Progress Report

Completed in fulfilment of the requirement for mid-candidature review

The relationship between servant leadership and job satisfaction: The moderating roles of the decision making process and organisational structure.

Nathan Eva (ID: 20294492)

Supervisors Dr. Sen Sendjaya Dr. Daniel Prajogo

Date: 03/05/2012

CONTENTS
Table of Figures ........................................................................................................................................ i Abstract ................................................................................................................................................... ii 1. The Current Reserach.......................................................................................................................... 1 1.1 Purpose of the Study..................................................................................................................... 1 1.2 Justification for the Research........................................................................................................ 2 1.3 Hypotheses ................................................................................................................................... 3 1.4 Methodology................................................................................................................................. 5 1.4.1 Data Collection ....................................................................................................................... 6 1.4.2 Data Analysis .......................................................................................................................... 7 1.5 Discussion...................................................................................................................................... 8 2. Progress............................................................................................................................................... 9 2.1 Thesis Progression......................................................................................................................... 9 2.2 Timetable for Completion ........................................................................................................... 12 2.3 Deviations from Confirmation .................................................................................................... 14 2.4 Oral Presentation Component .................................................................................................... 15 References ............................................................................................................................................ 16

TABLE OF FIGURES
Figure 1.1 Conceptual Framework .......................................................................................................... 5 Figure 2.1 Confirmation Timetable ....................................................................................................... 13 Figure 2.2 Mid-Candidature Review Timetable .................................................................................... 13

ABSTRACT
The effect of servant leadership on employee outcomes has garnered much attention recently (e.g. Hoveida, Salari & Asemi, 2011; Ruiz, Ruiz & Martnez, 2011; Walumbwa, Hartnell & Oke, 2010). More research however is needed to better understand the context and conditions for such process to occur. This research explores the extent to which decision making process and organisational structure influence the relationship between servant leadership and job satisfaction. Findings from two studies using both experimental manipulations and organisational surveys suggest that both moderators have significant effects on the servant leadership-job satisfaction link. Specifically, servant leaders produced higher levels of job satisfaction amongst employees under a low organisational structure and high levels of involvement within the organisations decision making process. Theoretical and managerial implications of the findings are discussed at the conclusion of the presentation.

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1. THE CURRENT RESERACH

1.1 PURPOSE OF THE STUDY

The purpose of this study is to examine the impact of organisational characteristics on the relationship between servant leadership and job satisfaction. Specifically this study will explore the framework of servant leadership and the effects of the decision making process and organisational structure on its relationship with job satisfaction. The proposition of this research is that the relationship between servant leadership and job satisfaction is moderated by both the decision making process and organisational structure. Previous research on leadership and job satisfaction has been numerous and far-reaching (Barbuto Jr & Wheeler, 2006; Castaneda & Nahavandi, 1991; Cerit, 2009; Fernandez, 2008; Griffith, 2004; Hu, Yang & Islam, 2010; Laub, 1999; Madlock, 2008; Miears, 2004; West, Bocarnea & Maranon, 2009), with researchers often grouping leadership as an antecedent of job satisfaction. Apart from leadership, other variables such as the decision making process and organisational structure have been shown to have an effect on job satisfaction but have only been measured as standalone organisational constructs, not as moderating factors to leadership (Cheng, Lai & Wu, 2010; Katsikea, Theodosiou, Perdikis & Kehagias, 2011; Kim & Jogaratnam, 2010; Madlock, 2008; Williams, 1998). Furthermore, both the decision making process and organisational structure have been researched in relation to leadership and the impact that a particular leadership style has on these dimensions (Chaganti & Sambharya, 1987; Kim & Jogaratnam, 2010; Lindgreen, Palmer, Wetzels & Antioco, 2009; Thomas & Ramaswamy, 1994). Each of these three dimensions (leadership, decision making process and organisational structure) are individually important to the success of the organisation, however they have not been mutually researched to understand their impact and interaction effects on employee job satisfaction.

These research gaps will be addressed within this thesis by looking at three overarching research questions. First, Research Question One will pertain to how the decision making process affects the relationship between servant leadership and job satisfaction. Second, Research Questions Two will address how organisational structure affects the relationship between servant leadership and job satisfaction. Finally, Research Question Three will analyse the how the decision making process and organisational structure interact to affect the relationship between servant leadership and job satisfaction. Each of these relationships will be tested using moderating hypotheses via two distinct quantitative methods. With this research gaps in mind, this research will have two key contributions. First, it will be the first study to examine the process by which servant leadership, an emerging leadership construct, predicts job satisfaction in the corporate context by integrating the decision making process, organizational structure, leadership, and job satisfaction literature. Second, the study will contribute to the leadership field in general and servant leadership in particular. Specifically, the study will help build the predictive validity of servant leadership as predictor of a key performance measure (i.e., job satisfaction) in an Australian setting. Since most servant leadership studies to date have been conducted in the US (Han, Kakabadse & Kakabadse, 2010; Winston & Ryan, 2007), this study will test the extent to which servant leadership can be applied in different cultural settings.

1.2 JUSTIFICATION FOR THE RESEARCH

Research into organisational characteristics using servant leadership theory is limited, so are empirical studies on job satisfaction and servant leadership within an Australian business setting. In this light, the current study has the following significance: 1. It creates context for the servant leadership job satisfaction relationship, looking at it with multiple moderating factors;

2. It further validates the importance of empowerment theory in predicting and enhancing job satisfaction (Jiang, Li-Yun & Law, 2011); 3. It creates a clear link between employee driven leadership theories (servant leadership) and organisational structure; 4. It expands the validity of how servant leaders make their decisions and the means in which they go about it; 5. It is the first study to integrates the decision making process literature with the organisational structure literature, demonstrating the influence organisational structure has over the decision making process; 6. This study validates a shorter, 18-item servant leadership behavioural scale based on the Sendjaya, Sarros and Santora (2008) framework. The shortened scale still maintains its focus on morality and spirituality and its use of multiple dimensions; and 7. It has extending the cultural applicability of the servant leadership framework, testing it in an Australian setting.

1.3 HYPOTHESES
Research Question One: How does the decision making process affect the relationship between servant leadership and job satisfaction? Hypothesis 1: The level of leader involvement in the decision making process positively moderates the relationship between servant leadership and job satisfaction whereby the more a servant leader is involved in the decision making process, the higher levels of elicited employee job satisfaction. Hypothesis 2: The level of leader dominance in the decision making process negatively moderates the relationship between servant leadership and job satisfaction whereby the

more a servant leader is dominant in the decision making process, the lower levels of elicited employee job satisfaction. Hypothesis 3: The positive relationship between servant leadership and job satisfaction will be moderated by both involvement and dominance such that the positive relationship between servant leadership and job satisfaction will be stronger when involvement is high and dominance is low. Research Question Two: How does organisational structure affect the relationship between servant leadership and job satisfaction? Hypothesis 4: The level of organisation formalisation negatively moderates the relationship between servant leadership and job satisfaction whereby the more formalised the organisation the lower levels of elicited employee job satisfaction. Hypothesis 5: The level of organisation centralisation negatively moderates the relationship between servant leadership and job satisfaction whereby the more centralisation the organisation the lower levels of elicited employee job satisfaction. Hypothesis 6: The positive relationship between servant leadership and job satisfaction will be moderated by both formalisation and centralisation such that the positive relationship between servant leadership and job satisfaction will be stronger when formalisation and centralisation are low. Research Question Thee: How does the decision making process and organisational structure interact to affect the relationship between servant leadership and job satisfaction? Hypothesis 7: The positive relationship between servant leadership and job satisfaction will be moderated by both involvement and formalisation such that the relationship between

servant leadership and job satisfaction will be strongest when involvement is high and formalisation is low. Hypothesis 8: The positive relationship between servant leadership and job satisfaction will be negatively moderated by both dominance and centralisation such that the relationship between servant leadership and job satisfaction will be weakest when dominance and centralisation are is high. Figure 1.1 Conceptual Framework

Decision Making Process Servant Leadership Organisational Structure Job Satisfaction

1.4 METHODOLOGY
There have been reservations in behavioural science research, such as leadership, regarding the suitability of use of only a single method, therefore experiments and surveys were included within this study (Dial, 2006; Yukl, 1989). Furthermore, there have been increased calls for experimental designs within leadership research due to the growing concern of self-report limitations (Brutus & Duniewicz, 2012).

The experiments set out to draw causal conclusions of the hypotheses before the organisational survey was undertaken. Therefore the hypotheses were first tested in a laboratory experiment which was high in internal validity (Mook, 1983). This method has previously been employed in leadership research by Van Knippenberg and associates (Rus, Van Knippenberg & Wisse, 2010, 2012; Van Ginkel & Van Knippenberg, 2012; Van Knippenberg & Van Knippenberg, 2005; Van Quaquebeke, Van Knippenberg & Eckloff, 2011). In the survey, the leaders level of servant leadership behaviours, decision making process and employees job satisfaction was measured in an organisational context. Following the method established by Rus et al. (2012, pp. 18-19), the survey was undertaken to further bolster the confidence in our conclusions by a replication via a different method, the use of a different research population as well as a broader conceptualisation of the decision making process and organisational structure differing levels of servant leadership behaviours than was able to be achieved with the laboratory experiments. Although the experimental study will yield consistent casual evidence it does not offer support for the theoretical framework in an organisational setting. Therefore, there is great value in testing the generalizability of the experimental findings of servant leadership in the field. Further, it increases confidence in the findings by establishing that they are not limited to a specific methodological design (Denzin, 1970).

1.4.1 DATA COLLECTION

1.4.1.1 EXPERIMENT 975 Australian business and economics students (391 male, 508 female, 76 undisclosed) with a mean age of 19.50 years (SD = 1.50) voluntarily participated in the study. Participants were randomly assigned to one of the 2 (high or low leader involvement in the decision making process) x 2 (high or low leader dominance in the decision making process) x 2 (high or low centralised organisational environment) x 2 (high or low formalised organisational environment) conditions.

Participants were given instructions on how to complete the case study and were informed that they were participating in a study from a leading consultancy firm, assisting them in improving their graduate program. Participants were asked to put themselves in the scenario that they had just completed a three year graduate program for a leading Australian consultancy firm working with the same supervisor (leader) for their entire tenure. In each of the scenarios the supervisors were described as portraying servant leader behaviours based upon the Sendjaya et al. (2008) servant leadership framework. 1.4.1.2 SURVEY The participants are direct reports of their respective companies CEO/GM/MD and were recruited from a mailing database of enterprises within Australia. The questionnaire was sent via postal mail to 1,500 randomly selected companies from the database. Of the 1,500 participants that were contacted, 336 questionnaires were returned yielding a response rate of 22.4%. 336 responses was well above the recommended sample size of 200-250 for a survey design (Hair, Black, Babin & Anderson, 2010; Maxwell, 2000). 68% of the respondents were male and 60% were aged below 50. They had worked for their respective leader for an average of 7.5 years.

1.4.2 DATA ANALYSIS

1.4.2.1 EXPERIMENT Analysis of Variance (ANOVA) and t-tests were used to test the hypotheses via the SPSS software. As recommended by Tharenou, Donohue and Cooper (2007), planned comparison analysis was used determine if particular manipulations resulted in differing levels of job satisfaction. The analysis revealed that all eight hypotheses were supported by the experiments.

1.4.2.2 SURVEY In order to test the hypotheses with the organisational survey data, a hierarchical regression analysis was performed by entering the control variables, servant leadership and the study variables into different steps of the equation (variables were z-standardised prior to analyses). Simple slopes analysis and post-hoc tests for slope differences were used for both the two-way and three-way significant moderations (Dawson & Richter, 2006). The analysis revealed that Hypotheses 1, 6, 7 and 8 were supported by the organisational survey data. An example of both the experiment and the survey analysis is presented in piece of work submitted entitled Research Question Two.

1.5 DISCUSSION
This research creates context for the servant leadership job satisfaction relationship. In previous research the relationship between servant leadership and job satisfaction has only been looked at without any moderating factors (Cerit, 2009; Jaramillo, Grisaffe, Chonko & Roberts, 2009; Mehta & Pillay, 2011). This research has revealed that differing levels of the decision making process and organisational structure affects the impact servant leadership has on employee job satisfaction. The research extends the foundations for the creation of a full model of servant leadership situation applicability.

2. PROGRESS
This section outline the progress made since confirmation in May, 2011. Since then major progress has been made on the thesis and the maturation of the research itself. In particular, the methodological approach has changed in reaction to advancements in leadership research (Schneider & George, 2011; Van Ginkel & Van Knippenberg, 2012; Van Quaquebeke et al., 2011) and the data analysis has changed to suit advancements in methodological analyses. Although adaptation has been made to the study, it has not hindered my original progress towards completion. The progress chapter will be split into four sections: 1. The progress to date on each of the chapters of the thesis; 2. The timetable for completion will be reassessed; 3. Deviations from the confirmation timetable and research design will be justified; and 4. How the oral reflects the work presented in the progress report.

2.1 THESIS PROGRESSION

Due to the subject nature of the study, namely servant leadership, this thesis will be examined by American reviewers. Therefore, the thesis will take on an amalgamation of the traditional thesis structure and thesis by publication. The thesis contains nine chapters, three of which (Chapters Five through Seven) will be written in publication style. The methodology, literature review and descriptive data analysis will still follow a traditional style. The progress of each of the chapters is outlined below. Chapter One: Introduction

As the introduction reflects the entire thesis, this will continue to be under review as the discussion chapter develops. The chapter discusses the purpose of the study, the statement of the problem, the contribution it makes to theory and practice, definition of key terms and an overview of the thesis. The draft of this chapter is currently under review by my supervisors. Chapter Two: Literature Review This chapter is in the final stages of current completion, reviewing the servant leadership research from 2012. This chapter discusses an overview of leadership as a concept before focusing on servant leadership in terms of its origins, development, characteristics and measures. The decision making process is then reviewed, looking at the variables of involvement and dominance. Organisational structure will be assessed in terms of formalisation and centralisation and job satisfaction will be analysed as the dependant variable. The literature review will still continue to develop and the latest draft is yet to be assessed by my supervisors. This chapter is the next to be reviewed by my supervisors and will be submitted for review on the 4th of June, 2012. Chapter Three: Methodology The research achieves triangulation by using two distinct forms of quantitative data, namely vignette experiments and organisational surveys. The methodology discusses the rationale for both data collection methods, the instrumentation, sample, data collection and analysis. This chapter is completed and currently under review by my supervisors awaiting feedback. Chapter Four: Descriptive Data Analysis The quantitative data obtained from the experiment and the organisational survey was analysed using methods outlined by Hair et al. (2010), among others. The demographics of the data, data preparation, construct validity and reliability and the validation of the composite scores was discussed in this chapter. This chapter is completed and currently under review by my supervisors.

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Chapter Five: Research Question One This chapter addresses how the decision making process interacts with the servant leadership job satisfaction relationship. In so it addresses the first three hypotheses looking at involvement and dominance as moderators in this relationship. The surrounding literature, procedure, results and discussion are presented in this chapter. Study 1 provided support for the hypotheses where Study 2 only provided support for Hypothesis 1. This chapter is completed and currently under review by my supervisors. Chapter Six: Research Question Two This chapter addresses how organisational structure interacts with the servant leadership job satisfaction relationship. In so it addresses hypotheses four through six looking at formalisation and centralisation as moderators in this relationship. The surrounding literature, procedure, results and discussion are presented in this chapter. Study 1 provided support for the hypotheses where Study 2 only provided support for Hypothesis 6. This chapter is completed and currently under review by my supervisors. Chapter Seven: Research Question Three This chapter addresses how the decision-making process and organisational structure interact with the servant leadership job satisfaction relationship. In so it addresses hypotheses seven and eight looking at involvement and formalisation and dominance and centralisation as moderators in this relationship. The surrounding literature, procedure, results and discussion are presented in this chapter. Study 1 and Study 2 provided support for both the hypotheses. This chapter is completed and currently under review by my supervisors. Chapter Eight: General Discussion

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The general discussion will tie the three research questions together, discussing the extension of both theory and practice through this study. In particular it will focus on furthering empowerment theory based upon the aforementioned variables. The chapter will go on to suggest further research and models in this area. This chapter is at its infancy stages with work to be completed on it in the coming months. It is envisaged that the draft will be sent to the supervisors by August 2012. Chapter Nine: Conclusion This chapter will summarises the finding, speak on the limitations of the study and reiterate the implications and importance of the study. This chapter will be addressed once the general discussion and the literature review have been submitted for review.

2.2 TIMETABLE FOR COMPLETION

Currently, seven of the nine chapters of the thesis are under review by my supervisors. The feedback on these chapters will be addressed in the coming months. It is envisaged that the final draft of the literature review will be completed by June and the general discussion by September. The conclusion then will be addressed after feedback on the general discussion. Currently, Research Question Two has been accepted as a conference paper in the 2nd Global Servant Leadership Research Roundtable in June this year. After the mid-candidature review submission will be made to the European Academy of Management Doctorial Colloquium and the British Academy of Management Doctorial Colloquium. Application will also be made for the Academy of Management Conference in 2013 based on Research Question Three. No journal articles have been submitted from the research as yet. However, after the Servant Leadership Roundtable, Research Question Two will be submitted, as well as Research Question Three after the Academy of Management submission. The reviewed timetable for the thesis is illustrated below. 12

Figure 2.1 Confirmation Timetable Activity Jan 2010 Literature Review 2011 Literature Review Methodology Ethics Approval Data Collection (Survey) Results Data Collection (Interviews) 2012 Data Collection (Interviews) Results Discussion Conclusion Introduction Revisions 2013 Revisions Submission Writing of Journal Articles Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

Figure 2.2 Mid-Candidature Review Timetable Activity Jan 2012 Literature Review General Discussion Conclusion Revisions 2013 Revisions Submission Writing of Journal Articles Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

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2.3 DEVIATIONS FROM CONFIRMATION

The current state of the thesis is currently where the timetable in the confirmation stated. The timetable requires the months of May, June and July to be spent on the discussion, which is the current state of progress. There are no major deviations from the timetable laid out in the confirmation from this current point in time. However, there have been methodological deviations from the confirmation report. First, the study employed the use of experiments to test the hypotheses before they were tested in an organisational setting. As the decision making process and organisational structure had very rarely been used in association with leadership studies, let alone together, the experiments sought to test if the theoretical arguments held true in practice. Therefore a simulated organisational environment was created which allowed different levels of the decision making process and organisational structure to be manipulated. Using the experiments alongside the organisational survey bolstered the confidence in the findings as the conclusions were replicated using a different method and a different research population, thus increasing the generalizability of the findings (Rus et al., 2012). Further, it increases confidence in the findings by establishing that they are not limited to a specific methodological design (Denzin, 1989). This method has previously been employed in leadership research by Van Knippenberg and associates (Rus et al., 2010, 2012; Van Ginkel & Van Knippenberg, 2012; Van Knippenberg & Van Knippenberg, 2005; Van Quaquebeke et al., 2011). Second, the qualitative part of the thesis no longer will be addressed. The results gained from the experiments, surveys and the surrounding literature allow the researcher insight into the phenomena without needing to take a qualitative approach. Further using experiments and the survey achieve triangulation, addressing issues concerning validity and reliability (Denzin, 1989). Thirdly, with the advancement in simple slopes analysis, three-way moderation effects will now be addressed in the thesis (Zhang & Peterson, 2011). The three-way interaction between servant

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leadership, the decision making process and organisational structure had been discussed during the first year of candidature but was not brought to confirmation due to the technicality of the procedures. With the advancement of plotting programs and a growing proliferation of three-way moderations in the leadership field, the three-way moderations were analysed for the thesis.

2.4 ORAL PRESENTATION COMPONENT

The oral presentation component of the mid-candidature review will take place on the 11th of May. The 20 minute presentation will briefly cover the progression made across the thesis by presenting the findings and preliminary discussion of the research. Although unable to cover the full extent of the research, the presentation will give an insight to the current state of the research for feedback and comment.

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