Transformational Leadership across Hierarchical Levels in UK

Manufacturing Organizations

Gareth Edwards

Bristol Business School, University of the West of England, UK

Senior Lecturer in Organisations Studies

Frenchay Campus, Coldharbour Road

Bristol, BS16 1QY

Gareth3.edwards@uwe.ac.uk

+44 (0)117 328 1707

Biography - Gareth is a Senior Lecturer in Organisation Studies at Bristol Business School. His

current interests are in the application of ideas on aesthetics and leadership, community and dispersed

theories of leadership. Before entering academia Gareth spent twelve years working for a leadership

and executive development company.

Roger Gill

Durham Business School, Durham University, UK

r.w.t.gill@durham.ac.uk

Biography – Roger is Visiting Professor of Leadership Studies at Durham Business School and an

independent consultant in leadership and leadership development. He has held a full-time chair in

organizational behaviour and HRM and a subsequent visiting professorship in leadership studies at the

University of Strathclyde Business School in Scotland, with responsibility for executive education,

established and directed the Research Centre for Leadership Studies at The Leadership Trust, run his

own HR management consulting firm in Singapore and Southeast Asia, and held senior appointments

in HR management consulting with the PA Consulting Group in Southeast Asia and in HR

management in the textile and engineering industries in England.

Transformational Leadership across Hierarchical Levels in UK

Manufacturing Organizations

Purpose

This paper reports an empirical study of the effectiveness of transformational, transactional

and laissez-faire leadership across hierarchical levels in manufacturing organizations in the

UK. The aim was to develop a framework of leadership across hierarchical levels that would

be useful for leadership development programmes and interventions.

Design/methodology/approach

Managers from 38 companies completed a 360-degree version of the Multifactor Leadership

Questionnaire. Multiple responses – self, superior, subordinate and peer ratings – were

obtained for 367 managers of whom 15% were female and 85% male, aged between 21 and

62 years (mean = 42 years), from 38 organizations in the UK manufacturing sector. Of the

367 subjects, unanimous (cases were used only if all ratings agreed on the hierarchical level

of the subject) opinions on hierarchical level were gained for 215 (58%), which includes 30

top-level managers, 33 directors, 54 senior managers, 43 middle managers and 55 lower

managers. Data concerning time span was also obtained for 253 managers.

Findings

The findings of the research show a distinct pattern of behaviours across different hierarchical

levels of organizations. Transformational leadership is equally effective across hierarchical

levels in organizations, whereas transactional leadership is not effective at the uppermost

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hierarchical levels in organizations but effective at levels lower down. Laissez-faire

leadership is ineffective at all hierarchical levels.

Originality/value

A framework of effective leadership behaviours across hierarchical levels in organizations

was developed from the findings. This framework can be used as a basis for leadership

development in UK manufacturing organisations and potentially wider more general

organisation contexts.

Key words: Transformational, Transactional, Leadership, Effectiveness, Hierarchical Level

Classification – Research Paper

1. Introduction

The literature regarding leadership has recently witnessed a shift toward studying leadership

in context (Antonakis, Avolio, and Sivasubramaniam, 2003; Fairhurst, 2009; Fry and Kriger;

2009; Liden and Antonakis, 2009; Pawar and Eastman, 1997; Porter and McLaughlin, 2006)

and as a distributed phenomenon across organizations (e.g. Gronn, 2002). Studies on

transformational leadership have responded and have started to shift focus towards

identifying and understanding contextual and organizational variables (Zhu, Avolio and

Walumbwa, 2009). This paper contributes to this shift in focus by exploring the contextual

impact of hierarchical level on transformational, transactional and laissez-faire leadership and

reports a framework of these leadership behaviours across five hierarchical levels in UK-

based manufacturing organizations. This paper adds to knowledge in the area of hierarchical

level and leadership research as it investigates leadership effectiveness across hierarchical

levels in a UK context, which has not been investigated to date. The paper also explores a

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higher number of organisational levels than previous research and gathers data from a broader

number of rating sources, then previous research – self, superior, subordinate and peer.

2. Leadership Behaviours across Hierarchical Levels

A number of writers have hypothesized differences in leadership style, behaviour and

processes across hierarchical levels (Antonakis, Avolio, and Sivasubramaniam, 2003; Collins,

2005; Den Hartog, House, Hanges, Ruiz-Quintanilla, and Dorfman, 1999; Dubin, 1979;

Grint, 1997; Hunt, 1991; Hunt, Osborn, and Boal, 2009; Mumford, Campion, and Morgeson,

2007; Rowe, 2001; Saskin, 1988; Stogdill, 1974; Waldman and Yammarino, 1999; and

Zaccaro, 2001). One ‘macro’ perspective (Dubin, 1979) has contrasted ‘leadership of

organizations’ and ‘leadership in organizations’. Leadership of organizations essentially

focuses on the leadership of the total organization, whereas, leadership in organizations

involves face-to-face interaction in pairs or groups at lower levels of an organization. A

similar distinction is that of visionary leadership and managerial leadership suggested by

Rowe (2001). A recent paper adds weight to these distinctions (Hunt et al., 2009) highlighting

an important role of managerial leadership just below the strategic apex (director-level) in

organizations. This paper investigates these distinctions in a UK setting through the lens of

transformational, transactional and laissez-faire leadership.

There have been a number of studies that have investigated transformational leadership

across organizational levels (Alimo-Metcalfe and Alban-Metcalfe, 2003; Bass, Waldman,

Avolio, and Bebb, 1987; Bruch and Walter, 2007; Densten, 2003; Lowe, Kroeck, and

Sivasubramaniam, 1996; Oshagbemi and Gill, 2004; Stordeur, Vandenberghe, and D’hoore,

2000; Yammarino and Bass, 1990; Yokochi, 1989). Results within this body of research,

however, have been varied. There are also areas that need further investigation, for example;

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only four of these studies have investigated the relative effectiveness of transformational and

transactional leadership at differing levels (Bruch, and Walter, 2007; Densten, 2003; Lowe et

al., 1996; Stordeur et al., 2000), none of which have been within the UK. Further research,

therefore, is needed to clarify the relative effectiveness of these behaviours across

organizational levels in UK organizations.

With this question regarding effectiveness of transformational and transactional leadership

across hierarchical levels it is worth reviewing the general research regarding the

effectiveness of these behaviours. For example, recent research in 72 U.S. Army platoons

found that both active transactional and transformational leadership behaviours are positively

correlated with potency, cohesion and performance (Bass, Avolio, Jung, and Berson 2003).

Previous research supports this finding, suggesting that the most effective leaders typically

display both transformational and transactional leadership (Avolio and Bass, 1998; Avolio,

Bass, and Jung, 1999; Bass and Avolio, 1993; Curphy, 1992; Hater and Bass, 1988; Howell

and Avolio, 1993; Kane and Tremble, 1998). In addition, it has been suggested that effective

transformational leadership behaviour augments effective transactional leadership behaviour

(Bass, 1985, 1998; Bass and Riggio, 2006). The effectiveness of transformational leadership,

therefore, builds on a foundation of transactional leadership behaviours. This paper

investigates these general findings regarding effectiveness across hierarchical levels in UK

manufacturing organisations.

Most of the studies regarding transformational and transactional leadership across

organisations report comparisons based on two levels (sometimes referred to loosely as

‘upper’ versus ‘lower’ levels) (Bass, et al., 1987; Bruch and Walter, 2007; Lowe, et al., 1996;

Stordeur, Vandenberghe, and D’hoore, 2000; Yammarino and Bass, 1990; Yokochi, 1989),

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two have studied three levels (Alimo-Metcalfe and Alban-Metcalfe, 2003; Oshagbemi and

Gill, 2004) and only one has studied four levels in organizations (Densten, 2003). This

research broadens the scope of previous research provides a more detailed examination of

differing management levels by exploring five levels in organisations – top, director, senior,

middle and lower level management.

In addition, Densten (2003) used Stratified-systems theory (Jacobs and Jaques, 1987; Jaques,

1976, 1989, 1990; Jaques and Clement, 1991) (SST) as the framework to record the

frequency of leadership behaviours (as described in the FRL model) of 480 senior police

officers in Australia. Stratified-systems theory (Jacobs and Jaques, 1987; Jaques, 1976, 1989,

1990; Jaques and Clement, 1991) is a prescriptive model of organisational structure based on

defining hierarchical level according to the complexity of work at each level. The model

therefore is a useful addition to the already existing research literature concerning the FRL

model and hierarchical level that we review below. SST suggests a model of organisational

functioning whereby tasks or requirements increase in complexity with ascending

organisational levels. The increasing task complexity is a function of the uncertainties created

by the necessity to deal with a more encompassing and a more turbulent environment further

up the organisational hierarchy (Hunt, 1991). The model shows seven levels within

organisations grouped into three domains: systems, organisational, and direct leadership. The

grouping is based on a measure of task complexity at each level termed ‘time span of

discretion’. Time span is defined as the maximum time for a manager at a given hierarchical

level to complete critical tasks (Hunt, 1991) (see Table 1). This model is also considered in

this research project.

(Insert Table 1 about here)

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In summary, the objective of the research was to investigate the effectiveness of

transformational, transactional and laissez-faire leadership across five hierarchical levels in

organizations in a UK context and to develop a working model based on the findings of the

research. This has not been done to date in the UK and therefore would be deemed a new

contribution to our understanding of a well known theory. Indeed, the applicability of the Full

Range Leadership Model’s description of transformational leadership has, in the past, been

questioned (Alban-Metcalfe and Alimo-Metcalfe, 2000; Alimo-Metcalfe and Alban-Metcalfe,

2001). This research, therefore, hopes to add to the investigation of this form of leadership

behaviour in the UK.

3. Method

3.1 Defining Hierarchical Level

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The meaning of ‘organizational level’ and how it should be measured have been cited as

important considerations concerning multiple-level leadership research (Nealey and

Fiedler, 1968). Cognitive theories of organization (Weick and Bougon, 2001) need to

be considered. Perceptions of the hierarchical level of a manager using 360-degree

ratings arguably the most rigorous method. This is because management, hierarchy

and even organization have been theorised as being construed through cognitive maps

(Weick and Bougon, 2001). It seems, therefore, that the true nature of a hierarchy is

what people perceive it to be. Unanimous opinion of ratings was chosen as the

preferred method of defining hierarchical level as it was deemed the most rigorous.

Previous research on transformational, transactional and laissez-faire leadership has

used two methods to define hierarchical level: job or vocation title or rank and the

manager’s own perception. Using job title or rank as a method of defining hierarchical

level seems adequate for structured organizations such as the military. An alternative

method, however, is needed for organizations where positions or ranks are more

ambiguous or unclear and, therefore, less comparable between organizations. The use

of a manager’s own opinion is adequate, but the discussion above concerning

cognitive maps implies that a consensus opinion would be more accurate. In addition,

data on Stratified-systems theory (SST) was also collected (Jacobs and Jaques, 1987;

Jaques, 1976, 1989, 1990; Jaques and Clement, 1991).

3.2 Design

The study used a between-groups design with 11 dependent variables. These variables were -

Attributed charisma (AC), Idealized influence (II), Inspirational motivation (IM), Intellectual

stimulation (IS), Individualized consideration (IC), Transformational leadership (TFL) (a

composite of the preceding five variables), Contingent reward (CR), Active management-by-

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exception (MBEA), Passive management-by-exception (MBEP), Transactional leadership

(TAL) – a composite of the preceding three variables, Laissez-faire leadership (LF). There

were also three outcome variables - Follower satisfaction (SAT), Leadership effectiveness

(EFF), Level of extra effort by followers (EE). All of these variables reflected scales in the

MLQ.

A 360-degree method was used, with four categories of rating – self-rating, peer rating,

superior rating, and subordinate rating. There is general agreement among academic

researchers that there is greater congruence between other-ratings (e.g. superior and

subordinate ratings, peer and superior ratings, etc.) than between self-ratings and other-

ratings (e.g. self-ratings and superior ratings, self-ratings and peer ratings, etc.) (Furnham and

Stringfield, 1994, 1998; Harris and Schaubroeck, 1988; Holzbach, 1978). There is also

general agreement among empirical research findings that self-ratings are consistently higher

than other-ratings. These significant differences are attributed to leniency or halo effects

(Furnham and Stringfield, 1998; Harris and Schaubroeck, 1988; Kruger and Dunning, 1999).

Indeed, some researchers suggest the risk of bias from self-ratings is over-estimated

(Crampton and Wagner, 1994; Saville et al., 1996; Schwarz, 1999; Spector, 1994). Saville et

al. (1996) have demonstrated how self-report personality scales show predictable, significant,

and substantial correlations with criteria of management job success. Furthmore, Hough et al.

(1990) suggest that response distortion due to social desirability does not appear significantly

to affect validity coefficients. In addition, the use of different perceptions of leader

behaviours by using self-ratings and subordinate ratings is useful. It provides a more

inclusive view of leadership (Borman, 1991; Mount and Scullen, 2001; Tornow, 1993).

Therefore, the decision was made to include self-ratings in the analysis, but to test whether

they did make a significant difference to the data.

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 There were two independent variables: hierarchical level as judged by unanimous opinion

(cases were used only if all ratings agreed on the hierarchical level of the subject) and time

span. Five categories of hierarchical level were identified - Top-level management (e.g.

chairman, chief executive officer, managing director), Director-level management (e.g.

finance director, operations director and other directors), Senior management (e.g. general

manager, site manager), Middle management (e.g. production manager, sales manager),

Lower management (e.g. supervisor, team leader). The second independent variable was time

span of the manager’s role (as viewed by the manager him/herself). Four categories were

identified in line with SST (Jacobs and Jaques, 1987; Jaques, 1976, 1989, 1990; Jaques and

Clement, 1991). These were ‘up to three months’ (Stratum I), ‘three months to one year’

(Stratum II), ‘one to two years’ (Stratum III), and ‘two to five years’ (Stratum IV). No data

were obtained for time spans above five years.

It was reasoned that the use of a quantitative methodology was beneficial for this piece

of research. Firstly, it would enable comparison with previous research. Secondly, it would

enable replication in future research initiatives. Indeed, the literature highlights the

importance of replication studies (Hubbard and Ryan, 2000): most researchers see replication

studies as providing genuine scientific knowledge. It is also suggested that ‘replication with

extension’, which modifies aspects of the original research design, is a highly suitable means

for knowledge creation (Hubbard and Ryan, 2000; Rosenthal and Rosnow, 1984).

3.3 Sample

The original sample consisted of 432 managers. Multiple responses were gained for 367

managers of whom 15% were female and 85% male, aged between 21 and 62 years (mean =

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42 years), from 38 organizations in the UK manufacturing sector. Manufacturing

organizations were chosen because of their relatively well-defined hierarchical structures. A

solely-UK sample was used to control for national culture variance (Bass, 1998). The

organizations were of varying sizes, ranging from five to 3,000 employees (mean = 285

employees) and £0.2 million to £220 million turnover (mean = £27 million).

Of the 367 subjects, unanimous opinions on hierarchical level were gained for 215 (58%), of

whom 30 were top-level managers, 33 were director-level managers, 54 were senior

managers, 43 were middle managers and 55 were lower managers (see table 2 for a

breakdown of ratings by hierarchical level). Multiple MLQ ratings (self, peer, superior and

subordinate) data concerning time span was obtained for 253 managers, of whom 56 reported

a time span of up to three months, 53 a time span of three months to one year, 79 a time span

of one to two years, and 49 a time span of two to five years (see table 3 for a breakdown of

ratings by time span). There are some ‘rules of thumb’ cited in the literature for determining

sample size (Roscoe, 1975). Firstly, sample sizes of 30 to 500 are deemed appropriate for

quantitative empirical research. Secondly, where samples are to be divided into sub-samples,

a minimum sub-sample size of 30 for each category is deemed necessary (Sekaran, 2003).

(Insert Table 2 about here)

(Insert Table 3 about here)

3.4 Materials

The materials consisted of a 360-degree version of the Multi-factor Leadership

Questionnaire, Form 5X-short (Bass and Avolio, 1997) with both self-rating and other–rating

11
forms) and demographic sheets for all raters. This version of the MLQ is a 45-item

questionnaire with a five-point Likert-type scale for rating the frequency of use of leadership

behaviours associated with the scales that constitute the dimensions of transformational,

transactional and laissez-faire leadership (see Table 2). The rating scale has the following

designations: 0 = ‘not at all’; 1 = ‘once in a while’; 2 = ‘sometimes’; 3 = ‘fairly often’; and 4

= ‘frequently, if not always’. The first 34 items measure leadership behaviour and the

remaining 11 items measure leader effectiveness (e.g.,, “leads a group that is effective”,

satisfaction with the leader and his or her methods, e.g.,, “uses methods of leadership that are

satisfying”, and the extra effort provided by followers, e.g.,, “increases others willingness to

try harder”).

As the study was a replication-with-extension, the MLQ was used for the research. There are,

however, concerns about the lack of supporting evidence for the factor model of

transformational leadership represented by the MLQ that have led some researchers to

suggest alternative factor models (Bycio, Hackett, and Allen, 1995; Carless, 1998; Deluga

and Souza, 1991; Den Hartog, Van Muijen, and Koopman, 1997; Hinkin and Schriesheim,

2008a; Hinkin and Tracy, 1999; Howell and Avolio, 1993; Kantse, et al., 2007; Koh, 1990;

Lievens, Van Geit, and Coetsier, 1997; Rafferty and Griffin, 2004; Tepper and Percy, 1994;

Yammarino and Dubinski, 1994). Although there are criticisms of the MLQ it has been

suggested that they do not necessarily detract from the theory of transformational and

transactional leadership (Avolio and Bass, 1993; Hinkin and Tracey, 1999). Indeed, past

independent meta-analyses (Gasper, 1992; Lowe et al., 1996; Patterson, Fuller, Kester, and

Stringer, 1995) have confirmed that the MLQ can be regarded as providing a satisfactory

model for assessing transformational leadership. In addition, a recent review has identified 14

studies that generated conflicting claims regarding the factor structure of the MLQ and the

12
number of factors that best represent the model (Antonakis et al., 2003). Taking differing

contextual considerations into account, however, a recent analysis of the MLQ concluded

that, firstly, the nine-factor model best represented the factor structure underlying the MLQ

(Form 5X) instrument. Secondly, the results of this research suggested that the MLQ can be

satisfactorily used to measure Full Range Leadership in relation to its underlying theory.

Lastly, research has indicated that it is premature to collapse factors in this model before

exploring the context in which the survey ratings are collected (Antonakis et al., 2003). Since

this time, however, there have been further criticisms of the MLQ suggesting the theory for

the four dimensions – contingent reward, management-by-exception (active), management-

by-exception (passive) and laissez-faire – is underdeveloped (Hinkin and Schriesheim,

2008b). Furthermore there has also been criticism of the items that constitute the MLQ,

which have been seen to be too ambiguous with respect to level of analysis, i.e. it is unclear

whether they are measuring at an individual, group or organisational level (Schriesheim et al.,

2009).

Given the debate above an exploratory and confirmatory factor analysis was conducted on the

current data set and is reported in a separate paper (Author 1, et al., under review). This

analysis suggested a slightly different variant of the MLQ model which comprises: active

constructive leadership, active management-by-exception and passive avoidant leadership

based on the exploratory factor analysis. This model has been found in a previous study of

nurses in Finland (Kantse, et al., 2007). The analysis conducted by Author 1, et al., however,

also provides support for the nine factor model in confirmatory factor analysis (Chi² =

2,103.583, DF = 558, CFI = 0.901, TLI = 0.888, RMEA = 0.047) (Author 1, et al., under

review). As the study was a replication-with-extension into the UK context, the full nine

factor model of the MLQ was used for comparative purposes.

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3.5 Procedure

Organizations were approached via electronic mail to seek agreement for the participation of

their managers. The benefit to their organizations (a report on a comprehensive 360-degree

assessment of leadership in their organization) was explained. Agreement to take part in the

research was obtained, and a company representative (to receive the questionnaires) was

chosen by the contact person in the company. The questionnaires were mailed in sealed

envelopes to company representatives, who then distributed the sealed envelopes to the

participants in the study. The questionnaires were therefore of an ‘administered’ nature, which

is important to highlight (Baruch 1999, Baruch and Holtom, 2008). The completed

questionnaires were returned to the company representatives in sealed envelopes and

forwarded to the research co-ordinator in a pre-paid envelope. Data were collated and

analyzed using SPSS version 10.

3.6 Data Analysis

The study used mean values of the multiple responses (ratings by self, peer, superior and

subordinate) for analysis purposes. Previous research using multiple responses also used the

mean score for all individuals who responded to questionnaires as the measure for each scale

(Atwater and Yammarino, 1992; Hegarty, 1974; Shipper and Davy, 2002). We do

acknowledge, however, the importance of individual perceptions analysis was conducted on

the same basis for individual responses (self, peer, subordinate and superior) (e.g. Atwater, et

al., 1998). Results of this analysis and similarities and differences are discussed later in the

paper. Correlation Coefficients (Pearson’s r) were calculated to test for relationships between

the dependent variables - transformational leadership, transactional leadership and laissez-

faire - and independent variables. More detailed multiple regression analysis was also

14
performed for hierarchical level and time span to investigate the impact of independent

variables (extra effort, effectiveness and satisfaction) for all dependent variables. Hierarchical

regression analysis was also performed to investigate the relative impact of other variables

that may have impacted the results – organization size and rating source.

4. Results

The dependent variable ‘transformational leadership’ failed the goodness-of-fit test. The

results of non-parametric test alternatives (Spearman’s ) was therefore reported for this

variable. The descriptive statistics for each dependent variable and the coefficients of

correlation between dependent variables and the outcome variables – ‘extra effort’,

‘leadership effectiveness’ and ‘follower satisfaction’ – were tabulated (see Tables 4, 5 and 6).

(Insert Table 4 about here)

(Insert Table 5 about here)

(Insert Table 6 about here)

Multiple regression analysis was also performed to investigate predictors (taken from the

independent variable list) of dependent variables (extra effort, effectiveness and satisfaction)

for each category variable level. To ensure an adequate sample size of around 45 (five

observations for each independent variable) (Hair, Anderson, Tatham, and Black, 1998) the

top-level manager category was merged with the director-level category. The results of the

multiple regression analysis are presented in Tables 7 and 8. The table reports standardised

15
betas (β) along with the adjusted regression coefficient (∆ R²) and F ratio. Regression

equations are available for examination upon request.

(Insert Table 7 about here)

(Insert Table 8 about here)

4.1 Hierarchical Regression Analysis

The results of the hierarchical regression analyses are presented in table 9 and show that the

category variable hierarchical level and the variable rating have the strongest moderating

effect on independent and dependent variables. The results of the regression analyses show

the variable ‘organizational size’ had no moderating effect on independent and dependent

variables. Owing to the strong moderating effect of the variable ‘rating’ the independent and

dependent variables were subjected to further analysis by the original category variables

(hierarchical level and time span) split by each rating category (self, peer, superior and

subordinate). A full assessment of differences between each of these perspectives and

between these perspectives and the results obtained with the aggregated data set is available

on request and summarized in the discussion below.

(Insert Table 9 about here)

5. Discussion

The findings of the research show a distinct pattern of behaviours across different hierarchical

levels of organizations in the UK. Transformational leadership is equally effective across

hierarchical levels in organizations, whereas transactional leadership is not effective at the

16
uppermost hierarchical levels in organizations but effective at levels lower down. Laissez-

faire leadership is ineffective at all hierarchical levels. A framework of effective leadership

behaviours across hierarchical levels in organizations was developed from the findings (see

figure 1).

(Insert Figure 1 about here)

With regards to comparing hierarchical level and time span there is similarity in results for

transformational leadership as it is conducive to extra effort, effective, and satisfying at all

time spans. The results concerning extra effort, effectiveness and satisfaction of transactional

leadership, however, show little similarity between category variables. For example,

transactional leadership appears to be conducive to extra effort when exhibited by senior-

level managers, conducive to extra effort, effective and satisfying when exhibited by middle-

level managers, and effective and satisfying when exhibited by lower-level managers; but in

comparison it appears to be conducive to extra effort, effective and satisfying only at the

highest time spans. Again this may have been due to the time spans used in the research being

related more to senior-level, middle-level and lower-level managers than to director-level and

top-level managers.

Laissez-faire leadership appears to be inhibitory to extra effort when exhibited by lower-level

managers, yet it was not inhibitory when exhibited by managers working to time spans of up

to three months. The results, however, were the same for both category variables for

effectiveness and satisfaction.

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The results concerning individual responses (self, peer, superior and subordinate), highlighted

in Figure 2, show similar results, especially for subordinate and self ratings. Peer and superior

ratings appear to have differing view, especially in the case of superior ratings in which they

have almost the opposite view. This is reminiscent of the suggestion that aspects of behaviour

deemed to be important by one member of an organization may be different from those

regarded as important by others (Alimo-Metcalfe, 1996; Borman, 1974; Bradley, 1978;

Colvin, 2001; Ilgen and Feldman, 1983; Salam, Cox, and Sims, 1997). For example, Alimo-

Metcalfe (1996) suggests that superiors tend to focus on technical managerial skills, such as

decision making and problem solving, whereas subordinates are more concerned with

interpersonal skills, sensitivity, empowerment and visionary leadership. This appears to be

supported by these findings.

(Insert Figure 2 about here)

With regards to the constituent factors of transformational and transactional leadership, the

more detailed analysis given by the regression analysis shows a slightly different, more

confusing picture of effective and ineffective behaviours at differing levels. Similar to the

findings of Bruch and Walter (2007) idealised influence and inspirational motivation were

found to be ineffective at lower levels of organisations (hierarchical level and time span) in

the study. With regards to the transactional leadership behaviours (contingent reward and

active management-by-exception), they still appear to be related to effectiveness and

satisfaction at lower and middle levels and middle to lower time spans, with the exception of

contingent reward being effective at top and director level. Also individualised consideration

appears to be the most widespread behaviour, being satisfying at all organisational levels

measured. Also of interest were the nuances of intellectual stimulation being conducive to

18
extra effort at top and director-level, inspirational motivation and individualised consideration

being conducive to extra effort at senior levels and attributed charisma and intellectual

stimulation being conducive to extra effort at middle levels. Interestingly, no behaviours were

found to be conducive to extra effort at lower levels (except attributed charisma for the lower

time spans). This may suggest that transformational leadership may not be achieving

performance beyond normal expectations by changing how people feel about themselves and

what is possible and by raising their motivation to new heights (c.f. Bass, 1985) at lower

levels of organisations. And indeed, this may only be the case for certain behaviours at certain

levels in organisations.

This investigation has found a comparative lack of transformational leadership behaviours

and increased effectiveness of active transactional leadership behaviours at middle and lower

levels compared with higher levels in the organizational hierarchy. This may be due, as was

suggested earlier, to managers at lower levels being more oriented towards a steady workflow

and having to have a greater focus on maintaining effective operations. Higher-level

managers, in comparison, focus more on change and on the creation and communication of

new organizational policies (Katz and Kahn, 1966, 1978; Selznick, 1957). Indeed, a recent

study (Stewart and Johnson, 2009), suggests that as teams become increasingly diverse, as

would happen as a manager rises in the organization hierarchy, leadership may need to adapt

approaches that successfully manage interpersonal relationships and clearly establish roles to

ensure effective performance. This could mark the shift from transactional to

transformational behaviours found by this study.

Furthermore, the results of this research provide evidence to challenge previous findings

concerning the proposition that effective leaders typically display both transformational and

19
transactional leadership behaviours (Avolio and Bass, 1998; Avolio et al., 1999; Bass and

Avolio, 1993; Hater and Bass, 1998; Howell and Avolio, 1993). It appears that only senior,

middle and lower level managers are effective when displaying both transactional and

transformational leadership behaviours. Our research also supports concerns about the

generalizability of the Full-Range Leadership model (Bryman, 1992; Gill, 2006). It implies

that there are differences in leadership requirements across hierarchical levels in

organizations (Antonakis, et al., 2003; Den Hartog, et al., 1999; Grint, 1997; Hunt, 1991;

Saskin, 1988; Waldman and Yammarino, 1999; Zaccaro, 2001). Our findings, however, do

support the augmentation effect of transformational leadership on transactional leadership

(Bass, 1985; 1998; Bass and Riggio, 2006). Our results go further by illustrating that this

augmentation effect also occurs at a macro organizational level.

The framework reported in this paper reflects the more macro distinctions of leadership

discussed earlier in the paper (Dubin, 1979; Rowe, 2001). The findings also support the

suggestion made by Hunt et al. (2009) that the role of the managerial level just below the

strategic apex is critical. From the perspective of this research this is highlighted by a shift

from transformational and transactional leadership requirements to solely transformational

leadership requirements. The distinction found in this paper also reflects similar distinctions

made in the self-monitoring and effective leadership literature (Caligiuri and Day, 2000;

Sosik, Jung, and Dinger, 2009). There is a caveat attached to these summary comments,

however, as when behaviour is investigated at the more distinct level of constituent factors

the picture becomes much more specific to various organisational levels. There appears to be

a distinct pattern of behaviours relating to extra effort, effectiveness and satisfaction at

different levels in organisations in the UK.

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6. Implications for Leadership Development

The results of our research highlight the need for the development of transformational

leadership behaviours at all levels of UK manufacturing organizations. The results also

suggest that lower, middle and senior level managers (and potential managers) still require

the development of active transactional leadership behaviours as well as transformational

leadership behaviours. This form of leadership development needs to reflect the key

characteristics of active management-by-exception, such as setting objectives and techniques

for actively monitoring progress and taking corrective action as necessary. This reflects

programmes on the market (e.g. Edwards et al. 2002) where task orientation as well as

relationship building is seen as important in developing leadership ability and capacity. This

is recognised in this particular example by expressing the importance of self-development for

leadership and inter-relational aspects of leadership but without forgetting how managers and

leaders frame tasks and what is seen as a successful outcome for groups. The essence of

leadership in such programmes is to approach these tensions within an experiential process

(Edwards et al. 2002). In addition, higher-level managers, on the other hand, need

development that concentrates on moving from the use of active management-by-exception

to the use of more constructive transactional leadership behaviour – contingent reward – and

transformational leadership behaviours. In considering lower managers for more senior

positions in organizations, the use of transformational leadership behaviours by these

managers should be the basis for the assessment of their suitability.

The ‘Full-Range Leadership’ model has previously been hailed as ‘the leadership

development solution for all managers’ regardless of organizational and national boundaries

(Avolio, 1999; Bass, 1997). Indeed, the ‘Full-Range Leadership’ Programme (FRLP), which

focuses on developing transformational leadership, has had positive results in many

21
applications (Avolio and Bass 1994; 1998; Barling et al., 1996; Bass, 1998; Crookall, 1989;

Dvir 1998). These improvements, however, tend to be accompanied by a reduction in the use

of managing-by-exception (Bass, 1998; Bass and Avolio, 1990; 1994).

This study has shown that a reduction in the use of management-by-exception (active),

therefore, may be detrimental at certain levels in organisations. The study has provided

evidence to suggest that the Full-Range Leadership Programme may need to be altered to

accommodate the need for the development of transactional leadership, especially active

management-by-exception, in managers at middle and lower levels of organizations. A

programme that develops transformational leadership at the cost of management-by-

exception (Bass and Avolio, 1990; 1994) may not be suitable for all managers if there is a

reduction in the use of active management-by-exception.

7. Limitations and Further Research

Firstly, there are concerns regarding the ‘effectiveness’ scales used in the MLQ (extra effort,

effectiveness and satisfaction). Indeed within this data analysis it is recognised that it may

not be appropriate to combine individual effectiveness items in to overarching constructs

(extra effort, effectiveness and satisfaction). Items in this scale may be influenced by implicit

leadership theories (Lord, Foti, and De Vader, 1984; Meindl, 1990) or by halo effect. Using

the MLQ may, as a consequence, have exaggerated the importance of a leader’s behaviour

and removed attention from important interpersonal and situational factors (Pittenger, 2001).

More explicit effectiveness scales and other forms of effectiveness (e.g., financial targets,

goal accomplishment, etc.) therefore need to be used and analysed. The measures of

leadership effectiveness in this study represent individuals’ perceptions of leadership

effectiveness rather than objectively measured performance outcomes (e.g., team

22
performance) and could also contribute to common method variance. In addition, the

categorization of hierarchical level (e.g., senior, middle and lower) may mean different things

in different organizations (Hunt, 1991) and in previous research. Qualitative analysis of the

meaning of particular hierarchical levels such as lower, middle and senior across different

organizations is therefore recommended. Lastly, there are variables that might affect results in

the data analysis which have not been considered, such as gender, age, functional or

departmental background etc. Further analysis will consider such variables in relation to

leadership and hierarchical level.

8. Conclusions

The results of the research suggest a distinct pattern in the use and effectiveness of

transformational, transactional and laissez-faire leadership at different levels of

organizational hierarchy. The use of transformational leadership is lacking at middle and

lower levels, and the effectiveness of transactional leadership is decreased both above and

below middle-level management. The effectiveness of transformational leadership, the use of

transactional leadership, and the use and ineffectiveness of laissez-faire leadership are

constant across the hierarchical levels of organizations.

We provide a working model based on this pattern. Evidence to support the model exists in

previous research and theory. The model is supported by theory in that transformational

leadership is more prevalent at upper levels than at lower levels, and transactional leadership

is more effective at middle and lower levels than at upper levels. The findings support general

distinctions made in the leadership literature of (Dubin, 1979; Hunt et al., 2009; Rowe, 2001).

23
The findings also add to knowledge in the area of leadership by providing new data and

conclusions on the effectiveness of transactional and the ineffectiveness of laissez-faire

leadership across hierarchical levels. Our research has also provided a more comprehensive

investigation in this area by addressing five hierarchical levels and data from multiple

responses, in most cases 360-degree assessment. No other research is known to have

provided such in-depth data.

Finally, we provide evidence to challenge previous findings that effective leaders typically

display both transformational and transactional leadership behaviours. Only senior, middle

and lower-level managers are effective when displaying both transactional and

transformational leadership behaviours. There is evidence also to support concerns about the

generalizability of the Full-Range Leadership model and suggestions of differences of

leadership in general across hierarchical levels in organizations. We have suggested how the

Full-Range Leadership programme, reflecting the findings, may be modified to better suit the

leadership requirements of managers at different hierarchical levels of an organization.

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Table 1. Domains and Levels in Stratified-systems Theory

Time span Level Domain

20 years and over VII - Corporation Systems
10-20 years VI - Group Systems
5-10 years V - Company Organisational
2-5 years IV - Division (General Organisational

Management)
1-2 years III - Department Direct
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Table 2. Ratings Breakdown by Hierarchical Level

Top-level Director-level Senior-level Middle-level Lower-level

(n=30) (n=33) (n=54) (n=43) (n=55)

Rating Sources
Self rating 29 (30.8%) 32 (30.5%) 48 (27.7%) 39 (28.0%) 49 (26.5%)
Superior rating 5 (5.3%) 20 (19.0%) 48 (27.7%) 37 (26.6%) 49 (26.5%)
Peer rating 5 (5.3%) 22 (21.0%) 40 (23.1%) 24 (17.3%) 41 (22.2%)
Subordinate rating 48 (51.1%) 29 (27.6%) 37 (21.4%) 34 (24.5%) 39 (21.1%)
Unstated 7 (7.4%) 2 (1.9%) 0 (0.0%) 5 (3.6%) 7 (3.8%)
Total 94 105 173 139 185

Rating Scope
360 degree 12 (40.0%) 15 (49.5%) 20 (37.0%) 19 (44.2%) 29 (52.7%)
270 degree 10 (33.3%) 9 (27.3%) 25 (46.3%) 15 (34.9%) 17 (30.9%)
180 degree 8 (26.7%) 9 (27.3%) 9 (16.7%) 9 (20.9%) 9 (16.4%)
Total 30 33 54 43 55
Total Ratings 94 105 173 139 185

39
Table 3. Ratings Breakdown by Time Span

Two years One year and Three Up to three

and under under two months and months

five years years (n=79) under one (n=56)

(n=49) year (n=53)

Rating Sources
Self rating 49 (29.0%) 79 (29.0%) 52 (29.7%) 54 (27.3%)
Superior rating 37 (21.9%) 70 (25.7%) 37 (21.1%) 41 (20.7%)
Peer rating 31 (18.3%) 46 (16.9%) 41 (23.4%) 52 (26.3%)
Subordinate rating 47 (27.8%) 76 (27.9%) 41 (23.4%) 45 (22.7%)
Unstated 5 (3.0%) 1 (0.4%) 4 (2.3%) 6 (3.0%)
Total 169 272 175 198

Rating Scope
360 degree 27 (55.1%) 45 (57.0%) 25 (47.2%) 34 (60.7%)
270 degree 17 (34.7%) 24 (30.4%) 19 (35.8%) 18 (32.1%)
180 degree 5 (10.2%) 10 (12.6%) 9 (17.0%) 4 (7.5%)
Total 49 79 53 56
Total Ratings 169 272 175 198

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Table 4: Inter-Correlations between Analysis Variables

Variable M SD X₁ X₂ X₃ X₄ X₅ X₆ X₇ X₈ X₉
X₁ AC 2.63 .80 1.00
X₂ II 2.55 .83 .67*** 1.00
X₃ IM 2.68 .84 .68*** .73*** 1.00
X₄ IS 2.60 .76 .62*** .58*** .61*** 1.00
X₅ IC 2.71 .83 .62*** .55*** .56*** .65*** 1.00
X₆ CR 2.67 .80 .64*** .65*** .66*** .60*** .63*** 1.00
X₇ MBEA 2.31 .87 .23*** .26*** .18*** .19*** .13*** .29*** 1.00
X₈ MBEP 1.25 .79 -.37*** -.25*** -.32*** -.33*** -.32*** -.30*** -.05* 1.00
X₉ LF .81 .75 -.46*** -.35*** -.41*** -.38*** -.39*** -.40*** -.08** .64*** 1.00
N.B. * = P<0.05, ** = P<0.01, *** = P<0.001,
Table 5: Means, Standard Deviations and Correlation Coefficients (Pearson’s r and Spearman’s ) for

Hierarchical Level and Outcome Variable Scores

Dependent Top-level Director-level Senior-level Middle-level Lower-level

Variable (n=30) (n=33) (n=54) (n=43) (n=55)

Means and

Standard

Deviations
TFL 2.92 (.30) 2.81 (.43) 2.74 (.41) 2.62 (.44) 2.35 (.47)
TAL 2.07 (.26) 2.09 (.30) 2.11 (.25) 2.11 (.32) 2.02 (.24)
LF .68 (.43) .75 (.48) .75 (.43) .87 (.51) .90 (.53)
EE 2.87 (.43) 2.61 (.53) 2.50 (.58) 2.34 (.62) 2.10 (.53)
EFF 2.94 (.46) 3.07 (.36) 2.98 (.41) 2.88 (.51) 2.88 (.53)

Extra Effort
TFL .48** .77*** .70*** .69*** .63***
TAL -.27 -.04 .30* .32* .19
LF -.56** -.52** -.31* -.35* -.26
Effectiveness
TFL .57** .75*** .73*** .75*** .56***
TAL .15 .07 .12 .45** .31*
LF -.60*** -.64*** -.52*** -.55*** -.65***
Satisfaction
TFL .69*** .74*** .76*** .70*** .65***
TAL .19 -.00 .26 .33* .29*
LF -.65*** -.56** -.47*** -.66*** -.49***
N.B. * p<0.05, ** p<0.01, *** p<0.001,  Spearman’s  value (all other values are Pearson’s r)

* Standard deviations in parenthesis

Table 6: Means, Standard Deviations and Correlation Coefficients (Pearson’s r and

Spearman’s ) for Time Span and Outcome Variable Scores

Dependent Two years and One year and Three months Up to three

Variable under five years under two years and under one months (n=56)

(n=49) (n=79) year (n=53)

Means and

Standard

Deviations
TFL 2.77 (.43) 2.76 (.40) 2.71 (.39) 2.52 (.42)
TAL 2.11 (.27) 2.12 (.25) 2.03 (.27) 2.07 (.22)
LF .84 (.47) .73 (.42) .68 (.40) .75 (.51)
EE 2.47 (.51) 2.48 (.59) 2.62 (.55) 2.30 (.61)
EFF 2.84 (.47) 3.02 (.43) 2.95 (.44) 2.94 (.43)
SAT 2.99 (.52) 3.02 (.48) 2.98 (.54) 3.00 (.57)

Extra Effort
TFL .66*** .77*** .72*** .59***
TAL .34* .32** -.03 .18
LF -.32* -.42*** -.62*** -.19
Effectiveness
TFL .69*** .72*** .73*** .67***
TAL .39* .22* .14 .18
LF -.50*** -.64*** -.64*** -.63***
Satisfaction
TFL .71*** .67*** .80*** .64***
TAL .36* .24* .06 .11
LF -.59*** -.70*** -.62*** -.65***
N.B. * p<0.05, ** p<0.01, *** p<0.001,  Spearman’s  value (all other values are Pearson’s r)

* Standard deviations in parenthesis

43
Table 7: Results of Multiple Regression for Extra Effort, Effectiveness and Satisfaction by
Hierarchical Level

Independent Variable Top-level and Director- Senior-level Middle-level Lower-level

level (n = 54) (n = 43) (n = 55)
(n = 63)
Extra Effort
AC .15 .05 .55* .35
II -.09 -.19 .38 .28
IM .17 .62** -.34 .18
IS .40** .11 .36* -.16
IC .09 .27* -.05 .02
CR -.05 .09 -.05 .10
MBEA -.15 -.02 .12 -.20
MBEP .10 .15 -.20 -.20
LF -.32* -.04 .29 .10
∆ R² .50 .58 .55 .38
F 7.97*** 9.12*** 6.78*** 4.58***
Effectiveness
AC .16 .23 .23 .37*
II .08 .15 .21 -.37**
IM -.13 .25 -.12 -.51***
IS -.01 .13 -.05 -.05
IC .34* .15 .31 .40**
CR .28* -.14 .14 .44***
MBEA .00 -.12 .22 .32**
MBEP -.12 .02 -.19 -.09
LF -.15 -.23 .02 -.33**
∆ R² .58 .53 .64 .70
F 10.36*** 7.73*** 9.37*** 14.64***
Satisfaction
AC .38** .60** .06 .47**
II .11 -.26 .15 -.03
IM -.22 .21 -.04 -.20
IS .10 -.04 -.01 -.25
IC .32** .28* .47** .52**
CR .17 .04 -.07 .23
MBEA -.06 -.04 .21* .05
MBEP -.11 .02 -.23 .00
LF -.07 -.13 -.21 -.13
∆ R² .68 .63 .70 .58
F 15.31*** 10.93*** 12.13*** 9.38***
N.B. * = P<0.05, ** = P<0.01, *** = P<0.001, ∆ R² = Adjusted regression Coefficient, , F = F Ratio

44
Table 8: Results of Multiple Regression for Extra Effort, Effectiveness and Satisfaction by
Time Span
Independent Variable Two years and over One year and Three months Up to three
(n = 65) under two years and under one months
(n = 79) year (n = 56)
(n = 53)
Extra Effort
AC .21 .27 .40* .49*
II .16 .15 -.06 .00
IM .21 .24 .02 .13
IS .17 .06 .24 .06
IC .10 .27* -.05 -.01
CR .02 .08 .22 .16
MBEA -.12 .02 -.18 -.21
MBEP .05 .23* -.12 .07
LF .03 .00 -.12 .12
∆ R² .41 .62 .56 .32
F 5.90*** 14.92*** 8.28*** 3.92**
Effectiveness
AC .24 .56*** .26 .34*
II .03 -.04 .12 -.02
IM .16 -.07 -.17 -.34*
IS -.10 -.24* .08 .16
IC .26 .28** .38** .02
CR .20 .23* .07 .36*
MBEA -.04 -.10 .05 -.07
MBEP -.05 -.13 .01 -.19
LF -.13 -.06 -.29* -.30*
∆ R² .58 .67 .64 .61
F 10.92*** 18.58*** 11.35*** 10.67***
Satisfaction
AC .42* .45*** .27 .23
II -.07 -.11 .05 .04
IM -.07 -.18 .05 -.15
IS -.02 -.09 .15 -.01
IC .32 .39*** .42** .16
CR .22 .19* -.05 .16
MBEA -.04 -.06 .05 -.03
MBEP .02 .00 -.07 -.16
LF -.15 -.30** -.11 -.35*
∆ R² .62 .74 .71 .49
F 12.79*** 26.07*** 15.10*** 6.96***
N.B. * = P<0.05, ** = P<0.01, *** = P<0.001, ∆ R² = Adjusted regression Coefficient, , F = F Ratio

Table 9: Results of Hierarchical Regression Analyses for Independent and Dependent

Variables by Category Variables

Organization Size Hierarchical Level Rating

R F Change R F R F
Square Square Change Square Change
Change Change Change
AC .00 .15 .07 37.33*** .00 1.03
II .00 .14 .11 56.36*** .03 17.81***
IM .00 .64 .10 53.82*** .02 11.78**
IS .00 .00 .08 39.67*** .04 22.30***
IC .00 .00 .00 1.69 .11 56.62***

45
 TFL .00 .04 .09 46.56*** .05 26.60***
CR .00 1.39 .03 13.99*** .04 23.09***
MBEA .00 .28 .02 10.46** .00 2.20
MBEP .01 3.63 .00 .16 .02 7.66**
TAL .00 .01 .00 .14 .00 .01
LF .00 .12 .02 10.04** .05 24.58***
EE .00 .00 .08 40.94*** .02 8.04**
EFF .00 .14 .01 3.53 .02 10.76**
SAT .00 .52 .00 2.18 .03 13.35***
ACLEAD .00 .00 .08 42.00*** .05 28.32***
PALEAD .00 .74 .00 2.22 .04 17.59***
N.B. * = P<0.05, ** = P<0.01, *** = P<0.001,

46
Figure 1. A Working Model of Transformational and Transactional Leadership across

Hierarchical Levels

TOP

DIRECTOR

SENIOR

Notes: The reason for the diamond shape for

transformational and transactional is that while
transactional leadership was conducive to extra
MIDDLE
effort, effective and satisfying at middle
management levels it was only conducive to
extra effort at senior levels and effective and
satisfying at lower levels. Laissez-faire was
inhibitory to extra effort, ineffective and
LOWER unsatisfying at all levels.

Transformational leadership

Transformational and transactional leadership

47
Figure 2. A Model of Transformational and Transactional Leadership across Hierarchical
Levels according to Different Rating Sources

Superior ratings Self-ratings

Subordinate Peer ratings

ratings

Key

Both transformational and transactional deemed effective

Only transformational leadership deemed effective
Denotes divisions between hierarchical levels

48