HR Management Systems

EMPIRICAL RELATIONSHIPS BETWEEN THEORIES OF SERVANT, TRANSFORMATIONAL, AND TRANSACTIONAL LEADERSHIP

RYNETTA R. WASHINGTON

Department of Management College of Business

Lowder Building 415 West Magnolia Avenue

Auburn University, Alabama 36849

ABSTRACT

This study found employees’ perceptions of their supervisors’ servant leadership to be positively related not only to employees’ perceptions of their supervisors’ transformational leadership but also their supervisors’ contingent reward leadership and active management-by- exception leadership. Perceived servant leadership was negatively related to perceived passive management-by-exception leadership and laissez faire leadership.

INTRODUCTION

A subject of growing interest in the leadership literature is servant leadership theory, which is a leadership paradigm first introduced by Robert K. Greenleaf in 1977. According to the theory, a servant leader emphasizes the good of followers over self-interests of the leader by: (a) valuing and developing people, (b) practicing authenticity in leadership, (c) building community, (d) providing leadership for the good of followers, and (e) sharing status and power for the common good of followers, the total organization, and persons served by the organization (Laub, 1999). Since its conceptual inception, servant leadership has been espoused by a growing number of researchers as a “valid theory” of organizational leadership (Russell & Stone, 2002). Although the leadership paradigm is generally missing from the academic literature, servant leadership theory is included in many management textbooks (Hamilton & Nord, 2005). The surge of empirical and practical interest in servant leadership theory can be attributed to a movement away from traditional hierarchical and patriarchical leadership (Crippen, 2005; Nwogu, 2004). Spears (1995) explained that as the end of the twentieth century approached, traditional autocratic and hierarchical modes of leadership were slowly yielding to a newer model of leadership. This model attempted to enhance the personal growth of workers and improve the quality of organizations through personal involvement in decision making, a combination of teamwork and community, and ethical and caring behavior. Like many other leadership thinkers, Spears referred to this emerging approach to leadership and service as servant-leadership—a theory that Bass (2000) described as requiring substantial empirical research.

With servant leadership research shifting from primarily anecdotal support to empirical validation (Nwogu, 2004), the purpose of the current study was to advance the empirical support for servant leadership theory by exploring the relationship between servant leadership and two of the most popular leadership theories discussed by researchers—transformational leadership and transactional leadership (Smith et al., 2004). The concept of servant leadership shares similarities with the notion of transformational leadership (Stone, Russell, & Patterson, 2003),

which occurs when a leader empowers followers to achieve organizational goals. Servant leadership shares fewer similarities with the concept of transactional leadership, which is defined as a process of social exchange between leaders and followers that involves reward-based transactions for the purpose of meeting expectations established for followers (Smith et al., 2004).

LITERATURE REVIEW

Background on Servant Leadership Theory Greenleaf suggested a first-among-equals approach to leadership as “key to [a servant leader’s] greatness” (p. 21). Servant leadership places the leader in a non-focal position within a group such that resources and support are provided to followers without expectation of acknowledgement (Smith et al., 2004). Unlike traditional leaders who are primarily motivated by aspirations to lead, servant leaders are motivated more by a desire to serve than to lead (Greenleaf, 1977). As a result, the motivation of servant leaders arises from an underlying attitude of egalitarianism (Smith et al, 2004). That is, servant leaders sincerely believe they are no better than the organizational members they lead. By sharing leadership and displaying authenticity in leadership, servant leaders function as “trustees” who facilitate the development of community among organizational members. Furthermore, Spears (1998) described several servant leader characteristics that have been confirmed in various studies (Contee-Borders, 2003; Taylor-Gillham, 1998): listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, commitment to the growth of people, and building community.

Background on Transformational and Transactional Leadership Theories Unlike servant leadership theory, transformational leadership and transactional leadership theories have been investigated in numerous empirical studies since Burns (1978) first introduced the concepts in his discussion of political leadership. Burns considered leaders to be either transformational or transactional, while others such as Bass (1985) viewed leadership as a continuum with transformational leadership theory on one end and transactional leadership theory on the other end. According to Burns (1978), transformational leadership occurs when leaders and followers engage each other in such a way that they raise one another to higher levels of motivation and morality. Transformational leadership theory includes four dimensions— individualized consideration, idealized influence (charisma), inspirational motivation, and intellectual stimulation (Judge & Piccolo, 2004). On the leadership theory continuum, transactional leadership is located on the end opposite of transformational leadership theory. Viewed as more commonplace than transformational leadership (Burns, 1978), transactional leadership is described as an exchange process in which leaders recognize followers’ needs and then define appropriate exchange processes to meet both the needs of the followers and leaders’ expectations (Bass, 1985). Forms of transactional leadership include contingent reward leadership, management-by-exception leadership that is active or passive, and laissez faire leadership (Bass & Avolio, 1990).

Servant Leadership Versus Transformational Leadership

According to the tenets of servant leadership and transformational leadership, both models incorporate characteristics such as respect, vision, influence, modeling, trust, integrity, and delegation (Stone et al., 2003). Stone and colleagues noted servant leadership and transformational leadership are likely to be most similar in their emphasis on individualized appreciation and consideration of followers. Likewise, in their development of a conceptual matrix comparing theoretical components of servant leadership and transformational leadership, Smith and colleagues (2004) found that at the level of theoretical dimensions, transformational leadership’s idealized influence, inspirational motivation, and individualized consideration corresponded with components of servant leadership. The researchers also found both leadership models to embrace and encourage innovation and creativity.

Hypothesis 1: Employees’ perceptions of their immediate supervisors’ servant leadership will be positively related to employees’ perceptions of their immediate supervisors’ transformational leadership.

Servant Leadership Versus Transactional Leadership

Servant leadership and transactional leadership are distinguishable in a number of ways. Servant leaders emphasize activities that demonstrate concern about followers’ well-being, while transactional leaders focus on the routine maintenance activities of allocating resources and monitoring and directing followers in order to achieve organizational goals (Kanungo, 2001). Unlike the servant leader who influences followers through personal development and empowerment, the transactional leader influences followers through the use of rewards, sanctions, and formal authority and position to induce compliant behavior. According to Blanchard and Johnson (1985), transactional leaders create strong expectations for employee work behaviors, along with clear indications of rewards employees will receive in exchange for meeting transactional leaders’ expectations. Thus, transactional leaders use contingent reward behavior to set up transactions with followers in order to achieve work goals (Bass, 1985). Transactional leaders work to induce compliant behavior by not only using rewards but also sanctions and formal authority—all influence strategies contradicting the empowerment strategies emphasized by servant leaders.

Hypothesis 2: Employees’ perceptions of their immediate supervisors’ servant leadership will be negatively related to employees’ perceptions of their immediate supervisors’ contingent reward leadership. Transactional leaders utilizing management-by-exception do not involve themselves with

followers until deviations from work standards occur (Bass, 1985; 1990). Here, passive leaders wait until followers’ behaviors have created problems before they take corrective action against obvious deviations from performance standards. On the other hand, active leaders monitor follower performance in order to anticipate deviations from standards prior to their becoming problems (Hater & Bass, 1988). Both active and passive management-by-exception emphasize the use of tactics such as discipline, punishment, negative feedback (Bass & Avolio, 1993) and other influence strategies that oppose the empowerment tactics embraced in servant leadership.

Hypothesis 3: Employees’ perceptions of their immediate supervisors’ servant leadership will be negatively related to employees’ perceptions of their immediate supervisors’ active management-by-exception leadership.

Hypothesis 4: Employees’ perceptions of their immediate supervisors’ servant leadership will be negatively related to employees’ perceptions of their immediate supervisors’ passive management-by-exception leadership.

Laissez faire leaders distinguish themselves from servant leaders by the laissez faire leaders’ lack of involvement in their leadership of followers (Bradford and Lippit, 1945). Unlike servant leaders, who are primarily driven by the interests of followers, laissez faire leaders do not consider nor work to meet the needs of followers—even when action is necessary (Bass, 1985). In contrast with servant leaders’ focus on active participation in the development of followers, laissez faire leaders’ are defined by overall inactivity in relations with followers (Barbuto, 2005).

Hypothesis 5: Employees’ perceptions of their immediate supervisors’ servant leadership will be negatively related to employees’ perceptions of their immediate supervisors’ laissez faire leadership.

METHODODOLGY

Of 473 employees invited to participate in the study, 207 (44%) provided questionnaire

data. Five organizations in the Southern U.S were utilized—a daycare, a community foundation, a newspaper, and two municipal public works facilities (each public works facility was located in a different state). A multiorganizational sample was sought for the study in order to enhance the variation and generalizability of responses. Analyses of variance revealed that scores on measures did not differ among the organizations (p > .05). Servant leadership was measured using Liden, Wayne, Zhao, and Henderson’s (2005) 28- item servant leadership instrument, and Cronbach’s alpha was .97. Transformational leadership was measured using 20 items from Avolio and Bass’ (2004) Multifactor Leadership Questionnaire (MLQ—Form 5X), and Cronbach’s alpha was .96. Transactional leadership was measured using 16 items from Avolio and Bass’ (2004) MLQ—Form 5X, and Cronbach’s alpha was .85 for the contingent reward items, .74 for the active management-by-exception items, .66 for the passive management-by-exception items, and .83 for the laissez faire items. Regression analyses were utilized to test the hypotheses.

RESULTS Transformational leadership was positively related to servant leadership (β = .86, p < .01)

and accounted for over 70% of the variance in servant leadership (R2 = .73). Surprisingly, contingent reward leadership was positively related to servant leadership (β = .80, p < .01) and accounted for 65% of the variance in servant leadership (R2= .65). Active management-by- exception was also surprisingly positively related to servant leadership (β = .38, p < .01) and accounted for 14% of the variance in servant leadership (R2 = .14). As predicted, employees’ perceptions of their immediate supervisors’ servant leadership was negatively related to employees’ perceptions of their immediate supervisors’ passive management-by-exception leadership (β = -.23, p < .01), with an R2 of .05. As also predicted, employees’ perceptions of their immediate supervisors’ servant leadership was negatively related to employees’ perceptions of their immediate supervisors’ laissez faire leadership (β = -.40, p < .01), with an R2 of .16.

DISCUSSION

The present research endeavored to provide empirical support for servant leadership theory by studying its relationship with the well-supported leadership theories of transformational leadership, contingent reward leadership, active and passive management-by- exception leadership, and laissez-faire leadership. As predicted, employees’ perceptions of their supervisors’ servant leadership was positively related to employees’ perceptions of their supervisors transformational leadership (r = .86, p < .01). In other words, supervisors perceived as servant leaders were likely to also be perceived as transformational leaders. The finding supports previously suggested similarities between the theories, e.g., both theories prescribe to people-oriented, moral, and inspirational leadership (Graham, 1991) and the valuing, mentoring, and empowering of followers (Smith et al., 2004). As also expected, perceived servant leadership was negatively related to perceived passive management-by-exception (r = -.23, p < .01) and laissez faire leadership (r = -.40, p < .01). Supervisors reported as demonstrating servant leadership were not likely to be reported as demonstrating behaviors characteristic of passive management-by-exception or laissez faire leadership styles. For leaders to either never intervene in employee work or intervene only in employee work when corrective action is necessary involves respective use of either inactivity in leadership or discipline, punishment, and negative feedback (Bass & Avolio, 1993)—tactics that oppose the empowerment tactics embraced in servant leadership. Surprisingly, perceived servant leadership was positively related to perceived contingent reward leadership (r = .80, p < .01) and perceived active management-by-exception leadership (r = .38, p < .01). That is, supervisors perceived to practice servant leadership were likely to also be perceived to practice contingent reward leadership and active management-by-exception leadership. These findings were somewhat unexpected, given transactional leadership theory’s primary emphasis on the fulfillment of leaders’ personal needs by requiring followers to demonstrate behaviors compliant with the leaders’ expectations (Kanungo, 2001). However, according to Conger and Kanungo (1998), transactional leaders operate according to a vision that may or may not represent the shared perspective advocated by servant leaders. Thus, there may be the possibility that transactional leaders share some decision-making with followers such that followers’ interests are considered in the development of the transactional leaders’ exchange of rewards for compliance. As a result, transactional contingent reward leadership may resemble servant leadership when transactional leaders create work expectations agreed upon by followers. Contingent reward behavior may then be used to set up transactions with employees in order to achieve both work goals (Bass, 1985) and personal employee goals. Likewise, perceived active management-by-exception may also appear akin to servant leadership in some respects. Although an active management-by-exception leader monitors a follower’s performance in order to anticipate deviations from standards prior to their becoming problems (Hater & Bass, 1988), active management-by-exception leadership may appear as a form of servant leadership when the imposed standards are embraced by both the transactional leader and his/her followers. Such a rationale may help to explain why perceived servant leadership was found to be positively related to perceived transactional active management-by- exception leadership in the present study.

Limitations

Potential limitations of the current study include a demographically and organizationally limited sample and common method bias due to cross-sectional self-reports and respondent social desirability. The sample was predominantly male (79%); therefore, the current study should be replicated in samples with more even distributions of gender. To minimize common method bias due to cross-sectional self-reporting, a delay was adopted between data collection points for different constructs from the same sources in order to reduce the potential for inflated relationships (Avolio, Yammarino, and Bass, 1991). To discourage and minimize social desirability in responses, respondents were assured that all questionnaire responses would be kept confidential with the researcher.

Implications The present research represents an attempt to build theoretical development for servant leadership theory by empirically comparing and contrasting servant leadership theory with more established theories of transformational and transactional leadership. Such theoretical and empirical comparisons and contrasts are needful in the academic literature, as implied by Bass and Avolio (1993), who stated “we have only scratched the surface in terms of connecting [leadership models such as]…transformational leadership to other [leadership] models” (p. 75). Bass (2000) concluded servant leadership’s profound conceptual foundation offers great opportunity for further theoretical development, as was endeavored in the current study. One intriguing finding in the current research is the suggested overlap between theories of servant leadership and transformational leadership. According to Stone and colleagues (Stone et al., 2003), the two constructs are not antithetical but are complementary ideologies that help to answer a growing need for more dynamic leadership in the workplace. Spears (1994) explained:

There is a revolution underway. In corporate boardrooms, university classes, community leadership groups, not-for-profit organizations and elsewhere, change is occurring around the ways in which we, as a society, approach the subject of work and leadership. Many people are seeking new and better ways of integrating work with their own personal and spiritual growth. They are seeking to combine the best elements of leadership, based upon service to others, as part of an exciting concept called "servant-leadership." (p. 9)

Kotter (1990) stated the business world is now more volatile and increasingly inclusive of greater international competition, faster technology, and a demographically changing workforce. Thus, like transformational leadership, servant leadership can offer a framework for the dynamic leadership required in today’s workplace (Stone et al., 2003). Although both leaders are people-oriented, servant leaders focus on followers by serving with a primary focus on service itself and not organizational results (Stone et al., 2003). Transformational leaders, however, direct their focus toward the organization and build commitment toward organizational objectives through empowering followers to accomplish organizational objectives (Yukl, 2006). Therefore, future research should investigate how people-focused, empowerment theories, i.e., servant leadership, may possibly help to “complete” organization-focused, empowerment theories, i.e., transformational leadership.

REFERENCES AVAILABLE FROM THE AUTHOR

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