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Leading an organization through change using emotional intelligence

Dissertation
Author: Karen L. McKenzie
Abstract:
The purpose of this qualitative, phenomenological study was to explore, investigate, and understand how managers who use emotional intelligence (EI may influence employees when change occurs in an organization. Change happens when companies are merged, acquired, closed, downsized or restructured. The way change is communicated, processed, planned, and implemented affects all employees. EI can play an integral part in helping employees implement, embrace, and adapt to change within an organization by using the five qualities of EI: (a) self-awareness, (b) self-regulation, (c) motivation, (d) empathy, and (e) social skills. The goal of this study was to help managers who have an understanding of emotions assist employees adapt to organizational changes and aid in motivating employees to incorporate change. The purpose of the research was to examine the different responses given by managers in the automotive industry regarding practices of EI in a change process. The analysis revealed the different mechanisms for communicating change and the impact of the mechanisms from a manager's perspective. The study also involved investigating how the managers perceived EI how the managers incorporated EI in effecting change, and the managers' perceived impact of the use of EI. Significant relationships emerged between managers' awareness of EI, use of EI, and individual differences in preference of methods. The conclusions included suggestions regarding the intelligent use of different tactics and mechanisms for formulating an action plan to handle an issue. The current research resulted in insight to potential training programs that can be devised on the basis of the findings enumerated in this dissertation.

TABLE OF CONTENTS LIST OF TABLES xi CHAPTER 1: INTRODUCTION 1 Background of the Study 7 Statement of the Study 10 Purpose of the Study 11 Significance of the Study 12 Significance of the Study to Leadership 13 Nature of the Study 14 Research Questions 15 Theoretical Framework 16 Definition of Terms 21 Assumptions 23 Limitations 23 Scope and Limitations 24 Delimitations 25 Summary 25 CHAPTER 2: REVIEW OF THE LITERATURE 27 Scholarly Journals Researched 29 The History of Leadership 30 Transactional Leadership 32 Transformational Leadership 34 Charismatic Leadership 37

viii EI and Primal Leadership 39 Emotional Intelligence 40 Foundational Studies that Established EI 41 EI and Quality of Life 44 EI at the Workplace 48 EI and Leadership 52 EI in Change Management 61 Textbooks and Anthologies 62 Conclusion 63 Summary 65 CHAPTER 3: METHOD 66 Research Method and Design Appropriateness 66 Research and Appropriateness of Design 68 Research Questions 71 Population and Sampling 72 Population 74 Informed Consent 75 Sampling Frame 76 Confidentiality 77 Geographic Location 78 Privacy, Confidentiality, and Document Safeguards 78 Instrumentation 79 Instrument Appropriateness 80

ix Data Collection 80 Data Analysis 81 Validity and Reliability 81 Summary 85 CHAPTER 4: RESULTS 87 Demographics 88 Data Collection 92 Data Analysis 94 Ways Change is Expressed in the Work Place 95 Ways the Manager Incorporates Change 97 Awareness of Emotional Intelligence 98 Methods to Communicate with Employees 99 Effect or Feedback from Employees 100 Conclusion 100 Summary 101 Chapter 5: CONCLUSIONS AND RECOMMENDATIONS 103 Findings and Interpretations 104 Communication of Change by Company 105 How Managers Communicate Change 107 Awareness of Emotional Intelligence 108 Awareness and Active Use of Emotional Intelligence 108 Awareness and Education of Emotional Intelligence 109 Awareness of Emotional Intelligence and Organizational Factors 110

X Method of Incorporating Change I l l Aspect of Emotional Intelligence Used I l l Preferred Methods of Incorporating Change 112 Aspect and Method of Emotional Intelligence 113 Impact of Application of Emotional Intelligence 114 Aspect of Emotional Intelligence and Employee Feedback 115 Limitations 115 Recommendations/Implications 116 Suggestions for Further Research 120 Summary 121 REFERENCES 122 APPENDIX A: CONSENT FORM to conduct study 137 APPENDIX B: PERMISSION TO USE PREMISES 139 APPENDIX C: INTERVIEW QUESTIONS 141 APPENDIX D: LETTER EXPLAINING NATURE OF STUDY TO PARTICIPANTS 143 APPENDIX E: SIGNED CONSENT FORM TO PARTICIPATE IN STUDY... 145 APPENDIX F: CONSENT FORM TO RECORD INTERVIEW FOR THIS STUDY 148

LIST OF TABLES Table 1 Qualities of EI 6 Table 2 Various Methods of EI Research 18 Table 3 Scholarly Journals Researched 28 Table 4 Number of Years With the Organization 89 Table 5 Number of Years as a Manager 90 Table 6 Number of Employees Reporting to Individual 91 Table 7 Number of Changes or Reorganizations in Past 10 Years 92 Table 8 Common Constituents for Announcement of Change 96 Table 9 Ways Managers Incorporate Change 97 Table 10 Preferred Methods of Motivation 99

1 CHAPTER 1: INTRODUCTION Change is inevitable in working environments, and change affects many employees over the course of their professional careers. The Bureau of Labor Statistics (as cited in Hendricks, 2005) counted 16,334 mass layoffs involving 50 or more people during the year that ended in October of 2004. These events left over a million people out of corporate jobs and countless others wondering whether to leave before the next round of layoffs began (Henricks, 2005). Change occurs within organizations when companies are merged, acquired, closed, downsized or restructured (Gandolfi, 2007). In every organization, the way change is communicated, processed, planned, and implemented affects all employees. Emotional Intelligence (EI) can play an integral part in helping employees implement, embrace, and adapt to change within an organization (D'Intino, Goldsby, Houghton, & Neck, 2007). According to J. D. Mayer and Salovey (1995), EI consists of four aspects that include identifying emotions, using emotions to facilitate thought, understanding emotions, and managing emotions. Goleman (1998b) defined EI in terms of five qualities within each branch: (a) self-awareness, (b) self-regulation, (c) motivation, (d) empathy, and (e) social skills. Managers who have an understanding of emotions may be able to assist employees within an organization to adapt to organizational changes within their group (Kerber & Buono, 2005). Such leaders assist with implementing change, because they can influence and help employees understand the change and motivate employees to incorporate change (Skinner & Spurgeon, 2005).

2 A leader can influence, motivate, and nurture employees as the change occurs within the group (Kerber & Buono, 2005). Managers may use different tools to help employees embrace change. However, when change is implemented, the manager or leader must not forget that all employees are human and are affected by the same change (Tse, Dasborough, & Ashkanasy, 2008). Knowledge management may be a bottom-up process that materializes best when inspired by compassionate and humanistic leadership (Aupperle, 2008). Managers must remember organizational change affects everyone (Kerber & Buono, 2005). EI is one method for influencing organizational performance and learning (Scott-Ladd, Travaglione, & Marshall, 2006). According to Scott-Ladd et al, EI is a leadership paradigm that invokes humanistic and cultural skills. Carter (2007) described five qualities of EI: (a) self-awareness, (b) self-regulation, (c) motivation, (d) empathy, and (e) social skills. Self-awareness, referred to knowing one's internal states, preferences, resources, and intuitions. Downey, Papageorgiou, and Stough (2006) and D'Intino et al. (2007) defined self- regulation as managing one's internal states, impulses, and resources. Abraham (2006) and Tunajek (2006) defined motivation as emotional tendencies that guided or facilitated the reaching of goals. Martinovski, Traum, and Marsella (2007), and Romm (2007) defined empathy as awareness of others' needs, feelings or concerns. Finally, Dong and Howard (2006) and Naylor (2006) defined social skills as adeptness at inducing desirable responses in others. The qualities associated with EI may assist managers in leading change within an organization by using a more humanistic approach with their employees. The change can

3 be to the benefit or detriment of the organization; however, the daily operations of an organization must continue with minimal disruption (Boot & Beile, 2005). Managers should be open about change and consistently feed information to employees to make them aware of how the change may influence the employees (Post, 2007). Sometimes change is difficult to accept, and employees must continue with their daily routine while thinking about the unknown factors that could affect them (Naylor, 2006). "Repetitive-change syndrome is change that causes weariness, initiative overload and a corrosive cynicism that can build with every new wave of change, making each succeeding waves all the more difficult to manage" (Abrahamson, 2004, p. 4). Senior leaders need to consider making only necessary changes in order to avoid creating a repetitive-change syndrome type of environment (Kerber & Buono, 2005). Open communication with employees is essential for addressing the issues associated with repetitive change (Boot & Beile, 2005). Communication is a vital link to people and information within any company, especially if organizational restructuring is occurring (Thill & Bovee, 2007). "Proposing changes that do not consider the overall impact to the business or that are poorly analyzed can do great harm to the organization and to the credibility of the quality professional" (Dalgleish, 2005, p. 1). It is important to examine and understand when change is necessary. Organizational leaders should conduct a deep analysis when considering changing something within an organization, because each change can have a trickledown effect on the entire group (Boyatzis & Saatcioglu, 2008). Changing a minor process or procedure could affect many people and departments. The champion for implementing a change must understand how the change

4 can influence the organization as a whole. During changing times, leaders must realize that to increase their credibility in their subordinates' eyes and must understand that the effectiveness of implementing change depends on the successful communication of the change through conversations in different workplace settings throughout the change process (Douglas, Martin, & Krapels, 2006). Even though change occurs in every type of environment, the current study was limited to the automotive industry in MI. Downsizing is an intentional process of personnel reduction in an organization aimed at improving the company's competitive position (Kerber & Buono, 2005). In the last two decades, an increasing number of companies have resorted to downsizing. Most of the time, the practice is driven by reductions in labor demand or by the efforts of firms to increase operating efficiency by reducing labor costs (Stavrou, Kassinis, & Filotheou, 2006). Many types of industries have had to downsize their workforce. The reduction in the size of the workforce has affected many people mentally and physically due to the drastic changes involved (DeKlerk, 2007). One of the changes implemented has been doubling the workload of employees, because many organizations reduce their staff without replacing those positions (Boot & Beile, 2005). Many employees have to double the number of required tasks they perform (Kerber & Buono, 2005). The pressure of twice the workload can lead to errors on the job, an increase in stress among the employees, and a reduction in self-worth because the employees may feel like they never accomplish enough (Senge, Lichtenstein, Kaeufer, & Bradbury, 2007). Many change initiatives focus on instrumental factors surrounding financial metrics but have failed to address sociological dimensions (Skordoulis & Dawson, 2007).

5 Sometimes within an organization, changes that are designed to improve the organization financially are made without truly understanding the impact those changes may have on the organization (DeKlerk, 2007). Issues such as employee workloads, tasks that slip through the cracks, and the emotional effects of the change on management and employees can affect the organization. A leader who is trained in EI or who has EI skills should be able to recognize these types of issues associated with organizational change and address the issues before any disruption occurs (Kerber & Buono, 2005). EI can aid a manager in helping employees understand the change, including how the change can affect the employees and why the change is necessary for the organization. EI may be critical for bridging organizational, instrumental, and human needs and leading to improved organizational performance (Goleman, Boyatzis, & McKee, 2002). EI consists of five qualities. The first quality is self-awareness or knowing one's internal states, preferences, resources, and intuitions (Carter, 2007). The second quality is self-regulation, or managing one's internal states, impulses, and resources (D'Intino et al., 2007; Downey et al., 2006). The third quality is motivation, or emotional tendencies that guide or facilitate reaching goals (Abraham, 2006; Tunajek, 2006). The fourth quality is empathy, or awareness of others' needs, feelings or concerns (Martinovski et al., 2007; Romm, 2007). The fifth quality is social skills, or adeptness at inducing desirable responses in others (Dong & Howard, 2006; Naylor, 2006). Using the five qualities of EI can aid in understanding how one can manage oneself. These competencies are listed in Table 1.

6 The adoption of self-awareness, self-regulation, motivation, empathy, and social skills can enable a leader to help employees grow and adapt to change within the organization without disrupting their productivity. Change within an organization may create disruption due to employees not knowing the new manager, not understanding a new procedure, or not understanding how the change may affect their job. These uncertainties can affect employees' work patterns and effectiveness (Kerber & Buono, 2005). Table 1 Qualities of EI Self- Self-Regulation Motivation Empathy Social Skills Awareness Emotional Self-Control Achievement. Understanding Influence awareness Drive others Accurate Trustworthiness Commitment Developing Communication self- Others assessment Self- Conscientiousness Initiative Service Conflict confidence Orientation management Adaptability Optimism Leveraging Diversity Leadership Innovation Political Awareness Building bonds Collaboration Cooperation Team capabilities Change catalyst Because of societal trends, management fads, competitive moves, and new technologies, managers are under pressure to implement fast-paced changes in the workplace (Lyons, 2007). Managers and other implementers often fail to see the central role of creating shared understanding about a change event (Kerber & Buono, 2005). Managers, as change agents, may not stop to assess the views held by employees or the

7 implementation team. Leaders must recognize that as change occurs, an understanding of why change is necessary is very important to employees (Frigo, 2006). If the change is not truly understood by everyone, then the change may be difficult to implement (Kerr, Garvin, Heaton, & Boyle, 2006). Background of the Study Successful organizations continually anticipate and manage a variety of changes due to the globalization of markets: economic changes, technological changes, market changes, political changes, social changes, and competitive intensity (Weeks, Roberts, Chonko, & Jones, 2004). As the rate of change affecting business continues to accelerate, leaders in organizations strive to develop and implement change initiatives. Organizational change is comprised of processes that break down existing structures and create new structures; the structures include new organizations, cultures, business strategies, and ways of working (Weeks et al., 2004). The purpose of the current study was to examine how leaders within the automotive industry who are going through change can use EI to keep employees motivated, interested, and open about their feelings while trying to adapt to this type of change (George, 2006). The current research revolved around the five qualities of EI: self-awareness, self-regulation, motivation, empathy, and social skills. The intention of the current study was to analyze how these five qualities aided the incorporation of change. Adjibolosoo (2004) distinguished humanistic leadership from traditional leadership. Traditional leadership is "solely concerned with the development, enhancement, and management of systems, institutions, processes, and technologies"

8 (Adjibolosoo, 2004, p. 154). Humanistic leadership, in contrast, can play an important role in EI, because humanistic leaders relate more to emotions. Other elements that are important to consider when making changes within an organization are both the drivers and the factors that impede change (Cork, 2005). One of the most relevant factors in implementing change can be the financial impact on the organization when downsizing or terminating employees (Abrahamson, 2004). Implementing changes can cost an organization more money due to additional time spent implementing change, training employees about the change, and including checkpoints to ensure the change was complete. Even though cost savings may be associated with downsizing, the change can have an emotional effect on the organization as a whole (Abrahamson, 2004). Before change occurs in any organization, there must be an understanding of the impact of the change before introducing the change (Post, 2007). "Change must be planned, focused and inclusive to succeed, and any change agent must be supported in practice by peers who believe in the cause and can act as a champion" (Cork, 2005, p. 2). Sometimes unplanned change occurs, and it would be beneficial to understand how this type of change affects the organization and the employees who work there. The understanding that change affects many departments within an organization assists managers with the implementation of a smooth transition (Gandolfi, 2007). Unexpected changes such as managers or employees leaving an organization may still transpire. By handling technical or controllable changes more competently, an organization may transform more effectively. Organizational survival has always depended on leaders for decisions and structures that affect profitability, innovation,

9 return on investment, customer retention, and market leadership (McLagan, 2004). Leaders must also consider the emotional effect of change within the company and how the change may affect employees' morale (Williams, 2006). Once the management recognizes implementing a change within the organization is essential, communicating the change openly and effectively is very important (Kerber & Buono, 2005). Employees and managers must have a basic comprehension of why the change needs to occur and how the affect the change can have (Boot & Beile, 2005). The change must be explicitly clear to everyone before it occurs. Making the change explicit can help the organization realize what has to happen before the change takes place (Boot & Beile, 2005). Change can sometimes create negativity in employees' work attitude, which should be addressed before any change occurs (Mayer, Nishii, Schneider, & Goldstein, 2007). Change occurs through communication, which is a central element for creating and sustaining a changed reality (Lyons, 2007). As managers bring about change, emphasis should be on having the support of the employees and other managers, as change agents are important (Kerber & Buono, 2005). Individuals who understand why the change is required may be more likely to accept the change and how it is implemented (DeKlerk, 2007). Cynicism can occur within an organization at any level for various reasons. When implementing change, managers must understand the potential for cynicism to develop and must try to communicate openly about the changes to prevent a lack of enthusiasm (Emmerling & Goleman, 2005). Organizational cynicism is a negative attitude toward one's employing organization, comprised of the belief that the organization is

10 untrustworthy and lacking in integrity (Fatt, 2004). This can lead to the manifestation of reproachful and critical behaviors toward the organization, which may lower job satisfaction, reduce commitment, and deter behavior that can lead to resistance to change (Ferres, Connell, & Travaglione, 2005). Statement of the Study Change in the corporate environment is inevitable in the 21st century work milieu. Change occurs due to downsizing, mergers and acquisitions, the selling of companies, and internal corporate culture changes. According to Vithessonthi (2007), researchers have agreed resistance to change can affect both decisions and outcomes. The negative and undesired resistance from employees and management may lead to the failure of efforts in organizational change. When managers and employees try to adapt to change, it can be difficult to keep productivity and motivation high. Managers should be open with employees when implementing change and should help employees understand why change is necessary (Gooch, 2006). Employees should question and be open with management in order to understand the change prior to its implementation (Naylor, 2006). Two-way communication is essential for employees to understand why and how change needs to take place (Thill & Bovee, 2007). Managers who use the five qualities of EI may maintain better results when executing change (Singh, 2007). The intent of this qualitative phenomenological study was to examine how managers may use EI as a tool in leading change within an organization, and more specifically, within the automotive industry located in Troy, MI.

11 Purpose of the Study The purpose of this qualitative, phenomenological research study was to explore how EI may aid leaders acting as change agents within an organization, by keeping employees productive and motivated. The focus of this study was to analyze descriptive data in terms of the five major factors of EI: self-awareness, self-regulation, motivation, empathy, and social skills (Goleman, 1998a). The phenomenological, qualitative method was appropriate for the current research in the business environment, because this type of research is an excellent tool for studying the attitudes and reactions of individuals associated with the system, including employees and business professionals (Boot & Beile, 2005). The goal of the current phenomenological study was to analyze the attitudes and reactions of leaders in the automotive industry who were involved in changes within their organization. Research has shown leaders who understand EI have been instrumental in creating innovative, agile workplaces and teams that model effective relations, cohesiveness, and high performance (Chrusciel, 2008; Goyal & Akhilesh, 2007; Pauleen & Schroeder, 2007). Change within an organization may be an emotional experience for everyone involved because of unknown factors and unpredicted outcomes. Sometimes emotions are difficult to hide when change occurs (Choi, 2006). According to Goleman (1998b), handling emotions can be challenging; and emotions take a certain set of skills to manage. The automotive industry constantly faces new challenges that involve change; and these changes were a focus of this research.

12 Significance of the Study The aim of the current study was to analyze how EI may aid leaders who are incorporating change within an organization. The findings of the current study may help leaders understand change can drastically affect employees' productivity and motivation. Leaders should understand EI is a tool for overcoming the challenges that change presents for employee productivity and motivation (Naylor, 2006). Change is not easy for most people; both the leader and employees should understand the change so the change can be implemented successfully (Choi, 2006). The fear of change is common, and eliminating fear by embracing change can only help in the accomplishment of change (Brooks & Nafukho, 2006). The current study may assist leaders in the automotive industry in dealing with the ongoing challenges presented by change and may assist in achieving organizational goals during the process of change. In times of change, leaders with high EI generate an atmosphere of cooperation and trust by aligning themselves with the goals of the organization and by considering the long-term needs of the organization and its members (Ferres et al., 2005). These actions promote quality interpersonal relationships with employees and contribute to a leader's ability to influence emotions and attitudes toward change. When leaders are able to influence their employees' emotions, the leaders induce employees to reevaluate extant negative feelings (Ferres et al., 2005). EI can play a major role in assisting leaders in handling change within an organization, because change can be an emotional experience for both the management and the employees (Ferres et al., 2005). When management understands how to deal with emotions, the managers can aid the implementation of change and motivate employees to

13 adapt to the change (McLagan, 2004). The goal of the current study was to represent the findings in a way that is helpful to managers. Significance of the Study to Leadership The present study was helpful in the exploration of leadership, because leaders must understand how change can affect an organization and its employees (Raelin, 2005). The current study can assist leaders in comprehending that when change occurs many employees may feel threatened and afraid to work or voice their opinions. Leaders must learn how to act as change agents when implementing change (Naylor, 2006). Change may not be easy for anyone, but people accept change better when the group that needs to know about the change understands the change and its necessity (Mueller & Curhan, 2006). Leaders must use their emotional abilities to understand the change, explain the need for the innovation, and understand the issues involved in bringing about the change (McLagan, 2004). Managers should consider multiple factors when attempting any change within an organization: (a) how the change affects the institution as a whole, (b) how the change affects other departments, (c) what fears employees have about the change, and (d) whether the change is truly necessary. Managers need to take into consideration the above factors when implementing change (McLagan, 2004). Regular meetings may assist in the implementation of a change within a group by using communication as a tool to keep employees informed of how and when change will take place. When leaders put themselves in their employees' positions and answer the relevant questions, the leaders can be successful in understanding how the employees may react to this new change. Using one's emotions to understand a change and why it is

14 necessary can allow a manager to lead an organization while making the alteration (Cork, 2005). Emotional skills may help a leader keep employees motivated and maintain high productivity during a stressful time. Using open communication is a key factor in ensuring changes take place in the most efficient and effective ways possible (Dalgleish, 2005). The current study resulted in information that may help leaders understand how emotions can improve their skill sets to implement change and act as change agents within an organization. Nature of the Study The nature of the present research was a qualitative, phenomenological study that involved interviewing approximately 20 leaders within one automotive organization who were change agents within the company. Interviews with both male and female managers facilitated understanding (a) what types of changes occurred within the facility, (b) how those changes affected interviewees, (c) how interviewees led the organization through the change, and (d) how EI influenced the interviewees' change process. The design was appropriate because it highlighted the experiences of managers in implementing change, and the findings may assist other leaders in managing change effectively. Senge et al. (2007) suggested, Change efforts can be doomed from the start due to the fantasy that somehow organizations can change without personal change and without change within the leadership positions. Specifically, where change leaders have the ability to perceive and understand the emotional impact of change on themselves and others they could assist employees in coping with change and the major uncertainty that occurs with change, (p. 48)

15 In other words, not only do organizations change; but employees and managers change in order to adapt to new environments. The five qualities of EI, including self-regulation, self-awareness, motivation, empathy, and social skills, are tools for a leader implementing change. The leaders should allow themselves to look at the employees' view to understand what is happening within the organization (Cork, 2005). The leaders may not realize everything that is occurring among employees in the organization. EI can help leaders learn how the employees are feeling and assist employees in adapting to change (McLagan, 2004). With many changes within an organization, sometimes employees can become tired of newness. Consequently, employees lack motivation and enthusiasm when a necessary change occurs. When change happens within an organization, leaders should recognize employees must continue to meet the goals and objectives of the organization at the same time as the change is happening (Post, 2007). Research Questions The current study addressed seven research questions to better understand the perceptions or beliefs of the managers being interviewed: 1. What is your perception of how EI can aid a leader in acting as a change agent within the organization? 2. What is your perception of how EI can affect the outcome of the change? 3. What is your perception of how the five qualities of EI can influence a leader when acting as a change agent within an organization? 4. What is your perception of how the use of EI can affect productivity within the group when change is occurring?

Full document contains 164 pages
Abstract: The purpose of this qualitative, phenomenological study was to explore, investigate, and understand how managers who use emotional intelligence (EI may influence employees when change occurs in an organization. Change happens when companies are merged, acquired, closed, downsized or restructured. The way change is communicated, processed, planned, and implemented affects all employees. EI can play an integral part in helping employees implement, embrace, and adapt to change within an organization by using the five qualities of EI: (a) self-awareness, (b) self-regulation, (c) motivation, (d) empathy, and (e) social skills. The goal of this study was to help managers who have an understanding of emotions assist employees adapt to organizational changes and aid in motivating employees to incorporate change. The purpose of the research was to examine the different responses given by managers in the automotive industry regarding practices of EI in a change process. The analysis revealed the different mechanisms for communicating change and the impact of the mechanisms from a manager's perspective. The study also involved investigating how the managers perceived EI how the managers incorporated EI in effecting change, and the managers' perceived impact of the use of EI. Significant relationships emerged between managers' awareness of EI, use of EI, and individual differences in preference of methods. The conclusions included suggestions regarding the intelligent use of different tactics and mechanisms for formulating an action plan to handle an issue. The current research resulted in insight to potential training programs that can be devised on the basis of the findings enumerated in this dissertation.