1Shokane.qxd Davis (1975, p. 43) defines the business environment as the aggregate of all the conditions, events and influences that surround and affect an organisation, and if the latter is to remain prosperous it must frequently adapt to its business environment (as it constantly changes). The complex interaction between an organisation and its environment is further aggravated by the impact of globalisation. Stals (2002, p. 19) explains globalisation as the process of integrating worldwide markets and market operations. According to Jackson (1998, p. 01), globalisation of businesses is not just a new phenomenon but also “a handy word for internationalisation of trade and capital.” Schermerhorn, Hunt and Osborne (1997, p. 22) see globalisation as the new world order that provides a new business environment characterised by worldwide interdependence of resources, suppliers, product markets and business competition. It is a process of free trade and commerce accompanied by fierce competition on international markets. Vignali (2001, p. 97) sees globalisation as a process that involves developing strategies as though the world market is a single entity. Central to these integrated world market strategies are the following issues: International use of information technology; Provision of quality in terms of goods and services; and Selling goods and services at prices and quality than the competitors elsewhere (Wright & Burns, 1998, p. 899). Therefore, there is little doubt that countries are being encouraged by the process of globalisation to move from inward focused economic practices to open-market economic practices. This encourages a stronger private sector, a stronger competitive market and a freer trade market economy. Within the context of the Southern African Development Community (SADC) and Africa in general, South Africa is the only country that has reached the advanced stage of a liberal and open economy. In this advanced stage of liberal economy, South African markets for goods, services and capital have the depth, the liquidity, the infrastructure and the sophistication needed for successful integration with the rest of the global economy (Stals, 2002, p. 19). According to De Kock and Slabbert (2001, p. 4), globalisation of businesses has ushered in the concept of ‘world-class’. A ‘world- class’ organisation means the ability of a business to establish itself in foreign markets and withstand any form of competition. The following issues are central to a ‘world-class’ strategy: Leadership as a springboard to world-class practices in people management; Cost-efficiency in the delivery of goods and services; A participative culture of joint-governance; benchmarking and continuous learning of best practices (Prinsloo, Moropodi, Slabbert and Parker, 1999, pp. 27-34). Therefore, the focus of the literature study had been to unpack the concept of leadership as a springboard to study world-class best practices in people management. Organisations in pursuit of ‘world-class’ depends on the availabilit y of the right leadership pract ices. Research defines Leadership as the process of inf luencing, motivating, supporting, facilitating, and encouraging employees in pursuit of organisational goals through the means put together by all members of the business (Drouillard & Grobler, Kleiner, 1996, p. 31; Brewster, Dowling & Warnich, 2000, p. 29; Smit, 2000, p. 57). Deducing from the definition of leadership above, the latter can be further unpacked as follows: An activit y of inf luencing individuals and team members to strive willingly to achieve organisation goals; A process of giving meaning to the activities people performs, support them and provide guidance and direction; A process of art iculat ing a vision that entails the right values and attit udes. Manz, Neck and Mancuso (1997, p. 3) are of the opinion that leadership is about the leader’s abilit y to lead himself and lead others to lead themselves. Horner (1997, pp. 270- 287) sees leadership as the accomplishment of a group rather than an individual. Newstrom and Davis (1997, p. 229) and Graetz (2000, p. 559) added that leadership is the mental and emot ional involvement of employees in a group sit uat ion where organisat ion decisions are concluded. Graetz (2000, pp. 550-551) explicates the advantages of leadership that: It encourages product ivit y; It reduces conf licts, organisation t urnover and absenteeism; It elevates MS SHOKANE KJ STANZ JA SLABBERT Department of Human Resource Management RAU University ABSTRACT The aim of this study was to describe the nature of leadership in organisations in pursuit of ‘world class’ competitive status. ‘Analysis of Variance’ (ANOVA) was used for analysis and interpretation of data. The sample of convenience consisted of 534 senior leaders. The difference between transactional and transformational leadership dimensions was determined. The results showed that the nature of leadership in South Africa is diversified between transactional leadership and transformational leadership dimensions. The diverse nature of leadership is brought about by the dynamics of organisational environments. More also, there is a definite shift away from conventional transactional leadership to a combination of transactional and transformational leadership dimensions. OPSOMMING Die doel van die studie was om die aard van leierskap in organisasies in die navolging van wêreldklas meedingende status te ondersoek. Variansie-ontleding (ANOVA) is gebruik om data te analiseer en te interpreteer. Die geleentheidsteekproef het uit 534 senior leiers bestaan. Die verskil tussen transaksienele en trans formasionele leierskapsdimensies is bepaal. Die resultate dui daarop dat leierskap in Suid Afrika ’n kombinasie van transaksionele en transformasionele leierskap aanneem. Die diverse aard van leierskap word deur die dinamika van organisasie- omgewings teweeg gebring. Meer nog is daar ’n definitiewe wegbeweeg van die konvensionele transaksionele leierskap na ’n kombinasie van transaksionele en transformasionele leierskap. DESCRIPTION OF LEADERSHIP IN SOUTH AFRICA: ORGANISATIONAL CONTEXT PERSPECTIVE Requests for copies should be addressed to: MS Shokane, Department of Human Resource Management, RAU University, PO Box 524, Auckland Park, 2006 1 SA Journal of Human Resource Management, 2004, 2 (3), 1-6 SA Tydskrif vir Menslikehulpbronbestuur, 2004, 2 (3), 1-6 employees’ self-esteem and job satisfaction; It encourages employee commitment to goals; and it allows for better f low of communication. In line with the concept of participative leadership is the leader’s integration of productivity with employees’ wellbeing in an organisation. According to Newstrom and Davis (1997, p. 208), the most successful managers are those that consider both the productivity and the employees’ well being for success. Graetz (2000, p. 557) adds that in order for organisations to strive for competitiveness they must find the right balance between instrumental and inspirational leadership. Harnessing the two dimensions provides the organisation with a task-oriented dimension of leadership while embracing the interpersonal aspect of leadership. Smit (2000, p. 73) adds to the exposition above that organisations need to understand the difference between a manager and a leader and then harmonise the two qualities synergistically to offset any weaknesses inherent in each. This is due to the fact that organisations need a structured, deliberate and controlled view of a manager and a flexible, visionary and uncontrolled view of a leader (Veldsman: 2002, p. 80; Kossek & Block: 2000, p. 18). Drouillard and Kleiner (1996, pp. 31-32) compared the qualities of a leader to that of a manager and came up with the following results: The manager’s mind is always within the system of administration, while the leader’s soul is to envisage the future; The manager’s focus is in the immediate, while the leader’s focus is in long-term; The manager’s approach to work is conservative, while the leader’s approach to work is inspirational. Bass and Avolio (1997, p. 13) use the concept of transformational and transactional leadership interchangeably to describe the relations bet ween a leader and manager respectively. Transformational leadership means a high-order kind of leadership that is inspirational to employees to acquire both short-term and long-term goals. Transactional leadership means the ability of a leader to manage the behaviours of employees and resources of the organisation to acquire short-term goals. Sarros and Santora (2001, p. 392) acknowledge the overlapping relation between the two concepts by stating the following results in their study: Transactional leadership deals with the management of resources, systems, and structures. Transformational leadership is rooted within the personal side of management. De Kock and Slabbert (2001) emphasise that both transactional and transformational leaders have an important role to play in modern day organisation, as one cannot exists without the other. Avolio (2000, p. 7) adds that transformational leadership facilitates the diffusion of organisation vision, strategy, and long-term goals. Lack of transformational leadership in business means greater degree of confusion and lack of alignment of organisation goals across all levels. Therefore, transformational leadership provides the alignment of people’s actions to the organisation’s vision, strategy, and long-term goals for a greater degree of consistency and coherence in business processes. RESEARCH OBJECTIVE Maritz (2000, p. 18) did a benchmarking study of South African organisations against its international counterparts. The results for the study highlighted that South African leaders lack a sense of urgency to move away from a conventional transactional leadership. Organisations are still rigid and bureaucratic in terms of pay structures and rewards systems. Avolio (2000, p. 7) adds that leaders who are more transformational have the ability to enhance alignment around a compelling vision and strategy, the consequence of which is the employees’ greater understanding of the organisation’s long-term goals. Parker (1998, pp. 186-187) provided the following postulate for further research that: ‘South African business organisations are hard on people and hard on performance, instead of being soft on people and hard on performance.’ In line with Parker (1998) and Prinsloo et al (1999), the Productivit y Development Survey of 280 South African organisations showed that one in 25 managers embraces a multi- skilled, team-based work, collaborations in decision-making, and the involvement of teams (Bennett, 1999). Given the background above, it became obligatory for the researcher to investigate and describe the nat ure of transactional, transformational and non-leadership dimensions in the South African business context. The aim was to use the three reputable organisations from various sectors of the economy to describe the nature of leadership in South Africa. Figure 1: Leadership Model adapted from Bass and Avolio (1997, p. 13). It describes various dimensions of leadership: From transformational to non-transactional leadership dimensions. The following section provides a detailed description of the model of leadership above and the hypotheses for the study: Transformational leadership Transformational leadership is a high-order form of leadership in exchange processes characterised by the leader’s ability to display conviction of right values, beliefs and shared purpose that lead to long-term positive implications for an organisations. There are four t y pes of transformational leadership dimensions: 1. Individualised Consideration Individual consideration means the leader’s ability to see and treat individual employee as important assets that contribute to productivity in the workplace. (Bass & Avolio: 1997, pp. 13-21) (Sarros & Santora: 2001, p. 385). 2. Inspirational Motivation Inspirational motivation means the ability of a leader to clearly articulate an appealing future state of the company. This includes Communicating the vision, mission, and values of the organisation (Bass and Avolio: 1997, pp. 13-21) (Sarros & Santora: 2001, p. 385). 3. Intellectual Stimulation Intellectually stimulate means the leader’s ability to encourage employees’ creativit y when developing ideas or working SHOKANE, STANZ, SLABBERT2 Effective Transformational leadership Constructive Transactional Passive Ineffective Frequency Active Active Management-by- exemption Passive Management-by- exemption Laissez-Faire through challenging obstacles in the organisation (Bass & Avolio: 1997, pp. 13-21) (Sarros and Santora: 2001, p. 386). 4. Idealised Influence Idealised influence means the leader’s ability to charismatically influence followers that the latter emulates the leader’s behaviour (Sarros & Santora: 2001, p. 387). Transactional leadership Transactional leadership can be defined as the day-to-day exchange relations between the employers and employees that comprise of Constructive transactional leadership, Active Management-by-Exception leadership, and Passive Management- by-Exception leadership. (Bass & Avolio: 1997, pp. 13-21). 1. Constructive Transactional Leadership Constructive transactional leadership means the manager engages in constructive transactions for rewards for accomplishment of organisational goals (Jung: 2001, p. 187). Therefore, the outcome of this approach is the employer’s encouragement for performance beyond expectations for rewards. 2. Active Management-by-Exemption Leadership Active Management-by-Exemption leadership means the manager puts in place measures of performance and actively monitors performance for corrective actions (Jung: 2001, p. 188) (Sarros & Santora: 2001, p. 389). 3. Passive Management by Exemption Leadership Passive Management by Exemption leadership means the manager rarely puts in place measures of performance, and passively monitors performance for corrective actions. (Sarros & Santora: 2001, p. 389). Non-leadership Non-leadership is a form of leadership with absence of both the transactional and or transformational leadership dimension. An attribute of laissez-faire’s non-leadership includes delays in terms of decision-making and avoidance to motivate others. Given the likelihood that Laissez-faire’s non-leadership will not have effect to the nature of leadership in any business or behaviour group. HYPOTHESES In the light of the stated objectives of this study, 3 major hypotheses have been formulated. H1: The means across the group of organisations will differ statistically significantly with regards to transformational leadership due to the dynamics of the business environments. H2: The means across the group of organisations will differ statistically significantly with regards to transactional leadership due to the dynamics of the business environments. H3: The means across the group of organisations will differ statistically significantly with regards to Laissez-Faire approach (non-leadership) due to the dynamics of the business environments. METHOD The following section explicates the research design, the instrument used for the collection of data, and the procedure followed in the collection, analysis and interpretation of data. Research Design The opinions of South African leaders on the nature of leadership are vital for this study, and a sample survey was used. The method involves the collection and analysis of information in respect of a sample of participants from three major organisations in South Africa. Hartley (2001, p. 185) outlines the following characteristics of the sample survey technique: � In a sample survey technique there must be a link between the sample and the population from which it is drawn. � It is a systematic collection of information, with the researcher using the same procedure with all the respondents. A convenience sample of employees from different organisations was sought for the study. Highly experienced employees and students on management and leadership from a Tertiary Sector Institution, and highly experienced executive employees from a Public Sector Institution and a Private Sector Corporation were drawn for the st udy. The sampled participants had to have at least three years of managerial experience. The sample sizes in the three selected organisations ranged from 97 to 238. The names of the selected organisations are not revealed for the purpose of confidentiality. The study is considered exploratory, as the sample is not representative of the entire business environment, but a sample of convenience. Generalisation to the entire business community can therefore not be made. Measuring Instrument The measuring instrument comprised two sections, namely, biographical/background questions and the Multifactor Leadership Questionnaire. Based on the previous research done on the Multifactor Leadership Questionnaire (MLQ), the reliabilit y coefficients in respect of transformational leadership, transactional leadership, and laissez-faire yielded 0,99, 0,73 and 0,80 respectively (Bass and Avolio, 1997; Gardner and Stouch, 2000, p73; Ackerman, Schepers and Lessing 2000, p. 58). The MLQ is a self-administered questionnaire consisting of 45 items sub-divided into several dimensions. Each item was measured on a 5-point Likert scale. Permission was obtained from Productivity Development (Pt y) Ltd, the organisation with the copyrights of the Multifactor Leadership Questionnaire in South Africa, for the use of the instrument. The following table describes the sampled items of the MLQ: TABLE 1 THE DIMENSIONS OF THE MLQ Dimensions Number First order Sample Items of Item factor Transformational 5 1. Charismatic leader I instil pride in others Leadership for being associated with me (item 10) 2. Idealised influence I specif y the importance of having a strong sense of purpose (item 14) 3. Inspirational I articulate a compelling Motivation vision of the future (item number 26) 4. Intellectual I seek differing stimulation perspectives when solving problems (item number 8) 5. Individual I spend time teaching Consideration and coaching (item 16) Transactional 3 1. Contingent I make clear what one Leadership Reward can expect when performance goals are achieved (item 16) 2. Management-by- I focus on irregularities, Exception (Active) mistakes, exceptions and deviations from standards (item 4) 3. Management-by- I show that I am a firm Exception (Passive) believer in ‘if it ain’t broke, don’t fix it’ Non- transactional 1 1. Laissez-Faire I delay responding to urgent requests (item 33) LEADERSHIP IN SOUTH AFRICA 3 Statistical Analysis The assistance of Rand Afrikaans Universit y’s Statistical Consultation Services for analysis of the data was sourced. In order to determine whether the vector of means of the three organisations differ statistically significantly in respect of the dimensions of the MLQ a Multivariate Analysis of Variance (MANOVA) was utilised. One-way Analysis of Variance (ANOVA) was subsequently used to determine whether the means of the three groups in respect of each of the dimensions of the MLQ differed statistically significantly. Finally multiple comparisons (Scheffe or Dunnett’s T3) were used to determine which organizations differed statistically significantly with regard to each of the dimensions. A 5% level of significance was utilised throughout the study. RESULTS The reliability coefficients of the three leadership dimensions across the three sampled organisations are shown in table 2. The dimensions Transformational Leadership and Non-Leadership (Laisses-Faire) can be considered reliable since the reliability coefficients was greater than 0,6 (alpha coefficients) in each case. However, for Transactional Leadership the reliability coefficient is only 0,44. Therefore, the reliability of the results on transactional leadership dimension was short of the expected results as explicated by the other research studies (see Measuring Instrument above). TABLE 2 RELIABILITY ESTIMATES OF MLQ FOR THE STUDY Measures N Number of items Alpha Transformational 534 20 0.84 Transactional 534 12 0.44 Non-leadership 534 4 0.61 Descriptive statistics of the three leadership dimensions for each of the sample organisations together with 95% CI’s for the means appear in table 3. The statistical null- hypothesis for the equality of the vector of population’s means (MANOVA) was rejected (Wilks Lambda = 0.074, p-value < 0.05). The null-hypotheses of equal population means for each one of the dimensions of the MLQ were rejected (p-values<0.05 in each case). Table 4 provides the one-way analysis of variance (ANOVA), comparing the means of the various organisations in respect of the MLQ. TABLE 4 ONE-WAY ANALYSIS OF VARIANCE (ANOVA): COMPARISON OF THE MEANS OF THE ORGANISATIONS IN RESPECT OF THE MLQ Variables Source of Sum of df Mean F Sig. varience squares square Tansformational Between groups 4,922 2 2,461 14,141 0,000 Within groups 92,023 531 0,173 Total 97,015 533 Transactional Between groups 1,758 2 0,879 5,794 0,003 Within groups 80,550 531 0,152 Total 82,308 533 Non-leadership Between groups 10,416 2 5,208 14,510 0,000 Within groups 190,591 531 0,359 Total 201,007 533 To determine which of the organisations differ significantly with respect to each of the dimensions, post–hoc comparisons in the form of Scheffe’s multiple comparisons were used for transformational leadership as well as transactional leadership. In both cases the null-hy pothesis of equal population variances (using Levene’s test for the quality of error variances) could be assumed. In the case of non-leadership, the assumption of equal population variances could not be made (based on Levene’s test for the equality of error variances). Table 5 describes the Scheffe multiple comparisons of the means of the various groups for transformational, transactional and non-leadership dimensions. Based on the multiple comparisons above, the statistically different means for each of the dimensions of the MLQ are further shown in table 6. These results show that the Private Sector Corporation, Public Sector Institution, and Tertiary Sector Institution differed statistically significantly with regards to transformational and transactional (see Table 3, Table 4; and Table 5). The Tertiary Education Sector Institution, with a mean of 3,145, indicated that it is significantly more transformational. The statistical difference between the Private Sector Corporation and the Public Sector Institution equaled 0,157, with the Private Sector Corporation becoming more transformational than the Public SHOKANE, STANZ, SLABBERT4 TABLE 3 MEAN, STANDARD DEVIATIONS IN RESPECT OF THE MLQ DIMENSIONS Variables Company N Mean Std. Deviation Std. Error 95% Confidence Min Max Interval for Mean Lower Bound Upper Bound Transformational Private Sector Corporation 238 3,048 0,392 0,025 2,998 3,098 1,9 3,9 Public Sector Institution 199 2,891 0,464 0,032 2,826 2,956 1,3 3,8 Tertiary Sector Institution 97 3,145 0,364 0,037 3,072 3,219 2,35 3,9 Total 534 3,007 0,426 0,018 2,971 3,044 1,3 3,9 Transactional Private Sector Corporation 238 2,109 0, 382 0,024 2,06 2,158 1,25 3,42 Public Sector Institution 199 2,211 0, 407 0,028 2,153 2,267 0, 57 3,33 Tertiary Sector Institution 97 2,065 0, 367 0,037 1,991 2,139 1,17 3 Total 534 2,139 0, 392 0,017 2,105 2,172 0, 57 3,42 Non-leadership Private Sector Corporation 238 0,487 0,502 0,032 0,422 0,551 0 2,5 Public Sector Institution 199 0,781 0, 712 0,051 0,681 0,879 0 3 Tertiary Sector Institution 97 0,502 0,560 0,056 0,389 0,615 0 3,5 Total 534 5,991 0,614 0,265 0,546 0,651 0 3,5 Sector Institution (see Table 5). The results offered a full support to hypothesis 1 that transformational leadership will differ statistically significantly between organisations due to the dynamics of the business environment. TABLE 5 SHEFFE’S MULTIPLE COMPARISON OF THE GROUPS IN RESPECT OF THE MLQ Variables Means of groups Difference between group means Group 1 Group 2 Group 3 1-2 1-3 2-3 Transformational 3,048 2,891 3,145 0,157 -0,097 -0,254 Transactional 2,109 2,211 2,065 -0,102 0,044 0,146 Non-leadership: 0,487 0,781 0,502 -0,294 -0,015 0,279 Laisses-Faire Group 1: Private Sector Corporation Group 2: Public Sector Institution Group 3: Tertiary Education Sector Institution The Public Sector Institution, with an arithmetic mean of 2,211, indicated that it is more transactional than Private Sector Corporation and the Tertiary Sector Institution (with means = 2,109 and 2,065 respectively). The implication of the results of the Public Sector Institution is that the organisation is more transactional and less transformational when compared to the Private Sector Corporation and the Tertiary Sector Institution. The mean difference between the latter two organisations in terms of transactional leadership is 0,044, with the Private Sector Corporation becoming more transactional than the Tertiary Sector Institution. This means that the Private Sector Corporation is not more transformational nor more transactional but rather found to strike a balance between the two dimensions. The results offered a full support to hypothesis 2 that transactional leadership will differ statistically significantly from organisation to organisation due to the dynamics of the business environment. These results further show that the Private Sector Corporation, Public Sector Institution, and Tertiary Education Sector Institution did not differ statistically significantly with regards to Non-leading (Laissez-Faire approach). The three organisations indicated arithmetic means of 0,487, 0,780, and 0,502 respectively. Therefore, results could not support fully hypothesis 3’s postulate, namely, the means across the group of organisations will differ statistically significantly with regards to Laissez-Faire approach (non-leadership) due to the dynamics of the business environments. The significance of the overall results indicated that the three organisation became either more transformational on the one hand, more transactional on the other hand or both transactional and transformational. This view is in line with the emphasis by Graetz (2000), Smit (2000) and Veldsman (2002) in the literat ure that a synerg y bet ween the transactional and transformational leadership dimensions is required in organisations to offset any weaknesses inherent in each. Moreover, the results could not support hypothesis 3 due to less statistical difference between the means for the transactional, transformational and non-leadership dimension (Table 03). LEADERSHIP IN SOUTH AFRICA 5 TABLE 6 MULTIPLE COMPARISONS OF MEANS (MEAN DIFFERENCE BETWEEN TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP) Sheffe (I) Company Name (J) Company Name Mean Std Error Sig. 95% Confidence Interval Difference (I-J) Lower Upper Bound Bound Private Sector Corporation Private Sector Corporation Public Sector Institution 0,258 0,044 0,000 0,148 0,368 Tertiary Education Sector Institution -0,141 0,561 0,044 -0,278 -0,003 Public Sector Institution Private Sector Corporation -0,258 0,044 0,000 -0,368 -0,148 Public Sector Institution Tertiary Education Sector Institution -0,399 0,057 0,000 -0,541 -0,257 Tertiary Education Sector Institution Private Sector Corporation -0,141 0,056 0,044 0,003 0,278 Public Sector Institution 0,399 0,057 0,000 0,257 0,541 Tertiary Education Sector Institution Dunnett T3 Private Sector Corporation Private Sector Corporation Public Sector Institution 0,258 0,045 0,000 0,150 0,366 Tertiary Education Sector Institution -0,141 0,054 0,032 -0,237 -0,009 Public Sector Institution Private Sector Corporation -0,258 0,045 0,000 -0,366 -0,150 Public Sector Institution Tertiary Education Sector Institution -0,399 0,056 0,000 -0,535 -0,263 Tertiary Education Sector Institution Private Sector Corporation 0,141 0,054 0,032 0,009 0,273 Public Sector Institution 0,399 0,056 0,000 0,263 0,535 Tertiary Education Sector Institution Based on the observed Mean The Mean Difference is significant at the 0,05 level DISCUSSION Deducing from the results of the study the nat ure of organisational leadership is diversified bet ween the transactional and transformational leadership dimensions. The diverse nature of leadership might be brought about by the dynamics of the organisational environments within which these organisations exist. The environments could influence the dimension of leading to either a transactional, a transformational, or towards both the transactional and transformational leadership. More also, it has been emphasised in the literature that the business environment is the aggregate of all the conditions, events and influences that surround and affect an organisation. And if the latter is to remain prosperous it must frequently adapt to an ever-changing business environment (Davis: 1975, p. 43). Veldsman (2002: p. 24) elaborated extensively on the subject matter argued by Davis (1975) above that leaders must relate their organisations to the dynamics of the ecosystem surrounding it. The administrative nature of public sector environment may be limiting the derivation of transformational leadership in the Public Sector Institution. The Tertiary Sector Institution is significantly a transformational organisation compared with the Private Sector Corporation and the Public Sector Institution. Continuous learning of best practices may be the main contributing factor towards derivation of transformational leadership. Complexit y of the changing manufacturing environment, accompanied by globalisation and fierce international competition, requires the harnessing of both the transactional and transformational leadership dimensions. 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