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Emotional intelligence and transformational

leadership in retailing

Hilary Duckett
Oxford Brookes University, Oxford, UK
Elspeth Macfarlane
Oxford Brookes University, Oxford, UK

Keywords assured. Research conducted by The Institute


Leaders, Introduction of Management found that:
Transformational leadership,
Transactional leadership, The impact of leadership on organisational Almost half of junior managers, rate the
Retailing, Management styles, change and performance has been the quality of leadership in their organisations
Organizational structure as poor (Horne and Stedman-Jones, 1992,
subject of extensive research and a number
of research studies have focused on the p. 3).
Abstract
This study examines the connections between transformational While the significance of leadership
relationship between emotional
intelligence (EQ) and
leadership and organisational success is recognised at a macro- and
transformational leadership in the (Burns, 1978; Bennis and Nanus, 1997; microeconomic level, the term remains
context of a UK-based retailing Kotter, 1990; Eisenbach et al., 1999). This
organisation and examines
obtuse and elusive:
whether a relationship exists
study focuses on the leadership Leadership seems to be a black box or a
between store manager requirements of a UK retailing organisation mysterious concept. Every time an attempt is
performance and EQ profiles. It that had undergone a period of intensive made to define what makes for effective
identifies a discrepancy between
the organisation's idealized leader growth and was moving into a phase of leadership the results present us with
success criteria and the average maturity and consolidation. contradictions and draw people to the
profiles derived from its current The study critiques the dimensions conclusion that great leaders must be born
cohort of store managers. The and not made (Higgs and Dulewicz, 1999,
used to measure leader success using the
results show a strong connection
between the theory of EQ and theories of emotional intelligence (EQ) and p. 85).
transformational leadership: transformational leadership. The
however, differences between the applications of this approach are presented
idealised and actual EQ scores
were mainly located in
and conclusions drawn. Theoretical perspectives
transactional capabilities. The
The trait (or Great Man) theory prominent
study also questions the
between 1930 and 1950 centred on the
requirement for transformational Leadership in context
leader qualities at all stages of an identification of characteristics or
organisation's life cycle. The intense interest in the study of attributes of successful leaders.
leadership is partly attributable to The theory was founded on a belief that
its supposed contribution to economic leadership abilities were innate, however a
wealth and its significance in leveraging limitation was that studies often yielded
change and maximizing individual contradictory results (Stodgill, 1948;
and business performance (Kuhnert, Ghiselli, 1963). Contradictions between the
Received: December 2002 1994; Cleaver, 2002). A recent (2002) studies coupled with an increasing concern
Revised: May 2003 publication by the Institute of Management that the pre-determined basis of theory was
Accepted: June 2003 found that: elitist led to a second phase of leadership
There is a positive association between research, which can be broadly termed
leadership development and the growth of behavioural. Studies within this paradigm
financial turnover (Horne and concluded that a group's performance was
Stedman-Jones, 2002, p. 3). dependent on the leader's behaviour along a
directive/participative continuum (Hersey
While leadership is clearly critical to and Blanchard, 1988; Tannenbaum and
business success the complexity of the Schmidt, 1973). These studies tended to
Leadership & Organization
Development Journal dynamic ensures that its quality is not suggest that ``ideal'' styles of leading were
24/6 [2003] 309-317
# MCB UP Limited The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
[ISSN 0143-7739]
[DOI 10.1108/01437730310494284] http://www.emeraldinsight.com/researchregister http://www.emeraldinsight.com/0143-7739.htm

[ 309 ]
Hilary Duckett and characterised by greater levels of follower . . . [a] relationship of mutual stimulation and
Elspeth Macfarlane participation in decision making. The elevation that converts followers into leaders
Emotional intelligence and (Burns, 1978, p. 4).
transformational leadership in contingency theory was developed from the
retailing work of Fiedler (1967), Vroom and Yetton
Thus transforming leadership is relational
Leadership & Organization (1973), and House and Dessler (1974). The
Development Journal and reciprocal. Burns (1978) contrasted this
contingency theorists concluded that the
24/6 [2003] 309-317 with transactional leadership involving a
leadership construct was complex and
extended beyond simply the behaviour of the basic exchange of organisational resources
leader. Equally influential was the and rewards for action and performance.
situational or contextual setting. This Burns (1978) suggested that transactional
leadership paradigm focused on the leaders' leadership is limited in scope because
ability to adapt their behaviour to the resources are scarce and power is contested
specific needs of individuals or the context. and dispersed thus leader discretion is
It recognised that leadership is a relational restricted.
process involving interaction with a range Bass (1990) developed the work of Burns
of stakeholders and structures. (1978) into a model of transformational and
Contemporary leadership writing has transactional leadership. Both categories
focused increasingly on this individualised have a range of behaviours associated with
and adaptable relationship between the them that are depicted in Table I.
leader and follower and the importance of Bass (1990) proposed a hypothesis
the needs (social, psychological, extrinsic) of that transformational leaders were more
followers as a constituency. Bass (1985) likely to be seen as satisfying and effective
identified this transition within the and tested this using the multifactor
leadership questionnaire across a range of
literature from the classical tradition of
sectors public, private, health and defence.
perceiving leaders as achieving tasks by
He also correlated the results against
controlling and directing human behaviour
independent measures of productivity and
towards a model that recognises the
financial performance. His findings
centrality of fostering a positive
suggested that:
relationship with followers. Leadership
. . . transformational leaders have better
as a relational process involves interaction relationships with their supervisors and
with a range of stakeholders and structures make more of a contribution to the
and will: organisation than do those who are only
. . . involve leaders, followers, members, and transactional (Bass, 1990, p. 631).
subordinates or constituents as they interact,
create visions, become inspired, find meaning In addition he found employees were willing
in their work and lives, and gain trust and to exert more effort and to increase standards
respect (Clark and Clark, 1992, p. 2). for transformational leaders. A focus on
individualised consideration meant that in
general transformational leadership resulted
Transformational leadership in more risk taking and higher levels of
entrepreneurial activity. In conclusion Bass
The terms transforming, transformational
(1990) suggested that:
and transactional (Burns, 1978; Bass, 1990)
. . . when a firm is faced with a turbulent
have become central to the study of
market-place . . . then transformational
leadership and are often used to differentiate leadership needs to be fostered at all levels in
leadership and management. The theory of the firm (Bass, 1990, p. 639).
transforming leadership was first developed
Bass's (1990) findings are supported by recent
by Burns (1978) in order to differentiate those
research by Krishnan (2001) who suggests
leaders that established meaningful and
that superior performance is possible only
motivating relationships with subordinates
through stimulating and motivating
and followers from those that relied
followers to higher levels of performance
extensively on exchange or transaction to
through transformational leadership. His
generate results. Burns (1978) identified that
study found that the values of
a transforming leader: transformational leaders and transactional
. . . looks for potential motives in followers,
leaders are different ± the former
seeks to satisfy higher needs, and engages the
characterised by a focus on collective welfare
full person of the follower (Burns, 1978, p. 4).
and equality, change orientated and moral
He proposed that transforming leaders values and the latter oriented to the routine
developed: and competence values.
[ 310 ]
Hilary Duckett and Table I
Elspeth Macfarlane Transformational and transactional leadership
Emotional intelligence and
transformational leadership in Transformational leadership Transactional leadership
retailing
Leadership & Organization Charisma: provides vision and sense of mission, instills Contingent reward: contracts exchange of rewards for
Development Journal pride, gains respect and trust efforts, promises rewards for good performance,
24/6 [2003] 309-317 recognises accomplishments
Inspiration: communicates high expectations, uses Management by exception (active): watches and
symbols to focus efforts, expresses important searches for deviations from rules and standards,
purposes in simple ways takes corrective action
Intellectual stimulation: promotes intelligence, Management by exception (passive): intervenes only if
rationality and careful problem solving standards are not met
Individualised consideration: gives personal attention, Laissez-faire: abdicates responsibilities, avoids making
treats each employee individually, coaches and decisions
advises
Source: Bass (1990, p. 630)

The importance of leadership to the Intrapersonal intelligence is defined as: the


maintenance and development of ability to form an accurate reading of oneself
organisational culture has been emphasized and to be able to make use of this to operate
by successive writers (Peters and Waterman, effectively. It is from the constructions of
1982; Handy, 1985; Burns, 1978). Leadership
interpersonal and intrapersonal intelligence
exerts a tacit and explicit influence on
that EQ has originated.
culture through language, structure,
In 1990 Salovey and Mayer used the term
values, and behaviour and operates at a
``emotional intelligence'' as a subset of social
group and individual level. Eisenbach et al.
intelligence that involves the:
(1999, p. 83) suggested that the leadership
. . . ability to monitor one's own and others'
relationship is central to ``changing (the)
feelings and emotions, to discriminate among
values, beliefs and attitudes of followers''.
them and to use this information to guide
In particular their research emphasized the
one's thinking and action (Salovey and
importance of transformational leadership in
Mayer, 1990, p. 189).
radical change contexts because of its longer-
term psychological impacts on follower Salovey and Mayer's (1990) construction of
behaviour and attitudes creating ``a culture EQ comprises an aptitude for: appraising and
which embraces change'' (Eisenbach et al.,
expressing emotions in self and others;
1999, p. 85).
regulating emotions in self and others; and
using emotions in adaptive ways. Goleman
(1998) translated the concept of EQ into two
The concept of EQ
broad dimensions which he termed personal
EQ has developed from a realisation that and social competence. Personal competence
intelligence involves not only abstract and comprises: self awareness; self regulation;
concrete ability but also social ability. Given and motivation. Social competence relates to
an increased recognition of the importance of an individual's interaction with others and
the relationship between leaders and comprises: empathy; and social skills (such
followers ± the definition of social or as communication, leadership and
emotional intelligence may have a valence collaborating).
for constructions of leadership theory.
Salovey and Mayer (1990) defined social
intelligence as: EQ and transformational
The ability to perceive one's own and others leadership
internal states, motives and behaviours and
to act towards them optimally on the basis of Goleman (1998) considered leadership and
that information (Salovey and Mayer, 1990, EQ to be synonymous:
p. 187). IQ and technical skills do matter, but mainly
as threshold capabilities . . . recent
Gardner (1983) defined interpersonal research clearly shows that emotional
intelligence as the ability to understand intelligence is the sine qua non of leadership.
other people, what motivates them, how they Without it, a person can have the best
work and how to work co-operatively. training in the world, an incisive, analytical

[ 311 ]
Hilary Duckett and mind, and an endless supply of smart ideas, products. The selection criteria that were
Elspeth Macfarlane but still will not make a good leader applied thus reflected transformational
Emotional intelligence and (Goleman, 1998, p. 92). rather than transactional qualities and this
transformational leadership in
retailing did present difficulties as they grew from an
A person with high emotional intelligence has abstract concept to an operational business.
Leadership & Organization
Development Journal the ability to understand themselves and The incongruence between the human
24/6 [2003] 309-317 others and to adapt behaviours to a given resource interventions and the
context. Individuals with a high EQ and thus organisational requirements is discussed
demonstrable personal and social competence more fully.
may be oriented towards a transformational The preliminary research focuses on
leadership style with an emphasis on measuring performance of store managers
motivating and influencing others. Some through the summation of three different
measures. First, annual appraisal scores
research suggests that an organisation that is
derived from pre-determined criteria;
characterised by EQ has increased employee
second, sales to target figures; and third,
co-operation, motivation, and productivity ranking by head office directors. As a
and increased profits (an association also separate research exercise the EQ profiles of
reflected in transformational leadership the store managers were collected to
literature (Bass, 1990)). ascertain the relationship between EQ and
performance. The tool used to determine the
EQ profiles was the SMS-EQ Profile (widely
Methodology used in the USA). All 20 store managers were
approached for inclusion in the study but
The results of an empirical study into the EQ statistically reliable data was finally
profiles of a group of retail managers is collected from 13.
presented. The research explores the
relationship between EQ and
transformational leadership and considers The SMS-EQ profile
the applicability of transformational and EQ
The SMS-EQ profile is a quantitative tool
profiles as evaluative criteria. For the
designed to produce an EQ profile. The tool
purposes of this research the following
has been in use since 1970 and normed
hypotheses are tested:
extensively in the USA. The test can be used:
H1. EQ profiles can be mapped against the
as a diagnostic tool to examine the profiles of
transformational leader profiles.
H2. If there is a relationship between the existing managers; to identify an ``ideal''
variables then the ideal manager profile for recruitment and selection
profile at Company X would have high purposes; or to determine the content of
EQ and transformational leadership management development programmes. The
qualities. profile measures 13 dimensions which
combine transactional and transformational
The case study was centred on a small
retailing organisation operating from 21 leadership qualities. The purpose of this
stores in the UK. The company was study was to determine if a relationship
established in the UK in 1988 and reached existed between high EQ and high levels of
profitability in 1996 ± within 12 years it had performance. These dimensions are
generated a turnover of £25m. Company X paralleled in other constructs (Goleman,
expanded rapidly over this period from 2 1998; Dulewicz and Higgs, 1999; Salovey and
stores to 21. At the time of testing the Mayer, 1990). A description of each of the
company employed 470 staff in a variety of dimensions is presented in Table II. In
different capacities including head office, addition the dimensions have been mapped
administration and store employees. At its against the earlier theoretical model of
conception the organisation chose to
transformational/transactional leadership
inculcate a culture that was fluid , flexible
from Table I. The mapping process
and not constrained by too many rules and
demonstrates the connections between EQ
procedures. The philosophy of the founders
was to create a non-threatening environment dimensions and the dual leadership
that would promote risk-taking and descriptors for transformational/
entrepreneurial activity at all levels of the transactional.
business. The initial selection criteria The SMS-EQ survey is administered in two
reflected this emphasising strong parts: in part one the respondent checks a list
inter-personal skills and an affinity with the of 360 adjectives and selects those which
organisational culture and a love of the he/she believes to be accurate external
[ 312 ]
Hilary Duckett and Table II
Elspeth Macfarlane The 13 dimensions used in the profile tool
Emotional intelligence and
transformational leadership in Transformational/transactional
retailing
SMS-EQ dimension Description leadership
Leadership & Organization
Development Journal Energy Emotional energy is the energy a person Transformational ± inspiration/energy
24/6 [2003] 309-317 has to cope with stress, conflict, frustration
and pressure
Stress Emotional stress is the degree to which a Transformational ± inspiration
person is troubled by uncomfortable
feelings
Optimism To what degree an individual sees the world Transformational ± charisma/
in a positive or negative light inspiration
Self esteem The tendency to value oneself and be Transformational ± individualized
self accepting consideration
Commitment to work Commitment to work is the tendency to Transformational ± inspiration/
work hard, to get things done, and to take intellectual stimulation
responsibility Transactional ± management by
exception (active)
Attention to details Attention to detail measures to what Transactional ± management by
degree a person pays careful attention to exception (active)
what he/she is doing, and to what degree a
person strives for precision in tasks
Change Desire to change measures to what degree Transformational ± charisma/
people like to change in their environment, intellectual stimulation/inspiration
in what they believe or in their behaviour
Courage Courage is the willingness to risk injury, Transformational ± inspiration/
loss, hardship or physical discomfort to charisma
reach a desired goal
Direction (transformational/ Self direction is the tendency to form Transformational ± inspiration,
transactional) opinions, set goals, and make decisions charisma
Transactional ± management by
exception (active)/contingent reward
Assertiveness Assertiveness measures to what degree a Transformational ± inspiration
person tries to motivate others to believe or
do something
Tolerance Tolerance is the degree to which a person Transformational ± individualized
is patient or willing to put up with consideration
inconvenience from others
Consideration Consideration for others is how Transformational ± individualized
understandable, thoughtful, helpful, honest consideration
and responsible the person is
Sociability This is the tendency to meet people, spend Transformational ± individualized
time talking and be group orientated consideration

perceptions; in part two the respondent resource specialists at Company X. This


checks the same list and selects those which idealised score was later compared to
the he/she feels are self descriptors. The average and individual profiles of managers
average test-retest reliability correlation is at Company X.
0.74 and the survey has been rated as being 95
to 100 per cent accurate (Simmons, 1998).
Using more detailed dimension descriptors of Results
character tendencies enabled an ``idealised''
score for a store manager at Company X to be Table II illustrates that the SMS EQ profile
determined. The score was derived by the has characteristics of both transformational
research team in conjunction with human and transactional leadership. However, the
[ 313 ]
Hilary Duckett and emphasis of the profile is transformationally attention to detail (transactional), direction
Elspeth Macfarlane orientated. Thus H1 that EQ profiles can be (transformational/transactional) and
Emotional intelligence and
transformational leadership in mapped against the transformational leader consideration (transformational) indicated
retailing profiles has been demonstrated. that the average scores for store managers
Leadership & Organization H2 that the ideal manager profile at were significantly below the idealised.
Development Journal Company X would have high EQ and Indeed these average EQ scores were well
24/6 [2003] 309-317
transformational leadership qualities was below the acceptable levels recommended for
tested by applying the tripartite most jobs (Simmons, 1998).
performance scoring system (annual When correlated with the appraisal scores
appraisal scores; sales to target figures; and and director ratings the results
directors ranking) and the store managers demonstrated that those individuals who
EQ profile scores. had high levels of performance also had
For the purposes of comparison the 13 EQ higher EQ measures and their profiles were
profile scores were accumulated and an more similar to the ``ideal'' than those with
average profile for the cohort determined. poorer performance.
This enabled comparison (Table III) between Thus H2 has been partially demonstrated.
the ``ideal'' and ``actual'' EQ profiles and Across the dimensions of energy, stress,
allowed the differences between the two to be optimism, self esteem, change, courage,
identified. assertiveness, tolerance and sociability the
According to the Simmons survey (1998) store managers reflected the idealised high
deviations of between 1 and 2 cause only EQ profile that had been derived by
slight problems in the workplace, however, Company X. However the data revealed
differences over 2 are significant (Simmons, some discrepancies between the store
1998). Those scores of 2 for commitment to managers' scores and the company's
work, attention to detail, direction and idealised profile in relation to commitment
consideration are therefore shown in bold. to work, attention to detail, direction and
The results are plotted on the graph consideration. Of these dimensions,
(Figure 1) to highlight the differences commitment to work and direction display
between the idealised and average store elements of transactional and
manager EQ profiles. transformational leadership, attention to
The results showed that for the EQ detail is a purely transactional leader
dimensions of energy, stress, optimism, self characteristic and consideration is solely
esteem, change, assertion and sociability the transformational. Thus the data has shown
current cohort of managers scores reflected that for Company X elements of both
the idealised company scores. These transactional and transformational
dimensions all represent transformational leadership were required for effective
areas of leadership as shown in Table II. performance. It was largely the
However, the dimensions relating to transactional elements of leadership where
commitment to work (transactional), there were significant gaps between the

Table III
Differences between actual average and idealised EQ scores
Difference between actual
SMS-EQ dimension Average EQ profile Ideal EQ profile average and ideal scores
Energy 6.2 high 7 high ±0.8
Stress 4 moderate 4 moderate =
Optimism 4.3 moderate 5 moderate ±0.7
Self esteem 5.8 high 5 moderate +0.8
Work 3.9 moderate 7 high ±3.1
Detail 3.2 low 5.5 high ±2.3
Change 7.3 high 7 high ±0.3
Courage 5.7 high 5.5 high +0.2
Direction 5 moderate 7 high ±2
Assertive 5.7 high 6 high ±0.3
Tolerance 5.1 moderate 6 high ±0.9
Considerate 3.6 low 6 high ±2.4
Sociable 6.2 high 7 high ±0.8
Note: Those scores of +/±2 for commitment to work, attention to detail, direction and consideration are shown
in bold

[ 314 ]
Hilary Duckett and Figure 1
Elspeth Macfarlane Differences between average and idealised EQ profiles
Emotional intelligence and
transformational leadership in
retailing
Leadership & Organization
Development Journal
24/6 [2003] 309-317

organisational task requirements and the requirements of the task are not fully
manager's competence. This performance matched by the competencies of the
gap is discussed more fully below. managers.
This performance gap was reinforced by
the organisational culture at Company X.
Discussion Much effort had been expended on
The results of this study demonstrate a establishing an open, positive culture that
relationship between success, EQ and valued sharing and trust. This cultural mix
transformational leadership in a retail reinforced the transformational leadership
management context thus confirming orientation with its focus on collective
previous research (Bass, 1990). Table II maps welfare and equality (Burns, 1978; Bass,
the relationship between transformational 1990) and the relational aspects of leading
and EQ leadership profiles and demonstrates and managing (Clark and Clark, 1992). The
a high level of commonality. Through human organisation had established a culture that
resource interventions such as selection and was averse to rules and regulations and
succession planning, Company X had created a non-threatening environment that
established criteria that emphasised encouraged the selection of creative, risk-
transformational and high EQ leaders. taking and entrepreneurial leaders (Bass,
However, the idealised manager profiles 1990) needed during the radical change
(shown in Figure 1) indicated that measures (``start-up'') phase of the business
of success for store managers at Company X (Eisenbach et al., 1999). The culture was
also included transactional leader further reinforced through a range of
characteristics (commitment to work, human resource interventions such as
attention to detail and direction). Much recruitment, review and progression
research (Burns, 1978; Bass, 1990; Eisenbach decisions. Such tacit and explicit
et al., 1999; Krishnan, 2001) illustrates the interventions (Peters and Waterman, 1982;
value of transformational styles for Handy, 1985; Burns, 1978; Eisenbach et al.,
organisational development and follower 1999) resulted in a predisposition to
satisfaction, however, this study has also transformational leadership orientations
demonstrated that for the retail managers at and diminished the value of transactional
Company X there was also a requirement to competencies. As a consequence managers
exhibit transactional characteristics. The did not possess the transactional (Bass, 1990)
discrepancy shown in Figure 1 between the competencies (analytical ability;
actual and idealised manager profiles results assertiveness; ability to delegate; and
in a performance gap whereby the resilience) nor did they match the EQ
[ 315 ]
Hilary Duckett and descriptors attention to detail and work Retrospective interventions used as a
Elspeth Macfarlane commitment. These dimensions were all corrective measure are costly.
Emotional intelligence and
transformational leadership in areas of weakness for this cohort of Had the organisation used the SMS-EQ
retailing managers and resulted in a performance gap profile as a selection tool the resultant
Leadership & Organization and a cohort of managers who were partly criteria would have reflected transactional
Development Journal and transformational competencies and
24/6 [2003] 309-317 but not wholly successful.
the performance gap could have been
To an extent the directors at Company X
avoided.
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