Effect of chief executive officers as servant leaders on team project performance: A social learning perspective
Main Article Content
This study explored the mechanism through which chief executive officers’ (CEOs) servant leadership style affects team project performance. We established a multilevel mechanism through which servant leadership exerts an indirect influence on team performance via team goal clarity and team process clarity. Participants comprised 100 CEOs matched with 572 middle managers, working at intelligence intensive companies. Our results show that CEOs’ servant leadership, through its effect on team goal clarity, team process clarity, and team knowledge creation, had an indirect influence on team project performance. Thus, leadership selection and training programs should be developed for CEOs, and top leaders should stimulate employees’ understanding of team goals and work processes.
Sam Walton, the founder of Walmart, emphasized that influential leaders should not simply sit behind their desks and call the shots. Instead, managers should have an open door and listen to employees so that they can help them, and even serve them by helping them deal with their problems (Walton & Huey, 1992). Walton himself employed this management philosophy and Walmart has become the world’s largest retailer (Gereffi & Christian, 2009). Walton’s actions are representative of servant leadership, the focus of which is on the moral high ground of emphasizing and safeguarding followers’ welfare and growth, and refers to leaders who put followers’ needs, aspirations, and interests above their own (Greenleaf, 1977). Servant leadership is a model that highlights inspiration and moral safeguards (Greenleaf, 1970). It differs from other leadership models, such as transformational leadership, owing to the emphasis on personal integrity (Peterson et al., 2012).
The influence of servant leadership on followers’ performance and team performance has been studied by previous researchers. For example, Chen et al. (2015) examined the influence of hairdressing salon managers’ servant leadership on stylists’ service performance and found that stylists’ self-identity mediated the positive effect of servant leadership on service performance. Hu and Liden (2011) found that servant leadership was positively related to team performance and team organizational citizenship behavior. However, the influence of servant leadership by strategic leaders in high positions in organizations, for example, chief executive officers (CEOs), on team performance has rarely been examined.
CEOs play a critical role in the running of an organization, and exert influence on its internal and external images. The CEO is like a business card: People dealing with the CEO get to know them and realize what kind of person they are, thus associating this realization with their perception of the company. In addition, apart from influencing their direct subordinates (top management team members) and the running of the organization, CEOs’ servant leadership can influence members through team goal clarity and team process clarity, which have an important role with an upward influence on strategy formation and translation of organizational goals and strategies into concrete actions (Seelos & Mair, 2005).
In this study we drew on social learning theory (Bandura, 1973, 1977) to develop a model in which the effect of CEOs’ servant leadership is shown. According to this theory, employees consider salient persons as role models from whom they can obtain information about desirable organizational behavior. Specifically, servant leadership practiced by CEOs can indirectly affect the work-related outcomes of employees at lower levels, that is, team members. As top organizational leaders, CEOs can stimulate a social learning process among followers.
We have made a significant theoretical contribution in this study. Previous researchers’ investigations on servant leadership (Hu & Liden, 2011; Laub, 1999; Russell & Stone, 2002; Spears, 1995), include antecedents (Barbuto et al., 2014; Beck, 2014) and outcomes (Chen et al., 2015; Choudhary et al., 2013). However, recently most researchers have investigated only the direct effect of servant leaders on immediate followers’ performance. We have extended the scope of this research to include how the servant leadership of high-level leaders (i.e., CEOs) influences team knowledge sharing and team performance.
Previous researchers focused primarily on the influence exerted by CEOs’ personal characteristics, such as demographic variables (Hambrick & Mason, 1984), personality traits (Fiol, 1989; Thomas et al., 1993), and leadership style (Uhl-Bien & Arena, 2018), on organizational outcomes. Few have examined how CEOs’ leadership affects followers’ psychological states and work outcomes (see, e.g., Kang et al., 2015). In addition, Zhang et al. (2015) called for researchers’ attention to move from CEOs’ personal traits to examining their leadership styles. We sought to fill this gap in the literature.
Literature Review and Hypothesis Development
Servant Chief Executive Officers, Team Goal Clarity, and Team Process Clarity
Ehrhart (2004) identified seven servant leadership dimensions: forming a relationship with followers, empowering followers, providing opportunities for follower development, behaving ethically, demonstrating conceptual skills, promoting follower success, and contributing to the welfare of people outside the organization. Researchers of the servant leadership effect have found that at the organizational level, servant leadership has a positive influence on organizational performance (Chen et al., 2015; Hunter et al., 2013; Liden et al., 2014; Peterson et al., 2012; Schaubroeck et al., 2011).
Team goal clarity refers to the extent to which employees’ personal working goals and responsibilities are clearly communicated, and to their understanding of the processes required to achieve these goals (Sawyer, 1992). To fulfill their role, employees must have clear expectations of their own goals, the way to accomplish these goals, and the connection between their own work and that of others (Bang et al., 2010), which also relates to team process clarity. The combined effects of team goal clarity and team process clarity not only improve employees’ understanding of task goals and paths but also strengthen the connections between colleagues, teams, and organizations in an industrial chain (van der Hoek et al., 2018).
We proposed that CEO servant leadership would promote the development of team goal clarity and team process clarity. As CEO servant leaders help and empower followers to grow (Liden et al., 2008), they likely respect their followers and share information with team members. When leaders share information about organizational goals and problems, followers gain a clear understanding of their team’s overall goals, and understand how their own tasks relate to these goals. Servant leaders’ stewardship and empowering behavior may also prompt followers to focus on team responsibilities, thereby encouraging the followers to adhere to team work processes.
Leaders are often regarded as role models; thus, followers may imitate the behavior of their immediate superiors (Yaffe & Kark, 2011). Social learning theory states that servant leaders may consciously or unconsciously encourage follower behavior through role modeling (Chartrand & Bargh, 1999). As organizational leaders, CEOs serve as role models for followers through their direct influence on followers’ attitudes and behavior (Jordan et al., 2013). Mayer et al. (2012) stated that when followers believe their leaders have desirable qualities (e.g., integrity and concern for others), they engage in their work and make additional efforts to understand team goals and work processes. Thus, we proposed the following hypotheses:
Hypothesis 1: Chief executive officers’ servant leadership will be positively related to team goal clarity.
Hypothesis 2: Chief executive officers’ servant leadership will be positively related to team process clarity.
Knowledge Creation
Knowledge creation in organizations refers to employees’ knowledge being made available, expanded, concretized, and connected with the organizational knowledge system (Nonaka et al., 1994). The basic structure of Jakubik’s (2011) knowledge creation framework is learning, understanding, and shaping, whereby learning is a new, dynamic, dialectical, and continuous process of experience, understanding, and perception, in which meanings and perspectives are changed and shaped.
According to goal setting theory, a clear (vs. unclear) goal is more likely to be achieved (Locke, 1968). If employees perceive team goals clearly, they perceive the organizational intention, thus increasing organizational attachment (Widyanti, 2020). By contrast, fuzzy and conflicting objectives may confuse employees, thereby reducing their organizational commitment. Also, if employees have a low target, they may forget or feel confused about work priority. Thus, they may their effort exploring less promising ideas or, owing to lack of communication, not concentrate on the same target and reduce work efficiency (Peralta et al., 2015), thereby reducing knowledge creation. Therefore, we proposed the following hypothesis:
Hypothesis 3: Team goal clarity will be positively related to team knowledge creation.
Clear goals and processes often facilitate information and experience sharing (Hu & Liden, 2011), and such initiatives should have a positive impact on knowledge creation (Birkinshaw, 1996). On the one hand, team process clarity can impact on team members’ efficacy (Hackman, 1987), such that team members are likely to have high-quality communication with high process clarity. Thus, dysfunctional conflict caused by uncertainty about their responsibility in the process can be avoided. This harmonious team relationship may lead to members having high clarity in their teamwork, thus increasing willingness and quality of knowledge creation. On the other hand, Korman (2001) found that when the work process is clearly communicated in the work environment, a self-reinforcing incentive system can be activated, and employees feel valued when they obtain work-related information. High process clarity enables employees to understand their team’s ideas, which they process to form new knowledge and increase knowledge creation. Therefore, we proposed the following hypothesis:
Hypothesis 4: Team process clarity will be positively related to team knowledge creation.
By actively sharing information, servant CEOs can enhance team members’ sense of identity toward team work processes and goals and, thus, can stimulate team enthusiasm (Zaccaro et al., 2008). Through servant leaders’ information sharing, each member of a team can get to know each other’s goal (Sawyer, 1992), the relationship between the team and members can be enhanced, and a foundation for overall knowledge creation is laid (Diefendorff & Lord, 2008). Therefore, we proposed the following hypotheses:
Hypothesis 5: Team goal clarity will mediate the positive relationship between chief executive officers’ servant leadership and team knowledge creation.
Hypothesis 6: Team process clarity will mediate the positive relationship between chief executive officers’ servant leadership and team knowledge creation.
Project Performance
In the background of a rapidly changing market, enterprise competition is increasingly fierce. If an enterprise wants to gain market competition advantage, it is necessary to continually improve its performance. Thus, we proposed that team knowledge creation would have a positive impact on team project performance (i.e., innovation performance and brand recognition).
Knowledge, which is the most important intangible enterprise asset for competitive advantage, is irreplaceable in production and operation. It is an important factor affecting enterprise growth in many fields, such as interdisciplinary and career fields. Technological innovation is an important way to enhance enterprise competitiveness and competitive advantage (Howell & Higgins, 1990), and knowledge is the essential element for innovation (Thornhill, 2006). Knowledge creation translates existing knowledge into business value, leading to product innovation (Lee & Choi, 2003). Accumulation and application of knowledge resources are essential for enterprises to achieve good performance and sustainable growth.
Brand recognition refers to the degree to which an individual believes that a brand can provide the required value (Chaudhuri & Holbrook, 2001). Brand recognition may also represent reliability because a brand with high recognition may represent to consumers that this brand provides high quality goods and services that are reliable. Thus, a brand should be strong enough to influence the trend of consumption, thereby affecting consumer needs (Dwivedi et al., 2019). Teams can create new knowledge from existing knowledge and generate new knowledge through combinatorial processes. This knowledge transformation enables teams to integrate emerging knowledge into their strategic development (Nonaka, 1994). In this way teams can create brand competitiveness and brand reputation, which are associated with high brand recognition (Gupta et al., 2020).
If employees develop a clear belief about work goals and processes, they can create more knowledge and produce further desirable performances. Therefore, we proposed the following hypotheses:
Hypothesis 7: Team knowledge creation will be positively related to team innovation.
Hypothesis 8: Team knowledge creation will be positively related to brand recognition.
Hypothesis 9: Team knowledge creation will mediate the positive relationship between team goal clarity and team project performance.
Hypothesis 10: Team knowledge creation will mediate the positive relationship between team process clarity and team project performance.
Figure 1. Research Model
Note. CEO = chief executive officer.
* p < .05. ** p < .01. *** p < .001.
Method
Participants
We contacted 139 CEOs of companies in various industries in China, with business association assistance. These small- and medium-sized intelligence intensive companies can help us capture the effect of CEO servant leadership on middle managers, as in these companies these people have direct and frequent interaction at work.
Among the groups of middle managers, on average between 64.30% and 72.42% were men (M = 1.34, SD = 0.27). The age in each group ranged from 24 to 47 years (M = 32.40, SD = 6.23). The education level for all managers in each group was a bachelor’s degree.
Procedure
This study was approved by the Research Ethics Committee of Beijing Jiaotong University. We obtained a list of middle managers from the human resources department of each company. We told the participants that participation was voluntary, and that the data would be used only for academic research purposes. Participants were assured of the confidentiality of their answers, and we gave them a gift of CNY 10 (USD 1.50) after each wave as a reward. Participants could express any concern to us. We assigned a unique number to each participant to match their data; this number could not be tied to their identification information. Participants submitted surveys in self-sealed envelopes to ensure confidentiality.
At Time 1, we distributed survey forms to 791 middle managers, who were asked to rate their CEO’s servant leadership. We received 718 completed forms (response rate = 90.78%). We then distributed survey forms to those 718 middle managers, who reported on team goal clarity and team process clarity at Time 2, and received 672 completed forms (response rate = 93.59%). Measures on team knowledge creation were then distributed to these 672 managers and were completed by 593 of them at Time 3 (response rate = 88.24%). At Time 4, we sent 139 surveys to CEOs, and 116 (response rate = 83.45%) completed the evaluation of team project performance. There was a time lag of 2 weeks between Times 1 and 2, and also between Times 2 and 3. After matching, the final sample comprised 100 CEOs and 572 middle managers.
Measures
Participants rated items on a 7-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree) for all measures. We translated the items into Chinese using the standard translation/back-translation procedure to ensure accuracy (Brislin, 1986).
Chief Executive Officers’ Servant Leadership
Middle managers evaluated their CEO’s servant leadership using Liden et al.’s (2008) 16-item scale. A sample item is “My CEO makes my career development a priority.” Cronbach’s alpha was .93 in our study.
Team Goal Clarity
We measured team goal clarity with Sawyer’s (1992) five-item measure. A sample item is “My duties and responsibilities are clear.” Cronbach’s alpha was .92 in our study.
Team Process Clarity
We measured team process clarity with Sawyer’s (1992) five-item measure. A sample item is “I am clear about how to divide my time among the tasks required of my job.” Cronbach’s alpha was .90 in our study.
Team Knowledge Creation
We measured team knowledge creation with Bryant’s (2005) 10-item scale. A sample item is “My firm’s workers constantly generate new ideas.” Cronbach’s alpha was .97 in our study.
Team Project Performance
Wang and Ahmed’s (2004) six-item affective commitment scale was used to measure team innovation. A sample item is “We are constantly improving our business processes.” Cronbach’s alpha was .89 in our study. An eight-item affective commitment scale from Delgado-Ballester (2004) was used to measure brand recognition. A sample item is “I can rely on brand [X].” Cronbach’s alpha was .98 in our study.
Data Analysis
As CEO servant leadership, team goal clarity, team process clarity, and team knowledge creation were rated by middle managers, we aggregated these variables to the team level. We calculated rwg (j) values (LeBreton & Senter, 2007) and intraclass correlation coefficients (ICC; Bliese, 2000), and tested whether average scores differed significantly across teams using one-way analyses of variance.
The results show that for CEO servant leadership, median rwg (j) = .75, ICC(1) = .40, ICC(2) = .79, F = 4.77, p < .001. For team goal clarity, median rwg (j) = .63, ICC(1) = .34, ICC(2) = .75, F = 4.01, p < .001. For team process clarity, the median rwg (j) = .67, ICC(1) = .26, ICC(2) = .67, F = 3.03, p < .001. For team knowledge creation, median rwg (j) = .73, ICC(1) = .44, ICC(2) = .82, F = 5.47, p < .001. These findings indicate that our aggregation was appropriate.
Results
Means, standard deviations, and correlations of study variables are presented in Table 1.
Table 1. Means, Standard Deviations, and Correlations of Study Variables
Note. N = 100 teams. CEO = chief executive officer. Cronbach’s alphas are reported in boldface on the diagonal.
** p < .01 (two-tailed). *** p < .001 (two-tailed).
Before testing the hypotheses, we conducted a confirmatory factor analysis to determine if the measurement model captured distinct constructs. Taking into account the number of items and sample size, we used the item-to-construct balance approach (Little et al., 2002) to create three parcels (i.e., CEO servant leadership, innovation, and brand recognition). The results set out in Table 2 show that our hypothesized six-factor model fitted the data well. The alternative models had a significantly poorer fit compared to the six-factor model (see Table 2).
Table 2. Model Fit Results for Confirmatory Factor Analysis
Note. CEO = chief executive officer; RMSEA = root mean square error of approximation; SRMR = standardized root mean square residual; CFI = comparative fix index; TLI = Tucker–Lewis index.
a CEO servant leadership, Team goal clarity, Team process clarity, Team knowledge creation, Innovation, Brand recognition
b CEO servant leadership, Team goal clarity + Team process clarity, Team knowledge creation, Innovation, Brand recognition
c CEO servant leadership, Team goal clarity + Team process clarity, Team knowledge creation, Innovation + Brand recognition
d CEO servant leadership + Team goal clarity + Team process clarity, Team knowledge creation, Innovation + Brand recognition
e CEO servant leadership + Team goal clarity + Team process clarity, Team knowledge creation + Innovation + Brand recognition
f CEO servant leadership + Team goal clarity + Team process clarity + Team knowledge creation + Innovation + Brand recognition
*** p < .001 (two-tailed).
Hypothesis Testing
Table 3 and Figure 1 show that CEO servant leadership was significantly and positively related to team goal clarity and team process clarity. Therefore, Hypotheses 1 and 2 were supported. Team goal clarity and team process clarity were significantly and positively related to team knowledge creation. Therefore, Hypotheses 3 and 4 were supported. Further, team knowledge creation was significantly and positively related to innovation and brand recognition. Thus, Hypotheses 7 and 8 were supported.
Table 3. Hypothesis Testing Results
Note. N = 100 teams. CEO = chief executive officer. Standard errors of unstandardized coefficients are shown in parentheses.
* p < .05 (two-tailed). ** p < .01 (two-tailed). *** p < .001 (two-tailed).
Results of a bootstrapping analysis (see Table 4) show that the serial indirect effect of CEO servant leadership on team project performance (i.e., innovation and brand recognition) via team goal clarity and team knowledge creation was significant. The serial indirect effect of CEO servant leadership on team project performance (i.e., innovation and brand recognition) via team process clarity and team knowledge creation was also significant. Thus, Hypotheses 5, 6, 9, and 10 were supported. The results also show the inner mechanism of the model: Specifically, team goal clarity and team process clarity mediated the relationship between CEO servant leadership and team knowledge creation, and team knowledge creation mediated the relationship between clarity and team performance.
Table 4. Serial Indirect Effect Model
Note. CEO = chief executive officer; CI = confidence interval.
Discussion
Theoretical Implications
We have made important contributions to the servant leadership literature. First, we established a multilevel mechanism through which CEO servant leadership exerted an indirect influence on team work outcomes. Waldman and Yammarino (1999) pointed out the lack of a multilevel approach in prior work on the influence of leadership at upper levels of the organization. Previous researchers have not systematically explored the various loci through which upper-level leaders influence followers’ cognition and behavior.
Second, few researchers have explained the mechanism of how servant leadership influences team goal clarity and team process clarity (see, e.g., Hu & Liden, 2011). We filled this research gap by exploring the mechanism of how servant leadership exerts an influence on knowledge creation through the mediators of team goal clarity and team process clarity. We found that the servant CEO provided specific information and became a role model for team members, and then improved and enhanced their team’s goal and process clarity.
Practical Implications
A practical implication is our finding that team goal clarity and team process clarity can enhance team knowledge creation and team project management. Top management team members should also consider team goal clarity and team process clarity, and strive to stimulate employees’ understanding of team goals and work processes. For example, leaders should seek to learn about the team goal clarity and team process clarity levels of their followers through surveys or communication. When both goal clarity and team process clarity levels are low, top management team members must conduct behavior that promotes enhancement and improvement. For example, top leaders could arrange work according to the management logic of starting from goals, and moving on to tasks, and then to specific behaviors.
Limitations and Directions for Future Research
We explored a multilevel model linking CEO servant leadership to team goal clarity and team process clarity, and examined the indirect effect of these factors on knowledge creation and project performance in the organization. This link is helpful for the adoption of a systematic way for understanding the effect of CEO servant leader behavior on team members. However, there are other factors that can affect these relationships, such as organizational culture and individual characteristics. Future researchers should pay attention to other factors when exploring the influence of CEO servant leaders on organizational factors.
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Figure 1. Research Model
Note. CEO = chief executive officer.
* p < .05. ** p < .01. *** p < .001.
Table 1. Means, Standard Deviations, and Correlations of Study Variables
Note. N = 100 teams. CEO = chief executive officer. Cronbach’s alphas are reported in boldface on the diagonal.
** p < .01 (two-tailed). *** p < .001 (two-tailed).
Table 2. Model Fit Results for Confirmatory Factor Analysis
Note. CEO = chief executive officer; RMSEA = root mean square error of approximation; SRMR = standardized root mean square residual; CFI = comparative fix index; TLI = Tucker–Lewis index.
a CEO servant leadership, Team goal clarity, Team process clarity, Team knowledge creation, Innovation, Brand recognition
b CEO servant leadership, Team goal clarity + Team process clarity, Team knowledge creation, Innovation, Brand recognition
c CEO servant leadership, Team goal clarity + Team process clarity, Team knowledge creation, Innovation + Brand recognition
d CEO servant leadership + Team goal clarity + Team process clarity, Team knowledge creation, Innovation + Brand recognition
e CEO servant leadership + Team goal clarity + Team process clarity, Team knowledge creation + Innovation + Brand recognition
f CEO servant leadership + Team goal clarity + Team process clarity + Team knowledge creation + Innovation + Brand recognition
*** p < .001 (two-tailed).
Table 3. Hypothesis Testing Results
Note. N = 100 teams. CEO = chief executive officer. Standard errors of unstandardized coefficients are shown in parentheses.
* p < .05 (two-tailed). ** p < .01 (two-tailed). *** p < .001 (two-tailed).
Table 4. Serial Indirect Effect Model
Note. CEO = chief executive officer; CI = confidence interval.
Yuhuan Xia, School of Economics and Management, Beijing Jiaotong University, Haidian, Beijing 100044, People’s Republic of China. Email: [email protected]