Exploring leadership within the modern organization: Understanding the dynamics of effective leadership of a virtual, multigenerational workforce
iv Table of Contents Dedication iii List of Tables vii List of Figures viii CHAPTER 1. INTRODUCTION 1 Introduction to the Problem 1 Statement of the Problem 4 Significance of the Study 10 Purpose of the Study 12 Importance of the Study 13 Research Questions 14 Definition of Terms 16 Methodology 17 Assumptions 18 Limitations 19 Chapter Summary 19 CHAPTER 2. LITERATURE REVIEW 21 An Overview of Leadership and Related Research 21 Early Leadership Studies 23 Contemporary Leadership Approaches 29 Aspects of Effective Leadership 35 The Context of Modern Work 38 Virtual Workers 40
v Virtual Workers and Higher Education 46 Issues Impacting Virtual Work and Group Dynamics 49 Communication in the Modern Organization 53 Advantages of Virtual Work and Teams 57 The Challenges of Virtual Work 60 Leadership of Virtual Teams and Work 62 Leadership and Motivation 73 Multiple Generations in the Workforce Today 75 Leading a Multigenerational Workforce 94 CHAPTER 3. METHODOLOGY 99 Introduction 99 Description of the Methodology 100 Design of the Study 103 Population and Sample 107 Instrumentation 110 Data Analysis 115 Summary of Methodology 117 CHAPTER 4. DATA COLLECTION AND ANALYSIS 118 Introduction 118 Data Collection Process 118 Quantitative Data 125 Analysis of Quantitative Data 134 Qualitative Research 148
vi Summary of Findings 173 CHAPTER 5. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 178 Introduction 178 Summary of the Study 178 Summary of Findings 180 Implications and Conclusions 181 Strengths and Limitations 195 Recommendations From the Data 197 Recommendations for Further Research 201 Conclusion 203 REFERENCES 206 APPENDIX A. OPEN-ENDED INTERVIEW QUESTION PROMPTS 227 APPENDIX B. SUPPLEMENTAL DEMOGRAPHIC QUESTIONNAIRE 228
vii List of Tables Table 1. Perceived/Actual Use of Transformational Leadership Styles 128 Table 2. Ideal/Preferred Leadership Styles 139 Table 3. Qualitative Phase: Frequency of MLQ-5X Themes in Summary Responses 151
viii List of Figures Figure 1. Gender of participants 121 Figure 2. Industry of participants 121 Figure 3. Education of participants 122 Figure 4. Work setting of participants 123 Figure 5. Perceived/actual by generation 126 Figure 6. Passive/avoidant behavior—actual 132 Figure 7. Transactional leadership—actual 132 Figure 8. Transformational leadership—actual 133 Figure 9. Passive/avoidant behavior—ideal 137 Figure 10. Transactional leadership—ideal 137 Figure 11. Transformational leadership—ideal 138 Figure 12. Ideal/preferred by generation 139
CHAPTER 1. INTRODUCTION
Introduction to the Problem Leadership is a central component upon which the success of modern organizations is highly dependent (Cascio & Shurygailo, 2003; Zigurs, 2003). Leadership has been studied in depth with numerous definitions and theories, but identifying effective leadership styles, strategies, and practices can be elusive, as it is more of an art than a science since it can be dependent on the context or situation of the organization in question and how the leader interacts and responds to it (Gibson, Ivancevich, & Donnelly, 2000; Yukl, Gordon, & Taber, 2002). The overall context of the modern organization is rapidly changing as it begins to adapt and morph in response to the evolution from an industrial-based, goods-producing economy with physical workplaces to one that is information-, service-, or knowledge- based and enabled through the accelerated development, deployment, and adoption of information-rich communication technologies. The U.S. Department of Labor (2007) does not see a change in this trend of jobs migrating to this type of work. Several factors have contributed to the changes of the modern organization. Some of the leading reasons range from the change to an information economy to the competitive need for specialized staff to be in the field closer to the client, to even the evolution of robust information communication technologies. These conditions and new
2 opportunities have combined to allow organizations and workers the ability to move away from the traditional physical workplace and conduct their tasks or jobs from virtually any place at any time. Another dimension this shift presents is the increased utilization of teams in the virtual organization to address the need to react more rapidly to the complex demands of the knowledge-industry marketplace (Duarte & Snyder, 2001) in order to create some type of competitive advantage (Cascio, 2000). All of these factors are contributing to the emergence of the virtual worker and team. This evolution to a distributed workforce has grown to substantial numbers. In 2004, the estimate in the United States alone was some 8.4 million workers participating in at least one virtual team. Although a precise definition of who is and is not a virtual worker and an exact number have not been identified, the range of numbers is still significant. Many large companies today report as much as 40–50% of their workforce to be working virtually and in a distributed manner (Conlin, 2005; Manochehri & Pinkerton, 2003), and even conservative projections for 2012 see some 40% of the workforce being distributed and virtual (Conlin, 2005). With so many workers being distributed and working in this new manner, it is having a significant effect on the structure and operations of these organizations as leaders begin to cope with a workforce that has new ways of approaching work, possesses diverse skill sets, has differing values, and is more and more frequently not physically present in the same location as the leader and fellow workers. Although the data illustrating the growth and proliferation of virtual workers and teams to this point have referenced private industry only, that is not to say that higher education is not experiencing similar changes to their organizations due to the dramatic
3 enrollment increases in distance education. The remarkable growth of online instruction that now serves some 4.6 million students each term at both public and private, 2- and 4- year institutions has demonstrated that schools are relying on the virtual faculty member and course designers to help meet this market’s demands (Allen & Seaman, 2010). Just as for private industry, effective leadership of these virtual workers will be critical to the organization’s success, and insights from this study will aid in this effort. Leadership has never been seen as an easy task or skill, and compounding that challenge in this new virtual environment of distributed work with different organizational structures and dynamics is a lack of research and literature on effective leadership in such a dynamic setting (Zigurs, 2003). Even though there is an absence of information, due to the pervasiveness and trend of this type of work, some experts believe that all managers and leaders will work with a virtual workforce at some point in the not- too-distant future (Hainsfurther, 2002). The modern leader does not have the benefit of literature and research that provides understanding, insight, and guidance on leading this new phenomenon of the virtual worker and team. Just as with traditional organizational leaders, the virtual leader needs to have a solid understanding of the most effective leadership practices that will result in the organization reaching its full potential for productivity and goal achievement. Complicating the modern work environment further is the changing composition of the workforce. Just as work and the organization are changing and evolving, so too are the employees who comprise this workforce, whom the leaders and managers must direct and lead in this new environment. With a work environment that is more complex and
4 competitive than in the past, the modern organization will need workers with a breadth of skills, knowledge, experience, and creativity that no single worker or group of workers possess, but does likely exist in a multigenerational workforce (Salopek, 2006). Presently there are two dominant generations in the workforce, Baby Boomers (those born from 1946–1964) and Generation X (born from 1965 to 1976), and a third, the Millennials (those born from 1977–2000), has recently begun to enter the working ranks (Neusner, Basso, Brenna, & Lobet, 2001; Smola & Sutton, 2002). Although each generation brings different strengths to the workplace, they also bring different values, beliefs, and expectations regarding work to their jobs and organizations (Weston, 2006; Zemke, Raines, & Filipczak, 2000). The modern work setting also has these different generations interacting with a regularity and frequency that previous generations did not experience, and due to their differing values and perspectives, when combined with this new era of interaction, the potential for intergenerational conflict is quite high (Weston, 2006). If organizations are to succeed and remain competitive in the modern work environment, they will need to find ways to effectively lead this new generational diversity (Dominguez, 2003).
Statement of the Problem Leadership has been examined in depth and from many perspectives to identify what factors contribute to the success of effective leaders and, consequently, organizations. A variety of research has shown that effective leadership directly contributes to the superior performance of an organization (Cascio & Shurygailo, 2003; Zigurs, 2003). These studies and related literature have primarily been about the
5 leadership of the traditional face-to-face interactions between leaders and followers in brick-and-mortar buildings and the physically colocated work site. New technologies that have developed and emerged in recent years, in particular, information communication technologies (ICTs), such as the Internet, have allowed organizations to begin to evolve away from the limitations of a traditional physical face- to-face (FTF) setting to one that is more geographically dispersed in order to gain some strategic advantage (Crandall & Gao, 2005; Malone, 2004). This technological advancement has taken workers out of the traditional office or headquarters and allowed them to be placed anywhere in the world and enabled to conduct work at any time through the ICTs. The pressures of the new information economy combined with the technological capabilities have even impacted the physical structure of organizations. In this knowledge- or information-based economy, the diverse, specialized talent that an organization requires to respond to this new environment is not likely to be found within the existing organization or be located in close proximity to the other members of the organization (Bell & Kozlowksi, 2002). One way to maintain competitiveness as a contemporary organization is to utilize teams comprised of specialists. The traditional hierarchical structure of the large organization has given way to the efficiencies, significant cost savings, productivity, and strategic benefits of smaller distributed teams that are able to combine expertise and resources and respond to a market need much faster than the traditional organization (Malone, 2004). This translates into organizations that have less hierarchical structure with centralized power and control, and consequently
6 means they are flattening out and pushing decisions and power away from the top of a centralized hierarchy (Goldsmith & Morgan, 2004; Malone, 2004). Growing numbers of American corporations are migrating toward a virtual workforce and a flatter organization, as reflected in companies such as IBM, PricewaterhouseCoopers, Whirlpool, Boeing, Hewlett-Packard, and Sun Microsystems. The evidence of the breadth and scope of this organizational and business-practice paradigm shift is in the growing number of workers participating to some degree outside of the physical office, using technology to work and interact (Bell & Kozlowski, 2002). Estimates are that roughly one in five workers engages to some degree in work away from the traditional headquarters or office. In 2005, there was a year-over-year increase of 17% with this type of worker, with 28.8 million workers participating to some degree in virtual work away from the office (The Telework Coalition, n.d.). It is believed that roughly 8.4 million American workers are part of at least one virtual team (Ahuja & Galvin, 2001). Some experts believe that by 2012, some 40% of the workforce will be distributed and working virtually (Conlin, 2005). It is not just the technological capabilities alone that are driving this significant change in the way business is conducted; it is also a product of the shift from an industrial economy to one that is information- or knowledge-based (Friedman, 2006; R. G. Harris, 2001; Malone, 2004). Knowledge and information is replacing “land, capital and raw materials as the primary source of competitive advantage” (Ware & Grantham, 2003, p. 143). Market forces in this new economic setting are putting pressure on organizations to find new ways to maintain their competitiveness and even their very existence as an ongoing commercial enterprise (Arnison & Miller, 2002).
7 In addition to these changes, there is yet another fundamental change to the organizational and work dynamic, and that involves the next generation of workers. This new generation of workers is often referred to as Generation Y, Echo Boomers, or Millennials (Loughlin & Barling, 2001). This new generation of workers is beginning to enter the workforce and is considerably different from the generations of workers they will be joining and replacing: the Baby Boomers, the Generation Xers, and even the limited number of Traditionals (those born from 1920–1945) who still exist in the workplace (Kupperschmidt, 2000). They not only have different skills that have been developed through formal education, but growing up with technology and ICTs has allowed them to develop in a world that is rich in information, is globally connected, and consequently has nurtured a different set of values, perspectives, and motivations (Stauffer, 1997). Due to these generational differences, leaders need to employ different leadership styles if their efforts are to be optimized (Yu & Miller, 2005). This next generation of workers has values that differ considerably from those of the aging Baby Boomers who are beginning to enter their retirement years. In 2003, nearly 30% of U.S. workers were 50 or older (Baker & Greenes, 2006), and by 2014, some 78 million Baby Boomers will be between 50 and 68 (Frauenheim, 2006). However, it is expected that the rebel values of the Boomer generation will likely see larger numbers of them work longer and more frequently as consultants as part of teams as they are needed on specific projects (Baker & Greenes, 2006). With different skills, motivating factors, and values, these differing generations of workers will require the leader to employ different leadership styles and approaches in order to motivate each
8 cohort, minimize conflict, and reap their fullest output potential (Hendry, 1995; Price, 2000). Communication, interaction, and information exchange among team members also becomes an issue in this new virtual environment. In traditional organizational settings, there is a great deal of what is called rich communication. It is not just the actual data that are being exchanged but the nonverbal elements that add to what is being communicated in the colocated environments. This could take the form of hand gestures, facial expressions, body language, and tone. In a technologically mediated exchange in a virtual setting, even with videoconferencing, there is a potential that the message could be misinterpreted or altered during the exchange (Fiore, Salas, Cuevas, & Bowers, 2003). As a result, information exchange, interaction, and communication, although always important between the leaders and members of an organization, it is something of which the leader must be even more diligent and cognizant in order to ensure success in the virtual environment. Although not a leadership trait or style, communication is critical to organizational success and effective leadership. How is communication affected for effective virtual leaders and organizations in this setting? Does the leader need to communicate more frequently, and, if so, how, with what type of content emphasis, and with what medium? Should the communication and its content be tailored or targeted differently for workers in FTF settings versus those that are distributed and interact virtually? Then, how should communications to the different generations be adjusted, if at all?
9 The modern organization is evolving into something that has not been experienced by leaders before, with a new organizational structure that is widely distributed across space and time, which is virtual in nature to some degree, is more frequently comprised of teams brought together for a specific purpose, which have significant interaction and communication in pursuit of organizational goals and objectives through the use of technology instead of the frequent FTF interactions associated with older, colocated, traditional organizations. Complicating these dynamics further is that this is all being conducted through a workforce comprised of multiple generations who have different skill sets, values, and communication styles. The leader of the modern organization is presented with new and unique challenges that include a diverse workforce comprised of members from different generations, who possess different skills, characteristics, traits, and values. In addition, they must cope with the dynamics of the workforce being physically distributed away from the traditional organization’s physical headquarters and its hierarchical structure, along with the corresponding FTF interactions, and relying on technology-mediated communication and interaction to overcome, and time, space, and other differences. With limited research on the issues of virtual leadership and the impact of an age-diverse workforce, there are no definitive insights regarding how the modern leader is to address the confluence of these issues. It is not clear if leaders should apply or modify what they are currently doing, or if an entirely new approach to organizational leadership should emerge to overcome leading from a distance and different generations simultaneously. Historically, many of the dimensions associated with effective leadership dealt with interpersonal interactions, relationships, communication, and, in some cases, the physical
10 presence and charisma of the leader. However, in this new organizational environment, it is not known how these traditional dimensions of leadership are impacted, ranging from being limited or marginalized to being changed dramatically to emphasize certain aspects. Little is known about leadership in this new virtual context (Zaccaro & Bader, 2003; Zigurs, 2003). With an organization’s success being dependent on effective leadership, it is important that today’s and tomorrow’s leaders are aware of the most effective leadership practices, as well as organizational and workforce characteristics that contribute to the success of the modern workforce and those who comprise it. Related to leadership is the issue of organizational culture. A strong organizational culture has been found to be associated with enhanced performance of an organization (Isaac & Pitt, 1993; Ogbonna & Harris, 2000). The leader plays a critical role in establishing organizational culture. In a virtual setting, absent physical presence and with the challenges of virtual interaction and communication, it is not clear if the leader can facilitate the appropriate culture, or if one can even exist in the virtual environment as compared with the traditional colocated workplace.
Significance of the Study This study explored and attempted to discover and reveal new insights as to how the modern organizational leader will need to guide and effectively lead the diverse multigenerational workforce in the emerging virtual work environment, where presently little is known. This study provided some understanding and a perspective of which contemporary leadership styles (transformational, transactional, laissez-faire) are
11 effective with traditional organizations and that can be applied to this new paradigm, and those that are not. This study also exposed insights into what new approaches, styles, or adaptations from what is known about effective leadership today can be employed to overcome the challenges these types of dispersed and diverse organizations present in order to achieve the strategic advantages they afford. This study presents new perspectives as to the leadership preferences of this diverse workforce in different settings. The goal of this study was to reveal entirely new ideas relating to leadership within this new organizational context that expose new and innovative practices that the modern leader can utilize in this new organizational setting. The findings also demonstrated that leadership practices are evolving and adapting from previously used theories and approaches, which will need to be explored further as this topic is probed and better understood in the future by others. The intent of this exploratory study was to add new perspectives and insights to the limited amount of literature that is known currently on the topic of leading an age- diverse workforce of virtual employees, teams, and organizations. The goal was to create new knowledge that provides guidance on the issue of leadership in this growing organizational context so that the leaders of today and tomorrow will have research-based suggested practices, approaches, and strategies to assist in the effective and optimal leadership of their respective organizations. This study benefits leaders of organizations that operate to a substantial degree with a distributed workforce and virtual organization, which can encompass small and large enterprises, private and public sector operations, including higher education, by identifying which contemporary or known leadership practices can be adapted and
12 utilized in leading such organizations. The study also examined if there were any findings of new or innovative leadership styles that have emerged as effective in this new organizational context. This study and findings provide leadership scholars who are interested in the new generation of organization, with its age-diverse workforce, insights and perspectives on this emerging issue and the literature that is available to this point. The findings also provide insights into best leadership practices for virtual organizations that can be validated further and/or provide inspiration and cues to look closer at the leadership issues raised.
Purpose of the Study The purpose of the study was to begin to address the lack of information and guidance regarding the effective leadership of the emerging virtual workforce and diverse multigenerational workers who comprise it. The study identified and examined the challenges to effective leadership in this virtual context of work, along with the factors that contribute to them, as well as the differences in leading the traditional colocated organizational environment. Information from this study now allows for leadership strategies to be developed to mitigate the identified challenges and address the preferences of diverse generational workers in different work settings. The study also provides insights into what some of the effective leadership practices are for the multigenerational workforce in this setting, as well as the leadership preferences of the workforce. The primary outcome of the study was be to explore this rapidly expanding leadership domain and provide an understanding and then a framework of best practices
13 to assist leaders in reaching their respective organization’s goals and fullest potential through the virtual multigenerational workforce. This study identified which contemporary or recognized leadership styles are effective in the virtual setting with respect to the different generations of workers, as well as any leadership preferences they have. It also identified which specific leadership behaviors, actions, attributes, traits, tactics, and strategies are effective for virtual workers and the different generations, as well as any significant differences that exist, such as frequency or complete avoidance of some of these leadership variables compared to the leader’s actions and approaches in the traditional organization environment. The study also examined and identified the challenges that the composition of this new workforce presents, with its different generations of workers, which brings diverse skills, values, and perspectives of the world to their work and organizations. Leadership needs to take these new factors into account when dealing with such a diverse virtual workforce in this new setting. The findings from the study now can assist leaders in identifying key workforce factors that should be recognized and appropriately dealt with as leaders in order to reach the organization’s goals. These findings also help identify the organizational variables and leadership practices that enhance the leader’s and the organization’s effectiveness.
Importance of the Study The study was of importance due to a number of factors. The first is the dramatic growth in the number of virtual workers, teams, and organizations moving into this operational domain. Another factor is the dependence on leadership for organizational
14 success, yet there is little known about effective leadership in this new virtual setting. This study and findings assist leaders operating in this environment by adding to the body of knowledge in relation to being able to understand the differences between the traditional organization and that of working virtually with new structures and how they impact their leadership style and practices. It also identified leadership challenges specific to the virtual setting with the multigenerational workforce, as well as strategies to effectively overcome them. The study explored which contemporary leadership practices are preferred by the diverse workforce cohorts, as well as what is effective, those that need to be adapted and adjusted in some manner, those that are ineffective, and those that may be new or significantly different from those that have been common in the traditional organization. In addition, the study began to address the generational diversity of the workforce and explore how leadership is affected with a multigenerational workforce.
Research Questions The following question, with its related subquestions, provided the guiding framework of inquiry for this study. A mixed-method approach was utilized to explore and answer these questions. 1. What leadership style and practices appear to be effective in leading the modern organization, which has an age-diverse multigenerational workforce, as well as conducting work virtually through technology and an absence of physical presence?
15 From the aforementioned primary research question, two areas of phenomena emerge that were the focus of the study. One dimension of the phenomena involves the leadership of a multigenerational workforce; the other relates to leading virtually from a distance. The following subordinate questions attempted to elicit findings that will provide for a better understanding of effective leadership in the context of the modern organization. 2. How are the different generations of workers impacted by different leadership styles and by being led virtually? 3. What leadership strategies and approaches can address and overcome challenges associated leading an age-diverse workforce that works virtually? 4. Are there different leadership preferences for each of the generational cohorts of workers? 5. Are there any significant statistical relationships that emerge from the quantitative phase between leadership style and behavior and the different generational cohorts of workers? 6. What styles of contemporary leadership appear to be most effective with the modern workforce in the context of virtual work? 7. What are the challenges that are unique to the virtual worker when compared to the worker in the traditional FTF organization? 8. Are there any notable adaptations or adjustments to contemporary leadership styles, actions, or behaviors associated with effective organizations in this context, and, if so, what are they?
16 9. If a contemporary leadership approach is not recognized, is there a new leadership style emerging for the modern work environment? 10. What, if any, other issues may appear to impact leader effectiveness in the modern work setting as related to the variables of this study?
Definition of Terms Baby Boomer generation. This generational cohort is comprised of individuals born between 1946 and 1964. Colocated. Being in close physical proximity to one another; physically located in the same area. Contemporary leadership styles. Transformational, transactional, and laissez-faire approaches to leadership. Effective/effectiveness. The ability to produce a predetermined desired effect. Also defined as doing the right task in the correct manner (Tichy & Devanna, 1990). Generation X. This generational cohort is comprised of individuals born between 1965 and 1976. Leader. The head of an organization or team who directs and inspires the membership to pursue and achieve an identified goal. Leadership behaviors. Those actions and activities in which the leader engages to inspire and motivate the organization’s members to take action in order to achieve an identified goal. Millennials. This generational cohort is comprised of individuals born between 1977 and 2000.