary for scale: Mean=16.4789 Std.Dv. =1.91131 Valid N: 71

Cronbach alpha: -.22530 Standardized alpha:

Average inter-item corr.: -.04650

Variable Mean if deleted

Var. if deleted

StDv. if deleted

Itm-Totl Correl.

Alpha if deleted

Q1 13.90141 3.440984 1.854989 -0.105832 0.000000

Q2 14.95775 2.688355 1.639621 0.129583 0.000000

Q3 14.05634 3.292600 1.814552 -0.082327 0.000000

Q4 13.98592 3.309661 1.819247 -0.063760 0.000000

Q8 15.69014 4.270185 2.066442 -0.495029 0.030475

Q9 14.95775 3.336243 1.826538 -0.107599 0.000000

Q13 13.98592 2.267407 1.505791 0.020740 0.000000

Q14 14.94366 3.236263 1.798962 0.065001 0.000000

Q15 15.35211 3.692918 1.921697 -0.157927 0.000000 Source: Generated by the researcher

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Type 2 Questions

Summary for scale: Mean=9.29577 Std.Dv. =1.41819 Valid N: 71

Cronbach alpha: -.00576 Standardized alpha:

Average inter-item corr.: -.03098

Variable Mean if deleted

Var. if deleted

StDv. if deleted

Itm-Totl Correl.

Alpha if deleted

Q5 7.985916 1.337830 1.156646 0.157833 0.000000

Q6 8.549295 2.303908 1.517863-

0.3863460.271655

Q7 8.408451 2.072605 1.439654-

0.2083030.108633

Q10 7.760563 1.168022 1.080751 0.099105 0.000000

Q11 5.549296 1.205316 1.097869 0.115659 0.000000

Q12 8.225352 1.836540 1.355190 0.116712 0.000000

Source: Generated by the researcher

As indicated in the results above, the Cronbachs alpha for Type 1 was .22530 and 00576 for

Type 2 questions. An alpha of .70 or higher is considered as acceptable in most Social

Science research (UCLA, 2006). It is therefore concluded that the reliability is low for both

Type 1 and type 2 questions.

Schmitt (1995) indicates that the value of alpha will increase with the length of the test.

Although the researcher could not conduct a long test, this single run was necessary to

highlight some of the limitations of the data collected.

1. Age and Experience

This theme came about as a result of a question that arose during the Grounded Theory process

as explained in the Methodology section. It was interesting to note as shown in Table below

that 20% of the respondents saw age and experience as a positive factor for them. Conversely

only 7% felt that it had no impact at all. However, 27% observed that age and experience was

somewhat of a paradox. Frank Horwitz said No matter how experienced you are, no matter

how good you think your judgement is, you still make mistakes. (Frank Horwitz.txt 8:18

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(120:121)). Simon Susman also said that although age came with wisdom, it also had the

disadvantage of being set in ones ways which then leads to Aristocracy and Bureaucracy. (P3,

173:176).

Table 7

Age and Experience Percentage Table

Variable Total Percentage

A Paradox 4 27

Confidence 4 27

Credibility 1 7

Learning 2 13

Little Impact 1 7

Clarity in Decision-making 4 27

More Discerning 1 7

Positive 3 20

Cause of Pride and Rigidity 1 7

Visionary and Proactive 1 7

Younger can work 2 13

Younger less discerning 1 7

Younger more forceful 1 7 Source: Generated by the researcher

In the end, although the ability to lead effectively was assigned to the older executive, thirteen

percent were quick to acknowledge that younger executives can be good leaders. It can be

concluded therefore that age and experience do not have a uniform effect on senior executives.

Others become more discerning while others just become more rigid and set in their ways.

However it can also be concluded that confidence in the ability to make decisions as one

acquires a track record of experiences (Mike Jackson.txt P9:32 - (336-338))

2. Challenges of Leadership

The most prominent factor under this theme was diversity. This diversity was expressed both

as a human and a business phenomenon. The human aspect included issues such as personality

types and educational background. The business aspect highlighted issues such as level of

understanding of the subject at point of discussion. Andre Van Niekerk pointed out that in

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some cases colleagues will be at a different place with regards to understanding of the issue

under discussion. The challenge is to then make sure that everyone gets to an acceptable, level

of understanding before proceeding to solicit a decision on the issue. Such a process is time

consuming, he described it as painful patience, plant-growing kind of stuff (Andre Van

Niekerk.txt 10:18 (218-219)). In addition to diversity, 27% of the executives noted that the

one of the challenges for leadership was the issue of maintaining balance. Carlton Dallas noted

that a business had to equally consider investment in bricks and mortar as well as the human

capital of the business. (Carlton Dallas.txt 5:15 (124:125)). On the human aspect, Frank

Horwitz noted that it was his job to try and retain them by letting them go (Frank Horwitz

8:12 73:75).

Another significant challenge for leadership was that of split corporate life stages within

organisations. Leon Vermaak noted that he needed to vary between getting involved at an

operational level for start-up divisions and allowing the more established divisions to operate

autonomously. He said even within the company Im playing a sort of dual leadership

role. (Leon Vermaak.txt -12:14 (75:78)). Thirteen percent of the respondents noted another

challenge for leadership as the ability to effectively manage resources. This prevailed more in

organisations with divisions in other geographical locations. The challenge was to ensure that

divisions that were generating excess revenue would not spend it on non-priority areas but

instead make the funds available to priority areas in other geographical locations (Dallas

(96:99). Mike Jackson noted that studies such as this one focussed mainly on the leader. His

assertion was that the leader is only as good as his Board will let him be. This introduces a

more external aspect to the phenomenon of leadership challenge.

Strategic management was another challenge that emerged in the qualitative analysis. Marcus

Banga (11:4 (12:13) spoke about having to stay focussed on making sure that the company

compensates its eroding market share elsewhere as well as building its brand into a

recognisable and powerful contender on the market. Others interviewed also spoke about the

need to be the formulator and ultimately the communicator of strategic direction and

implementation to all in the organisation (P15: Ralph Mupita.txt - 15:22 (213:217)). Mupitas

observation echoes with Pollitt (2005: 34).

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3. Company Performance

The qualitative analysis showed that 70% of the organisations had a positive performance. The

quantitative analysis concurred with this (see Figure below). This shows a common

understanding between the leaders and employees on issues of company performance.

Figure 13

Responses to survey question 12

Response to Company Performance

Q12 = 71*1*normal(x, 1.0704, 0.2577)

Yes No

Q12 Is the company performing well at present?

0

10

20

30

40

50

60

70

No

of o

bs

Source: Generated by the researcher

Company size was noted as a factor that promoted agility when reacting to change and the

environment. This agility led to better performance and a better translation of opportunities to

revenue. (Estelle Morkel.txt 1:23 (38:40))

Although approximately 90% of the organisations were said to be doing well on overall

performance, 27% of the organisations noted that their market share was either declining or

was seriously challenged by other players in the market. The distribution of corporate life stage

for the companies with challenged market share was Adolescence, between Prime and Stable

and between Stable and Aristocracy. The table below shows the breakdown of the

correspondence between corporate life stage and company performance.

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Table 8

Company Performance vs Corporate Life Stage

Company Performance

Corporate Life Stage Challenged Mkt Share

Positive Overall

Performance Stabilising Bureaucracy Aristocracy Btwn Stable and Aristocracy Stable Btwn Prime and Stable Prime Btwn Adolescence and Prime Adolescence Go-Go Infant Courtship

Source: Generated by the researcher

It can be concluded that the reasons for this distribution (especially for those with challenged

market share) may be as a result of the split life stages that exist in the organisations. This

would i