Home Business & Finance Distance Leadership in International Corporations: Why Organizations Struggle when Distances Grow
Physical distance is defined as how close or how far leaders and subordinates are located from each other (Antonakis & Atwater, 2002, p. 684). The dimension implies only little face-to-face interaction between the two parties and is expected to create challenges which may result in a severe decrease in performance of the distant team. A physically distant setting might make it more difficult for transformational leaders to establish individualized relationships (Howell et al., 2005; Kerr & Jermier, 1978). Furthermore, physical distance may cause difficulties for leaders to monitor and rate followers’ performance. The more opportunities leaders have to observe their subordinates, the higher they rate their performance (Judge & Ferris, 1993). Particularly, active influence on subordinate performance becomes challenging (Kerr & Jermier, 1978). Being physically close, leaders have the chance to role model and influence subordinates directly which is certainly hindered over long distance (Yagil, 1998). Investigating behaviors of distance leaders shows they are more frequently reported to possess strong rhetorical skills as a characteristic of charisma (Shamir, 1995). Indeed, particularly in distant follower- leader relationships, charismatic leadership is regarded as highly efficient (Katz & Kahn, 1978). It is assumed that high physical distance may lead to a reduction of social interaction which will further weaken the relationship between leaders and followers (Bass, 1990). Subordinates also tend to place stronger emphasis on leaders’ behaviors if they are distant as specific actions are more dominating (Howell et al., 2005).
A longitudinal analysis by Howell and Hall-Merenda (1999) surveying banking managers and their team members in a Canadian institution evaluated effects of transformational and transactional leadership behaviors on follower performance under physically close and distant conditions. The authors hypothesized transformational leadership to be directly and positively related to follower performance, yet the assumption could not be confirmed. Also for contingent reward leadership, no statistically significant direct positive relation could be detected. On the contrary, MBEa was found to be positively related to follower performance, whereas MBEp did not reveal negative significant results as projected. The authors expected contingent reward leadership to predict follower performance in close leader-follower conditions. However, empirical evidence was found for the opposite; contingent reward produced significantly better follower performance under distant conditions. MBEa showed lower follower performance when followers were distant. On the other hand, MBEp led to lower performance when followers were close. LMX ratings by followers revealed significant correlations with follower performance. Assessing effects of LMX on perceptions of leadership behavior the authors found LMX to be positively associated with transformational and contingent reward leadership. LMX further displayed significant negative effects on MBEa and MBEp leadership behavior. No evidence was found for moderating effects of physical distance on the relationship between LMX and follower performance. Summarizing the outcomes, the authors discovered that transformational leadership is significantly more effective in predicting follower performance under close leader-follower relationships. Perhaps the most significant finding of this study is that relationships between leadership behavior (transformational, contingent reward, MBEa, and MBEp) and follower performance were moderated by physical distance.
In addition, Kirkman and colleagues (2004) assume empowerment to be a critical factor for learning in virtual team environments as virtual teams that lack empowerment might become passive. The researchers test the hypothesis that virtual teams high in team empowerment are presumed to take more corrective actions in order to improve team processes than those showing a low degree of team empowerment. The scholars finally reveal that team empowerment is significantly related to positive work-related outcomes as empowerment is found to be predicting process improvement in a virtual setting. For teams meeting face-to-face frequently the effect of empowerment on process improvement was not significant. Furthermore, empowerment was found to positively impact leader performance, innovation, and job satisfaction. The authors even argue that team empowerment could be a substitute for leadership in virtual teams. As virtual teams lack external motivation, intrinsic motivation might be a critical factor improving their performance (Kirkman et al., 2004).
Howell and team (2005) assessed effects of physical distance on business unit performance in the Canadian banking sector. The authors found transformational leadership to predict business unit performance under close conditions and physical distance to have moderating effects. These findings concur with previous empirical evidence (Howell & Hall-Merenda, 1999). In a dispersed context, transformational leadership no longer predicted unit performance. Contrasting findings were retrieved for contingent reward leadership. While leaders and followers were close, contingent reward leadership was not linked to business unit performance. However, when distant from each other, business unit performance increased. These outcomes suggest that while transformational leadership was more effective in a close environment, contingent reward leadership might enhance performance in a distant setting. The scholars interpret this finding as contingent reward leaders granting their followers autonomy to perform tasks in a way that works best for distantly self-managed subordinates - as long as targets are met.
Aiming to identify the role of inspirational leadership (Bass, 1985) on virtual team performance, Joshi et al. (2009) observed that by cultivating socialized relationships with followers, inspirational leaders are able to foster attitudes directed at the collective team entity. Providing inspiration and vision, setting collective goals and inspiring group unity involves exceptional attention when developing leadership behavior. In other words, inspirational leaders are important in all contexts but are more important in highly dispersed contexts. Since inspirational leadership was discovered to facilitate positive outcomes, developing critical leadership behaviors that may be considered inspirational is clearly an imperative when working globally. Although the importance of self-management in teams is often emphasized, the results of the study imply that certain aspects of active leadership may have a pivotal role for influencing important work-related outcomes (Joshi et al., 2009).
Physical distance seemed not to impact either leadership performance or communication effectiveness, according to Neufeld et al. (2010). A positive link was found between transformational leadership and perceived leadership performance, however physical distance showed no significant correlations. Being physically close might be an advantage as leaders have the opportunity to role model and influence followers directly, which is surely more difficult to exercise over a long distance (Yagil, 1998). Establishing individualized relationships might also work better when leaders and followers are close. The researchers conclude that physical distance does not necessarily need to negatively affect leadership or communication. The key to leadership effectiveness rather lies in communication, as this was found to have mediating effects on the influence of transformational and contingent reward leadership on leader performance. Since both leader archetypes are perceived as good communicators, the combination of both behaviors might positively influence follower performance. Assumptions by the authors conclude that without effective communication, leadership becomes irrelevant, particularly under conditions of physical distance (Neufeld et al., 2010).
A recent empirical assessment of 681 employees in 129 teams and 116 team leaders conducted by Andressen et al. (2012) examined the relationship of self-leadership to transformational leadership, motivation, job performance, and affective commitment. Self-leadership was assessed using the RSLQ (Houghton & Neck, 2002). Furthermore, the researchers investigated the role of virtuality in this relation. To wit, Andressen and colleagues are the first to investigate this influence in a virtual context. First, it was discovered that follower self-leadership acted as a process factor for the influence of transformational leadership determining motivation. Results demonstrate that team leader virtuality moderated the relationship between transformational leadership and self-leadership of followers, indicating that transformational leadership is less predictive of self-leadership in high-distance settings. Moreover, self-leadership predicted motivation more strongly when working in a virtual setting.
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