Leadership Styles: Behavioural & Participative

Introduction

This blog essay will focus on two leadership theories; behavioural and participative-leadership theory. Behavioural leadership theory has a focus on individual leaders’ behaviour which may be consciously expressed in various ways (Behavioral Theories of Leadership, n.d.). There remains contention however, on the level and role of unconscious behaviours and their contribution to this leadership theory (Fair, 2019). Behavioural leadership demarcates leaders into two predominant types: task or people-oriented (Behavioral Theories of Leadership, n.d.).

Participative leadership theory emerged as an offshoot of behavioural theory (Fair, 2019). Contrasted to the latter’s focus on tasks and/or people, participative leadership theory assesses how the group as a whole con contribute to leadership and goal actualization (Root III, 2019). Thus, this style of leadership leverages the unique skills and abilities of each member, and so is similar to the democratic leadership style discussed by Cherry (n.d.).

Consideration will now be given to each of these leadership theories in further detail. Subsequently, a discussion around which style is typically ideal in a multinational company will take place. This will focus on large multinationals with global subsidiaries, such as the STEM company consultants, PNO Group, which recently acquired the Utrecht-based life science consulting firm ttopstart (de Boer, 2018).

Patrick de Boer, the Founder of ttopstart.

Behavioural Theories of Leadership

At the heart of behavioural leadership theory, is the behaviourist’s hypothesis that the behaviour of a given leader is the best predictor of their potential to influence others and garner success (Behavioral Theories of Leadership, n.d.). Two key studies led to this paradigm; the 1940’s Ohio State University study (Stogdill, 1948) and the University of Michigan study led by the famed organizational psychologist, Dr. Rensis Likert (Likert, 1961). The first study by Stogdill (1948) was based on hundreds of statements leading to the identification of two clusters of behaviours deemed important for successful leadership. These clusters included: an initiating structure (organization of the work and associated communication channels) and consideration with respect to relationship building (Virkus, 2009). The former of these is associated with being a task-oriented leader and the latter is descriptive of people-orientated leaders (Behavioral Theories of Leadership, n.d.). Based on this work, a leadership questionnaire called the ‘LBDQ’ or the ‘Leaders Behaviour Description Questionnaire’ has been developed (Behavioral Theories of Leadership, n.d.).

However, the shortcomings of the LBDQ have been identified as having marginally acceptable predictive value and its overall construction is unacceptable due to the lack of meaningfully or empirically defining ‘leadership’ (Ton, 1985). With respect to the aforementioned Michigan study, Likert (1961) identified three leadership traits, with two being found by Stogdill (1948), namely task- and relationship-orientated behaviours, in addition to a trait that would become a new theory; participative leadership (Behavioral Theories of Leadership, n.d.).

Participative Management and Employee and Stakeholder Involvement

As stated by Branch (2002) “Participative management addresses the relationship between the organization and its workers and stakeholders. It addresses fundamental issues of governance within organizations and the role of employees and external stakeholders in all levels of organizational decision making”. A participative leadership approach can enable managers to maintain high levels of effectiveness, productivity, innovation, and sustained team member motivation in dynamic and complex environments (Branch, 2002). Further, this leadership style gives significant view to addressing external company stakeholders (i.e. the wider community) in order to help maintain harmonious business operations due to the shift towards corporate social responsibility (CSR) (Rok, 2009). A key social and organizational utility of this participative approach is the potential to resolve competing or contradictory interests via good-faith negotiation and/or collective bargaining, as opposed to the pure use of authority (Bolle De Bal, 1992a).

Let us accept for the moment the position that everyone, including organizations, always acts in a self-interested and selfish manner; note, even acting ‘altruistically’ causes a dopaminergic release that causes a positive feedback loop to guide such behaviour, and thus can still be said to ultimately be ‘selfish’ in nature (Sonne & Gash, 2018). This would lead to the conclusion that CSR too, is driven by innate selfishness despite its marketed guise (Jarvis, 2009). Now, despite this selfishness, participative leadership is associated with win-win outcomes (as decided by participants) between the various stakeholders and generally leads to more ethical business decisions (Kearney & Hayes, 1994; Green, 2017; Adda, Azigwe, & Awuni, 2016). So, when economics Nobel laureate, Prof. Milton Friedman (1962) famously claimed, “The social responsibility of business is to increase its profits” in his book ‘Capitalism and Freedom’, businesses should absolutely take heed of how CSR plays into effectuating profits. For example, the pharmaceutical industry in the United States can no longer ignore the American public over inflated drug prices, as doing so has been affecting their bottom-line and could mobilize voters (as external stakeholders) to facilitate political change such as stricter pricing regulations (Keshavan, 2016). At the end of the day, companies need to satisfy not only shareholders, but external stakeholders in order to not only remain profitable, but to survive (Mahasi, et al., 2013). This is precisely where a participative leadership style is required.

Milton Friedman was a controversial American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy.

Leadership in Multinationals

Due to the significantly complicated and networked makeup of multinational companies, particularly those with one or more subsidiaries, and the need for multiple leadership traits (from task and relationship organization to management of an inclusive group of diverse stakeholders), the participative style of leadership is warranted. Due to the varied projects and often tight deadlines that projects within a multinational organization possess, good leadership here requires a strong task-oriented focus. However, because of the diverse nature of the teams and need to manage hierarchical relationships in order to boost business-based efficiency, an effective leader also requires people-orientated leadership skills (Rothacker & Hauer, 2014). Add to this the highlights from the prior section around both shareholder and external stakeholder management, and it is clear that participative leadership will be required. Also clear should now be the fact that, overall, agile leaders need to be developed for effective management in multinational companies; this is because a shift from leadership style dependent on the situation will be essential (Beheshti, 2018).

Take for example the European multinational scientific consulting firm, PNO Consultants, who last year acquired the Dutch life science consulting SME ttopstart, which became a subsidiary of PNO (de Boer, 2018). When a merger integration occurs, significant cultural hurdles need to be overcome otherwise maximum value capture will go unrealized (Chao, et al., 2018). Existing client projects need to be managed efficiently (task-based leadership), staff from the acquired company need to be culturally integrated into effective teams comprised of those from the acquiring firm (relationship-oriented leadership), and those aforementioned clients as external stakeholders need to have their concerns proactively managed (requiring participative leadership). By all accounts (based on my discussions), management at both PNO Group and ttopstart knew this and so took a very proactive approach to ensuring their leadership style was suitable and could create the synergies required to enhance their competitive edge in the market place (of the life science/biotech consulting industry in Europe).

The European countries that the PNO Group operate in highlighted in yellow.

Conclusions

In today’s dynamic business environments where more stakeholders become directly or indirectly integrated into the operational picture of a company, a staunch shift in leadership style is required (Mahasi, et al., 2013). This shift is one away from hierarchical power bases, to one involving a diversely talented team, hence the need for agile participative leadership (Beheshti, 2018). By understanding when and why a leadership style change is called for allows one to increase the value they add to different aspects of a business. Of course, this requires the active acquisition of skills (such as knowing when to take a step back, being transparent, active risk management, and knowing how to actively develop team members) and being open to constructive feedback to aid personal and professional development (Brower, 2019). Whilst this is a lot of additional work for one to take on, it should be seen as an investment and as such, should be actively managed.

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