transform or transact? which leader gets better results? a

Journal of Business & Leadership: Research, Practice, and Journal of Business & Leadership: Research, Practice, and

Teaching (2005-2012) Teaching (2005-2012)

Volume 1 Number 1 Journal of Business & Leadership Article 11

1-1-2005

Transform or Transact? Which Leader Gets Better Results? A Transform or Transact? Which Leader Gets Better Results? A

Meta - Analysis Meta - Analysis

Jay Mulki Northeastern University

Fernando Jaramillo University of Texas at Arlington

William Locander Jacksonville University

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Part of the Business Commons, and the Education Commons

Recommended Citation Recommended Citation Mulki, Jay; Jaramillo, Fernando; and Locander, William (2005) "Transform or Transact? Which Leader Gets Better Results? A Meta - Analysis," Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012): Vol. 1 : No. 1 , Article 11. Available at: https://scholars.fhsu.edu/jbl/vol1/iss1/11

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Joum al of Business and Lt:ade rship Re sea rch. Pract ice. and Teaching ~005 . Vo l I . No. I . 85-9-1

TRANSFORM OR TRANSACT? WHICH LEADER GETS BETTER RESULTS? A META- ANALYSIS

Jay Mulki . No rtheastern Uni versity Fernando Jaramillo. University of Texas at Arlington William Locander. Jac ksotwill e Uni ve rsit y

This stw~r used meta-a11a~rsis to im·e!' ;ti;:me th e relatio11ship betwee11 lead ership s~r!es a11d job per{orma11ce i11 sale s selli11;:s. Spec~fical~r. th e resear ch im ·esti;:rttes wheth er tra11sjo rmatio11af or transa

ctio11af lead en-hip is more appropriate i11 crealing a high perjormi11g sale s e11viro11m e111. Re su/1:-.·

i11dic

at e /!uti lrttllsjormaliollaf lead ership is positil ·e~r a11d si;.:llljicall/~1' related lo sa/es perso11 's job p er{orma11ce. whereas the re/atio11ship betwe e11 trcm.m ctio11af le ad ership a11d job p erjorma11ce is mix ed.

A lso , res ult s .w;.:;.:es t fl/(/t the re/mio11ship be1wee11 tra11sfo rmrttio11af lead ership u11d job perfomumc e is stro11;.:er whe11 subjective, rather tha11 objecfil·e, m easures of job p erjormu11ce are used.

Introduction

Sa les force resea rchers have noted that a manager' s leadership style i 11 tl uences bo th salespeop le· s att itudes :111d be h3\·iors and has a direc t effec t on job perfor mance (e.g .. Mac Kenzie ct a l. . 200 I : Shoemaker. 1999) In add it ion. le3de rsh i p inn uences job sari s fa ct ion and organi za ti onal commitm ent (e .g .. Agan,al et a l. . 1999: Comer et a l.. 199 5). ''hi ch are important determinants of s3le s perform ance (e.g. .J aramill o et 31.. 2005: ivl3

cKen zie et a l. . 1998). T he c riti ca l question fo r

t'CS e3 rchers and prac titi oners co nce rn s identifying leadership sty les ' ' hi ch foster grea ter sa les results. Thi s questi on has broa der impli c3 ti ons because ~ 3 1 e s force pe rform ance is 3 key determinant of organi za tional success (e.g .. Crave ns et a l. . 199.3: MacKen zie et a l .. 1998) .

T ransac ti onal and trans format io n a I leadership styles have been '' id ely studied (e .g .. Dubinsky et a l. . 1995: Bass. 1997: MacKenzie et al .. 200 I). The former emphas izes in strumental compliance us in g re,,ard s and puni shm ent to stimul ate subordin ates beha viors (Co mer et a l. . 1995: Geye r & Stevrer 1998) . Conve rse ly. transform ati ona l leaders arti cul ate a vision for thei r foll owers. provide an appropri ate ro le mode l fo r th em. and foster the acceptance of group goa ls (e .g .. Bass. 1997: MacKenzie et a l. . 200 I). Thi s. in turn . transforms the fo ll owers· as pi rati ons. needs. preferences. and va I ues to be a li gned with organi za ti onal goa ls (Jex. 2002 : MacKenzie et a l. . 200 I).

Th e criti ca l ro le of leadership 111 bu sin ess performance has spawned severa l research projects and books on leadership by both practiti oners and academici ans (e.g.: Eg ri & Herman. 2000 : Humphreys. 2002: MacKenzie et a l.. 200 I: Sosik & Godshalk. 2000) .

85

Se,er a l academ ic j ournal s are de,·oted entire ly to th e study leadership (e.g .. Journa I o f Leadership : Researc h. Prac ti ce. and Teac hin g. Journa l of Leadership and Organi za ti onal De,·e loptn ent. Leade rship Q uart erl y. and Leadership in Hea lth Sen·ices). In industry. sa les managers are ex peri mentin g '' ith differe nt leadership st: les '' ith the goa l to enh ance th e perform3nce of thei r sa les force . From one perspec ti ve. transac ti ona l leadership ''as found to be more effec ti ve in sa les settin gs beca use these leaders set c lear goa ls. a li gned re\\ards. '' e re d irective Jbout tas k . and prO\·id ed

rei nf orc ing feedback abo ut ind ividu a l perf orm ance (e .g .. Bass. 1997: Dubinsky et a l. . 1995).

From an other perspe cti,·e. resea rchers have noted that transfonn3ti onal leadership co uld be more effect ive beca use it taps into an ind ividua l's co re va lues. persona l go31s. and asp irati ons moti,·ati ng salespeople to perform abo,·e j ob req uirements (e .g.. Humphreys. 2002 : McKenzie et a l. . 200 I) Whil e so me sa lespeop le are most responsive to leaders who use th e transacti ona l st: le. other sa lespeople preferred leaders with a tra nsfo rmati ona l style '' ho moti va te th em us1n g intellectually stimulatin g meth ods to perform above and beyo nd th e ca ll of duty (Comer et a l. . 1995: MacKen zie et al .. 200 1).

In spite of the numero us studi es on th e effec t of leadership St) les on salespe rso ns· job attitudes and beha,·iors. there is a lack of ag ree ment as to whi ch leadership style is most app ropriate for improv ing j ob performance . Research thus far has failed to sa ti sfactorily answer the criti ca l research question: what is th e most effect ive leade rshi p sty le in sa les settings? In view of thi s. a systematic stati sti ca l rev iew of the ava il ab le resea rch ca n be ve ry va luab le to prov ide a clearer vis ion of the impact o f leadership sty le on

1

Mulki et al.: Transform or Transact? Which Leader Gets Better Results? A Meta -

Published by FHSU Scholars Repository, 2005

\ l ui~ I. Jaramillo. and Locander

sa lespe rson job perfo rm ance and can be of int erest to both ac:Jdemi cs as ' ' e ll as practiti oners.

To our kn O\\ ledge_ this is the first meta-ana ly sis that ha e:-- pl ored th e ~impac t of leadershi p st;. le on job performa nce in a sa les settin g. The findin gs of thi s study compare th e t\\ 0 ' 'i de l: prac ti ced types of leadersh1p and iden tif, the effec ti\ e leade rshi p st;. le for sa les 1nana!.! ers -t o enhance sa les force pe rfo rmance . Speciflca ll : . thi s stud;. ana lyzes empiri ca l resea rch to determine ,, he t her the re i at ionsh i p bet\\ ee n leade rsh 1p and _j ob perto rm :J nce is stron!2.e r for transfo rm ati onal , er" u ~ tran sactional leade rship. Thi s resea rch a lso prm ides an addi tiona l in sight b: exa minin g the effec t of the job perform an ce measure used ( i.e .. subJ eC ti ve ,-s. obj cct i' e) 011 th e leadershi p style-pe rfo rm ance 1 · el:1ti o n ~ hi p .

T ran sactional Leadership

Tra ns:J c ti ona l leaders form re lati onships th at a .: imperso n:1 l and based on excha nge s '' ith fo iJ o,, ers

( B a~s. i9CJ 7: Yam marin o. 1997). The;. en g:1ge fo iJ o,, ers in an exc han!2.e that pro\' ides the m ' ' ith materi al and S\ lnboli c r e ,,~:1 rd s for th ei r '' ork and loya lt y (Bass. 1-997). Transac ti onal leade rship has I\\ O key dimensions: "co ni in !Lent IT \\ ard ·· and " manage ment b y except ion (1\ IBE) .-:-. Tra nsac ti onal leaders ''ho prac ti ce a co ntin gent IT \\ ard style ge ner::li ly perform three ke: functi ons in 'a l e ~ force manage ment: I ) th ey set clear norm s for uoal · and re, , ards. 2) monitor de ' i:J ti on from goal . and 3) ad min ister correc ti \'e ac ti on using re,, ards and

puni shme nt (Bass. 199 7: Ho,,e JI & A\'o li o. 1993: \\ 'a lclm :J n et al.. 200 I). Leade rs ' ' ho di spl ay a ma

na!2.e me nt b' except ion (1\ lBE) st: le are kn own to be

de tached and -o bserve salesperson ac ti\'iti es from afa r ([3:J ss. 1997). Leade rs ''ith a MBE style in,·oh·e the mseJ, ·es in salespe rson ac ti \' iti es onl y if th ere is a negati ' e de \ ia tion from the ex pec ted co ur e of ac tion (Co mer et al. . 1995)

Sl) llle researc hers sugge · t th at a transacti onal leader hi p st: le increases . alespeople' s confidence about ''hat is e:--pec ted fro m th em resultin g in grea ter moti\ati on to Jccorn plish goa ls (Dubin sky et a l. . 1995) . In co ntrast. it ca n be argued th at in bound ary spann ing co ndi ti ons. tran sac t ion a I leade rship depri,·es sales peopl e of th e necessa ry nex ibilit·y to meet a \' ari ety of cu tomers· e:--pe ra tions (.J ohnston & Marshall. 2005). In fa ct. the C\ idence of th e relationship betw een tran ac tional leadership and job perfo rm ance is mi xed. sho,,in g both pos it i\ e (e .g .. Yamm arin o et al .. 199 7) and nega ti \ e (e .g .. Humphrey . 2002) correlati ons. Such mi :--ed result \\a rra nt fu rther analys is. The abo\'e di sc uss ion leads us to th e fo ll owin g resea rch question:

86

Joumal of Business and Lead~ rs h1 r Research. Prac tic e. and Teaching

Research Question 1: Is tran acti onal leadership pos iti\'e ly related to sa lesperson j ob performan ce0 If so. hm' trong is thi s relati onship 0

Transformational Leadership

Transformati onal le:1d ers operate out of a deeply he ld personal \'alu e system. Through articulation and role modelin g_ the\' ra ise th e consc iousness of their fo llo\\'ers abo: n hi gher considerati ons and create a \\'Ork

envir onm ent ''h er; indi,·idua l are moti vated. in spired. and cha ll en2.e d (Bass. 1997: Humphreys. 2002 ). These leaders are ; bl e to increase fo ll o\\'ers· perception of se lfeffi

cacv and self \\'Orth by providin g meaningful and

cha ll e1; gin g \\'Ork (Bass. 1985: Humphreys. 2002 ). This res ult s i n leader-fo ll o\\'er re lati onships that are personal and not based on forma l rui es. regulations. rewards. and puni shm ent s (Yamm arino. 1997) . Empl oyees working ' ' ith transform ati onal leaders genera lly look beyond the ir personal interests and accept the organizati onal , ·is ion and mi ss ion as the ir O\\'n (Mac Kenzie et a l.. 200 1 ). Research sho\\'S th at sa lespeople percei ve transform ati onal leaders as pay in g special anenti on to th e ir indi vidua l ac hi eve ment needs and personal growth (Bass. 1997: Humphreys. 2002 ). Studies have al so sho" n th at tran sformati onal leadership had a positive impac t on inn ovati veness . crea ted a perception of increased empo\\'erment. enh anced tea m effectiveness. and pe rform ance (E ienkO\. 200 2). The above di scuss ion suu!.!e sts th at transform ati onal leadership may result in g r~;te r j ob sati sfac ti on :1 nd orga ni za tiona l commitment. poss ibly leadin g to hi gher job performance .

Oth er resea rchers ha\' e argued th at transformational leadership may not have a pos iti ve impact on a lesperson anitudes and behavi ors due to the nature of

th e sellin g task (Dubinsky et a l. . 1995). As boundary spann ers. salespeopl e int erac t with different indi vidual s and group both within and out s ide the organi zati on. The physica l separati on from the organi zation may impede deve loping a strong re lati onship" ith the leader. Thi s, in turn . co uld dimini sh the impact of transformational leadership on job sa ti sfacti on. organizational co mmitm ent. and perfo rmance . Empiri cal research has reported th at the rel ati onship between transformational leadership and a sa le person's perform ance is mixed, rangin g from stati sti ca ll y in significant (e.g .. Dubinsky et al. . 1995) to pos iti ve (e.g .. Humphreys, 2002). The abo\'e di scuss ion leads to th e fo llowing important resea rch qu estions:

Research Question 2: is transformational leadership posi ti\'e ly re lated to sa lesperson's j ob performance? if so. ho\\ trong is thi s rel ati onship?

2

Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012), Vol. 1 [2005], No. 1, Art. 11


Mulki . Jaramillo. and Locander

Research Question 2: Is transformational leadership pos iti ve ly related to salesperson's job performance" If so. ho'' strong is thi s relati onship"

Research Question 3: Is the relationship between leadership and job performance stronger with transformati onal rather than tran sac tional leadership"

Moderating Effect of Job Performance Measure

Three earli er meta-anal yses have hypothes ized that the type of measure used to assess performance (i.e .. obj ec ti ve or subjec ti ve) moderates th e strength of the re lationships among job performance and its antecedents (e.g .. Churchill et a l.. 19 85: Ca no et a l. . 200-L Yinchur et al. . 1998) . Ev idence of the moderatin g effec t of meas ure type is contradi ctory. Churchill et al. ·s ( 1985) metaanalys i uggests that the corre lati ons between predi ctors and criteri a are not infl ated when subj ec ti ve. rather than obj ec tive. measures are used. However. two rece nt metaanalyses indicate th at th e strength of the re lati onship be t\\ een job performance and it s antecedents 1s artifi ciall y infl ated ''hen subj ec ti ve meas ures are used (Cano et a l. . 2004: Yin chur et a l. . 1998).

An artifi c ia l!\ inflated co rre lati on between job performance and it s antecedents may be expl ain ed by two fac tors. First. the respondent prov iding both th e perform ance and antecedents data is oft en th e sa me person. Thi s in creases the like lih ood of common method va ri ance ''h en subjective meas ures are used (Li ndell & Whitn ey. 200 I: PodsakotT et a l.. 2003 ). Second. job perfo rmance and it s ant ecedents are lih.ely to be measured u in g common sca le formats ( .g .. Likert sca les) or imilar anchor points (e .g .. extremely. a l\\ ays.

never). Thi s results in artifi c ia ll y infl ated corre lati ons (Dona ld son & Grant-Ya ll one. 2002) . Research indicates th at common method vanan ce account for approximate ly 25% of the total variance in behavi ora l studi es using subjecti ve meas ures (Donaldson & GrantYa ll one. 2002: Williams et al. . 1989).

The moderating effect of mea urement type may also be expl ained by th e differences in the data which are captured by objective and subj ecti ve measures . Objecti ve measures include factors such as net profit dollars. sa les vo lume. market share. exp enses. number of ne'' accounts. and number of sa les demonstrati ons (e .g .. Churchill et al.. 1985: Jackson et a l. . 1995). Due to the difficulti es in obtaining objective data , studies using objective measures often ~el y on only one of these elements. On the other hand. subjecti ve ratin gs of performan ce are more holi stic and may capture numerous e lements of performance (Ca no et al. . 2004 ).

87

Joumal of Business and Lcadersh1p R~search . Pract1ce. and Tcachlnf!

The above discuss ion leads to the fol io" ing research questions:

Research Question .t : Is the relationship be t\\ een transformational leadership and job perfo rmance stronger when a subj ec ti ve rather than an obj ec tive measure of performance is used"

Research Question 5: Is the re l:lli onshi p be t,, een tran actional leadership and job perfo rmance stronger when a subj ecti ve rath er than an objec ti, ·e mea ure of performance is use d"

METHOD

Simple

compari sons of empiri ca l studi es ma~ produce the illu sion of confli ctin g fin din gs beca use re ea rch res ults are inherently probabili sti c and coul d have occ urred by chance due to sa mplin g and measurement error (Hunter & Sc hm idt. 2004). By integrating findin gs ae ro s tu dies. meta-a nalysi controls fo r these stati sti ca l arti fac ts and provides genera l an " ·ers about the relati onships among organi za ti onal vari abl es (A rth ur et a l. . 200 I: Hunter & Sc hmidt. 2004).

Alth ough num erou tudies have inves tiga ted the effec t of transform ati onal and transac t ion a I leadership on perform ance. a meta-analys is examin ing the directi on and strength of th ese re lat ionship has not yet been unde rt aken in sales settin gs. Meta-ana lys is is one of th e most important inno\'a ti ons in the behav iora l sc iences beca use of it s ca pac it~ to synthes ize em pir ica l researc h and . th ereby. offers ge neral an '' ers to im port ant resea rch que tions (Hunter & Sc hmi dt. 2004).

Inclusion Criteria

Tra n formati onal leadership i o ft en operati onalized with three hi ghl y re lated dim ensions: I) arti cul atin g a vision. 2) prov idin g appropri ate mode lin g. and 3) fo terin g the acceptance of group goa ls (e.g .. Bass. 1997: Mac Kenzie et a l. . 200 I) . In cont rast. sa les re ea rchers have often characteri zed tran ac tiona l leadership as I) contin gent rewards and/or 2) management by exception (e .g., Bass. I 985 : Humphreys. 2002) . The above desc ribed leadership dimensions are consid ered a most appropri ate for se lling contexts (e .g .. Humphreys. 2002: Yammarin o et al. , I 998). Therefore. thi resea rch is limited to studies using th ese leadership dimensions.

Onl y studies where the re pondent was clea rl y identified as a sa lesperson were included. To be eligible. tudi es had to report Pearson's co rre lati on coeffi c ient (r)

or other stati sti cs th at can be conve rt ed to r. such as F-

3



f\hill-.1. Jaramillo. and Loca n<kr

'~ lu c. t-\'a lu e. p-va lu c. and X Studi es publi shed in refe reed jo urnab. co nfe rence proceedin gs. and di ~~e rt a ti o n s bet\\Cen Januar: 198 5 and June 15. 200-1 "ere e li g ible for in c lu sion in thi s meta-a na lys is. Th e tim e frame ''a s estab li shed bec~u s c Bass · seminal ''o rk on transac ti ona l and transformat ional wa s first publi shed in 1985

Study Sea rch

To obtain an amplt' co ll ec ti on or stu d ies reportin g ~n effect :-, i7e of l eacie r~ h ip ~ t y l c on j ob perf orm ance . th e fo lio'' ing procedu re \\<I ~ used. First. an e lec troni c ~en rc h nf th e fo li O\\ i ng da t <1 ha sc ~ " a ::, co nducted: ;\ meri ca n p..,:c ho log ica l ;\ ~.., ,K i a ti o n Ps:cART ICLE Emera ld. 1-il· ..,tSe<~c h [CO. Pro() uest (r\131 iiN FORf\1 G lobal and di ~~e n a ti o n ab ~ tl ·ac t s ) .

:lllclthe /\eade m: or Ma nage ment

On lin e Arti c le Retrie,nl . Ke: ' ' orcl s used 1n the electr oni c ~ e :m: h "ere : tr~1n ~ fo rm a ti o n a l l eade r~ hi p.

t 1· :111 ~ a c t i o n ~ I lcade1·~ h i p. job perfor man ce. and s<1le s. Second . a m<Jnua l e:--a minat ion of the arti c les ide ntifi ed

from th e co lnput er-basccl -,e arc h e ~ \\as ca rried out . Th i1·d. 1n anual sea rches \\e l·e made ofa ll i s~ uc ~o ft h e

l ,11 k" c·t .II ( 201111) l <IIlle r ct :d ( 199'>)

I lt~hnhi-.' ct .II I I 11<1'>) I lt1h 111 , 1-.' cl :~I (I '19'> 1 I l11h111' k: cl :II ( I 1191>) ( '"'cr t.. \ tn rcr (I 'I' IX) II '"' ell ,..._ ll :ill- \kr cnd .l ( 199'11 ll 11111 plli"C\' (2002) \ l :~ c f.. cn; l c ct :d (211111)

RICh (I '111'>) R<>gcr' (2 111111) '-

1""' ' clc. \ che n!-. (2 011 1)

Y.lllll ll :l rllltl ct :d ( 1'197)

I

Y ~tmm :1nm) t..' l ~~~ ( JlJl)X)

Iota!

Table I: Stud~·

I II ,

hX

I ' (I ~-~

I 7 ~ JX 3 7(! 317 _i()l)

~ 77

121

~-

I

ll() .... ,6

30 Ill

JSI 7

Joumal or Business and L~ade rs hip Research. Pra cti ce. and Teac hing

fo llowin g j ournals during the e li g ible publication period: Industri al Marketin g Manage ment, Int ernational Journal o f Researc h 111 Marketin g. Journal o f Applied Ps:c ho logy. Journal o f Bus iness Resea rch. Journal of th e Acade my of Marketing Sc ience. Journal of Marketin g. Journ al o f Persona l Se llin g & Sales Management. and the Journal of Retailin g. Finally. a call for \\ Orkin g papers. forthcoming artic les. and unpubli shed resea rch '' as posted on ELMA R-AMA, Sa les Li stser\'. and the Organi zati onal Behavior Subgroup announce ment s of th e Academv of Mana ge ment. These announ ce ments reach both marketing and manage ment resea rchers.

The search process y ie ld ed a tota l o f t\\'e lve journal arti c le and t\\ O di sse rt ati ons cont a inin g fift een effect s ize s re ultin g from 3. 81 7. salespeopl e (see tab le I). Respondents '' ere from both bus iness-to-business as ''el l a bus iness-to-co nsum er senin gs. They worked in a \'a ri ety of industri es in c luding aut omoti ve. banking. e lec troni c co mponents. insurance. ph armaceutical. and reta ilin g. Effec t s izes in c lu ded studies from four co untri es: Australi a. Austri a. Ca nada. and th e U.S.

Effect Sizes

.II' ' ( orrrl:ttiHII \\ ith .IP

ITH' T HC," ' ri~ C'""-

" () 21

" () J() .() 02 '-, () 2~ 0 J I () (I()~ () Ill '-, () 31 () ()()

II 2lJ {) 21 -0 2 I 0 10 0 ()l} (\ 02

() -ll 19 .() I ~

(I (\ 05 (I 117 (l {) 20

II I H 0 ~ ~ ... 0 II~ I I () 07 :-, () 17 () J(J

() ~ J (I ~~

"\11tn : 1\,unp k \11C . Jph l' crl t>r rn :lll cc ,\lc:hllrc (0 - Oh(cCtll c . ~ - :-,llhiC Ctl\ c) . I r:lll' lt> nn :lllon: il I cadcr, IHp . : 1 r:tn, actt nn.tl l eaJcr..., htfl (( p nttngL·nt Re,,ard , ). anJ ' I rt lll \ :ICIH 1nal I ~:: t Lkr .., JHp (t\l:ln :tgcm-..:n t h~ I \ Ce p tt on)

Meta-Analytic Model

The t\\ 0 most '' ide ly used procedures in metaa n a l ~ s is arc the fi:--cd effect s model and th e rand om

effects mode l (A rthur et a l.. 200 1: llunter & Sc hmi dt. 200 -1 ) Thi s meta-a na lys is uses the rand om effec ts mode l fo r t\\ 0 reasons. First. it is more ge nerali za ble beca use it nc co unh for both random and systemati c variance ( llunt cr & Sc hmidt. 200-1) . Systemati c va ri ance is ca used by the heterogeneity of indi\'iclual study charac te ri sti cs. i.e .. potenti al moderators (e.g .. A11hur et a l. . 200 I: Hunter & Sc hmidt. 200-1 ). Seco nd . randomeffec t mode l i c nse rva ti \'c nnd less prone to Type I

88

error s ince co nlicl ence interva ls aro und the mean effect s1zes are large r (e .g .. llunter & Sc hmidt. 2004: Overton, 1998)

C redibility and Confidence Intuvals

It is import ant to di stin gui sh between cred ibili ty and confidence interva ls in reporting and interpreting the result s o f meta-a na lyti c findings (Arthur et al., 2001: Hunter & Sc hmidt . 2004: Whitener, 1990). Both mat hematical and interpreti ve differences exist between these two interval s. A confidence interval concerns the ran ge of the true popul at ion va lue and is calcu lated using

4



Mul~i . Jara111illo. and Locanda

the standard error of th e mean effec t size (Hunter & Sc hmidt. ~00-l: Whitene r. 1990) Hence. confidence interva ls are used to assess the stati sti ca l s ignifi cance of a relationship . If th e co nfidence interv al does not in clude ze ro. th e mea n e ffect s ize is stati sti ca lly signifi ca nt at a specified a lpha le\ e l (Lipsey & Wi lso n. ~ 001 ).

On the other h;:md . a creel i bi I it~ i nt c rv ~li co rresponds to th e estimated di stri buti on o r th e infinit e samp le of effe ct s iLt'S. and is ca lculated us in g th e standard de \·iati on of the mea n effec t s izes (Hunt er & Sc hmidt. ~00-l:

Whit ener. 1990) . In \ ie\\ of thi s. credibility

intcn·a ls

are used to assess \\ hethcr s itu ati ona l differe nces e:\ ist and to in vesti ga te th e presence o r moderator::, (Lips e: & \\ .il son. ~00 1 : \\ 'hitcn er. 1990) . As o. uggested. confidence int c n a l ~ arc ~1ppro p ri a t e for ill\ esti ga tin g if th e re lati onships hct\\ecn leadership sty les andj oh perfo rm ance arc o. tati s ti call y s ignifi ca nt

Oisattenuation of Effect S izes

llunt er and Schm idt (~004) state th ;-J t d isattcnuation

Journal of Business and Leadership Re search. Prac11ce. and Teach 111 g

is an adj ustment of effect s izes fo r measurement error of latent va riables. They argue that di sattenuati on is necessary to improve the accuracy of th e es timat ed re lationships among constructs. As indi ca ted by Hunt er and Sc hmidt (~004). fai lure to adju . t for sc a le re li abi l it~

res

ult s in an und erestimati on of the me;1 n effec t s ize. Ad justm ent s to r meas urement error have been used in prc\'i ous sales meta-a na lyses (e .g .. Jar;1mi ll o et a l. . ~00 5:

Ri ch et a l.. 1999)

Meta-Analysis Results

The researc h questi ons presented in thi s stud y \\'Cre add ressed by us in g the proced ures suggested b~ Arthur et a !. . (~00 I) and Hunter & Sc hmidt (~004) Fo li O\\ ing th eir guide lin es. mea n effe ct s izes. co nfidence int erva ls. and credibilit y interva ls \\ ere c::!lcul atcd . Both ;-Jrtenuatcd (obscn ·ed correlati ons) and di ssate nu atcd (adju sted co rrelations) mea n e ffec t s izes \\ere estimated . Table~ prO\ id es a S Uilllll a r~ of th e result s.

Table 2: Summary of Meta-Analytical Results

k ' I I 1)~ 0

n Cu nfidt·n rc l ntC'n al 1)3 1!~ ~ cn~ dihi l it\ lnrrnal I·S .'\ '

Lo\\ lli g h r c

Lo\\ I lli c h (hrr:ll l I:' I .:' . <0 1 I II I II 11011 II ~ I () 12 .() ~3 I II ~ 7

0 II (1 _\(1 () 23 .IJ()l) 1

() ~ ~

-II I- II I-I -IIII -I -1131 I) 2_, Ohjrrll\l'

I .:' ~ I I (I :'II

1.11.:'11 -II II:' I-I

h I It ; r '

(hrrall I 1\11 -1111

I r :tu,for malional l.t•: ttlcnhip (CorT)

I k ' I r ' 'J:' 1X1 ( onfidrnrr lntrnal

rc' 1J:' Ci o ( rt'llihilif\ lllfl'r\;tl

FS '\' l.o\\ l li !! h l.o\\ lli ;: ll

(hrrall 1 ~ 1 J . ~112 11 1-1 IIIIX 0 21 2 11 0 I 7 00 1 (IJ -1

Subj(' cli' r I ~ I l .o'i-1 II 20 0 I-' 0 28 I 7-1 () 23 1!0 1 () 3('< Ohjcrrin I ~ I I .!JOX II 07 II 02 0 1.1 17 ()II~ II 02 II I-I

.\ole-: ' Number n l I lice \ ""'"' · ' ~:1mrk \Ill'. t\llcnu:llcd 1\ kan l: ll c c l <,,7c . ' D":lllcnuatcd 1\k :111l llc c1 ',11c . ' I :111 -,: ll c ;-.: "'"d'c ' "' '" :111 c ll ecr Site o l

ten> (fl = 0) ncc· Jed Ill redu ce the mc~ n cllccl "'" (rc ) ' "II Il l

Transactiona l Leadership and Job Performance

Us in g the stati stica l analys is deve loped by Hunter & Sc hmidt (2004). the mea ns and credibility int erv a ls \\ ere ca lculated us in g the samp le s ize and effec t s izes co ll ec ted from th e empiri ca l studi e that arc sumnwri ze d in

tabl e I. As show n in tabl e~- result s indi ca te th at the

attenuated mea n effect s ize o f the re lationship between tran sact ion a I leadership (coni ingent re\\'a rds) and job performance (r) is 0. 11 and th e di satt enu ated mean effec t size (rc) is 0.13. The 95% confidence interva l ranges from 0.003 to 0 . 2~ . Sin ce the 95% confidence interva l doe not in c luci e zero. therefo re. the relati onship bet \\ ee n

89

transac t ion a I leadership (co ntin ge nt reward s) and salespe rso ns· perform ance is stati sti ca ll y s ignifi cant (A rthur ct a l. . ~ 00 I: Lipsey & Wil son. ~00 I). Further ana lysis revea led that thi s re lat ionship is s ignifi cant \\·hen subj ec ti\·e measures o f perform ance are used, r =

0.23 (r, = 0 . ~5). and the 95% co nfid ence interval ranges from 0. 13 to 0.32. 1-i o \\'eve r. thi s re lat ionship becomes stati sti ca ll y in signifi ca nt when objecti ve measures are used. r = -0 02 (rc = -0 .04 ). C lw, -0 . 17 to 0.14. In additi on. result s show that the re lati onship between transac ti onal leadership (manage ment by except ion) and j ob performance is stati sti ca ll y s ignifi ca nt but negative r = - 0. 1 I ( rc= -0 .13 ). C l'l5", -0. 2 1 to -0.02 .

5



Mulki . Jaram illo . and Loca nder

Taken together. these results prov ide a mixed re ponse to resea rch question I. Whil e the relati onship between transac tiona l leadership (contingent rewards) sty le and performance is stati stica il y significant. it becomes in s ignifi can t when obj ecti ve measures are used. Thi s suggests that th e s ignifica nt and pos itive reI at ionsh i p bet'' et' n tran sac tional leadership style and performa nce holds only ''h en subj ec ti ve meas ures of performance are used . A lso. the relationshi p between transac t ion a I leadership (manage ment by except ion) style and perfo rm ance is stati sti ca ll y signifi ca nt. but negati ,·e. These fi nd in gs lead to the conclusion that the impac t of transactiona l leadership style on job pe rformance depe nds on: I ) the dimension of trnn sact ional leade rship ( contin gent rewards or manage ment by exception). and 2) the type of measure used to assess j ob perfo rm ance (subj ec ti ve or objective) .

Transformational Leadership Sl) ·le and Job Pe rformance

As sho" n in tab le 2. results indi cate that the att enu nted mea n effec t s ize o f th e re lat ionship bet\\een t r ~111 s format ion a I leadershi p and job performance '' as 0 15 (r, = 0 17) The 95% confidence inter\'a l ranges from 0.0 I to 0.3 -1 . S in ce the 95% co nfidence interva l docs not co nta in ze ro. the relati on hi p bet\\·ee n trans form at io n a I leadership nnd snles persons · performan ce is ~ wt i s ti ca ll y signifi cant (A nhur et a l.. 200 I: Lipse: & Wil so n. 2001 ). In add iti on. un like trnnsact ional leadership. result s shO\\ ' that th e re I at ionsh i p bet\\'een transformati onal leade rship and sa lespersons· performan ce is pos iti\'e and s ignifica nt rega rdless of the type of measure used to assess per formance . The mea n effec t size for tran sform ational leade rship and subjec ti ve performance \\ aS 0.22 (rc = 0 25). Cl95" .. 0 15 to 0.29. The mea n effec t ize of the re I at ionsh i p bet\\'ee n transformational leadership and object i,·e perfo rmance was 0.07 (rc = 0.08). CJ950 , 0.02 to 0.1 ' . Thus. th ese results provide a pos iti ve response to Researc h Question 2. This brings suppon to the noti on th at trnnsform ati ona l leade rshi p positi ve ly effec ts job pt>rfo rmance (e .g .. Bass. 1997: Humphreys. 2002) .

Results provid e an inconclusive answer to research questi on 3. Thi s is beca use the strength of the leade rship perfo rm ance re i at ionsh i p depend s on the dimen sions of transacti onal k adersh i p (contin gent rewards or mnnage ment by exce ption) and the type of perfo rmance measures (subjecti\'e or objec ti ve). A definit ive conc lu sion about a stronger effect of transformati onal leade rship on perform ance cann ot be made because the 95% confiden ce interva ls of the leadership-j ob perform ance relationship overl ap for the conti nge nt

90

Journal o f Bus iness and Leadership Re search. Practi ce. and Teaching

reward s dimen sion of tran sactiona l leadership (r = 0.11. C l95 ·, 0.003 to 0.22) and transformationa l leadership (r =

0.15. Clw, 0.08 to 0.21 ). However. it should be noted that transformational

leadership has a stron ger effect on performance than transactional leadership when obj ective measures of performance are used . Thi s is based on th e significant and pos itive relationship between transformational leadership and objecti ve performance (r = 0 07. Cl95'. 0.02 to 0.13) and the stat isti ca ll y in significant re lationshi p bet\\een transacti onal leadership and performa nce (r = -0 .02. C LJ'"• -0. 17 to 0. 1-1) Fin al ly. results impl y that th e re lati onship bet,, een leadership and job perto rm ance is stronge r with transform at ional leadership (r = 0.15. CI<J5', 0.08 to 0.2 1) rather than transactiona l leadership w.hen the man agement by exception dimen sion is used (r = -0 . 11. C1950 , -0 .21 to-0.02) .

Moderating Effect of Job Performance Measures

Researc h Questi on -1 \\'aS about the moderating effect of meas urement type (subj ec tive. objecti ve perfo rmance) on the re lationship between tran sform ati ona l leadership and sa lesperson's perform ance . As shown in tabl e 2. th e rt>lationship bet,,·een transformati onal leader hi p style and j ob pe rto rmance is stronger ''hen subj ec tive (0 .22 . Clw,

0.15 to 0.29) rather tlwn objecti\'e (0 07. C lw. 0.02 to 0.13) measures of perform ance '' ere used . Since the two confidence interva ls do not over lap. result s show that the modernti ng effec t of meas urement type is stati sti ca lly s ignifica nt (A nhur et a l. . 200 1: Sc henker & Gentleman. 2001 ).

Similarl y. Research Questi on 5 re lated to the effect of measurement type on the rel ationship between transac ti onal leadership styl e and j ob performance . As prev iously in dicated . contin gent rewards and manage ment by exce ption are the two most widel y used measures of transformati ona l leadership in sa les force resea rch. Result s indicate th at the rel ati onship between transac ti onal leade rship style (contin gent rewards) and job performance is stronger when subj ec tive (0.23. Clw.

0.13 to 0.32) rather than obj ecti ve ( -0 .02 , C l95", -0 .17 to 0. 1-l) measures of performance are used. Although at a = 0.05 the confidence interva ls have a sma ll overlap , the d iffere nce is stati stic all y significant because the mean effec t size of the tran sactio nal leadership sty le and subj ec ti ve performance (r = 0.23) is not contained in the confidence interval of the tran sactional leadership style and object ive performance (C I95 , , -0 . 17 to 0.14), and vice versa (Sc henker and Gent leman 200 I). In addition, these confidence interval s do not overl ap at a = 0.06. A

6



Mu lk1 . Jaramillo. and Locand~ r

compari son between subjective and object ive measures for the transact ional leadership sty le (manage ment by exception) and job performance relationship was not poss ibl e because onl y one study prov ided a correlati on between tran sactiona l leaders hip sty le (management by exception) and objecti ve j ob performance. Taken together. these res ults ind icate that stronger re lationships bet\\ een both transfo rm ational and transactiona l lc<Jdersh i p sty le (co ni in gen t rewards) and j ob performa nce are expected when subj ec ti ve. rath er than objecti ve. perfo rmance measures are used prov iding pos iti,·e ans\\ ers to Researc h Question 4 and Resea rch Questi on 5

DISCUSSION

Thi s stu dy found th at th e re lationship bet\\ ee n tr<J ns <Jc ti onal leadership ty le and j ob perfo rm ance r<J ngcs from neg<J ti\'c to stati sti ca ll y in signifi ca nt. Two re<Jsons m il ~ cxp iJin thi s phenomenon. First. le<Jders cli s pl a~

ing transac tiona l leadership styl e. es pec i a l! ~

mJ nagc ment b: exce pti on. ofte n use negati,·e re inforce ment to co ntrol sa lespeopl e. Ma nage rs me li~ e ly to crea te an environment of fea r th at Cil ll n eg<J ti\ e l ~ impac t performance (Howe ll & H<JIIMerenci<J. 1999). Second. fa ilure of trans<Jc ti onal leade rshi p to in spire strong perform<Jnce co uld be due to the grea ter re li ance on reward s and puni shment s (D ubin s ~y et a !. . 1995: Mac Kenzie et a !. . 2001 ). The expected perfo rm ance may not materi a I ize if S<Jies peo pl e perce i\ e th at th e re\\ ard S) Stem i unfair. or if the: do not ful ly un derstand th e link bet\\ ee n th e orga ni za ti ona l re" ard and th e pe rformance (J ohnston & Marshall . 2005) Th is assoc iati on is '' ea k ''h en th e manage r is unabl e to effec ti ve ly communi ca te the re\\ arcl stn7cture to sa lespeople. Fin a lly. puniti ve behav ior assoc iated '' ith co ntingent reward s has th e potenti a l to dec rease ro le c larity thereby leadi ng to poor performance (Mac Kenzie et a!. . 200 I) .

The findings of thi s study support th e be lief that a transform ational leadership sty le has a stronger re lationship '' ith j ob performance than th e manaQe ment by

exce pti on dimen sion of a tran sac tional leadership

style . Thi s hi ghli ghts th e important ro le of th e sales manager in settinQ the o r!.! a ni za ti onal vision to "Uide sa les;erson beha,·ior s (Ba ~s . 1997). Also. the ~tud\' result s are consistent with the notion th at effectiv~ managers lead by exa mple and engage in behaviors that are emulated by sa lespeople. thus he lpin g them ac hi eve a greater performance (Carle ss et a!. . 200 I). Leaders with transfo rmationa l sty le lead by exampl e maki ng sure that there is consistency between the vision they set for the department and the1r articulation of the goa ls and

9 1

Journal of Business and Leadership Res~ a rc h . Practl c~. and T~aching

objectives. Transformational leaders set exampl es by th eir se lf-confident behav ior and by di spl ay ing <J rtitud es and va lues that are compatibl e with their mi ss ion. Results of thi s meta-analysis are consistent wi th the idea th at effec ti ve mangers are able to create a team spirit that enhances the group and indi vidual performance (MacKen zie et al .. 2001 ).

Th e results po int o ut the power of transformational leade rship exe mplifi ed by th e manage rs· ab ility to

articular -; a vision for the sa les department and moti\'ate salespeople to go the extra mil e to ge t results. While money is a powerfu l moti\ a tor. results o f thi s metaana lys is suggest it takes more th an money to ac hi eve superi or performance . Thi s is evide nt in the current en,·ir onm ent of teJm se llin g " here success is cont ingent on th e entire tea m performin g. A leade r. who is ab le to he lp team members interna li ze group goa ls as the ir own. is l i~e l y to see bener result s. A transformati onal leader is ab le to get bener result s as she/he tran sfo rm s th e entire teJ m by pro·: idin g a \·is ion and <J n ove rall goa l.

Man<Jge rs are responsibl e fo r thi s transfo rmati on. which ultimate ly result in hi gher perfo rm ance.

Subjective vs. Objecti, ·e Measures of Performance

Th e types of measures ta ~ e n affec t th e re lationship bet\\een tran sform ati on<J I l e<Jdership sty le and j ob perfo rmance. Stronge r results <Jre found when j ob pe rform ance is measured us in g subjective rather than obj ec ti ve meas ures The result s o f thi s meta-ana lys is are consistent wi th other meta-ana lyses \\ hi ch fo und that the co rre lations bet\\ ee n predi ctors and criteri a may be artifi c ia ll y infl ated wh en subjec ti,·e rather than obj ec tive measures are used (Ca no et a l .. 2004 : Vin chur et a l. , 199 8) . Sa les force resea rchers sho ul d consider these di fferences wh en conductin g and eva luatin g resea rch studi es.

Limitations and Future Research

Seve ml limitati ons to thi s stud\' need to be stil ted . First. selec ti on bias may be a lim i-tati on of th e studv

a lth ough th e fa il -safe N stati sti c d imini shes the threat;~ va li dity from fil e drawer cases (L ipsey & Wil son. 200 1 ). As sho'' n in tabl e 2. I 95 effec t s izes " otdd be needed to red uce the mean e ffec t size of the re lati onship between transformati ona l leadership styl e and j ob performance to 0.01 . Also. 72 studi es \\ Ould be nee,:ed to increase th e mea n effect size o f th e re lat ionship between transac ti onal leadership sty le (management by excepti on) and j ob perfo rman ce to 0.0 I . In spite of our effort to reduce selec ti on bias. it is poss ible that re levant studi es were exc luded from thi s meta-a nalys is. Second .

7



Mul ki. Jaramill o. and Locander

studi es were e:-;c luded from thi s meta-an alys is. Second. thi s stud\ onh refl ects the direc t effects of transfo rm a-ti onal ~nd transac tional leadership sty les on job perform ance and does not inc lude indirect effect. It is poss ible th at both transform ati onal and transa ctional leade rship affec ts j ob attitudes (e.g .. JOb sat1 sfac t1 on. or!.!.a ni za ti onal co mmitment). \\'hi ch in turn may lead to a !.!. r;a ter performance (e .g .. Aga rwal et a l. . 1999: Sparks & Schenk . 200 I) . Future meta-analyses may in vesti ga te th e indirec t e ffec t of leade r hip styles on job performance . A th ird limi ta ti on from thi s meta-a nalys is is tha t due io sample size restricti ons. the relati onships bet\\cen th e di mensions of transfo rm ation leade rship (i.e.. int e llect ual stimul ati on. idea li zed influence. i nspi rati onal mot i\ at ion. and ind i \' idua l conside ration) and job perf ormance could not be established. Future cmpiri c JI resea rch in sa les se ttin gs is needed to assess th e strenQth of th ese relati onshi ps. Fi na ll y. results from this met;-a nalysis do im ply ca usality of th e analyzed relati onshi ps.

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l'v1u lk i. Jaramillo. and Locander

Yammarino. F .. Spangler. W .. & Dubinsky. A. 1998. Tran sformati onal and contingent reward leadership :

Journal of Business and Leadersh ip : Research. Practice. and Teaching

Indi vidual. dyad. and group leve ls of analysis . Leadership Quarterly, 9: 27-54 .

Jay Mulki is an ass istant professor of marketin g at North eastern Uni versity . He received hi s Ph.D. from the University of So uth Flor ida. Hi s research interests are in the areas of personal se llin g and sa les manage ment. He has publi shed in Journal of Business Research and Journal of Personal Se llin g & Sa les Management. He has also publi shed in confere nce proceedings of Assoc iation for Hi stori ca l Research in Market in g. Southwest Academy of Management Conference. and National Conference in Sa les Ma nagement.

Fernando Jaramillo is an ass istant professo r of marketing at Uni ve rsity ofTe:-.:as at Arlin gton. He received hi s Ph .D. in market in g from Uni vers ity of South Florida. Hi s research interests inc lude sa les force performance and marketing strateg: . He has publi shed in Journal of Perso nal Se lling & Sa les Ma nagement. Intern ati onal Journal of Research in Market in g . .J ourn al of Business Researc h. Journal of Marketin g Educat ion. and Academy of Marketin g Sc ience Rev ie''.

William Locander is the Davis Chair and Director of the Dav is Leadership Center at Jacksonvi ll e Uni ve rsity. He rece ived hi s Ph .D. in marketing from Uni versity of Illin ois in 1973. He has publi slred in Journal of Marketing Researc h . .J ourna l of ivlarketing. Journ al of Consumer Resea rch. and Industrial Marketin g Managemen t.

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transform or transact? which leader gets better results? a

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