RELATIONSHIPS BETWEEN LEADERSHIP STYLES AND
ORGANIZATIONAL SUCCESS IN WOMAN-OWNED AND –LED SMALL
BUSINESSES
Chapter 1 Introduction
For many individuals, self-employment is part of the American dream. Small
business formation and entrepreneurship provide a method for integration to the country’s
mainstream as well as a means for social and economic mobility (Hisrich,
Langan-Fox, & Grant, 2007; Jarmin & Krizan, 2010). Small businesses generate about
70% of all jobs in the United States (Ling, Simsek, Lubatkin, & Veiga, 2008; County
Business Patterns, 2012) making them vital to the economic strength of the country.
Between 1980 and 2010, more than half the gross domestic product (GDP) of the United
States was generated by small businesses while also serving as the chief creators of new
jobs (SBA Office of Advocacy, 2011, January; U.S. Small Business Administration,
2010a).
The harsh reality of business survival and closure rates affects the positive
contributions of new business formation to the economy of the United States. New firms
are more volatile and more likely to close, especially smaller firms (Haltiwanger, Jarmin,
& Miranda, 2010, August). Only one-half of new businesses survive after four years
(Headd & Kirchhoff, 2009; SBA Office of Advocacy, 2011, January). Business survival
rates have a direct affect on employment. Forty percent of jobs created by new
businesses are lost within the first five years because of business closures (Haltiwanger et
al., 2010, August; SBA Small Business Facts, 2012, May). Many factors contribute to
small business closure including
an owner’s lack of business experience;
inadequate capital or funding;
1
poor planning or control of business operations;
inability to adapt to changing circumstances;
lack of resources; and
owner’s overconfidence and optimism bias (Atamian &
VanZante,
2010; Beaver, 2003; Bird & Sapp, 2004; Gunmundsson & Lechner,
2013; Hmieleski & Baron, 2009; Kessler, Korunka, Frank, & Lueger,
2012; Lee, Stearns, Osteryoung, & Stephanson, 2009; Valdiserri &
Wilson, 2010).
Ineffective leadership and management are the causes mostly attributed to
business failure (Atamian & VanZante, 2010; Bass, 2008; Beaver, 2003; Brown, 2007;
Lee et al., 2009; Valdiserri & Wilson, 2010). This is especially true for small businesses.
Small business owners generally do not see themselves as leaders or label themselves as
entrepreneurs (Dhaliwal, 2010; Wilson & Tagg, 2010), nor do they have a particular
desire to become leaders (Kempster & Cope, 2010).
Profitability is the goal of business, regardless of size or form. However, small
businesses differ in characteristics, objectives, qualities, and operating circumstances
(Beaver, 2003). The goal of most small business owners is to be profitable enough to
provide a living and to achieve a level of independence (Ahl, 2006; Beaver, 2003;
2
Dawson & Henley, 2012). Most firms do not grow much after formation (Headd &
Kirchhoff, 2009). Regardless of gender, most small business owners have no desire to
hire employees unless the demand for the product or service exceeds the abilities of the
owner (Ahl, 2006). Even then, the small business owner may limit the business size to
stay within the desired scope (Robinson & Stubberud, 2011).
Small business performance is linked closely to business success but there is no
consensus on how performance or success should be measured. The goals and
performance indicators are defined by the owner and measured by his or her perceptions
of organizational outcomes (Bauer, 2011; Simpson, Padmore, & Newman, 2012).
Financial gain or loss is a standard performance indicator for business success. However,
in small businesses non-monetary goals and personal objectives may be more significant
(Bauer, 2011). Personal goals can also drive the decision to limit the size and growth of
the business (Ahl, 2006; Robinson & Stubberud, 2011).
Successful small businesses must have robust leadership (Beaver, 2003; Darling,
Gabrielsson, & Seristö, 2007; Valdiserri & Wilson, 2010). In general, leaders indirectly
influence organizational performance and do not achieve results themselves (Clawson,
2009; Kaiser, Hogan, & Craig, 2008). In small businesses, limited resources and
personnel (Atamian & VanZante, 2010) require many owners to assume a ‘hands-on’
approach. An individual with a marketable skill or innovative idea does not necessarily
possess the experience or training that translates to successful leadership of employees.
The fact many small business owners never intend to become employers can make them
accidental and possibly reluctant leaders (Atamian & VanZante, 2010; Brown, 2007).
Fortunately, leadership can be learned (Fernandez, 2008; Kempster & Cope, 2010).
3
Entrepreneurs who exhibit excellence in providing leadership have a higher
potential for success than entrepreneurs who merely manage their businesses (Darling et
al., 2007; Losapio, 2012; Mitchelmore & Rowley, 2013). Leadership styles can have a
powerful affect on firm performance (Matzler, Schwarz, Deutinger, & Harms, 2008;
Yukl, 2008) with transformational and transactional leadership styles contributing to
organizational success (Avolio & Bass, 2004), economic growth, and employment
opportunities in small businesses (Valdiserri & Wilson, 2010). In addition, the
correlation is positive between increased employee satisfaction and organizational
performance in small businesses and a transformational leadership style (Chung-Wen,
2008; Frazier, 2013).
Chapter 1 introduces the doctoral dissertation study. The chapter contains the
study background, problem statement, and purpose. Additional topics include the
significance of the research to the study of leadership, the research questions, the study
hypotheses, the theoretical framework, and the nature of the study. The chapter continues
with the definitions of terms and the study assumptions, limitations, and delimitations
upon which the study rests. A summary concludes the chapter.
Background of the Problem
Leadership is a “process of motivating people to work together collaboratively to
accomplish great things” (Vroom & Jago, 2007, p. 18). Small business leadership comes
from the owner/founder (Langowitz & Allen, 2010). However, few business owners
possess all the skills or knowledge needed to launch, maintain, and lead a successful
business (Atamian & VanZante, 2010; Brown, 2007). Effective leadership can be defined
as a leader successfully influencing others to attain defined goals (Bass, 2008). Effective
4
leadership styles contribute to organizational viability and performance when leaders
demonstrate “professional leadership behaviors (e.g. setting a mission, creating a process
for achieving goals, aligning processes and procedures) and personal leadership
behaviors (e.g. building trust, caring for people, acting morally)” (Mastrangelo, Eddy, &
Lorenzet, 2004, p. 435). Transformational, transactional, and laissez-faire leadership
styles influence small business organizational performance as well as the performance of
the individual members. To lead a successful business, the small business owner benefits
from understanding better leadership behaviors and leadership styles that enhance or
disrupt business performance (Atamian & VanZante, 2010).
From a theoretical perspective, the development of women’s business ownership
is integral to the economic growth of the United States (Economics and Statistics
Administration, 2010). The start-up rate of women-owned businesses remains steady at
twice that of men-owned start-ups (Economics and Statistics Administration, 2010). In
2008-2009, approximately 10 million private sector businesses in the United States had
majority female ownership (51% or more) contributing $3 trillion annually to the
economy and representing nearly 23 million jobs or 16% of all jobs in the nation (Center
for Women’s Business Research, 2009).
Entrepreneurship and small business activities emerged as a research field within
the past quarter century (Landstrom, 2005). Analysis of the results from the Global
Entrepreneurship Monitor (GEM) 2011 survey of new business activity reveals women
are accountable for one-fourth of established businesses globally and one-third of new
businesses (Kelley et al., 2012; Terjesen & Elam, 2012). Women business owners are
understudied even though they represent one of the fastest growing segments (Brandt &
5
Laiho, 2013; Fairlie & Robb, 2009; O'Carroll & Millne, 2010; Yammarino, 2013). The
United States is in the position to lead the way in examining this economic opportunity
and developing new ways of increasing the contributions of female entrepreneurship
(O'Carroll & Millne, 2010).
The focus of this doctoral dissertation study was the relationship between
leadership styles in woman-owned and –led small businesses and organizational success.
The service-sector organizations were limited to professional, business, and personal
service businesses with fewer than 20 employees in North Myrtle Beach, South Carolina.
Statement of the Problem
The general problem guiding this study was one-third of new businesses in the
United States close within two years (Lussier & Halabi, 2010; SBA Office of Advocacy,
2011, January) and only one-half survive after four years (Headd & Kirchhoff, 2009;
SBA Office of Advocacy, 2011, January), negatively affecting the nation’s economic
strength. Small businesses are the number one private sector job creators in the United
States (U.S. Small Business Administration, 2010a; SBA Office of Advocacy, 2011,
January), yet the economic outlook for small business formation is uncertain at the time
of this study (Fairlie, 2012). Business survival rates remain steady for the past three
decades (Headd & Kirchhoff, 2009). The short life cycle directly affects the role of small
business in the economic growth of the United States (U.S. Department of Treasury,
2011).
The survival rate of women-owned businesses is lower than the rate of menowned
businesses according to data from the United States Census Bureau 1992 Characteristics
of Business Owners (CBO). Woman-owned businesses are nearly 13% more likely to
close (Fairlie & Robb, 2009, December). The trend continues with the survival of three
6
out of four women-owned businesses versus the survival of four out of five men-owned
businesses based on 2006 data from The Kauffman Firm Survey (KFS) of new businesses
in the United States (Robb & Coleman, 2009). Even when controlling for a variety of
business and owner characteristics, compared to male-owned businesses, female-owned
businesses also under perform in the areas of employment, profits, and sales (Robb &
Coleman, 2009; Fairlie & Robb, 2009). Additionally, the rate of female business
ownership is 60% of the male business ownership rate (Fairlie, 2012).
Poor leadership and management skills contribute to small business failure and
closure (Atamian & VanZante, 2010; Bass, 2008; Beaver, 2003; Brown, 2007; Lee et al.,
2009; Valdiserri & Wilson, 2010). This study addressed this specific problem. Small
business leadership comes from the owner/founder (Langowitz & Allen, 2010). Small
business leadership styles and behaviors directly influence small business success and
failure (Kaiser et al., 2008). However, only one-half of women business owners in the
United States have managerial work experience prior to business ownership (Costin,
2012; Dhaliwal, 2010; Fairlie & Robb, 2009) and the majority have fewer opportunities
to attain necessary leadership and networking skills (Fairlie & Robb, 2009; Kempster &
Cope, 2010; Sullivan & Meek, 2012). Seventy-six percent of women in the United States
founded their own small business, of which 72% had never owned a business previously
based on United States Census data (United Stated Small Business Administration,
2010b). The lack of prior business experience is emerging as a critical contributing factor
in explaining business performance outcomes (Jarmin & Krizan, 2010).
South Carolina received a score of “C” on the 2007-2008 Assets and Opportunity
Scorecard published by the Corporation for Enterprise Development (CFED). The state
7
was 36th in the nation in terms of business development outcomes (Alliance for Women,
2010) and 45th for women’s business ownership (Mittelstaedt, St. John, & Gras, 2008).
Women in business leadership roles in South Carolina are underrepresented according to
the Institute for Women’s Policy Research and the United States Department of Labor.
Approximately one-quarter of chief executive officers (CEOs) are female, half of
business organizations have no women in decision-making roles, and 35% of business
organizations have one female in a decision-making role (Mittelstaedt et al., 2008). This
study addressed the specific problem by examining the relationship between leadership
styles in woman-owned and –led small businesses in South Carolina and organizational
success. Findings from this study may suggest the leadership styles that may enhance
organizational success in women-owned and –led businesses with fewer than 20
employees.
Purpose of the Study
The purpose of this quantitative research study was to examine the relationship
between leadership styles in woman-owned and –led small businesses and organizational
success. The study reflected the self-perceptions of the small business owner/leaders and
employees to provide their perceptions of their respective owner/leader’s leadership
styles and effectiveness behaviors strongly linked in prior research to organizational
success (Avolio & Bass, 2004). This descriptive study had a cross-sectional design with
data collected during a single time period. Cross-sectional design relies on existing
differences instead of change following intervention and groups selected for existing
differences rather than random allocation, thus making an ideal design for descriptive
analysis (de Vaus, 2011).
8
The non-random sampling technique known as purposive or judgmental sampling
approach was selected. Purposive sampling was appropriate for sampling for specific or
special situations by researchers using methods to locate subjects who can best provide
the required information (Neuman, 2011; Sekaran & Bougie, 2010). The sample
(described in more detail in Chapter 3) was developed from businesses a) licensed by the
City of North Myrtle Beach, South Carolina Business License Department during the
period of 2013-2014 and b) current members of the North Myrtle Beach, South Carolina
Chamber of Commerce. The researcher sorted the business lists to exclude businesses
outside the target population.
Leadership styles were the predictor (independent) variables as defined by
fullrange leadership theory (FRLT), known as transformational, transactional, and passive
avoidant/laissez-faire leadership styles (Bass, 2008). The leadership styles were
measured with Bass and Avolio’s Multifactor Leadership Questionnaire (MLQ) (Avolio
& Bass, 2004). Organizational success, the criterion (dependent) variable, was measured
by owner/leader self-perceptions and employee rater perceptions of their leaders in three
areas of outcome of leadership behaviors: a) extra effort (motivation), b) effectiveness,
and c) satisfaction with leadership (Avolio & Bass, 2004). These three areas of outcome
of leadership behaviors served as the operationalized criterion variable (Neuman, 2011).
The study sought to understand the relationship between leadership styles in
woman-owned and –led small businesses and organizational success. The study was an
extension of Valdiserri and Wilson’s (2010) study involving the examination of the
relationship between leadership styles and business profitability and success based on
perceptions of leader effectiveness by leaders, managers, and employees. The purpose of
9
the Valdiserri and Wilson research study was “to examine how leadership styles
influence[d] small [construction company] businesses’ profitability [measured through
employee effectiveness scores] and success [measured through employee satisfaction
scores]” (Valdiserri & Wilson, 2010, p. 49). There were no female leader or manager
participants in this study; therefore, there was an opportunity to examine industries with
male and female leaders/managers or solely female leaders/managers.
Significance of the Study to Leadership
The tendency in most current literature is to treat men and women as identical
groups and focus on differences between them, which leads to general conclusions.
However, the conclusions may not support generalization. Therefore, an understanding
of female entrepreneurship and business ownership would benefit from studies based on
a more heterogeneous approach (Hill, Leitch, & Harrison, 2006). Limited research
attention has been given to entrepreneurial leadership styles, as perceived by their
employees (Jensen & Luthans, 2006) and the influence of leadership styles on business
performance and success (Rowold, 2011).
Examining the relationship between the leadership styles of female small business
owners and organizational success may suggest leadership styles that may enhance
success in woman-owned and –led small businesses. Female entrepreneurs, and federal,
state, and local community policy makers who create programs to help female
entrepreneurs and small business owners, will benefit from understanding better the
relationship between leadership styles and organizational success. The current study
bridges existing literature regarding female entrepreneurs and business owners to
10
leadership styles that may contribute to success in woman-owned and -led businesses and
enhance our understanding of the leadership–business success linkage.
Nature of the Study
The researcher must determine the type of research necessary to answer the
problem (Leedy & Ormrod, 2010). A descriptive quantitative research method and
nonexperimental correlational design was used to achieve the study purpose and address
the study problem. Establishing, confirming, or validating relationships and contributing
to existing theories through the development of generalizations is the intent of
quantitative research. This is achieved by looking at quantities of one or more variables
through collecting numeric data to answer a research question (Leedy & Ormrod, 2010;
Salkind, 2008). Quantitative research theory is deductive. Working toward concrete
empirical evidence, researchers begin with ideas or theories and develop the proposition
into a testable empirical hypothesis (Neuman, 2011).
In contrast, the intent of qualitative research is to understand better complex
situations by looking at characteristics that the researcher cannot easily reduce to
numerical values. Building from empirical observations toward theoretical concepts,
qualitative research theory is inductive (Leedy & Ormrod, 2010; Neuman, 2011). As
such, a qualitative research methodology was not appropriate to achieve the stated
purpose of this study or address the study problem.
Quantitative research designs include experimental and non-experimental studies
(de Vaus, 2011; Leedy & Ormrod, 2010). In experimental research studies, the researcher
manipulates the variables by establishing the conditions for behaviors being studied to
11
measure the other variable. In quasi-experimental research studies, researchers do not
control for all the confounding variables; therefore, the researchers must take into
consideration whatever variables and explanations are not controlled when interpreting
the data (Leedy & Ormrod, 2010).
The goal of non-experimental research is to describe the direction and size of the
relationship between variables or to provide an accurate description of a situation. The
key characteristic is the collection of data without any intervention. Correlational method
is non-experimental, non-manipulative, and describes the relationship between two or
more variables without directly attributing effect of one variable on another (Salkind,
2008; Whittemore & Melkus, 2008). The researcher observes naturally occurring
behavior (Cozby, 2009; Neuman, 2011). The aim of descriptive research is to explain a
particular phenomenon by an examination of the relationships between variables (Cozby,
2009; Leedy & Ormrod, 2011; Salkind, 2008). Descriptive correlational research was in
alignment with the goals of this study: to examine the relationship between leadership
styles and organizational success with the resulting data analysis contributing to the
existing knowledge in the area of leadership styles and success in woman-owned and -led
small businesses.
For analysis of results from survey research to be considered an accurate
representation of the studied population, scientific sampling techniques must be used to
identify the study sample (Cozby, 2009). In quantitative research, the primary use of
sampling is to create a representative sample that closely represents the population.
Probability and non-probability sampling are the two major types of sampling designs.
With probability sampling, all members of the study population have the chance of
12
selection as a sample subject. The general selection process with this sampling design is
the random selection of sample subjects from the larger study population. The
nonrandom sampling technique known as purposive or judgmental sampling approach
was selected for this study, which was appropriate for sampling for specific or special
situations. The researcher used methods to locate subjects who could best provide the
required information (Neuman, 2011; Sekaran & Bougie, 2010).
The study target population consisted of owner/leaders and employees from
woman-owned and -led small businesses with fewer than 20 employees. The study
sample consisted of service-sector woman-owned and -led small businesses with fewer
than 20 employees a) licensed by the City of North Myrtle Beach, South Carolina
Business License Department during the period of 2013-2014 and b) current members of
the North Myrtle Beach, South Carolina Chamber of Commerce. The service-sector
organizations were limited to professional, business, and personal services businesses in
North Myrtle Beach, South Carolina and the number of participant employee raters was
subject to the number of participant owner/leaders. The search identified 73
womenowned businesses in the selected service sectors. All 73 businesses were
contacted by mail and telephone to explain the purpose and nature of the research study.
Twenty-one businesses were excluded (18 had no employees and three of the female
owners employed others to lead the business) leaving 52 businesses that fit within the
specified parameters. Twenty-two of the eligible business owners were willing to
participate. Permission to access business lists from the North Myrtle Beach Chamber of
Commerce and from the City of North Myrtle Beach is presented in Appendix A and
Appendix B, respectively.
13
Bass and Avolio’s Multifactor Leadership Questionnaire (MLQ) 5x-Short (MLQ
for Researchers, 2013) was used to collect data to measure the predictor (independent)
variables and criterion (dependent) variables. Survey research method is a cost effective
and time efficient way for researchers to study relationships between variables and
changes in behaviors, especially in comparison to the methods of direct or participant
observation and unstructured interviews (Cozby, 2009; Neuman, 2011). Researchers
bring a wide range of experiences and beliefs to their research, which can affect the
process. Biases can occur at different points in the research process including during
observation, which can influence the outcome of results (Christensen, Johnson, & Turner,
2011). The MLQ 5x-Short is a computerized self-administered questionnaire (MLQ for
Researchers, 2013) so data is collected without intervention or influence of researcher
bias over the process (Christensen et al., 2011; Salkind, 2008; Whittemore & Melkus,
2008). Three MLQ survey instruments were used to collect and score data.
The MLQ Leader Form was used to collect data from leaders describing
her self-perceived leadership styles and leadership behaviors;
the MLQ Rater Form to collect data from employees at the same or lower
level as the business leader describing the perceived leadership styles and
leadership behaviors; and
the MLQ Scoring Key (5x) Short (5x-Short) to score data for measuring
the leadership styles and outcomes of leadership behaviors scales (MLQ
for Researchers, 2013).
The MLQ is not designed to label leaders by the defined leadership styles. The
MLQ 5x-Short contains 45 items to identify and measure key leadership and effectiveness
14
behaviors, which are shown to be strongly linked to individual and organizational success
in prior research (Avolio & Bass, 2004). Four highly inter-correlated items measure the
nine leadership components or factors of full-range leadership theory (FRLT).
Transformational leadership style factors include idealized attributes (IA), idealized
behaviors (IB), inspirational motivation (IM), intellectual stimulation (IS), and individual
consideration (IC). Transactional leadership style factors include contingent reward (CR)
and management-by-exception active (MBEA). Laissez-faire/passive avoidant leadership
style factors include laissez-faire or passive-avoidant (LF) and management-by-exception
passive (MBEP). There are nine outcomes of leadership items measured – three for extra
effort (EE), four for effectiveness (EFF), and two for satisfaction with leadership (SAT)
(Avolio & Bass, 2004).
Validity is documented for MLQ Rater Form for the relationship between rater
evaluation of leaders and organizational success. The contrast between a leader’s
selfperceptions and how others perceive them is provided by the MLQ Leader Form
(Avolio & Bass, 2004). A 5-point Likert–type scale was used for data measurement using
a range of 0.0 (e.g., not at all) to 4.0 (e.g., frequently, if not always). The MLQ Scoring
Key (5x) Short was used to score the MLQ-5x Rater Form and Leader Form by
computing the average of total response values related to a variable (Avolio & Bass,
2004). The MLQ5x scoring methodology and the relationship of items or factors and
variables are presented in Chapter 3 in Table 5. As the most validated measure of
transformational and transactional leadership styles (MLQ for Researchers, 2013), the
MLQ was used in a number of research studies (Ayman, Korabik, & Morris, 2009;
Cassard & Hamel, 2008;
15
Chung-Wen, 2008; Frazier, 2013; Hamel, 2007; Just, 2011; Ling et al., 2008; Ryan &
Tipu, 2013; Tafvelin, Armelius, & Westerberg, 2011; Valdiserri & Wilson, 2010;
Velkova, 2011; Wadensten, 2012; Weatherly, 2012; Yitshaki, 2012).
Statistical analysis for data was conducted using the Statistical Package for the
Social Sciences® Version 21 (SPSS) and Excel® computer programs for Windows®. For
this study, Spearman (rs) rank correlation coefficient test, an equivalent non-parametric
test to the Pearson (r) product-moment correlation coefficient test, was selected based on
the non-normal distribution of data. Spearman (rs) coefficients were used to determine
the relationship between the predictor variables of leadership styles and the
operationalized criterion variables in three areas of outcome of leadership behaviors: a)
extra effort (motivation), b) effectiveness, and c) satisfaction with leadership (Cozby,
2009; Sekaran & Bougie, 2010). Pearson (r), used when data distribution is normal, was
an effective method for analysis of data from the MLQ in studies cited in the literature
review (Cassard & Hamel, 2008; Hamel, 2007; Valdiserri & Wilson, 2010; Wadensten,
2013). All correlational coefficient r-values can range from ± 1.0 and provide the
direction of the relationship (Cozby, 2009). If the relationship existed, the direction and
strength of the relationship was determined. Study results included reports and
interpretation of the strength and direction of the correlations plus descriptive analysis
statistics. Factor analysis and multiple linear regression analysis were conducted in order
to explore multivariate relationships. Multiple regression analysis is similar to Spearman
(rs) statistical correlations; however, all nine predictor variables were examined
simultaneously. Multivariate multiple regression analysis was appropriate to model the
16
linear relationship between more than one independent (predictor) variable and more than
one operationalized dependent (criterion) variable (Dattalo, 2013).
A histogram was used to illustrate the distribution of data. Scatterplot graphs
were used to display the relationship between variables (Cozby, 2009). In addition,
demographic questionnaires of the participant leaders (see Appendix C) and employees
(see Appendix D) were administered and analyzed to understand the business and
personal profiles. The demographic data of the characteristics of the study participants
was described using descriptive analysis statistics (e.g., frequency and percent
distribution).
Research Questions
The purpose of this quantitative descriptive correlational research study was to
examine the relationship between leadership styles in woman-owned and –led small
businesses and organizational success. Based on the literature review, the research
questions were:
1. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee
perceptions of their leader’s leadership behavior of extra effort
(motivation)?
2. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee
perceptions of the leadership effectiveness of the leader?
17
3. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee
satisfaction with the leadership?
Samples of survey instrument questions used to gather data addressing the research
questions were provided in Appendix E for self-perceived leadership styles and behaviors
of leaders and Appendix F for employee/rater description of the perceived leadership
styles and behaviors of the leader. The scoring key sample was provided in Appendix G.
Study Hypotheses and Variables
The hypotheses for this study included null and alternative or research hypotheses
addressing the research questions. The predictor variables were leadership styles as
defined by the full-range leadership theory, known as transformational, transactional, and
laissez-faire/passive avoidant leadership styles (Bass, 2008). The three leadership styles
are not mutually exclusive. Leaders may exhibit the three leadership styles (Avolio &
Bass, 2004; Bass, 2008). Three areas of outcome of leadership behaviors served as the
operationalized criterion variables for organizational success. Measured with the MLQ
5x-Short, employee rater perceptions of their leaders in three areas are a) extra effort
(motivation), b) effectiveness, and c) satisfaction with leadership. In this study, the null
hypotheses predicted there was no relationship between the variables and the population
and the alternative or research hypotheses predict the relationship exists (Cozby, 2009).
The first three hypotheses tested the first research question pertaining to the
relationship between leadership styles and employee perceptions of their leader’s
leadership behavior of extra effort (motivation).
18
H10: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H1a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
19
woman-
H20: There is no relationship between transactional leadership style in
owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H2a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H30: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
H3a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
The next three hypotheses tested the second research question pertaining
to the relationship between leadership styles and employee perceptions of the
leadership effectiveness of the leader.
H40: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
20
woman-
H4a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H50: There is no relationship between transactional leadership style in
owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H5a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H60: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
H6a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
The last three hypotheses tested the third research question pertaining to
the relationship between leadership styles and employee satisfaction with the
leadership.
21
woman-
H70: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H7a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H80: There is no relationship between transactional leadership style in
owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H8a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H90: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with the leadership.
H9a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with the leadership.
Theoretical Framework of the Study
The theoretical framework guiding this study was Bass and Avolio’s full-range
leadership theory (Avolio, Bass, & Jung, 1999; Bass, 2008). Full-range leadership theory
22
woman-
(FRLT) is an integrative theory of transactional, transformational, and laissez-faire
leadership (Bass, 2008). The model attempts to explain leadership styles and leadership
outcomes by empirical measurement of behaviors with the Multifactor Leadership
Questionnaire (MLQ) (Bass, 2008). The study sought to understand the relationship
between the leadership styles in woman-owned and –led small businesses and
organizational success. Figure 1 depicts the framework of the research study.
23
Figure 1. Conceptual framework for relationships between leadership styles and
organizational success in woman-owned and -led small businesses.
Transformational and transactional leadership styles are strongly linked to
organizational success (Avolio & Bass, 2004). Transformational leadership style and
increased employee satisfaction and organizational performance in small businesses are
correlated positively (Chung-Wen, 2008; Frazier, 2013). The behaviors of a leader and
how subordinates perceive the behaviors are related to perceptions of job satisfaction and
performance (Brandt & Laiho, 2013; Fernandez, 2008; Kolapo Sakiru, D'Silva, Othman,
Daud Silong, & Temitope Busayo, 2013; Salman, Riaz, Saifullah, & Rashid, 2011;
Skogstad, Einarsen, Torsheim, Aasland, & Hetland, 2007). Analysis of current research
illustrates the relationship between transformational and transactional leadership styles
with employee performance is significantly positive. Conversely, laissez-faire leadership
style is negatively associated with employee performance (Fernandez, 2008; Salman et al.,
2011; Skogstad et al., 2007). This study addressed three leadership styles -
transformational, transactional, and laissez-faire.
Transformational leadership style. The transformational leadership style
resides in the ability of a leader to inspire the admiration, loyalty, and trust of followers.
24
Followers willingly place the group interests before their individual interests (Bass,
2008). Transformational leaders have the ability to motivate others to accept and strive to
achieve his or her vision (Newstrom, 2011). The characteristics of transformational
leadership style include relationship orientation, enabling followers, leader charisma,
shared vision, relationship empowerment of others, and modeling behavior (Bass, 2008).
The MLQ (5x-Short), the latest version, is considered to be the best validated instrument
to gauge transformational, transactional, and laissez-faire leadership styles and behaviors
and the most popular instrument for measuring transformational leadership style (Bass,
2008; MLQ for Researchers, 2013; Yang, 2008).
Transactional leadership style. The transactional leadership style provides some
type of exchange between leader and follower (Bass, 2008; Northouse, 2013). The
characteristics of transactional leadership style include leader control, task orientation,
and situational focus (Bass, 2008). Bass and Avolio (Avolio et al., 1999; Bass, 2008)
defined the two factors of transactional leadership style. Exchange (i.e., emotional and
economic) is the basis for contingent reward. Management-by-exception active is a
negative transaction in which the leader actively acts on or waits for mistakes or errors
(Avolio et al., 1999; Bass, 2008).
Laissez-faire leadership/Passive avoidant style. Laissez-faire is a style of
nonleadership or an absence of leadership and is the most inactive form of leadership
(Avolio et al., 1999; Bass, 2008). The characteristics of laissez-faire leadership style
include abdication of authority, avoidance of decision-making or taking positions, and
passivity (Bass, 2008; Northouse, 2013). Leaders demonstrate passive-avoidant behaviors
25
by giving no feedback and making no effort to assist followers in satisfying his or her
needs.
Management-by-exception passive is a negative transaction with the leader waiting for
mistakes or errors to act (Avolio et al., 1999; Bass, 2008).
By answering the research questions, the researcher sought to understand the
relationship between leadership styles in woman-owned and –led small businesses and
organizational success. Findings from this study may suggest the leadership styles that
may enhance organizational success at women-owned and –led businesses with fewer
than 20 employees.
Definition of Terms
The following terms were defined as used within the context of the problems in
the research study.
Effectiveness of leadership (Operationalized criterion variable). An outcome
or result of leadership behavior, the MLQ measures the rater’s evaluation of the leader’s
effectiveness in use of leadership methods. The types of effective leadership behaviors
measured include a) meeting the job-related needs of others, b) representing the
organization to higher authorities, c) meeting organizational requirements, and d) leading
an effective group. Effectiveness items are identified by number on the MLQ surveys and
are measured on a 5-point Likert–type scale (Avolio & Bass, 2004).
Entrepreneur. An entrepreneur is a person who forms or starts a business (Stangler,
Litan, & Motoyama, 2012). The study used the terms business owner, founder, and
entrepreneur in a similar and interchangeable way.
Entrepreneurship. Entrepreneurship is business formation (Stangler et al., 2012).
26
Extra effort (Operationalized criterion variable). An outcome or result of leadership
behaviors, the MLQ measures a rater’s perceptions of the leader as motivating.
The types of motivational leadership behaviors measured include a) “getting others to do more
than what is expected of them, [b)] heightening others’ desire to succeed, [and c)] increase
other’s willingness to try harder” (Avolio & Bass, 2004, p. 103). The extra effort/motivation
items are identified by number on the MLQ surveys and measured on a
5-point Likert–type scale (Avolio & Bass, 2004).
Full-range leadership theory (FRLT). Full-range leadership theory is an
integrative theory of transactional, transformational, and laissez-faire leadership styles.
The model attempts to explain leadership styles and predict leadership outcomes by
empirical measurement of behaviors with the Multifactor Leadership Questionnaire
(MLQ) (Bass, 2008).
Laissez-faire/Passive avoidant leadership (Predictor variable). A leadership
style in FRLT with non-leadership or an absence of leadership. It is the most inactive
leadership form (Bass, 2008). Laissez-faire/passive avoidant leadership style factors
include Laissez-faire or Passive-Avoidant Leadership (LF) and Management-
byException Passive (MBEP). The factors are identified by number on the MLQ
surveys and measured on a 5-point Likert–type scale (Avolio & Bass, 2004).
Leader. A leader is the individual responsible for leading a business firm or
organization and for charting the strategic direction. Leaders influence the success and
performance of the organization by motivating employees/followers (Yukl, 2012).
Leadership. “The essence of leadership in organizations is influencing and
facilitating individual and collective efforts to accomplish shared objectives” (Yukl,
27
2012, p. 66).
Microenterprise. A business with four or fewer employees (Alliance for Women,
2010).
Organizational success (Criterion variable). Organizational success is the
attainment of the owner-defined organizational goals and performance indicators through
the efforts of owners, leaders, and employees. Organizational success is measured on a 5-
point Likert–type scale with the MLQ 5x-Short by employee rater perceptions of their
leaders in three areas of outcome of leadership behaviors: a) extra effort (e.g., motivation),
b) effectiveness, and c) satisfaction with leadership. These key leadership and
effectiveness behaviors are shown to be strongly linked to individual and organizational
success in prior research (Avolio & Bass, 2004).
Satisfaction with leadership (Operationalized criterion variable). An
outcome or result of leadership behaviors, the MLQ measures a rater’s satisfaction with
the leader’s a) use of leadership methods and b) ability to work with others. The
satisfaction items are identified by number on the MLQ surveys and measured on a
5point Likert–type scale (Avolio & Bass, 2004).
Small business. A small business “is independently owned and operated, is
organized for profit, and is not dominant in its field” (U.S. Small Business
Administration, 2010a, para. 1).
Transactional leadership (Predictor variable). A leadership style in FRLT that
provides some type of exchange between leader and follower (Bass, 2008; Northouse,
2013). Transactional leadership style factors include contingent reward (CR) and
28
management-by-exception active (MBEA). The factors are identified by number on the
MLQ surveys and measured on a 5-point Likert–type scale (Avolio & Bass, 2004).
Transformational leadership (Predictor variable). A leadership style in FRLT in
which leaders motivate others to accept their vision (Newstrom, 2011) by building
relationships and promoting cooperation (Moore, Moore, & Moore, 2011).
Transformational leadership style factors include idealized attributes (IA), idealized
behaviors (IB), inspirational motivation (IM), intellectual stimulation (IS), and individual
consideration (IC). The factors are identified by number on the MLQ surveys and
measured on a 5-point Likert–type scale (Avolio & Bass, 2004).
Woman-owned and –led business. A private sector business with majority
female ownership of 51% or more, and led by women (U.S. Census Bureau, 2010).
Assumptions
The assumptions of the researcher are the foundation on which a study rests (Leedy
& Ormrod, 2010; Neuman, 2011). This researcher brought to the research study the
following assumptions. The first set of assumptions addressed the study participants:
a) all participants understood the MLQ survey and were honest and unbiased in his or her
answers, b) all participants understood all answers were confidential and did not discuss
answers with other participants, and c) all participants were willing participants.
The second set of assumptions addressed the study business leaders: a) participating
business leaders were using transformational, transactional, and laissez-faire leadership
styles; b) participating business leaders shared the vision and mission of the organization
with members as a means to attaining the goals of the organization; and c) participating
business leaders did not act solely as managers.
29
The third set of assumptions addressed the MLQ survey: a) leadership style
differences were adequately reflected and measured by the MLQ Leader Form, b)
employee perceptions of leadership styles and behaviors were effectively identified by
the MLQ Rater Form, and c) leadership styles and organizational success were
effectively measured by the MLQ 5x-Short. The final assumption was the criterion
group consisting of the study target population of owner/leaders and employees from
servicesector woman-owned and –led businesses with fewer than 20 employees in
North Myrtle Beach, South Carolina, was representative of woman-owned and –led
small businesses in general.
Limitations and Delimitations
Several possible limitations existed. The limitations of descriptive correlational
research include the inability to measure or infer cause and effect. Establishing causal
relationships is difficult as we cannot observe one phenomenon producing the change
in another. Just because one event follows another, we do not know if this is an effect
of one event causing the other (deVaus, 2011). A number of third variables can
influence the observed relationships between variables. This is known as the third-
variable problem (Cozby, 2009).
The collection of data was limited to one specific time, which opens up the
possibility of time set biases. The use solely of the MLQ instruments limited the research to
examining the styles, behaviors, and attributes addressed by the instruments. The
parameters of the study were limited to studying leaders and employees employed by
woman-owned and –led small businesses with fewer than 20 employees in the defined
service-sectors in North Myrtle Beach, South Carolina. The study focus was the
30
relationship between the predictor variables of leadership styles defined by full-range
leadership theory and the criterion variable of organizational success measured by employee
perceptions of the leadership behaviors of extra effort, effectiveness, and satisfaction with
leadership.
Delimiting factors included the service-sector, small businesses with fewer than
20 employees, woman-owned and -led organizations, and North Myrtle Beach, South
Carolina, as the stipulated geographic area.
Summary
Chapter 1 introduced the purpose of the study as an examination of the relationship
between leadership styles and organizational success in woman-owned and – led small
businesses. The chapter contained the background of the study, a statement of the
problem, and an explanation of the study purpose. The significance of the study to
leadership, the research questions, the study hypotheses, and the nature of the study
followed. The theoretical framework was examined, and a definition of terms and the
study assumptions, limitations, and delimitations upon which the study rests were
provided.
Chapter 2 contains an overview of the literature related to the issues of leadership
styles of women business owners and organizational success. Key terms from the problem
statement form the basis for the literature review. The classification of articles includes
the topics of leadership styles (i.e., transformational, transactional, laissez-faire), women
and leadership, women business owners, female entrepreneurship, small business and
entrepreneurship, and employees, leadership styles, and organizational success.
31
Chapter 3 contains a description of the selected research methodology and a discussion
of the appropriateness of the design. The chapter includes a description of the population and
sample frame, a discussion of the research instruments, an explanation of the data collection
methods, and presentation of the techniques for data analysis. The research design guided the
analysis contained in Chapter 4, and the summary, conclusions, and recommendations
presented in Chapter 5.
32
Chapter 2
Literature Review
Chapter 1 provided an overview of the problem of small business failure and the
relationship between leadership styles and organizational success in small businesses.
Chapter 2 begins with an overview of the topic search and review process. The core
themes of the literature review include full-range leadership theory, women and
leadership, women and small business ownership, and leadership styles and
organizational success. The chapter ends with a conclusion and a summary.
Topic Search and Literature Review Process
The formal literature review commenced with searches within University of Phoenix
Library online primarily using EBSCOHost and ProQuest. The classification of articles
included the topics of leadership styles (i.e., transformational, transactional, laissez-faire),
women and leadership, women business owners, female entrepreneurship, small business
and entrepreneurship, and employees, leadership styles, and organizational success. The
review process continued with searches of online databases of scholarly peer-reviewed
journals, online books, and reference works including results beyond the
University of Phoenix Library online collection. Online database searches include Wiley
Online Library, SAGE Publications, Emerald Group, ProQuest Dissertations & Theses,
ProQuest Entrepreneurship, and ABI/INFORM Complete.
To address the issues of leadership style of women business owners and
organizational success and performance, articles were identified in entrepreneurship,
small business, and leadership journals, such as Entrepreneurship Theory & Practice,
33
Journal of Leadership and Organizational Studies, Journal of Small Business Management,
Journal of Small Business and Entrepreneurship, Leadership &
Organization Development Journal, and International Journal of Gender and
Entrepreneurship. In addition, relevant chapters were identified in scholarly and seminal books
such as The Bass Handbook of Leadership, Encyclopedia of Entrepreneurship,
Frontiers of Entrepreneurship Research, and Pioneers in Entrepreneurship and Small
Business Research (International Studies in Entrepreneurship). Government statistics,
documents, and policy papers were identified on government agencies websites including
the United States Census Bureau, United States Small Business Administration, United
States Department of the Treasury, and United States Bureau of Labor Statistics.
The review process moved from seminal works to peer-reviewed articles no older
than five years of the date of the search zooming in from the general topic of leadership
styles to specific topics identified above (Wellington, Bathmaker, Hunt, McCulloch, &
Sikes, 2009). The dissertation research study contains 177 cited documents, which met the
search criteria and were included in the referenced documents. Table 1 contains a
summary of the reviewed and cited publications.
Table 1
Reviewed and Cited Publications
Reviewed and Cited Publications Instances
Books 17
Dissertations/Theses 11
Guides/Manuals 3
Journal Articles (scholarly publications, including peer-
reviewed) 111
Online Software 2
34
Online Databases 3
Reports 30
Total 177
Historical Perspective of Leadership Theory
Leadership is universal (Bass, 2008; Yammarino, 2013). Although definitions of
leadership vary upon context, Yammarino (2013) provided a comprehensive definition
based on commonalities in leadership definitions and ideas over the years. “Leadership is
a multi-level (person, dyad, group, collective) leader-follower interaction process that
occurs in a particular situation (context) where a leader (e.g., superior, supervisor) and
followers (e.g., subordinates, direct reports) share a purpose (vision, mission) and jointly
accomplish things (e.g., goals, objectives, tasks) willingly (e.g., without coercion)”
(Yammarino, 2013, p. 150). As leadership styles changes with time and situation (Burns,
1978), leadership styles are not mutually exclusive (Avolio & Bass, 2004; Bass, 2008).
Research on leadership styles began in earnest in the early 1900s with trait, behavior, and
contingency theories (Bass, 2008).
Trait leadership style theory. The basis of trait leadership style theory is leaders
are different from followers and possess unique traits. Leaders are born, not made under
the ‘Great Man’ theory (Bass, 2008; Northouse, 2013). Trait theory research lists
characteristics leaders possess as perceived by others to include self-confidence,
intelligence, determination, integrity, and sociability (Hernandez, Eberly, Avolio &
Johnson, 2011; Northouse, 2013). However, Stogdill’s review of more than 120
leadership trait studies led to the conclusion there was no leadership trait pattern, and
35
leadership cannot be identified by traits alone. Traits were deficient predictors of effective
leadership (Hernandez et al., 2011). Stogdill predicted future leadership style research
and theorization must integrate personal and situational characteristics (Bass, 2008;
Hernandez et al., 2011).
Behavioral leadership style theory. The focus of behavioral leadership style
theory is what leaders do based on the observation of effective and ineffective leaders
(Clawson, 2009). Lewin’s classic behavioral theory research study defined leadership in
terms of behavioral style: a) autocratic with tight control and the leader making all
decisions, b) democratic with group participation and majority rule, and c) laissez-faire
with a low level of leader activity (Bass, 2008). A comprehensive leadership behavior
study used the Leader Behavior Description Questionnaire, a rating scale of leader
behavior, to identify two reliable dimensions of a leader’s behavior (Clegg, Kornberger, &
Pitsis, 2008). The dimensions were “an orientation towards interacting and relating to
other human beings, and the tasks or technical side of work” (Clegg et al., 2008, p. 133).
However, further research could not reveal consistent patterns in the relationship between
leader behavior and group and organizational outcomes (Bass, 2008).
Blake and Mouton identified two behavioral leadership style dimensions as
concern for people and concern for production (Newstrom, 2011). Blake and Mouton’s
Leadership Grid demonstrated high concern for people and production to be the most
desirable leadership style. Minimum concern for people and production was the least
desirable leadership style (Northouse, 2013). Weed, Mitchell, and Moffitt (Northouse,
2013) supported Blake and Mouton’s conclusions and added another dimension. The
36
researchers concluded it was more important that leadership style, subordinate
personality, and task type be well matched.
Contingency leadership style theory. The contingency approach to leadership
led by Fiedler centered on a personality measure called the least-preferred co-worker or
LPC scale (Bass, 2008; Northouse, 2013). Fiedler believed the score of the individual and
other situational factors were a result of his or her effectiveness. The degree of fit
between an individual and a situation were contingent on a) leader-member relationships,
b) positional power, and c) the task structure (Bass, 2008; Northouse, 2013).
House’s path-goal theory is a contingency approach to leadership. The basis of
this theory is the relationship between leader behaviors, follower characteristics, and the
work setting. Focusing on employee motivation, the goals of this leadership theory are
the enhancement of employee performance and satisfaction (Northouse, 2013). Three
kinds of moderating variables effect a leader’s behavior: task (e.g., role, routine, external
controls), environmental variables, and differences in individual personality, expectations,
and preferences (Bass, 2008).
Situational leadership style theory. Situational leadership style theory is
based on the assumption of a dynamic relationship in which leaders must adjust their
behavior in relationship to the readiness of his or her followers. Readiness is
determined as a result of ability and willingness. Hersey and Blanchard’s theory of
situational leadership defined four combinations of task and relationship behaviors
(Northouse, 2013). Leaders adapt the level of direction and support based on the task
behavior (the level of guidance required), and the relationship behavior (the level of
37
communication, involvement, and interaction). Leaders must know when to adjust his
or her style to maximize follower performance (Bass, 2008).
Relational leader-member exchange leadership style theory. As the first
theory to focus on the differences between a leader and each of his or her followers, the
uniqueness of leader-follower relationships form the basis for leader-member exchange
(LMX) theory (Northouse, 2013). Leader-followers have a dyadic relationship. Based
on mutual respect and trust, ‘in-group’ followers have a reciprocal relationship with his or
her leader. Followers in the ‘out-group’ have a low-quality relationship with his or her
leader, which is based on satisfying obligations (Antonakis, Cianciolo, & Sternberg,
2004; Northouse, 2013). Leaders applying LMX theory can improve relationships with
all followers in the work unit by assessing his or her leadership styles from a relationship
perspective (Northouse, 2013).
Transactional and transforming leadership styles. In Leadership, considered a
seminal work, Burns (1978) defined leadership as “leaders inducing followers to act for
certain goals that represent the values and the motivations -the wants and needs, the
aspirations and expectations- of both leaders and followers” (p. 100). Burns observed the
fundamental crisis of leadership as the underlying mediocrity of those in positions of power.
The lack of a foundation of knowledge of leadership created an inability to distinguish
between different types of leaders (Bass, 2008). Burns called for the creation of a school of
leadership through the pursuit of research and analysis. By focusing on the interaction
between leaders and followers, Burns identified transactional and transforming forms of
leadership styles, which included a moral and ethical effect. Building on Burns’ theory,
Bass (2008) distinguished transactional leadership style from
38
transformational leadership style.
Full-range Leadership Theory
The theoretical framework guiding this study is Bass and Avolio’s full-range
leadership theory (FRLT), which integrates transformational, transactional, and
laissezfaire leadership styles (Avolio et al., 1999; Bass, 2008). The theory evolved from
research by Bass to identify leadership behaviors, which would be applicable at any level
and in any kind of organization (Wan Khairuzzaman, Hussain, & Muhammad, 2011).
Bass (2008; Avolio et al., 1999) originally identified seven behavioral factors: charisma,
intellectual stimulation, individualized consideration, inspirational motivation, contingent
reward, management-by-exception, and laissez-faire leadership. Upon further analysis,
Bass merged charisma and inspirational motivation to form the basis for a six-factor
model of transformational and transactional leadership, which is the FRLT model (Avolio
et al., 1999; Avolio & Bass, 2004; Bass, 2008):
charisma/inspirational;
intellectual stimulation;
individualized consideration;
contingent reward;
active management-by-exception; and
passive-avoidant or laissez-faire leadership (Avolio et al., 1999;
Avolio & Bass, 2004; Bass, 2008).
Full-range leadership theory factors and characteristics are outlined in Table 2. The model
attempts to explain leadership styles and predict leadership outcomes by empirical
measurement of behaviors with the Multifactor Leadership Questionnaire (MLQ) (Bass,
39
2008). The resulting continuum of leadership style activity and effectiveness (Avolio et
al., 1999; Bass, 2008) is illustrated in Figure 2.
Table 2
Full-range Leadership Theory Factors and Characteristics
Styles
Transformational
Leadership Style
Transactional
Leadership Style
Laissez-faire/Passive-
Avoidant Behavior
Leadership Style
FLRT Factors &
Characteristics 5 ‘I’s
Leadership Factors
Leadership
Characteristics
Idealized Attributes Contingent Reward
(IA) (CR)
Idealized Behaviors Management-by-
(IB) Exception Active
(MBEA)
Inspirational
Motivation (IM)
Intellectual Stimulation
(IS)
Individual
Consideration (IC)
Relationship orientation Leader control
Enabling followers Task orientation
Leader charisma Situational focus
Shared vision
Relationship
empowerment of
others
Modeling behavior
Laissez-faire or
Passive-Avoidant
Leadership (LF)
Management-
byException Passive
(MBEP)
Abdication of
authority Avoidance of
decisionmaking or
taking positions
Passivity
Note. Adapted with permission from Multi Leadership Questionnaire Manual and
Samples Set by Bruce J. Avolio and Bernard M. Bass, 2004, Mind Garden, Inc
40
Figure 2. Conceptual Model of FRLT Leadership Continuum. (Avolio et al., 1999; Bass, 2008).
Transformational leadership style. Transformational leadership resides in the
ability of a leader to inspire the admiration, loyalty, and trust of followers. Followers
willingly place the group interests before their individual interests (Bass, 2008).
Transformational leaders have the ability to motivate others to accept and strive to achieve
his or her vision (Newstrom, 2011). The factors associated with transformational
leadership in the FRLT model include
Idealized attributes (IA). The leader builds respect and trust by
going beyond self-interest. Followers identify and want to emulate
his or her leader (Avolio & Bass, 2004; Bass, 2008; Northouse,
2013).
Idealized behaviors (IB). The leader supplies followers with a
defined sense of purpose. Acting as an ethical role model,
followers identify with the leaders’ expressed vision (Avolio &
Bass, 2004; Bass, 2008; Northouse, 2013).
Inspirational motivation (IM). The leader motivates followers to
aim for goals that are ambitious by communicating confidence and
raising expectations. Thereby, this creates a situation for
selffulfilling prophesy (Avolio & Bass, 2004; Bass, 2008;
Northouse,
2013).
Intellectual stimulation (IS). Followers are encouraged to
question their assumptions and the current environment. The goal
41
is to unleash the followers’ creative and innovative problemsolving
abilities (Avolio & Bass, 2004; Bass, 2008; Northouse, 2013).
Individual consideration (IC). The leader focuses on mentoring or
coaching individuals to optimize potential and meet each
individual’s need for growth and achievement (Avolio & Bass,
2004).
Analysis of data from current research studies focused on employee
organizational commitment and job satisfaction, revealed a positive correlation with
transformational leadership style (Cassard & Hamel, 2008; Frazier, 2013; Hamel, 2007;
Kolapo Sakiru et al., 2013; Nielsen, Randall, Yarker, & Brenner, 2008; Tafvelin et al.,
2011; Yang, 2012). Employees became more interested in being innovative, creative, and
involved in their work when leaders demonstrated a transformational leadership style
(Nielsen et al., 2008; Yang, 2012). Research suggested employee well-being and the
effects of transformational leaders are positively correlated (Tafvelin et al., 2011;
Velkova, 2011). Additionally, a leader employing transformational leadership style was
shown to be predictive of positive organizational performance and outcomes (Just, 2011;
Yang, 2012).
The application of a transformational leadership style has been demonstrated to
be an effective strategy for leaders when dealing with complex issues and a variety of
stakeholders (Moore et al., 2011). This was supported in a study of public service leaders
faced with balancing the demand for excellent services with the demand for cutting costs.
Leaders who focused on elements of transformational leadership style to approach
42
change made greater progress. Leaders drew upon actions such as collaboration,
employee engagement, and appreciative transformational choices (Powe, 2010).
Transactional leadership style. Transactional leadership style provides some
type of exchange between leader and follower (Avolio & Bass, 2004; Bass, 2008). The
factors associated with transformational leadership in the FRLT model include
Contingent reward (CR). Constructive economic and emotional
transactions or exchanges form the foundation. Leaders outline
expectations of the followers as well as what the followers will
receive if the expectation levels are met (Avolio & Bass, 2004;
Bass, 2008; Northouse, 2013).
Management-by-exception active (MBEA). This is negative
corrective exchange or transaction in which the leader actively acts
on or waits for mistakes or errors (Avolio & Bass, 2004; Bass,
2008; Northouse, 2013).
Using meta-analytic techniques to examine leadership styles and employee
commitment, Jackson, Meyer, and Wang (2013) found a strong positive correlation
between contingent reward and affective employee commitment. A weaker but still
positive correlation was established with management-by-exception active, whereas
management-by-exception passive demonstrated a negative correlation. Increased
employee job satisfaction and organizational performance was correlated positively
with transactional leadership style (Yang, 2012). In addition, research revealed
contingent reward had a positive effect on employee well-being (Velkova, 2011).
43
Laissez-faire or passive avoidant leadership style. Laissez-faire, the most
inactive leadership form, is a style of non-leadership. Bass and Avolio added
laissezfaire leadership at the end leadership continuum in the FRLT model (Avolio &
Bass, 2004; Bass, 2008; Northouse, 2013). The factors associated with laissez-faire
leadership in the FRLT model include
Laissez-faire or passive-avoidant leadership (LF). The leader
gives no feedback and makes no effort to assist followers in
satisfying his or her needs (Avolio & Bass, 2004; Bass, 2008;
Northouse, 2013).
Management-by-exception passive (MBEP). This is a negative
corrective transaction in which the leader waits for mistakes or
errors to act (Avolio & Bass, 2004; Bass, 2008; Northouse, 2013).
The effect of laissez-faire leadership style on follower well-being is harmful
(Velkova, 2011). There is a strong negative relationship between laissez-faire leadership
style and affective employee commitment (Yang, 2012). Skogstad et al. (2007) concluded
laissez-faire is a form of destructive behavior, not a type of zero or nonleadership. A
leader’s destructive behaviors may produce a counterproductive leadership style rather
than a non-leadership style. The influence of laissez-faire leaders can cause followers to
experience workplace stress, psychological distress, and bullying. Laissezfaire leadership
style was correlated positively with coworkers conflicts, follower role conflict, and
follower role ambiguity (Skogstad et al., 2007), which contributed to this being the least
effective form of leadership as assessed by the MLQ (Bass, 2008; Northouse, 2013).
44
Current research on full-range leadership theory. The best fitting models
revealed by the Avolio et al. (1999) and Avolio and Bass (2004) study form the
foundation for FRLT model outlined in this review. Research studies covering a wide
range of organizational settings support the acceptance of the FRLT model (Cassard &
Hamel, 2008; Frazier, 2013; Hamel, 2007; Jackson et al., 2013; Nielsen et al., 2008;
Skogstad et al., 2007; Tafvelin et al., 2011; Velkova, 2011; Yang, 2012). Hernandez et al.
(2011) conducted a qualitative review of leadership literature with FRLT co-founder
Avolio as one of the study authors. The authors offered a two-dimensional framework of
leadership theories presented in Figure 3. One frame was the locus or source of
leadership, defined as a) leaders, b) context, c) followers, d) collectives, and d) dyads.
The other frame was mechanisms or behaviors of leadership, or how leadership is
enacted, defined as a) traits (to be), b) behaviors (to do), c) cognition (to think), and d)
affect (to feel) (Hernandez et al., 2011). Several leadership style theories share cells,
which suggest the fluidity and complexity of leadership theories. However, all leadership
theories have two underlying principles –“‘Where does leadership come from?’ and ‘How
is leadership transmitted?’” (Hernandez et al., 2011, p. 1181).
Some leadership style theories are limited because they capture only one or two
mechanisms. Based on meta-analysis of core leadership style theories, a more holistic
view of leadership is achieved through an integration of multiple frameworks.
Hernandez et al. (2011) identified the loci and mechanisms for leadership theories
examined in the literature review as illustrated in Figure 3 and Appendix H (enlarged).
Trait Theory: Loci- Leader; Mechanism- Traits
Behavioral Theory: Loci- Leader; Mechanism- Behaviors
45
Contingency Theory- Fiedler: Loci- Leader and context;
Mechanism-
Traits
Contingency Theory- Path-Goal: a) Loci- Leader and context;
Mechanism- Traits; b) Loci- Followers; Mechanism- Traits
Situational Theory: Loci- Dyads; Mechanism- Behaviors
Relational Leader-Member Exchange Theory: a) Loci- Dyads and
collectives; Mechanism- Behaviors; b) Loci- Collectives;
Mechanism-
Behaviors
Transactional Theory: Loci- Leader; Mechanism- Behaviors
Transformational Theory: Loci- Dyads; Mechanisms- Traits,
behaviors, cognition, and affect (Hernandez et al., 2011).
The authors observed transformational leadership style, one of the most effective
theories, included all four defined leadership mechanisms and “captur[es] both unique
and interactive effects across theories” (Hernandez et al., 2011, p. 1182). Contrary to the
observations of Hernandez et al. (2011), critical evaluation of the FRLT model in current
research suggests situational variables have been overlooked. Leadership effectiveness
may be positively or negatively influenced by these variables (Kaiser & Overfield, 2010;
Michel, Lyons, & Cho, 2011; Wan Khairuzzaman et al., 2011). A summary of current
FRLT research follows.
46
Figure 3. Leadership theories within the two-dimensional framework from “The loci and
mechanisms of leadership: Exploring a more comprehensive view of leadership theory,”
by M. Hernandez, M. B. Eberly, B. J. Avolio, and M. D. Johnson, 2011, The Leadership
Quarterly, 22(6), p. 1166. Copyright 2011 by Elsevier Limited. Reprinted with permission.
Kaiser and Overfield (2010) suggested current leadership style research “lack[s]
comprehensive models of the processes and intervening factors that explain the link
between individual leaders and organizational performance” (p. 164). They proposed the
use of a leadership value chain to understand better how individual leaders contribute to
organizational effectiveness. The leadership value chain identified the range of factors to
be considered in determining the value of leadership. The components in sequence order
included 1) leader characteristic (i.e., psychological, intellectual, and social capital); 2)
leadership styles (i.e., behaviors and decisions); 3) unit process (i.e., employee, team, and
organizational performance); and 4) unit results (i.e., productivity, financial, customer, and
human resources). These components link individual leaders to organizational
effectiveness in areas, such as productivity, financial outcomes, customer market share,
human resources, and organizational purpose (Kaiser & Overfield, 2010).
47
Wan Khairuzzaman et al. (2011) proposed an integrative framework of leadership
style effectiveness combining components of FRLT and substitutes for leadership. The
framework resulted from a review of existing literature of empirical research conducted
during the past two decades. The situational factors of the framework consisted of
subordinate, task, and organizational characteristics. The other two major framework
components were leadership styles and behaviors, and criteria for subordinate outcomes.
Wan Khairuzzaman et al. (2011) did not claim effective leadership process definitely
would result from their integrated framework. They suggested future research would be
made more meaningful by “careful selection of substitutes variables, leadership behaviors,
and work outcomes especially in the context of industry under study” (p. 130). For
substitutes for leadership, Hernandez et al. (2011) identified the loci as context and
followers and mechanisms as traits and behaviors.
The Managerial Practices Survey (MPS) assesses several effective leader behaviors
such as consulting, empowering, and role and objective clarification. Inclusion of these
effective leader behaviors, which are overlooked by the MLQ, may enhance the predictive
success of the FRLT model (Michel et al., 2011). Michel et al. (2011) examined the extent
FRLT model behaviors are assessed by the MLQ. Analysis of the findings revealed MPS
components influenced the employee/subordinate-rated and leader/boss-rated
effectiveness beyond the measured MLQ components in every circumstance. Michel et al.
(2011) suggested a more inclusive model with a broader perspective on leadership
behaviors was necessary to understand better effective leadership.
The relevance of the FRLT model in a non-western environment was the focus of
a study in Pakistan (Ryan & Tipu, 2013). The researchers concluded the three FRLT
48
leadership styles were not identified. The two dimensions the study identified (i.e., active
leadership and passive-avoidant leadership) offered insight to the nature of leadership in
Pakistan. Ryan and Tipu (2013) concluded leadership-training programs in a nonwestern
context should proceed with caution. However, the authors suggested an effective
leadership style, which influences positively organizational performance, would result by
the application of the “contextually appropriate combinations individual leadership
dimensions” (Ryan &Tipu, 2013, p. 2126) of the FRLT model. The Global Leadership
and Organizational Behavior Effectiveness (GLOBE) initiative, the most extensive
international leadership research project to date, confirmed leadership is culture-bound.
For GLOBE leadership, Hernandez et al. (2011) identified a) loci as leader and
mechanisms as traits and behaviors and b) loci as context and followers and mechanism
as cognitive. However, a unique theory of global leadership has not yet been developed
by the GLOBE initiative (Hernandez et al., 2011).
Women and Leadership Styles
Inclusion of women in the study of leadership styles began in earnest in the early
1980s (Bass, 2008; Moore, 2010). This coincided with a marked increase of women in
management and leadership positions during the 1970s though these opportunities tended
to be in fields dominated by female employees, such as education and nursing (Bass,
2008). Existing literature on women and leadership concentrates on exploring leadership
styles and management styles and gender-related differences (Bass, 2008; Hopkins,
O'Neil, Passarelli, & Bilimoria, 2008; Sullivan & Meek, 2012). However, the literature
does not fully explore the role of leadership styles in organizational success and
performance of woman-owned businesses.
49
Certain leadership styles are linked with gender stereotypes. Transformational
leadership behaviors are linked with female leaders (Hopkins et. al, 2008; Mattare,
Mohan, & Shah, 2010). Research findings suggested the tendency of women to adopt a
relationship-based approach in interactions with employees and clients (Brandt &
Laiho, 2013; Hopkins et al., 2008; Tibus, 2010).
Empirical research supported three aspects of gender-related differences in the
evolution of women's leadership styles (Brandt & Laiho, 2013; Hopkins et al., 2008).
First, men and women differ in leadership styles with women using a more democratic
style and men using a more autocratic style. Female leaders have a tendency to adopt
transformational leadership style more than male leaders (Brandt & Laiho, 2013; Hopkins
et al., 2008). This tendency declined in male-dominated settings (Bass, 2008; Eagly.
2007; Mattare et al., 2010).
Second, leadership behaviors differ between women and men. Women leaders
scored higher on the competencies of awareness of their emotions, empathy, and
interpersonal relations. Men scored higher in the competencies of being more selfconfident,
adaptable, better able to handle stress, and optimism (Bass, 2008; Eagly, 2007; Brandt &
Laiho, 2013; Hopkins et al., 2008).
Third, in a male-dominated setting, effectiveness of male and female leadership
styles differs favoring male leaders. Male and female subordinates may interpret a
woman leader’s behavior differently (Ayman et al., 2009; Brandt & Laiho, 2013; Eagly,
2007). Meta-analysis supported these findings, which indicated women leaders are more
devalued when in roles that are more stereotypically masculine (e.g., leadership) (Ayman et al.,
2009; Brandt & Laiho, 2013; Eagly, 2007). Women's leadership effectiveness was more
50
favorable when in a female-dominated setting (Eagly, 2007; Hopkins et al., 2008, Mattare et al.,
2010). When in masculine environments, female leaders can gain positive recognition from
followers by implementing behaviors that are more transformational in participative ways
(Arnold & Loughlin, 2013).
Emerging literature is somewhat conflicting regarding leadership behaviors and
the differing roles of women. Women leaders typically demonstrated behaviors aligned
with transformational leadership style - a focus on building and maintaining relationships,
communication, collaboration, and valuing teamwork (Eagly, 2007; Hopkins et al., 2008;
Knopik & Moerer, 2010; Mattare et al., 2010; Tibus, 2010). Women
entrepreneur/business owners were more task-oriented, reluctant to delegate authority, and
focused on their own actions instead of collaborative relationships (Knopik & Moerer,
2010; Mattare et al., 2010). The tendency to be more autocratic and less likely to let
employees make decisions independently was negatively correlated with organizational
performance (Mattare et al., 2010). However, the results of another research study
revealed women entrepreneurs exhibited a leadership style, which encouraged creativity
by balancing behaviors expected of male leaders (e.g., authoritative command) and female
leaders (e.g., collaborative communication) (Moore et al, 2011).
Leadership development of women employees was seen as a tactical business
advantage by increasing the capacities of female employees (Ayman et al., 2009). Recent
studies suggested a more ethically based organizational environment could result from the
development of women business leaders. However, the vast potential of women’s
leadership is untapped (Cassard & Hamel, 2008). This suggests an important role for
51
women entrepreneurs in advancing the practice of business leadership and management
(Moore, 2010; Moore et al., 2011; Sullivan & Meek, 2012).
Historical Perspective on Small Business and Entrepreneurial Research
Entrepreneurship and small business activities emerged as a research field within
the past quarter century, although entrepreneurial activities are integral to human history
(Bass, 2008; Landstrom, 2005). McClelland, a major contributor to pioneering literature
on the psychology of the entrepreneur, defined a need for achievement, independence, and
a risk-taking propensity as values possessed by entrepreneurs (Bass, 2008; Brockhaus,
1982). Weber and Hagen contributed to the social and cultural dimension of
entrepreneurship, suggesting the creation of entrepreneurial firms was a result of the
interaction of situational and cultural factors (Shaper & Sokol, 1982). They defined the
life path of entrepreneurial events contributing to company formations as a) starting with
negative displacements (e.g., fired, divorced, widowed, bored, reaching middle age), b)
between things (e.g., out of military, school, jail), or c) positive pull from mentor, partner,
investor, or customer. These events were followed by d) the perception of desirability and
e) the perception of feasibility (Shaper & Sokol, 1982).
A pioneer of entrepreneurial research, Arnold Cooper, focused on the process of
new firm start-up and performance determinants in recently formed firms, generally those
established fewer than two years (Landstrom, 2005). Regarding the entrepreneurial
process, entrepreneurs who selected business ownership were extremely optimistic of their
chances for success (Gunmundsson & Lechner, 2013; Hmieleski & Baron, 2009;
Landstrom, 2005). However, both well-prepared and poorly prepared entrepreneurs were equally
as optimistic of the chances for success, thereby demonstrating cognitive dissonance. Cognitive
52
dissonance may play into the propensity for risk-taking and contribute to an inability to evaluate
his or her abilities and a tendency not to seek information or assistance (Landstrom, 2005).
The discussion of small business and entrepreneurship research continues. The topics
include women and small business ownership and entrepreneurship and a summary and
comparison of men and small business ownership. The discussion of employees, leadership
styles, and organizational success follows.
Women and Small Business Ownership and Entrepreneurship
From a historical perspective, financial necessity was the main reason for women
starting businesses (e.g., divorced, widowed, with small children at home) (Buttner,
1993). Early research on women business owners revealed little difference between
selfemployed males and females in respect to demographic and psychological skills
(Brush, 1992; Landstrom, 2005). Female and male entrepreneurs demonstrated greater
differences in business goals and management styles (Brush, 1992). Analysis of historical
research on female entrepreneurs demonstrated they lacked the understanding and skills
needed in the areas of management and finance (Bowen & Hisrich, 1986). These
conclusions support a gender bias, which positions women entrepreneurs as “lacking and
incomplete men” (Ahl & Marlow, 2012, p. 543) who need to learn how to be business
owners (Ahl & Marlow, 2012).
Current literature regarding female entrepreneurs concentrates primarily on two
issues. One issue is the reasons women become business owners (Barba-Sanchez &
Martin-Ruiz, 2009; Brush, Duffy, & Kelley, 2012; Dawson & Henley, 2012; Dhaliwal,
2010; Kariv, 2011; Ncube & Wasburn, 2010). Female entrepreneurs have a tendency to
fall into two groups: a) those that enter non-professional self-employment to limit work
53
hours to focus on family commitments and b) those seeking career advancement
through self-employment (Klapper & Parker, 2011). The attributes of the individual
and environmental factors that influence women’s entrepreneurial activity is a second
issue (Brush et al., 2012; Dawson & Henley, 2012; Dhaliwal, 2010; Fairlie & Robb,
2009;
Gupta, Turban, Wasti, & Sikdar, 2009; Kariv, 2011; Norsiah-Mat & Razak, 2011;
Sullivan & Meek, 2012).
The impetus for women pursuing entrepreneurship can be defined as ‘pull’ factors or
‘push’ factors. Pull factors for pursuing entrepreneurship include flexibility, independence,
family commitments, financial security, opportunity, and self-concepts (Bledsoe & Oatsvall,
2010; Dalborg, von Friedrichs, & Wincent, 2012; Dawson &
Henley, 2012; Dhaliwal, 2010; Kariv, 2011: Ncube & Wasburn, 2010; Sullivan & Meek, 2012;
Terjesen & Elam, 2012). The most commonly cited motivation factor for women pursuing
entrepreneurship is independence (Dawson & Henley, 2012).
Push factors for women pursuing entrepreneurship include workplace
restructuring, downsizing, hitting the ‘glass ceiling’, and necessity (Brush et al., 2012:
Dawson & Henley, 2012; Kariv, 2011). Push factors may account for as much as 48% of
motivation for women pursuing entrepreneurship (Dawson & Henley, 2012). Push and
pull factors are outlined in Table 3.
Table 3
54
Push and Pull Factors for Female Entrepreneurs
Pull Factors for Pursuing
Entrepreneurship
Independence Factors Financial Security Opportunity
Factors Factors
Self-concept
Factors
To gain independence by
becoming one’s own boss
To apply accumulated
business experience
Always wanted to be
selfemployed
Tired of being an
employee Desire for a
more effective work and
family life balance
Increase income to Opportunity
support self and presented
itself family
To gain financial
independence
To increase income
Pride in one’s
achievements
Nothing to
show from
efforts as an
employee
Push Factors for Pursuing Entrepreneurship
Workplace restructuring, downsizing
Glass ceiling
Necessity: lack of household income and changes in economic environment
Career dissatisfaction: lack of recognition; uninteresting or unrewarding work
Lack of career opportunities: over-looked for promotion; obstructive affects of male-
dominated networks faced in the labor market
Note. Brush et al., 2012: Dawson & Henley, 2012; Dhaliwal, 2010; Kariv, 2011; Klapper &
Parker, 2011; Ncube & Wasburn, 2010; Sullivan & Meek, 2012.
For women there are several deterrents to pursuing entrepreneurship including a
lack of support from men in their lives (e.g., partner, husband, father, and son) because
they do not correlate feminine characteristics with entrepreneurship (Dhaliwal, 2010;
Gupta et al., 2009). A form of self-imposed segregation by women can be created by
socially learned stereotypes of business ownership viewed as masculine. An additional
55
deterrent is a lack of support from resources providers (e.g., lenders, suppliers,
customers) (Gupta et al., 2009). The lack of financial resources has been called the
‘second glass ceiling’, which influences the health of the entire economy (Bosse &
Taylor, 2012). This may also contribute to female entrepreneurs entering low-capital
intensive sectors (Klapper & Parker, 2011).
Women may avoid entrepreneurship because they have fewer opportunities to attain
the necessary managerial and networking skills (Fairlie & Robb, 2009; Sullivan & Meek,
2012), have negative perceptions of themselves and the business environment, and fear of
failure (Allen, Langowitz, Elam, & Dean, 2008; Terjesen & Elam, 2012). Even when
faced with these obstacles, many women find entrepreneurial motivation in their
commitment to the idea that forms the basis for the business (Barba-Sanchez &
MartinRuiz, 2009; Dhaliwal, 2010). Women who pursue entrepreneurship possess a
willingness to do what is necessary to start the enterprise (Barba-Sanchez & Martin-Ruiz,
2009).
Female entrepreneurs are over-represented in the retail, sales, and services
industry sectors (Fairlie & Robb, 2009; Klapper & Parker, 2011). Businesses in these
sectors are generally smaller in scale with lower average returns and face a higher degree
of competition (Klapper & Parker, 2011). In 2008, 39% of woman-owned businesses
were in service industries (21% professional, scientific, technical; 11% business; 7%
personal services) (Center for Women’s Business Research, 2009). However, the decision
of woman-owned firms to locate in service-industry sectors experiencing employment
growth, such as health care and education services, may contribute to the fact formation
56
of woman-owned businesses remains steady at twice the rate of menowned businesses
(Economics and Statistics Administration, 2010).
Although women business owners demonstrate a strong desire for growth (Dalborg
et al., 2012), they have a tendency to have lower expectation of growth than male business
owners (Terjesen & Elam, 2012). In general, there is a tendency for woman-owned
businesses to be smaller and less successful in terms of survival and growth than men-
owned businesses. This is important because business size can have an effect on success
outcomes with bigger businesses tending to be more successful (Landstrom, 2005;
Terjesen & Elam, 2012). There are a variety of reasons for the size and financial success
of woman-owned businesses:
fewer years of work experience (Costin, 2012; Fairlie & Robb,
2009);
less likely to have previous business ownership and managerial
experience (Costin, 2012; Dhaliwal, 2010; Fairlie & Robb, 2009);
less involvement in civic organizations (Dhaliwal, 2010);
over-represented in crowded business sectors, such as professional
services, retail, and personal services (Fairlie & Robb, 2009; Klapper
& Parker, 2011);
overall less focused on profit (Dawson & Henley, 2012);
owner limits growth to meet personal goals, such as work-life
balance and flexibility (Fairlie & Robb, 2009; Sullivan & Meek,
2012);
less start-up capital (Fairlie & Robb, 2009: Klapper & Parker, 2011);
57
constrained by family commitments (Bauer, 2011);
working fewer hours (Fairlie & Robb, 2009); and
fewer opportunities to attain necessary leadership, managerial, and
networking skills (Fairlie & Robb, 2009; Kempster & Cope, 2010;
Sullivan & Meek, 2012).
When measuring growth in small businesses, current methods are non-gender specific.
As a result, the perceived weakness in the growth of woman-owned businesses is based
on growth measurements that do not reflect how these owners pursue growth. The
criteria many female entrepreneurs use to measure business growth include product and
service quality and commitment to employment (Costin, 2012).
Masculine assumptions forming the foundation of entrepreneurial research
weakens the current state of the discussion (Ahl & Marlow, 2012; Malach Pines, Lerner,
& Schwartz, 2010). Women business owners may operate their business differently from
male business owners by taking fewer risks. In general, women business owners attempt
to find a work-family balance, focus on social goals and values, and grow their
businesses more slowly (Brandt & Laiho, 2013; Costin, 2012; Fairlie & Robb, 2009;
Loscocco & Bird, 2012; Robb & Watson, 2012; Terjesen & Elam, 2012). Dalborg et al.
(2012) concluded there were similarities in growth aspirations in woman-owned
businesses and Maslow’s Hierarchy of Needs model. Across the different sectors studied,
women business owners were extrinsically motivated to achieve business stability and
survival before hiring employees. In hierarchical order, intrinsic motivations were
composed of the need to create work, for appreciation, and for personal development, as
shown in Figure 4. Reluctance to use debt or equity financing, using personal savings
58
and profits instead, are added obstacles to growth in woman-owned businesses (Bledsoe
& Oatsvall, 2010). Analysis of existing literature suggests a positive relationship
between firm growth and the availability of credit and financing.
Figure 4. Growth platforms and motivation in hierarchical model from “Beyond the
numbers: Qualitative growth in women's businesses,” by C. Dalborg, Y. von Friedrichs,
and J. Wincent, 2012, International Journal of Gender and Entrepreneurship, 4(3), p.
306. Copyright 2012 by Emerald Group Publishing Limited. Reprinted with
permission.
Analysis of results of a research study of business owners focused on how male
and female owners see each other demonstrated male and female business owners do not
necessarily differ in characteristics attributed to successful entrepreneurship. The
characteristics included independence, self-confidence, taking initiative, and decisiveness
among others (Moore, 2010; Wilson & Tagg, 2010). Higher education was a characteristic
of business owners positively correlated with organizational success, which contributed
more to success in woman-owned businesses (Kariv, 2011). Additionally, women with
formal education demonstrate a more transformational leadership style (Lincoln, 2012).
According to 2008 United States Census data, three-quarters of women founded their own
59
small business, of which the majority had never owned a business previously and half
owning their business for fewer than 10 years. Thirty-five percent of women small
business owners are under age 45 and more than half have less than a bachelor’s degree
(United Stated Small Business Administration, 2010b).
Critical to organizational success is an entrepreneur’s willingness and ability to
become a leader (Kempster & Cope, 2010). However, many women business owners do
not perceive themselves as entrepreneurs or leaders (Dhaliwal, 2010) and have no desire
to be leaders (Kempster & Cope, 2010). Current entrepreneurship research suggests
concern for successful entrepreneurship if women cannot acquire essential managerial
experience to develop leadership and networking skills (Sullivan & Meek, 2012).
Men and Small Business Ownership – Summary and Comparison
Gender bias is evident in small business and entrepreneurial research (Ahl & Marlow,
2012). Performance measures favor men (Klapper, 2011) with financial gain or loss as a
standard performance indicator for business success (Bauer, 2011).
Entrepreneurship is generally perceived as a masculine field; therefore, entrepreneurship
is seen as stereotypically male (Gupta et al., 2009). Historical research by entrepreneurial
theorist Aldrich on women business owners revealed little difference between
selfemployed males and females in respect to demographic and psychological skills
(Brush, 1990, 1992; Landstrom, 2005). However, differences were greater in the areas of
business goals and management styles (Brush, 1990, 1992).
In the United States, men owned 51% of all privately held firms (with majority
male ownership of 51% or more) in 2007 contributing $8.5 trillion to the economy and
creating or maintaining 41.5 million jobs (35% of all U.S. jobs) (U.S. Census Bureau,
60
2010). Measuring profit outcomes, men-owned firms are twice as profitable as
womenowned firms according to The Kauffman Firm Survey of new businesses (Robb
& Coleman, 2009). Analysis of recent survey data from The Kauffman Institute (i.e.,
Kaufman Index of Entrepreneurial Activity and Kauffman Firm Survey) reveals room
for improvement in the entrepreneurial gender gap (Mitchell, 2011):
Entrepreneurial activity of the work-age population: 44% of men
versus 24% of women are involved in starting a business on average
in a given month.
Total share of entrepreneurial activity: 64.7% for men versus 35.3%
for women.
Start-ups that are employer firms: 44% for men-owned firms versus
36% for women-owned firms.
Firms with annual revenues of more than $100,000 after three years
of formation: 32.8% for men-owned firms versus 19.8% for
womenowned firms.
Some differences between men and women business owners and men- and
women-owned businesses benefit the performance of female-owned businesses whereas
others benefit the performance of male-owned businesses (Robb & Watson, 2012). Gaps
in female and male small business performance can be attributed to gender differences that
advantage male-owned businesses such as networks, lending, and experience (Fairlie &
Robb, 2009). Characteristics of male business owners when compared to female business
owners include
61
nearly 54% have previous work experience in a business similar to
the business owned versus 42% of female owners (Fairlie & Robb,
2009);
more use of bank financing and access to credit (Klapper & Parker,
2011);
more hours spent on work (Fairlie & Robb, 2009);
fewer hours spent on housework and child care resulting in a weekly
combined workload of six hours less than female business owners
(Loscocco & Bird, 2012);
ninety percent live with a spouse or intimate partner versus 67% of
female owners (Loscocco & Bird, 2012); and
prior to business ownership, recent data reveals a narrowing in the
gap in management experience opportunities- 56.6% for men versus
52.3% for women (Fairlie & Robb, 2009).
Characteristics of men-owned businesses compared to women-owned businesses include
more likely to have employees and to have more employees (Fairlie
&
Robb, 2009; Robb & Coleman, 2009);
more likely to have significantly higher gross sales (Fairlie & Robb,
2009; Loscocco & Bird, 2012);
larger in terms of assets (Robb & Coleman, 2009);
more likely to be exporters (Jarmin & Krizan, 2010); and
62
more likely to be in the sectors of construction, finance, and
insurance versus the sectors of retail, sales, and services where
woman-owned businesses are over represented (Robb & Farhat,
2013).
The survival rate for newly-established privately owned firms from 2002 to 2004 was
70%. The survival rates for this period for firms by gender were 66% for womenowned,
72% for men-owned, and 69% for equally-owned (Economics and Statistics Administration,
2010). However, analysis of a longitudinal (five-year) database of more than 4000 new
ventures started in the United States in 2004 suggested a narrowing of the survival gap
between female- and male- new ventures. The four-year survival rate was 62.1% for
women-owned businesses versus 63.4% for men-owned businesses (Robb & Watson, 2011).
Weiler and Bernasek (2001) compared statistics on the creation and failure rates
of women-owned and men-owned businesses to examine discrimination practices to
better understand women’s position in the labor market. Their conclusions from the
statistical analysis included (a) gender profiles for entrepreneurs did not differ
significantly; (b) structural advantages for males were responsible for some of the gaps
between male and female entrepreneurs (e.g., women-owned business were more likely
to have no paid workers, men-owned business were more likely to have no female
employees); (c) women were more likely to start businesses that require little or no
money; (d) men were more likely to receive commercial loans for their businesses; (e)
women-entrepreneurs often earned less than they could in the labor market which
worsened the economic status of women; and (f) more women started a business without
prior work experience. The authors concluded that the continued lower status of women
63
in labor markets and entrepreneurial markets could be because of the obstructive impact
of established male-dominated networks. Women continued to become self-employed
despite having to confront greater discrimination than faced in the labor market. The
authors concluded that existing discrimination factors and obstructive impacts of
maledominated networks faced by women in the labor markets were motivating factors in
the decision-making process by women to pursue entrepreneurship (Weiler & Bernasek,
2001).
Gender differences in leadership styles were addressed in the previous section on
women and leadership styles. To summarize, certain leadership styles are linked with
gender stereotypes. Transformational leadership behaviors are linked with female leaders
(Brandt & Laiho, 2013; Hopkins et al., 2008; Mattare et al., 2010) whereas men use a
more autocratic style (Hopkins et al., 2008). Male leaders demonstrate behaviors of
selfconfident, adaptability, ability to handle stress, and optimism while female leaders
demonstrate behaviors of empathy and emotional awareness (Bass, 2008; Brandt &
Laiho, 2013; Eagly. 2007; Hopkins et al., 2008). In a male-dominated setting,
effectiveness favors male leaders (Ayman et al., 2009; Brandt & Laiho, 2013; Eagly,
2007). The discussion of gender and small business continues throughout the literature
review.
Organizational Success in Small Businesses
“Leadership [is] the ability to influence, motivate, and enable others to contribute
to the effectiveness and success of the organizations of which they are members (Bass,
2008, p. 23).” Leaders influence business success and failure, no matter the size of the
64
organization. However, small business owners have more limited time and personnel than
larger businesses (Atamian & VanZante, 2010). There is increasing agreement that
leadership capability is crucial to the success and failure of small businesses. New firms
are more volatile and more likely to close, especially smaller firms (Haltiwanger et al.,
2010, August). Ineffective leadership and management are the causes mostly attributed
to business failure (Atamian & VanZante, 2010; Bass, 2008; Beaver, 2003; Brown, 2007;
Lee et al., 2009; Valdiserri & Wilson, 2010).
Perceptions of small business success and failure differ between
owner/entrepreneurs and researchers. Attainment of predefined goals can satisfy the
small business owner although the business may fall short in attaining an optimal level
(Bauer, 2011; Robinson & Stubberud, 2011; Simpson et al., 2012). Researchers in the
fields of small business and entrepreneurship often define success and failure in terms
of financial achievement and survival of the business (Bauer, 2011; Headd &
Kirchhoff,
2009; Simpson et al., 2012). Business closure is not always synonymous with failure.
Business owners may elect to close a business while it is still successful based on a
planned event, such as retirement or selling the business (Beaver, 2003).
Small business leadership comes from the owner/founder (Langowitz & Allen,
2010). Success entrepreneurial leaders are “value-based visionaries and communicators,
functioning from a position of trust and confidence conveyed upon them by the
individuals with whom they are associated in the organization” (Darling et al., 2007, p.
19). Entrepreneurs who exhibit excellence in providing leadership have a higher
probability for success than entrepreneurs who merely manage their businesses (Darling
65
et al., 2007; Losapio, 2012; Mitchelmore & Rowley, 2013). Therefore, small business
leadership styles and behaviors directly influence small business success and failure.
Assessment of the performance of the organization for which a leader is responsible is a
basis for evaluating leadership effectiveness (Kaiser et al., 2008).
Analysis of research findings demonstrated the link between small business
leadership behaviors, employee commitment, job satisfaction and performance, and
organizational performance (Chung-Wen, 2008; Frazier, 2013; Jackson et al., 2013;
Khan, Ghouri, & Awang, 2013; Kolapo Sakiru et al., 2013; Mitchelmore & Rowley, 2013;
Tafevlin et al., 2011; Tsai, 2011; Yang, 2012). Leaders contribute to organizational
performance and viability through effective leadership actions. The actions include
setting the mission and objectives and aligning goals with processes and procedures
(Mastrangelo et al., 2004; Nelson, Brunetto, Farr-Wharton, & Ramsey, 2007). Simply
stated, leadership behaviors influence employee commitment and job satisfaction, thereby
influencing small business success and failure outcomes.
In current research on small business leadership, transformational and
transactional leadership styles were correlated positively with increased employee job
satisfaction, which was correlated with organizational performance (Chung-Wen, 2008;
Frazier, 2013; Just, 2011; Kolapo Sakiru et al., 2013; Tsai, 2011; Yang, 2012). Leader
and employee interactions considered positive and good encouraged employees to meet
organizational missions and objectives. In turn, this enhanced job satisfaction
(ChungWen, 2008; Tsai, 2011). Leaders demonstrating a transformational leadership
style also contributed to employee well-being (Tafvelin et al., 2011).
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With affective employee commitment to a company, an employee wants to stay; with
normative employee commitment, an employee feels an obligation to stay with the company
(Jackson et al., 2013). The influence of leader behaviors was the focus of a meta-analysis
examination of the relationship between transformational, charismatic, and transactional
leadership styles and employee commitment levels. The correlation was strongest between
affective employee commitment and transformational and charismatic leadership styles.
The correlation was moderate between normative employee commitment and
transformational and charismatic leadership styles (Jackson et al.,
2013).
Transactional leadership behaviors varied in the influence on employee
commitment. Contingent reward demonstrated the strongest correlation with affective
employee commitment (Jackson et al., 2013). Management-by-exception (active)
demonstrated a considerably weaker, but still positive correlation. Affective employee
commitment was negatively correlated with management-by-exception (passive). As
expected, the strongest negative correlation was demonstrated between laissez-faire
leadership style and affective employee commitment (Jackson et al., 2013). Analysis of
the results from this research study supports the leadership style-employee
commitmentorganizational performance link.
The relationship between organizational performance and transformational
leadership style was supported in a recent research study of leaders of small businesses
(Just, 2011). Determining how well organizational outcomes can be predicted by leadership
style was the purpose of the study. Based on the study findings, transformational leadership
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style predicted positive organizational outcomes (Just, 2011). A positive correlation
between transformational leaders and employee’s perception and a climate for innovation in
small businesses was also demonstrated by the research findings
(Tafvelin et al., 2011).
Small business owners become leaders by virtue of their position and
organizational necessity (Kempster & Cope, 2010). However, female entrepreneurs
generally have fewer opportunities to attain necessary leadership, managerial, and
networking skills (Fairlie & Robb, 2009; Kempster & Cope, 2010; Sullivan & Meek,
2012). Currently, there is a lack of research on performance outcomes of women-
owned businesses. The lack of studies with large enough samples of woman-owned
businesses is the primary factor (Fairlie & Robb, 2009). Understanding the relationship
between the leadership styles of a woman business owner and organizational success
may suggest the leadership styles that may enhance organizational success at women-
owned and –led businesses.
Organizational Success, Employees, and Outcomes of Leadership Styles
Employee engagement is necessary to achieve organizational goals and objectives
(Shuck & Herd, 2013). The relationship between leader and employee affects employee
commitment to effective performance, which affects organizational effectiveness (Nelson
et al., 2007). Effective leadership behaviors, such as building trust, caring for people,
and acting ethically and morally contribute to employee commitment (Khan et al, 2013;
Mastrangelo et al., 2004; Nelson et al., 2007). Followers who perceive their leaders as
caring for his or her welfare show self-confidence and emotional well-being and are more
68
loyal (Walumbwa & Hartnell, 2011; Yukl, 2010). Greater organizational productivity and
a higher level of status for leaders result from these factors (Yukl, 2010).
The behavior of a leader and how it is perceived by subordinates is positively
related to perceptions of performance and job satisfaction (Chung-Wen, 2008; Craig,
2013; Fernandez, 2008). Employees are inspired to be more interested and creative in
their work by transformational leaders who are visionary and creative in his or her
leadership behaviors (Brandt & Laiho, 2013; Nielsen et al., 2008). Transformational
leaders enhance performance and achieve higher levels of motivation by a) providing
learning opportunities, b) providing regular feedback, c) creating an environment that
encourages innovation, and d) delegating duties (Walumbwa & Hartnell, 2011).
Observations from a study of public administration office supervisors rating their
leadership behavior and the leadership behavior of their leaders indicated
transformational leadership style was important to job performance and commitment
from a leader and follower perceptive. Of equal importance was the similarity in
transformational leadership style between leader and follower (Cassard & Hamel,
2008).
Latino employees in the United States were the focus of a study of the
relationship between leadership styles measured by the MLQ and employee perceptions
of satisfaction with leadership and job motivation (Cifuentes, 2013). Data analysis
indicated employee responses were significantly lower than the norm, which suggested
Latino employees were less motivated and less satisfied with their leaders. However,
satisfaction with leadership and motivation (extra effort) were highly important to Latino
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employees and positively correlated with characteristics of transformational,
transactional, and servant leadership styles (Cifuentes, 2013).
As an exchange relationship between leaders and followers that is equitable is
implied by leadership, effective leadership can be defined as a leader successfully
influencing others to attain defined goals (Bass, 2008). Leadership effectiveness has been
correlated with transformational leadership style. Analysis of results of a study of
employee perceptions of leadership styles of police supervisors, using the MLQ, revealed
a significant positive relationship between organizational effectiveness and
transformational leadership style and significantly negative relationships between
organizational effectiveness and transactional leadership style and passive avoidant
leadership style (Kiehl, 2013). A transformational leadership style was positively
correlated with leadership effectiveness and leader readiness among healthcare executives
based on employee perceptions measured by the MLQ (Mhoon-Walker,
2013).
Women have been rated significantly higher than men on the outcome measures of
inspiring extra effort from subordinates, subordinates expressing satisfaction with their
leadership, and their effectiveness in leading overall. Leaders can enhance the
performance of the organization by using a combination of specific task, relations,
change, and external behaviors relevant for the situation (Yukl, 2012). Positive follower
perceptions of leaders contributing to organizational performance are related to
taskoriented, relations-oriented, and development-oriented leadership behaviors. Positive
follower perceptions of leaders contributing to job satisfaction are related to
relationsoriented and development-oriented behaviors (Fernandez, 2008). Decreased
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absenteeism and increased production are demonstrated by highly motivated and satisfied
employees (Webb, 2007).
Effective employee performance requires a cooperative effort by leaders and
followers (Yukl, 2008). The interactive, transformational leadership style employed by
women leaders can result in the organizational outcomes of open communication,
employee satisfaction, and a more innovation and productive environment. These
outcomes jointly contribute to the potential for greater financial return and firm growth
(Moore et al., 2011; Walumbwa & Hartnell, 2011).
Examination of the relationship between transformational leadership style and the
role of followers in organizational success has progressed. However, there should be more
research on women entrepreneurs to contribute to our understanding of leadership, which
is currently incomplete (Kahn et al., 2013; Yammarino, 2013). Leadership studies would
benefit from a more integrative examination of the relationship between transformational
leadership style and the role of followers in organizational success in woman-owned and –
led businesses.
Predictor and Criterion Variables
This research study examined the defined variables to determine relationships
using a correlational research method. The criterion (dependent) variable is influenced
by the predictor (independent) variable (Cozby, 2009). In this research study, the
predictor variables were leadership styles defined by full-range leadership theory –
transformational, transactional, and laissez-faire. Leaders may exhibit the three
leadership styles (Avolio & Bass, 2004; Bass, 2008). The criterion variable was
organizational success. Three areas of outcome of leadership behaviors strongly linked to
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individual and organizational success in prior research (Avolio & Bass, 2004) served as
the operationalized criterion variables. The outcomes of leadership measured by
employee perceptions of the leader were a) extra effort (motivation), b) effectiveness, and
c) satisfaction with leadership. The goals of this study were to examine the relationship
between leadership styles and organizational success with the resulting data analysis
contributing to the existing knowledge in the area of leadership styles and organizational
success in woman-owned and -led small businesses. Based on the literature review, the research
questions are:
1. What is the relationship between leadership styles in woman-owned
and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra
effort/motivation?
2. What is the relationship between leadership styles in woman-owned
and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader?
3. What is the relationship between leadership styles in woman-owned
and –led small businesses and organizational success measured by
employee satisfaction with the leadership?
The researcher used Bass and Avolio’s Multifactor Leadership Questionnaire
(MLQ) 5-X survey (MLQ for Researchers, 2013) to collect data to measure the predictor
variables and the operationalized criterion variables. To evaluate if a relationship was
present between the predictor variables of leadership styles and the criterion variables, the
data analysis method was Spearman (rs) rank correlation coefficients (Cozby, 2009;
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Sekaran & Bougie, 2010). If the relationship existed, the direction and strength of the
relationship was determined. The study results included reports and interpretation of
the strength and direction of the correlations plus descriptive analysis statistics. The
linear relationship between the multiple predictor variables and the multiple
operationalized criterion variables was analyzed using multivariate multiple regression
analysis and factor analysis (Dattalo, 2013).
Studies with Leadership Styles as Independent or Predictor Variables
Leadership styles defined by full-range leadership theory were independent or
predictor variables in several studies cited in this literature review. Cassard and Hamel
(2008) used a correlational, descriptive analysis survey design to examine the relationship
between the criterion variables of employee organizational commitment and job satisfaction, and
the predictor variable of transformational leadership. Analysis of data revealed a positive
correlation with transformational leadership and the criterion variables (Cassard & Hamel, 2008).
Employee performance was influenced by his or her perceptions of the leadership
styles exhibited by leaders (Hamel, 2007; Salman et al., 2011). The predictor variables
(i.e., the five subscales related to transformational leadership) were used to determine the
transformational leadership style of the followers and his or her perceptions of the
transformational leadership style of direct managers and indirect managers (Hamel, 2007).
From a leader and follower standpoint, observations supported transformational
leadership style was important in relationship to organizational commitment and job
performance (Hamel, 2007).
The relationship between the independent variables (i.e., transformational,
transactional, laissez-faire, consideration, and initiating structure leadership behaviors)
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and team performance, the dependent variable, was the focus of study by Rowold (2011).
Data analysis revealed facets of the team member heterogeneity (e.g., age, gender, and
culture) influenced the relationship between team performance and transformational,
laissez-faire, and consideration leadership behaviors. Additionally, a positive correlation
was demonstrated between the performance of gender heterogeneous work teams and
transformational leadership style and consideration behaviors (Rowold, 2011).
The independent variable was leadership style (i.e., transformational,
transactional, laissez-faire) in a quantitative, cross-sectional, non-experimental study and
the dependent variable was employee well-being (Velkova, 2011). Almost all hypotheses
were supported by the study findings. Employee well-being was positively affected by
leaders exhibiting transformational and contingent reward transactional behaviors. In
comparison, leaders exhibiting laissez-faire behaviors negatively affected employees
(Velkova, 2011).
Leadership styles were the predictor variables (i.e., transformational,
transactional, laissez-faire) in a study of the relationship with entrepreneurial
orientation and business performance in Taiwan-based small and medium enterprises
(SMEs). The author concluded transformational leadership style was most strongly
correlated to entrepreneurial orientation. This combination contributed to increased
business performance (Chung-Wen, 2008).
Correlational Studies of Leadership Styles
A Langowitz and Allen (2010) study of chief executives in growth-oriented SMEs
provided preliminary results regarding the influence of a leader’s founder status and
management style. There was a strong correlation between the successes of a growing
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business with CEO leadership capabilities. A Langowitz and Minniti (2007) correlational
study investigated “what variables influence the entrepreneurial propensity of women and
whether those variables [had] a significant correlation with differences across genders” (p.
341). The authors concluded a significantly strong positive correlation existed between
the likelihood of business formation and a woman’s self-confidence and opportunity
perception. The case for ‘women entrepreneurs are born rather than made’ was not
supported (Langowitz & Minniti, 2007).
Data from Wang and Poutziouris’ (2010) study of owner-managed SMEs
supported a positive correlation between owner-managers of fast growing SMEs and
the adoption of people-oriented leadership style. Achievement-oriented leadership style
and superior sales growth were also positively correlated. The relationship between
transformational leadership style and organizational performance was supported in a
study of catalog industry small business leaders (Just, 2011). The purpose of the study
was to determine how well leadership style predicts organizational outcomes. Based on
the study findings, transformational leadership style predicted positive organizational
outcomes (Just, 2011). A positive correlation was revealed between new firm growth
and an entrepreneurs’ emotional intelligence in a study of Israel-based businesses, as
was a positive correlation with transformational leadership orientation (Yitshaki, 2012).
A positive correlation between leaders exhibiting a transformational leadership
style and employee perceptions and a climate for innovation in small businesses was
revealed by Tafvelin et al.’s (2011) research study of a Swedish social service organization.
The researchers concluded employee well-being and the short-term and long-term effects
of transformational leaders were positively correlated. This conclusion supported the use
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of transformational leadership behaviors in creating a climate that contributes to employee
well-being (Tafvelin et al., 2011).
Wadensten (2012) examined employee perceptions of transformational leadership
behaviors of female leaders in small female-led nonprofits in New Hampshire. The
purpose of the study was to find out if a relationship existed between the perceived level
of transformational leadership behavior and an employee’s intention to quit. Analysis of
the data revealed employees were less likely to quit when female leaders were perceived
to exhibit three qualities of transformational leadership style: idealized influence
attributed, inspirational motivation, and intellectual stimulation. This held true for the
transactional leadership behavior of contingent reward (Wadensten, 2012). In comparison,
the transactional leadership behavior of management-by-exception (passive) was
positively correlated with increased likelihood of employees quitting their jobs
(Wadensten, 2012). A correlational study of the relationship between leadership style and
employee retention and job satisfaction by Weatherly (2012) indicated leaderparticipants
used all the MLQ leadership styles. However, similar to the Wadensten results, the
strongest positive correlation existed between managers exhibiting transformational
leadership behaviors and employee job satisfaction and retention (Weatherly, 2012).
Skogstad et al. (2007) conducted a study of Norwegian employees designed to
test the assumption that laissez-faire leadership style was a form of destructive
behavior, not a type of zero or non-leadership. Analysis of study data supported the
assumption with a strong positive correlation. Skogstad et al. (2007) recommended
organizations work to prevent aggressive and abusive leadership styles and behaviors
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and be aware of the potential negative work environment created by leaders exhibiting
a laissez-faire leadership style.
Understanding the link between transformational leadership style and employee
performance was the focus of a leadership study of employees and their immediate
supervisors of an organization in the southwestern United States (Walumbwa & Hartnell,
2011). Data analysis revealed transformational leaders enhanced performance and achieved
higher levels of motivation by a) providing opportunities to learn, b) providing regular
feedback, c) challenging employees to think of new and innovative ideas, and d) delegating
duties. Employees who perceived their leaders as caring for his or her welfare showed self-
confidence and emotional well-being and increased loyalty. Walumbwa and Hartnell
(2011) suggested organizations could realize an important return on investment on follower
development by training leaders to be more transformational.
Analysis of data from a research study of public relations firms in Taiwan, focused
on employee organizational commitment and job satisfaction, revealed a positive
correlation with transformational leadership style (Yang, 2012). Employees became more
interested in being innovative, creative, and involved in their work when leaders
demonstrated a transformational leadership style. Additionally, a leader employing a
transformational leadership style was shown to be predictive of positive organizational
performance and outcomes. Transactional leadership style was positively correlated with
increased employee job satisfaction and organizational performance (Yang, 2012).
Leadership styles in Taiwan-based SMEs and the relationship with business
performance and entrepreneurial orientation were examined in a correlational,
quantitative study. Similar to the United States, nearly 98% of Taiwan businesses are
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SMEs (Chung-Wen, 2008). A positive relationship was revealed between a)
transformational leadership style and business performance and b) entrepreneurial
orientation and business performance. The author observed the contribution to higher
businesses performance resulting from the combination of transformational leadership
style and higher entrepreneurial orientation (Chung-Wen, 2008).
Valdiserri and Wilson (2010) studied the affect of leadership styles (i.e.,
transformational, transactional, laissez-faire) in small construction companies on
profitability and organizational success. In this correlational, quantitative design study,
data analysis supported the strong positive relationships between transformational and
transactional leadership behaviors, profitability, and organizational success (Valdiserri
&Wilson, 2010). Information system technology knowledge workers in small
businesses were the focus of a research study of the relationship among organizational
leadership styles, organizational culture, and employee job satisfaction and
organizational performance (Frazier, 2013). Analysis of findings demonstrated a
positive correlation between transformational and transactional leadership styles and
increased employee job satisfaction, which was positively correlated with
organizational performance (Frazier, 2013).
Current Conditions for Small Business
Businesses are most likely to fail within three and one-half years of forming,
making this a critical period (Allen et al., 2007). Factors contributing to business survival
include size and resources such as employees, adequate capital, and an educated and
experienced owner. Factors contributing to business closure include inadequate startup
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capital, a relatively young owner, and an owner’s lack of managerial and leadership skills
(Beaver, 2003; Brown, 2007; Dhaliwal, 2010; Fairlie & Robb, 2009; Headd, 2003;
Jarmin & Krizan, 2010).
The United States has been a world leader in new business formation and is
currently fourth on the World Bank’s Doing Business ranking (Stangler et al., 2012).
However, United States business startup rates fell to a record low of 8% in 2010 based on
the United States Census Bureau's Business Dynamics Statistics (BDS), the most
complete public-use dataset on business dynamics for United States firms with paid
employees (Haltiwanger, Jarmin, & Miranda, 2012). This is part of a long-term,
downward trend for new firms as a percentage of all businesses. Thirty-five percent of
all United States businesses are five years or younger, down from 50% in the beginning
of the 1980s (Haltiwanger et al., 2012).
There is a mutual relationship between economic conditions of the United States
and entrepreneurship (Kelly et al., 2012). Small businesses add value to economy by the
creation of new jobs, products, and industries (Hugh, 2013; Hussain, Sultan, & Ilyas,
2011). Young businesses (i.e., employer firms in the first two years) boast a higher net rate
of job creation than older firms (Haltiwanger, Hyatt, McEntarfer, & Sousa, 2012,
November).
An examination of BDS business cycle data revealed, relative to small firms, large
firms proportionally eliminate more jobs when unemployment is high (Moscarini &
Postel-Vinay, 2012). The net rate of job creation by large firms has slowed down much
faster in the recent Great Recession (Moscarini & Postel-Vinay, 2012), which started in
December 2007 (Fairlie, 2012). Small business formation is often a response to
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unemployment, making them an increasingly valuable source of employment (Moscarini
& Postel-Vinay, 2012) and most likely to lead economic recovery (Headd, 2009).
Woman-owned small businesses and the economy. Woman-owned businesses,
one of the fast growing economic segments, play a vital role in the economic growth of
the United States (United Stated Small Business Administration, 2010b). Women owned
just 5% of all small businesses in the United States 40 years ago (National Women’s
Business Council, 2012). By 2007, women owned 7.8 million businesses, accounting for
28% of all businesses nationwide. Eighty-eight percent of these woman-owned
businesses were small businesses (United States Census Bureau, 2010). However, the
rate of woman business ownership of less than seven percent in the United States
contributes to the lack of research on business performance outcomes for woman-owned
businesses (Fairlie & Robb, 2009).
The current economic influence of woman-owned businesses is $3 trillion
annually, creating or maintaining 23 million jobs (Center for Women’s Business Research,
2009). Although the growth-rate of woman-owned businesses currently is one and one-
half times the national average, these businesses are under-represented in highgrowth
firms (Morris, Miyasaki, Watters, & Coombes, 2006). The majority of womanowned
businesses (68.2%) currently have receipts of less than $25,000 annually
(National Women’s Business Council, 2012).
The service-industry sectors provide a rich research environment for accessing
woman-owned and –led businesses. The second highest rate of new business activity in
2011 was in the service-industry sectors (Fairlie, 2012). This suggests the importance of this
sector to the current and future economic strength of the United States.
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Woman-owned small businesses in South Carolina and the economy. There is
a relationship between state economic growth and national economic strength (Hafer,
2013). A good indicator of the state of the economy is the unemployment rate. The 2013
statewide unemployment rate (seasonally adjusted) for South Carolina was 7.91% versus
the national rate of 7.4% (United States Bureau of Labor Statistics, 2014).
On every indicator of women’s economic status except for the percentage of
women in managerial and professional occupations, South Carolina ranks in the lower
third nationally:
small business ownership - 41st (Alliance for Women, 2010);
microenterprise ownership - 39th (Alliance for Women, 2010); and
overall women’s business ownership - 45th (Mittelstaedt et al., 2008).
According to the Institute for Women’s Policy Research and the United States
Department of Labor, South Carolina ranks 18th nationally with a third of women
workers employed in managerial and professional occupations (Williams, 2008).
However, data reveals women are under-represented in business leadership roles.
Approximately 25% of South Carolina CEOs are female, nearly half of business
organizations have no women in decision-making roles, and slightly more than a third of
business organizations have only one female in a decision-making role (Mittelstaedt et
al., 2008).
Self-employment, entrepreneurship, and business ownership are fundamental
economic engines, representing a source of income and an opportunity to build wealth.
Current trends in the state are encouraging with the level of growth in the number of
woman-owned businesses as demonstrated by the national ranking of 18th in the percentage
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of woman-owned businesses with employees (Mittelstaedt et al., 2008). The number of
woman-owned firms in South Carolina experienced growth of 68% from 2002 to 2007.
During the same period, woman-owned businesses realized a 40% increase in sales
revenues (U. S. Census Bureau, 2002, 2007).
Summary
Based on the available literature on the role of leadership in small business,
effective leadership is essential to organizational success (Darling et al., 2007; Valdiserri
& Wilson, 2010). Evidence indicates a relationship exists between founding success, new
venture survival of small businesses, and leadership capability (Langowitz & Allen,
2010). Leader behaviors and subordinate’s perceptions of leader behaviors have an effect on
employee perceptions of performance, effectiveness, and job satisfaction (ChungWen, 2008;
Fernandez, 2008). The value of contributions of employees to small businesses tends to be
magnified by limited resources and personnel.
The literature review contains a discussion of the influence of leadership styles on
small business success. Leadership styles can have a strong affect on a firm’s
innovativeness and performance (Chung-Wen, 2008; Kahn et al., 2013; Matzler et al.,
2008; Yukl, 2008). The leadership styles of women business leaders result from the lack
of experience and lack of business knowledge. The majority of women start their own
small business and are new to business ownership (United Stated Small Business
Administration, 2010b). In contrast, successful entrepreneurs generally possess relevant
industry and managerial experiences, have owned businesses, and start businesses similar
to those they left (Landstrom, 2005). The success level of small woman-owned business
organizations effects GDP and employment in the United States, which directly influences
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the economy. Small business ownership for women is a means of economic inclusion
(Malach Pines et al., 2010) and gender equality, which is currently unrealized
(Loscocco & Bird, 2012).
There is a relationship between organizational leadership styles and organizational
success. Effective organizational performance requires a cooperative effort by leaders
and followers (Yukl, 2008). Businesses founder-leaders with prior leadership experience
create more jobs than founders who are very knowledgeable about overall business
(Dencker, Gruber, & Shah, 2009). Successful small business leaders influence
organizational success, which extends to stakeholders, the community, and the country.
Conclusion
Entrepreneurship became a fast growing research area in the early part of the 21st
century partly because the field is in the early phase of examination. Although the
percentage of woman-owned firms in the United States has grown, the percentage of
woman-owned firms with employees remains relatively low (National Women’s Business
Council, 2012; United States Census Bureau, 2010), contributing to limited research in
this area (Brandt & Laiho; Minniti, 2010). Additionally, limited empirical research
attention has been given to entrepreneurial leadership styles and employee perceptions
(Jensen & Luthans, 2006), and the influence of leadership styles on business success and
performance (Rowold, 2009). The lack of knowledge currently available on
a) growing a business from ‘point A to point B’, b) how to become an employer firm, and
c) how to move from being a technical expert to a business leader contributes to growth
limitations of woman-owned businesses (Center for Women’s Business Research, 2009).
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Research on women leaders and managers, entrepreneurs, and business owners
reveals a contrast in leadership styles and behaviors. Women leaders and managers
demonstrate transformational leadership style tendencies (Buttner, 2001; Hopkins et. al,
2008; Knopik & Moerer, 2010). Women entrepreneurs demonstrate the tendencies of a
more task-orientation and focusing on their own actions (Knopik & Moerer, 2010). These
differences are important because the interactive, transformational leadership style
employed by women leaders’ contributes to the potential for greater financial return and
firm growth (Moore et al., 2011; Walumbwa & Hartnell, 2011). Transformational
leadership is one of the most effective leadership theories (Hernandez et al., 2011).
Transformational leaders can enhance performance and achieve higher levels of
motivation of subordinates contributing to organizational survival and growth
(Walumbwa & Hartnell, 2011).
The lack of empirical research on entrepreneurial leadership styles and
performance outcomes of woman-owned employer businesses implies a gap exists.
Contemporary entrepreneurship research will benefit from studies focused on the
experience of women business owners and their qualities and behaviors, which contribute
to expanded economic growth (Ahl & Marlow, 2012). The current study bridges existing
literature regarding female entrepreneurs and business owners to leadership styles that may
contribute to success in woman-owned and -led businesses and enhance our understanding
of the leadership styles–business success linkage.
Chapter 3 contains a description of the selected research methodology and a
discussion of the appropriateness of the design. The chapter includes a description of the
84
population and sample frame, a discussion of the research instruments, an explanation of the
data collection methods, and presentation of the techniques for data analysis.
Chapter 3
Method
Beginning with a restatement of the study purpose, this chapter contains a
description of the methods to be used to conduct this research study. The topics addressed
in this chapter include research method and design appropriateness, population and
sampling, participants’ informed consent, confidentiality, and geographic location. Data
collection techniques, type, and instrument appropriateness follow. The chapter continues
with an explanation of research design validity and reliability, data analysis, participant
selection, and a summary.
The purpose of this quantitative descriptive correlational research study was to
examine the relationship between leadership styles in woman-owned and –led small businesses
and organizational success in service-sector industries in North Myrtle Beach, South Carolina.
The contributions of small businesses to the economy of the United
States are influenced by high closure and failure rates (Haltiwanger et al., 2010, August;
SBA Small Business Facts, 2012, May). A small businesses owners’ lack of leadership
skills is a primary factor attributing to these high rates (Ataman & VanZante, 2010; Beaver,
2003; Brown, 2007; Lee et al., 2009; Valdiserri & Wilson, 2010). As the fastest growing
segment in small business formation, the success and survival of woman-owned and –led
small businesses is linked to the health of the economy at personal, local, state, and
national levels. Many influences push or pull women to entrepreneurship; however, most
women share the attribute of starting a business without previous opportunities to gain
85
leadership and management skills (Fairlie & Robb, 2009; Kempster & Cope, 2010;
Sullivan & Meek, 2012). Additionally, the motivations for business ownership and the
determinants of business success for women business owners do not necessarily conform to
standard financial or economic performance measures (Ahl, 2006; Bauer, 2011; Robinson
& Stubberud, 2011).
Studies of leadership styles and women and leadership styles and women
business owners are relatively new to the fields of leadership research and business
ownership research. Despite the empirical studies mentioned in this chapter and the
literature review, few studies exist on entrepreneurial leadership styles and organizational
success in woman-owned employer businesses and perceptions of leadership styles and
behaviors by subordinates. Research studies on leadership styles in woman-owned
employer small businesses are even more limited because less than 12% of womanowned
businesses in the United States have employees (U.S. Census Bureau, 2010).
Woman-owned firms are over-represented in service-sector businesses (Fairlie & Robb,
2009; Klapper & Parker, 2011) while the service-sector industries increased as a
percentage of employment in the United States (Economics and Statistics Administration,
2010). These factors allude to the link between the present and future economic strength
of the country and closure and failure rates in woman-owned small businesses. In
addition, research studies on leadership styles and organizational success in womanowned
and-led employer firms will contribute to the existing knowledge in the area of leadership
styles and organizational success in woman-owned and -led small businesses.
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Research Design and Research Questions
The descriptive quantitative, correlational research method was used to achieve
the study purpose and address the studied problem. The purpose of descriptive research
is to describe the current state of an occurrence, event, or incident using words or
numbers (Neuman, 2011; Salkind, 2008). By looking at the relationship between
variables without implying a cause-and-effect relationship (Neuman, 2011; Salkind,
2008), correlational studies “describe a particular phenomenon in a way that
communicates the overall picture of whatever is being studied” (Salkind, 2008, p. 204).
Leadership styles were the predictor (independent) variables and organizational success
was the criterion (dependent) variable. Three categories of leadership styles,
transformational, transactional, and laissez-faire, served as the predictor variables. As
leaders may exhibit the three leadership styles, the leadership styles are not mutually
exclusive (Avolio & Bass, 2004; Bass, 2008). The current study measured the
relationships with organizational success. Organizational success was measured with
the MLQ by owner/leader self-perceptions and employee rater perceptions of their
leaders in three areas of outcome of leadership behaviors: a) extra effort (motivation),
b) effectiveness, and c) satisfaction with leadership (Avolio & Bass, 2004). These three
areas of outcome of leadership behaviors served as the operationalized criterion
variables. Operationalism is the process of linking a definition of the concepts of a
theory to a measurement procedure (Neuman, 2011) by, first, looking at the behavioral
dimensions and properties of the concept and, second, categorizing the concepts into
elements that are observable and measurable (Sekaran & Bougie, 2010). The
operational level is the link between theoretical (abstract concept and
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conceptualization) level and empirical (indicator or measurable) level (Neuman, 2011).
The study design used the Spearman’s rho rank correlation coefficients, factor analysis,
and multivariate multi regression analysis to determine the relationship between the
predictor variables and the operationalized criterion variables (Cozby, 2009; Sekaran &
Bougie, 2010).
The purpose of this quantitative descriptive correlational research study was to
examine the relationship between leadership styles in woman-owned and –led small
businesses and organizational success. Based on the literature review, the research
questions were:
1. What is the relationship between leadership styles in woman-owned
and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra
effort (motivation)?
2. What is the relationship between leadership styles in woman-owned
and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader?
3. What is the relationship between leadership styles in woman-owned
and –led small businesses and organizational success measured by
employee satisfaction with leadership?
The questions provided guidance on the type of data to be collected and how to analyze
and interpret those data (Leedy & Ormrod, 2010). Samples of survey instrument
questions used to gather data addressing the research questions are provided in Appendix
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E for leaders’ self-perceived leadership style and Appendix F for employee/rater
description of the perceived leadership style of the leader.
Study Hypotheses and Variables
A hypothesis is defined as “a logical supposition, a reasonable guess, an educated
conjecture” (Leedy & Ormrod, 2010, p. 4). The hypotheses for this study included null and
alternative or research hypotheses addressing the research questions. The null hypotheses
predicted there was no relationship between the variables and the general population and
the alternative or research hypotheses predicted the relationships existed
(Cozby, 2009).
A variable is anything that can take on differing values (Sekaran & Bougie, 2010).
This study will deal with two types of variables. The main variables, the dependent or
criterion variables, were of primary interest. The second variable type, the independent
or the predictor variables, positively or negatively influenced the criterion or dependent
variables (Sekaran & Bougie, 2010). Table 4 indicates the operational variables used in
the study. The predictor variables, the leadership styles as defined by full-range
leadership theory (FRLT) (Bass, 2008), were separated into nine operationalized
leadership factors or behaviors. Therefore, analysis of data revealed more specific results
contributing to a better understanding of the relationship with the operationalized
criterion variables. The criterion variable, organizational success, was measured with the
MLQ by owner/leader self-perceptions and employee rater perceptions of their leaders in
three areas of outcome of leadership behaviors, which served as the operationalized
criterion variables.
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Table 4
Operational Variables
Construct Variable Predictor/Criterion Scale Abbreviation
Transformational
Leadership
Transformational
Leadership
Predictor
(Independent)
IA or II(A), IB or
II(B), IM, IS, IC
Transactional
Leadership
Transactional
Leadership
Predictor
(Independent) CR, MBEA
Laissez-Faire/
Laissez-Faire/ Passive
Passive Avoidant
Avoidant Leadership
Leadership
Predictor
(Independent) LF, MBEP
Organizational
Extra Effort
Success
Criterion
(Dependent) EE
Organizational
Effectiveness
Success
Criterion
(Dependent) EFF
Organizational
Satisfaction
Success
Criterion
(Dependent)
SAT
Note. Adapted with permission from Multi Leadership Questionnaire Manual and
Samples Set by Bruce J. Avolio and Bernard M. Bass, 2004, Mind Garden, Inc.
The relationship between leadership styles and organizational success
measure by extra effort. The first three hypotheses tested the first research question
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pertaining to the relationship between leadership style and employee perceptions of
their leader’s leadership behavior of extra effort/motivation.
H10: There is no relationship between transformational leadership style in woman-
owned and –led small businesses and organizational success measured by employee
perceptions of their leader’s leadership behavior of extra effort.
H1a: There is a relationship between transformational leadership style in woman-
owned and –led small businesses and organizational success measured by employee
perceptions of their leader’s leadership behavior of extra effort.
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:
woman-
H20 There is no relationship between transactional leadership style in
owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H2a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H30: There is no relationship between passive avoidant/laissez-faire
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
H3a: There is a relationship between passive avoidant/laissez-faire
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
The relationship between leadership styles and organizational success
measure by effectiveness. The next three hypotheses tested the second research
question pertaining to the relationship between leadership style and employee
perceptions of the leadership effectiveness of the leader.
H40: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
92
:
woman-
H4a There is a relationship between transformational leadership style in
owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H50: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H5a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H60: There is no relationship between passive avoidant/laissez-faire
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
H6a: There is a relationship between passive avoidant/laissez-faire
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
The relationship between leadership styles and organizational success
measure by satisfaction with leadership. The last three hypotheses tested the
third research question pertaining to the relationship between leadership style and
employee satisfaction with leadership.
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:
woman-
H70 There is no relationship between transformational leadership style in
owned and –led small businesses and organizational success measured by
employee satisfaction with leadership.
H7a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with leadership.
H80: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with leadership.
H8a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with leadership.
H90: There is no relationship between passive avoidant/laissez-faire
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with leadership.
H9a: There is a relationship between passive avoidant/laissez-faire
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with leadership.
The researcher used Bass and Avolio’s Multifactor Leadership Questionnaire
(MLQ) survey (MLQ for Researchers, 2013) to collect data to measure the predictor
94
:
woman-
variables and criterion variable. Three MLQ survey instruments were used to collect and
analyze data using a 5-point Likert–type scale for data measurement- the MLQ Leader
Form, the MLQ Rater Form, and the MLQ Scoring Key Form 5x. The MLQ Scoring Key
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Form 5x survey captures and measures full-range leadership styles. As the most validated
measure of transformational and transactional leadership styles (MLQ for
Researchers, 2013), the MLQ is used in a large number of research studies (Ayman et al.,
2009; Cassard & Hamel, 2008; Chung-Wen, 2008; Frazier, 2013; Hamel, 2007; Just,
2011; Ling et al., 2008; Ryan & Tipu, 2013; Tafvelin et al., 2011; Valdiserri & Wilson,
2010; Velkova, 2011; Wadensten, 2012; Weatherly, 2012; Yitshaki, 2012). Frazier
(2013), using the MLQ, measured the relationship between leadership behaviors and job
satisfaction and organizational performance using correlation coefficient analysis.
Analysis of the findings revealed a positive correlation between employee job satisfaction
and organizational performance. Leadership styles of small businesses owners was
shown to be predictive of organizational performance and outcomes (Just, 2011). The
findings from the Valdiserri and Wilson (2010) research study, of which the current study
is an extension, revealed leadership styles in small construction businesses influenced
profitability and organizational success.
Appropriateness of Design
The quantitative descriptive correlational research study was designed to examine
the relationship between leadership styles (the predictor variables) in woman-owned and
–led small businesses and organizational success (the criterion variable). Research design
can be compared to architectural design (de Vaus, 2011). An architect must first
determine what type of building is being constructed to ensure the plans will achieve the
desired outcome. Similarly, a researcher must first determine, based on the research
question, what type of evidence needs to be collected to answer convincingly the question
or test the theory (de Vaus, 2011). In quantitative research, a researcher is testing
96
whether the independent variable influences the outcome or dependent variable. A
researcher examines “the predicted relationship among variables in the theory, and then
test the relationships with new participants or at new sites” (Creswell, 2005, p. 128).
Qualitative research is more subjective so control is important to contain researcher
biases. The researcher should consider techniques, like audits by an outside researcher,
for justification of the study since subjectivity can call into question the reliability and
validity of the study (Creswell, 2005). Based on the research questions previously stated,
the method chosen for the current study was a quantitative design accompanied by survey
instruments.
Quantitative research designs include experimental and non-experimental (de
Vaus, 2011; Leedy & Ormrod, 2010). The goal of experimental and quasi-experimental
research studies is to examine the outcomes of an intervention. In experimental research
studies, the researcher manipulates the variables by establishing the conditions for
behaviors being studied to measure the other variable. However, researchers do not
control for all the confounding variables in quasi-experimental research studies;
therefore, the researchers must take into consideration whatever variables and
explanations are not controlled when interpreting the data (Leedy & Ormrod, 2010).
The goal of non-experimental research is to describe the direction and size of the
relationship between variables or to provide an accurate description of a situation. The
key characteristic is the collection of data without any intervention. Correlational method
is non-experimental, non-manipulative, and describes the relationship between two or
more variables without directly attributing effect of one variable on another (Salkind,
2008; Whittemore & Melkus, 2008). The researcher observes naturally occurring
97
behavior (Cozby, 2009; Neuman, 2011). Explaining a particular phenomenon by an
examination of the relationships between variables is the aim of descriptive research
(Cozby, 2009; Leedy & Ormrod, 2011; Salkind, 2008). Descriptive correlational research
was in alignment with the goals of this study: to examine the relationship between
leadership styles and organizational success with the resulting data analysis contributing
to the existing knowledge in the area of leadership and success in womanowned and -led
small businesses.
Surveys use self-report measurement techniques to collect data quickly and
inexpensively to address research questions and to study relationships between variables
and changes in behaviors. The survey method is a way for researchers to study
relationships among variables to learn more about populations by using a sample from a
population (Cozby, 2009; Neuman, 2011). Observation (direct or participant) and
unstructured interviews are alternative data collection methods (Cozby, 2009; Neuman,
2011). These methods can be prohibitive with the financial costs and time required to
conduct interviews or observations and code and analyze data. Researcher biases can
occur during observation and coding, which can influence the outcome of results
(Christensen et al., 2011). The MLQ 5x-Short, a computerized self-administered
questionnaire (MLQ for Researchers, 2013), was used to collect data to measure the
predictor (independent) variables and criterion (dependent) variable. With this method,
data were collected without intervention or influence of researcher (Christensen et al.,
2011; Salkind, 2008; Whittemore & Melkus, 2008).
For analysis of results from survey research to be considered an accurate
representation of the studied population, scientific sampling techniques must be used to
98
identify the study sample (Cozby, 2009). The non-random sampling technique known as
purposive or judgmental sampling approach was selected for this study, which was
appropriate when sampling for specific or special situations. The researcher used
methods to locate subjects who could best provide the required information (Neuman,
2011; Sekaran & Bougie, 2010).
The MLQ survey was used to collect data on leadership styles in many studies
cited in the study including research by Cassard and Hamel (2008), Chung-Wen (2008),
Tafvelin et al. (2011), Wadensten (2012), Walumbwa and Hartnell (2011), Weatherly
(2012), and Yitshaki (2012). Avolio et al. (1999) and Avolio and Bass (2004) reexamined
the components of transformational and transactional leadership styles using the MLQ
Form 5x to determine the best fitting models. The comprehensive study included United
States and foreign organizations covering a range of firms with 45 members to 549
members. In all, 3786 respondents described their respective leader by completing the
MLQ Form 5x. The descriptive statistics and reliabilities for the MLQ Form 5x for all
items and for each leadership factor scales were generally high ranging from 0.74 to 0.94
(Avolio & Bass, 2004). The MLQ survey is the most validated measure of
transformational and transactional leadership (MLQ for Researchers, 2013). The use of a
well-established and validated survey instrument can eliminate problems associated with
survey instruments, such as questionnaire length (the number of items and completion
time), reliability, and readability level (Christensen et al., 2010). The MLQ questionnaire
takes approximately 15 minutes to complete and is written at United
States ninth-grade reading level (Avolio & Bass, 2004).
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Population
The U.S. Small Business Administration (2010a) defines a small business as
having 500 or fewer employees. However, most small businesses are considerably
smaller with fewer than 20 employees and nearly 80% with no employees (U.S. SBA
Profile, 2013). The target population of this research study met the criteria established by
the U.S. Small Business Administration small business profile.
The group of individuals of interest to the researcher comprises the target
population (Cozby, 2009), which set the parameters of the current study. The study target
population consisted of owner/leaders and employees from woman-owned and -led small
businesses with fewer than 20 employees a) licensed by the City of North Myrtle Beach
Business License Department during the period of 2013-2014 and b) current members of
the North Myrtle Beach Chamber of Commerce. The service-sector organizations were
limited to professional, business, and personal services businesses in
North Myrtle Beach, South Carolina. Permission to access business lists from the North
Myrtle Beach Chamber of Commerce and the City of North Myrtle Beach is presented in
Appendix A and Appendix B, respectively.
Informed Consent
The recommended protocols for conducting research with human participants
were integrated in the quantitative research design. The researcher provided study
participants with all information that may have influenced their decision to participate
prior to making that decision. Participants were informed about the purpose, the nature,
and the reason for the study. Employees were be informed of the voluntary nature of
participation and that participation was not a requirement of employment or any other
100
factor. Participants were assured of the confidentiality of their responses to the MLQ
survey questions and of their right to refuse or terminate participation at any time.
Participants received a written explanation of the current study via email so they
understood better what was expected from him or her when completing the MLQ survey
instruments.
After review of the informed consent on the Mind Garden Transform website (see
Appendix I), participants either agreed to participate by clicking on the “Agree” button or
declined by clicking on the “Disagree” button. Participants were informed selection of
the “Agree” button represented the signature of the participant with the same legally
binding powers, and he or she was stating they were 18 years old or order and had read
and understood the informed consent form and agreed to participate in the research study.
They were instructed to print a copy of the informed consent page for their records.
Participant selection of the “Agree” button permitted access to the survey instruments.
Participants who declined did not receive access to the survey instruments. The identity
of the participants or respondents or their affiliated organizations was suppressed by
Mind Garden to ensure confidentiality and privacy.
Sampling Frame
Based on the defined population of a study, the sampling frame is the set or list of
people representing the sample within a population. The alignment of the sampling frame
and the defined population is crucial to sample accuracy and validity (Cozby, 2011;
Neuman, 2011). Quantitative sampling approaches are categorized as probability
sampling and non-probability sampling. Random selection is used in the probability
sampling method so “the researcher can assume that the characteristics of the sample
101
approximate the characteristics of the total population” (Leedy & Ormrod, 2010, p. 205).
When representativeness of the sample is critical to the study, probability sampling is
appropriate because each element of the population has an equal chance of selection as a
sample subject (Sekaran & Bougie, 2010).
Non-probability sampling is appropriate for when sampling for specific or special
situations. The researcher uses methods to locate subjects who can best provide the
required information (Neuman, 2011; Sekaran & Bougie, 2010). Guided by the study
purpose and focus, the non-random sampling technique known as purposive or
judgmental sampling approach was selected for this study.
Following IRB approval, the researcher sorted North Myrtle Beach business
license data and North Myrtle Beach Chamber of Commerce data to exclude businesses
outside the target population: a) male-owned businesses; b) businesses with 20 or more
employees; c) businesses without employees; d) businesses outside the professional,
business, and personal service sectors; and e) businesses outside North Myrtle Beach.
The remaining businesses received a preliminary recruitment postal letter, with the
researcher’s contact information, requesting their assistance and participation in the study
(see Appendix J). A phone call followed to answer questions, to confirm the organization
met the parameters set for the population, and, if so, see if the leader/owner was
interested in participating in the study. The researcher offered to come to the business at
a pre-arranged time with a delicious, healthy snack and non-alcoholic beverage to explain
the study and the survey process to all potential voluntary participants and leaders. The
e-mail addresses of the owner/leaders who volunteered to participate, and potential
employee/raters invitees provided by the owner/leaders, were collected during this
102
process. The number of participant employee raters was subject to the number of
participant business leader/owners. The search identified 52 woman-owned and –led
businesses that fit within the specified parameters. Twenty-two of the eligible business
owners were willing to participate, resulting in 65 people who meet the eligibility
requirement for participants – 22 owner/leaders and 43 raters.
The sample size of the study was determined using statistical methods. The
number of participants required to detect a significant relationship or difference, if they
exist (Cozby, 2009), was determined by power analysis using the Raosoft® (2014) online
sample size calculator tool. Raosoft® is a producer of survey software programs for
information gathering and analysis. The free sample size calculator computes the critical
value for the normal distribution (Raosoft, 2014). Criteria for calculating the require
sample included a) the population size of eligible participants of 65, b) a 5% margin of
error, c) a confidence level of 95%, and d) a response distribution of 50% (Raosoft,
2014). The calculation was based on normal distribution and the assumption of more
than about 30 samples. The sample size n and margin of error E are given by the
following:
x = Z (c /100)2r(100-r) n = N
x /((N -1)E 2 + x )
E = Sqrt[(N - n )x /n (N -1)]
n = the population size, r = the
fraction of responses of interest
Z(c/100) is the critical value for the confidence level c (Raosoft, 2014).
103
The desired sample size of participants required for the study was n=56. Sixty
participants completed the survey – 20 owner/leaders and 40 raters. Two owner/leaders
withdrew from the study with two employees and one employee from a participating
business declined to participate. Based on Raosoft® power analysis and previous studies
(Cifuentes, 2013; Frazier, 2013; Hamel, 2007; Just, 2011; Kolapo Sakiru et al., 2013;
Salman et al., 2011; Valdiserri & Wilson, 2010; Wadensten, 2012), the sample size was
adequate to generalize to the population of women-owned and –led businesses with fewer
than 20 employees in the United States once statistical analyses were conducted. With
the population size of this research study, if all eligible participants responded, the
generalizability of the study results was supported in comparison to responses from a
small percentage from a large sample (Raosoft, 2014). The research study had a response
rate of 98% (60 of 61 eligible participants).
Confidentiality
Participants were assured of the confidentiality of their responses to the MLQ
survey questions by completing the electronic consent letter and form in the Mind Garden
website prior to completing the survey instruments. No names of the participants or
respondents or their affiliated organizations were among the collected survey data to
ensure confidentiality and privacy. Additionally, a Confidentiality Statement Form was
signed both by the researcher and the committee chair (see Appendix K). The researcher
kept any information used to identify a participant or affiliated organization in a locked
file, which was accessible only by the researcher. Electronic data was stored by the
researcher on a separate flash drive for use on a personal computer with password
protection (de Vaus, 2011).
104
Information received on the Mind Garden Transform system website was
confidential and was not shared or revealed to anyone other than the researcher. The
researcher had no contact with the participants during data collection because the
respondents responded directly to an electronic data collector. As the participants were
not disabled, less privileged, or related to the researcher, participant vulnerability to
unethical research practices was minimal. The raw data will remain on file for three
years. At that time, all electronic/computer data will be destroyed and deleted, and all
hard copy data will be shredded.
Geographic Location
According to the Corporation for Enterprise Development (CFED) Annual Assets
and Opportunity Scorecard, South Carolina ranks 37th in the nation for the percentage of
the labor force owning small businesses based on data from the United States Census
Bureau and the Bureau of Labor Statistics (CFED, 2013). However, the county business
patterns of Horry County, South Carolina, in which North Myrtle Beach is located, are
favorable to accessing the study population and sample. Twenty-three percent of Horry
County businesses are woman-owned (U.S. Census Bureau, 2007) and 33% Horry
County businesses are professional, business, and personal services businesses (County
Business Patterns, 2012).
Instrumentation
Three surveys from Bass and Avolio’s MLQ 5-x Short were used for data
collection and scoring. The MLQ Scoring Key (5x) Short was used to score the MLQ-5x
by computing the average of total response values related to a variable. There were four
items per leadership style factor or scale plus nine outcome items – three for extra effort,
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four for effectiveness, and two for satisfaction (Avolio & Bass, 2004). The MLQ-5x
scoring methodology and the relationship of items and variables are presented in Table 5.
Scores were computed for statistical analysis for each leadership scale measured for each
operationalized criterion variable.
Employee rating and attitude surveys provide a subjective measurement of leader
effectiveness and employee satisfaction with leadership (Bass, 2008). The MLQ was
used by Frazier (2013) to measure transformational and transactional leadership styles in
an examination of the relationship between leadership styles and organizational culture
and employee job satisfaction and performance. Results of the survey demonstrated a
significantly positive correlation between transformational and transactional leadership
behaviors and employee job satisfaction with effectiveness in organizational culture. The
average correlational coefficient (r) among the dimensions was .96. Frazier’s survey also
revealed a significantly positive correlation between transformational and transactional
leadership dimensions/factors and organizational culture, and employee job satisfaction
with organizational performance with r = .96. Internal consistency of the leadership
measurement was supported by analysis of the study results of a 99% confidence level.
Valdiserri and Wilson’s (2010) research study of the relationship between
leadership styles (i.e., transformational, transactional, laissez-fair) and organizational
profitability and success in small businesses in the construction industry sector used the
MLQ survey. A strong and significant correlational coefficient (r) of .669 was revealed
between transformational leadership style and employee effectiveness. The correlational
coefficient was .587 for the relationship between transactional leadership style and
employee effectiveness, demonstrating a moderately strong positive relationship. The
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relationship between transformation and transactional leadership styles and organizational
profitability were supported by correlational coefficients of .669 and .587, respectively.
The survey results revealed weak relationships between laissez-faire leadership style and
a) organizational success with a correlational coefficient of .181 and
b) organizational profitability with a correlational coefficient of .167.
The validity and reliability of the MLQ survey supported in the research studies
cited above supports the reliability of the study. The MLQ survey uses a 5-point
Likerttype scale for measuring perceptions of leadership styles and outcomes of
leadership. The rating scale to evaluation the MLQ factors will be arranged as follow: “0
= not at all, 1 = once in a while, 2 = sometimes, 3 = fairly often, and 4 = frequently, if
not always” (Avolio & Bass, 2004, p.14). Table 6 contains the MLQ leadership style and
outcomes of leadership scales, subscales, and attributes.
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Table 5
MLQ-5x Scoring Methodology
Variable Scale Name MLQ-5X Items Scoring Method
Transformational Idealized Attributes or
Idealized Influence
(Attributes)
10, 18, 21, 25 Average of total response
values
Transformational Idealized Behaviors or
Idealized Influence
(Behaviors)
6, 14, 23, 34 Average of total response
values
Transformational Inspirational Motivation 9, 13, 26, 36 Average of total response
values
Transformational Intellectual Stimulation 2, 8, 30, 32 Average of total response
values
Transformational Individual Consideration 15, 19, 29, 31 Average of total response
values
Transactional Contingent Reward 1, 11, 16, 35 Average of total response
values
Transactional Management by Exception
(Active)
4, 22, 24, 27 Average of total response
values
Passive Avoidant Management by Exception
(Passive)
3, 12, 17, 20 Average of total response
values
Passive Avoidant Laissez-Faire 5, 7, 28, 33 Average of total response
Outcome Characteristic Scale Name Items Items
Outcomes of Leadership Extra Effort 39, 42, 44 Average of total response
values
Outcomes of Leadership Effectiveness 37, 40, 43, 45 Average of total response
values
Outcomes of Leadership Satisfaction 38, 41
Average of total response
values
108
Note. Adapted with permission from Multi Leadership Questionnaire Manual and
Samples Set by Bruce J. Avolio and Bernard M. Bass, 2004, Mind Garden, Inc.
Table 6
Leadership and Outcomes of Leadership Scales in the Multifactor Leadership Questionnaire
Leadership Styles Attributes
Transformational
Idealized attributes
Idealized behaviors
Inspirational motivation
Intellectual stimulation
Individualized consideration
Transactional
Contingent reward
Management-by-exception active
Laissez-faire Passive/Avoidant
Management-by-exception passive
Demonstrates a sense of power, confidence, and
qualities that followers want to emulate and
identify with.
Communicates the organizational values,
beliefs, mission, and purpose and the
ethical and moral consequences of decision-
making.
Enthusiastically articulates a vision for the
future and expresses confidence in achieving
goals.
Seeks new perspective for problem solving
and stimulates innovation and creativity of
followers by questioning assumptions.
Focuses on mentoring or coaching individuals to
optimize potential and meet each individual’s
need for growth and achievement.
Clarifies expectations and provides rewards for
satisfactory performance by followers.
Focuses on monitoring follower’s mistakes and
failure to meet standards and taking corrective
action after the fact.
Avoids decision-making or involvement and is
frequently absent.
Takes action after followers make mistakes or
after problems occur.
Outcomes of Leadership Styles Attributes
Extra effort Motives others to exceed expectations, increase
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Satisfaction with leadership
Effectiveness of leadership
willingness to work, and desire success.
Uses leadership methods that satisfy employees
and works well with others.
Effective in leading and representing groups,
meeting organizational requirements, and needs
of others.
Note. Adapted with permission from Multi Leadership Questionnaire Manual and
Samples Set by Bruce J. Avolio and Bernard M. Bass, 2004, Mind Garden, Inc.
Data Collection
The MLQ survey instruments were administered electronically using the Mind
Garden Transform Online Survey system (Bass & Avolio, 2004). The administration of
demographic questionnaires designed for the participant/leaders and participant/raters
(employees) by the researcher (see Appendix C and D) augmented the demographic data
collected by the instruments. All participants completed the instruments and
questionnaire online at the Mind Garden Transform website. Participants were required
to give consent prior to gaining access to the survey.
To facilitate administration of the MLQ, the researcher purchased a License to
Reproduce/Administer from Mind Garden (see Appendix L). A custom 360 multi-rater
campaign was created using Mind Garden’s Transform system with several people rating
each individual leader. The Transform system is effective for researchers as it is designed
to handle effectively the complexities of a multi-rater campaign and provides a
convenient method for receiving and integrating ratings (MLQ for Researchers, 2013).
As the administrator, the researcher logged in to the Transform system to enter the name
and e-mail address of each participant/leader and those individuals who were invited to
rate the leaders. An e-mail sent via [email protected] to the
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participant/leaders (see Appendix M) provided a link to a participant page for each
individual to be rated to complete their self-rating and demographic survey online.
E-mail sent via [email protected] to participant/rater invitees (see
Appendix N) provided inform on the research study and participation instructions,
requested voluntary participation, and told them to expect communication from
[email protected] to access the rating survey linked to his or her leader and a
demographic survey online. Rating email notices were sent from
[email protected] (see Appendix O) (Transform by Mind Garden, 2011). The
researcher/administrator went to the Transform website to check on the status of the
participants and to send e-mail reminders, when necessary.
Data Analysis
Statistical analyses for data was conducted using the Statistical Package for the
Social Sciences® Version 21(SPSS) and Excel® computer programs for Windows®.
Statistical analyses was performed after data collection to determine the relationship
between leadership styles and organizational success. The researcher accessed a .cvs file
including raw scores by question and by scale and the demographic survey data for
leaders and employee raters.
Prior to data analysis, Pearson (r) correctional test and multi regression analysis
were determined as appropriate analytical tools for the data collected for the study.
Distribution of data were assessed initially using with descriptive statistical tests of
kurtosis and skewness to measure the deviation from normality. Based on the results,
normality was assessed with the Kolmogorov-Smirnov (KS) test and found to be
significant, reflecting a non-normal distribution for 100% of the data. Pearson (r)
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correlation coefficient, a parametric test, is the most frequently used measure of
relationships between the variables being correlated for data that has been assessed to be
normally distributed (George & Mallery, 2014). For this study, Spearman (rs) rank
correlation, an equivalent non-parametric test to the Pearson (r) test, was selected based
on the non-normal distribution of data. Coefficients reflect the strength and degree of
positive or negative relationship between the independent (predictor) and dependent
(criterion) variables expressed on an index between +1.00 and -1.00 (Neuman, 2011;
Salkind, 2008).
The linear relationship between the multiple predictor variables and the multiple
criterion variables were analyzed using multivariate multiple regression analysis to
determine the combined relationships (Dattalo, 2013). A number of different variables
may be related to a given behavior; therefore, the process of multiple regression analysis
can increase the prediction accuracy for a given criterion variable by combining a number
of predictor variables (Cozby, 2009). The result of multivariate multiple regression
analysis is a regression equation. Direct evaluation of the comparative strengths of
relationship between the variables was measured using standardized coefficients called
Beta (β). As with Spearman (rs) coefficients, Beta (β) values vary between ±1.0 (George
& Mallery, 2014). R-square (R²) is the amount of variance explained in the criterion
variable by the predictor variables. The correlation coefficient R, the root of R², can take
on values between 0 and 1. The level of significance was a < .05 for the study, which
formed the basis for rejection of the null hypotheses (Dattalo, 2013). Additionally, the
multi-regression model assumes the normal distribution of data but normal distribution is
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not critical to obtaining accurate results (George & Mallery, 2014; Simon, 2006). Factor
analysis was used to identify the factors that explain most of the variance that was
observed before multivariate multiple regression analysis was performed. Factor analysis
is used in studies as a method to screen variables prior to performing linear regression
analysis, enabling comparison of the results of relationships of multiple variables (IBM,
2014).
Study results included reports and interpretation of the strength and direction of
the correlations plus descriptive analysis statistics. The demographic characteristics
collected from the leader/participants included age, education level, previous leadership
and business ownership experience, and whether the owner started the present business
(see Appendix C). The demographic characteristics collected from the rater/participants
included age, education level, and length of present employment (see Appendix D). The
demographic data of the characteristics of the study population were described using
descriptive analysis statistics (e.g., frequency and percent distribution).
Validity and Reliability
Validity is the extent to which a researcher has measured adequately or truly the
stated variables. The researcher’s selection of study design, data collection, and sampling
are among the many factors that enhance or threaten validity (Cozby, 2009). The
construct validity of a research study is dependent on how well the instrument measures
the stated phenomenon or variables (Cozby, 2009; Whittemore & Melkus, 2008). Internal
validity is determined by the extent the detected affects reflect reality and are not a result
of extraneous factors. The generalization of the study findings beyond the study sample
is a determinant of external validity (Whittemore & Melkus, 2008).
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The validity of the current study was dependent on the ability of the research
method to address the research question. Therefore, validity was influenced by the
inability to measure or infer cause and effect inherent in the descriptive correlational
research method. A number of third variables can influence the observed relationships
between variables (Cozby, 2009) as it is not possible to observe one phenomenon
producing the change in another (deVaus, 2011). The threats of construct validity and
internal validity were addressed in the study by the use of a well-established and
validated survey instrument.
The MLQ (5x-Short), the latest version, is considered to be the best validated
instrument to gauge transformational, transactional, and laissez-faire leadership styles and
behaviors and the most popular instrument for measuring transformational leadership
style (Bass, 2008; MLQ for Researchers, 2013; Yang, 2008). Validity is documented for
MLQ Rater Form for the relationship between rater evaluation of leaders and
organizational success (Avolio & Bass, 2004). As presented in the literature review, the
MLQ was used in a number of research studies across a broad range of businesses
(Ayman et al., 2009; Cassard & Hamel, 2008; Chung-Wen, 2008; Frazier, 2013; Hamel,
2007; Just, 2011; Ling et al., 2008; Ryan & Tipu, 2013; Tafvelin et al., 2011; Valdiserri
& Wilson, 2010; Velkova, 2011; Wadensten, 2012; Weatherly, 2012; Yitshaki, 2012).
Problems of generalization can be overcome by using statistical methods to
determine the sample size required to detect a significant relationship or difference, if
they exist (Cozby, 2009). The current research study had a response rate of 98% (60 of
61 eligible participants) with essentially all eligible participants responding. Thus
increasing the generalizability of the study results, especially when compared to studies
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with a small percentage of respondents from a large sample (Raosoft, 2014). MLQ
results can be influenced when leaders select and contact raters rather than an
independent authority, resulting in inflated scores by as much as one unit as compared to
the norms (Avolio & Bass, 2004). This was addressed by explaining to the owner/leader
the importance of inviting all employees. The researcher sent e-mail invitations via
[email protected] to all potential employee raters for voluntary
participation (Transform by Mind Garden, 2011). In a multi-rater campaign, the ideal
number of raters per leader is eight to 10 and a minimum of three raters per leader is
suggested (Avolio & Bass, 2004). As the study included businesses with fewer than 20
employees, businesses with fewer than three employees were included in the study.
Whereas truthfulness is suggested by validity, consistency or dependability is
suggested by reliability (Neuman, 2011). Reliability is “the degree of consistency or
dependability with which an instrument measures what it is designed to measure”
(Whittemore & Melkus, 2008, p. 210). Reliability analysis for the current study, to
examine how well the different items in the MLQ measure the same behavior or outcome
factor scale, was checked using the Cronbach’s alpha reliability coefficient. Reliabilities
over 0.8 are considered good, while those in the 0.7 range are considered acceptable and
less than 0.6 are generally considered poor (Sekaran & Bougie, 2010).
The MLQ has been used over 25 years in a wide range of industries including the
military, governmental and non-governmental agencies, and Fortune 500 firms and small
businesses in a variety of sectors. In addition, the MLQ has been administered in various
forms in more than 30 countries and in many languages (Avolio & Bass, 2004). The
effectiveness of the MLQ over time supports the reliability of the survey instrument. The
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Multifactor Leadership Questionnaire Manual contains reports of the reliabilities of and
validity of the MLQ 5-x survey. The comprehensive study by Avolio et al. (1999) and
Avolio and Bass (2004) to reexamine components of leadership (i.e., transformational and
transactional) using the MLQ 5x included United States and foreign organizations. The
reliabilities for all items and for all leadership factor scales ranged from 0.74 to 0.94
(Avolio & Bass, 2004).
Summary
The purpose of the descriptive correlational quantitative research study was to
examine the relationship between leadership styles and organizational success within
woman-owned and –led service-sector small businesses in North Myrtle Beach, South
Carolina. The goal of the study was the resulting data analysis contributing to the
existing knowledge in the area of leadership styles and organizational success in
womanowned and -led small businesses. The quantitative methodology identified the
relationship between the predictor variables of leadership styles and the criterion variable
of organizational success. The chapter contained an assessment of the research method
and design appropriateness followed with a discussion on the MLQ survey instrument,
which was used to collect data to measure leadership styles and leadership behavior data.
In addition, the reliability and validity of the MLQ instrument and the research design
were examined.
The participants of the study were women business owner/leaders and their
employees in professional, business, and personal services small businesses with fewer
than 20 employees in North Myrtle Beach, South Carolina. Participation in the study was
voluntary. The chapter continued with a discussion on participant protections, informed
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consent, and confidentiality plus population and sampling, data collection procedures and
rationale, and validity and reliability.
Correlational analysis was applied to measure the correlation coefficient of the
criterion variables to determine the strength and direction of the relationship. Data was
correlated using the Spearman (rs) rank correlation test to measure each predictor variable
against the operationalized criterion variables. The linear relationship between the
multiple predictor variables and the multiple operationalized criterion variables was
analyzed using factor analysis and multivariate multiple regression analysis. Study
results included reports and interpretation of the strength and direction of the correlations
plus descriptive analysis statistics. The research design guided the analysis contained in
Chapter 4, and the summary, conclusions, and recommendations presented in Chapter 5.
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Chapter 4
Results
The purpose of this quantitative descriptive correlational research study was to
examine the relationship between leadership styles (predictor variables) in woman-owned
and –led small businesses and organizational success (criterion variable) in service-sector
industries in North Myrtle Beach, South Carolina. Participants completed the Multifactor
Leadership Questionnaire (MLQ) survey, as well as a demographic survey. Data analysis
presented in this chapter was conducted to examine the relationship of perceived
leadership styles as defined by full-range leadership theory (FRLT), known as
transformational, transactional, and laissez-faire, and organizational success.
The target population within the study sample was owner/leaders, subordinates,
and partners within women-owned and –led small businesses in North Myrtle Beach,
South Carolina. The size of target popultion was 65 and the sample used was 60 after two
business owners withdrew from the study (a total of four participants) and one employee
rater declined to participate resulting in a response rate of 98% (60 of 61 participants).
Incorporated in this chapter are in-depth discussions of quantitative results of the study
including descriptive data collected in the study, data analysis, data results, and the
chapter summary.
Data Collection Process
Data for this study came from the surveyed participant owner/leaders,
subordinates, and partners within women-owned and –led small business in North Myrtle
Beach, South Carolina whose owner/leaders volunteered to participate. Owner/leaders
authorized the voluntary participation of subordinates and partners by providing
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employee first and last names and email addresses. If there were businesses partners,
owner/leaders provided first and last names and email addresses and designated them as
partners. The owner/leaders were asked to supply a complete list of employees for
voluntary participation; however, researcher access was limited to the information
provided by the owner/leader.
Following IRB approval, the data collection process began with the release of
email messages to the owner/leader participants who volunteered to take part in the
dissertation research study (see Appendix M). The personalized email messages
contained a direct link to access the Multifactor Leadership Questionnaire and
demographic survey on the Mind Garden Transform system website, after completing the
electronic informed consent form (see Appendix I). The data collection process
continued with the release of email messages to subordinates and partners (i.e.,
participant raters) informing him or her of the dissertation research study and the
owner/leader’s voluntary participation, plus a request for his or her voluntary
participation in rating the owner/leader (see Appendix N). A second email to participant
raters followed with a direct link to access the Multifactor Leadership Questionnaire and
demographic survey on the Mind Garden Transform system website (see Appendix O),
after completing the electronic informed consent form (see Appendix I). The raw data
from participants, as well survey responses, by question and by scale, were compiled and
calculated by Mind Garden. The identity of the participants was suppressed by Mind
Garden to ensure confidentiality and privacy. The .cvs data file was downloaded from the
Transform site by the researcher for transfer in Statistical Package for the Social
Sciences® Version 21(SPSS) for analysis.
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The data were saved as an Excel® spreadsheet with each column representing the
participants’ responses. Because the identity of the participants was suppressed in the
data file, alpha-numeric identification numbers were assigned to match scores with
participant owner/leaders and associated partcipant raters. Electronic data resided on a
separate flash drive with storage on a personal computer with password protection and
only the researcher had access (de Vaus, 2011).
Findings
Access to the survey was distributed by email to 22 woman-owned and –led small
service-sector businesses located in North Myrtle Beach, South Carolina. Two businesses
owners who volunteered to participate withdrew from the study after one of the leaders
had completed the survey and no employees had responded. Both participant businesses
were removed from the study by deleting leader and rater information and data collected
from the Transform site. Additionally, one employee from a participating business did
not respond to the survey. Organizational success was the criterion variable and of
primary consideration for the quantitative analysis.
The employee classifications for the study sample were owner/leaders, partners,
managers, and other employees. The study sample participants who completed the MLQ
and demographic surveys were composed of 20 owner/leader participants and 40
participants combined from the remaining categories. Three MLQ survey instruments
were used to collect and analyze data using a 5-point Likert–type scale for data
measurement- the MLQ Leader Form, the MLQ Rater Form, and the MLQ Scoring Key
Form 5x to capture and measure full-range leadership theory styles. Measured with the
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MLQ 5x-Short, owner/leader self-perceptions and employee rater perceptions of their
leaders in three areas were a) extra effort (motivation), b) effectiveness, and c)
satisfaction with leadership.
Presentation and analysis of data. The current study results are presented by
demographic data of the participants, statistical analysis of data related to the research
questions and hypotheses, and a chapter summary.
Descriptive statistics for demographics. Participants were asked to complete a
demographic survey in addition to completing the MLQ survey. The information was
entered into a spreadsheet with each column representing the survey responses of the
participants and identification numbers used to match the responses with the participants.
Both participant/leaders and participant/raters reported their gender, age, education, and
ethnicity. In addition, participant/raters were asked to report their length of time on the
job and managerial role within the company. Participant/leaders were asked to report
their length of previous work experience; previous experience as business manager,
business leader, and other leadership roles; and current business formation, ownership
structure, and number of employees (full-time and part-time). Table 7 contains the
gender distribution of owner/leaders, partners, self-identified managers, and other
employees. The distribution of the population between female and male participants was
unbalanced. However, the distribution presented an accurate representation of
womanowned professional, business, and personal service-sector business organizations.
Table 8 contains the distribution of owner/leaders, partners, managers, and other
employees by organization positions.
Of the 60 study participants, one (1.67%) was between the ages of 18 and 24, 15
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(25%) were 25-34 years of age, eight (13.33%) were 35-44, 15 (25%) were 45-54, 17
(28.33%) were 55-64, and four (6.67%) were 65-75 years old. Participants included 51
(85%) White, five (8.3%) Hispanic, one (1.67%) Black, and one (1.67%) Asian. Two
(3.33%) participants preferred not to answer. Amongst the 60 study participants, seven
(11.67%) reported high school or GED as their highest educational level and 10 (16.67%)
reported vocational or trade school. Eight (13.33%) participants attended college while
16 (26.67%) reported associate’s degrees, 10 (16.67%) reported bachelor’s degrees, three
(5%) reported master’s degrees, and six (10%) reported doctoral or professional degrees.
Of the 40 rater participants, three (6.67%) reported the length of employment with their
organization as 0-1 years, 12 (30%) reported 2-3 years, 14 (35%) reported 4-5 years,
seven (11.67%) reported 6-10 years, and four (10%) more than 10 years. Tables for these
four demographic categories are presented in Appendix P.
Table 7
Gender Distribution of Respondents (N =60)
Company Position Female Male No Response
n % n % n %
Owner/Leader
Partner
Manager
Other Employees
Total
20
0
3
26
49
33.33%
0
5.00%
43.33%
81.66%
0
2
1
7
10
0
3.33%
1.67%
11.67%
16.67%
0
0
0
1
1
0
0
0
1.67%
1.67%
Table 8
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Company Position of Respondents (N=60)
Company
Owner
/Leader Partner Manager Employee No
Response
P1 1 0 1 2 0
P2 1 0 0 1 0
P3 1 0 0 1 0
P4 1 0 0 4 0
P5 1 0 0 2 0
P6 1 0 0 1 0
P7 1 0 0 2 0
P8 1 1 1 2 0
P9 1 0 0 1 0
P10 1 0 0 2 0
P11 1 0 1 2 0
P12 1 0 0 2 0
P13 1 1 1 1 0
P14 1 0 0 1 0
P15 1 0 1 1 0
P16 1 0 0 2 0
P17 1 0 0 1 0
P18 1 0 1 1 0
P19 1 0 0 1 0
P20 1 0 0 2 0
Self-reported demographic data of the owner/leader participants, presented in Table 9,
provided information regarding previous leadership, managerial, business ownership, and
work experience. In addition, data is presented on present business conditions including
formation, ownership structure, and employment levels. Of the 20 owner/leader
participants, one (5%) reported the length of previous work experience as 0-1 years, five
(25%) reported 6-10 years, four (20%) reported 11-20 years, and eight (40%) more than
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20 years. Two (10%) preferred not to answer and none reported 2-5years. The majority
of owner/leaders reported prior managerial and/or leadership experience, with 14 (70%)
reporting managerial experience, 13 (65%) holding previous leadership positions in
business, and 10 (50%) holding previous leadership positions in social, civic, or other
organizations. Additionally, nine (45%) of the owner/leaders had started other
businesses. As might be expected, the nine leaders with previous entrepreneurial
experience also reported previous managerial experience and leadership positions in
business.
Of the present businesses, 15 (75%) were started /founded by the owner/leader
while four (20%) were purchased as existing businesses, and one (5%) was inherited.
Fifteen (75%) of owner/leaders were sole business owners, two (10%) had a team/partner
ownership structure, two (10%) family ownership, and one (5%) preferred not to answer.
Regarding employees, 12 (60%) owners reported employing 1-5 part-time employees,
seven (35%) with no part-time employees, and one (5%) preferred not to answer.
Regarding full-time employees, 14 (70%) owners reported 1-5 employees, two (10%)
with more than five, three (15%) with no full-time-employees, and one (5%) preferred
not to answer.
The self-reported information in several response categories was not
representative of women business owners in the United States. According to 2008 United
States Census data, three-quarters of women founded their own small business (which is
consistent with the study data), of which the majority had never owned a business
previously and half owning their business for fewer than 10 years. Thirty-five percent of
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women small business owners are under age 45 and more than half have less than a
bachelor’s degree (United Stated Small Business Administration, 2010b).
Table 9
Leadership/Ownership Distribution of Participant/Leader Respondents (N = 20)
n % n % n % n %
Previous work experience 0-1 years
1 5%
More than 20 years
8 40%
2-5 years
0 0
Prefer not to answer (PNTA)
2 10%
5 6-10 years
2
11-20 years
5% 4
20%
Previously held managerial
position
Yes
14 70%
No
6 30% 0
PNTA
0
Previously held leadership
position in business
Yes
13 65%
No
7 35% 0
PNTA
0
Previously held
leadership position in
social, civic or other
organization
Yes
10 50%
No
10 50% 0
PNTA
0
Started other businesses Yes
9 45%
No
11 55% 0
PNTA
0
How present business was
formed
Started/ founded new
business
15 75%
Purchased existing business
4 20%
Inherited business
1 5%
Other/ PNTA
0 0
Ownership structure Solely owned
15 75%
Team of entrepreneurs/
partners
2 10%
Family business
2 10%
PNTA
1 5%
Number of employees-
Part-time
0
7 35%
1 to 5
12 60%
5+
0 0
PNTA
1 5%
Number of employees-
Full-time
0
3 15%
1 to 5
14 70%
5+
2 10%
PNTA
1 5%
Descriptive statistics for variables. The objective of the research study was to
collect and analyze data from the MLQ Scoring Key Form 5x to identify statistical
relationships between the predictor variables and the criterion variable. The predictor
variables, leadership styles as defined by the full-range leadership theory (Bass, 2008),
were examined to determine the relationship to organizational success (criterion variable).
The descriptive statistics for the predictor and criterion variables are shown in
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Table 10, Table 11, and Table 12. The MLQ 5x surveys produced both variables. The
MLQ Leader Form evaluated the leader’s self-perceived leadership styles and leadership
behaviors (see Table 11). The MLQ Rater Form evaluated the leadership styles and
leadership behaviors of the business leader as perceived by employees at the same or
lower level (see Table 12) (MLQ for Researchers, 2013). The combined leader and rater
scores are presented in Table 10. Figure 5 contains a histogram illustrating the
relationship between leader and rater leadership style and organizational outcome
response scores. The smallest score was 0 and the maximum possible score was 4. The
self-report instruments contained 45 items measured on a 5-point Likert–type scale with 5
measured response options ranging from 0 = not at all to 4 = frequently, if not always
(Avolio & Bass, 2004). Additionally, participants had the option of not responding by
selecting “unsure” if he or she a) deemed the item to be irrelevant, b) were unsure or did
not know the answer, or c) preferred not to answer. The scoring method was the average
of total response values. The MLQ-5x scoring methodology and the relationship of items
and variables were presented in Chapter 3 - Table 5.
Scores were computed for each leadership scale measured for each
operationalized criterion variable. The mean and standard deviation were calculated by
leadership style scale and operationalized criterion variable, which resulted in an
accumulated mean and standard deviation. The ideal frequency for all five
transformational behaviors should be 3 (“fairly often”) or higher. The ideal frequency for
the transactional behavior of contingent reward (CR) should be between 2 (“sometimes”)
and 3 (“fairly often”). The ideal frequency for the transactional behavior of
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managementby-exception (active) (MBEA) should be between 1 (“once in a while”) and
2
(“sometimes”). The ideal frequency for the laissez-faire – passive avoidant behaviors
management-by-exception (passive) (MBEP) and laissez-faire (LF)) should between 0
(“not at all”) and 1 (“once in a while”). The strongest leaders achieve rated frequencies
of 3.5 or higher for the outcomes of leadership (extra effort (EE), effectiveness (EFF),
and satisfaction (SAT) (Bass & Avolio, 2013).
Figure 5. Relationship between leader and rater leadership style and organizational
outcome response scores.
Note. IA = Idealized Attributes; IB = Idealized Behaviors; IM = Inspirational Motivation;
IS = Intellectual Stimulation; IC = Individual Consideration; CR= Contingent Reward;
MBEA = Management by Exception Active; MBEP = Management by Exception
Passive; LF = Laissez-Faire; EE = Extra Effort; EFF = Effectiveness; SAT = Satisfaction;
Leaders - N = 20; Raters - N = 40.
Table 10
Descriptive Statistics for the Leadership Style and Organizational Outcome Scores
for All Participants (N = 60)
Dimension Factor M SD Min. Max.
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Transformational Idealized Attributes (IA) 3.38 0.67 1 4
Idealized Behaviors (IB) 3.36 0.61 1.5 4
Inspirational Motivation (IM) 3.46 0.61 1.8 4
Intellectual Stimulation (IS) 2.78 0.67 0.5 4
Individualized Consideration
(IC)
3.14 0.62 0.8 4
Transactional Contingent Reward (CR) 3.02 0.59 0.8 4
Laissez-faire
Organizational
Outcomes
Management by Exception
Active (MBEA)
Management by Exception
Passive (MBEP)
Laissez-faire (LF)
Extra Effort (EE)
Effectiveness (EFF)
Satisfaction (SAT)
1.21
0.59
0.66
3.12
3.51
3.47
0.92
0.58
0.51
0.68
0.60
0.62
0
0
0
1.3
1.3
1
3.5
2
2
4
4
4
Transformational
Transactional
Laissez-faire
Accumulated Mean Score Accumulated SD Score
3.23
2.11
0.62
0.64
0.75
0.55
Table 11
Descriptive Statistics for the Leadership Style and Organizational Outcome Scores for
Leader Participants (N = 20)
Dimension Factor M SD Min. Max.
128
Transformational
Transactional
Laissez-faire
Organizational
Outcomes
Idealized Attributes (IA)
Idealized Behaviors (IB)
Inspirational Motivation (IM)
Intellectual Stimulation (IS)
Individualized Consideration
(IC)
Contingent Reward (CR)
Management by Exception
Active (MBEA)
Management by Exception
Passive (MBEP)
Laissez-faire (LF)
Extra Effort (EE)
Effectiveness (EFF)
Satisfaction (SAT)
3.05
3.33
3.31
2.79
3.17
2.97
1.51
0.95
0.68
2.81
3.27
3.38
0.58
0.58
0.59
0.42
0.4
0.55
0.77
0.53
0.5
0.68
0.64
0.56
1.55
2.3
2
2.3
2.5
2.3
0.3
0.3
0
1.7
2
2
3.8
4
4
3.5
4
4
3.5
2
1.5
3.7
4
4
Transformational
Transactional
Laissez-faire
Accumulated Mean Score Accumulated SD Score
3.13
2.24
0.82
0.64
0.75
0.55
Table 12
Descriptive Statistics for the Leadership Style and Organizational Outcome Scores for
Rater Participants (N = 40)
Dimension Factor M SD Min. Max.
Transformational
Transactional
Laissez-faire
Organizational
Outcomes
Idealized Attributes (IA)
Idealized Behaviors (IB)
Inspirational Motivation (IM)
Intellectual Stimulation (IS)
Individualized Consideration (IC)
Contingent Reward (CR)
Management by Exception
Active (MBEA)
Management by Exception
Passive (MBEP)
Laissez-faire (LF)
Extra Effort (EE)
Effectiveness (EFF)
Satisfaction (SAT)
3.49
3.38
3.54
2.78
3.13
3.04
1.06
0.41
0.65
3.27
3.63
3.51
0.71
0.61
0.6
0.75
0.7
0.59
0.94
0.51
0.50
0.64
0.55
0.66
1
1.5
1.8
0.5
0.8
0.8
0
0
0
1.3
1.3
1
4
4
4
4
4
4
3.3
2
2
4
4
4
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Transformational
Transactional
Laissez-faire
Accumulated Mean Score Accumulated SD Score
3.26
2.05
0.53
0.67
0.77
0.50
Evaluation of research questions.
Research question 1. What is the relationship between leadership styles in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort (motivation)?
As presented in Table 12, the mean score for results of the extra effort from the MLQ
Rater Form was 3.27 (SD = .68), well above the 2.0 mid-point score but below the 3.5
score achieved by the strongest leaders. In comparison, the mean score for results of the
extra effort from the MLQ Leader Form was 2.81 (SD = .64) and 3.12 (SD = .68) for the
combined leader and rater scoring. The five factors of transformational leadership
scoring from the MLQ Rater Form ranged from a high of 3.49 (inspirational motivation –
IM) to a low of 2.78 (intellectual stimulation - IS) and a leader high score of 3.33
(idealized behaviors - IB) to a low of 2.78 (intellectual stimulation - IS). The
transactional factor of contingent reward (CR) scoring was also well above the mid-point
at 3.04 for raters and 2.97 for leaders. The laissez-faire dimension of leadership style had
the lowest individual and mean scores for both participant groups. The scores were
below 1, falling within the ideal frequency level.
Research question 2. What is the relationship between leadership styles in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader? Raters perceived
leaders as possessing leadership styles that contribute to organizational effectiveness at a
130
higher level than the leader’s self-perceptions. The rater and combined participant mean
scores for the organizational outcome of effectiveness were the highest of the three
outcome factors with a score of 3.63 (SD = .55) and 3.51 (SD = .60), respectively, above
the score of 3.5 achieved by the strongest leaders, while the leader mean score was 3.27
(SD = .64). The two factors for laissez-faire leadership plus the management by
exception- active (MBEA) factor of transactional leadership had mean scores of 1.06 for
raters and 1.51 for leaders, indicating the female leaders possessed few of these
leadership behaviors.
Research question 3. What is the relationship between leadership styles in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with leadership? Raters perceived leaders as possessing leadership
styles that contribute to organizational satisfaction with leadership at a higher level than
the leader’s self-perceptions. The rater mean score for the organizational outcome of
satisfaction with leadership was second highest of the three outcome factors with a score
of 3.51 (SD = .66), while the leader and combined mean scores were the highest for the
three factors with scores of 3.38 (SD = .56) and 3.47 (SD = .62), respectively. The two
factors for laissez-faire leadership had mean scores below 1.0 for both raters and leaders,
indicating the female leaders possessed few of these leadership behaviors.
Distribution of data. Prior to data analysis, normality of distribution was
assessed initially using descriptive statistical tests of kurtosis and skewness to measure
the deviation from normality. Skewness measures the extent of the deviation from the
mean of the distribution values with a balanced distribution represented by a zero (0)
131
value. The greater the number of smaller values is indicted by a positive skewness and
the great the number of larger values is indicted by a negative skewness. The
“peakedness” or the “flatness” of the distribution is measured by the kurtosis value with a
bell-like shape close to normal represented by values near zero (0). A value of ± 1 for
both values is considered excellent. Positive values for kurtosis are an indication of a
more peaked distribution and a negative value indicates a flatter than normal distribution
(George & Mallery, 2014). Based on the results presented in Table 25 in Appendix Q,
normality was assessed with the nonparametric Kolmogorov-Smirnov (KS) test, which
compared the sample cumulative distribution to the hypothesized normal cumulative
distribution (George & Mallery, 2014). The significance values in the range of
between .002 and .300 indicated the distribution differed from normal. The results of the
normality testing reflected a non-normal distribution for 100% of the data (see Table 26
and 27 in Appendix Q). The histogram in Figure 33 in Appendix Q demonstrated the data
distribution of transformational leadership style. This is a typical example of the findings
from the study.
Data analysis. All statistical analyses for the study were tested using a .05 alpha
level. To predict the relationship between the predictor and criterion variables,
correlation analysis was applied using Spearman (rs) rank correlation coefficients.
Spearman (rs) provides the direction of the relationship. The rs value range for a positive
relationship is 0.00 to 1.00 and a negative direction rs value range is 0.00 to -1.00
(Cozby, 2009; Neuman, 2011; Salkind, 2008). The linear relationship between the
multiple predictor variables and the multiple criterion variables were analyzed using
multivariate multiple regression analysis and factor analysis (Dattalo, 2013; IBM, 2014).
132
Reliability analysis for the current study, to examine how well the different items in the
MLQ measure the same behavior or outcome factor scale, was checked using the
Cronbach’s alpha reliability coefficient.
Study Hypotheses and Variables
Nine hypotheses for this study included null and alternative or research
hypotheses addressing the research questions. The predictor variables were leadership
styles as defined by the full-range leadership theory, known as transformational,
transactional, and laissez-faire/passive avoidant leadership styles (Bass, 2008). Three
areas of outcome of leadership behaviors served as the operationalized criterion variables
for organizational success. Measured with the MLQ 5x-Short, owner/leader
selfperceptions and employee rater perceptions of their leaders in three areas are a) extra
effort (motivation), b) effectiveness, and c) satisfaction with leadership. In this study, the
null hypotheses predict there is no relationship between the variables and the population
and the alternative hypotheses predict the relationship exists (Cozby, 2009).
Relationship between leadership styles and organizational success measured
by extra effort. The first three hypotheses tested the first research question:
RQ1. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee perceptions of
their leader’s leadership behavior of extra effort (motivation)?
H10: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
133
H1a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H20: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H2a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H30: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
H3a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
Relationship between leadership styles and organizational success measured
by effectiveness. The next three hypotheses tested the second research question:
RQ2. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee perceptions of the
leadership effectiveness of the leader?
134
H40: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H4a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H50: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H5a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H60: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
H6a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
Relationship between leadership styles and organizational success measured
by satisfaction with leadership. The last three hypotheses tested the third research
question:
135
RQ3. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee satisfaction with
the leadership?
H70: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H7a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H80: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H8a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H90: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with the leadership.
H9a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with the leadership.
136
Results
Cronbach’s alpha for variables. Cronbach’s alpha reliability coefficient was
used to examine how well the different items in the MLQ measured the same behavior or
outcome factor scale (Sekaran & Bougie, 2010). Cronbach’s alpha is measured on the
same scale as Spearman (rs) with reliabilities closer to 1.00 demonstrating a greater
internal consistency for the assessed item. The formula used to determine alpha (α) is α =
rk/[1 + (k – 1)r] with (k) the number of items in the scale and (r) the average correlation
between pairs of items (George & Mallery, 2014).
The general guide for interpretation of alpha values is:
Excellent: α > .9
Good: α > .8
Acceptable: α > .7
Questionable: α > .6 Poor:
α > .5
Unacceptable: α < .5 (George & Mallery, 2014).
All of the scale scores had acceptable to good reliability, with a score above the
alpha .70, with the exception of idealized attributes (IA), individual consideration (IC),
contingent reward (CR), laissez-faire (LF), and extra effort (EE) (see Table 13). With
Cronbach’s alpha scores at or slightly below the .70 score for IA (.69), IC (.70), and EE
(.70), the reliability for measurements of these variables was not a major limitation for
the study. With alpha scores below .50 for CR (.44) and LF (.31), the reliability for the
measurements was questionable. However, these variables are from a validated
instrument; therefore, they were used in the study.
Table 13
137
Cronbach’s Alpha of Leadership Style and Outcomes Behavior Scores
Variable N α Number of
Items
Idealized Attributes (IA)
Idealized Behaviors (IB)
Inspirational Motivation (IM)
Intellectual Stimulation (IS)
Individual Consideration (IC)
Contingent Reward (CR)
Management by Exception Active (MBEA)
Management by Exception Passive (MBEP)
Laissez-faire (LF)
Extra Effort (EE)
Effectiveness (EFF)
Satisfaction with Leadership (SAT)
58
58
59
48
59
59
53
58
60
59
48
59
0.69
0.79
0.85
0.75
0.70
0.44
0.77
0.73
0.31
0.70
0.80
0.75
4
4
4
4
4
4
4
4
4
3
4
2
Note. N = Number of completed surveys within each section (no questions left
blank); α = Statistical alpha coefficient; Number of Items = Number of questions
per variable.
Spearman (rs) rank correlation analyses. Spearman (rs) correlation statistic
was used to measure and evaluate the relationships between the nine operationalized
predictor variables and three criterion variables. The predictor variables were separated
into nine operationalized leadership factors or behaviors; therefore, analysis of data
revealed more specific results contributing to a better understanding of the relationship
with the operationalized criterion variables. The correlation between the full-range
leadership theory subscales and the organizational outcomes of extra effort, effectiveness,
and satisfaction with leadership were measured using the MLQ Scoring Key Form 5X
survey.
Statistically significant correlations signified the presence of a correlation
between the leadership behavior and the outcome of leadership behavior. The higher the
correlational coefficient, the stronger the relationship between the variables. Both
138
positive and negative statistical significance between the predictor and criterion variables
was shown by Spearman correlation analysis. Bivariate correlation results between the
predictor and criterion variables are presented in Tables 28 and 29 in Appendix R.
The null hypotheses represented the assumption of truth unless strong evidence
showed it was false. The level of significance for the p-value was .05, which indicated a
95% reliability level and a 5% chance of uncertainty. P-values greater than .05 identified
the probability the result of the analysis was produced by chance for a true, null
hypothesis (George & Mallery, 2014). The test of significance was determined by the
alternative hypotheses. A two-tail test was performed as there was no prior expectation
regarding the positive or negative relationship between the criterion and predictor
variables (George & Mallery, 2014).
Scatterplot graphs were useful for plotting multivariate data to help determine
potential relationships among scale variables. This was achieved by displaying the nature
of correlations through illustrating the linear relationships on a scatterplot graph (George
& Mallery, 2014). The possible linear relationships were:
A positive correlation, when the increasing value of the x-axis variable
(displayed across the bottom) accompanies increases in the y-axis variable
(displayed on the side), results in an upward slanting line.
A negative correlation, when the decreasing value of the x-axis variable
accompanies decreases in the y-axis variable, results in a downward
sloping line.
A zero correlation, resulting in a straight line, denotes no defined patterns
of the plot points (Cozby, 2009).
139
The following methods were used to reject null hypotheses: a) statistically significant
correlations of the nine leadership behaviors to the three organizational outcomes, b) the
p-values were not greater than .05, and c) reliability supported by Cronbach’s alpha
coefficients.
Idealized attributes (IA). With idealized attributes, followers identify and want to
emulate leaders (Avolio & Bass, 2004; Bass, 2008; Northouse, 2013). The relationship
between the idealized attributes leaders and raters scores and the outcomes of extra effort
(EE), effectiveness (EFF), and satisfaction with leadership (SAT) are depicted in Figures
6, 7, and 8, respectively. Spearman (rs) for the five transformational leadership subscales
to the three outcomes scales for all participants and rater participants only are presented
in Table 14.
The findings supported the rejection of null hypotheses H10, H40, and H70, thereby,
supporting acceptance of alternative hypotheses H1a, H4a, and H7a. The pvalues for each
of the variables were .000, signaling a significant relationship. The correlation coefficient
(r) between idealized attributes and the three outcomes were positive and very strong at
the 0.01 level: EE (all participants = .620; raters = .630), EFF (combined = .735; raters
=.771), and SAT (combined = .668; raters = .793). This was supported by the slope lines
in the three figures, which were in a positive direction for all outcomes. The trend line
for owner/leader participants was included to illustrate the relationship between self-
perception versus employee rater perception.
Table 14
Spearman Correlation Matrix, Transformational Leadership Scales to Behavioral
Outcome Scales
140
Outcome Scales
EE
Combined
EFF SAT EE
Raters
EFF SAT
IA
p-value
IB
p-value
IM
p-value
IS p-
value
IC
p-value
.620**
0.000
.408**
0.001
.731**
0.000
.472**
0.000
.449**
0.000
.735**
0.000
.544**
0.000
.630**
0.000
.458**
0.000
.426**
0.001
N = 60
.668**
0.000
.588**
0.000
.717**
0.000
.506**
0.000
.491**
0.000
.630**
0.000
.480**
0.002
.741**
0.000
.507**
0.001
.523**
0.000
.771**
0.000
.694**
0.000
.630**
0.000
.493**
0.001
.464**
0.001
.793**
0.000
.737**
0.000
.716**
0.000
.507**
0.001
.493**
0.000
N = 40
Note. **. Correlation is significant at the 0.01 level (2-tailed); *. Correlation is significant at the
0.05 level (2-tailed).
Figure 6 . Scatterplot of extra effort versus the idealized
attributes scores.
141
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Extra Effort (EE)
Idealized Attributes (IA
)
Leaders
Raters
Linear
(Leader
s)
Figure 7. Sca tterplot of effectiveness versus the idealized
attributes scores.
Figure 8. Scatterplot of satisfaction with leadership versus the
idealized attributes scores.
Idealized behaviors (IB). The leader supplies followers with a defined sense of
purpose when a leader displays idealized behaviors (Avolio & Bass, 2004; Bass, 2008;
Northouse, 2013). The relationship between the idealized behaviors leaders and raters
scores and the outcomes of extra effort (EE), effectiveness (EFF), and satisfaction with
leadership (SAT) are depicted in Figures 9, 10, and 11, respectively.
142
The correlation coefficient score between extra effort and idealized behaviors was
among the weakest of the five transformational leaders subscales. The p-values for the
variables between .000 and .002 signaled a significant relationship. Spearman (rs)
correlation coefficient scores between idealized behaviors and all outcomes were positive
and very strong at the 0.01 level: EE (all participants = .408; raters = .480), EFF (all
participants = .544; raters = .694), and SAT (all participants =.588; raters = .737) (see
Table 14). The scatter diagrams showed evidence of a positive correlation between the
variables with slope lines in a positive direction for all outcomes for both participant
groups. These findings supported the rejection of null hypotheses H10, H40, and H70,
thereby, supporting acceptance of alternative hypotheses H1a, H4a, and H7a.
Figure 9. Scatterplot of extra effort versus the idealized behaviors scores.
143
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Extra Effort (EE)
Idealized Behaviors (IB)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
Figure 10. Scatterplot of effectiveness versus the idealized behaviors
scores.
Figure 11. Scatterplot of satisfaction with leadership versus the idealized behaviors
scores.
Inspired motivation (IM). With inspired motivation, the leader motivates
followers to aim for goals that are ambitious by communicating confidence and raising
expectations (Avolio & Bass, 2004; Bass, 2008; Northouse, 2013). The relationship
between the inspired motivation leaders and raters scores and the outcomes of extra effort
144
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Effectiveness (EFF)
Idealized Behaviors (IB
Leaders
Raters
Linear (Leaders)
Linear (Raters)
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Satisfaction (SAT)
Idealized Behaviors (IB
Leaders
Raters
Linear (Leaders)
Linear (Raters)
(EE), effectiveness (EFF), and satisfaction with leadership (SAT) are depicted in Figures
12, 13, and 14, respectively.
The correlations were statistically significant, allowing for the rejection of null
hypotheses H10, H40, and H70, thereby, supporting acceptance of alternative hypotheses
H1a, H4a, and H7a. The p-values for the variables of .000 signaled a significant
relationship. The Spearman (rs) correlation coefficient r scores between inspired
motivation and all outcomes were among the highest and strongest of the
transformational leadership subscales (at the 0.01 level): EE (all participants = .731;
raters = .741), EFF (all participants =.630; raters = .630), and SAT (all participants =.717;
raters = .716) (see Table 14). The scatter diagrams showed evidence of a positive and
strong correlation between the variables as shown by the angle of the linear slopes.
Figure 12. Scatterplot of extra effort versus the inspired motivation
scores.
145
Figure 13. Scatterplot of effectiveness versus the inspired motivation
scores.
Figure 14. Scatterplot of satisfaction with leadership versus the inspire
motivation scores.
Intellectual stimulation (IS). Followers are encouraged to question their
assumptions and the current environment when leaders under intellectual stimulation
leadership behaviors (Avolio & Bass, 2004; Bass, 2008; Northouse, 2013). The
relationship between the intellectual stimulation leaders and raters scores and the
outcomes of extra effort (EE), effectiveness (EFF), and satisfaction with leadership (SAT)
are depicted in Figures 15, 16, and 17, respectively.
146
The p-values for the variables between .000 and .001 signaled a significant
relationship. Spearman (rs) correlation coefficient scores between intellectual stimulation
and all outcomes were positive and very strong at the 0.01 level. However, the scores
were among the lowest for transformational leadership subscales for all outcomes: EE (all
participants = .472; raters = .507), EFF (all participants =.458; raters = .493), and SAT
(all participants = .506; raters = .507) (see Table 14). The scatter diagrams showed
evidence of a positive correlation between the variables with slope lines in a positive
direction for all outcomes for both participant groups. The null hypotheses H10, H40, and
H70 were rejected.
Figure 15. Scatterplot of extra effort versus the intellectual stimulation
scores.
147
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Extra Effort (EE)
Intellectual Stimulation (IS)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
Figure 16. Scatterplot of effectiveness versus the intellectual stimulation
scores.
Figure 17. Scatterplot of satisfaction with leadership versus the
intellectual stimulation scores.
Individualized consideration (IC). The leader focuses on mentoring or coaching
individuals to optimize potential and meet each individual’s need for growth and
achievement with individual consideration leadership behaviors (Avolio & Bass, 2004).
148
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Effectiveness (EFF)
Intellectual Stimulation (IS)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Satisfaction (SAT)
Intellectual Stimulation (IS)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
The relationship between the individualized consideration leaders and raters scores and
the outcomes of extra effort (EE), effectiveness (EFF), and satisfaction with leadership
(SAT) are depicted in Figures17, 18, and 19, respectively.
Spearman (rs) correlation coefficient scores between individual consideration and
all outcomes were positive and very strong at the 0.01 level: EE (all participants = .449;
raters = .523), EFF (all participants = .426; raters = .464) and SAT (all participants
= .491; raters = .493) (see Table 14). The p-values for the variables between .000
and .001 signaled a significant relationship. The slope lines were in a positive direction
for all outcomes for both participant groups. The findings supported the rejection of null
hypotheses H10, H40, and H70, thereby, supporting acceptance of alternative hypotheses
H1a, H4a, and H7a.
Figure 18. Scatterplot of extra effort versus the individual consideration
scores.
149
All Leaders and Raters
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Extra Effort (EE)
Individual Consideration (IC)
Leaders
Raters
Linear
Leaders(
)
Figure 19 . Scatterplot of effectiveness versus the individual
consideration scores.
Figure 20. Scatterplot of satisfaction with leadership versus the
individual consideration scores.
Contingent reward (CR). Constructive economic and emotional transactions or
exchanges form the foundation of contingent reward behaviors (Avolio & Bass, 2004;
Bass, 2008; Northouse, 2013). The relationship between the contingent reward leaders
and raters scores and the outcomes of extra effort (EE), effectiveness (EFF), and
satisfaction with leadership (SAT) are depicted in Figures 21, 22, and 23, respectively.
150
Spearman (rs) correlation coefficient for the two transactional leadership subscales to the
three outcomes scales are presented in Table 15.
These findings supported the rejection of null hypotheses H20, H50, and H80,
thereby, supporting acceptance of alternative hypotheses H2a, H5a, and H8a. The pvalues
for the variables of extra effort and satisfaction with leadership were between .000
and .057, signaling a significant relationship. However, the p-values for the variable of
effectiveness were between .002 and .153, indicated the probability the outcomes were a
result of chance. The correlation coefficient r between contingent reward and the three
outcomes were positive and very strong at the 0.01 level: EE (all participants = .463;
raters = .560); EFF (all participants = .393; raters = .230) and SAT (all participants
= .453; raters = .303). The slope lines are in a positive direction for all outcomes for both
participant groups.
Table 15
Spearman Correlation Matrix, Transactional Leadership Scales to
Behavioral Outcomes Scales
Outcome Scales
EE
Combined
EFF SAT EE
Raters
EFF SAT
CR
p-value
MBEA
p-value
.463**
0.000
-.349**
0.006
.393**
0.002
-.356**
0.005
N = 60
.453**
0.000
-.282*
0.029
.560**
0.000
-.323*
0.042
.230**
0.153
-.473**
0.002
.303**
0.057
-.354*
0.025
N = 40
Note. **. Correlation is significant at the 0.01 level (2-tailed); *. Correlation is
significant at the 0.05 level (2-tailed).
151
Figure 21. Scatterplot of extra effort versus the contingent reward
scores.
Figure 22. Scatterplot of effectiveness versus the contingent reward
scores.
152
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Extra Effort (EE)
Contingent Reward (CR)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
0
1
2
3
4
0.00 1.00 2.00 3.00 4.00
Effectiveness (EFF)
Contingent Reward (CR)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
Figure 23. Scatterplot of satisfaction with leadership versus the
contingent reward scores.
Management-by-exception active (MBEA). This is negative corrective exchange
or transaction in which the leader actively acts on or waits for mistakes or errors (Avolio
& Bass, 2004; Bass, 2008; Northouse, 2013). The relationship between the
managementby-exception active leaders and raters scores and the outcomes of extra effort
(EE), effectiveness (EFF), and satisfaction with leadership (SAT) are depicted in Figures
21, 22, and 23, respectively.
The findings supported the rejection of null hypotheses H20, H50, and H80. The p-
values for all variables of between .002 and .042 signaled a significant relationship.
Spearman (rs) correlation coefficient scores between management-by-exception (active)
and all outcomes were negative and strong: EE (all participants = -.349; raters = -.323),
EFF (all participants = -.356; raters = -.473), and SAT (all participants = -.282; raters
= .354) (see Table 15). The slope lines were in a negative direction for all outcomes for
153
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Satisfaction (SAT)
Contingent Reward (CR)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
rater participants. As shown by the angle of the linear slope, the scatter diagram show
evidence of a negative correlation between the variables. However, the slope lines were
essentially flat for all outcomes for leader participants and showed evidence of no
correlation between the variables based on leader self-perception ratings. The results
were questionable because of small sample size of 20 owner/leader participants.
Figure 24. Scatterplot of extra effort versus the management-
byexception active scores.
154
Figure 25. Scatter plot of effectiveness versus the management-by-
exception active scores.
Figure 26. Scatterplot of satisfaction with leadership versus the
management-by-exception active scores.
Management-by-exception passive (MBEP). This is a negative corrective
transaction in which the leader waits for mistakes or errors to act (Avolio & Bass, 2004;
Bass, 2008; Northouse, 2013). The relationship between the inspired motivation leaders
and raters scores and the outcomes of extra effort (EE), effectiveness (EFF), and
155
satisfaction with leadership (SAT) are depicted in Figures 27, 28, and 29, respectively.
The p-values for the variables were between .000 and .074, signaling a significant
relationship. Spearman (rs) correlation coefficient for the two laissez-faire leadership
subscales to the three outcomes scales are presented in Table 16.
Spearman (rs) correlation coefficient scores between management-by-exception
passive and all outcomes were negative and very strong at the 0.01 or 0.05 level: EE (all
participants = -.426; raters = -.287), EFF (all participants = -.564; raters = -.495), and
SAT (all participants = -.486; raters = -.494) (see Table 16). The slope lines were in a
negative direction for all outcomes for rater participants. As shown by the angle of the
linear slope, the scatter diagram show evidence of a negative correlation between the
variables. The null hypotheses H30, H60, and H90 were rejected.
Table 16
Spearman Correlation Matrix, Laissez-faire Leadership Scales to
Behavioral Outcomes Scales
Outcome Scales
EE
Combined
EFF SAT EE
Raters
EFF SAT
MBEP
p-value
LF
p-value
-.426**
0.001
-.071
0.592
-.564**
0.000
-.274**
0.034
N = 60
-.486*
0.000
-.299*
0.020
-.287*
0.073
-.049
0.764
-.495**
0.001
-.307
0.054
-.494*
0.001
-.240
0.136
N = 40
Note. **. Correlation is significant at the 0.01 level (2-tailed); *.
Correlation is significant at the 0.05 level (2-tailed).
156
Figure 27. Scatterplot of extra effort versus the management-
byexception passive scores.
Figure 28. Scatterplot of effectiveness versus the management-
byexception passive scores.
157
Figure 29. Scatterplot of satisfaction with leadership versus the
management-by-exception passive scores.
Laissez-faire (LF). The leader gives no feedback and makes no effort to assist
followers in satisfying his or her needs (Avolio & Bass, 2004; Bass, 2008; Northouse,
2013). The relationship between the laissez-faire leaders and raters scores and the
outcomes of extra effort (EE), effectiveness (EFF), and satisfaction with leadership (SAT)
are depicted in Figures 30, 31, and 32, respectively.
Spearman (rs) correlation coefficient scores between laissez-faire and all
outcomes were negative: EE (all participants = -.071; raters = -.049), EFF (all participants
= -.274; raters = -.307), and SAT (all participants = -.299; raters = -.240). The slope lines
were in a negative direction for all outcomes for rater participants, revealing evidence of
a negative correlation between the variables. The p-value range for the variable of
effectiveness was between .034 and .054, indicating a significant relationship. The p-
value range for the variables of extra effort and satisfaction with leadership was
between .020 and .764. The p-values exceeding .05 identified the probability the result of
158
the analysis was produced by chance. However, negative or nonsignificant results do not
inevitably indicate the null hypothesis is correct (Cozby, 2009). Non-significant results
may be an outcome of many factors. Based on the Cronbach alpha coefficient, the
reliability for measurement of the laissez-faire variable was questionable, which could
have influenced the non-significant results.
Findings from multiple studies should be examined to provide evidence that
variables are not related (Cozby, 2009). The results from the current study were not
supported by the research studies presented in the literature review nor Spearman (rs)
correlational coefficients. This conclusion supported the rejection of null hypotheses H30,
H60, and H90, thereby, supporting acceptance of alternative hypotheses H3a, H6a,
and H9a.
Figure 30. Scatterplot of extra effort versus the laissez-faire scores.
159
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Extra Effort (EE)
Laissez-faire (LF)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
Figure 31. Scatterplot of effectiveness versus the laissez-faire scores.
Figure 32. Scatterplot of satisfaction with leadership versus the
laissezfaire scores.
Multivariate multiple regression analyses and factor analysis. Factor analysis
and multiple linear regression analysis were conducted in order to explore multivariate
relationships. Multiple regression analysis is similar to Spearman (rs) statistical
160
0.00
1.00
2.00
3.00
4.00
0.00 1.00 2.00 3.00 4.00
Satisfaction (SAT)
Laissez-faire (LF)
Leaders
Raters
Linear (Leaders)
Linear (Raters)
correlations; however, all nine predictor variables were examined simultaneously. For
this study, direct evaluation of the comparative strengths of relationship between the
variables was measured using standardized coefficients called Beta (β). This is a partial
correlation in which all other variables in the equation have been restricted. As with B
values, Beta (β) values vary between ±1.0 (George & Mallery, 2014). The amount of
variance explained in the criterion variable by the predictor variables was measured by
Rsquare (R²). The correlation coefficient R, the root of R², can take on values between 0
and 1 (Dattalo, 2013). The level of significance for the p-value was .05 for the study.
Results are presented in Table 17 and 18 for factor analysis and Table 19 and 20 for
regression analysis.
Factor analysis. Factor analysis was used to identify the key factors that may
explain most of the variance observed for the criterion variables (IBM, 2014) before
multivariate multiple regression analysis was performed. Two factors emerged with
eigenvalues greater than 1.0 emerged and explained 64.57% of the variance for combined
scores and 68.13% for rater scores. In both instances, Factor 1 was dominated by IB and
Factor 2 was dominated by IA. The results indicated a clear division of factors related to
idealized behaviors and idealized attributes. The basis for variables selected to represent
these variables was the highest absolute factor loadings. Therefore, IB represented Factor
1 and IA represented Factor 2. Multivariate multiple regression analyses were conducted
based on these results. The criterion variables were extra effort (EE), effectiveness (EFF),
and satisfaction with leadership (SAT), and idealized behaviors (IB) and idealized
attributes (IA) were the predictor variables.
Table 17
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Exploratory Factor Analysis (Varimax Rotation) for All Participant Scores
Factor
Initial Eigenvalues a. Factor Loading b. Factor Loading
Rotated Component
Matrixc
Total
% of
Variance Cumulative
% Total
% of
Variance
Cumulative
% Total
% of
Variance
Cumulative
% Factor 1 Factor 2
IA 4.647 51.636 51.636 4.647 51.636 51.636 3.697 41.077 41.077 .647 .585
IB 1.164 12.933 64.568 1.164 12.933 64.568 2.114 23.492 64.568 .757 .266
IM .846 9.397 73.966 .722 .465
IS .732 8.129 82.095 .698 .340
IC .559 6.207 88.302 .641 .455
CR .479 5.319 93.621 .783 .087
MBEA .259 2.873 96.493 .097 -.850
MBEP .159 1.766 98.260 -.365 -.640
LF .157 1.740 100.000 -.729 .153
Note . a. Extraction Method: Principal Component Analysis; b. Rotation Method: Varimax; c. Rotation converged in 3 iterations.
Table 18
Exploratory Factor Analysis (Varimax Rotation) for Rater Scores
Factor
Initial Eigenvalues a. Factor Loading b. Factor Loading
Rotated
Component
Matrixc
Total
% of
Variance Cumulative
% Total
% of
Varianc
e
Cumulative
% Total
% of
Variance
Cumulative
% Factor 1 Factor 2
IA 5.075 56.393 56.393 5.075 56.393 56.393 3.366 37.395 37.395 .761 .511
IB 1.056 11.733 68.125 1.056 11.733 68.125 2.766 30.730 68.125 .816 .299
IM .858 9.533 77.659 .799 .413
IS .734 8.152 85.810 .529 .583
IC .631 7.013 92.824 .377 .802
CR .245 2.726 95.550 .623 .337
MBEA .219 2.432 97.982 .009 -.749
MBEP .099 1.104 99.086 -.346 -.763
162
LF .082 .914 100.000 -.744 .072
Note . a. Extraction Method: Principal Component Analysis; b. Rotation Method: Varimax; c. Rotation converged in 3 iterations.
Multivariate multiple regression analysis for extra effort. A significantly
significant model was generated (p = .0000) capable of explaining 48% (R2 = .48) of the
variance in the criterion variable for the combined group and 56% (R2 = .56) for the rater
group. The p-value of .000 indicated a significant relationship to suggest that a female
business owner/leader’s combined behaviors predicted organizational success as
measured by extra effort. The Beta (β) coefficients indicated an increased value of the
criterion variable for the predictor variables:
Combined scores- idealized behaviors (IB) (.473) and idealized attributes
(IA) (.503);
Rater scores- idealized behaviors (IB) (.500) and idealized attributes (IA)
(.555).
Multivariate multiple regression analysis for effectiveness. A significantly
significant model was generated (p = .0000), which indicated a significant relationship to
suggest that a female business owner/leader’s combined behaviors predicted
organizational success as measured by effectiveness. The R² value indicated 53% (R2
= .53) of the variance in the criterion variable for the combined group, and 69% (R2
= .69) for the rater group, was accounted for by predictor variable leadership behaviors.
The Beta (β) coefficients indicated an increased value of the criterion variable for the
predictor variables:
Combined scores- idealized behaviors (IB) (.479) and idealized attributes
(IA) (.544);
163
Rater score- idealized behaviors (IB) (.465) and idealized attributes (IA)
(.688).
Multivariate multiple regression analysis for satisfaction with leadership. A
significantly significant model was generated (p = .0000) capable of explaining 60% (R2
= .60) of the variance in the criterion variable for the combined group and 67% (R2 = .67)
for the rater group. The p-value of .000 indicated a significant relationship to suggest that
a female business owner/leader’s combined behaviors predicted organizational success as
measured by satisfaction with leadership. The Beta (β) coefficients indicated an
increased value of the criterion variable for the predictor variables:
Combined scores- idealized behaviors (IB) (.450) and idealized attributes
(IA) (.631);
Rater scores- idealized behaviors (IB) (.488) and idealized attributes (IA)
(.658).
Multiple regression revealed the significant power of a female business
owner/leader’s combined behaviors to predict organizational success, and reconfirmed
the correlational relationship among the criterion and predictor variables. For the
combined participant group, the model was capable of explaining 48% of the variance in
extra effort (EE), 53% in effectiveness, (EFF), and 60% in satisfaction with leadership
(SAT). The percentage of variance for criterion variables that was not explained by
factors covered in this study for all participants were 52% (EE), 47% (EFF), and 40%
(SAT). The rater scores were more significant, as the model was capable of explaining
56% of the variance in extra effort (EE), 69% in effectiveness, (EFF), and 67% in
164
satisfaction with leadership (SAT). The percentage of variance for criterion variables that
were not explained by factors covered in this study for rater participants were 44%
(EE), 31% (EFF), and 33% (SAT).
Table 19
Multiple Regression of Criterion Variables versus Leadership Styles for All Participant
Scores
Predictor Variables a.
b.
Standardized
Unstandardized Coefficients
Coefficients
t p
BSE Beta (β)
(Constant)
Idealized Behaviors (IB)
Idealized Attributes (IA)
3.115 .32
3
.343
.065
.065
.065
.473
.503
48.071
4.942
5.250
.000
.000
.000
165
Note. a. Criterion variable: Extra
Effor t (EE); b. F(2, 57) = 25.99 ; p = .000; R² = .48.
Predictor Variables c.
b.
Unstandardized Coefficients Standardized
Coefficients t p
BSE Beta (β)
(Constant)
Idealized Behaviors (IB)
Idealized Attributes (IA)
3.507
.327
.287
.054
.055
.055
.544
.479
64.594
5.967
5.244
.000
.000
.000
Note. c. Criterion variable:
Effectivene ss (EFF); b. F(2, 5 = 31.54; p = .000; R² = .53.
Predictor Variables d.
b.
Unstandardized Coefficients Standardized
Coefficients t p
BSE Beta (β)
(Constant)
Idealized Behaviors (IB)
Idealized Attributes (IA)
3.467
.393
.281
.052
.052
.052
.631
.450
67.029
7.543
5.384
.000
.000
.000
Note. d. Criterion variable: Satisfaction with leadership (SAT); b. F(2, 57) = 42.94; p = .000; R² = .60.
Table 20
Multiple Regression of Criterion Variables versus Leadership Styles for Rater Scores
Predictor Variables a.
b.
Standardized
Unstandardized Coefficients
Coefficients
t p
BSE Beta (β)
(Constant)
Idealized Attributes (IA)
Idealized Behaviors (IB)
3.268
.320
.355
.069
.070
.070
.500
.555
47.354
4.582
5.084
.000
.000
.000
166
7)
Note. a. Criterion variable: Extra
Effor t (EE); b. F(2, 37)
22.42 ; p
= .00 0; R² = .56.
Predictor Variables c.
b.
Unstandardized Coefficients Standardized
Coefficients t p
BSE Beta (β)
(Constant)
Idealized Attributes (IA)
Idealized Behaviors (IB)
3.625
.379
.256
.050
.050
.050
.688
.465
72.862
7.521
5.077
.000
.000
.000
Note . c. Criterion variable:
Effectivene
ss (EFF); b. F(2,
3 = 41.16 ; p .000; R² = .69.
Predictor Variables d.
b.
Unstandardized Coefficients Standardized
Coefficients
t p
BSE Beta (β)
(Constant)
Idealized Attributes (IA)
Idealized Behaviors (IB)
3.513
.431
.320
.061
.062
.062
.658
.488
57.513
6.966
5.167
.000
.000
.000
Note. d. Criterion variable: Satisfaction with leadership (SAT); b. F(2, 37) = 37.61 ; p = .000; R² = .67.
Summary
The data analyses were presented in Chapter 4. Data in this research study were
collected from participants’ responses from four surveys: the MLQ Leader Form, the
MLQ Rater Form, owner/leader demographic survey, and rater demographic survey.
Descriptive statistics, scatterplots, and inferential statistics allowed analysis of the data.
Included in the data presentation were 19 tables and 27 figures plus summary data for the
variables.
Cronbach’s alpha reliability coefficients were computed to examine how well the
different items in the MLQ measure the same behavior or outcome factor scale.
Correlation analysis was applied using Spearman (rs) rank correlation coefficients to
167
=
7) =
predict the relationship between the predictor variables and criterion variables. Analyses
failed to prove the nine null hypotheses.
A multivariate multiple regression analysis and factor analysis were performed to
determine whether the leadership behaviors related to transformation, transactional, and
laissez-faire leadership styles, collectively, predicted better organizational success than
any single leadership behavior alone. Chapter 5 contains a summary of the study,
findings, provides conclusions and discussion of the study implication, and
recommendations for further research based on the results of this study.
Chapter 5
Conclusions and Recommendations
The results and statistical analysis used to test the research questions and
hypotheses were provided in Chapter 4. As a result of Spearman (rs) rank correlational
coefficient analyses, there was a presentation of the nine statistically significant
relationships. The outcomes of factor analysis and multivariate multiple regression
analysis were offered. This chapter contains a summary of the study, findings, provides
conclusions and discussion of the study implications, and recommendations for further
research based on the results of this study.
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Study Summary
The specific problem of the study was poor leadership and management skills
contribute to small business failure and closure (Atamian & VanZante, 2010; Bass, 2008;
Beaver, 2003; Brown, 2007; Lee et al., 2009; Valdiserri & Wilson, 2010). General
problem of the study was one-third of new businesses in the United States close within
two years (Lussier & Halabi, 2010; SBA Office of Advocacy, 2011, January) and only
one-half survive after four years (Headd & Kirchhoff, 2009; SBA Office of Advocacy,
2011, January), negatively affecting the nation’s economic strength. Many influences
push or pull women to entrepreneurship; however, most women share the attribute of
starting a business without previous opportunities to gain leadership and management
skills (Fairlie & Robb, 2009; Kempster & Cope, 2010; Sullivan & Meek, 2012). Few
studies exist on entrepreneurial leadership styles and organizational success in
womanowned employer businesses and perceptions of leadership styles and behaviors by
subordinates.
The purpose of this quantitative correlational research study was to examine the
relationship between leadership styles in woman-owned and –led small businesses and
organizational success. The study method was deemed appropriate for determining
whether relationships existed between the variables used to test the hypotheses (Leedy &
Ormrod, 2010; Neuman, 2011). The study reflected the self-perceptions of the small
business owner/leaders and employees to provide their perceptions of their respective
owner/leader’s leadership styles and effectiveness behaviors strongly linked in prior
research to organizational success (Avolio & Bass, 2004). This study was an extension of
Valdiserri and Wilson’s (2010) study involving the examination of the relationship
169
between leadership styles and business profitability and success based on perceptions of
leader effectiveness by leaders, managers, and employees. There were no female leader
or manager participants in this study; therefore, there was an opportunity to examine
industries with male and female leaders/managers or solely female leaders/managers.
The predictor variables, the leadership styles as defined by full-range leadership
theory (FRLT) (Bass, 2008), known as transformational, transactional, and laissez-faire,
were examined to determine the relationship to organizational success (criterion variable).
Three MLQ survey instruments were used to collect and analyze data - the MLQ Leader
Form, the MLQ Rater Form, and the MLQ Scoring Key Form 5x to capture and measure
full-range leadership theory styles. Measured with the MLQ 5x-Short, owner/leader self-
perceptions and employee rater perceptions of their leaders were examined for the
operationalized criterion variables of a) extra effort (motivation), b) effectiveness, and c)
satisfaction with leadership. In addition to completing the MLQ survey, participants were
asked to complete a demographic survey.
The research questions presented in chapter 1 set the course for addressing the
research problem to examine the relationship of leadership to the operationalized criterion
variables. Nine null hypotheses and nine alternative hypotheses assisted in testing the
research questions. Based on the literature review, the research questions were:
1. What is the relationship between leadership styles in womanowned
and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra
effort/motivation?
170
2. What is the relationship between leadership styles in womanowned
and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader?
3. What is the relationship between leadership styles in womanowned
and –led small businesses and organizational success measured by
employee satisfaction with the leadership?
The non-random sampling technique known as purposive or judgmental sampling
approach was selected for this study, which was appropriate for sampling for specific or
special situations. The researcher used methods to locate subjects who could best provide
the required information (Neuman, 2011; Sekaran & Bougie, 2010). The target
population within the study sample was owner/leaders, subordinates, and partners within
women-owned and –led small businesses in North Myrtle Beach, South Carolina. The
size of target population was 65 and the sample used was 60 after two business owners
withdrew from the study (a total of four participants) and one employee rater declined to
participate resulting in a response rate of 98% (60 of 61 participants).
Reliability analysis for the current study was checked using the Cronbach’s alpha
reliability coefficient. The results of the normality testing reflected a non-normal
distribution for 100% of the MLQ survey data collected. To predict the relationship
between the predictor and criterion variables, correlation analysis was applied using
Spearman (rs) rank correlation coefficients. Spearman (rs), an equivalent non-parametric
test to the Pearson (r) test, was selected based on the non-normal distribution of data
(Cozby, 2009; Neuman, 2011; Salkind, 2008). A multivariate multiple regression analysis
and factor analysis were performed to determine whether the leadership behaviors related
171
to transformation, transactional, and laissez-faire leadership styles, collectively, predicted
better organizational success than any single leadership behavior alone (Dattalo, 2013;
IBM, 2014).
Findings and Interpretations
The study involved running two statistical tests on the MLQ survey data.
Spearman (rs) rank correlation coefficient test was used to evaluate the relationship
between the nine leadership variables and the three outcome variables. The results of the
Spearman (rs) correlational test led to the rejection of the nine null hypotheses (i.e., H1 –
H9). Statically significant multivariate correlations were detected through multivariate
multiple regression analysis and factor analysis. Descriptive statistical analyses of the
demographic data provided by the participants revealed consistencies and contradictions
with research studies from the literature review. Details for each research question,
hypothesis, and pertinent details follow below.
Descriptive statistics for the variables. Of the nine leadership behaviors, eight
of the individual behaviors, and all three accumulated mean scores for transformational,
transactional, and laisses-faire dimensions, met or exceeded the ideal frequency levels.
This was true for owner/leader perception scores, rater perceptions scores, and combined
participant scores. The transformational behavior of intellectual stimulation (IS) was the
common factor that fell below the ideal level. The rater perceptions scores and combined
participant scores were aligned for all predictor variable factors and two of the criterion
variable factors. The accumulated mean score for transformational leadership was the
highest, with inspired motivation (IM) receiving the highest individual behavior score.
The accumulated mean score for laissez-faire/passive avoidant leadership was the lowest,
172
with management-by-exception active receiving the lowest individual behavior score.
For transactional leadership, contingent reward (CR) received the highest individual
behavior score. Rater participant scores mirrored these outcomes with the following
exceptions: inspired motivation (IM) received the highest individual behavior score for
transformational leadership and laissez-faire (LF) received the lowest individual behavior
score for laissez-faire/passive avoidant leadership.
The results revealed an overall alignment of the owner/leader self-perceived
leadership styles and employee perceptions of the leader’s leadership behaviors.
Alignment of leader-follower perceptions contributes to organizational success. As an
exchange relationship between leaders and followers that is equitable is implied by
leadership, effective leadership can be defined as a leader successfully influencing others
to attain defined goals (Bass, 2008).
The strongest leaders achieve ideal frequency ratings of 3.5 or higher for the
outcomes of leadership. Based on rater perceptions scores, the owner/leaders were
perceived to be strong leaders in relationship to effectiveness (EFF) and satisfaction with
leadership (SAT) behaviors. The combined participant scores essentially echoed the rater
scores. This outcome supports Yukl’s (2012) observation that women have been rated
significantly higher than men on the outcome measures of inspiring extra effort from
subordinates, subordinates expressing satisfaction with their leadership, and their
effectiveness in leading overall. However, owner/leader’s scores fell short of the ideal
levels for all organizational outcomes, with the highest score for satisfaction with
leadership (SAT) and the low score for extra effort (EE). The leader self-perception
scores were aligned with the Dhaliwal’s (2010) assessment that small business owners
173
generally do not see themselves as leaders or label themselves as entrepreneurs.
Fortunately, employee performance is influenced by his or her perceptions of the
leadership styles exhibited by a leader (Hamel, 2007; Salma et al., 2011). Satisfaction
with leadership and motivation (extra effort) are highly correlated with transformational
and transactional leadership styles (Cifuentes, 2013).
Spearman correlational analyses. Nine null hypotheses and nine alternative
hypotheses assisted in testing the research questions. In this study, the null hypotheses
predicted there was no relationship between the variables and the population and the
alternative hypotheses predicted the relationship exists (Cozby, 2009). The results of the
Spearman (rs) rank correlation analysis for all the hypotheses tested were statistically
significant, thus allowing for the rejection of the nine null hypotheses. However, the
unacceptable Cronbach’s alpha reliability coefficients for factors of contingent reward
and laissez-faire were limitations of this study.
Relationship between leadership styles and organizational success measured by
extra effort. The first three hypotheses tested the first research question:
RQ1. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee perceptions of
their leader’s leadership behavior of extra effort (motivation)?
H10: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
174
H1a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
The results indicated support for H1a. A significant and positive relationship
exists between transformational leadership style of female business owner/leaders and
employee perceptions of their leader’s leadership behavior of extra effort. This was true
for all five transformational behavior scales. The most significant relationships were
revealed for the scales of inspirational motivation (IM) and idealized attributes (IA). The
results are consistent with previous research as presented in chapter 2 including the
Valdiserri and Wilson (2010) study.
H20: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
H2a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of their leader’s leadership behavior of extra effort.
The Spearman (rs) coefficients for the leadership scale of contingent reward (CR)
revealed a significant and positive relationship exists between the transactional leadership
behavior of contingent reward of female business owner/leaders and employee
perceptions of their leader’s leadership behavior of extra effort. Conversely, the
Spearman (rs) coefficients for the leadership scale of management-by-exception active
revealed a moderately significant and negative relationship exists between the
175
transactional leadership behavior of management-by-exception active of female business
owner/leaders and employee perceptions of their leader’s leadership behavior of extra
effort. The results are consistent with previous research as presented in Chapter 2,
supporting acceptance for H2a.
H30: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
H3a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of their leader’s leadership behavior
of extra effort.
Analyses of study results indicated the acceptance for H3a. The Spearman (rs)
coefficient for the leadership scale of management-by-exception passive (MBEP)
revealed a significant and negative relationship exists between the laissez-faire leadership
behavior of management-by-exception passive of female business owner/leaders and
employee perceptions of their leader’s leadership behavior of extra effort. The Spearman
(rs) coefficient for the leadership scale of laissez-faire (LF) revealed a significant and
negative relationship exists between the laisse-faire leadership behavior of female
business owner/leaders and employee perceptions of their leader’s leadership behavior of
extra effort. However, p-values identified the probability the result of the analysis was
176
produced by chance. The Cronbach alpha score for this factor brought into question the
reliability of the measurements of this variable; however, negative or non-significant
results do not inevitably indicate the null hypothesis is correct (Cozby, 2009). The results
for the leadership scale of management-by-exception passive (MBEP) were consistent
with previous research as presented in Chapter 2. However, the results for the leadership
scale of laissez-faire (LF) were not.
Based on the literature review, the effect of laissez-faire leadership style on
follower well-being is harmful (Velkova, 2011). There is a strong negative relationship
between laissez-faire leadership style and affective employee commitment (Yang, 2012).
A leader’s destructive behaviors may produce a counterproductive leadership style rather
than a non-leadership style. Laissez-faire leadership style was correlated positively with
coworkers conflicts, follower role conflict, and follower role ambiguity (Skogstad et al.,
2007), which contributed to this being the least effective form of leadership as assessed
by the MLQ (Bass, 2008; Northouse, 2013).
The results for the leadership scale of laissez-faire (LF) were not supported by the
analyses of Spearman (rs) correlational coefficients performed for this study.
Adjustments to the theory on the relationship between perceptions of laissez-faire/passive
avoidant leadership behavior of female business owner/leaders and organizational
success, as measured by employee perceptions of their leader’s leadership behavior of
extra effort, would be unsound based on the results of the current study. Conducting the
study with a reasonably large sample would be one way to rule out the sample size of the
current study was too small.
177
Relationship between leadership styles and organizational success measured by
leader effectiveness. The next three hypotheses tested the second research question:
RQ2. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee perceptions of the
leadership effectiveness of the leader?
H40: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
H4a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
The results of the Spearman (rs) rank correlation analysis test for all five
transformational behavior scales led to acceptance of H4a. The most significant
relationships were revealed for the scales of idealized attributes (IA), inspirational
motivation (IM), and idealized behaviors (IB). Consistent with previous research as
presented in the literature review, a significant and positive relationship exists between
transformational leadership style of female business owner/leaders and employee
perceptions of their leader’s leadership behavior of effectiveness.
H50: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
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H5a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee perceptions of the leadership effectiveness of the leader.
The Spearman (rs) coefficient for the leadership scale of contingent reward (CR)
revealed a significant and positive relationship exists between the transactional leadership
behavior of contingent reward of female business owner/leaders and employee
perceptions of their leader’s leadership behavior of effectiveness. A moderately
significant and negative relationship exists between the transactional leadership behavior
of management-by-exception active (MBEA) of female business owner/leaders and
employee perceptions of their leader’s leadership behavior of effectiveness, based on
Spearman (rs) coefficient for the leadership scale of MBEA. The results supported
acceptance for H5a and are consistent with previous research as presented in Chapter 2.
H60: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
H6a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee perceptions of the leadership effectiveness of the
leader.
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The results of the Spearman (rs) rank correlational coefficient statistical test
indicated acceptance for H6a. The Spearman (rs) coefficient for the leadership scale of
management-by-exception passive revealed a significant and negative relationship exists
between the laissez-faire leadership behavior of management-by-exception passive of
female business owner/leaders and employee perceptions of their leader’s leadership
behavior of effectiveness. The Spearman (rs) coefficient for the leadership scale of
laissez-faire (LF) revealed a moderately significant and negative relationship exists
between the laisse-faire leadership behavior of female business owner/leaders and
employee perceptions of their leader’s leadership behavior of effectiveness. The results
are consistent with previous research as presented in Chapter 2.
Relationship between leadership styles and organizational success measured by
employee satisfaction with leadership. The last three hypotheses tested the third research
question:
RQ3. What is the relationship between leadership styles in woman-owned and –
led small businesses and organizational success measured by employee satisfaction with
the leadership?
H70: There is no relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H7a: There is a relationship between transformational leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
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The results of the Spearman (rs) rank correlational coefficient statistical test
exposed a significant and positive relationship exists between transformational leadership
style of female business owner/leaders and employee perceptions of their satisfaction
with the leadership. This was true for all five transformational behavior scales. The most
significant relationships were revealed for the scales of inspirational motivation (IM),
idealized attributes (IA), and idealized behaviors (IB). The results are consistent with
previous research as presented in Chapter 2.
H80: There is no relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
H8a: There is a relationship between transactional leadership style in
woman-owned and –led small businesses and organizational success measured by
employee satisfaction with the leadership.
The Spearman (rs) coefficient for the leadership scale of contingent reward (CR)
revealed a significant and positive relationship exists between the transactional leadership
behavior of contingent reward of female business owner/leaders and employee
perceptions of their satisfaction with leadership. Conversely, the Spearman (rs)
coefficient for the leadership scale of management-by-exception active (MBEA) revealed
a moderately significant and negative relationship exists between the transactional
leadership behavior of management-by-exception active of female business
owner/leaders and employee perceptions of their satisfaction with leadership. The results
are consistent with previous research as presented in Chapter 2.
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H90: There is no relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with the leadership.
H9a: There is a relationship between laissez-faire/passive avoidant
leadership style in woman-owned and –led small businesses and organizational
success measured by employee satisfaction with the leadership.
The results of the Spearman (rs) rank correlational coefficient statistical test led to
support for H9a. True for both laissez-faire/passive avoidant behavior scales, a significant
and negative relationship exists between laissez-faire/passive avoidant leadership style of
female business owner/leaders and employee perceptions of their satisfaction with
leadership. The most significant relationship was revealed for the leadership scale of
management-by-exception passive (MBEP) while the Spearman (rs) coefficient for the
leadership scale of laissez-faire (LF) revealed the existence of a moderately significant
and negative relationship. The results are consistent with previous research as presented
in the literature review.
Factor analysis. Factor analysis identified idealized behaviors (IB) and idealized
attributes (IA) as the key factors that may explain most of the variance observed for the
criterion variables (IBM, 2014). Multivariate multiple regression analyses were
conducted based on these results.
Multivariate multiple regression analyses. Multiple regression revealed the
significant power of a female business owner/leader’s combined behaviors to predict
organizational success, and reconfirmed the correlational relationship among the criterion
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and predictor variables. The regression analysis results for the operationalized criterion
variables extra effort (EE), effectiveness (EFF), and satisfaction with leadership (SAT)
indicated a significant relationship to suggest that a female business owner/leader’s
combined behaviors predicted organizational success. The percentage of variance for
criterion variables that was not explained by factors covered in this study for all
participants ranged from 40% to 52% and 33% to 44% for rater participants. This led to
the conclusion that the observed relationships between variables could have been
influence by a number of third variables (Cozby, 2009). This conclusion supported the
critical evaluations of the FRLT model presented in the literature review. Kaiser and
Overfield’s (2010) suggested that leadership research lacks a comprehensive model of the
factors that explains the leader-organizational performance link. Based on research
findings, Michel et al. (2011) concluded a more inclusive model with a broader
perspective on leadership behavior is necessary to understand better effective leadership.
Alternatively, the variance could have resulted from the size of the participant
businesses. Seventy-five percent (fifteen) of the businesses had fewer than three rater
participants per owner/leader participant. In a multi-rater campaign, a minimum of three
raters per leader is suggested (Avolio & Bass, 2004). MLQ results can be influenced
when leaders select and contact raters, which would be unavoidable in very small
businesses. As a result, the rater participant scores could have been inflated by as much
as one unit as compared to the norms (Avolio & Bass, 2004).
Descriptive statistics for demographics. The gender distribution presented an
accurate representation of woman-owned professional, business, and personal
servicesector business organizations, where woman-owned businesses are over
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represented (Robb & Farhat, 2013). Consistent with 2008 United States Census data
cited in the literature review (United Stated Small Business Administration, 2010b),
three-quarters of the women founded their own small business, of which the majority had
not previously started other businesses. An educated owner is a contributing factor to
business survival (Beaver, 2003; Brown, 2007; Dhaliwal, 2010; Fairlie & Robb, 2009;
Headd, 2003; Jarmin & Krizan, 2010). In the current study, more than half of the
owner/leaders have less than a bachelor’s degree. However, 25% (5) of the owner/leaders
reported earned Master’s (1) and Doctorate or professional (4) degrees. Higher education
was a characteristic of business owners positively correlated with organizational success,
which contributed more to success in woman-owned businesses (Kariv, 2011).
Additionally, women with formal education demonstrate a more transformational
leadership style
(Lincoln, 2012).
The self-reported information in several response categories was not
representative of women business owners in the United States, as reported in the literature
review. Factors contributing to business closure include a relatively young owner and an
owner’s lack of managerial and leadership skills (Beaver, 2003; Brown, 2007; Dhaliwal,
2010; Fairlie & Robb, 2009; Headd, 2003; Jarmin & Krizan, 2010). In the current study,
a smaller percentage (30%) of participant leaders were under the age of 45 versus 35% of
female business owners in the United States (United Stated Small Business
Administration, 2010b). The majority of participant leaders previously held managerial
positions (70%) versus 52.3% of female business owners in the United States (Fairlie &
Robb, 2009), and previously held business leadership (65%) positions. The lack of prior
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business experience is emerging as a critical contributing factor in explaining business
performance outcomes (Jarmin & Krizan, 2010). A slightly older population and the
higher percentage of owner/leaders with management and leadership experience may
have contributed to high rater participant mean scores for the three perceived leadership
organizational outcomes.
Implications of the Study
As reported in several studies cited in the literature review, the causes attributed
mostly to business failure are ineffective leadership and management (Atamian &
VanZante, 2010; Bass, 2008; Beaver, 2003; Brown, 2007; Lee et al., 2009; Valdiserri &
Wilson, 2010). Beaver, (2003), Darling et al. (2007), and Valdiserri and Wilson (2010)
indicated successful small businesses must have robust leadership. Kelly et al. (2012)
noted there was a mutual relationship between economic conditions of the United States
and entrepreneurship. Evaluation of Country Business Patterns (2012) indicated small
businesses generate about 70% of all jobs in the United States; making them vital to the
economic strength of the country (Ling et al., 2008.) However, only one-half of the new
businesses in the United States survive after four years (Headd & Kirchhoff, 2009; SBA
Office of Advocacy, 2011, January). Woman-owned businesses play a vital role in the
economic health of the United States (United States Small Business Administration,
2010b) with a start-up rate twice that of businesses owned by men (Economics and
Statistics Administration, 2010).
Findings in this study contributed to the understanding of how employees
perceive the leadership behaviors of female small business owner/leaders and how the
behaviors influence organizational success as measured by three outcomes of leadership –
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extra effort (motivation), effectiveness, and satisfaction with leadership. The goal of
most small business owners is to be profitable enough to provide a living and to achieve a
level of independence (Ahl, 2006; Beaver, 2003; Dawson & Henley, 2012). Regardless
of gender, most small business owners have no desire to hire employees unless the
demand for the product or service exceeds the abilities of the owner (Ahl, 2006). It is the
responsibility of female small business owner/leaders to influence, motivate, and enable
employees (Bass, 2008) to maximize employee performance (i.e., extra
effort/motivation), employee effectiveness, and employee satisfaction with leadership to
achieve organizational success.
A conflict exists regarding leadership behaviors and the differing roles of women.
Female leaders typically demonstrated behaviors aligned with transformational leadership
style (Eagly, 2007; Hopkins et al., 2008; Knopik & Moerer, 2010; Mattare et al., 2010;
Tibus, 2010) while female entrepreneur/business owners were more task-oriented,
reluctant to delegate authority, and focused on their own actions instead of collaborative
relationships (Knopik & Moerer, 2010; Mattare et al., 2010). Empirical support was
provided for the argument that transformational and transactional female leaders are more
likely to influence organizational success through employee perceptions of extra effort,
effectiveness, and satisfaction with leadership, thereby, supporting a balancing of
behaviors, as noted by Moore et al. (2011). This argument was supported by the findings
of the current study by the multivariate multiple regression analyses and assessment of
the descriptive statistics for the variables.
Based on the analysis of the findings of the Spearman (rs) correlations tests, no
adjustments are necessary to the theories on the relationship between perceptions of
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transformational, transactional, and laissez-faire leadership and organizational success as
measured by extra effort, effectiveness, and satisfaction with leadership. The rejection of
nine null hypotheses in the study demonstrated the relationship between robust leadership
and organizational success in service -sector women-owned- and -led business with fewer
than 20 employees. However, interpretation of multiple regression analyses suggested
the comprehensive nature of the factors of FRLT model is questionable for explaining the
connection between leadership and organizational success based on performance in the
businesses of the type and size examined in the study. The percentage of variance in the
criterion variables not explained by the FRLT factors alluded to the deficiency of the
leadership model.
Assumptions, Limitations, and Delimitations
The study was based on assumptions about leadership styles and the relationship
to organizational success of small businesses. It was assumed all participants were honest
and unbiased in his or her answers to the MLQ surveys and demographic surveys, and did
not discuss answers with other participants, so data were not skewed. It was assumed the
participating business owner/leaders were using transformational, transactional, and
laissez-faire leadership styles and shared the vision and mission of the organization with
members as a means to attaining the goals of the organization.
The MLQ Leader Form, MLQ Rater Form, and MLQ 5x-Short were used in the
study. It was assumed a) leadership style differences were adequately reflected and
measured by the MLQ Leader Form, b) employee perceptions of leadership styles and
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behaviors were effectively identified by the MLQ Rater Form, and c) leadership styles
and organizational success were effectively measured by the MLQ 5x-Short. The use
solely of the MLQ instruments limited the research to examining the styles, behaviors,
and attributes addressed by the instruments.
The validity and reliability of the MLQ survey, as an instrument for examining
leadership, have been tested and documented in numerous research studies across a broad
range of businesses cited in the literature review (Ayman et al., 2009; Cassard & Hamel,
2008; Chung-Wen, 2008; Frazier, 2013; Hamel, 2007; Just, 2011; Ling et al., 2008; Ryan
& Tipu, 2013; Tafvelin et al., 2011; Valdiserri & Wilson, 2010; Velkova, 2011;
Wadensten, 2012; Weatherly, 2012; Yitshaki, 2012). However, data analysis for the
current study revealed questionable Cronbach’s alpha scores for the leadership behaviors
of contingent reward and laissez-faire, which brought into question the reliability for
measurements of these variables.
The study was limited to surveying owner/leaders and personnel employed in
service-sector woman-owned and –led businesses with fewer than 20 employees in North
Myrtle Beach, South Carolina. An assumption of the study was the target population was
representative of woman-owned and –led small businesses in general. Delimiting factors
of the study included the service-sector, small businesses with fewer than 20 employees,
woman-owned and -led organizations, and North Myrtle Beach, South Carolina, as the
stipulated geographic area.
The minimum number of raters per leader suggested for the MLQ is three (Avolio
& Bass, 2004). Seventy-five percent of the business in the study had three or fewer
employees, which may have influenced the MLQ results. The owner/leaders were asked
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to supply a complete list of employees for voluntary participation; however, researcher
access to employees was limited to the information provided by the owner/leader. This
may have resulted in rater score inflation.
The research study had a response rate of 98% (60 of 61 eligible participants).
The 60 participants from service-sector woman-owned small business who completed the
survey - 20 owner/leaders and 40 raters – signified a reasonable representation of the 20
participating organizations. With the population size of this research study, if all eligible
participants responded, the generalizability of the study results was supported in
comparison to responses from a small percentage from a large sample (Raosoft, 2014). In
addition, the small p-values resulting from the Spearman (rs) coefficient test indicated the
correlational significance, even with the relatively small sample size.
The study was restricted by the limitations of descriptive correlational research,
which included the inability to measure or infer cause and effect (deVaus, 2011). A
number of third variables could have influenced the observed relationships between
variables (Cozby, 2009). The collection of data was limited to one specific time, which
opened up the possibility of time set biases.
Recommendations
Recommendations for woman-owned and –led small businesses. The
economic outlook for small business formation is uncertain at the time of this study
(Fairlie, 2012), making the study particularly relevant. The survival rate of womenowned
businesses is lower than the rate of men-owned businesses. Woman-owned businesses
are nearly 13% more likely to close (Fairlie & Robb, 2009, December). By answering the
research questions, the researcher sought to understand the relationship between
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leadership styles in woman-owned and –led small businesses and organizational success.
Findings from this study suggested the leadership styles that may enhance organizational
success at women-owned and –led businesses with fewer than 20 employees. The results
of the MLQ surveys revealed the transformational, transactional, and laissez-faire
leadership styles affected organizational success in small service-sector small businesses.
The sphere of influence of a small business owner/leader is influenced by the size
and structure of the organization. Small business owners have more limited time and
personnel than larger businesses, which may contribute to many owner’s assuming a
‘hands-on’ approach (Atamian & VanZante, 2010). Therefore, the value of the
contributions of employees to small business performance tend to be magnified.
Effective organizational performance requires a cooperative effort by leaders and
followers (Yukl, 2008). Walumbwa and Hartnell (2011) suggested organizations could
realize an important return on investment on follower development by training leaders to
be more transformational. Transformational leaders enhance performance and achieve
higher levels of motivation by a) providing learning opportunities, b) providing regular
feedback, c) creating an environment that encourages innovation, and d) delegating
duties.
Critical to organizational success is an entrepreneur’s willingness and ability to
become a leader (Kempster & Cope, 2010). The leadership styles of women business
leaders result from the lack of experience and lack of business knowledge. Current
entrepreneurship research suggests concern for successful entrepreneurship if women
cannot acquire essential managerial experience to develop leadership and networking
skills (Sullivan & Meek, 2012). Small business leaders are encouraged to seek
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leadership positions in business, civic, and social organizations as a way to develop
leadership and networking skills.
The behavior of a leader and how it is perceived by subordinates is positively
related to perceptions of performance and job satisfaction (Chung-Wen, 2008; Craig,
2013; Fernandez, 2008). The interactive, transformational leadership style employed by
women leaders can result in the organizational outcomes of open communication,
employee satisfaction, and a more innovation and productive environment (Moore et al.,
2011; Walumbwa & Hartnell, 2011). However, in the current study, multiple regression
revealed the significant power of a female business owner/leader’s combined behaviors to
predict organizational success. Transformational, transactional, and laissez-faire
leadership styles influence small business organizational performance as well as the
performance of the individual members. To lead a successful business, the small business
owner benefits from understanding better leadership behaviors and leadership styles that
enhance or disrupt business performance (Atamian & VanZante, 2010). Small business
leaders are encouraged to become better educated on leadership behaviors and the
positive and negative outcomes attributed to the behaviors.
Recommendations for small business development programs. It is
recommended that federal, state, and local community policy makers who create
programs to help female entrepreneurs and small business owners foster programs
focused on skills for leadership and employee development. Small business development
programs have a tendency to concentrate on the “how to” aspects of business, such as
finance, management, and marketing. However, entrepreneurs who exhibit excellence in
providing leadership have a higher potential for success than entrepreneurs who merely
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manage their businesses (Darling et al., 2007; Losapio, 2012; Mitchelmore & Rowley,
2013). Recommended topics include assessment of leadership behaviors, outcomes of
leadership, leader-follower dynamics, leading teams, and organizational design and
culture.
Recommendations for future research. Recommendations for future research
were guided by the study results. Replication of the study to test the hypotheses by
surveying a broader population of woman-owned and led business with fewer than 20
employee is recommended. The U.S. Small Business Administration (2010a) defines a
small business as having 500 or fewer employees. Based on this definition, research
could be expanded to include woman-owned and led business with more than 20
employees and fewer than 500. Broadening the range of business sectors and geographic
locations would allow access to a more diverse population, providing perspectives to
confirm generalization of results across regions within and outside South Carolina.
The methodology of the study was quantitative and the research design was
correlational. Conducting a qualitative research study to explore the relationship between
leadership styles and organizational success examined in this study could lead to a better
understanding by looking at characteristics that the researcher cannot easily reduce to
numerical values (Leedy & Ormrod, 2010; Neuman, 2011). Conducting a mixed methods
research study to explore the relationships examined in this study would combine
quantitative and qualitative research criteria. Combining subjective qualitative data and
objective quantitative data in the same study could provide a more complete picture and
reduce alternative explanations of findings (Christensen et al., 2011; Leedy &
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Ormrod, 2010). The recommended research study methods may be appropriate for
identifying factors that explain the link between leadership behaviors and organizational
success, which were not explained in the current study by FRLT model factors. Such
study findings might advance leadership research by contributing to a more
comprehensive model to explain the leader-organizational performance link.
Analysis of study demographics revealed 45% of the owner/leader participants
self-reported previous business ownership plus managerial and leadership experience.
Research could also be expanded to include analysis of owner/leader and rater
participants based on owner/leaders possessing previous business ownership,
management, and leadership experience versus first-time business owner/leaders. With
the custom 360 multi-rater campaign used in the current study, data was coded so the
responses of participant owner/leaders and their participant raters were associated so the
data was available for this expanded analysis. As it was outside the scope of the current
study, data analysis was not conduct for direct owner/leader – rater relationships.
Summary
This quantitative, descriptive correlational study was an examination of the
relationship between leadership styles as defined by full-range leadership theory (FRLT),
known as transformational, transactional, and laissez-faire, of female small business
owner/leaders and organizational success measured by perceptions of the leaders in three
areas: a) extra effort (motivation), b) effectiveness, and c) satisfaction with leadership. To
determine the relationship between the variables, two statistical tests were run on data
collected from Multifactor Leadership Questionnaire (MLQ) survey submitted through a
Mind Garden Transform website by 60 participants. The results indicated a positive
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significant relationship exists between transformational leadership style and the
contingent reward factor of transactional leadership style and organizational success.
Conversely, a negative significant relationship exists between the management-
byexception active factor of transactional leadership style and laissez-faire leadership
style and organizational success.
Analyses of the findings revealed contributions to the existing literature on
leadership styles of female business owner/leaders. It was concluded female business
owner/leaders demonstrated a balance between the behaviors of women leaders that are
aligned with transformational leadership style and the more transactional behaviors of
female entrepreneur/business owners. The results indicated the significant power of a
female small business owner/leader’s combined leadership behaviors to predict
organizational success. However, analysis exposed unidentified variables influenced
organizational success that were not accounted for by FRLT factors. Thus, supporting the
critical evaluations of the FRLT model presented in the literature review, which
recommended a more inclusive model with a broader perspective on leadership behavior
(Michel et al., 2011) and a comprehensive model of the factors that explains the
leaderorganizational performance link (Kaiser & Overfield, 2010).
Recommendations include small business development programs focused on
skills for leadership and employee development, including leadership behaviors and the
positive and negative outcomes attributed to the behaviors. Recommendations for further
research include studies of a broader range of business sectors and geographic locations
to access a more diverse population, and a mixed methods research study to identify
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factors that were not explained in the current study by FRLT model factors to advance
leadership research by contributing to a more comprehensive leadership model.
Conclusion
This study involved discussions pertaining to the problem statement as presented
in Chapter 1. The specific problem of the study was poor leadership and management
skills contribute to small business failure and closure (Atamian & VanZante, 2010; Bass,
2008; Beaver, 2003; Brown, 2007; Lee et al., 2009; Valdiserri & Wilson, 2010). The
general problem of the study was one-third of new businesses in the United States close
within two years (Lussier & Halabi, 2010; SBA Office of Advocacy, 2011, January) and
only one-half survive after four years (Headd & Kirchhoff, 2009; SBA Office of
Advocacy, 2011, January), negatively affecting the nation’s economic strength.
Chapter 2 included a review of the literature on theories of leadership, women and
leadership, women and entrepreneurship, organizational success in small businesses, and
employees and outcomes of leadership styles. Chapter 3 contained a description of the
research methodology, and Chapter 4 included the analyses and study results. The
discussion of the interpretation of findings and results, the study implications, and
recommendations were contained in Chapter 5.
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