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Academy of Management Conference

The relationship between servant leadership
and job satisfaction:
The moderating roles of the
decision making process and organizational structure.
Nathan Eva,
Sen Sendjaya
Daniel Prajogo
Department of Management, Monash University

www.monash.edu.au
Introduction
• Employee job satisfaction has continued to decline (Clark, 2012;
Mendes, 2011)

• Clear link between leadership and employee job satisfaction
• Many of the Fortune’s 100 Best Companies to Work for in
America have adopted servant leadership (Hunter et al., 2013)
• Drawing from classical contingency theory (Shenhar, 2001)
• Need to understand the boundary conditions in which servant
leadership affects job satisfaction
www.monash.edu.au
2
Hypothesized Model

H4

H5

www.monash.edu.au
3
Method
Study 1 - Survey
• Sample: 336 middle
managers of small to medium
enterprises.
• Rated leadership style and
decision making of their
CEO/GM/MD.
• Rated the level of
organizational structure.
• Rated their job satisfaction.
• Hierarchical regression and
simple slopes analysis.

Study 2 - Experiment
• 2 x 2 x 2 x 2 x 2 betweensubjects design.
–

(Charness et al., 2012)

• 32 differing vignette case
studies.
• 1,569 respondents.
• Post hoc analysis of the
power exceeds 0.80
threshold.
–

(Tharenou et al., 2007)

• Data analyzed using a oneway between groups ANOVA.
www.monash.edu.au
4
Study 1 – Organisational Survey
Hypotheses 1 - 3
Leader involvement and formalization as the moderators of the relationship between
servant leadership and job satisfaction
5

4.5
Job Satisfaction

(1) Low Inv Low Form

(2) High Inv Low Form

4

(3) Low Inv High Form
(4) High Inv High Form

3.5

3
Low

High
Servant Leadership

www.monash.edu.au
5
Study 1 – Organisational Survey
Hypotheses 4 - 6
Leader dominance and centralization as the moderators of the relationship between
servant leadership and job satisfaction
5

4.5

Job Satisfaction

(1) Low Dom Low Cent
4

(2) High Dom Low
Cent
(3) Low Dom High
Cent

3.5

(4) High Dom High
Cent

3

2.5
Low

High
Servant Leadership

www.monash.edu.au
6

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Aom presentation

  • 1. Academy of Management Conference The relationship between servant leadership and job satisfaction: The moderating roles of the decision making process and organizational structure. Nathan Eva, Sen Sendjaya Daniel Prajogo Department of Management, Monash University www.monash.edu.au
  • 2. Introduction • Employee job satisfaction has continued to decline (Clark, 2012; Mendes, 2011) • Clear link between leadership and employee job satisfaction • Many of the Fortune’s 100 Best Companies to Work for in America have adopted servant leadership (Hunter et al., 2013) • Drawing from classical contingency theory (Shenhar, 2001) • Need to understand the boundary conditions in which servant leadership affects job satisfaction www.monash.edu.au 2
  • 4. Method Study 1 - Survey • Sample: 336 middle managers of small to medium enterprises. • Rated leadership style and decision making of their CEO/GM/MD. • Rated the level of organizational structure. • Rated their job satisfaction. • Hierarchical regression and simple slopes analysis. Study 2 - Experiment • 2 x 2 x 2 x 2 x 2 betweensubjects design. – (Charness et al., 2012) • 32 differing vignette case studies. • 1,569 respondents. • Post hoc analysis of the power exceeds 0.80 threshold. – (Tharenou et al., 2007) • Data analyzed using a oneway between groups ANOVA. www.monash.edu.au 4
  • 5. Study 1 – Organisational Survey Hypotheses 1 - 3 Leader involvement and formalization as the moderators of the relationship between servant leadership and job satisfaction 5 4.5 Job Satisfaction (1) Low Inv Low Form (2) High Inv Low Form 4 (3) Low Inv High Form (4) High Inv High Form 3.5 3 Low High Servant Leadership www.monash.edu.au 5
  • 6. Study 1 – Organisational Survey Hypotheses 4 - 6 Leader dominance and centralization as the moderators of the relationship between servant leadership and job satisfaction 5 4.5 Job Satisfaction (1) Low Dom Low Cent 4 (2) High Dom Low Cent (3) Low Dom High Cent 3.5 (4) High Dom High Cent 3 2.5 Low High Servant Leadership www.monash.edu.au 6
  • 7. Study 2 – Experiment 4 4 3.5 3.5 (2) High Inv Low Form 3 (3) Low Inv High Form (1) Low Dom Low Cent Job Satisfaction Job Satisfaction (1) Low Inv Low Form (2) High Dom Low Cent 3 (3) Low Dom High Cent (4) High Inv High Form 2.5 2 (4) High Dom High Cent 2.5 2 Narcissistic Servant Narcissistic Servant Leadership Style Leadership Style Hypothesis 3 Hypothesis 6 www.monash.edu.au 7
  • 8. Discussion • Creates context for the servant leadership job satisfaction relationship. • Leaders need to be actively involved, working with the employees, not just delegating orders from their ivory tower. • Servant leaders who were highly dominant elicited lower levels of job satisfaction in their employees than servant leaders who were not dominant. • Formalization positively impacted job satisfaction when paired with leader involvement. • The relationship between servant leadership and job satisfaction was weakest when dominance and centralization was low and strongest when dominance was low and centralization was high. www.monash.edu.au 8
  • 9. Thank You • Questions? • Suggestions? • Comments? www.monash.edu.au 9
  • 10. References Charness, G., Gneezy, U., & Kuhn, M. A. (2012). Experimental methods: Between-subject and within-subject design. Journal of Economic Behavior & Organization, 81(1), 1-8. Clark, C. (2012, 13 December). Job satisfaction declining in federal workforce Retrieved 6 February, 2013, from http://www.worldatwork.org/waw/adimComment?id=68306 Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Upper Saddle River, N.J.: Pearson Prentice Hall. Maxwell, S. E. (2000). Sample size and multiple regression analysis. Psychological Methods, 5(4), 434-458. Mayer, B. W., Dale, K., & Fox, M. L. (2011). Processes for developing simulation self-esteem. Business Education Innovation Journal, 3(1), 65-76. Mendes, E. (2011). U.S. Job satisfaction struggles to recover to 2008 levels Retrieved 09/01, 2013, from http://www.gallup.com/poll/147833/job-satisfaction-struggles-recover-2008-levels.aspx Moyes, G. D., & Redd, T. C. (2008). Empirical analysis of factors influencing the level of job satisfaction of Caucasian and Hispanic accounting professionals. International Business & Economics Research Journal 7(10), 21-42. Myers, A., & Hansen, C. H. (2011). Experimental psychology (7th ed.). Belmont, CA: Wadsworth Publishing. www.monash.edu.au 10
  • 11. References Pepitone, J. (2010, January 5). U.S. Job satisfaction hits 22-year low, from http://money.cnn.com/2010/01/05/news/economy/job_satisfaction_report/ Podsakoff, P. M., MacKenzie, S. B., Moorman, R. H., & Fetter, R. (1990). Transformational leader behaviors and their effects on followers' trust in leader, satisfaction, and organizational citizenship behaviors. The Leadership Quarterly, 1(2), 107-142. Provan, K. G., & Skinner, S. J. (1989). Interorganizational dependence and control as predictors of opportunism in dealer-supplier relations. Academy of Management Journal, 32(1), 202-212. Sendjaya, S., Sarros, J. C., & Santora, J. C. (2008). Defining and measuring servant leadership behaviour in organizations. Journal of Management Studies, 45(2), 402-424. Tharenou, P., Donohue, R., & Cooper, B. (2007). Management research methods. Port Melbourne, VIC: Cambridge University Press. www.monash.edu.au 11
  • 12. Survey Scales • Servant Leadership – (Sendjaya et al., 2008) • Decision Making Process (Involvement/Dominance) – (Mayer et al., 2011) • Organisational Structure (Formalisation/Centralisation) – (Provan & Skinner, 1989) • Job Satisfaction – (Moyes & Redd, 2008) • Transformational Leadership – (Podsakoff et al., 1990) • Size (number of employees) • Tenure under the leader, Age & Gender www.monash.edu.au 12
  • 13. Experiment Scales • Job Satisfaction – • • • • • (Moyes & Redd, 2008) Age Gender Degree Major Current Year of Study www.monash.edu.au 13
  • 14. Sample Questions • Servant Leadership – Leads by personal example • Involvement – My CEO participates in most strategic decision making meetings • Dominance – My CEO is reluctant to compromise their decisions with others’ views. • Centralisation – Even small matters have to be referred to someone higher up for a final answer • Formalisation – The company has a large number of written rules and policies www.monash.edu.au 14
  • 15. Experiment Manipulations • Servant Leadership – • High Involvement Low Dominance – • “Your supervisor constantly listened to your opinions, often going out of her way to help you resolve problems, even if it disadvantaged her. Over the journey your supervisor has acted as a mentor being very open and honest, helping you through different and varied situations. “In these discussions your supervisor was always present and active. From your interactions, you noticed that your supervisor listened intently, was well informed of all the situations inside and outside of the company.” High Dominance Low Involvement – “…your supervisor empowered your team to run your own meetings; however she was quite dominant in every decision. From your interactions, you noticed she would only appreciate views that were aligned with her own, always pushed to have her decisions implemented and was reluctant to compromise on her position.” www.monash.edu.au 15
  • 16. Experiment Manipulations • High Formalisation – • “You were handed a rules and procedure manual and were told that every question you had about your job could be found in there. Once you looked inside, you found a clear job description telling you what you needed to do for each job rotation and guidelines to follow if any issue arose.” High Centralisation – “…you were told by one of the workers that “you’ll learn quickly, that in this company you can’t use your own discretion – you do what they tell you”. Thinking back, you realise that many of the decisions you have made, had to be approved by your supervisor...” www.monash.edu.au 16

Editor's Notes

  1. JS down (not rising back to pre-2008 levels)In the literature clear link bw L and JS“the effectiveness of the organisation is dependent on the goodness of fit between the structural variables and the environmental variables”We know TL leads to JS so we want to control for that in the study
  2. Drawing from the contingency theory the leadership style of the leader must fit with the organizational sub-systems in order to obtain internal fit. When the sub-systems are all working together, internal fit occurs and thus we should see the highest levels of employee job satisfaction. Leadership: Servant, Narcissistic (low servant leadership behaviors), transformational leadershipDMP: Involved or Dominant in the decision making processOS: Formalization and CentralizationDominance refers to the extent to which a leader dominates the DMP striving to have their own views implementedLeaders dominate due to expertise, experience, personal style or to uphold a personal moral code SL dominate due to moral codeDom = reduced JSThe structural constraints from high levels of centralization reduce the servant leader’s ability to empower their employees.Cent has shown to reduce JS and also reduce the empowerment given to employeesHigher levels of centralization leads to a lack of flexibility, thus leaders will tend to make the decisions independently creating institutionalised dominance thus decreasing job satisfaction
  3. Collected the survey – Understanding the limitations of a self-report survey (even with interaction effects), we tested the hypotheses in a controlled setting.Vignettes – chosen as ease of administration and the timely manner they can be produced and administered. Pilot Studies – 77 business studentsSample exceeds 30-40 per cell (Myers and Hansen, 2011)G*Power
  4. Hierarchical regression analysis with SPSS.Hyp 1 Supported that Inv mod the relationship between SL and JSHyp 2 not-supported that Form mod the relationship between SL and JSHyp 3 supported that Inv and Form interact to mod the relationship between SL and JSSimple slopes analysis - illustrated using one standard deviation above and below the mean of servant leadership, involvement, and formalisation to represent high and lowSimple slopes analyses and post hoc tests for slope differences
  5. Hierarchical regression analysis with SPSS.Hyp 4 not-supported that Dom mod the relationship between SL and JSHyp 5 supported that Cent mod the relationship between SL and JSHyp 6 supported that Dom and Cent interact to mod the relationship between SL and JSSimple slopes analyses and post hoc tests for slope differences
  6. The data was divided up into groups based on the hyp. All hyp were supported.Presented is the findings from Hyp 3 and 6.
  7. Context: Showing that in order to achieve the highest levels of employee job sat it is not enough to just have SL – SL needs to fit with the system1: Surprising, however it is not uncommon to find form = JS in small to medium firms. Looking into SL further, the formalised procedures put in place should have an emphasis on collaboration, equality, accountability, trust and empowerment. Therefore breading a servant culture throughout the organisation even after they have left. More research needed on this point. 2: Relationship was weak as low dom and low cent employees felt empowered – therefore the addition of the SL to this subsystem is not having as dramatic effect. Change to high centralization becomes gradient becomes much greater. Cent has a –’ve on JS, this is shown through the results when SL is not present. However, as a SL looks to collaborate with their employees and maximise the human capital at their disposal, the employees feel a sense of power not felt in a non-SL led centralized organisation. Therefore by implementing SL in a highly centralised workplace – we see a significant change in employee job satisfaction.