Panpilai Vajanapoom Thesis.pdf - Swinburne Research Bank

AN EXAMINATION OF EXECUTIVE LEADERSHIP

AND ORGANISATIONAL PERFORMANCE IN

PUBLICLY LISTED COMPANIES OF THAILAND

PANPILAI VAJANAPOOM B.B.A. (Assumption University, Bangkok, Thailand)

M.B.A. (Coventry University, Coventry, England)

A thesis submitted to the fulfillment of the requirements

for the degree of Doctor of Philosophy

Australian Graduate School of Entrepreneurship

Swinburne University of Technology, Australia

2005

DECLARATION

This thesis contains no material which has been accepted at any other

university for the award of a degree, and to the best of my knowledge and

belief, the thesis contains no material previously published or written by

another person, except when due reference is made in the text of the thesis.

Panpilai Vajanapoom Melbourne, Australia

(January 2005)

i

ACKNOWLEDGEMENTS

This thesis could not have been completed without the kind assistance, encouragement and support from many people along the journey. First and foremost, I am deeply grateful to my supervisor, Professor Chris Christodoulou, for his enduring guidance and invaluable assistance that he has provided me from the Day 1 of my study until the completion of this thesis. His constant encouragement, understanding, patience, and professional feedback about the work I was engaged during my entire doctoral study have been invaluable to me. Words cannot express the absolute gratitude and indebtedness that I owe to him. I must especially thank both the Australian Graduate School of Entrepreneurship, Swinburne University of Technology, for the excellent facility they provided for the research programme, and the Swinburne Graduate Research School for awarding me a Higher Education Divisional Research Scholarship. My special appreciation goes to all the participating companies for their generous support and cooperation that I received during the fieldwork in Thailand. I would also like to acknowledge the School of Mathematics, Department of Statistics, Swinburne University of Technology for the excellent statistics courses provided and the statistics lecturers for their guidance and assistance on statistical matters involved in the data analyses for the research. My special thanks also go to Dr. Sheikh Rahman, PhD colleagues and all my friends for their continuous advice and assistance in many ways during my research endeavour. Finally, I would like to take the opportunity to thank my brother, Mr. Korn Vajanapoom and relatives for their encouragement throughout all these years. Especially, I wish to express my deepest thanks and love to my parents, Mr. Nirach Vajanapoom and Mrs. Ratanasri Vajanapoom for being at the centre of my life. Your everlasting love, unconditional support and encouragement sustained me both spiritually and physically during the years of my graduate schooling. “Thank You” for all your love.

ii

TABLE OF CONTENTS

DECLARATION iACKNOWLEDGMENTS iiLIST OF ABBREVIATIONS xiiiLIST OF TABLES xvLIST OF FIGURES xxiABSTRACT xxii

PART ONE INTRODUCTION AND BACKGROUND 1

Chapter 1 Introduction 3 1.1 Research Background 3

1.2 Research Objectives 5

1.3 Research Process 6

1.4 Organisation of the Thesis 7

1.5 Contribution of This Research 10

Chapter 2 Background on Thailand and Publicly Listed Companies of Thailand

11

2.1 Introduction 11 Section 1: Background on Thailand 11 2.2 Country Profile 11 2.2.1 Historical Background 11 2.2.2 Geographic Location 12 2.2.3 Climate 13 2.2.4 Population 14 2.2.5 Nationality 14 2.2.5.1 Composition 14 2.2.5.2 Language 14 2.2.6 Religion 15 2.2.7 Education 15

iii

2.3 Political Framework 16

2.3.1 Political Background 16

2.3.2 Political and Administration System 17

2.3.2.1 Aspects of the Thai Political System 17

2.3.2.2 Government Structure 17

2.4 Economic Framework 18

2.4.1 Major Economic Sectors 18

2.4.1.1 Agriculture 19

2.4.1.2 Manufacturing 19

2.4.1.3 Services 20

2.4.2 Economic Performance 20

2.4.3 Development of the Private Sector 21

2.5 Cultural Framework 23

2.5.1 Dimensions of Thai Cultural Values 23

2.5.2 Thai Culture and Traditions 24

2.5.3 Thai Working Culture 25

Section 2: Publicly Listed Companies of Thailand 27

2.6 Thai Capital Market 27

2.7 Securities and Exchange Commission (SEC) 28

2.7.1 Primary Market 29

2.7.2 Secondary Market 29

2.7.2.1 Stock Exchange of Thailand (SET) 29

2.7.2.2 Thai Bond Dealing Centre (TBDC) 30

2.7.2.3 Market of Alternative Investment (MAI) 30

2.8 The Stock Exchange of Thailand (SET) 32

2.8.1 Historical Background of SET 32

2.8.2 Regulatory Structure 33

2.8.3 Selected Main Operations of SET 34

2.8.3.1 Listing 34

2.8.3.2 Supervision of Publicly Listed Companies 34

2.8.3.3 Trading 35

2.9 Characteristics of Publicly Listed Companies of Thailand 36

2.9.1 Number of Listed Companies 36

2.9.2 Listing Year 37

2.9.3 Industries Represented 37

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2.9.4 Trend in the Number of Publicly Listed Companies 39

2.10 Chapter Summary 39

PART TWO LITERATURE REVIEW 40 Chapter 3 Literature Review 42 3.1 Introduction 42

3.2 An Evolutionary Perspective of Management Models 43

3.2.1 The Emergence of the Rational Goal Model and the Internal Process Model: (Quarter 1: 1900-1925)

43

3.2.2 The Emergence of the Human Relations Model: (Quarter 2: 1926-1950)

44

3.2.3 The Emergence of the Open Systems Model: (Quarter 3: 1951-1975)

45

3.2.4 The Emergence of the Integrative Model: (1976-Present)

46

3.2.5 Summary 48

3.3 Organisational Leadership 48

3.3.1 The Nature of Leadership 49

3.3.2 Definition of Leadership 50

3.3.3 Level of Organisation 51

3.3.4 The Nature of Managerial Work 53

3.3.5 Taxonomies of Leadership Roles 56

3.3.6 Quinn’s (1988) Framework 58

3.3.7 Synthesis of Executive Leadership Roles 60

3.3.8 Leaders’ Behavioural Complexity 62

3.3.9 Summary 64

3.4 CEO Attributes 65

3.4.1 Demographic Characteristics 66

3.4.1.1 Age 66

3.4.1.2 Education 67

3.4.1.3 Functional Background 68

3.4.1.4 Tenure 70

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3.4.1.5 Work Experience 71

3.4.1.6 Origin of Appointment 72

3.4.2 Personality Characteristics 73

3.4.2.1 Need for Achievement 74

3.4.2.2 Locus of Control 75

3.4.3 Leadership Style 76

3.4.3.1 Classical Leadership Styles 77

3.4.3.2 Leadership Studies 77

3.4.4 Summary 83

3.5 Organisational Performance 83

3.5.1 Performance Measurement 84

3.5.2 Methodology Issues in Measuring Organisational Performance

86

3.5.3 Summary 87

3.6 Contingency Factors 87

3.6.1 Size of Organisation 87

3.6.2 Environmental Conditions 89

3.6.2.1 Dimensions of the Environment 90

3.6.3 Business Strategy 92

3.6.3.1 Strategies and Managerial Characteristics Research

93

3.6.3.2 Typologies of Strategies 94

3.6.4 Summary 97

3.7 Executive Leadership and Organisational Performance 98

3.7.1 Summary 100


Chapter 4 Theoretical Framework, Research Questions and Hypotheses

101

4.1 Introduction 101

4.2 Theoretical Framework 101

4.3 Key Components of the Framework 103

4.3.1 Sphere 1: Executive Leadership 103

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4.3.1.1 CEO Role Behaviour 103

4.3.1.2 CEO Attributes 104

4.3.2 Sphere 2: Organisational Performance 105

4.3.3 Sphere 3: Contingency Factors 106

4.3.3.1 Size of Organisation 106

4.3.3.2 Environmental Conditions 106

4.3.3.3 Business Strategy 107

4.4 Research Questions 108

4.5 Hypotheses Generation 108

4.5.1 Research Question 1: Do CEOs make a difference on organisational performance?

109

4.5.2 Research Question 2 and 5: Behavioural Complexity and Organisational Performance

110

4.5.3 Research Question 3 and 6: CEO Attributes and Organisational Performance

112

4.5.4 Research Question 4: Behavioural Complexity and CEO Attributes

114

4.5.5 Research Question 7: Attributes Requirement for a CEO Position

115


PART THREE RESEARCH DESIGN 117

Chapter 5 Research Methodology 119 5.1 Introduction 119

5.2 Population Definition 119

5.3 Survey Approach 121

5.4 Survey Instrument Development 121

5.4.1 The Questionnaire 121

5.4.2 The Questionnaire Pre-testing 122

5.4.3 The Final Questionnaire 123

5.5 Data Collection Procedure 123

5.5.1 Respondent Approach Process 123

5.5.1.1 Introductory Letter 124

5.5.1.2 Telephone and Facsimile Follow-Ups 124

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5.5.1.3 The Use of Personal Networks 125

5.5.2 Interview Process 125

5.5.3 Response Rate 126

5.6 Instrument Measurements 126

5.6.1 Executive Leadership 126

5.6.1.1 CEO Role Behaviour 126

5.6.1.2 CEO Attributes 132

5.6.2 Organisational Performance 134

5.6.2.1 Subjective Data 135

5.6.2.2 Objective Data 138

5.6.2.3 Convergent Analysis 139

5.6.3 Contingency Factors 140

5.6.3.1 Size of Firm 140



5.7 Data Analysis Methods 145


PART FOUR RESEARCH RESULTS 147

Chapter 6 Analysis of Respondent Companies 149 6.1 Introduction 149

6.2 Profile of Respondent Companies 149

6.2.1 Industries Represented 149

6.2.2 SET Classification 150

6.2.3 Company Size 152

6.2.4 Number of Years Listed on the Thai Stock Exchange 153

6.3 Background of Respondents 153

6.3.1 Gender 153

6.3.2 Age 154

6.3.3 Educational Level 154

6.3.4 Functional Background 156

6.3.5 CEO Experience 157

6.3.5.1 Current Organisation 157

6.3.5.2 Other Organisations 157

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6.3.6 Work Experience 158

6.3.6.1 Organisational Experience 158

6.3.6.2 Overseas Work Experience 159

6.3.6.3 Industry Experience 160

6.3.7 Origin of Appointment 160


Chapter 7 Thai Replication of Hart and Quinn’s (1993) Study 163 7.1 Introduction 163

7.2 Impact of Executive Leadership Roles 163

7.3 Leadership Profiles of Organisation 165

7.4 Leadership Types and Organisational Performance 168

7.4.1 Classifying Executive Leadership Roles: Q-Type Cluster Analysis

168

7.4.2 Classifying Executive Leadership Roles: Percentile Breaks 173


Chapter 8 Thai Replication of Zakliki’s (1996) Study 180 8.1 Introduction 180

8.2 Relative Importance of Executive Leadership 180

8.2.1 Impact of Executive Leadership Roles 180

8.2.2 Impact of CEO Characteristics 182

8.3 Impact of Behavioural Complexity on Performance 184

8.3.1 Classifying Executive Leadership Roles: Constructing Behavioural Complexity Index

184

8.3.2 Contingency Factors 186

8.3.2.1 Size 186



8.4 Comparisons of CEO Characteristics 192

8.4.1 CEOs’ Age 192

8.4.2 CEOs’ Educational Level 193

8.4.3 CEOs’ Functional Background 194

8.4.4 CEO Experience 194

8.4.5 Work Experience 196

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8.4.6 Origin of Appointment 197

8.5 Comparisons of Leadership Style 198


Chapter 9 Comparison of Findings from Extended Thai Study with Hypotheses

202


9.2 Executive Leadership and Organisational Performance 202

9.2.1 Impact of Executive Leadership Roles 203

9.2.2 Impact of CEO Attributes 204

9.3 Behavioural Complexity and Organisational Performance 206

9.3.1 Constructing Behavioural Complexity Index 207

9.3.2 Contingency Approach 208

9.3.2.1 The Effect of Size 208

9.3.2.2 The Effect of Environmental Factors 209

9.3.2.3 The Effect of Business Strategy 209

9.4 CEO Attributes and Organisational Performance 215

9.4.1 Comparing CEO Attributes of High and Low Performers: Constructing Performance Index

215

9.4.2 Comparing CEO Attributes of High and Low Performers: Q-Type Cluster Analysis

217

9.4.3 Contingency Approach 221

9.4.3.1 Size 221



9.5 Behavioural Complexity and CEO Attributes 230

9.5.1 Q-Type Cluster Analysis on Leadership Roles 230

9.5.2 Constructing Behavioural Complexity Index on Leadership Roles

232

9.6 CEO Attributes and Contingency Factors 236

9.6.1 Comparison between Small and Large Firms 236

9.6.2 Comparison between Stable and Turbulent Environment 239

9.6.3 Comparison between Business Strategy 241


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Chapter 10 Additional Findings: Additional Perspectives on Executive Leadership in Thailand

246


10.2 Key Success Attributes for Thai Executive Leadership 246

10.3 Strengths and Weaknesses of CEOs 247

10.3.1 Strengths of CEOs 248

10.3.2 Weaknesses of CEOs 254

10.4 CEO Succession Criteria 260

10.5 Knowledge and Skills Required for Executive Development 264

10.6 Leadership Style and CEO Attributes 270

10.7 CEOs’ Origin of Appointment and CEO Attributes 271


PART FIVE CONCLUSIONS 276 Chapter 11 Conclusions and Implications 278 11.1 Introduction 278

11.2 Characteristics of Respondent Companies 278

11.3 Results of Thai Replication 280

11.3.1 Results of Thai Replication (H&Q) 281

11.3.2 Results of Thai Replication (Z) 283

11.4 Major Findings from Extended Thai Study 286

11.4.1 Executive Leadership and Organisational Performance

286

11.4.2 Behavioural Complexity and Organisational Performance

288

11.4.3 CEO Attributes and Organisational Performance 289

11.4.4 Behavioural Complexity and CEO Attributes 292

11.4.5 CEO Attributes and Contingency Factors 293

11.5 Summary of Additional Perspectives on Executive Leadership in Thailand

294

11.6 Implications of Results 296

11.6.1 Implications to Theory 296

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11.6.2 Implications to Practice 297

11.6.3 Implications to Research Methodology 299

11.7 A Final Overview 300


Chapter 12 Limitations and Future Research 303 12.1 Introduction 303

12.2 Limitations of This Study 303

12.3 Future Research Directions 304


References 306

Appendix A List of Publicly Listed Companies of Thailand 324

Appendix B Introductory Letter, Reference Letter and Research Questionnaires

331

Appendix C Factor Analysis 356

Appendix D Industry Classification 406

Enclosure Floppy Disc - Database

xii

LIST OF ABBREVIATIONS & And

$ US Dollar

% Percentage

Adj Adjust

ANOVA Analysis of Variance

ASCO Association of Securities Companies

ASSET Automated System for the Stock Exchange of Thailand

Baht Thai Currency

BBL Bangkok Bank Co. Limited.

B.E. Buddhist Era

BOD Board of Director

BSE Bangkok Stock Exchange

e.g. For Example

etc et cetera

CEO(s) Chief Executive Officer(s)

COO Chief Operating Officer

GDP Gross Domestic Product

H&Q Hart and Quinn

i.e. That is

IMF International Monetary Fund

KMO Kaiser-Meyer-Olkin Measure of Sampling

MAI Market of Alternative Investment

MBA Master of Business Administration

MD Managing Director

MOF Ministry of Finance

MOC Ministry of Commerce

N Number

NIB National Identity Board

NESDB National Economic and Social Development Board

NSO National Statistical Office

OEC Office of Education Council

xiii

LIST OF ABBREVIATIONS (CONTINUED) PCA Principle Component Analysis

Q Question

ROA Return on Assets

S.E. Standard Error

SEC Securities and Exchange Commission

SET Stock Exchange of Thailand

SIC Standard Industrial Classification

SD Standard Deviation

SMEs Small-Medium Enterprises

TAT Tourism Authority of Thailand

TBDC Thai Bond Dealing Centre

Thai Replication (H&Q)

Thai replication of Hart and Quinn’s (1993) study by employing the same analytical tools and techniques for data analyses

Thai Replication (Z)

Thai replication of Zakliki’s (1996) study by employing the same analytical tools and techniques for data analyses

US United States

USSR The Union of Soviet Socialist Republics

Z Zakliki Study

xiv

LIST OF TABLES 2.1 Economic Performance Indicators (1998-2002) 18

2.2 The Number of Listed Companies on the SET and MAI 36

2.3 Listing Year of Publicly Listed Companies of Thailand 37

2.4 Number of Shares and Market Values by Industrial Sectors 38

3.1 Characteristics of Four Management Models 46

3.2 Summary of Ten Executive Roles 54

3.3 Taxonomies of Leadership Roles 57

3.4 Summary of Four Executive Leadership Roles 62

3.5 Theme of Leadership Style/Behaviour Research 80

3.6 Strategic Dimensions and Characteristics Studies 94

5.1 Executive Leadership Roles Scale 127

5.2 Executive Leadership Roles Measures (Comparing Thai Replication (H&Q),Hart and Quinn Study and Zakliki Replication Study)

129

5.3 Executive Leadership Roles Measures (Comparing Thai Replication (Z) and Zakliki Study)

130

5.4 Extended Thai Study: Executive Leadership Roles Measures 131

5.5 Leadership Style Scale 133

5.6 Leadership Style Scores 134

5.7 Organisational Performance Scale 135

5.8 Organisational Performance Measures (Comparing Thai Replication (H&Q),Hart and Quinn Study and Zakliki Replication Study)

136

5.9 Organisational Performance Measures (Comparing Thai Replication (Z) and Zakliki Study)

137

5.10 Extended Thai Study: Organisational Performance Measures 138

5.11 Correlation between Subjective and Objective Data (Comparing SET Classification and SIC Group)

139

5.12 Environmental Dimensions and Indicators I 141

5.13 Environmental Dimensions and Indicators II 141

5.14 Environmental Dimensions Scores 142

5.15 Environment Classification 143

5.16 Strategy Dimensions and Descriptions 144

6.1 Distribution of Company Activities by SIC Code 150

xv

LIST OF TABLES (CONTINUED) 6.2 Distribution of Company Activities by SET Code 151

6.3 Company Size Measured by Number of Employees 152

6.4 Number of Years Listed on Thai Stock Exchange 153

6.5 Summary of Respondents’ Gender 154

6.6 Summary of Respondents’ Age 154

6.7 Summary of Respondents’ Educational Level 155

6.8 Summary of Respondents’ Overseas Education 155

6.9 Summary of Respondents’ Functional Background 156

6.10 Summary of Respondents’ CEO Tenure in Current Firms 157

6.11 Summary of Respondents’ CEO Tenure in Other Firms 158

6.12 Number of Years Respondents’ Stayed in Current Firms 159

6.13 Summary of Respondents’ Overseas Work Experience 159

6.14 Summary of Respondents’ Industry Experience 160

6.15 Summary of Respondents’ Origin of Appointment 161

7.1 Multiple Regression: Organisational Performance on Executive Leadership Roles (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

164

7.2 Firms Classification on Their Performance Level Basis 166

7.3 ANOVA: Leadership Profiles of High and Low Performing Firms (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

167

7.4 Q-Type Cluster Analysis on Roles (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

169

7.5 ANOVA: Leadership Types (Q-Type Cluster Analysis) and Organisational Performance (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

171

7.6 Multiple Regression: Organisational Performance on Executive Leadership Types (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

172

7.7 Percentile Breaks of Leadership Roles (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

174

xvi

LIST OF TABLES (CONTINUED) 7.8 ANOVA: Leadership Types (Percentile Breaks) and Organisational

Performance (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

175

7.9 Multiple Regression: Leadership Types (Percentile Breaks) on Organisational Performance (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

177

8.1 Multiple Regression: Organisational Performance on Executive Leadership Roles (Comparing Thai Replication (Z) and Zakliki Study)

181

8.2 Multiple Regression: Organisational Performance on CEO Characteristics

(Comparing Thai Replication (Z) and Zakliki Study) 183

8.3 Classifying Cases: Scoring the Level of Performing Leadership Roles 184

8.4 ANOVA: Behavioural Complexity and Organisational Performance (Comparing Thai Replication (Z) and Zakliki Study)

185

8.5 Multiple Regression: Behavioural Complexity and Organisational Performance by Size (Comparing Thai Replication (Z) and Zakliki Study)

188

8.6 Multiple Regression: Behavioural Complexity and Organisational Performance by Environmental Conditions (Comparing Thai Replication (Z) and Zakliki Study)

189

8.7 Multiple Regression: Behavioural Complexity and Organisational Performance by Business Type (Comparing Thai Replication (Z) and Zakliki Study)

190

8.8 Behavioural Complexity and Organisational Performance: Contingency Approach (Comparing Thai Replication (Z) and Zakliki Study)

191

8.9 Summary of CEOs’ Age 192

8.10 Summary of CEOs’ Educational Level 193

8.11 Summary of CEOs’ Holding an MBA Degree 193

8.12 Summary of CEOs’ Functional Background 194

8.13 Summary of CEO Tenure in the Current Position 195

8.14 Summary of CEO Experience in Other Organisations 195

8.15 Summary of CEOs’ Total Tenure in the Firm 196

8.16 Summary of CEOs’ Industry Experience 197

8.17 Summary of CEO Tenure and Work Experience 197

8.18 Summary of CEOs’ Origin of Appointment 198

xvii

LIST OF TABLES (CONTINUED) 8.19 Summary of Leadership Style 198

8.20 Dimensions of Leadership 199

9.1 Multiple Regression: Organisational Performance on Executive Leadership Roles

204

9.2 Multiple Regression: Organisational Performance on CEO Attributes 205

9.3 Scoring the Level of Behavioural Complexity 207

9.4 ANOVA Results: Behavioural Complexity and Organisational Performance 208

9.5 Multiple Regression: Behavioural Complexity and Organisational Performance (Comparing Small and Large Firms)

211

9.6 Multiple Regression: Behavioural Complexity and Organisational Performance (Comparing Stable and Turbulent Environment)

212

9.7 Multiple Regression: Behavioural Complexity and Organisational Performance (Comparing Business Types)

213

9.8 Business Strategy (Comparing High Performers and Low Performers) 214

9.9 Firm Classification Based on Performance Level 216

9.10 ANOVA Results for CEO Attributes 217

9.11 Q-Type Cluster Analysis: Final Cluster Centre and Descriptive Statistic in Each Cluster

218

9.12 T-Test Results for CEO attributes 219

9.13 Comparing High Performers vs. Low Performers 220

9.14 T-Test Results for CEO Attributes (Comparing Small and Large Firms) 222

9.15 Cramer’s V Test for CEO Attributes (Comparing Small and Large Firms) 223

9.16 T-Test Results for CEO Attributes (Comparing Stable and Turbulent Environment)

224

9.17 Cramer’s V Test for CEO Attributes (Comparing Stable and Turbulent Environment)

225

9.18 T-Test Results for CEO Attributes (Comparing Business Strategy) 227

9.19 Cramer’s V Results for CEO Attributes (Comparing Business Strategy) 228

9.20 Q-Type Cluster Analysis: Final Cluster Centre and Descriptive Statistic in Each Cluster

231

9.21 ANOVA Results: Leadership Types and CEO Attributes 232

9.22 Scoring the level of Performing Leadership Roles 233

9.23 ANOVA Results: Leadership Types and CEO Attributes 234

xviii

LIST OF TABLES (CONTINUED) 9.24 CEO Attributes of High vs. Low Complexity 235

9.25 T-Test Results for CEO Attributes 237

9.26 Relationship between CEO Attributes and Firm Size 238

9.27 T-Test Results for CEO Attributes 239

9.28 Relationship between CEO Attributes and Environmental Conditions 240

9.29 ANOVA Results: CEO Attributes and Business Strategy 242

9.30 Relationship between CEO Attributes and Business Strategy 243

10.1 Key Success Attributes for Thai Executive Leadership 247

10.2 Summary of CEOs’ Strengths 248

10.3 CEOs’ Strengths by Firm Group 249

10.4 CEOs’ Strengths by Size of Firm 250

10.5 CEOs’ Strengths by Environmental Conditions 251

10.6 CEOs’ Strengths by Business Strategy 252

10.7 CEOs’ Strengths by Behavioural Complexity Group 253

10.8 CEOs’ Strengths by Leadership Style 254

10.9 Summary of CEOs’ Weaknesses 255

10.10 CEOs’ Weaknesses by Firm Groups 256

10.11 CEOs’ Weaknesses by Size of Firm 256

10.12 CEOs’ Weaknesses by Environmental Conditions 257

10.13 CEOs’ Weaknesses by Business Strategy 258

10.14 CEO Weaknesses by Behavioural Complexity Group 258

10.15 CEO Weaknesses by Leadership Style 259

10.16 CEO Succession Criteria 260

10.17 CEO Succession Criteria by Firm Groups 261

10.18 CEO Succession Criteria by Size of Firm 262

10.19 CEO Succession Criteria by Environmental Conditions 263

10.20 CEO Succession Criteria by Business Strategy 264

10.21 Knowledge and Skills Required for Executive Development 265

10.22 Knowledge and Skills Required for Executive Development by Firm Groups

266

xix

LIST OF TABLES (CONTINUED) 10.23 Knowledge and Skills Required for Executive Development

by Size of Firm 267

10.24 Knowledge and Skills Required for Executive Development by Environmental Conditions

268

10.25 Knowledge and Skills Required for Executive Development by Business Strategy

269

10.26 T-Test Results for Leadership Style 270

10.27 Relationship between Leadership Style and CEO Attributes 271

10.28 T-Test Results for CEOs’ Origin of Appointment 272

10.29 Relationship between Origin of Appointment and CEO Attributes 273

xx

LIST OF FIGURES 1.1 Summary of Research Process Flowchart 7

1.2 Organisation of the Thesis 9

2.1 Geographic Location of Thailand 13

2.2 SET Index and Turnover of Corporate Securities (1975-2002) 21

2.3 Regulatory Hierarchy of The Thai Capital Market 31

2.4 SET’ s Regularly Structure 33

2.5 Listing Procedure for Publicly Listed Companies 35

3.1 Competing Values Framework of Leadership Roles 59

3.2 Executive Leadership Roles Plotted on Competing Values Framework 60

3.3 Executive Leadership-A Model of Competing Roles 61

3.4 The Leadership Grid 80

3.5 Domains of Organisational Performance 86

4.1 Theoretical Framework 102

xxi

ABSTRACT

Despite great interest for many years on the effect of executive leadership on

organisational performance, there has been limited research into executive leadership

particularly the impact of CEOs’ behavioural complexity on organisational performance

or the association between the behavioural complexity and CEO attributes in developing

Asian countries such as Thailand. The main purpose of this thesis is to examine the

impact of CEOs’ executive leadership on organisational performance in publicly listed

companies of Thailand.

This study has built upon Hart and Quinn’s (1993) study based on the Competing

Values Framework about executive leadership roles and Zakliki’s (1996) study that

further developed a new integrative framework to examine CEOs’ executive leadership

by incorporating the concept of behavioural complexity and CEO attributes including

demographic characteristics, personality traits and leadership styles. Executive

leadership was tested against the three domains of organisational performance, namely

financial, business and organisational effectiveness in publicly listed companies of

Thailand. The contingency factors namely firm size, environmental conditions and

business strategy were also incorporated into the study in order to describe CEOs’

executive leadership and its relationship with organisational performance under different

conditions.

The research fieldwork was conducted in Thailand by the use of personal interviews

over a four and half-month period in 2003 and one hundred and twenty three CEOs

participated in total, representing an effective response rate of 51.25 per cent. Non-

response bias analysed showed that there was no important difference between the

respondents and non-respondents in term of industry or size classification.

Thai replication (H&Q) results showed a low significant relationship between the roles

played by CEOs and organisational performance, which was consistent with Hart and

Quinn’s (1993) study and Zakliki’s (1996) replication of Hart and Quinn. The Thai

replication (H&Q) revealed similar results with the original (H&Q) study and showed

xxii

that high behavioural complexity CEOs was predictive of higher firm performance with

respect to business performance and organisational effectiveness. In all these three

studies high behavioural complexity of the CEOs had little to do with financial

performance of firms.

Thai replication (Z) results showed that executive leadership including leadership roles

and CEO characteristics had more impact on the organisational effectiveness than other

aspects of firm performance. Both studies showed a similarity in that high behavioural

complexity of CEOs was associated with higher firm performance for organisational

effectiveness in general and for large firms and for firms following an analyser type of

strategy. Both studies also revealed that there was no association between CEO

behavioural complexity and financial performance regardless of situational factors.

The major results from the extended Thai study were examined against each of the

seven research questions generated for this research. It was found that CEOs make a

difference but there is a limited connection between executive leadership and firm

performance. Executive leadership including leadership roles and CEO attributes had

greater impact on organisational effectiveness than other firm performance dimensions.

High behavioural complexity of CEOs had a positive association with higher business

performance and organisational effectiveness in general, in large firms and for firms

following an analyser type of strategy. High behavioural complexity group also had a

positive relationship with organisational effectiveness in a stable environment and for

firms pursuing a prospector strategy. There was no association between high

behavioural complexity and financial performance regardless of any situational factors

except for the firms pursuing the analyser strategy. This study was able to show a broad

pattern in firms following an analyser type of strategy, namely that they had high

behavioural complexity CEOs with an internal locus of control and a positive

association with all three firm performance dimensions namely financial performance,

business performance, and organisational effectiveness. This pattern which was not

detected in previous studies may have been identified because of the refinement of the

instrument and the classification system. This finding is particularly important as it

xxiii

demonstrates an association between behavioural complexity and financial performance

is possible in certain specific situations.

This research identified that CEOs in high performing firms had a relatively longer

tenure in the existing position, a longer tenure in the current firm, a higher need for

achievement, a greater internal locus of control, an internal origin of appointment and

an autocratic leadership style. Further by applying contingency factors, the results found

that high performing firms tended to be associated with CEOs who have particular

attributes with the specific attribute requirements being dependent on the situation.

High behavioural complexity CEOs had a higher need for achievement, more internal

locus of control, autocratic leadership style and were less likely to come from a

planning and management background.

Attributes required in CEOs to be effective were determined by the situational context

namely firm size, environmental conditions and business strategy. CEO attributes

differed in smaller firms compared to larger firms, in stable environments compared

with turbulent environments as well as for defenders firms compared with prospector

firms and analyser firms.

Additional findings on other dimensions on executive leadership in Thailand identified

the key success attributes required for effective leaders, the major strengths and

weaknesses of CEOs, the main criteria for appointing CEOs, the important knowledge

and skills required for executive development, the leadership style and the CEO’s origin

of appointment. The data analyses were performed with respect to firm groups,

contingency factors, behavioural complexity group, and leadership style.

Overall, the findings from this research have significant implications for top

management theory, executive development, CEO selection, management education,

and research methodology. Future research with other types of organisations, replicating

these findings in another context other than just in Thailand and expanding the list of

contingency factors investigated would be worthwhile to help further understand the

relationship between executive leadership and organisational performance.

xxiv

PART ONE

INTRODUCTION AND BACKGROUND

Chapter 1 Introduction

Chapter2 Background on Thailand

and Publicly Listed Companies of Thailand

1

Chapter 1: Introduction

Part one of this thesis presents the research background and provides essential

background information about Thailand and the publicly listed companies of Thailand

as the population of this study. Chapter 1 encapsulates the research background, the

research objectives, the research processes, the organisation of the thesis, and

contributions of the research in this thesis. Chapter 2 introduces an overview of

Thailand’s social, political, economic and cultural frameworks and is followed by the

background on the Thai capital market, the Thai independent state financial institutions

and the characteristics of publicly listed companies of Thailand, the industries

represented as well as the trend in the number of publicly listed companies.

2


Chapter 1

Introduction

1.1 Research Background

Leadership has been one of the most widely discussed and researched topics in the area

of management literature for several decades. Both scholars and practitioners have been

heralding the importance of leaders to the revitalization and success of organisational

performance. Despite the great interest in the area of leadership, many of the studies

have been conducted on middle managers in organisations (Yukl 2002) and primarily

concerned with the relationship between leaders and their immediate followers (Bass

1990).

In recent years the attention of much management research has been on executive

leadership involving CEOs, senior executives, and the top management team. Executive

leadership focuses on the executives who have overall responsibility for an organisation

and are surrounded by ambiguity and complexity of the environment. It also includes

their characteristics, what they do, how they do it, and particularly, how they affect firm

outcomes (Finkelstein and Hambrick 1996). An examination and understanding of top

leaders can increase an understanding of many organisational phenomena.

As part of leadership research, there have been many attempts to understand effective

leadership. Systematic research first focused on the trait theory (see Bass 1990 for

review). Researchers have tried to identify universal factors that are associated with

successful leaders. The subsequent research was concerned with trying to identify

effective leadership behaviour. Research within this paradigm became known as the

behavioural school of leadership such as the Michigan State Group and the Ohio State

Group. Researchers then began to examine the influence process between leaders and

others and then to a more situational view of leadership (Yukl 1989). There also exists

another group of leadership theories, which focus on the role of the leader with certain

3


responsibilities and functions (e.g. Mintzberg 1973; Katz and Kahn 1978; Kotter 1988;

Quinn 1988). Fundamentally, this research employed a role theory of leadership to

evaluate the impact of the top leaders’ role behaviour on firm performance.

Competing Values Framework and Behavioural Complexity

There are a number of scholars who have identified the roles that are played by

successful leaders. Quinn (1988), who developed the Competing Values Framework,

one of the most popular conceptualisations of roles in that it argued that all leaders face

competing or paradoxical requirements. Effective leaders need to balance the

requirements of an external focus as well as an internal organisational focus. Leaders

must provide structure and predictability to the organisations while still allowing for

flexibility and stability. The need to achieve balance of the diverse managerial roles is

the key to being an effective leader.

The work of role theorists (e.g. Hooijberg and Quinn 1992) argued that the Competing

Values Framework of leadership roles provides a measure of behavioural complexity.

Behavioural complexity refers to “the ability to perform the multiple roles and

behaviour that circumscribe the requisite variety implied by an organisational or

environmental context” (Denision, Hooijberg, and Quinn 1995, p.526). Executives who

possess a broad behavioural repertoire and able to balance their paradoxical roles are

more likely to succeed than leaders who fulfil one or two roles to the exclusion of others

(Hooijberg 1996).

Hart and Quinn (1993) developed the model of four executive leadership roles built

upon the Competing Values Framework (Quinn 1988) and associates (e.g. Quinn and

Rohrbaugh 1983; Quinn and Cameron 1988). They argued that the ability to play the

multiple and competing roles by CEOs enhances better firm performance. Zakliki

(1996) has replicated Hart and Quinn’s (1993) work, and he found that CEO

behavioural complexity was associated with higher firm performance in general, in

large firms and for firms pursuing some types of strategies.

4


Hooijberg and Schneider (2001) have argued that the need for behavioural complexity is

a direct result of the social complexity of the leader’s environment. Viewed from

another perspective, lack of behavioural complexity may cause many leaders to fail in

their career and even to destroy their firms. Velsor and Leslie (1995), accordingly, have

argued that the ability to develop or adapt to the evolving demand of the jobs over time

is the most frequent success factor for North American and European executives.

It was clear from the existing literature review that only in the past decades have

researchers investigated issues relating to the behavioural complexity in Western

countries. There has been very limited empirical research that evaluates the impact of a

leader’s behavioural complexity on organisational performance or the association

between behavioural complexity and attributes, especially in developing Asian

countries such as Thailand. It is necessary to generalise and validate the research

findings on behavioural complexity in other settings.

This study has built upon Hart and Quinn’s (1993) study and Zakliki’s (1996) study that

further developed a new integrative framework to examine CEOs’ executive leadership

by incorporating the concept of behavioural complexity, and CEO attributes including

demographic characteristics, personality traits and leadership styles, and to identify their

impacts on organisational performance in publicly listed companies of Thailand. Several

studies (e.g. Kotter 1988; Boal and Whithead 1992) have argued that any studies on

leaders at the strategic level of organisation must focus both on traits and behaviours.

The contingency factors namely firm size, environmental conditions, and business

strategy were also incorporated into the new framework in order to describe CEOs’

executive leadership and its relationship with firm performance under different

conditions.

1.2 Research Objectives

The basic purpose of this research is to examine the impact of executive leadership

including role behaviour and attributes on organizational performance whilst incorporating

the impact of contingency factors for the publicly listed companies of Thailand. In order

5


to address the basic purpose of this research, the following research objectives were

formulated to guide the fieldwork in Thailand:

1. To examine the importance of executive leadership on organisational performance.

2. To examine the role behaviour pattern played by CEOs in high performing firms.

3. To explore CEOs’ common demographic characteristics, personality traits and

leadership styles in high performing firms.

4. To identify CEO attributes and their association with behavioural complexity.

5. To investigate the pattern of CEOs’ role behaviour across different situations.

6. To compare the Thai results with the comparable Hart and Quinn’s (1993) study and

the Zakliki’s (1996) study.

7. To explore additional findings on executive leadership in a Thai management

context.

1.3 Research Process

Figure 1.1 is a summary of research process in this thesis. Firstly, the most important

step was to identify the research questions after an extensive literature review including

academic literature, and relevant publications in Thailand. The theoretical framework

was established and hypotheses were generated after reviewing the related literature.

The research methodology was then designed based on the theoretical framework to

tackle the particular research questions. The questionnaire was developed based on the

theoretical framework and was pre-tested before conducting the fieldwork in Thailand.

The survey instruments were the basis of the personal interviews with CEOs in publicly

listed companies of Thailand. The final steps in the research process were the data

analysis, interpretation of the data and the thesis write-up.

6


Figure 1.1

Summary of Research Process Flowchart

Secondary Data Survey

Research Questions Identification

Literature Review

Theoretical Framework Establishment

Primary Data Collection

Data Analysis

Questionnaire Design and Pre-testing

Interpretation

Thesis Write Up

1.4 Organisation of the Thesis

Figure 1.2 outlines the organisation of the thesis by chapters. This thesis comprises

twelve chapters grouped into five parts.

Part one of this thesis consists of two chapters and aims to provide an overview picture

of research, essential background information about Thailand and particularly of

publicly listed companies of Thailand. Chapter 1 describes the research background, the

7


research objectives, the research processes, the organisation of the thesis, and

contributions of the research in this thesis. Chapter 2 introduces an overview of

Thailand’s social, political, economic and cultural frameworks and is followed by

the background on the Thai capital market, the Thai independent state financial

institutions and the characteristics of publicly listed companies of Thailand, the

industries represented as well as the trend in the number of publicly listed companies.

Part two covers chapters 3 and 4. Chapter 3 reviews the existing literature on various

facets of management and leadership starting from an evolution of management models

then examines organisational leadership, the CEO attributes, the organisational

performance, the contingency factors and then the studies on the link between executive

leadership and organisational performance. Chapter 4 conceptualises the findings from

the literature review in chapter 3 and develops a theoretical framework built upon the

previous research which tries to overcome the shortcomings and gaps in previous

theoretical frameworks. Seven research questions are identified and seven hypotheses

are developed based on all key elements depicted in the theoretical framework.

Part three covers chapter 5, which explains the research methodology adopted for this

research. In particular, it discusses the population definition, the survey approach, the

survey instrument development, the data collection procedures in Thailand, the survey

instrument measurements by which the independent, dependent and control variables

were measured in this research, and the data analysis methods including the appropriate

statistical analysis techniques.

Part four reports the research results obtained from the data analysis, and it is organised

into five chapters. Chapter 6 details the characteristics of respondent companies and

respondents. Chapter 7 discusses the results of the Thai replication of Hart and Quinn’s

(1993) study. Chapter 8 discusses the results of the Thai replication of Zakliki’s (1996)

findings and compares the comparable CEO attributes between the Thai and the

Australian study. Chapter 9 reports the major findings from the extended Thai study for

each of the seven proposed hypotheses generated for this research. Chapter 10 provides

additional findings on various perspectives of executive leadership in Thailand

8


including the key success attributes for Thai executive leadership, the strengths and

weaknesses of CEOs, the CEO succession criteria, the knowledge and skills required for

executive development, the leadership style and the CEOs’ origin of appointment.

Part five consists of chapters 11 and 12. Chapter 11 brings together the key empirical

findings of this research reported in chapters 6 to 10, and discusses the implications of

the research findings to theory, practice and methodology. Chapter 12 explains the

limitations and future research directions.

Figure 1.2

Organisation of the Thesis

PART ONE INTRODUCTION AND BACKGROUND

Chapter 1 Introduction

Chapter 2 Background on Thailand

PART TWO LITERATURE REVIEW

Chapter 3 Literature Review

Chapter 4 Theoretical Framework, Research Questions and Hypotheses

PART THREE RESEARCH DESIGN

Chapter 5 Research methodology

PART FOUR RESEARCH RESULTS

Chapter 6 Analysis of Respondent Companies

Chapter 7 Thai Replication of Hart and Quinn’s (1993) Study

Chapter 8 Thai Replication of Zakliki’s (1996) Study

Chapter 9 Comparison of Findings from Extended Thai Study with Hypotheses

Chapter 10 Additional Perspectives on Executive Leadership in Thailand

PART FIVE CONCLUSIONS

Chapter 11 Conclusions and Implications

Chapter 12 Limitations and Future Research Directions

9


1.5 Contributions of This Research

This study made several contributions to both theory and practice in this regard.

Firstly, this research builds on the existing literature and potentially makes contributions

to the body of knowledge in the area of upper levels of management and the theory of

behavioural complexity in the context of executive leadership in Thailand. This research

has provided a strong test of the theoretical framework and a tool to achieve a greater

understanding of upper echelon perspectives in a developing Asian nation.

Secondly, most of the executive leadership studies have been conducted in developed

countries such as the U.S., Australia, and other European countries. With the exception

of Japan, the amount of leadership research undertaken in other cultures is still very

limited (Yukl 2002). The leadership studies mostly reflect Western industrialised

culture. This study is one of few studies of executive leadership conducted outside of

these countries. As the first investigation of executive leadership in Thailand, the results

will contribute significantly to executive development, succession planning, leadership

training, and management education in Thailand and likewise in other developing

countries.

Thirdly, because this is a study of publicly listed companies in Thailand, the result of

this research can provide significant contributions to improving the effectiveness of the

business community in Thailand. In a practical way, it highlights how CEOs can

contribute to higher firm performance. Additionally, the identification of effective

leadership roles and CEO attributes such as demographic characteristics, personality

traits and leadership styles provides valuable data that can influence current Thai

organisations’ performance. In particular, this should help Thai companies to select and

develop leaders in order to compete successfully in 21st century.

Finally, this research has provided a database and the framework, which will permit

researchers, and related institutions to develop future research and analyse into more

specific issues on executive leadership and relevant topics.

10

Chapter 2: Background on Thailand and Publicly Listed Companies of Thailand

Chapter 2

Background on Thailand and Publicly Listed Companies of Thailand

2.1 Introduction

This chapter provides an overview of background information on Thailand, and the

publicly listed companies of Thailand who are the population for this research study.

This chapter has two main sections. Section 1 deals with the background on Thailand

and is organised into four subsections. Section 2.2 provides a brief profile of Thailand.

Section 2.3, 2.4, and 2.5 explore the Thai political, economic, and cultural frameworks.

Section 2 of this chapter examines the background of publicly listed companies of

Thailand. It is divided into four subsections. Section 2.6, 2.7 and 2.8 provide an

overview of the Thai capital market, and the background on Thai financial institutions

namely Securities and Exchange Commission (SEC) and Stock Exchange of Thailand

(SET). Section 2.10 describes the characteristics of publicly listed companies of

Thailand, the industries represented as well as the trend in the number of publicly listed

companies.

Section 1: Background on Thailand

2.2 Country Profile

2.2.1 Historical Background

There are conflicting ideas as to the origin of Thai people. One theory was that they

originated in northwestern Szechuan in China about 4,500 years ago and later migrated

down to their present homeland. Nevertheless, this theory has been challenged by the

11


discovery of remarkable prehistoric artefacts in the village of Ban Chiang, Udon Thani

province. These include evidence of bronze metallurgy going back 3,500 years. It now

appears that the Thais might have originated in Thailand and later scattered to various

parts of Asia, including some parts of China, though as yet the matter is far from settled.

Traditionally, “Siam” is the name by which the country was known to the world. On 11

May 1949, an official proclamation changed the name of the country to “Prathet Thai”,

or “Thailand”. Thai means free, and therefore “Thailand” means “Land of the Free”

(NIB 2000, p. 1).

2.2.2 Geographic Location

Thailand is located in the heart of Southeast Asian mainland and covering an area of

513,115 square kilometres, bordered by Malaysia in the South, Myanmar in the West

and North, Laos in the North and Cambodia in the East. Thailand has maximum

dimensions of about 2,500 kilometres north to south and 1,250 kilometres east to west,

with a coastline of approximately 1,840 kilometres on the Gulf of Thailand and 865

kilometres along the Indian Ocean (NIB 2000) (refer Figure 2.1).

Thailand is divided into 76 provinces and mainly categorised into four natural regions:

the North, the Central Plain, the Northeast, and the South. The North is mountainous

region comprising natural forests, and deep, narrow valleys and being the main source

of water resource for Thailand. The northeast region is an arid region characterised by a

rolling surface and undulating hills, about 200-300 metres above sea level. The southern

region is a long and narrow peninsular. Most of the area is mountainous and hilly, with

thick virgin forests and rich minerals and ores. Central Thailand is a lush, fertile valley

and plain. Bangkok is located in this region as the capital city of Thailand (NESBD

2004).

Bangkok was established as the capital city of Thailand since 1782 by the first monarch

of the present Chakri dynasty. Bangkok is a national treasure house and Thailand’s

spiritual, cultural, political, commercial, educational and diplomatic centre (TAT 2003).

12


Figure 2.1

Geographic Location of Thailand

2.2.3 Climate

Thailand is humid tropical country with a monsoon climate. Average temperatures are

29 degrees Celsius, ranging from a high of 35 degrees Celsius in April to 17 degrees

Celsius in December. There are three main seasons; the cool season ranging from

November to February, the hot season ranging from March to May, and the rainy season

ranging from June to October (NESDB 2004).

13


2.2.4 Population

By the end of 2002 Thailand had a total population of approximately 62.80 million,

comprising of 31.14 million males and 31.66 million females. Of the total population,

those living in Bangkok and immediate vicinity were 9.67 million and accounting for

15.40 %; and those living in the other regions were accounting for 84.60%. The most

densely populated region is the northeast, with a population of 21.61 million.

In average, the national density of population was 122 persons per square kilometre

while the density of population jumps to 3,686 persons per square kilometres in

Bangkok (NSO 2003). The study of the fertility rate of the Thai population conducted

by NESDB shows that the number of children will drop from 23.88 % in 2002 to

17.95% in 2025. The proportion of elderly is expected to leap from 9.74% to 19.99%,

while the proportion of working aged people will drop from 66.38% to 62.05%

(NESDB 2004).

2.2.5 Nationality

2.2.5.1 Composition

The major ethnic group of Thailand is Thai, along with the sizable communities whose

ethnic origins are Chinese, Malays, Khmer, Lao, Vietnamese, Indians and others. Of

these, Chinese are perhaps the most numerous, particularly in urban area and they

dominate local business enterprises in Thailand (Kahal 2001; NESDB 2004).

2.2.5.2 Language

The official national language is Thai, spoken by almost a hundred percent of the

population. It is a tonal language, uninflected, and mainly monosyllabic. Most

polysyllabic words in the vocabulary have been accepted, significantly from Khmer,

Pali, or Sanskrit. Thais speak one of the Thai dialects, with the exception of the hill

tribesmen in the northern provinces and the Muslims in the southern provinces.

14


However, other languages are regarded as Chinese, Malay and English. English is a

compulsory subject in schools and widely spoken and understood, particularly in

Bangkok and other major cities (NIB 2000; NESDB 2004).

2.2.6 Religion

Buddhism is the national religion. More than 90% of Thai people are Buddhists, while

the rest of population embraces Islam, Hinduism, Christianity and others. The freedom

of worship has been protected in every constitution of the kingdom of Thailand since

1932. It has provided that a person shall have complete freedom to profess any religion,

and shall have freedom to practice any religious rites in accordance with their belief

except in so far as they are incompatible with public order. Under the constitution and

in practice, the King of Thailand is patron of all major religions embraced by the people

(NIB 2000; NESDB 2004).

2.2.7 Education

The Thai education system is classified into formal, non-formal and informal education.

Formal education is divided into basic education and higher education, with 9 years of

education compulsory. The schooling years of people aged over 15 years averaged at

7.0 years in 1998 and this increased to 7.6 years by 2002. Levels of functional literacy

increased from 51.8% in 1998 to 56.6% in 2002. Education level, however differs

between regions of Thailand. The urban rate is 68.8%, compared with 50.8% in rural

areas and it is 73.7% in Bangkok (OEC 2004; NESDB 2004).

15


2.3 Political Framework

2.3.1 Political Background

Thailand’s governmental structure has undergone gradual and practical evolution in

response to a changing environment. During the Sukhothai kingdom (1257-1378), a

paternalistic system of government was adopted. The King would, like a father, look

after all people and personally pay close attention to their well -being.

Later, the kingdom of Ayutthaya inherited extensive Khmer tradition and customs,

including their government system with the King as a demigod. The development of the

government system during the reign of King Barommartrailokanat (1448-1488) was a

clear division between civilian and military administration and a strong centralised

government.

The succeeding Ratanakosin kingdom was established in Bangkok in 1976. It adopted

the Ayuthaya government structure. Thus, for over three centuries, the basic pattern of

government structure was carried out without any major changes. A major change,

however, occurred under the reign of His majesty King Chulalongkkorn (1868-1910).

The reorganisation of central and regional administration was carried out. This formed

the basis of the present government structure.

The political situation in Thailand faced structural change again on June 1932, when a

group of young intellectuals, overseas educated and imbued with the concept of western

democracy demanded a change from absolute to a constitutional monarchy. On

December 10, 1932, Thailand adopted its first constitution and ended the long years of

absolute monarchy (NIB 2000).

16


2.3.2 Political and Administration System

2.3.2.1 Aspects of the Thai Political System

The first aspect is the status of the king as head of the armed forces and upholder of the

Buddhist religion and all other religions. Every constitution provides that the King is

sacred and inviolable in his person. “ His sovereign power emanates from the people,

and as Head of State, he exercises his legislative power through the House of

Parliament, executive power through the cabinet headed by the prime minister, and

judicial power through the court” (NIB 2000, p. 197). The second aspect concerns the

legislative branch. The members of parliament are elected by public vote to the lower

house, while senators are elected by public vote in each province to the upper house.

The third aspect concerns the executive branch. The prime minister is the head of

cabinet under the Thai constitution (NIB 2000).

2.3.2.2 Government Structure

Thailand’s present government is nominally a constitutional monarchy with an elected

parliament. The prime minister is usually appointed from the House of Representatives

with at least one fifth of the members supporting the nomination. Once a person is

agreed upon, the recommendation is presented to the King. Then the prime minister

appoints a cabinet of no more than 35 members. General elections are held at least every

four years.

The House of Representative consists of 500 members. The public elects 400 members

and the rest (100) are nominated according to political party listed system. The senate

has 200 senators who are publicly elected. The first senatorial election was held in year

2000.

Nationally, Thailand has 76 provinces, administered by an appointed governor through

the supervision of the Ministry of Interior and subdivided into 795 districts, 81 sub-

districts, 7,255 groups of villages, and 72,577 villages. The administration of

17


Metropolitan Bangkok falls under the elected governor and is divided in to 50 districts.

The government administration is organised at three levels: the central administration,

the regional administration, and local administration (NESDB 2004).

2.4 Economic Framework

2.4.1 Major Economic Sectors

Thailand is regarded as a country built on agriculture. The structure of Thai economy is

based upon the agricultural sector throughout the Thai history. The economy has

gradually changed from being primarily based on agriculture, with some light industries

to one dominated by manufacturing and services (Kahal 2001). Over the years, the

industrial and service sectors have played significant roles as the main income and

employment generators and have increased their shares of the total GDP (NIB 2000).

Table 2.1 presents economic performance indicators during 1998–2002 by GDP with

the growth of economic sectors in Thailand.

Table 2.1

Economic Performance Indicators (1998-2002)

1998 1999 2000 2001 2002

GDP at current price (billion baht) 4,626 4,637 4,923 5,134 5,452

Economic growth (% change) -10.5 4.4 4.8 2.1 5.4

Agriculture 282.6 289.2 309.9 320.7 330.4

(% change) -1.5 2.3 7.2 3.5 3.0

Manufacturing 923.6 1,033.4 1,096.0 1,110.0 1,187.0

(% change) -10.9 11.0 6.1 1.4 6.8

Construction 90.2 84.1 76.1 76.3 80.6

(% change) -38.3 -6.8 -9.5 0.3 5.7

Service and others 1453.2 1465.3 1526.7 1564.8 1641.0

(% change) -9.4 0.8 4.2 2.5 4.9

Source: NESDB 2003a

18


The three main economic sectors namely agriculture, manufacturing and services are

selected to briefly described here as the foundation of Thai economy.

2.4.1.1 Agriculture

Agriculture has been the backbone of Thai economy. The real boost in agricultural

production came after the launching of the first National Economic and Social

Development (NESD) plan (1961-1966) when the agriculture sector was diversified into

crops, horticulture, livestock, and fishery. Agriculture has been given high priority for

development in all eight NESD plans in Thailand. Although the development in

agriculture appears less significant for the country’s macroeconomic performance since

the non agriculture sector has been growing at a more rapid rate in last decade, the

agriculture sector still retains a vital role in ensuring national food security and being

the source of work to which migratory labour to urban areas can return (NIB 2000). By

the end of year 2002, the agriculture sector grew 3% (NESDBa 2003) and employed

around 13.7% of the labour force (BBL 2004) in Thailand.

2.4.1.2 Manufacturing

The manufacturing sector has been traditionally allied to the agriculture sector. Many

agricultural products have been transformed to be manufactured goods and make more

trade earnings for the country (NIB 2000). The most important manufacturing sector in

Thailand is “computer parts and integrated circuits, followed by textiles, garments, and

motor vehicle production. The food industry is also an important sector contributing 15

per cent of total industrial output. There is also a growing petrochemical industry based

on gas from the Gulf of Thailand” (Kahal 2001, p.111). EIU (2001) reported that the

economic crisis in 1997 led to a sharp contraction in the manufacturing sector in

Thailand. In total 20,000 factories, or 16% of all factories registered with the Ministry

of Industry closed between 1996 and 2000.

The manufacturing sector grew 6.8% in 2002 with the manufacturing production index

growing on average by 8.4%. Industries experiencing high growth were iron and steel

19


products, electronics and vehicles. The average capacity utilisation rate stood at 60% in

2002 up from 53.5% in 2001 (BOT 2003).

2.4.1.3 Services

The service sector has been considered as a significant contributor to foreign exchange

earning and labour absorption in Thailand. During the first and second NESD plans

(1961-1966 and 1967-1971), the Thai government paid little attention to the services

sector. However, under the third to eighth plan (1972-2001), the Thai government has

emphasised service business as one of the potential source of foreign exchange earnings

and employment providers. Particularly, the fourth and fifth NESD plans were more

focused on tourism while the sixth NESD plan emphasised the promotion of direct

labour exports into many countries (Phongoaichit and Chisakul 1993; NESDBb 2003).

2.4.2 Economic Performance

Between the period 1986-1991, Thailand became one of the fastest growing economies

in the world. This growth resulted from a surge in manufactured exports, domestic

investment and foreign direct investment particularly from Japan and the Asian

countries (Warr 1993; Dixon 1999).

Since 1993 the economic growth was slow and in 1997 it halted suddenly. Thailand was

pressured to float the Thai Baht in July 1997, which resulted in its rapid devaluation

virtually shutting down the economy. The banking and finance industries collapsed,

while the property market, as well as export and import based industries suffered great

damage. Problem banks were unable to lend to exporters keen to capitalise on the

demand for suddenly competitively priced Thai products, while exporters and

manufacturers based on imported components found prices jumped dramatically. This

financial crisis directly affected the investment climate of the Thai stock market (refer

Figure 2.2).

20


Figure 2.2

SET Index and Turnover of Corporate Securities (1975-2002)

0

600

1200

1800

2400

75 77 79 81 83 85 87 89 91 93 95 97 99 010

450

900

1350

1800

Trade Value (Billion Baht) SET Index

Source: Figures adapted from SET 2003, p.30.

SET

IND

EX

Tra

de V

alue

(Bill

ion

Bah

t)

In 1999, the Thai economy recovered with a growth rate of 4.4%. Contributing factors

included government measures, IMF stimulus package, the world economic expansion,

and particularly the peak of the US. economy, which significantly benefited Thai

exports during 1999 and 2000. By the end of year 2000, however, the global economy

experienced a slowdown, which affected exports and slowed the growth rate of the

economy to 2.1%. The Thai economy remained sluggish throughout 2001 reflecting

a vulnerability of external environment. Under a supportive government policy and

favourable external conditions, the Thai economy in 2002 expanded by 5.4%, mainly

due to domestic demand, which played a crucial role in economic activity (NEDSB

2004).

2.4.3 Development of the Private Sector

Private enterprises have been the driving force of Thai economic growth. Growth and

diversification into industrial and service areas have to a large extent been initiated by

the private sector with major interests in major sectors in Thailand such as trading,

manufacturing, banking and service activities.

21


Baker and Pongpaichit (1998, p.10) identified three fundamental themes to explain the

development of business sector in Thailand. First, the immigrant Chinese dominate the

business community. Most of the big players are rooted in finance, manufacturing,

property and services. Second, this business community rose through the classic

techniques of such migrant businessmen in that they stuck together, they saved hard and

they obeyed their rulers. Finally, they prospered by connecting up with powerful forces

in the global economy.

Baker et al. (1998, pp.13-14) noted that in the early nineteenth century, the Chinese

migrated into Bangkok due to the internal political and economic crisis in China. The

King supported the migrants due to the need of labor and know-how to drive the

economy. Chinese migrants have settled down in Bangkok while Thai farmers have

preferred to stay in the rural area because they have had land to till and no interest to

move to the city. Thus far, Bangkok has become a city of business and has been

dominated by Chinese.

Up to the 1940s, Thailand’s business was considered as small-scale. Very few families

had done well in business and even fewer had prospered in industry. Only the big

manufacturing enterprises were a cement works, paper mill, tobacco factory, brewery,

textile mill, and soap factory. Bangkok had small shops, factories and service

businesses. The change, however, came in the 1940s as the war disrupted imports from

Europe and wiped out most foreign business. Many entrepreneurs who could seize the

opportunities during this period became major players in Thai business of the next

generation. For example, the Chirathiwat family initially started a grocery business and

went on to become the Central retailing empire. Thiem Chokwatana also first started a

grocery business. Later, he moved into manufacturing and built the Sahapat consumer

goods conglomerate. Srifuengfung family started a banking and insurance business and

later become a leading manufacturer with his interests in textiles, chemicals and glass

(Baker et al. 1998, pp.17-18).

These new entrepreneurs had all been born in Thailand from Chinese parentage. A few

of them were migrants in the last rush of migration in the 1930s. Some had been

22


educated partly in Thailand, partly in Hong Kong and Mainland China. In order to

maintain the leadership in business, they looked outwards for expertise and assistance.

They sent their children for overseas education and used their learning to upgrade the

operation and management of their family firms. They entered into joint ventures with

foreign capital that gave them access to technology, markets and business knowledge

(Baker et al. 1998, pp.25-26). Some transform their companies into publicly listed

companies to enhance their competitiveness in the world market (Korsak 2003).

2.5 Cultural Framework

2.5.1 Dimensions of Thai Cultural Values

Cultural values can influence the attitudes and behaviour of people in a number of

different ways. Culture differs from country to country and is shaped by the economic,

political, and legal systems of a particular country. National culture is defined as

“something that is shared by all, or most, inhabitants, of a country and that shaped their

behaviour and the way they see the world” (Robbins, Bergman and Stagg 1997, p. 124).

Hofstede (1991) has developed a framework of cultural values and the strong affect on

leadership styles in various countries. The four dimensions included: individualism vs.

collectivism, power distance, uncertainty avoidance, and masculinity. Based on his

research, Thailand is classified in a group of collectivist countries, which represents a

tight social framework where people in groups expect others in their group of which

they are a part to protect them when trouble arises in exchange for loyalty. He further

classified Thailand in a group of moderate to high power distance countries where the

society accepts a wide unequal distribution of power in organisations. According to

him, countries with the highest scores show that leaders make autocratic and

paternalistic decisions and the employees do as they are told and employees show a

great deal of respect to the leader. Organisation structure tends to be tall and the leaders

have few subordinates reporting directly to them. Further, Thailand is classified as

moderate uncertainty avoidance. Countries with highest scores tend to formalise

company activities and depend mainly on rules and regulations while the lowest scores

23


are much less structured. Finally, he found Thailand had a low score on masculinity

meaning the society values are characterised by a friendly work environment and

cooperation.

2.5.2 Thai Culture and Traditions

The basic way to comprehend Thai culture and traditions is to regard the basic unit of

society as the family. The focus on the family is very important to study Asian cultures

(Tocquer and Cudennec 1998). Generally, the Thai family is an extended family

consisting of several generations in the same house and mostly found in the rural areas

in which most Thais live. The families with smaller numbers are normally found in

Bangkok. Thais grow up with a strong sense of social harmony. The father is regarded

as the leader but the mother still plays the important role of instructing their children.

Respect to parents and to authority is considered to be the norm in Thailand (NIB

2000).

Thai culture has been under pressure to combine its own traditions with influences from

outside. The most distinct and pervasive aspect of Thai cultural imperatives is the

avoidance of social confrontation. One of the factors determining such behaviour is the

Buddhist teaching that places a religious value on the avoidance of emotional,

commitment, extremes and confrontation. Thai society so far has been considered as a

conflict-avoidance society which values peace while Western culture has developed

values that require individuals or groups with perceived causes for conflict to resolve

their conflict by a confrontation (e.g. SiengThai and Vadhanasindhu 1991; Klausner

1993; NESDBb 2003). However, Thai culture is not totally free from the Western

cultures or the other cultural influences. Various forms of influences have been

basically transferred through foreign direct investment, trading, joint ventures,

travelling, migration and overseas education (SiengThai and Vadhanasindhu 1991).

Thailand is considered an open society which easily adjusts to new cultural influences

(NEDSBb 2003).

24


Scarborough (1998) described the characteristics of Thais as a love of freedom and that

Thais search for a comfortable and untroubled situation in the workplace as a way of

life. Free enterprise has been part of Thailand’ management philosophy for years.

Therefore, a paternalistic form of management has developed widely in the country.

Kamoche (2000, p. 455) described recognised Thais characteristics as:

“Kreng Jai”: This involves the desire to be self-effacing, respectful, humble and

considerate, and the wish to avoid embarrassing others. In Thai society, “Krengjai” is

expressed in the social status as younger-elder, subordinate-superior, and student-

teacher relationships, whereas the Western society focuses on equality, frankness, and

directness (Klausner 1993, p. 258). Recently, such behaviour has been in the transition

as examples of labour fighting against top management, civil servants protesting against

government, children arguing with parents can be gradually found in the country.

“Bunkhun”: It is the reciprocity of goodness, showing kindness, giving and taking

favours.

“Jai Yen”: It shows the personality of calmness, patience, and the desire to maintain

harmony in social situations.

“Mai pen Rai”: It describes a common expression that is used in all situations to show

that “it does not matter” and “everything is fine”. It is about forgiving, and avoiding

causing offence.

“Sanook”: It characterises behaviour of fun, relaxation, but also signifies the

importance of amiable, social relations and goodwill towards others.

2.5.3 Thai Working Culture

Thai business enterprises predominantly are owned and managed by family members.

Personal and family conditions play an integral part in Thai business practices. The

25


formal courtesy in both business and personal relationship and sensitivity to other

opinions are traditionally considered to foster harmonious working conditions in

Thailand (Nananookul 1981; Siangthai and Vadhanasindhu 1991).

Buddhism is also believed to have a strong influence on managerial styles in Thailand.

The Thai business environment has been influenced by the friendship’s bond and family

blood relationship. The effect of culture on managerial style among Thai managers can

be found to the extent to which leaders believe in traditional values such as helpful,

close, warm, supportive and urban values such as discipline, hard work, and self-

reliance (Runglertkrengkai and Engkaninan 1987).

Klasuner (1993) explained that the style of Thai leaders is based on the maintenance of

formal organisational relations through strict adherence to a hierarchical structure.

Employees normally perceive leaders as a ruler or chief. Thai subordinates right down

the management line prefer to receive orders from their superiors, as they would like to

show their loyalty. Siengthai and Vadhanasindhu (1991) identified five factors that may

have supported the success of Thai leaders as self-realisation, knowing others, causality,

appropriateness of time and place and one’s personal potential.

Korsak (2003) categorised Thai business management styles into two groups from his

business experiences of more than 30 years in Thailand namely old family management

style, and new family management style.

Old Family Management Style or “Old Kongsi System”

Most businesses in Thailand are owned by Chinese Thais. The father is the head of the

family business and every member in the family is involved in all aspects of business

operations and contributes their earnings to the family centre. Few problems are usually

found when the number of family members is small, but when the number of family

member expands, many problems arise between them.

26


New Family Management Style or “New Kongsi System”

The new family management style or new Kongsi system tries to overcome the old style

by organising the business into more systematic structures such as setting up registered

companies and distributing company shares evenly to each of the family members. This

new system also allows potential and high experienced outsiders to be top executives

and to run the organisations. Some high performance firms offer securities to the public

by transforming limited companies into publicly listed companies in order to expand

their business and compete with other major multinational companies in the world

market.

Korsak suggested that whether it is old management style or new management style,

one of the key success factors in doing business is effective leaders. They should clearly

distinguish between “What is business?” and “What is family?” and remain open-

minded to people outside family members who have capabilities rather than to family

members who may have limited abilities to run firms effectively.

Section 2: Publicly Listed Companies of Thailand

Part 2 aims to explain the background of the publicly listed companies of Thailand as

the selected population of this research study. It is necessary to provide an overview of

the Thai capital market, and the related financial institutions namely SEC and SET since

they shape a significant part of environmental conditions in which publicly listed

companies of Thailand function in terms of rules, regulations, guidance, promotion and

supervision.

2.6 Thai Capital Market

The Thai capital market is considered to be the medium to long-term source of funds in

the country. Business enterprises can raise capital directly from the public by issuing

and offering diversity of securities for their business operations. The capital market is

considered to be a major player in enhancing the growth of the overall economic system

in the country.

27


The Thai capital market traces its origins back to the early 1960s. Under the first NESD

plan (1961-1966), Thailand promoted economic growth and stability to improve the

social status of the general public. In this regard, Thailand implemented the plan by

establishing orderly market securities in order to mobilise additional capital for national

economic development.

The development of Thai capital market has involved two distinct phases. The first

phase was the establishment of the privately owned Bangkok Stock Exchange, which

closed down shortly after its establishment due to the lack of official support. The

second phase was the establishment of the Securities Exchange of Thailand under the

Securities Exchange of Thailand Act, B.E. 2517 (1974), or the SET Act, which was

enacted on May 20, 1974. Consequently, the Securities Exchange of Thailand operated

under proper supervision and with official support.

Later, the replacement of the Securities Exchange of Thailand, B.E. 2517 (1974), by the

Securities Exchange Act B.E.2535 (1992) or the SEC Act; however, has become the

next step towards the development of the modern Thai capital market in terms of

creating a concrete legal framework, progressive secondary markets and the

improvement of securities business regulations (SEC 2002; SET 1999).

2.7 Securities and Exchange Commission (SEC)

According to the Securities Exchange Act B.E.2535 (1992) or the SEC Act, SEC was

established as an independent state agency, which is responsible for supervision and

development of the Thai capital market. The main responsibilities include policy

formulation, promotion and development of the securities business such as issuance and

offer of securities for sale to the public; securities exchange, the over-the-counter centre,

acquisition of securities for business take-overs; and prevention of unfair securities

trading practices.

The members of the SEC board comprise Ministry of Finance (MOF) as the chairman;

governor of Bank of Thailand (BOT); Permanent-Secretary of the MOF; Permanent-

28


Secretary of Ministry of Commerce (MOC); Four to six well-qualified persons

appointed by the cabinet upon the recommendation of the MOF that include

experts from each of the following fields: legal, accounting and finance; and

Secretary-General of the Office of the SEC (SEC 2001; SEC 2002).

While the SEC is a single unified supervisory body to oversee the development of the

capital market, the BOT retains the supervision of the money market in the country. The

SEC Act. 1992 provides a clear separation between the primary and the secondary

markets to facilitate their successful development. Both primary and secondary markets

are under the regulation and guidance of the SEC (SET 1999).

2.7.1 Primary Market

The SEC is responsible for regulating the primary market under the SEC Act. 1992. In

this regard, a company wishing to issue new securities or to undertake an initial public

offering or offer additional securities to the public should firstly apply for the SEC’ s

approval and comply with the filing requirements. The SEC carefully reviews the

financial status and operations of the company prior to allowing the company to issue

securities to the public (SET 1996; SET 1999).

2.7.2 Secondary Market

Securities can be traded in the secondary market once the issuer has applied for and

been granted approval by the SET after the initial public offering. The secondary market

comprises SET and Thai Bond Dealing Centre (TBDC), which serves as the over the

counter market in Thailand (SET 1996; SET 1999).

2.7.2.1 Stock Exchange of Thailand (SET)

The SET is strongly related to the SEC in various forms. The SEC plays an important

role in setting out the main policies and regulations for the SET. The SET is empowered

by the SEC to work independently and is the immediate monitor of the securities

29


trading information. Whenever any suspicious practices in securities trading happen, the

SET will hold the primary responsibility for inspection and collecting all the necessary

evidence and facts for further actions and coordination with the SEC.

The SET is considered as an important secondary market for trading securities, which

were initially issued and offered for sale to the public in the primary market. Legislation

establishing "The Securities Exchange of Thailand" was officially enacted in 1974 and

the SET began trading on April 30, 1975. On January 1, 1991"The Securities Exchange

of Thailand" formally changed its name to "The Stock Exchange of Thailand"

According to the SEC Act (1992), the SET’ s primary roles are to serve as a centre for

the trading of listed securities, and to provide the essential systems needed to facilitate

securities trading, to undertake any business relating to the Securities Exchange, such as

a clearinghouse, securities depository centre, securities registrar, or similar activities

and to undertake any other business approved by the SEC (SET 1996; SET 1999; SET

2001).

2.7.2.2 Thai Bond Dealing Centre (TBDC)

TBDC was formerly known as the Bond Dealer Club (BDC), which was established

within the organisational structure of Association of Securities Companies (ASCO). The

BDC served as special market for secondary trading of debt instruments, wholesale

market for debt securities and first organised secondary bond market. The primary roles

of the TBDC are considered to be to promote self-regulation through the establishment

of efficient and ethical practices and conventions, and to represent the common interests

of members in accordance with the development of the country’s financial market (SET

1996; SET 1999).

2.7.2.3 Market of Alternative Investment (MAI)

The SET officially launched a new market for small and medium-sized companies

(SMEs) since June 1999. SMEs play a crucial role in the country’s economic

30


development but usually face liquidity problems and high costs of capital. MAI was

established to assist SMEs in accessing low cost and low risk funds in the capital

market. MAI can provide investors with a great range of new investment alternatives.

The MAI has been established as a separate market to the SET. It has its own board of

governors, management team and staff. It is considered to be different from the SET in

terms of listed companies’ size, listing criteria, supervision and operation.

The regulatory hierarchy of the Thai capital market is shown in Figure 2.3.

Figure 2.3

Regulatory Hierarchy of the Thai Capital Market

Ministry of Finance

Other Securities

Related Business

Secondary

Market

The Thai Bond

Dealing Center

(TBDC)

The Stock Exchange

of Thailand

(SET)

Primary

Market

Securities and Exchange

Commission

Capital Market

Market of Alternative

Investment

(MAI)

Other Securities business

related organisations

Source: Figure adapted from SET 1999 and SEC 2002.

31


2.8 The Stock Exchange of Thailand (SET)

2.8.1 Historical Background of SET

The formation of Thai stock market dates back to July 1962 when a private group

established an organised stock exchange as a limited partnership. In 1963 the group

finally became a limited company and altered its name to the Bangkok Stock Exchange

Co., Ltd.

In spite of its well-established intentions, the Bangkok Stock Exchange (BSE) was

rather inactive with a yearly turnover value of only US$ 7.7 million in 1968, and US$

5.5 million in 1969. Trading volumes fell sharply thereafter to US$ 2.2 million in 1970,

and then US$ 1.4 million in 1971. In 1972 the turnover in debentures reached US$ 4.2

million, but stocks continued to perform poorly, with a turnover of US$1.3 million.

Finally the BSE ceased its operations in the early 1970’s.

Generally, it is accepted that the BSE failed to succeed due to lack of official support, as

well as the general investors’ limited understanding of the equity market. Due to the

failure of the BSE, a plan for the establishment of an official supported securities

market had attracted considerable attention under the second NESD plan (1967-1971).

In 1969, the Thai government acquired the services of Professor Sidney M. Robbins

from Columbia University to study the development of the Thai capital market as part

of a recommendation of the World Bank. In the same year, BOT also formed a working

group on capital market development.

In the early 1970’s, Thai government undertook a further step by amending the

announcement of executive council number 58 on the control of commercial undertakings

affecting public safety and welfare so as to extend government control and regulation

over the operations of finance and securities companies, which until then had operated

freely. Following such amendments, long-awaited legislation establishing. The

Securities Exchange of Thailand was enacted in 1974. At the end of the year the

32


revenue code was revised to activate the saving investment in the capital market. On

April 30, 1975, the Securities Exchange of Thailand officially started trading and on

January 1, 1991, its official name was formally changed to “ The Stock Exchange of

Thailand” (SET 1996; SET 1999).

2.8.2 Regulatory Structure

Figure 2.4 presents a regulatory framework of the SET. The SET is a juristic

organisation under the supervision of the SEC and operate as a non-profit organisation.

Figure 2.4

SET’ s Regularly Structure

Securities and Exchange Commission (SEC)

The Stock Exchange of Thailand (SET)

The SET’ s Board of Governors: 11 members

Appointed by the SEC:

Up to 5 Governors

Elected by members:

Up to 5 Governors

President: Appointed by the SET’ s Board of Governors

Member Firms

Source: Figure extracted from SET 1999, p. 11.

The board of the SET is composed of a maximum of eleven people including five

people appointed by the SEC and the other five elected by the SET’ s members. The

position term is two years. The managing director of the SET is appointed by the board

and has tenure for a four-year term. The board is responsible for formulating the SET’s

policies and supervising the exchange’s operations. Rules and regulations prescribed by

the board, however, must have SEC approval.

33


2.8.3 Selected Main Operations of SET

The main operations of the SET are classified selectively as the following:

2.8.3.1 Listing

In order to offer securities to the public, the transformation of a limited company into a

public limited company under the Public Company Act B.E. 2535 is required. The

consideration of the listing application by the SET will normally be completed within

30 days after all required documents and information have been submitted. The

applicant must appoint a financial advisor approved by the SEC and independent from

the applicant, to coordinate listing activities with the SET and prepare listing documents

in conjunction with the applicant. Only member companies of the SET are authorised to

buy or sell securities in the market. Membership is limited to securities companies,

which obtained a securities’ license from the MOF to engage in the securities business

as stockbrokers (SET 1999). As of December 2002, the SET had 49 firms as members

(SET 2003). The listing procedures are described in Figure 2.5.

2.8.3.2 Supervision of Publicly Listed Companies

According to the SET’ regulations, all publicly listed companies have to disclose the

prescribed information accurately, promptly and publicly with the time schedule set by

the SET. Thus, such information can be disseminated to the public within a suitable

time frame. All publicly listed companies are required to disclose information

simultaneously both Thai and English in order to satisfy both in Thai and foreign

investors.

In order to ensure efficient fair-trading, the SET applies supervisory signs when the

required information is not adequately disclosed to public. These signs include NP

(Notice pending), NR (Notice Received), H (Trading Halt) and SP (Suspension) signs

(SET 1999).

34


Figure 2.5

Listing Procedure for Publicly Listed Companies

Share distribution report

<=45 days after all required documents are submitted

IPO Application Listing Application

<=30 days after all required documents are submitted

Limited Company

Public Limited Company

Financial Advisor

SEC SET

Listing Pre-approval

IPO Approval

Public Offering Minor Shareholding

Requirement is fulfilled

Trading Begins

3 working days

Source: Figure extracted from SET 2000, p. 25.

2.8.3.3 Trading

Since April 1991, the SET has operated a fully computerised trading system namely the

Automated System for the Stock Exchange of Thailand (ASSET). It enables trading to

be efficient, equitable and liquid. Two principal methods of trading are available

Automatic Order Matching and Put Through transactions in the ASSET trading system.

The SET also monitors securities trading activities so as to detect and investigate

abnormal trading activities promptly (SET 2001).

35


2.9 Characteristics of Publicly Listed Companies of Thailand

The publicly listed companies are strongly interconnected to the SEC and SET. They

shape one significant part of environmental conditions in which the publicly listed

companies function in terms of rules, regulations, guidance, promotion and supervision.

On the other hand, the influences of the publicly listed companies can be found in terms

of the products for investment, performance index of stock market and the dynamism of

country development.

2.9.1 Number of Listed Companies

According to SET, publicly listed company refers to the issuing company of listed

securities. The listed companies on the Thai stock exchange market are classified into

two main types as:

1. Listed companies on the SET

2. Listed companies on the MAI

Table 2.2 summarised the number of publicly listed companies on the SET and MAI

during 1998-2002.

Table 2.2

The Number of Publicly Listed Companies on the SET and MAI

Listed Companies 1998 1999 2000 2001 2002

SET 418 392 381 382 389

MAI - - - 3 9

Source: SET 2000; SET 2001; SET 2002; SET 2003.

36


2.9.2 Listing Year

Table 2.3 summarises the listing year of publicly listed companies of Thailand. It

showed that the majority of companies (73.26%) have been listed in the Thai stock

exchange market during the 1988-1997 time period.

Table 2.3

Listing Year of Publicly Listed Companies of Thailand

Year N %

Before 1973 - -

1973-1977 22 5.66

1978-1982 23 5.91

1983-1987 26 6.69

1988-1992 153 39.33

1993-1997 132 33.93

1998-2002 33 8.48

Total 389 100.00

N: number of companies; %: percentage within total number of companies.

2.9.3 Industries Represented

Publicly listed companies of Thailand have been classified into thirty-one sectors,

separately from the MAI. These sectors comprises agribusiness, banking, building and

furnishing materials, chemicals and plastics, commerce, communication, electrical

products and computer, electronic components, energy, entertainment and recreation,

finance and securities, foods and beverages, health care services, hotels and travel

services, household goods, companies under rehabilitation, jewellery and ornaments,

machinery and equipment, mining, packaging, pharmaceutical products and cosmetics,

printing and publishing, professional services, property development, pulp and paper,

textile, clothing and footwear, vehicles and parts, warehouse, and others. Table 2.4

summarises number of shares and market values by industrial sectors in 2002.

37


Table 2.4

Number of Shares and Market Values by Industrial Sectors

Source: Adapted from SET 2003.

Section SET Classification Number of Listed Firms

Shares (Million Unit)

Market Values (Million Baht)

1 Agribusiness 20 6,270.36 39,724.83

2 Banking 14 33,378.58 321,930.37

3 Building and furnishing materials 18 5,093.99 237,170.25

4 Chemicals and plastics 12 4,280.32 44,463.15

5 Commerce 14 3,454.10 48,159.76

6 Communication 12 13,585.73 171,310.23

7 Electrical products and computer 10 2,171.59 18,742.26

8 Electrical components 8 2,237.25 56,425.34

9 Energy 9 7,421.45 270,386.88

10 Entertainment and recreation 10 3,819.16 82,706.50

11 Finance and securities 27 6,651.16 91,747.87

12 Food and beverages 22 2,078.75 42,791.20

13 Health care services 10 321.03 6,576.82

14 Hotels and travel services 10 1,397.44 30,843.73

15 Household goods 7 645.11 9,848.80

16 Insurance 21 536.33 26,344.18

17 Companies under rehabilitation 52 20,087.32 39,630.67

18 Jewellery and ornaments 2 224.39 1326.80

19 Machinery and equipment 3 48.10 1,546.40

20 Mining 1 226.00 2,712.00

21 Packaging 13 1,401.13 11,703.27

22 Pharmaceutical products and cosmetics 2 21.50 689.90

23 Printing and publishing 8 303.29 8,807.18

24 Professional service 2 8.50 876.00

25 Property development 28 8,043.50 135,007.35

26 Pulp and paper 4 948.88 46,101.53

27 Textiles, clothing and footwear 24 1,496.24 24,905.32

28 Transportation 8 3,115.39 64,695.67

29 Vehicles and parts 9 976.77 17,142.98

30 Warehouse and silo 4 66.87 1,578.88

31 Others 5 856.50 4,969.50

Total 389 131,166.72 1,860,865.65

38


2.9.4 Trend in the Number of Publicly Listed Companies

The number of publicly listed companies is anticipated to grow as a result of the strong

support from government and relevant institutions as well as the high demand for fund

raising to finance their companies’ expansion plans, to enhance their competitiveness,

and to establish systematic financial structures. Listed firms can raise additional capital

by issuing and listing other types of securities, such as preferred shares, warrants,

debentures, and convertible debentures beside from issuing and listing of common

shares through the stock exchange. As publicly listed companies, they have a more

positive public image since they have to fulfill the goal of transparent information

disclosure required by regulatory authorities. This image plays an important role in

firms’ credibility, and indirectly builds awareness of their products and services.

2.10 Chapter Summary

This chapter has provided an overview picture of the country in this study, Thailand in

terms of its social, political, economic and cultural conditions. These environmental

factors may have a great impact on the way people live and operate business in

Thailand. Publicly listed companies are part of the private sector that plays a crucial

role in the development of Thailand. To be a publicly listed company, companies are

equipped with a formal structure, high capital investment and usually a good record

of financial performance. Top management of publicly listed companies usually

operates in the more competitive domestic and international markets. In that regard, top

executives must be innovators, and able to adjust their role behaviour in response to the

challenges of the regulatory, political, economic, and cultural environments. At the

same time, executive leaders need to be focus strategically on their business to achieve

their companies’ objectives and provide a sense of continuity and stability to key

players such as employees, customers and suppliers. The impact of the top executive on

organisational performance is the focus of this research.

39

PART TWO

LITERATURE REVIEW

Chapter 3 Literature Review

Chapter 4 Theoretical Framework,

Research Questions and Hypotheses

40

Chapter 3: Literature Review

Part two of this thesis establishes the theoretical foundation for this research. Chapter 3

reviews the relevant literature on various facets of management and leadership

starting from an evolutionary perspective of management models, then examines

organisational leadership, the CEO attributes, the organisational performance, the

contingency factors and then the studies on the link between executive leadership and

organisational performance. Chapter 4 conceptualises the findings of the literature

review in chapter 3. It develops a theoretical framework built upon the previous

research but tries to overcome the shortcomings and gaps, which covers the main

three elements namely executive leadership (CEO role behaviour and CEO attributes),

organisational performance and contingency factors. Seven research questions were

identified and seven hypotheses were developed based on all key elements depicted in

the theoretical framework.

41


Chapter 3

Literature Review

3.1 Introduction

This chapter aims to develop a theoretical framework upon which to build this research.

The research seeks to examine the relationship between executive leadership and

organisational performance by incorporating contingency factors. The literature review

is organised into six main sections. Section 3.2 presents a theoretical foundation by

providing an evolutionary perspective of management models. Section 3.3 discusses the

nature of leadership followed by a definition of leadership, and looks at the level in the

organisation, and the nature of managerial work. Taxonomies of leadership roles,

Quinn’s (1988) framework, synthesis of executive leadership roles, and relevant

empirical and theoretical studies on the concept of behavioural complexity are also

addressed as part of this section. Section 3.4 describes CEO attributes regarding

demographic characteristics, personality traits and leadership styles as well as reviewing

relevant studies. Section 3.5 summarises the literature on organisational performance’s

measurement. Section 3.6 reviews relevant contingency factors namely firm size,

environmental conditions, and business strategy together with their impact on the

executive leadership and organisational performance. Section 3.7 discusses the relevant

studies concerning the link between executive leadership and organisational performance.

The focus of this research is upon the upper management level of the organisation rather

than on the lower level. The terms leaders and managers are used interchangeably to

refer to people who occupy executive positions. Further, executive leadership is defined

as the top leaders of organisations in which they are expected to exert leadership roles

for the purpose of this research.

42


3.2 An Evolutionary Perspective of Management Models

During the twentieth century a number of management models have emerged. A model

represents the set of assumptions for a general way of thinking about phenomena and

provides a particular perspective about the more complex reality in a social world. The

understanding of the models and their historical background can lead leaders to have

a broader array of managerial behaviours. Four major management models and how

they evolve from the prevailing conditions such as society, technology and political

environments in each quarter of the twentieth century are thus reviewed. This section

builds on the historical works of Wren (1994) and Quinn, Faerman, Thompson, and

McGrath (1996).

3.2.1 The Emergence of the Rational Goal Model and

the Internal Process Model: (Quarter 1: 1900-1925)

The industrial revolution, which began in the eighteenth century in the Great Britain,

was possibly the most important influence on management in the twentieth century.

The need for a formal theory arrived in the early 1900s to guide managers in managing

their organisations. The first quarter of this period was a period of diversity in

management thoughts (Robbins, Bergman and Stagg 1997).

When this period began, the economy was equipped with rich resources, cheap labour,

inexpensive energy, and technological invention and innovation in both agriculture and

manufacturing. The main concern of business was productivity and profit maximization.

The need to develop management techniques to address the efficiency of the

organisation influenced the father of scientific management namely Frederick Winslow

Taylor. Taylor believed in the principle of “one best way” for a job to be done. He

selected the right people for the job and trained them with the selected method together

with an incentive wage plan to motivate workers. These principles formed the core of

the scientific management approach (Wren 1994).

43


Another prominent group who developed management principles were Henri Fayol and

Max Weber. They were concerned with the overall organisation and how to make it

more efficient. Fayol’s attention was focused on the activities and roles of managers. He

classified the practices of management as the integration of other business functions and

as a result Fayol set up fourteen principles of management for practising managers both

in business and government (see Fayol 1984, pp.61-82 for reviews). Whereas Max

Weber’s emphasis was on describing the ideal, a system bureaucracy, which was

characterised by the division of labour, rational-legal authority, and a defined hierarchy.

Weber suggested that organisations would be more efficient if they were structured

around the defined guidelines (Blau 1970).

The first two broad models of management theory began to emerge during the first

quarter of the century. The first model was the rational goal model (Quinn 1988) in

which the ultimate criterion of organisation effectiveness was the achievement of profit

maximization. The assumption of this model is based on the belief that obvious

direction could lead to productive results. The manager’s job is considered to be as a

director and as a task-oriented producer. The second management theory that emerged

was complementary of the first model namely the internal process model (Quinn 1988).

The basic notion of this model is based on the belief that routinization leads to stability

such as structure, responsibilities, measurement, documentation and record keeping.

The ultimate value of this model is the achievement of efficient workflow. Thus the

manager’s job is to be a technical monitor and a coordinator (Quinn et al. 1996).

3.2.2 The Emergence of the Human Relations Model:

(Quarter 2: 1926-1950)

The second quarter of the twentieth century brought two major events to the world:

World War II and the collapse of stock market. The economy was characterised by the

boom, the crash, and the recovery following the war, and once again, offering bright

hopes for the future. Technological advances continued in all areas, but particularly in

agriculture, transportation, and consumer goods. Some fundamental changes began to

appear in industry. There was a sense of prosperity. Factory workers paid more attention

44


on recreations than survival. They were not eager to work as much time as their parents

once were. Managers found that the rational goal and the internal process models were

no longer as effective models to guide them as they once were (Quinn et al. 1996). As a

result the managers began to have more concern for the human aspects of organisations.

During this period, Elton Mayo carried out his famous work namely the Hawthorne

studies. His findings indicated that social acceptance and concomitant security had more

effect on a worker’s output than an incentive plan. The management thought during this

period became much more focused on the human elements than in the previous period

(Wren 1994).

By the end of the second quarter of the century, the human relations model (Quinn

1988) had emerged. The basic assumption of this model is participation, conflict

resolution, consensus building and commitment. The motivational factors are what

managers have to focus on to develop the worker’s efficiency. Leaders need to

understand the balance of economic logic and non- economic logic of sentiment (Wren

1994). The manager’s job is to be a mentor and a facilitator (Quinn et al. 1996). Griffin

(1990) argued that managers sometimes find the complexity of human relation difficult

to understand and to manage.

3.2.3 The Emergence of the Open Systems Model:

(Quarter 3: 1951-1975)

This period experienced the shock of the oil embargo, huge government debt and a

staggering world economy. Technological advances occurred at an ever-increasing rate

and societal values also shifted dramatically. People developed a more individualistic

orientation and organisations became more knowledge based. More importantly,

managers had to manage their organisations faced with an ever-increasing rate of

change and a need to understand how to manage in a fast changing and intense

information world. Katz and Kahn from the University of Michigan developed the open

systems model of organisations to help managers better understand the complexity of

the total situation (Quinn et al. 1996)

45


Organisations are viewed as an open system that continually seeks resources from the

environment in order to survive. An organisational system consists of four basic

elements namely resource inputs, transformation processes, outputs and the environment

(Kast and Rosenzweig 1985). Mintzberg (1973) investigated the managerial activities

of leaders and found that leaders operate in highly unpredictable environments.

Such studies are consistent with an open system model logic (Quinn 1988) in that

organisations are confronted with a high level of competition in ambiguous

environments. The organisation climate is based on the belief that continual adaptation

and innovation is necessary. The manager’s job is expected to be as a creative innovator

and broker (Quinn et al. 1996). Table 3.1 summarises the characteristics of the four

management models, which evolved with the prevailing conditions of each period of the

twentieth century.

Table 3.1

Characteristics of Four Management Models

Model Rational Goal Internal Process Human Relations Open Systems

Management

theory

Scientific

management

Administrative and

bureaucracy

Behavioural

management

Contingency theory

Criteria of

effectiveness

Productivity,

Profit

Routinization,

Stability

Cohesion,

Commitment

Continual adaptation,

Innovation

Emphasis Goal clarification,

Rational analysis,

Action taking

Responsibilities,

Measurement,

Documentation

Participation,

Conflict resolution,

Consensus building

Political adaptation,

Creative problem solving,

Change management

Climate Rational economic Hierarchical Team-oriented Innovative, Flexible

Roles of

manager

Director,

Producer

Monitor,

Coordinator

Mentor,

Facilitator

Innovator,

Broker

Source: Adapted from Quinn, Fareman, Thompson and McGrath 1996.

3.2.4 The Emergence of the Integrative Model: (1976-Present)

In accordance with Drucker (1993, p.1), “Every few hundred years in western history

there occurs a sharp transformation”. “Within a few short decades, society rearranges

itself-its world view; its basic values; its social and political structure; its arts; its key

46


institutions. Fifty years later there is a new world. And the people born then cannot even

imagine the world in which their grandparents lived and into which their own parents

were born”.

Drucker (1993) believed that people are now entering a post-capitalist society.

Organisations are more likely to be equipped with knowledge workers and service

workers. Apparently, this period began with the digital revolution, the information age

and the knowledge economy. Viewed from another perspective, organisations are facing

the impacts from technology changes, intense competition, changing global markets,

and the shortage of skilled employees.

Quinn et al. (2003) explained that the world of organisations and management is

changing as the twentieth century draws to a close. Longstanding political and business

enterprises began to crumble, the Berlin Wall came tumbling down, and later the USSR

itself disintegrated. Some of the most powerful organisations seemed strong one day

and in great difficulty the next. Nothing seems predictable in the new global economy.

Organisations are challenged by the emergence of Internet and E-commerce. At the

same time, there is often a short supply of employees with the right mix of

competencies and abilities.

Ireland and Hitt (1999) argued that competition in the 21st century’s global economy

would be challenging, complex, and filled with competitive opportunities and threats.

Effective strategic leadership practices can contribute to corporate success in turbulent

and unpredictable environments. Simultaneously, the new situation requires a shift in

focus for organisational leaders in such a dynamic environment (Dess and Picken 2000)

and the past simple solutions of management have become suspect (Quinn et al. 2003).

Leaders need to be innovative, talented, creative, and equipped with sophisticated skills

in order to achieve organisational effectiveness in a fast-changing environment. Quinn

et al. (2003) believed that none of the four management models offered a sufficient

answer for managers and leaders in such a complex and rapidly changing world. Future

leaders should have the capacities to see the complex and paradoxical patterns of all

four management models in a larger framework. “Some time we need stability,

47


sometimes we need change”. “Often we need both at the same time” (p.11). Leaders

need to comprehend the integration of four basic models to increase management

choices. They need to use “simultaneously, two or more seemingly opposite

approaches” (p.11) responding to highly ambiguous and fast changing environment

trends.

3.2.5 Summary

This section has described the evolution of management theories, which emerged from

the complex interaction of social, technical, and political forces during the twentieth

century and has discussed the current trends facing organisations and leadership. The

changing trends requires a shift in focus for organisational leaders. Leaders of the future

need to be innovative, creative and have a clear idea of how to respond to the fast

changing environments. They cannot rely on only one model to manage their

organisations. Rather, they should have the capacities to see the complex and

paradoxical patterns of all four management models in a larger framework, which

provides the premise of the present study and will be discussed in the next section of the

literature review.

3.3 Organisational Leadership

This section provides a discussion of the nature of leadership and the definition of

leadership used in this research. It further reviews the roles of leaders according to the

level in the organisation and reviews studies on the nature of managerial work. Then, it

addresses the taxonomies of leadership roles followed by the reviews of Quinn’s (1988)

Competing Values Framework and the synthesis of executive leadership roles by Hart

and Quinn (1993). Finally, it reviews the literature on behavioural complexity as well as

relevant empirical and theoretical studies.

48


3.3.1 The Nature of Leadership

Leadership is a universal phenomenon, and as such, has been a subject of intense debate

and controversy among theorists, psychologists, historians and business practitioners

since the emergence of civilization. There has been a major controversy whether

leadership should be viewed as a specialised role or as a shared influence process. One

group of scholars views leadership as a leader role with certain responsibilities and

functions (e.g. Katz and Kahn 1978; Kotter 1988; Mintzberg 1973, 1975; Quinn, 1988

etc.). A somewhat different group of scholars views leadership in term of an influence

process (e.g. Bass 1985; Bass and Avoli 1993; Zaccaro and Klimoski 2001 etc.).

Scholars in this group believed that leadership is a social process rather than a

specialised role. They pay attention on the complex influence process that occurs

among members, and the consequences for the group or the organisation.

This research employs the functional view of leadership based on a role theory of

leadership. Accordingly, leadership is what leaders do. Biddle and Thomas (1966, pp.

11-12) defined a role as “a behavioural repertoire characteristic of a person or a

position” or as “a set of standards, descriptions, norms, or concepts held for the

behaviours of a person or a position”. Similar definitions have also been presented by

Katz and Kahn (1978) and Quinn et al. (1996).

Biddle and Thomas (1966) argued that the role performance of an individual who

occupies specific role positions within a firm are typically constrained by personal

factors and organisational factors including specific attributes of the person, social

norms, demands and rules.

Katz and Kahn (1978) indicated that numerous factors such as personal attributes of a

person, interpersonal factors and organisational factors influence an individual’s role in

an organisation. An organisation is a system of roles. They further argued that the

conclusions drawn from the literature regarding individuals and roles are twofold. First,

roles shape the attitude of an individual, and frame the behaviour of what they should

49


do or should not do. Second, individuals are selected for a position because their

capabilities fit the role requirements or a pre-entry form of organisational socialisation.

Similarly, Stewart (1982) discussed leadership in general roles based on extensive

research using observation methods, interviews, and diaries. The three forces affecting a

leadership position are considered as: demands, constraints, and choices. These change

the nature of jobs and influence the leaders’ roles. Demands are roles expectations from

others. Constraints are both external and internal forces that limit what the leaders can

do. Choice is the freedom that the leaders possess. These include opportunities in

managerial positions to decide what to do and how to do it.

Recently, Yukl (2002) integrated the situational determinants to explain the different

patterns of demand, constraints and choices for different types of managerial jobs. The

aspects of situations are also found in the pattern of relationship, work pattern and

exposure

3.3.2 Definition of Leadership

The term leadership has been defined in many different ways according to their

individual perspective and to a great extent reflecting the purpose of researchers (Yukl

1994). Leadership in general is defined as “those behaviours of the group member or the

formally appointed leader that are perceived by subordinates as acceptable attempts to

influence their behaviours” (House and Baetz 1979, p.355). However, as defined above,

a role comprises an explicitly considered set of recurring behaviours that a person

executes. Because a role theory of leadership is the focus for the present study, a role

context for leadership needs to be defined.

In this research leadership is treated as a specialized role. Leadership roles are thus

defined as “recurring actions of an individual, appropriately interrelated with the

repetitive activities of others so as to yield a predictable outcome” (Katz and Kahn

1978, p. 189).

50


The definition proposed above by Katz and Kahn (1978) is appropriate for the present

research for the following reasons.

1. The definition is considered to be a more clearly definition of the role concept than

those provided by many leadership researchers.

2. As this research emphasises on the impact of leadership role behaviour on corporate

performance, the above definition is considered to be consistent with the theory

being evaluated.

3.3.3 Level of Organisation

The leadership literature reviewed so far generally emphasises the role context of

leadership without specifying the organisational level in which the leaders operate. This

section examines the literature on leadership roles based on organisational level.

The meaning of the term “level” sometimes appears to be confused in management

research. Organisational level used in this research refers to a hierarchical position

within an organisation (e.g. top-, middle-, lower level managers). There is evidence that

the roles and behaviours of top managers differs from those of middle managers (Katz

and Kahn 1978; Norburn 1989), but few have empirically examined the implications of

these qualitative differences (Day and Lord 1988). There is a need to clarify how top

executives differ from middle and lower levels.

Firstly, an examination of managerial skills by levels is undertaken since a leader needs

considerable skills to play an effective role. At lower level of organisations, Katz (1974)

identified that technical skills and human relation skills are crucial skills of leaders

whereas at middle levels, technical skills become relatively less important while the

conceptual skills increase in importance for leaders to be effective. The most important

skills for leaders at the higher levels of organisations are the conceptual skills, although

the human relation skills are also somewhat crucial. Conceptual skills are the most

important for top managers since their major responsibility is strategic decision making.

The conceptual skills are essential for effective planning, policy formulation and

coordination of separate parts of organisations (Katz and Kahn 1978). However, some

51


research indicates that the skill requirement for top mangers may also vary somewhat

from organisation to organisation, depending on the developmental stage of the

organisation (Mann 1965), the type of organisation, its size and the degree of

centralisation of authority (McLennan 1967).

Katz and Kahn (1978) classified the functions of top-, middle-, and lower level mangers

by investigating how they use organisational structure. They identified that top

managers create structure; middle level managers interpret structure and lower level

managers use structure.

Hunt and Phillips (1989, p.124) recognised that top leaders “are embedded in a

dynamic, changing environment and they must be able to assume different,

contradictory, or competing roles at different times and different situations”. The ability

to adapt multiple behavioural roles as dictated by environmental and organisational

environments is a critical part of a top executives’ work (Hooijberg and Quinn 1992;

Hooijberg, Hunt and Doge 1997). Katz and Kahn (1978) concluded that the actual

number of behaviours differ according to the managers’ level in the organisation. As the

individual moves up the hierarchy, he/she must execute a greater and more diverse set

of roles.

Further, Zaccaro (1996) provided evidence that top leaders must scan and monitor

external environments and form strategies or visions to enable their organisations to

survive in dynamic environments. They should have the ability to manage change,

envision future, sustain flexibility, and work with others to create a viable future for

their organisations (Ireland and Hitt 1999). They should also be responsible for

managing internal resources as well as knowledge within their organisations (Katz and

Kahn 1978).

Recently, Yukl (2002) claimed that job responsibilities differ for managers at different

levels according of the organisational hierarchy. Generally, top managers are more

concerned with making important decisions, including the determination of organisation

goals, formulating strategies, organisational structure design, and the allocation of

52


resources that affect the entire organisation. These individuals typically have titles such

as Managing Director (MD), Chief Operating Officer (COO) or Chief Executive Officer

(CEO) (Daft 1983; Robbins, Bergman, Stagg and Coulter 2003). Middle managers are

more concerned with the implementation of objectives and policies. They are concerned

with the behaviour of their entire department to ensure the result is in line with the

strategies and plans developed by the top managers (Dubrin, Ireland and Williams 1989;

Dubrin 1997). Lower level managers are those who work at the bottom level of

organisations and supervise employees who do the routine work (Dubrin 1997).

3.3.4 The Nature of Managerial Work

Researchers have used different approaches such as diaries, direct observation,

interviews and job description questionnaires to investigate what executives do (e.g.

Minzberg 1973; Kotter 1982; Kotter 1999). “It is easier understand managerial

leadership when the context in which it occurs can be described” (Yukl 2002, p.21).

This section examines major findings on the nature of managerial work.

Beginning with the prominent work of Minzberg (1973), who closely observed the

managerial activities of experienced chief executives, to find that they work at a hectic,

unrelenting pace and on a wide array of tasks. Their activities are considered as being

fragmented and interrupted by interactions with parties both inside and outside their

organisations. Based on his research, Minzberg concluded that managers play several

different roles. As a result, he developed a taxonomy of ten managerial roles to describe

a manager’s activities and these can be categorised into three broad groups:

interpersonal roles (figurehead, leader and liaison), informational-processing roles

(monitor, disseminator, and spokesperson), and decisional-making roles (entrepreneur,

disturbance handler, resource allocator, and negotiator). Minzberg’s ten managerial

roles are briefly described in Table 3.2.

Minzberg’s study provides a number of important insights into managerial work. He has

described how upper level managers of organisation allocate their time and he found

that a typical CEO is likely to spend 59 percent of their time in scheduled meetings, 22

53


percent performing deskwork, 10 percent in unscheduled meetings, 6 percent on the

telephone, and the remaining 3 percent on tours of company facilities (Minztberg 1973,

p.39).

Table 3.2

Summary of Ten Executive Roles

Categories Role Managerial Works

Interpersonal Figurehead Symbolic heads; performing a number of symbolic duties

of legal and social natures.

Leader Responsible for motivating, guiding employee including

hiring, directing, promoting and pervading associated

activities.

Liasion Maintain self-developed network with individuals and

groups outside organisational unit

Informational Monitor Seeking and scanning special information to develop a

through understanding of organisation and the

environment; Analysing information to discover the

problems and opportunities

Disseminator Transmitting information received from outsiders or from

subordinates to member of firms; some involves the factual

and interpretation of information

Spokesperson Transmitting information and expressing value statement

to people outside their organisational subunit;

demonstrating update knowledge of organisation and

environment.

Decisional Entrepreneur Initiating and designing a controlled change to exploited

opportunities form organisation and environment;

Improving projects such as developments of new products,

new equipments or structural reorganisation.

Disturbance handler Responsible for corrective action when the organisation

confronts unexpected disturbances.

Resource allocator Allocating resource such as money, personal, equipment,

services and facilities; Making or approval of all

significant organisational decisions.

Negotiator Reaching agreement during major negotiations with others.

Source: Developed from Minzberg 1973; Finkelstein and Hambrick 1996.

54


The study of Kotter (1982) also found that managers spend significant amounts of time

interacting and communicating with people outside and inside organisations. Kotter

(1999) documented that effective managers set up and continuously adjust their agendas

and build up effective networks as well as aggressively searching for both positive and

negative information. They do not conform to the traditional idea of what they should

do. “They rarely planned their days, often punctuating them with short, unorchestrated,

and even personal chats with people outside of their formal chain of command” (p.156).

They also often work larger hours so as to build their organisations’ competitiveness in

responding to the tense business environment. These findings are also consistent with

Viljoen and Dann (2000) findings, which indicated that most effective leaders devote a

considerable amount of time to build up their relationships with customers, suppliers,

employees and even competitors.

Yukl (1994, 2002) integrated the work of many researchers and summarised the nature

of managerial work as; hectic and unrelenting; varied and fragmented; reactive;

interactions which involved peers and outsiders; interactions which involved oral

communication; a disorderly and political decision process; and informal and adaptive

planning. These managerial activities happen because leaders face several dilemmas

both external and internal. They collect information from the outside and alert those

within the organisation about external developments (Finkelstein and Hambrick 1996).

However, the nature of managerial work is being challenged by the developing trends in

the economic, political and societal environments. According to Dess and Picken

(2000), technology is changing the nature of work in organisations. It is an age of

information technology. Leaders need to adjust themselves to the new technology in

terms of knowledge and skills. Another trend is globalisation. Foreign markets,

multinational companies, cross-national joint ventures have all become more important.

Leaders need to understand the cultural diversity of the workforce within their

organisations. The trend to smaller organisations becomes another challenge. Many

firms are being decentralised in to smaller ones by eliminating middle managers.

Therefore, there are expectations on leaders to cope with more changes in their roles.

55


56

3.3.5 Taxonomies of Leadership Roles

“To discover what managers do and how they spend their time, researchers have used

descriptive methods such as direct observation, diaries, and interviews” (Yukl 2002, p.

21). There tends to be a great deal of argument as to the adequacy of certain roles

theories to describe the management functions (e.g. Mintzberg 1973). However, Yukl

(1987) who integrated nearly four decades of research on managerial behaviours found

a great deal of convergence among researchers. He developed his own taxonomies by

separating behaviours into different categories based on the level of abstraction.

Table 3.3 presents a summary of taxonomies of leadership roles and included the works

by Stogdill (1963), Bowers and Seashore (1966), Mintzberg (1973), House and Mitchell

(1974), Morse and Wagner (1978), Luthans and Lockwood (1984), and Page (1985).

The next section examines the leadership roles developed by Quinn (1998) (which is not

covered by Yukl) and which provides the conceptual foundation for this research study.

57

Table 3.3

Taxonomies of Leadership Roles Yukl 1987

Mintzberg 1973

Moese and Wagner 1978

Stogdill 1963

Bowers and Seashore 1966

House and Mitchell 1974

Luthan and Lockwood 1984

Page 1985

Supporting Consideration Leader support

Supportive leadership

Consulting Participate leadership Delegating Tolerance of

freedom

Recognizing Motivating and reinforcing Rewarding Motivating Leader role Motivating and conflict

handling Production emphasis Goal emphasis Achievement-oriented

leadership Supervising

Managing conflict and team building

Integration Integration facilitation

Managing conflict

Developing Providing development Training and development

Clarifying Initiating structure Directive leadership

Planning and organizing

Resource allocator; Entrepreneur

Organizing and coordinating Work facilitation Planning and coordinating

Planning and organizing; strategic planning

Problem solving Disturbance handler Strategic problem solving Role assumption; Demand reconciliation

Problem solving and deciding

Decision making

Informing Disseminator Information handling Exchanging information Consulting Monitoring Monitor Monitoring

Controlling Monitoring indicators, controlling

Representing Spokesman; Negotiator; Figurehead

Managing environment and resources

Representing; Influencing superiors

Interacting with outsiders socializing and politicking

Representing and coordinating

Networking Liaison Source: Adapted from Yukl 1994.


3.3.6 Quinn’s (1988) Framework

Researchers have attempted to define leadership in terms of portfolios of roles. Each of

these scholars have included leadership roles that seem to be in contradiction with each

other and none has developed an integrated framework to address these issues. The

theorist who has formulated a framework of leadership that addresses the issue of

contradiction is Quinn (1988).

Quinn challenges traditional management theories that managers should be classified in

either one category or the other. These theories suggest that managers are either

autocratic or democratic (Bass 1990), people-oriented or task-oriented (Likert 1977),

theory X or theory Y (McGregor 1960), transactional or transformational (Burns 1978).

Rejecting such categorisation, Quinn proposed that effective leaders must fit into all

four quadrants of the “Competing Values Framework”. Effective leadership requires a

balancing and simultaneous mastery of contradictory capability (Quinn and Cameron

1988) (refer Figure 3.1).

The Competing Values Framework was developed to help understand leadership

necessary for organisational effectiveness. Four interrelated models are identified within

the framework. Two leadership roles are grouped within each of four quadrants. The

upper quadrant relates to the open system theory and defines two leadership roles as the

innovator role and the broker role. Moving to the lower right quadrant, two more

leadership roles are specified in accordance with the rational goal model namely the

producer role and the director role. The lower left quadrant is based on the internal

process model and it has the coordinator role and the monitor role specified in that

quadrant. The upper left quadrant based on the human relations model have within that

quadrant, the mentor role and the facilitator role.

58


Figure 3.1

Competing Values Framework of Leadership Roles

l Fl

ex

ibili

ty

Open Systems Model Human Relations Model

Internal Focus External Focus

Innovator Role Creative, Clever

Mentor Role Caring, Empathetic

(Shows Consideration) (Envisions Change)

Broker Role Resource-Oriented Politically Astute

Source: Adapted from Quinn 1988 and Hooijberg and Quinn 1992.

Quinn (1988) argued that the need to balance of the diverse managerial roles is the key

to being an effective manager. Each of roles in Quinn’s (1988) Competing Values

Framework has a competing role. If the manager is strong on the innovator role,

Quinn’s theory argues that the same manger must be equally strong on the competing

role of monitor. “Managers cannot achieve effectiveness by emphasising two or three

roles while ignoring the others” (Quinn 1988, p.106). The most effective managers must

perform diverse roles that include a degree of contradiction or paradox (Denision,

Hooijberg and Quinn 1995). There are considerable studies that support the concept that

managers who perform multiple roles are more effective than those who do not (e.g.

Mintzberg 1973; Blake and Mouton 1985).

Con

tro

(Acquires Resources)

Producer Role Task-Oriented Work-Focused

(Initiates Action)

Director Role Decisive Directive

(Provides Structure)

Coordinator Role Dependable, Reliable (Maintains Structure)

Monitor Role Technically Expert,

Well-Prepared (Collects Information)

Facilitator Role Facilitates Interaction

(Process-Oriented)

Internal Process Model Rational Goal Model

59


3.3.7 Synthesis of Executive Leadership Roles

Researchers like Hart and Quinn (1993) proposed the model of executive leadership

roles built upon the Competing Values Framework (Quinn 1988) and associates (e.g.

Quinn and Rohrbaugh 1983; Quinn and Cameron, 1988). They reviewed the concept of

competing values and other famous theorists including Donalson and Lorsch (1983),

Drucker (1973), Katz (1974) and Mintzberg (1975). Figure 3.2 illustrates the executive

leadership roles developed by other researchers plotted on the Competing Values

Framework.

Figure 3.2

Executive Leadership Roles Plotted on Competing Values Framework Flexibility

Organisation (D+L) Thought man (D)

People man (D) Conceptual skill (K)

Human skills (K) Entrepreneur (M)

Monitor (M)

Disseminator (M) Spokesman (M)

Front man (D)

Liaison (M) Liaison (M)

Leader (M)

Internal Focus External Control

Figurehead (M)

Product market (D+L) Capital market (D+L)

Technical skills (K) Action man (D)

Negotiator (M) Disturbance handler (M)

Resource allocator (M)

Predictability

Source: Hart and Quinn 1993, p. 550.

D= Drucker (1973); M=Mintzberg (1975); K= Katz (1974); D+L= Donaldson and Lorsch (1983).

60


Based on the integration of literature reviewed in this section, four fundamental roles for

CEOs, which match all four quadrants of the Competing Values Framework, was

detailed by Hart and Quinn (1993) (refer Figure 3.3). Each of the quadrants of the

models can be considered as “a domain of action”, “entailing a particular demand of the

firm” with “ a corespondent role of top management” (Hart and Quinn 1993, p. 551).

The details of each role are also briefly described in Table 3.4.

Figure 3.3

Executive Leadership- A Model of Competing Roles

Flexibility

Domain: Organisation Domain: Future

Demand: Commitment Demand: Innovation

Role: The Motivator Role: The Vision Setter

Internal Focus External Focus

Domain: Operating System Domain: Market

Demand: Efficiency Demand: Performance

Role: The Analyser Role: The Task Master

Predictability

Source: Hart and Quinn 1993, p. 552.

61


Table 3.4

Summary of Four Executive Leadership Roles

Executive

Leadership Roles Definition Descriptions

Vision setter Strategic direction and

new product

Creating a sense of identity and mission; Compelling the vision of

future; Spending considerable time on monitoring external

environments; Analysing competitors and markets; Interacting

with internal and external parties

Motivator Development of people

and identity

Translating the vision into the core concepts; Creating a sense of

excitement within the organisations; Challenging people to gain

new competencies and achieve higher level of organisations.

Analyser Management of ongoing

operation

Focusing on efficient management of internal operating system;

Critical reviewing and evaluating proposed projects; Forcing

functional managers to think new ways; Integrating conflicting

functional perspectives in the interest of total organisations.

Task master Achievement of market

plans

Concerning organisational performance and results; Serving the

full range of external stakeholders related with organisations;

Influencing decisions made by lower levels by contributing

specific knowledge; Focusing on getting job done today.

Source: Developed from Hart and Quinn (1993).

3.3.8 Leaders’ Behavioural Complexity

The concept of behavioural complexity was introduced by Denision, Hooijberg and

Quinn (1991) in their discussion of leadership paradox management. Behavioural

complexity is defined as “the ability to act out a cognitively complex strategy by

playing multiple, even competing roles, in a highly integrated and complementary way”

(Hooiberg and Quinn 1992, p. 164). The notion of behavioural complexity suggests that

the more effective managers will play more competing roles, and play them to a greater

extent, than less effective managers (Hooiberg and Quinn 1992, p. 165). The empirical

and theoretical studies investigating the concept of behavioural complexity are reviewed

in this section.

62


Beginning with the study of Denision, Hooijberg and Quinn (1991) who examined the

behavioural complexity of 176 public utility mangers and found that the effective

managers were more behavioural complex than ineffective managers. They measured

the perceptions of the managers’ subordinates to assess leadership behaviours of the

managers and then used the perceptions of managers’ superiors to split them into

effective managers and ineffective managers.

Quinn, Spreitzer, and Hart (1992) studied leaders from a Fortune 10 company and found

that leaders who balance competing demands well by performing multiple leadership

roles do better than leaders who focus on one demand over another.

Some studies have shown a link between behavioural complexity and performance.

Bullis (1992) examined the behavioural complexity of company commanders who

participated in combat training exercises at the army’s National Training Centre and the

impact on both leader and company effectiveness. Although he found that behavioural

complexity had a positive effect on leader effectiveness, he did not find a direct effect

on company effectiveness. The impact of behavioural complexity on company

effectiveness was rather indirect (and may be longer term) through leader effectiveness.

Similarly, in a study of 916 CEOs from a large metropolitan area in the industrial

midwest of the United States, Hart and Quinn (1993) found support for the assertion

that the ability to play multiple and competing roles enhances better firm performance.

The firms with CEOs having higher behavioural complexity produced the best firm

performances particularly in respect to business performance and organisational

effectiveness. The relationships held regardless of the firm size or variations in the

nature of the organisational environments.

Zakliki (1996) conducted another piece of empirical work on behavioural complexity by

replicating Hart and Quinn’s (1993) work in Australia and concluded that there is no

association between CEOs with behavioural complexity and higher performing firms.

However, with respect to his modified instruments he did find behavioural complexity

had a positive relationship with organisational effectiveness and business performance

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for firms that were pursuing some types of strategies. His findings also showed no

relationship between behavioural complexity and financial performance regardless of

situational factors. He argued that the inconsistencies between his study and Hart and

Quinn (1993) may be due to the sample and the nature of instruments.

Hooijberg (1996) examined the perceptions of the leader’s superiors, subordinates, and

peers of behavioural repertoire and behavioural differentiation of 282 middle managers

from 50 large manufacturing firms and 252 managers from public utilities. His research

showed strong support that leaders who have a broad repertoire of leadership roles and

perform those roles frequently are considered as more effective by subordinates, peers,

and superiors than less complex managers.

Hooijberg et al. (1997) extended the concept of behavioural complexity by placing them

in a comprehensive framework that links behavioural complexity, cognitive complexity

and social complexity in the “Leaderplex model”. The contribution of the Leaderplex

model mainly argues that behavioural complexity is informed by cognitive complexity

and social complexity of leaders. Cognitive complexity and social complexity are of

great importance to first and middle managers and they are of even greater importance

to leaders at the highest levels of organisations.

Recently, Hooijberg and Schneider (2001) linked the behavioural concept and social

intelligence with executive work. They believed that executive leaders who possess high

behavioural complexity and social intelligence are able to develop visions, coordinate

with internal and external stakeholders and view the organisation in the larger social

systems much more effectively.

3.3.9 Summary

This section has described the nature of leadership, the development of the role concept,

the importance of organisational level and the nature of managerial work. Then, the

taxonomies of leadership roles were reviewed followed by the literature on Competing

Values Framework of Quinn (1988), which serves as the foundation for measuring

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behavioural complexity for the purpose this study. Finally, the synthesis of executive

leadership roles and the concept of behavioural complexity were discussed. The next

section investigates CEO attributes that will be employed in this study in relation to

CEO role behaviour to test the relationship between executive leadership and

organisational performance.

3.4 CEO Attributes

CEO attributes are incorporated in this research, and they are important when

explaining the behaviours of CEO. These encompass “ a class of abilities, motivation,

attitudes, and personality traits that CEO brings to jobs” (Zakliki 1996, p.43). Boal and

Whithead (1992) identified that any studies on leaders at the strategic level of the

organisation must focus on both traits and behaviours. They not only have significant

association with organisational performance but also have considerable influence on the

role behaviours. Kotter (1982) is another researcher that articulated the importance of

managerial characteristics in addition to behaviours in any study of CEOs.

There are several studies that examine executives’ attributes and their influence on firm

performance and there are three main approaches. The first is to examine executives’

demographic characteristics (e.g. Bantel and Jackson 1989; Hambrick and Fukutomi

1991 etc.). Another approach is to measure executives’ mindsets and links their

psychological profiles to the subject of interests (e.g. Miller, Droge and Toulouse 1988;

Miller, Kets De Vries and Toulouse 1982; Miller and Toulouse 1986a,b). The final

approach is to investigate executive styles (e.g. Goleman 2000, Ogbonna and Harris

2000).

There is also evidence from a number of leadership studies that emphasise the

importance of the situation or contingency effects on the relationship between executive

attributes and organisational performance. For instance, Gupta’s (1984, 1988) studies

have typically adopted a strategic contingency perspective of executive leadership to

this linkage. The fit between executive attributes and contextual conditions results in

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distinctive firm performance. Ogbonna and Harris (2000) proposed that the association

of leadership styles and performance is mediated by organisational culture.

By inference, this research integrates these three major approaches to examine CEO

attributes with respect to role behaviour and corporate performance. CEO attributes are

organised into demographic characteristics, personality traits, and leadership styles. The

relevant and simple measurable attributes are selected to capture the significant concepts

for the purpose of research. The subsequent section reviews each of these attributes in

more detail.

3.4.1 Demographic Characteristics

Leader’ demographic characteristics have often been studied in the management

literature since the access to the data is easily validated through alternative sources and

provide great objectivity. Upper echelons theory suggests that leader characteristics

reflect executives’ cognitive and knowledge base (Hambrick and Mason 1984). As

such, Finkelstein and Hambrick (1996) argued that managerial characteristics have been

considered as a valid predictor of strategic choices and consequently organisational

performance. Demographic studies are reviewed in this section including those on age,

formal education, functional background, work experience, industry experience, CEO

tenure, and origin of appointment respectively.

3.4.1.1 Age

Several early studies attempted to investigate the differences in age between leaders and

followers, leaders and non-leaders (Bass 1990). Bass further pointed out that a review of

the study of leaders’ characteristics in 1948, ten studies reported a positive and eight

studies showed a negative on the relationship between leadership effectiveness and their

age. The relationship between age and leadership effectiveness is considered to be

equivocal.

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However, there are some studies that articulate the relationship between age and firm

performance. For instance, managerial youth are positively related to corporate growth.

They are more likely to have greater learning capabilities and likely to be more flexible

and risk taking (Child 1974). Hambrick and Mason (1984) suggested that firms with

older managers are less inclined to pursue risky strategies than those with younger

managers in a given industry and to have a consequent affect on firm performance.

Sambharaya (1989) suggested that firms should consider the selection and promotion of

younger executives into the upper echelon. However, a recent study by Kitchell (1997)

found that innovative firms are more likely to have older managers in a Canadian

context. She argued that younger executives might lack the credibility and the stability

of long-term commitment to achieve a radical change.

Other studies have shown that older managers are less able to evaluate new ideas

quickly and have less confidence in their decisions (Taylor 1975); certain learning

abilities such as memory declined with age (Burk and Light 1981); older executives are

more concerned with security both financial and career security (Carlsson and Karlsson

1970).

3.4.1.2 Education

Educational background of executives has been typically utilised as an indicator of that

person’s value, cognitive capacity (Daellenbach, McCarthy, and Schoenecker 1999),

knowledge, and skill base (Hambrick and Mason 1984). Bass (1990) concluded from an

extensive review of literature that a number of early studies showed a positive

relationship between education and leader effectiveness (p.80).

In the past decades, several studies have indicated that the education level of top

executives results in firm innovation. For instance, Bantel and Jackson (1989) found

that more highly educated managers are likely to generate creative solutions to the

complex problems associated with organisational innovations. CEOs who have

completed MBA programs lead firms who have more profitability than those without

such CEOs for high technology organisations (Hambrick, Black and Fredricksons

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1992). Wiersema and Bantel (1992) observed that CEOs with a high level of education

are associated with firm innovativeness in the banking industry.

Similarly, some studies provide evidence that higher educated executives are important

to venture performance (Robinson and Sexton 1994). Entrepreneurs also perceive the

importance of educational background and training as a critical factor for management

success (Yusuf 1995). However, there is also evidence that the educational level of

entrepreneurs is negatively associated with sales growth in small and medium sized

firms (Tan and Tay 1994).

Brockhaus (1980) documented that the lower level of education of the successful

entrepreneur contributed to their greater efforts to set up a successful business, these

successful entrepreneurs actually having an average number of years of education,

which is less than the requirement to obtain a high school degree. Frinkelstein and

Hambrick (1996) argued that the effect of educational background and firm

performance are not clear-cut and are affected by the contingency effects of

environmental and organisational factors.

Another stream of research shows that education implies member status in a socio-

economic group. Bass (1990, p. 83) indicated that “ 1. High socio-economic status was

an advantage in attaining leadership status. 2. Leaders who rose to high-level positions

in industry tended to come from the lower socio-economic strata of society than they

did a half-century earlier. 3. Leaders tended to be better educated now than formerly”.

3.4.1.3 Functional Background

Executives with different functional experiences are likely to differ in their knowledge,

skills, attitudes and perspectives. Dearbon and Simon (1958) asserted that executives

tend to define problems and action primarily in terms of their own functional areas. The

executives’ functional background also affects which problems he/she considers as

important, how these problems occurred, what types of solutions are generated and how

they evaluate these solutions (Bantel and Jackson 1989).

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Hambrick and Mason (1984) categorised functional experiences into two broad groups.

Executives who are related to marketing, sales and product research and development

are categorised as “output functions”. Executives with these backgrounds have more

external focus and emphasis on monitoring and adjusting products and market to

achieve growth. On the contrary, executives with “ throughput functions” such as

production, process engineering, and accounting, have a more internal focus towards

increasing efficiency in the transformation process.

There are considerable studies on functional capabilities of senior executives with

respect to their psychology and perceptions. Gupta and Govindarajan (1984)

demonstrated that managers whose specific functional area is marketing and sales are

positively associated with a tolerance for ambiguity. However, they also found that

there is no linkage between their functional background and their risk-taking propensity.

This is consistent with the study by Hitt and Tyler (1991) who also examined functional

background and risk propensity.

Many studies documented the importance of functional background to the

characteristics of firms. For instance, prospector firms tend to have executives with a

marketing background and very few with a finance background. The research results

also showed 77 percent of CEOs in prospector firms have a functional background in

marketing, R&D and sales as compared to only 10 percent of CEOs in defender firms

(Thomas, Litschert and Ramaswamy 1991). Executives from a marketing and sales, or

R&D backgrounds place more emphasis on growth and search for new opportunities

than executives with a technical background (Hambrick and Mason 1984).

Some investigators examined the importance of functional experience and its effect

upon firm performance (e.g. Miles and Snow 1978; Hayes and Abernathy 1980; Song

1982) and business innovation (Kitchell 1997). For example, Hayes and Abernathy

(1980) documented that functional capabilities of senior executives would significantly

affect the health of orgnisations. Executives with experiences in core functions would

produce superior returns. Kitchell (1997) examined executives’ functional experiences

in Canadian manufacturing firms. She concluded that top executives with an engineering

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background have a highly significant positive effect on technology adoption and

corporate innovativeness.

3.4.1.4 Tenure

CEO tenure is a construct of fundamental importance to organisations and research on

executive leadership. It refers to an indicator of the period that CEO stays in the

position. There are several studies focused on the significance of tenure (Hambrick and

Fukutomi 1991; Miller 1991).

Hambrick and Fukutomi (1991) proposed a comprehensive model of the seasons of the

CEO’s tenure. They argued that significant trends tend to occur on five fronts during

CEO’s time in office. First, CEOs come to the job with a strong commitment to their

paradigms. They have a period of experiment and are more open-minded after early

success. They tend to commit to the most comfortable and effective approach. Second,

they engage in routine learning than they did in their earlier period on the job. Third,

they still acquire more task knowledge but first rapidly and then slowly. As tenures

extend, they tend to reduce dependence on external information in favour of internal

sources. The source of their information becomes narrow and restrictive as their tenures

advance. Fourth, they feel less of a challenge in their tasks and less excitement. Fifth,

CEOs’ power increase with longer tenures. These trends give rise to the distinct patterns

of behaviour, executive attention and ultimately firm performance. This perspective

provides consistent findings with some other studies (e.g. Hambrick and Mason 1984;

Garbarro 1987; Miller 1991).

Several investigators examined the importance of tenure and its effects to firm

performance. For instance, Finkelstein and Hambrick (1990) found a positive

relationship between executive tenure and organisational performance against the

industry average. They concluded that the longer tenures of the executives, the higher

the performance of their firms. Norburn and Birley (1988) demonstrated that the effects

of executives’ tenures depend on the situational conditions. Executives with long

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tenures are negatively associated with firm performance in turbulent environments but

positively associated with firm performance in stable environments

Some studies have also argued that tenure affects negatively on organisational

performance. Hambrick and Mason (1984) suggested that executives who have spent

their entire career in one organisation are more likely to have a limited perspective and

tend to be focused on current products and markets rather than new areas and continue

to pursue persistent and unchanging strategies (Finkelstein and Hambrick 1990).

Moreover, they are significantly more committed to the status quo than those with

shorter tenure (Hambrick, Geletkanycz and Fredrickson 1993). Miller (1991) in his

study of 95 Canadian CEOs concluded that that organisations led by CEOs with long

years of CEO tenure do not perform as well as those in their earlier years. They are less

likely to have appropriate strategies and structures aligned with their environments. He

concluded that CEOs with longer tenure are “stale in the saddle”.

3.4.1.5 Work Experience

This study defines work experience to include the growth of capabilities and skills that

CEOs have developed in their careers both in the current organisation and within the

industry. It also refers to job-related experience rather than general experience.

Hambrick and Mason (1984) identified that career experiences can have a significant

effect on executives’ behaviours.

There is literature examining the importance of experiences in respect to managerial

behaviours and leadership effectiveness. Kotter (1988), based on his research on

executive behaviour, found that the most commonly related to leadership abilities is

career experience particularly those experienced during “one’s post-educational career”

(p.34). Govindarajan (1989) found that extensive work experience contributes to

executive effectiveness.

Griffin (1990) found that managers experience daily pressures by facing a variety of

management challenges and that the individual develops insights including perspectives

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and management skills. Most effective managers learn skills from their education and

work experiences. McCauley (2001) believed that executives who have a high ability to

learn the most from their experience tend not to be autocratic.

Work experience can be an indicator on how effective are the leader behaviours, what

impacts they have had on other organisations and what competences they possess

(McCauley 2001). Howard (2001) pointed out that a person’s work experience serves as

an important preliminary screen for selection to a vacant position. Fiedler (1996)

suggested that organisations should select individuals with work experience and job

relevant knowledge. He also found that more work-experienced leaders contribute to a

better performance under high stressful conditions.

3.4.1.6 Origin of Appointment

The origin of appointment has been discussed widely among researchers in succession

studies (e.g. Zajac 1990; Datta and Guthrie 1994; Lauterbach, Vu, and Weisberg 1999).

The serious questions for firms, especially during changing times, is whether to select

internal candidates or search outside for candidates (outsider versus insider).

Some findings showed that organisations most likely to recruit outside CEOs are the

firms with low pre-succession performance (e.g. Boeker and Goodstein 1993; Cannella

and Lubatkin 1993). CEOs selected from outside the firms are considered to usually

have broader perspectives in that they bring a different set of skills, unique experiences,

new ideas and perspectives to the companies. Young and fast growing firms also

usually need to develop their managerial skills from outsiders who have greater

knowledge of technology and the market (Sambharya 1989). CEOs selected from the

outside tend to make more changes in procedures, structure, and staff than CEOs

promoted from inside firms (Helmich and Brown 1972). Some investigators concluded

that the selection of outside CEOs is associated with better firm performance (e.g.

Warner, Watts and Wruck 1988; Datta and Guthrie 1994).

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On the other hand, internal selection is considered to be the result of a number of

positive outcomes. Howard (2001) noted that internal succession contributes to a better

loyalty climate, improved employee morale, and less cost and time on recruitment.

Similarly, Zajac (1990) has also provided results consistent with Howard. His findings

showed that the selection of CEOs with internal firm experiences tends to be related

with better firm performance and a number of advantages including reduced costs

associated with socialisation, turnover and compensation. Moreover, internal CEO

successions are more frequently found in larger firms because they can develop

management skills from within the firms (Lauterbach et al. 1999). The greater

likelihood of a new CEO being appointed from inside is usually associated with a

greater proportion of insiders on the board and with greater ownership among the board

insiders (Boeker and Goodstein 1993).

3.4.2 Personality Characteristics

Early studies on leadership tended to emphasise the identification of personality

traits, which characterised successful leaders. Scholars of this approach assumed that

successful leaders have certain innate qualities that distinguish them from non-leaders.

Some studies have suggested that personality traits such as personal integrity and self-

confidence are related to effective leadership (see Bass 1990). Miller and Droge (1986)

reported that CEOs in their sample companies differ significantly in their need for

achievement. Their findings showed that the greater the CEO’s need for achievement,

the stronger desire to personally control all company operations and take credit for

company success.

This study focuses on the personality characteristics that are mostly examined by

scholars of executive leadership theory. These comprise, the need for achievement and

the locus of control.

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3.4.2.1 Need for Achievement

Need for achievement is one of the most commonly used characteristics in leadership

studies. Achievement orientation theory was originally developed in the 1940s and has a

great deal of relevance to leadership (McClelland 1961). People who are equipped with

need for achievement are characterized as hard working, competitive, ambitious and

have a desire to master complex tasks (Van Eynde and Trucker 1996). McClelland

(1961) indicated that people with a high need for achievement desire to control events

affecting them. They try to accomplish their objectives in a systematic way and demand

concrete feedback on their performance. Such people prefer difficult tasks in which

success depends on their own ability rather than chance factors that are beyond their

control (Yukl 1994).

Many studies documented the importance of a high need for achievement to firm

effectiveness. For instance, Smith and Miner (1984) found a positive association

between achievement orientation of entrepreneurs and the growth rate of their firms.

Davidson (1989) demonstrated a positive relationship between need for achievement

and willingness to pursue growth among small business owners. Similarly, Papadakis

and Bourantas (1998) reported that CEOs with a high need for achievement in

manufacturing enterprises are positively associated with their innovative behaviours and

their firms’ level of technological innovation.

There are also studies on the CEOs’ need for achievement and firms’ strategic choices

(Miller and Toulouse 1986a), strategy making process (Miller, Droge and Toulouse

1988) and structure (Miller and Droge 1986; Miller and Toulouse 1986a). For instance,

Mile and Droge (1986) found that the CEO’s high need for achievement has a strong

influenced on the structure of the organisation including formalisation, centralisation

and integration. Miller and Toulouse (1986a) concluded that CEOs’ high need for

achievement is correlated to a more analytical, proactive and marketing-oriented

strategy with a more sophisticated and centralised structure. However, they further

argued that executives who have a strong motive of achievement are also more likely to

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accomplish jobs alone and fail to develop a sense of responsibility among subordinates.

In summary, there is evidence that the CEO’s need for achievement is related to role

behaviour and organisational performance.

3.4.2.2 Locus of Control

Locus of control as an executive’s characteristics has been examined by several studies

(e.g. Miller, Kets de Vries and Toulouse 1982; Miller and Toulouse 1986a,b; Papadakis

and Bourantas 1998 etc.). It has been viewed in the literature as an indicator of

managerial effectiveness (Yukl 2002).

Most of the studies examining locus of control used a personality scale developed by

Rotter (1966). People with a strong internal locus of control believe that events in their

lives are within their control. On the contrary, people with a strong of external locus

control believe that events in their lives are outside their control and that events are

mostly determined by luck, fate and destiny.

A number of studies have examined the differences between internals and externals. For

instance, Govindarajan (1989) argued that internals and externals have different

information-processing capabilities. Internals more actively search task-related

information and use that information better than externals. Internal locus of control

managers contribute to effectiveness in case of firm following a differentiation strategy.

Miller, Kets de Vries, and Toulouse (1982) examined Canadian top executives’ locus of

control and concluded that firms, which are led by internals are more innovative,

adaptive and flexible than are firms led by externals. Similarly, Miles and Toulouse

(1986a) conducted an empirical investigation of CEOs in 97 firms and documented that

CEOs with internal locus of control are more effective than externals in term of

innovation, being future oriented and they perform well in dynamic environments.

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Some studies documented the importance of internals and their effects on firm

performance. According to Howell and Avolio (1993) in a study of executives in 77

large financial institutions, they concluded that internals have better unit performance

than do the externals. Miller and Toulouse (1986a,b) found that CEOs with internal

locus of control are associated with high organisational performance such as sale growth

and profitability. Similarly, another study reported a link between internal locus of

control of managers and the success rate of small firms and new ventures (Brockhaus

1980).

Boone, Brabander and Witteloostujin (1996) reported that CEOs’ locus of control is

significantly related to profitability in a cross-sectional study of 39 small firms.

Recently, Boone Brabander, and Hellemans (2000) conducted a follow up study with

these 39 firms and analysed the association between locus of control and long-term

organisational survival. The results provided evidence that 21 percent of the 39 firms

studied in Boone et al. (1996) went bankrupt within 6 years. Among CEOs classified as

internals, only 1 company failed, whereas among the external CEOs 45 percent did not

survive. Boone et al. (2000) concluded that the CEOs’ locus of control is an important

predictor of small firm performance.

3.4.3 Leadership Style

This section briefly reviews the classical leadership theory and then examines other

notable style/behaviour related studies such as theory X and Y, Ohio State leadership

studies, Michigan leadership studies and leadership grid. Leadership studies that include

a contingency approach are also reviewed here such as Fiedler’s leadership contingency

theory (Fiedler 1964, 1967), House’s path-goal theory of leadership (House 1971),

Hersey and Blanchard’s situational theory (Hersey and Blanchard 1988), charismatic

and transformational leadership (House 1977; Burns 1978; Bass 1985).

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3.4.3.1 Classical Leadership Styles

The original concept of leadership style traces back to the seminal work conducted by

Lewin and Lippitt (1938). Their findings suggested that leadership styles could be

classified in terms of how much involvement leaders have with people-related vs. work-

related issues. Many studies into initiating structure vs. consideration and job-centred

vs. employee-centred leadership extended these ideas.

Bass (1990) listed over 30 studies of different leadership styles (see Bass 1990, p. 416

for reviews), and identified an autocratic cluster and democratic cluster. These concepts

draw a distinction between person-related vs. work-related behaviour; many seem to

have the notion of autocracy at one extreme and democracy at the other. The definition

of the two distinct styles can be summarised as follows:

Autocratic: “Leaders make a decision for their group and are concerned with what

is needed to get the job done. Likewise, such leaders discourage subordinates’

contributions to the decision process and pay little or no attention to the subordinates’

needs” (p.417)

Democratic: “Leaders solicit advice, opinion, and information from their followers and

share decision making with their followers. Democratic leaders use their power to set

the constraints within which followers are encouraged to join in deciding what is to be

done” (p.417).

3.4.3.2 Leadership Studies

The nature of leadership styles and integration mode of styles has long been discussed

in the leadership literature. This section briefly reviews only the most notable studies.

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Theory X and Theory Y

McGregor (1960) classified managers as holding one of two basic assumptions about

subordinates labeled Theory X and Theory Y. Typical Theory X managers believe that

people dislike work and will avoid it whenever possible. Therefore, theory X managers

are forced to have strong controls and directions achieved through punishment if people

do not work properly. On the other hand, Theory Y managers believe that people

usually work hard and seek responsibilities provided. People are self-motivated to reach

goals and have the capacity to innovate in solving problems. This theory is more

illustrative of the human relation approach. Accordingly, managers holding Theory Y

assumptions should treat people as if they are responsible and capable of self-control.

McGregor’s theory has considerably less attention for researchers and practitioners

today than in the past. However, his study highlighted with the importance of humanism

in management including the contribution of participative leadership (Dubrin et al 1989).

The Ohio State Leadership Studies

The Ohio State leadership studies undertaken initially by Hemphill and Coons identified

two dimensions of leadership behaviours: initiating structure and consideration.

Initiating structure contains specific task-oriented behaviours such as directing

subordinates, maintaining standards of performance and defining their subordinates’

roles to achieve job accomplishment. Consideration or people-oriented behaviours

generally defines the extent to which a leader has a social relationship and respect for

subordinates’ ideas and feelings. They look out for personal welfare of the group and

put suggestions of the group into action (Bass 1981).

The Michigan Leadership Studies

The University of Michigan studies, which were conducted during roughly the same

time frame as the Ohio State leadership studies had similar goals in terms of identifying

relationships between leader behaviour, group processes and measurement of group

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performance. The Michigan studies came up with two dimensions of leadership

behaviours namely employee-oriented and job-oriented behaviour. Leaders who are

employee-oriented are described as focusing on interpersonal relations and managers

are more supportive and helpful with subordinates. On the contrary, the job-oriented

leaders tend to focus on the technical or task aspect of the jobs. Michigan researchers

strongly favored leaders who are relationship-oriented because they are associated with

higher group productivity and higher job satisfaction (Likert 1967, 1977).

The Leadership Grid

Several researchers have carried out modifications to the Ohio State leadership studies

dimensions. One of the most notable works is Blake and Mouton (1985) from the

University of Texas. They developed a two-dimensional view of leadership style by

proposing a leadership grid based on the styles of concern for people and concern for

production. The grid (refer Figure 3.4) provides perspectives of how to exercise

leadership in pursuit of production with and through others. It also permits leaders to

understand various leadership styles and its consequences.

The grid incorporated nine positions along each axis creating eighty-one different

categories into which a leader’s style might fall. Blake and Mouton concluded that

managers perform best using 9,9 style. The notion of 9,9 style describes managers who

could be both initiate structure and consideration behaviour in the performance of their

managerial duties. They suggested that managers who performed both functions would

be more effective than managers who focused on one function more than the other.

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Figure 3.4

The Leadership Grid (1, 9) Country Club Management Thoughtful attention to needs of people for

satisfying relationship leads to a

comfortable, friendly organisation

atmosphere and work tempo

(9,9) Team Management Work accomplished is from committed people;

interdependence through a common stake in

organisation purpose leads to relationships of

trust and respect

(5,5) Organisation Man Management

Adequate organisation performance

is possible through balancing

the necessity to get out work with

maintaining morale of people

at a satisfactory level

(1,1) Impoverished Management Exertion of minimum effort to get required

work done is appropriate to sustain

organisation membership

(9,1) Task Management Efficiency in operations results from

arranging conditions of work in such a way

that human elements interfere to a minimum

degree

High

Concern for Production Source: Blake and Mouton, 1985, p. 12.

A summary of leadership style/behaviour research is presented in Table 3.5.The

research into this approach culminated in two types of leadership styles/behaviours;

people oriented and task oriented.

Table 3.5

Theme of Leadership Style/Behaviour Research

Ohio State University University of Michigan University of Texas

People orientation Consideration Employee-centred Concern for people

Task orientation Initiating Structure Job-centred Concern for

production

Source: Adapted from Daft, 1999, p. 79.

Con

cern

for

Peop

le

Low 1 2 3 4 5 6 7 8 9

9

8

7

6

5

4

3

2

1 Low

High

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Fiedler’s Leadership Contingency Theory

Fiedler’s contingency model (1964, 1967) proposed that effective group performance

depends on the proper match between the leader’s style and the degree to which the

situation allows the leader to control and influence the subordinates. The key to

Fiedler’s theory is to identify the appropriate combinations of style and situation. To

measure a leader’s style, Fiedler developed an instrument called “Least-Preferred Co-

Worker (LPC) questionnaire. The process involves having the leaders complete the LPC

questionnaire to determine their basic leadership style (note that Fiedler treat

individual’s leadership style as being fix). Next, the situation is evaluated in terms of

leader member relations, task structure, and position power. Fiedler contended that the

better the leader member relations, the more highly structured jobs, and the stronger

positional power influence was a combination which allowed a higher level of potential

leader influence.

House’s Path-Goal Theory of Leadership

Path goal theory developed by House (1971) is a contingency model of leadership that

incorporates key elements from expectancy theory of motivation. The bedrock of

House’s theory is his belief that it is the leader’s responsibility to increase subordinates’

motivation to attain personal and organisational goals. House’s theory defined four

types of leadership behaviours: supportive leadership (showing concern for

subordinates’ well-being and personal needs); directive leadership (letting subordinates

know what they are supposed to do); participative leadership (consulting with group

members and using their suggestions before making a decision); achievement-oriented

leader (setting clear and challenging goals for subordinates). This theory contrasts with

the Fiedler theory who argues that leaders could not change their behaviours. House

assumed that leaders can change their behaviours to match the situation.

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Hersey and Blanchard’s Situational Theory

Hersey and Blanchard (1988) developed one of the most cited leadership theories

concerning situational leadership. Their approach focuses on leadership in situations

and underlies the premise that different situations demand different kinds of leadership.

The characteristics of followers are considered as the important elements of the situation

and which determine what is effective leader behaviour. The relationship between

leader style and follower readiness is summarised into four different leadership styles

including “high task and low relationship: the telling style”, “high task and high

relationship: the selling style”, “high relationship and low task: the participating style”,

“low relationship and low task: the delegating style”. The most effective leadership

style depends on the readiness of followers.

Yukl (2002) believes the strength of situational leadership is the concept of leader

flexibility. Effective leaders need to find out about their subordinates’ needs and adapt

their styles. Situational leadership however has some limitations. Northhouse (1997)

indicated that there have been only a few studies conducted to justify the proposition set

forth by the approach.

Charismatic and Transformational Leadership Style

In the 1980s, leadership research placed a great deal of attention on charismatic

leadership and transformational leadership. There is considerable overlap, while there

are also differences in these concepts.

Beginning with House’s theory of charismatic leadership (1977), more attention began

to be focused on charisma of leaders. A theory of charismatic leadership emphasises on

how leader can create a strong influential impression among subordinates. The

charismatic leaders are likely to have a high self-confidence, a strong need for power

and a strong conviction in their own beliefs.

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Burns (1978) originally proposed the idea of transformational leadership. He described

transformational leadership as a process in which “ leaders and followers raise one

another to higher levels of morality and motivation” (p.20). Burns drew a clear

distinction between transformational leaders who addresses the needs, wants and the

motivations of followers and a power wielder such as Hitler who basically serve his

own needs.

Bass (1985) provided an extension of the prior work to develop a model of

transformational leadership where a leader has ability to inspire subordinates to perform

beyond expectations and to achieve goals beyond the expected outcome. Bass drew a

fairly clear distinction between transformational leadership and charisma. He points out

that movie stars and athletes are charismatic personalities and proposed that charisma is

a key component of transformational leadership, however a leader can be charismatic

but not transformational: He clarified that “charisma is a necessary ingredient of

transformational leadership, but by itself it is not sufficient to account for the

transformational process” (p.31). Transformational leadership emerged from and is

rooted in the studies of scholars such as Burns (1978), Bass (1985), Bennis and Nanus

(1985) and Tichy and De Vanna (1986). The extensive studies found transformational

leadership to be practiced by effective leaders in a variety of industries, and the military.

3.4.4 Summary

This section has described CEO attributes and presented the relevant studies, that

illustrates their impact on role behaviour and organisational performance. The next

section shifts the attention from executive leadership to organisational performance.

3.5 Organisational Performance

The concept of performance assessment is the most salient of debates in the field of

strategic management. Performance is a difficult concept both in terms of definition

and measurement (Meyer and Gupta 1994). There is no absolute indicator for firm

performance. Different researchers use different methods in measuring performance

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(Venkatraman and Ramanujam 1986). These indicators vary according to the goal

setters and the researchers’ expectations (Hofer 1983). The following sections focuses

on various studies of performance measurement followed by methodology issues.

3.5.1 Performance Measurement

The method of performance measurement differs from writers to writers. Katz and Kahn

(1978) classified firm performance in term of efficiency and effectiveness based on his

open system theory. Efficiency refers to the amount of output obtained from a given

input. Effectiveness refers to the acquisition of scarce resources by an organisation.

Typically effectiveness is observed as organisational growth and survival. They also

suggested that the best performing firms tend to be concerned with both efficiency and

effectiveness. This construct has been widely adopted by subsequent researchers (e.g.

Ostroff and Schmidt 1993; Davis and Pett 2002).

Pfeffer (1981) reviewed the literature and concluded that corporate performance can be

classified into the symbolic and subjective domains of activities. The symbolic activities

refer to outcomes pertaining to beliefs, attitudes and values of organisational members

while the subjective activities included budgeting and physical reference. The objective

of this classification is to examine how leaders’ decisions and policy may influence the

domain of firm performance.

Fry and Killing (1986) proposed two sets of firm performance measures. These are

related to the economic performance of business (e.g. growth, profitability and market

share) and organisational aspects (e.g. work attitudes, turnover, and morale). Both of

them are needed in the appraisal process. However, they mentioned that the economic

performance of business may or may not be consistent with the performance of

organisational aspects.

Bennett (1999) reviewed the literature and classified the measures of company

performance as: result-oriented and effort-oriented. The result-oriented performance

measures included sales volume or revenue, return on investment, market shares, and

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assets growths. The effort-based performance measures involved number of potential

customers contacted, number of complaints, and frequency of reports to top

management. This perspective seeks to identify the reasons behind the performance

outcomes.

Conceptually, Vekatraman and Ramanujam (1986) developed an approach to the

measurement of firm performance into three domains. The first domain is financial

performance based on accounting based measures such as return on assets, return on

investment, return on sales, sale growth, return on investment and earnings per share.

These indicators show the current profitability of organisations. The second domain

emphasises operational performance based on non-financial indicators in addition to

financial performance indicators. Measures used are market share position, new product

introduction, product quality, marketing effectiveness, value added manufacturing, and

other measures of technological efficiency. These indicators represent both the growth

and future positioning of the organisation. The third domain focuses on organisational

effectiveness based on stakeholder-based measures such as employee satisfaction,

quality and social responsibility. These indicators examine the non-economic or

stakeholder aspect of performance. This integrative approach based on three domains

has captured the interest of several empirical research (e.g. Hart and Quinn 1993;

Zakliki 1996) and is also consistent with the business model suggested by Meyer and

Gupta (1994). Figure 3.5 illustrates three domains of firm performance developed by

Vekatraman and Ramanujam (1986).

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Figure 3.5

Domains of Organisational Performance

Domain of Financial Performance

Domain of Financial+ Operational Performance

(Business Performance)

Domain of Organisational Effectiveness

Source: Adapted from Venkatraman and Ramanujam, 1986, p. 801.

3.5.2 Methodology Issues in Measuring Organisational Performance

There are different methodology approaches involved in measuring organisational

performance. Subjective measures mostly conceptualise both financial and non-

financial dimensions and are considered as being more biased data. This data is

normally derived from the use of interviews. Whereas, objective measures tend to rely

almost exclusively upon a set of accounting measures or financial reports (Sapienza,

Smith and Gannon 1988) and are usually considered as more reliable and being less

biased data (Miller and Friesen 1989). However, objective data also has some

shortcomings. As discussed by several researchers, objective data such as financial

reports may be lacking a strategic focus (Skinner 1974); failing to show non-financial

performance and operational activities e.g. organisational effectiveness (Venkatraman

and Ramanujam 1986); and may be providing an internal focus rather than an external

focus and have little regard for competitors or customers (Kaplan and Norton 1992).

Kaplan and Norton (1998) identified that no single measurement can in itself provide a

clear performance target or focus attention on the most critical area of business. The

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measures provide limited functional connection with executive leadership and may also

suffer from different time-lag effects of previous executive actions (Yukl 1994).

These shortcomings in traditional measures have encouraged efforts to overcome the

gaps by using an integrated framework of organisational performance and the need to

assess method convergence by using both subjective and objective measures in research

(e.g. Dess and Robinson 1984; Sapienza, Smith and Gannon 1988; Woodridge and

Floyed 1990; Hart and Quinn 1993; Zakliki 1996).

3.5.3 Summary

This section has discussed organisational performance from a variety of perspectives

and also examined methodological issues of measures. The next section reviews the

literature on the contingency factors, which may have considerable influence on both

executive leadership and its association with firm performance.

3.6 Contingency Factors

This section explores the situational variables that may have influence on the

relationship between executive leadership and organisational performance. Hart and

Quinn (1993) suggested that, “to clarify the specific relationships between executive

leadership and firm performance, future research could take a contingency approach”

(p. 570). The contingency requirements are consistent with the study of Finkelstein and

Hambrick (1996), which concluded that top managers do indeed matter on the firm

performance but they are conditioned by environmental and organisational factors. The

contingency variables used in the present research include firm size, environmental

conditions and business strategy.

3.6.1 Size of Organisation

The size of organisation can be measured in various ways but there is no substantial

agreement among researchers on what constitutes a firm’s size. Measures include total

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number of full time employees, total revenue, and asset size. Many researchers have

used the number of full time employees (e.g. Hart and Quinn 1993; Zakliki 1996;

Guthrie and Datta 1997) in their studies because of its simplicity of measurement.

A number of studies have suggested that size of organisation is related to the different

managerial behaviours of managers. Stearns (1987) believed that as firms grow in size,

there are greater pressures for leaders to control and coordinate activities, to implement

new management skills and to provide a significant amount of management time and

effort. Robert (1988) documented that leaders have less time to communicate with

subordinates in large firms as the number of levels in the organisation increase. Griffin

(1990) also pointed out that CEOs retains less of the decision making power in large

firms rather than small firms because of a greater degree of decentralisation.

On the other hand, Robbins and Barnwell (1998) reviewed the literature and argued that

often a small firm is a reflection of the owner’s personality and management. They tend

to have less management problems than do large firms. Small firms are normally

considered as having low formalisation and high centralisation. Managers in small

firms tend to have centralised decision-making and they are able control their firms

through direct supervision.

Organisational size is also viewed as a contingency variable affecting CEO selection. A

number of studies have examined the association between organisational size and the

selection of insiders versus outsiders. However, the research outcomes have provided

mix results. While Dalton and Kesners (1983) argued that large firms have a greater

probability to appoint insider CEOs, Friedman and Sign (1989) found no support for

such arguments. Guthrie and Datta (1997) examined the relationship between firm size

and the age of newly appointed CEOs and they found that small firms are more inclined

to hire younger CEOs since these firms are less formalised and more receptive to

innovations.

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3.6.2 Environmental Conditions

Ansoff (1965) described the relationship between an organisation and its environment

as the “firm is a creature of its environment. Its resources, its income, its problems, its

opportunities and its survival are generated and conditioned by environment (p.108).

Is the relationship between executive leaders and organisational performance

conditioned by environmental variables? Similar to size, environmental conditions have

been considered to be an important contingency in determining how and under what

conditions executives disrupt or sustain the firm activities. Dess and Beard (1984)

indicated that an organisation’s environment constrains and shapes behaviours and

activities within the boundaries of the firms. Top executives operate at the boundary of

the external environments and their organisations (Thompson 1967).

Few researchers have directly investigated the relationship between executive attributes

and environment conditions. However, there are studies identifying indirect linkages.

For instance, Gupta and Govindarajan (1982) examined a relationship among strategy,

managerial characteristics and performance. He found a significant relationship between

the managers’ willingness to take risk and environmental uncertainty. Miller and

Toulouse (1986b) conducted an empirical investigation of CEOs’ personality traits with

the strategies, structures and performance in small firms. He concluded that CEOs with

an internal locus of control are innovative and related to all indicators of performance in

firms when operating in dynamic environments. Papadakis and Bourantas (1998)

reported that CEOs with a high need for achievement are positively related with

innovative behaviours. Innovative CEOs have a greater influence on technological

innovation particularly in dynamic environments.

Any study on the extent to which executive leadership influences on organisational

performance under different environmental conditions needs to be able to measure

environmental dimensions.

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3.6.2.1 Dimensions of the Environment

This section reviews several theoretical and empirical studies derived from many

scholars and researchers. Various concepts and measures to classify the environmental

dimensions are used according to their perspectives. Beginning with the study of Emery

and Trist (1965), which developed a model that identified four kinds of environment

that an organisation must face. These are as follows:

1. Placid-randomised environment: It is relatively unchanging. Uncertainty is low.

2. Placid-clustered environment: It is slowly changing. Forces in the environment link

to each other.

3. Disturbed-reactive environment: There are many competitors. It is more complex

than the previous two environments.

4. Turbulent environment: It is most dynamic. Uncertainty is high.

Thompson (1967) suggested that an organisation’s environment could be viewed along

two dimensions, which determine the level of uncertainty faced by the organisations.

The two dimensions of the environment are labelled: degree of change, and degree of

homogeneity.

1. The degree of change is the extent to which the environment is relatively stable or

dynamic.

2. The degree of homogeneity is the extent to which the environment is relatively

simple or complex.

Child (1972) identified three dimensions of environment in his research. They are

labeled as:

1. Complexity: the heterogeneity and range of environment elements.

2. Variability: the degree of change and frequency of change.

3. Illiberality: the availability of resources in the environment.

Mintzberg (1979) classified the environment based on four characteristics labelled:

1. Stability: a range of environments from stable to dynamic.

2. Complexity: a range of environments from simple to complex.

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3. Market diversity: a range of markets from integrated to diversified.

4. Hostility: a range of environments from munificent to hostile.

Aldrich (1979) proposed a model based on six dimensions of the organisational task

environment derived from an extensive of literature review of population ecology and

resource dependence theory. His typology assumed the existence of an objective

environment and that prediction of its impact on the firm was possible. The six

dimensions were:

1. Environment capacity: the relative level of resources available to organisations.

2. Environmental homogeneity-heterogeneity: the degree of similarity or differentiation

between environmental elements.

3. Environmental stability-instability: the degree of turnover in the environment factor.

4. Environmental concentration-dispersion: the degree to which resources are evenly

distributed over the environment range or concentrated in specific locations.

5. Domain consensus – dissensus: the degree to which an organisation’s claim to a

particular domain is disrupted or recognized by other organisations.

6. Environmental turbulence: the degree to which environments are being disturbed by

the increasing rate of environmental interconnection.

Aldrich (1979) provided the theoretical basis for the subsequent research by Dess and

Beard 1984. Dess and Beard (1984) operationalised their environment dimensions by

using factor analysis on industry-level secondary data to synthesize Aldrich’s six

dimensions to the following three categories: Munificence (capacity), Complexity

(homogeneity- heterogeneity, concentration-dispersion) and Dynamism (stability-

instability, turbulence). These constructs have also found the considerable support from

the study of Rasheed and Prescott (1992).

Sharfman and Dean (1991) developed an alternative approach for classifying

environment. Specially, their measures capture many of the environmental pressures

perceived by senior managers. They conceptualised three dimensions of the

environment as follows:

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1. Complexity: the level of complex knowledge that is required to understand

environment.

2. Instability or Dynamism: the rate of unpredictable environmental change.

3. Resource Availability: the level of resources from the environment available to

organisations.

Zakliki (1996) also reviewed the extensive literature in this stream (e.g. Emery and Trist

1965; Child 1972; Aldrich 1979; Ansoff 1979; Dess and Beard 1986;) and

conceptualised the environmental conditions into four categories in his study. They are

as follows:

1. “Uncertainty or Dynamism related to degree of turnover and change of the

environment, which enhance the level of unpredictability.

2. Munificent or Capacity refers to the level of resources in the environment for the

success and survival of an organisation.

3. Complexity or Heterogeneity refers to the degree of similarity or diversity among

environmental forces and elements.

4. Hostility or Illiberality refers to degree of threat from key competitors and the way

they enact to each other” (p.84).

3.6.3 Business Strategy

The word strategy derives from Greek verb stratego, defining “ to plan the destruction

of one’s enemies through effective use of resources” (Wren 1994, p.423). Chandler

(1962) provided a broad meaning of strategy as “ the determination of the basic long-

term goals and objectives of an enterprise, and the adoption of courses of action and the

allocation of resources necessary for carrying out these goals” (p.13). Viewed from

another perspective, different tasks of executives result from organisational goal and

objectives. Kotter (1982) noted that the different types of strategies pose different task

demands.

Some studies (e.g. Gupta and Govindarajan 1984; Govindarajan 1989; Thomas et al.

1991) found that the alignment between firm strategies and managerial characteristics

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contributes to high firm performance. They indicated that superior firm performance is

achieved when managerial characteristics fit with the strategies of organisation.

Organisations pursue different strategies because their implementations require different

skills, values and the knowledge on the part of executives (Gupta 1984).

3.6.3.1 Strategies and Managerial Characteristics Research

A number of studies attempted to investigate the relationship between strategies and

managerial characteristics. For instance, managers who pursue differentiation strategies

are likely to have greater risk-taking propensities and higher internal locus of control

than those who pursue the cost leadership strategies (Miller and Toulouse 1986a). Smith

and White (1987) found an association between CEOs’ functional backgrounds and the

type of firm diversification. Govindarajan (1989) reported a significant relationship

between executives’ functional background and firm’s competitive strategies. The

functional areas in which CEOs have the most experience have consistently been

considered as a major influence on the strategic choices that they make (Finkelstein

1992; Michel and Hambrick 1992).

Table 3.6 illustrates previous studies between strategy dimensions and executive

characteristics. Different investigators utilised different strategy classifications and

different characteristics. Zakliki (1996) observed that it is difficult to compare the

results from the studies and find consistent findings.

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Table 3.6

Strategic Dimensions and Characteristics Studies

Researchers Strategic Dimensions Examined Executives Characteristics

Miles and Snow 1978 Prospector, Defender Functional background

Analyser, Reactor

Snow and Hrebiniak 1980 Prospector, Defender Functional knowledge

Analyser, Reactor

Porter 1980 Competitive strategy Marketing and creativity skills

Cost leadership

Differentiation

Focus

Miller, D., Kets De Vries, M., and

Toulouse, J. 1982

Corporate strategy –making Locus of control

(risk-taking, proactive, innovative,

futurity)

Gupta 1984 Diversification, Industry experience, Risk-taking,

SBU strategies: Porter (1980); Self and other directness, Functional

background, Interpersonal oriented Strategic mission

Gupta and Govindarajan 1984 Strategic Mission Tolerance for ambiguity

SBU strategies: Build, Harvest Willingness to take risk

Experience background

Miller and Toulouse 1986 (a) Innovation, Differentiation Flexibility, Locus of control

Focus, Strategy making Need for achievement

Miller and Toulouse 1986 (b) Porter’ s competitive strategy; Locus of control

Cost leadership, Differentiation, Focus

Govindarajan 1989 Porter’ s competitive strategy; Locus of control, Functional

Cost leadership, Differentiation, Focus background, Industry familiarity

Miller, Droge, and Toulouse 1988 Strategy -making process Need for achievement

Thomas and Ramaswamy 1989 Prospector, Defender, Age, Tenure,

Analyser, Reactor Functional background

Miller 1991 Porter’ s competitive strategy; CEO tenure

Cost leadership, Differentiation

Focus; Innovative, Marketing

Thomas and Ramaswamy 1996 Prospector, Defender, Functional background, Age

Analyser, Reactor Educational level

3.6.3.2 Typologies of Strategies

Thomas and Ramaswamy (1996) noted that “the central role of managerial influence is

best reflected in typology of strategic orientation” (p.250). Strategy typology is

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beneficial because it captures the important features of “separate, specific situations and

their major commonalities to facilitate the study of general strategic patterns” (p.250). It

also reflects the behaviour of the organisation with respect to its environment and

activities within a firm.

Several studies examine the linkage between strategy typologies and managerial

characteristics but there is still a lack of consensus in terms of strategic context.

However, there are some strategy typologies, which are widely recognised both for

theoretical and empirical research. This section reviews three dominant

conceptualisations including the Mile and Snow (1978) strategies, the Porter (1980)

generic strategies and the Minzberg (1998) generic strategies as well as reviewing

organisational life cycle which portrays the changing business situation of firms.

The typologies of Miles and Snow (1978) have been instrumental in identifying some

major classes of strategic profiles. Several research studies have utilised Miles and

Snow (1978) dimensions for the study of managerial characteristics (e.g. Thomas and

Ramaswamy 1989, 1996), of environmental scanning activities (Hagen and Amin 1995)

and of the relationships among strategy, distinctive competence and firm performance

(Snow and Hrebiniak 1980).

Miles and Snow (1978) identified four basic types of organisational strategies. These

strategies are based on organisational adaptation to three distinct problems:

entrepreneurial, engineering, administrative, and to how an organisation interprets its

external environments. These strategies are described as follows:

1. Defender strategy: Defenders are firms with narrow product-market lines. Top

executives do not tend to search for new opportunities. They are expert in their

firms’ limited area of operations and pay attention on improving the efficiency of

their existing ones.

2. Prospector strategy: Prospectors are firms continually searching for product

innovation and new market opportunities. The firms are proactive and creative

rather than reactive.

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3. Analyser strategy: Analysers operate in two types of product and market areas, one

stable and one variable. In the stable area, firms operate routinely through the formal

structure and process. In the volatile areas, innovation is the focus. Top executives

monitor competitors closely seeking new ideas and then adopt the promising ones.

Analysers seek both stability and flexibility.

4. Reactor strategy: Reactors lack a consideration of a strategy-structure relationship.

Top executives frequently perceive uncertainty of environments but their response

to environmental pressures tends to be piecemeal and ineffective.

Despite the many strategy typologies developed to categorise strategies, Porter’s (1985)

typologies have been dominant in strategic management literature. Many researchers

(e.g. Gupta 1984; Miller and Toulouse 1986b) have utilised this type of strategy

typology. According to Porter, strategies that allow firms to gain competitive advantage

derive from three different types of strategies: cost-leadership, differentiation, and

focus.

1. Cost-leadership strategy emphasises on producing standardized products at very

low per unit cost for a broad customer base. An organisation strives to have the

lowest costs in its industry.

2. Differentiation strategy emphasises on producing products and services that are

truly unique and different in the perceptions of the customers. An organisation

competes on the basis of providing different products or services.

3. Focus strategy emphasises on cost and differentiation advantage but in a narrow

customer segment. It concentrates on serving a marketing niche.

Mintzberg (1998) developed an alternative strategy typology that reflects the

complexity of competitive environment. He proposed two broad categories of strategies:

Differentiation, and Scope.

1. Strategies of differentiation can be distinguished in six basic ways. Differentiation

by price is a modification of Porter’s cost leadership. An organisation differentiates

product by charging below average market prices. Differentiation by image is a

strategy in which an organisation creates a certain image in customer’s perception.

The strategy of product support emphasises customer support services such as 24-

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hour delivery, after sale service. Differentiation by quality is a strategy in which an

organisation attempts to deliver higher reliability and performance at a comparable

price. The strategy by design emphasises on providing customers a wider selection

of product features and different designs. Finally the undifferentiated strategy

describes an organisation with no basis on differentiation.

2. Scope strategies are based on a demand-driven concept. These strategies include

unsegmentation, segmentation, niche and customising.

The organisational life cycle is also a useful framework for executives to evaluate their

firms’ position in the market and may impact on their managerial behaviours. The

stages of life cycles are (Benett 1999):

1. Birth is characterised with establishment of firm, less formal structure, short-term

plan, and simple administrative systems. Managers tend to decide personally and

supervise all activities.

2. Growth is concerned with the expansion of firms, hiring more staff, emergence of

bureaucracy, product and market development strategies and sharing decision-

making by executives.

3. Diversification is characterised by the expansion of firms in other industries and

geographical regions. Decision-making is increasingly delegated to decentralised

units.

4. Decline is characterised by a resistance to change, organisation inflexibility, aging

senior managers, and unwillingness to take risk. Firms stand between failure and

revival through reengineering or merger.

3.6.4 Summary

This section has discussed three contingency factors namely size of organisation,

environmental conditions, and business strategy. Several empirical studies suggest these

situational variables have considerable influence on the relationship between executive

leadership and organisational performance and also may impact on leadership roles and

managerial characteristics. The next section deals with the literature on the link between

executive leadership and organisational performance.

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3.7 Executive Leadership and Organisational Performance

The importance of executive leadership on organisational performance has been a

controversy in management circles for many years. Pfeffer (1977) argued that top

leaders have relatively little observed effects on performance outcomes. First, the

selection process for managers’ chosen for leadership positions results from a

homogeneous group of persons who have been previously promoted. Second, the leader

is embedded in a social system that constraints behaviour. Finally, the leader is also

constrained by the external forces in which the organisation operates.

Another viewpoint was declared by House (1988) and Finkelstein and Hambrick

(1996). They articulated that top leaders do indeed matter on firm performance but may

be conditional on several factors such as “the leader’s ability, follower’s ability,

organisational form, technological constraints, and environmental demands” (House

1988, p. 248).

Fiedler (1996), one of the most respected scholars on leadership, has provided a recent

treatise on the importance of leadership. He argued that leadership effectiveness is a

major determinant of the success or failure of groups and organisations. In order to

judge the importance of leaders on performance, Yukl (2002) argued that changes in the

CEOs should be associated with changes in the performance of organisation. However,

the more relevant questions according to Romanelli and Tushman (1988) is not that the

importance of leader but under what conditions does it matter to the organisation and

how much of a difference does leadership make on performance outcomes?

Widely cited cases of a direct relationship between leadership and firm performance

have been found in a number of succession studies. There are two main sources of

empirical studies (Lieberson and O’ Corner 1972, Salancik and Pfeffer 1977), which

have been often utilised by researchers arguing that leaders have minimal impact on

organisational performance (Day and Lord 1988). Liberson and O’ Corner (1972)

conducted a study of 167 organisation in 13 industries from 1946-1965. They analysed

the influence of environmental, corporate and leadership factors on sales, earnings and

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profit margins. From their longitudinal analysis, they concluded that more variance in

firm performance could be related to environmental factors than to leadership. Salancik

and Pfeffer (1977) investigated the influence of mayors on income and expenditures

variables in thirty US cities during the year 1951-1968. They concluded that mayors

exert little influence on firm performance.

These two studies have been criticised for methodological problems by many

researchers (e.g. Wenier 1978; Day and Lord 1988, Finkelstein and Hambrick 1996).

For instance, not controlling for organisational size, not allowing for the lag time for

leadership effect to occur, failure to consider the ability of leader, the order of entry of

the independent variables, and assuring the level of analysis of dependent variables.

These researchers believed that when the methodology was properly addressed, these

two studies may indicate much larger leadership impact on organisational outcome.

Weiner and Mahoney (1981) replicated the study of Liberson and O’Connor and found

that leadership accounts for more variance in firm performance than do many

organisational and environmental variables. They indicated the differences between

their findings and original study was a result of the different criterion measures and

statistic procedures used.

Similarly, Smith, Carson, and Alexander (1984) demonstrated evidence that leadership

definitely make a difference in a study of senior United Methodist ministers over a

twenty year period, from 1961-1980. They separated leaders based on an effectiveness

criterion. The effective leaders are consistently related to improved organisational

performance across several different organisations.

There is also other relevant succession literature that attempts to demonstrate the impact

of leaders on corporate performance including insider and outsider succession (Datta

and Gutherine 1994), succession planning and predecessor effects (Zajac 1990), prior

experience and characteristics of the successor (Hambrick and Mason 1984).

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Additionally, a review of previous executive studies found that the linkage between

executive leadership and major changes in organisational performance also depends

partly on the evolution stages of the organisations (Tushman and Romanelli 1985).

They argued that executive leadership is a critical mechanism in mediating forces for

stability and changes in organisations. How executives manage and deal with them is a

crucial determinant of organisation success or failure.

3.7.1 Summary

The previous studies indicate that research into leadership has gone through periods of

skepticism and generated conflicting results. This is one justification for the present

study to investigate the nature of the relationship between executive leadership and

organisational performance in a Thai sample. This research seeks to test whether

executive leadership act as accelerators or deterrents in selected Thai organisations.

3.8 Chapter Summary

The literature reviewed in this chapter has provided the theoretical foundation for this

research which covers theories and relevant studies of executive leadership roles, CEO

attributes, corporate performance, contingency factors namely firm size, environmental

conditions and business strategy. Most of relevant theories, and variables that have been

examined in the literature review were developed in Western countries. Very few

research studies have focused on either executive leadership or performance

measurement in a developing country such as Thailand. This research thus was designed

to overcome the shortcomings and gaps in earlier research, and to examine the

relationship between executive leadership and firm performance particularly in publicly

listed companies of Thailand. The next chapter presents a theoretical framework, which

builds upon the previous work, but tries to overcome its deficiencies, both at the

conceptual and the empirical level.

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Chapter 4: Theoretical Framework, Research Questions and Hypotheses

Chapter 4

Theoretical Framework, Research Questions and Hypotheses

4.1 Introduction

This chapter presents a theoretical framework developed from the relevant literature

reviewed in chapter 3. Seven key research questions and seven hypotheses that will be

used for conducting the research in this thesis are specified and described in detail. The

chapter is organised into four sections. Section 4.2 proposes a theoretical framework

built on previous research. Section 4.3 elaborates the key components in the framework.

Section 4.4 presents seven research questions. Section 4.5 generates seven hypotheses

that will be tested for this research.

4.2 Theoretical Framework

The theoretical framework for the present research builds on the framework of previous

studies undertaken by Hart and Quinn (1993) and Zakliki (1996) by including three key

components namely executive leadership (1) that includes CEO role behaviour (1.1) and

CEO attributes (1.2), organisational performance (2) and contingency factors (3).

Figure 4.1 shows the relationship among these key components.

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Figure 4.1

Theoretical Framework

CEO Role Behaviour

• Vision Setter

• Motivator

• Analyser

According to the framework, four important features deserve attention as follows:

Firstly, the framework provides a comprehensive picture of executive leadership by

pertaining a diverse set of CEO attributes as well as CEO role behaviour. This is

consistent with previous research (e.g Kotter 1988; Boal and Whithead 1992) that argue

that studies on leaders at the strategic level of the organisation must focus on both traits

and behaviours.

Secondly, the framework recognizes the multidimensional construct of organisational

performance by incorporating all relevant dependent variables as suggested in previous

research (e.g. Venkatraman and Ramanujam 1986; Hart and Quinn 1993; Zakliki 1996).

Three dimensions are postulated: financial performance, business performance and

organisational effectiveness.

• Task Master 1.1

CEO Attributes

• Demographic

• Personality

Characteristics

• Leadership Style 1.2

Organisational Performance

• Financial Performance

• Business Performance

• Organisational

Effectiveness 2

Contingency Factors

• Size

• Environment

• Strategy

3

Executive

Leadership

1

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Thirdly, the contingency variables are explicitly included in the framework. The focus

of this research is in line with suggestions from previous researchers who identified

three contingency control variables, which may moderate the executive leadership and

organisational performance relationship including size, environmental conditions and

business strategy (e.g. Hart and Quinn 1993; Zakliki 1996). Hart and Quinn (1993)

noted that future research should emphasise a contingency approach in order to clarify

the specific relationship between executive leadership and organisational performance.

Fourthly, the framework was specifically designed to examine executive leadership of

CEOs and their impact on organisational performance in publicly listed companies of

Thailand. More importantly, this research is regarded to be a pioneering study in that no

previous research has investigated CEOs in publicly listed companies of Thailand by

using all the variables depicted in the framework.

4.3 Key Components of the Framework

The theoretical framework shown in Figure 4.1 has three main components.

Sphere 1: Executive Leadership

1.1 CEO Role Behaviour

1.2 CEO Attributes

Sphere 2: Organisational Performance

Sphere 3: Contingency Factors

4.3.1 Sphere 1: Executive Leadership

4.3.1.1 CEO Role Behaviour

Quinn’s (1988) Competing Values Framework provides a theoretical background of

executive leadership roles for this research. Hart and Quinn (1993) synthesised four

executive leadership roles from a range of roles based on the Competing Values

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Framework and it is the Hart and Quinn’s (1993) typology that was adopted for the

present study. Accordingly, this classification encapsulates the following four

fundamental roles.

Vision Setter refers to the role of leader to create a sense of identity and mission and

articulate the firm’s basic purpose and future direction.

Motivator refers to the role of leader to create a sense of excitement and vitality within

the organisation.

Analyser refers to the role of leader to focus on efficient management of the internal

operating system in the interest of serving existing product-markets.

Task Master or “Hands On” Role refers to the role of leader concerned about firm

performance and results.

4.3.1.2 CEO Attributes

The literature has shown that previous empirical studies which examine executives’

attributes and their influence on either firm performance or contingency factors have

followed three main streams: demographic characteristics (e.g. Hambrick and Mason

1984, Bantel and Jackson 1989; Hambrick and Fukutomi 1991 etc.), psychological

profiles (e.g. Miller, Droge and Toulouse 1988; Miller, Kets De Vries and Toulouse

1982; Miller and Toulouse 1986a,b) and executive styles (e.g. Goleman 2000, Ogbonna

and Harris 2000).

The theoretical framework for this research has integrated all three major approaches

rather than use one approach for the present study to examine CEO attributes with

respect to role behaviour, corporate performance and contingency factors. CEO

attributes in this study included demographic characteristics, personality traits, and

leadership styles. The relevant measurable attributes were selected to capture the

significant concepts for the purpose of study.

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Demographic Characteristics:

They include age, level of education, overseas study, holding MBA degree, functional

background, tenure in a position, tenure in a firm, industry experience, overseas work

experience, and origin of appointment.

Personalities Profile:

This study selected personality characteristics that are mostly examined by scholars of

executive leadership theory. These comprise the need for achievement and the locus of

control. This is consistent with Finkelstein and Hambrick’s (1996) argument that more

research is needed to examine both demographic and psychological attributes to better

understand the effects of executives on their organisations.

Leadership Styles:

The literature review has shown that previous research on leadership styles (e.g. Bass

1990) listed over 30 studies of different leadership styles, which led to the concept of

autocratic cluster and democratic cluster. These concepts similarly draw a distinction

between person-related vs. work-related behaviour and many seem to have the notion of

autocracy at one extreme and democracy at the other. For the purpose of this research, it

was decided to adopt two distinct styles, which emerged from the literature review

namely autocratic and democratic as a measure of leadership styles for this study.

4.3.2 Sphere 2: Organisational Performance

Organisational performance has been viewed and measured in many different ways.

Yulk (2002) indicated that researchers tend to assess performance in term of multiple

indicators particularly when the consequence of the leader is being examined. Similarly,

several scholars and researchers also support the importance of multiple indices of

performance (e.g. Miller and Toulouse 1986; Hart and Quinn 1993; Meyer and Gupta

1994; Zakliki 1996; Kaplan and Norton 1998) as the concept is multifaceted.

As discussed in chapter 3, Venkatraman and Ramanujam (1986) provided a schematic

for describing the three domains of organisational performance. This classification of

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performance constructs provides a multiple perspective and a systematic approach to

performance measurement (refer Figure 3.4). The constructs are labeled as follows:

Financial performance: The current profitability of organisation.

Business performance: The growth and future positioning of the organisation.

Organisational effectiveness: The non-economic or stakeholder aspect of performance.

Additionally, subjective and objective measures are utilised in this research. The

subjective measures used are the respondents’ perceptions of the multidimensional

indicators of firm performance. The objective measures used will be obtained from the

data available in the official publications and annual reports. This research seeks to

enhance the degree of correlation between the two sets of data and ultimately establish

construct convergent validity.

4.3.3 Sphere 3: Contingency Factors

4.3.3.1 Size of Organisation

Firm size is used as the organisational control variables. There are various ways to

operationalize firm size including the total revenue, the number of employees, and the

asset size. However, this research utilized the number of employees as the measure of

organisational size to provide consistency with the previous studies (Hart and Quinn

1993; Zakliki 1996).

4.3.3.2 Environmental Conditions

Organisational environments have been characterized by a variety of perspectives. This

study requires the classification of environmental conditions based on a validated

procedure, reliable construction as well as being easy to measure and perceive.

It was decided to conceptualise the environmental conditions into four major measures

for the present research of environmental dimensions providing a coherent framework

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of existing environmental classifications with respect to population ecology

perspectives (e.g. Aldrich 1979; Dess and Beard 1984), uncertainty (Emery and Trist

1965; Child 1972) and business policy (Ansoff 1979). They are as follows:

Dynamism measures environmental volatility.

Munificence measures the abundance of resources in the environment.

Complexity measures inequalities among environmental variables.

Hostility measures the degree of threat among competitors.

4.3.3.3 Business Strategy

The current research adopted Miles and Snow’s (1978) typology to measure business

strategy. Snow and Hrebiniak (1980) articulated that Miles and Snow’s (1978) typology

is the only one that attributes an organisation as a complete system particularly its

strategic orientation. The typology draws on research in sociology, organisation theory,

and behavioural sciences. It also provides a comprehensive classification of

organisational behaviour pertaining major elements of strategy, structure, and process

(Thomas and Ramaswamy 1989, 1996) as well as explains the nature of executive

leadership (Zakliki 1996).

Miles and Snow (1978) grounded their typology on the process of organisational

adaptation to environmental changes. It is based on the strategic choices view in which

top managers’ perceptions define strategy in a variety of industries (James and Hatten

1995; Thomas and Ramaswamy 1996). Besides, it captures the complexity of

organisational behaviour as an open system (Hambrick 1981) and identifies the rate at

which an organisation changes its products and markets (Hambrick 1994). The

classification of strategic types used in the present research is:

Defender refers to the firms that operate with narrow product-market lines and are

expert in limited area of firm operations and focuses on improving the efficiency of

their existing ones.

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Prospector refers to the firms that are continually searching for product innovation and

new market opportunities. They are proactive and creative rather than reactive.

Analyser refers to the firms that operate in two types of product and market areas, one

stable and one variable. In the stable area, firms operate routinely through the formal

structure and process. In the volatile area, innovation is their focus.

Reactor refers to the firms that lack a consideration of the strategy-structure relationship

and their response to environmental pressures is piecemeal and ineffective.

4.4 Research Questions

The relationships depicted in the theoretical framework are used to develop the research

questions. The present research seeks to answer the following seven main research

questions. The first three research questions (question 1-3) relate to the relationship

between executive leadership and organisational performance. Research question 4

relates to the association between CEOs’ behavioural complexity and CEO attributes.

The latter three research questions (question 5-7) emphasise the influence of

contingency factors on executive leadership.

Q.1: Do CEOs make a difference organisational performance?

Q.2: What types of CEOs’ behaviour pattern contribute to higher firm performance?

Q.3: What are the common attributes of CEOs in the high performing firms?

Q.4: What kinds of CEO attributes are associated with higher behavioural complexity?

Q.5: Is the effect of behavioural complexity on organisational performance, universal

or contingent on the situational conditions?

Q.6: Which CEO attributes are associated with high performing firms regardless of

situational conditions including size, environmental conditions and business strategy?

Q.7: Based on this research, which are the important attributes required for CEOs in

different situational settings?

4.5 Hypotheses Generation

This research seeks to examine the relationship between executive leadership and

organisational performance. The contingency factors were incorporated into the

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framework in order to clarify their specific relationships in a Thai business context. In

practice it is not considered possible to cover all possible associations for testing against

data, although the theoretical framework does represent many theoretical relationships.

This research generates seven important hypotheses to permit formal testing of the data

collected from the Thai sample. The hypotheses are formally discussed below:

4.5.1 Research Question 1: Do CEOs make a difference on

organisational performance?

As discussed in chapter 3, the notion that executive leadership is an important

determinant of organisational performance has been well supported by many scholars

(e.g. House and Baetz 1979; Weiner and Mahoney 1981; Smith, Carson and Alexander

1984). However, “the effect of leader can be viewed as a causal chain of variables, with

each intervening variable mediating the effects of the preceding one on the next one”

(Yukl 2002, p. 9). Several researchers argued that executive leaders have considerable

impact on performance through organisational evolution (Tushman and Romanelli

1985), strategy (Chandler 1962), and symbolic aspects of managerial behaviour (Pfeffer

1981; Meindl, Ehrlich and Dukerich 1985). To sum up, they make a difference but on

which specific domain of organisational performance?

In this study, the three domains of firm performance (Venkatraman and Ramanujam

1986) are utilised to capture organisational performance. Financial performance refers

to the accounting-based measures of an organisation (e.g. return on asset, profitability,

cash flow). Business performance refers to market- and operation- based measures (e.g.

market share, sales growth and new product development). Organisational effectiveness

refers to stakeholder-based measures (e.g. employee satisfaction, quality and social

responsibility).

As mentioned by Romanelli and Tushman (1988), executive leaders have timing effects

resulting from their organisational activities. The leaders have an initial impact on the

level of employee commitment and this may result in increased productivity and

eventually effect the financial position of an organisation (Yukl 2002). He argued that

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“the farther along in the causal chain of variables, the longer it takes for the effect to

occur” (p.9). With respect to financial performance, Day and Lord (1988) noted that it is

unrealistic to expect immediate results, suggesting a lag effect between leadership and

profit. Financial performance reflects the short-term profitability of an organisation and

is not immediately influenced by executive leaders but may be influenced over the long

term (Hart and Quinn 1993; Zakliki 1996).

Based on above argument it can be expected that organisational effectiveness is the

most immediate influenced dimension of organisational performance by executive

leadership rather than the market growth or current profitability. The relationship between

executive leadership variables and organisational performance is based on this rationale.

Thus, the following hypothesis is developed:

Hypothesis 1: Executive leadership will have more impact on organisational

effectiveness than on business and financial performance.

4.5.2 Research Question 2 and 5: Behavioural Complexity and

Organisational Performance

The theoretical and empirical research of behavioural complexity that was reviewed in

chapter 3 argued that leaders who are more behaviourally complex (in that they are able

to balance the competing demands of their position) are evaluated as more effective

leaders and also accelerators of firm performance.

There are several studies that utilised a linkage between CEOs’ behavioural complexity

and firm performance (Hart and Quinn 1993; Zakliki 1996). Hart and Quinn (1993)

developed a model of four executive leadership roles and tested their relationships to

several aspects of firm performance with US samples. They indicated that particular

roles played by CEOs are significant predictors of firm performance. Specifically, the

highest performing firms were enhanced by CEOs with a high level of behavioural

complexity -“ leaders who were able to play at a high level all four roles” (p. 569).

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More importantly, they asserted that executive leaders with a high score on all four roles

had a high level of firm performance particularly with respect to business performance

and organizational effectiveness regardless of the nature of their organisational size or

business environments. The findings were considered to be a universal proposition.

The replication of Zakliki (1996) using an Australia sample of companies, found that

there was no association between CEOs with high behavioural complexity and higher

firm performance applying the same instrument and analytical tools. However, his

results with modified instruments and incorporating a contingency approach showed

that CEOs’ behavioural complexity can have a positive relationship with organisational

effectiveness and business performance but this is dependent on either organisational

size or business strategy. However, his findings were unable to show any relationship

between behavioural complexity and financial performance regardless of situational

factors.

The present research permits a further test of Hart and Quinn (1993)’s argument and

also allows a comparison with the results from Zakliki (1996)’s studies with the

relationship between behavioural complexity and organisational performance based on

data collected from the Thai sample.

Thus, the formal hypotheses to be tested are:

Hypothesis 2: High behavioural complexity or the simultaneous use of the Vision Setter,

Motivator, Analyser, and Task Master roles by CEOs will be associated with high

performance on all three performance dimensions namely financial, business, and


Hypothesis 3: High behavioural complexity will be positively associated with all three

domains of organisational performance regardless of contingency factors including size

of firm, environmental conditions and business strategy.

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4.5.3 Research Question 3 and 6: CEO Attributes and Organisational

Performance

In an earlier review of CEO attributes, it was inferred that CEOs with high need for

achievement and internal locus of control may be related to organisational outcomes.

Need for achievement determines a person’s need to meet standards of excellence, to

accomplish difficult tasks and to attain success. They try to accomplish their objectives

in a systematic way and demand concrete feedback on their performance (McClelland

1961). They habitually spend their time doing things better. Wainer and Rubin (1969)

showed that CEOs with a high need for achievement ran organisations that grow much

more rapidly than those of CEOs having low or average achievement needs. Many

studies documented the importance of high need for achievement to firm effectiveness

as cited in chapter 3.

Similarly, the internal locus of control has been viewed as an indicator of managerial

effectiveness (Yukl 2002). People with an internal locus of control perceive their lives

to be controlled by their own actions, skills and abilities. The importance of internals

and their effects on performance has been widely cited. They tend to be adaptive to new

conditions and allow for better organisational performance (Miller and Toulouse

1986a). It can be concluded that these personality variables are likely to affect CEOs by

enhancing their abilities to cope with complex tasks and stressful conditions as well as

to ultimately improve organisational performance.

Another attribute that seems to assist CEOs in managing well within their organisations

would be experience. CEOs’ experience comprises tenure in a position, tenure in a firm

and industry experience. An individual’s experience base is a key indicator of the type

of skills and cognitive bias that top managers bring to their jobs. Generally, experience

helps CEOs to handle responsibilities more effectively. “It strengthens an understanding

of what information will be most diagnostic as well as an understanding of the broad

cost and benefits of various options and the effectiveness of the decision” (Zakliki

1996, p. 102). Kotter (1988) asserted that the most commonly related dimension to

leadership abilities is career experiences.

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Thus, it can be expected that:

Hypothesis 4: Higher performing firms tend to be associated with CEOs who have

particular attributes e.g. high need for achievement, internal locus of control, greater

tenure in position, tenure in firm and industry experience than those in lower

performing firms.

However, it would appear that there are attributes that contribute to organisational

performance irrespective of organisational and environmental context. House and Baetz

(1979, p. 352) pointed out “that there are certain properties of all leadership situations

that are present to a significant degree and relatively relevant, and that there are likely to

be some specific traits required in most if not all leadership situations”. As mentioned

by Gupta (1988), there is a need to examine both universalistic and contingency

conditions for executive attributes as being potentially valid. Some illustrative examples

of universally attributes for leaders are personality stability and industry familiarity

(Bass 1990).

It can be expected that high need for achievement, internal locus of control, and greater

experience gained through longer tenure and industry familiarity are universally

beneficial attributes for CEOs. These special attributes of CEOs should improve, not

worsen organisational performance.

Therefore, the following hypothesis identifies universal propositions for the CEO

attributes.

Hypothesis 5: High performing organisations tend to be associated with CEOs who

have particular attributes e.g. high need for achievement, internal locus of control and

greater experience regardless of organisational size, environmental conditions and

business strategy.

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4.5.4 Research Question 4: Behavioural Complexity and CEO

Attributes

Behavioural complexity is an ability of effective managers who are not only cognitively

complex but who are also able to perform a diverse set of competing roles and

behaviours that circumscribe the requisite variety implied by an environmental and

organisational context (Denison, Hooijberg and Quinn 1995). The notion of behavioural

complexity indicates that more effective managers with diverse roles and skills have the

ability to act out in a highly integrated and complementary way far more than less

effective managers. They will also strike a balance among the various roles that they

play to a greater extent (Hooijberge and Quinn 1992). Boal and Whitehead (1992)

argued that the theory of leadership must consider both behaviour and traits. The ability

to behave complexly demands not only a cognitively complex process but also a

complex set of performance skills.

It can be expected that the capabilities of leaders to have a diversity and balance among

leadership role behaviours in a complex and paradoxical pattern of organisation (Quinn

1988) also demand a high level of job relevant experience and education. Most effective

managers learn and develop their skills from their experience and education (Griffin

1990). Yukl (1989) suggested that executive leaders interact extensively both laterally

and hierarchically within and outside their organisations. The role behavioural demand

of this network and its potential for complexity continues to grow as they develop in

their careers. “Individuals who are effective in large leadership roles often share a

number of career experiences” (Kotter 2001, p. 96). Similarly, Hambrick and Mason

(1984) argued that educational background of executives indicates their knowledge,

skill base and cognitive capacities. The high educational level of executives tends to

generate creative solutions to complex problems (Bental and Jackson 1989) and

promotes a diversity of roles (Blake and Mouton 1985). It can be inferred that education

equips an individual with analytical and technical skills, which are essential to

managing a business.

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One personality attribute that seems to have many associations with behavioural

complexity is Rotter’s (1966) locus of control. Several studies indicated that CEOs with

an internal locus of control tend to be activities oriented (Brockhaus 1980), task-related

information seekers (Govindarajan 1989), high performers in stressful situations

(Anderson 1977), and have innovative behaviours (Miller, Kets de Vries, and Toulouse

1982). Internals believe that they can control outcomes in their lives through their

abilities and skills. This seems to be consistent with the two most important aspects of

behavioural complexity: performing a diverse of leadership roles and having power to

balance among those roles.

Thus, the preceding relationship suggests the following hypothesis.

Hypothesis 6: CEOs who demonstrate greater behavioural complexity will be more

likely to have particular attributes e.g. greater experience, higher level of education,

and internal locus of control than less behaviourally complex CEOs.

4.5.5 Research Question 7: Attributes Required for a CEO Position

As discussed by many researchers in the previous chapter, the appropriate type of leader

required for effective organisational performance is dependent on the contingent

situation including those posed by the organisational and environmental context. The fit

between CEOs occupying the positions and the contingency factors has widely received

attention. For instance, organisations pursue different strategies because their

implementation requires different skills, values and the knowledge on the part of

executives (Gupta 1984). As suggested by Pfeffer and Salancik (1978), organisations

operating in different contexts may recruit leaders with different attributes. It would be

summarised that CEOs’ attributes serve as salient differentiating candidates.

Therefore, the following hypothesis is made.

Hypothesis 7: The qualities required in CEOs will be determined to a large extent by

organisational size, business strategy and environmental conditions.

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4.6 Chapter Summary

This chapter discusses a theoretical framework derived from the literature review in

chapter 3. It also presents the theoretical basis for the variables to be used in the

analysis. The seven research questions drawn from the framework as well as the seven

hypotheses to test the relationship between executive leadership and organisational

performance by incorporating a contingency approach were formally constructed. The

next part of this thesis reports the research methodology developed for the present

research.

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PART THREE

RESEARCH DESIGN

Chapter 5 Research Methodology

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Part three of this thesis describes the research methodology for the present research.

Chapter 5 discusses the population definition, the survey approach, the survey

instrument development, the pre-testing procedures, the data collection procedures, the

instrument measurements and the data analysis methods including the appropriate

statistical analysis techniques.

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Chapter 5: Research Methodology

Chapter 5

Research Methodology

5.1 Introduction

This chapter describes the methodology used in this research, including the population

definition, survey approach, survey instrument development, data collection procedures,

instrument measurements, and data analysis methods.

5.2 Population Definition

This research selected publicly listed companies of Thailand as its original population.

The two main reasons for this selection related to; firstly, the reliability and availability

of objective data for these firms, which is necessary to seek convergent validity on their

performance; and secondly, the need to perform a meaningful comparison with a

previous overseas study.

Since obtaining objective data on organisational performance for the last five years was

required for the present research, the primary concern was to select those companies

that had been listed for at least five years and operated without a rehabilitation plan. To

ensure the exclusion of the companies who did not meet these criteria, the researcher

contacted a SET executive and made phone calls directly to them enquiring on the

availability of their data and status. The companies who were excluded informed the

researcher that they should be excluded because they were under court supervision and

limited to provide any information. According to the SET official website (www.set.or.th)

at the end of year 2002 and also from authorised publications, three hundred and six

companies had been listed for the last five years and had operated in normal

circumstances.

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A further selection criterion was geographic location. The location of the companies’

headquarters was important and relevant to the needs of this research. As the research

approach had to be developed to be consistent with the limited financial resource and

time constraints, the companies with headquarters outside Bangkok, which is the capital

of Thailand, were excluded from this research. In total, fifty-eight companies were

located outside Bangkok and hence were excluded.

As the main purpose of this study is to investigate the most senior executives’ role

behaviour, attributes, leadership style and overall perspective of the entire organisation,

a further selection criterion was the requirement that the company had a single chief

executive. Hence, three companies that were managed by joint CEOs or MDs were

eliminated from this research.

A final selection criterion was the size of the companies. The companies that operated

with less than five employees were considered either as too small or as legal entities.

Hence, one company was excluded from the study.

In summary, two hundred and forty-four publicly listed companies of Thailand were

approached to participate in this research as the selected population (refer Appendix A)

after the application of the following selection criteria:

1. Company listed for at least five years and operating under normal circumstances.

2. Company with its headquarter located in the capital city of Thailand namely Bangkok.

3. Company being managed by a single CEO or MD.

4. Company employing at least five full-time employees.

To obtain valid data in order to apply the selection criteria, an extensive investigation

was undertaken through the secondary sources such as SET authorised publications,

SET official website and if required by approaching the relevant institutions and

companies for necessary information.

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5.3 Survey Approach

The importance of interpersonal relationships and networks within Thai culture and

society means that the use of a mail survey for this research would not be effective.

Discussions were held with a number of Thai researchers, Thai senior executives and

scholars on the main approach to achieve a high response rate and obtain a sufficiently

large number of respondents to allow a meaningful statistical analysis. It was required

that the research approach developed should be respectful of Thai culture and its

customs and traditions. Pongsapich (1998) asserted that Thai society is made up of

positions, which are hierarchically related. Individuals are considered as younger or

older, higher or lower, subordinate or superior and senior or junior, in relation to one

another. The decision was therefore made that the use of personal interviews arranged

with the assistance of a prominent Thai politician and Thai government authorities

would be the most appropriate approach for collecting a large amount of data especially

from the top leaders of publicly listed companies in Thailand.

5.4 Survey Instrument Development

5.4.1 The Questionnaire

A structured questionnaire was used in obtaining data through personal interviews in

this study. The questionnaire was developed in both English and Thai versions. To

ensure the accuracy of translation the Thai version was reviewed by two native Thai

speakers. One reviewer was an Associate Professor from a Thai university in Thailand

who also held a PhD degree from a university in America. Another held an MBA

degree from England and had worked in a multinational company for a number of years.

The questionnaire was structured to meet the following requirements:

1. to cover all significant issues and produce sufficient data for a meaningful analysis

and interpretation;

2. to minimise interviewer bias;

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3. to minimise ambiguity in questions;

4. to permit a meaningful comparison with key overseas studies;

5. to be consistent with the length of time available during interview (i.e. one hour).

5.4.2 The Questionnaire Pre-testing

The questionnaire was pre-tested with five pre-test respondents both in Australia and

Thailand. Two senior executives were pre-arranged for personal interviews in

Melbourne, Australia through the researcher’s personal networks. One respondent was

the chief executive of Thai International Airways Co., Ltd., Melbourne branch. Another

held a managerial position in an Australian government organisation. He had worked

for a number of years in Asia and in particular six years in Thailand.

The other three executives in Thailand who were used to pre-test the questionnaire were

interviewed by telephone calls from Australia. All three respondents were chief

executives in either the hotel, construction and agriculture businesses.

All pre-tested respondents were satisfied with the questionnaire and provided further

advice on how to access the most senior executives in Thailand, what problems might

be faced and how to overcome obstacles and get agreement from them to participate in

the survey.

In summary, the pre-test showed that:

1. The questionnaire could be administered within one hour.

2. The questions were clearly understood.

3. The format was clear and logical.

4. A high degree of credibility was maintained.

5.4.3 The Final Questionnaire

This study aimed to expand the earlier research by employing both closed and open-

ended questions. The open-ended questions were designed to gain understanding and

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capture the points of view of the respondents in detail. On the other hand, the closed

questions were structured and facilitated respondents understanding of topics,

reminding them of the points that they may not recognise within a limited time.

Overall, the questionnaire was divided into nine main sections with twenty-two

questions (refer Appendix B). It gathered data into five broad areas; firstly, roles of

CEOs; secondly, CEOs’ attributes including demographic characteristics, personality

characteristics, and leadership style; thirdly, organisational performance; fourthly,

contingency factors including size of firm, environmental conditions, and business

strategy; finally, dimensional perspectives of executive leadership in Thailand based on

the CEOs’ opinions.

5.5 Data Collection Procedure

The major source of data was largely dependent on personal interviews and the data on

measures of company performance and company profile were supplemented by the

secondary sources such as the company annual reports, company CD-ROM and

website, SET CD-ROM of listed companies, and SET official website and reports. The

secondary data collected was reviewed to understand each company before the personal

interview was conducted.

The data collection procedures were characterised into two major components: firstly

obtaining their agreement to participate in the survey to set up an interview, and

secondly the interviewing process itself. The fieldwork commenced in mid March 2003

and was conducted over a four and half month period.

5.5.1 Respondent Approach Process

As CEOs are particularly busy and difficult to get their approval to participate achieving

a satisfactory response rate was crucial to this research. The approach process needed to

be carefully executed to ensure the success of the fieldwork. To obtain a satisfactory

response rate, three major approaches were adopted in this research to gain the

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participation from CEOs; i.e., the use of an introductory letter, the use of telephone and

facsimile contacts and the use of personal networks.

5.5.1.1 Introductory Letter

An introductory letter supplemented with a supporting letter was sent by airmail

personally addressed to CEOs of publicly listed companies in Thailand in early March

2003 (refer Appendix B). Phone calls were used to all two hundred and forty four

publicly listed companies to obtain the correct spelling of the CEO’s name and

appropriate title for the CEOs.

An introductory letter signed by Professor Chris Christodoulou, a Professor of

Management from the Australian Graduate School of Entrepreneurship at Swinburne

University of Technology, Australia clearly introduced the significance of the study and

sought the participation of the respondents. The letter also stressed the length of time

required for interview, namely one hour. As well, the introductory letter particularly

emphasized the confidentiality aspects related with the data collected and promised to

send a report summarizing the major research findings on completion of the study. The

support letter was written by Mr. Chaipak Siriwat, a Former Deputy Minister of Labor,

Transportations and Communications, Prime Minister’s Office and Interior, and it

recommended the study and encouraged the CEOs to participate in this survey. Both

these letters emphasised the value and credibility of this research.

5.5.1.2 Telephone and Facsimile Follow-Ups

Telephone calls were used to follow up companies to participate in this survey. Most of

the telephone conversations were conducted with CEOs’ executive secretaries to

provide information on the topic and the significance of the study. The status of the

researcher’s background and reference network were introduced in order to increase

participation. The facsimile was also used to resend introductory and support letters

with a brief introduction of the study purpose following the phone calls. This approach

could allow the potential respondents to take time to consider the research details and to

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also overcome any problems with lost letters. On a number of occasions, some of the

secretaries who understood the significance of the study assisted the researcher to

convince their CEOs to participate in the survey. Relationships built up with executive

secretaries played a crucial role in obtaining respondents’ participation in this research.

Since CEOs are normally busy and difficult to access, the need for them to perceive the

researcher as credible and the research worthwhile was particularly important. On

average, three to five phone calls were necessary to gain agreement for an interview.

5.5.1.3 The Use of Personal Networks

The researcher sought assistance from a well-known Thai politician who signed the

support letter, a Thai senior government officer who was a Former Governor of four

provinces in Thailand, and Thai business owners who had connections both directly and

indirectly with chief executives of publicly listed companies. This approach helped

facilitate the researcher to gain access to potential respondents during the fieldwork.

From the early stages of this research it was clear that a good response rate was

dependent on a showing of high-level support for this research. The researcher thus

relied heavily on the assistance of those in high rank positions in government and

private sectors to approach potential respondents. This approach worked most

effectively and efficiently to gain the participations of top executives in Thailand for

this research.

5.5.2 Interview Process

Most of the interviews were pre-arranged and conducted in CEOs’ office during normal

business hours. CEOs were often busy with corporate meetings, external meetings and

traveling overseas. To reserve a date and time for interviews was also a complex and

time-consuming process. On a number of occasions, the researcher had to re-schedule

the interviews based upon the CEOs’ time availability.

On average, the interviews were completed within one hour. The purpose of study and

the researcher’s profile were introduced at the beginning of most of the interviews. The

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ability to clarify the questions and rely heavily on the questionnaire structure and its

instruction was important to ensure meaningful data collection. Generally, the

majorities of CEOs were satisfied when answering the questions and were happy to

provide explanations on their answers and on particular scores. Some of them also

provided knowledge on particular business aspects, relevant business documents and

even their published autobiography. The longest interview went for two and a half hours

because of the respondent’s willingness to elaborate.

5.5.3 Response Rate

In summary, one hundred and twenty three companies participated in this research.

During the fieldwork, four companies were eliminated from the study. All four were

selecting new CEOs and no one had been appointed. Therefore, the selected population

was reduced from two hundred and forty four to two hundred and forty, representing an

effective response rate of 51.25 per cent.

5.6 Instrument Measurements

This section aims to discuss the survey instrument by which the independent, dependent

and control variables were measured in this research. The discussion is organised

according to the three main components of the theoretical framework as depicted in

chapter 4 (refer Figure 4.1).

5.6.1 Executive Leadership

5.6.1.1 CEO Role Behaviour

CEO role behaviour was measured through twenty items in the questionnaire and five

questions were designed especially to tap each of four roles in the model. The role

behaviour items asked the CEOs to respond to a 5- point Likert scale ranging from 1

(very infrequently) through to 5 (very frequently). Table 5.1 details these items and

describes the different activities engaged by CEOs.

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Table 5.1

Executive Leadership Roles Scale

CEO Role

Behaviour Activities Items

Vision setter 1.

2

9

10.

20.

Concentrate on firm’s basic purpose and general direction

Nurture contacts with people external to the firm

Communicate a vision of the firm (future sense)

Study emerging social and economic trends

Analyse the competitors’ policies and actions.

Motivator 3.

4.

11.

12.

19.

Try to create a sense of excitement within the firm

Emphasize firm values through ceremonies and other events

Challenge people with new goals and inspiration

Short circuit the hierarchy by talking to people throughout the firm

Show concern for the needs of the staff

Task master 5.

6.

7.

8.

18.

Use position to influence decisions made at lower levels

Contribute specific knowledge and opinion about problems

Make trade-off decisions and allocate resources accordingly

Focus on results-‘getting the job done today’

Involve myself with daily operations to enhance efficiency

Analyser 13.

14.

15.

16.

17.

Force subordinates to think about problems in new ways

Evaluate critically proposed projects and programs

Integrate conflicting perspectives and unpopular vies

Set specific, operational target for the company

Assess records and reports against stated goals

Note: The first four items in each dimension were developed by Hart and Quinn (1993).

The last item in each dimension was developed by Zakliki (1996).

To ensure both validity and reliability, factor analysis and reliability analysis were

performed for CEO role behaviour. Three key sets of analyses were undertaken as part

of this investigation. The first analysis was a Thai replication of Hart and Quinn’s

(1993) study: Thai replication (H&Q). The second analysis was a Thai replication of

Zakliki’s (1996) study: Thai replication (Z). The third analysis was an extended Thai

study.

Thai Replication (H&Q)

Firstly, for the Thai replication (H&Q), the sixteen CEO role items were factor analysed

using Principle Component Analysis (PCA) and Varimax Rotation to estimate the

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128

number of factors (the same techniques and instrument used by Hart and Quinn, 1993).

Appendix C1 provides details on the factor analysis of CEO role behaviour. The results

showed that the four factors emerged to reflect the four executive leadership roles and

were adequate to represent the data. Besides, the factors were interpretable. The results

of final statistic and rotated factors were in the same pattern as the Hart and Quinn’s

(1993) findings. However, the emerging factors included some complex items and some

items loaded differently when compared to the original study.

Since one of the research purposes was to test the proposition developed by Hart and

Quinn’s (1993) findings, it was necessary to construct factor–based scales with the same

items that they used. Table 5.2 presents a summary of the items and descriptive

statistics for the resulting factors. The Thai replication (H&Q) column refers to the

factors that were calculated by summing the same items that Hart and Quinn, 1993

used. Zakliki’s (1996) results that used the same items were also compared. The results

of reliability tests revealed that the alpha coefficient for each of the role factors was the

same in three studies and this was considered as acceptable.

Thai Replication (Z)

Secondly, as mentioned earlier, for the Thai replication (Z), the twenty CEO role items

were factor analysed using PCA and Varimax Rotation (the same techniques and

instrument used by Zakliki, 1996). Appendix C2 provides details on the factor analysis

of CEO role behaviour. The results were in partial agreement with the Zakliki’s (1996)

findings. They included some complex items and some items loaded differently in all

four factors when compared to the Zakliki data.

Since one of the research purposes was to test the validity of Zakliki’s (1996) finding, it

was necessary to construct factor–based scales with the same items that Zakliki used.

Table 5.3 contains a summary of the items and descriptive statistics for each of the

resulting factors. The Thai replication (Z) column refers to the factors that were

calculated by summing the same items that Zakliki used. The alpha coefficient for each

of the role factors indicates adequate internal consistency for the subsequent analysis.

Table 5.2

Executive Leadership Roles Measures

(Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study Factor

Mean SD Alpha Mean SD Alpha Mean SD Alpha Items Included

Vision Setter 3.90 .64 .65 3.42 .84 .56 3.76 .70 .42 1.

9.

10.

Concentrate on a basic purpose and general direction

Communicate a sense of where the companies will be in 20 years

Study emerging trends

Motivator 3.75 .72 .75 3.40 .89 .71 3.64 .75 .57 11.

4.

3.

Challenge people with new goals and aspirations

Emphasize company values

Create a sense of excitement

Analyser 3.51 .66 .67 3.70 .82 .69 3.88 .70 .60 14.

15.

13.

Evaluate proposed projects

Integrate conflicting perspectives

Question subordinates

Task master 3.59 .61 .73 3.93 .67 .58 3.71 .70 .69 6.

8.

5.

7.

Contribute knowledge and options on problems

Focus on results

Influence decisions at lower levels

Make trade-off decisions and allocate resources

129

130

Table 5.3

Executive Leadership Roles Measures

(Comparing Thai Replication (Z) and Zakliki Study)

Thai Replication (Z) Zakliki Study Factor

Mean SD Alpha Mean SD Alpha Items Included

Vision setter 3.90 .66 .76 3.77 .64 .52 1.

2.

9.

10.


Nurture external contact

Communicate a sense of where the companies will be in 20 years


Motivator 3.84 .63 .77 3.92 .67 .61 3.

11.

4.

19.




Show concern for staff

Analyser 3.69 .59 .79 4.00 .65 .73 13.

14.

15.

16

17.

Question subordinates



Set operational target

Assess reports against goals

Task master 3.51 .56 .60 3.54 .75 .65 5.

6.

8.

18.



Focus on results

Involve with daily operation


Extended Thai Study

Finally, for the extended Thai study, CEO role behaviour was operationalised through

twenty items in the questionnaires. These role items were factor analysed using PCA,

Varimax Rotation and Oblimin Rotation to ensure both validity and reliability.

Appendix C3 provides details on the factor analysis of CEO role behaviour. The results

showed that three variables loaded ambiguously and were dropped from the analysis.

Seventeen of the original twenty items loaded unambiguously on the four interpretable

factors and retained for analysis. The four factors reflected the four executive leadership

roles and were meaningful dimensions.

Table 5.4 contains a summary of the items and descriptive statistics for the resulting

factors. The results of reliability tests revealed that the alpha coefficients for most

groups of variables were sufficient, and the lowest score for a factor was 0.73, which

was considered as acceptable and adequate for subsequent analysis.

Table 5.4

Extended Thai Study: Executive Leadership Roles Measures

Factor Mean SD Alpha Items Included

Vision setter 3.97 0.66 0.82 1.

10.

2.

20.



Nurture external contact


Motivator 3.78 0.62 0.78 11.

19.

3.

4.

12.


Show concern for staff



Short-circuit the hierarchy

Analyser 3.74 0.61 0.77 16.

17.

14.

15.

Set operational target

Assess reports against goals



Task master 3.59 0.61 0.73 5.

7.

6.

8.


Make trade-off decisions and allocate resources


Focus on results

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5.6.1.2 CEO Attributes

Demographic Characteristics

To measure CEO demographic characteristics, the relevant attributes were selected to

capture the significant concepts. They included; age, level of education, holding an

MBA degree, overseas study, functional background, tenure in position, CEO tenure

elsewhere, total tenure in firm, industry experience, overseas work experience and

origin of appointment.

Personality Characteristics

Two personality characteristics were used to measure CEO attributes in this study; need

for achievement and locus of control.

Need for achievement of CEOs was measured using the Manifest Need Questionnaire

developed by Steers and Braunstein (1976). They reported on the excellent predictive,

convergent, and discriminant validities and the high test-retest reliabilities achieved

with this scale. CEOs were asked to respond to a 7- point Likert scale ranging from 1

(never) through to 7 (always). The original scale contains 5 items. To make the purpose

of the items more obscure, three more items (2, 5, 7) were added in the questionnaire,

which served as filler items. Five items were constructed to measure CEOs’ need for

achievement. Question 6 was recoded to capture the same concept with the other

questions. The mean of CEOs’ need for achievement was 5.54 with a standard deviation

of 0.65.

CEOs’ locus of control was measured with the well-known Rotter I-E Scale (Rotter,

1966). This scale contains twenty-nine questions. Of these twenty-nine questions, six

serve as a diversion from the test’s intent. CEOs were asked to choose between an

internal and external alternative. A total score of locus of control score was obtained by

summing the number of external responses chosen. Locus of control scores ranged from

0 (internal) to 23 (external). Therefore, the lower scores on the instrument indicate the

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internal locus of control of subject. The mean of CEOs’ locus of control was 6.05 with a

standard deviation of 3.15.

Leadership Style

Following the work of Zakliki (1996) who studied CEOs’ leadership style in Australia,

the same instrument was used to measure leadership style in this study. The leadership

style dimensions encompass the individual’s capacity for leadership and initiative,

sharing information and objectives, participation and internal control. Table 5.5 details

these items as well as their dimensions.

Table 5.5

Leadership Style Scale

Dimension Managerial Belief Items

Capacity for leadership

and initiative

1.

2.

The average human being prefers to be directed, wishes to avoid

responsibility, and has relatively little ambition.

Leadership skills can be acquired by most people regardless of their

particular inborn traits and abilities.

Sharing information and

objectives

5.

7.

A good leader should give detailed and complete instructions to

subordinates, rather than giving them merely general directions and

depending upon their initiative to work out the details.

A superior should give his subordinates only that information which is

necessary for them to do their immediate tasks.

Participation 6.

4.

Group goal setting offers advantages that cannot be obtained by individual

goal setting.

In a work situation, if subordinates cannot influence me then I lose some

influence on them.

Internal control 8.

3.

The superior’s authority over his subordinates in an organisation is

primary economic.

The use of reward (pay, promotion, etc) and punishment (failure to promote,

etc.) is not the best to get subordinates to do their work.

The managerial belief items were used to capture the overall leadership style of CEOs.

CEOs were asked to respond to a 5-point Likert scale ranging from 1 (strongly agree)

through to 5 (strongly disagree). The purpose was to classify the respondents according

133


to their beliefs as either democratic or autocratic. These items were aggregated and

classified as the cases above and below the median value (median=3.5). The cases

above the median value were categorised as democratic style and those below the

median value were categorised as autocratic style. The right scales of questions (2, 3, 4,

6) were designed to capture the autocratic style rather than democratic style. Therefore,

the scores of these questions were recoded so the higher mean of all questions

represented the democratic beliefs. The mean of the two items was also calculated for

the each category. Table 5.6 illustrates the results of leadership style scores.

Table 5.6

Leadership Style Scores

Mean Category Dimension Items

Item Category

A Capacity for leadership and

initiative

1

2

3.43

3.30

3.37

B Sharing information and

objective

5

7

3.11

3.52

3.32

C Participation 6

4

4.17

2.62

3.40

D Internal control 3

8

3.41

4.07

3.74

5.6.2 Organisational Performance

Two sets of data on organisational performance were collected in this research;

subjective and objective data. The subjective data refers to CEOs’ perception of the

multiple dimensions of organisational performance. It provides a scheme to enlarge the

conceptualisation of performance as it addresses both financial and non-financial

aspects. The objective data refers to the data available in the annual reports or published

documents, which is often considered as more reliable and with less bias as a source of

data on organisational performance. To check the degree of association between two

sets of data, convergent analysis was performed to test convergent validity.

134


5.6.2.1 Subjective Data

Organisational performance was conceived as a multidimensional construct, following

the work of Hart and Quinn (1993), who operationalised the work of Venkatraman and

Ramanujam (1986). Three dimensions of performance were postulated as financial

performance, business performance and organisational effectiveness. These three

dimensions were operationalised through eleven items in the questionnaire in this

survey. CEOs were asked to assess their company’s performance on each of these items,

compared to that of other companies in the same market and at a similar stage of

development. CEO responded on a 7-point scale ranging from 1 (low performer) to 7

(high performer) on how their companies performed over the last five years relative to

the industry average. Table 5.7 illustrates the subjective items including the

performance dimensions.

Table 5.7

Organisational Performance Scale Dimensions Items Items Included

Financial performance Profitability 1.

2.

3.

Profitability level/return on assets

Cash flow

Share price

Business performance Market position 4.

5.

6.

Sales growth

Market share

New Product/service development

Organisational effectiveness Stakeholders view 7.

8.

9.

10.

11.

Quality of product/service

Employee satisfaction

Overall performance

Personnel development

Public image and goodwill

Note: Items 1, 2, 4, 5, 6, 7, 8, 9 were developed by Hart and Quinn (1993)

Items 3, 10, 11 were developed by Zakliki (1996)

To ensure both validity and reliability, factor analysis and reliability analysis again were

performed for organisational performance. Three key sets of analyses were undertaken.

135


The first analysis was the Thai replication (H&Q). The second analysis was the Thai

replication (Z). The third analysis was the extended Thai study.

Firstly, for the Thai replication (H&Q) three dimensions of performance were

operationalised through eight items. These eight items were factor analysed, using PCA

and Varimax Rotation to estimate the number of factors (the same techniques and

instrument used by Hart and Quinn, 1993). Appendix C4 provides the results on the

factor analysis of organisational performance. The Thai replication (H&Q)’s results

showed a similar pattern with the original study and generate an interpretable structure.

Table 5.8 contains the items and descriptive statistics for each of three performance

factors. The alpha coefficient for each of the factors indicates adequate internal

consistency given the preliminary nature of the analyses.

Table 5.8

Organisational Performance Measures (Comparing Thai Replication (H&Q), Hart and Quinn Study and Zakliki Replication Study)

Thai Replication (H&Q) Hart and Quinn

Study

Zakliki

Replication Study Factor

Mean SD Alpha Mean SD Alpha Mean SD Alpha

Items Included

Financial

performance

4.68 1.18 .86 4.42 1.47 .78 4.74 1.48 .82 1.

2.

Profitability/ROA

Cash flow

Business

performance

4.64 .93 .82 4.44 1.24 .64 4.64 1.02 .59 4.

5.

6.

Sales growth

Market share

Product development

Organisational

effectiveness

5.21 .72 .79 5.23 .85 .76 5.18 .89 .70 7.

8.

9.

Quality of products


Overall performance

As noted earlier, for the Thai replication (Z), organisational performance was

operationalised through eleven items. These items were factor analysed using the same

instrument as described for executive leadership role items. Appendix C5 provides the

results on the factor analysis of organisational performance. The results revealed that

the three factors emerged and were adequate to represent the data. However, the results

were in partial support with Zakliki’s (1996) finding since some items were loaded

136


differently in business performance factor and organisational effectiveness factor when

compared to the Zakliki study.

As one of the research purposes was to test the validity of Zakliki’s (1996) finding,

performance factors were constructed with the same items that Zakliki used. Table 5.9

contains the items and descriptive statistics as well as reliability for each of three

performance factors. The alpha coefficient for each of the factors indicates adequate

internal consistency for the subsequent analysis.

Table 5.9

Organisational Performance Measures


Thai Replication (Z) Zakliki Study Factor

N Mean SD Alpha N Mean SD Alpha Items Included

Financial

performance

123 4.56 1.12 .87 117 4.64 1.45 .84 1.

2.

3.

Profitability/ROA

Cash flow

Share price

Business

performance

123 4.59 1.02 .86 111 4.51 1.33 .83 4.

5.

Sales growth

Market share

Organisational

effectiveness

123 5.19 .75 .73 116 5.12 .85 .78 7.

8.

10.

11.

Quality of products




Finally, for the extended Thai study, three dimensions of performance were

operationalised through eleven items in the questionnaire. These performance items

were factor analysed using PCA, Varimax Rotation and Oblimin Rotation to ensure

both validity and reliability. Appendix C6 provides the results on the factor analysis of

firm performance. The results showed that the three factors emerged to reflect the three

dimensions of performance and were adequate to represent the data. Table 5.10 contains

the items and descriptive statistics as well as reliability for each of the three firm

performance factors. The alpha coefficient for each of the factors was adequate, and the

lowest score for a factor was 0.79, which was considered as acceptable and adequate for

subsequent analysis.

137


Table 5.10

Extended Thai Study: Organisational Performance Measures

Factor Mean S.D. Alpha Items Included

Financial performance 4.56 1.12 .87 1.

2.

3.

Profitability/ROA

Cash flow

Share price

Business performance 4.64 .93 .82 4.

5.

6.

Sales growth

Market share

Product development

Organisational effectiveness 5.19 .72 .79 7.

8.

9.

10.

11.

Quality of products


Overall performance



5.6.2.2 Objective Data

The objective data of firm performance were obtained from the official SET CD-Rom

and from published publications. In total three indicators were used as objective

measures of the organisational performance namely:

1. Return on assets (3 and 5 years)

2. Net profit margin (3 and 5 years)

3. Sales growth rate (3 and 5 years)

In this study most of the respondents provided adequate objective data to calculate the

necessary percentages and ratio. The correlation between the subjective and objective

data was performed to test the convergent validity on organisational performance in the

following sections.

138


5.6.2.3 Convergent Analysis

Convergent analysis refers to the degree of association between the subjective data and

objective data. This analysis was performed at the level of industry classification. It was

decided to conduct the analyses for both SET code and SIC code (refer Appendix D).

Table 5.11 illustrates correlations between the two sets of data on firm performance.

Table 5.11

Correlation between Subjective and Objective Data

(Comparing SET Classification and SIC Group)

In General SET Classification SIC Classification Ratios

N R Ind. N R Ind N R

Average ROA (3 years) with

profitability (P1)

123 .62**** 1

3

12

16

8

5

10

8

.79**

.89**

.90****

.75**

1

3

6

10

10

36

8

10

.67**

.75****

.85***

.93****

Average ROA (5 years) with

profitability (P1)

123 .67**** 5

9

12

16

6

5

10

8

.85**

.94**

.81***

.80**

3

6

9

10

36

8

5

10

.82****

.83**

.99***

.93****

Sales growth rate (3 years) with

sales growth (P4)

123 .49**** 5

7

12

6

6

10

.95***

.94***

.75**

3

6

10

36

8

10

.75****

.87***

.61*

Sales growth rate (5 years) with

sales growth (P4)

123 .57**** 4

12

16

25

5

10

8

11

.89**

.79***

.82**

.79***

3

6

8

12

36

8

5

11

.78****

.81**

.91**

.79***

Net profit margin (3 years)

with profitability (P1)

123 .51**** 2

9

12

6

5

10

.91**

.99***

.79***

6

10

11

8

10

21

.68*

.91****

.64***

Net profit margin (5 years)

with profitability (P1)

123 .49**** 7

12

6

10

.83**

.68**

3

6

10

36

8

10

.76****

.72**

.91****

P1, P4 refer to the indicators of subjective data. *p < .10, **p < .05, ***p < .01, ****p <.001.

139


The results suggested that there was good convergent validity between these two sets of

data on performance. In particular, the correlation grew in magnitude as more

homogeneous subsets were examined. For example, overall correlation between two

profitability indicators in general was 0.62 (p=.000). When the analysis was performed

for SET classification, the correlation for the food and beverage industry was 0.90

(p=.000) and for the building and furnishing materials was 0.89 (p=.04) etc.

Additionally, the same results were obtained when the analysis was performed within

the SIC classification. The correlation for the communication industry was 0.93

(p=.000) and for the accommodation, cafe and restaurants was 0.85 (p=.008) etc. These

results are consistent with previous research, which indicated that subjective

assessments of performance obtained from senior managers correlate with objective

measures (e.g. Dess and Robinson 1984; Wooldrige and Floyd 1990; Hart and Quinn

1993; Zakliki 1996). Given a general convergence between two measures, the use of

subjective data of performance was deemed appropriate for this research.

5.6.3 Contingency Factors

The contingency factors used in this study included size of firm, environmental


5.6.3.1 Size of Firm

The number of full-time employees was used to measure organisational size in this

study. The CEOs were requested to indicate the number of full time employees of their

firms.


The environmental conditions were used as a contingency factor when investigating the

link between executive leadership and organisational performance. CEOs were asked to

answer two sets of environmental condition questions. Firstly, three environmental

items were proposed by Dess and Beard (1984) namely dynamism, complexity and

140


munificence. The CEOs were asked to respond on a 5-point Likert scale ranging from 1

(strongly agree) through to 5 (strongly disagree) in the questionnaire. Table 5.12 details

environmental dimensions, indicators, and descriptive statistics.

Table 5.12

Environmental Dimensions and Indicators I Dimension Mean Indicators

Dynamism 2.25 1.The business environment for our company is changing rapidly

Complexity 2.28 2.The business environment we face is very complex with many organisations

whose actions can affect us

Munificence 2.15 3.The markets for our main product will grow next year

Secondly, four dimensions of environment were viewed as a perceptual construct

including uncertainty or dynamism (Miller and Droge 1986), heterogeneity (Miller,

1988; Miller 1993), hostility (Miller and Friesen 1983), and munificence (Dess and

Beard 1984; Hart and Quinn 1993). CEOs were asked to answer the questions on a 7-

point scale covering the relevant criteria. Table 5.13 details environmental dimensions

and their items.

Table 5.13

Environmental Dimensions and Indicators II Dimension Item

Dynamism or uncertainty 1.

2.

3.

4.

5.

Degree of change in marketing practices

Degree of changes in the product and service

Degree of change in technology

Predictability of consumer tastes

Predictability of competitors’ action

Complexity or

heterogeneity

7.

8.

9.

Degree of diversity of customers’ buying habits

Degree of diversity of competitors’ activity

Degree of diversity of required methods of production and service

Hostility or illiberality 6. Nature of competitors’ actions

Munificence or capacity 10. Level of sales growth

141


The aim of this present research in using these ten environmental items was to tackle the

dominant nature of the perceived environment. The dimension score was calculated by

summing the appropriate items. Table 5.14 presents the results of environmental

dimension scores.

Table 5.14

Environmental Dimensions Scores

Items Item

Mean

Dimension

Mean

Dynamism 1

2

3

4

5

4.87

3.56

3.61

3.06

3.37

3.69

Complexity 7

8

9

4.34

4.09

3.85

4.09

Munificence - 5.40 5.40

Hostility 6 4.24 4.24

Table 5.15 demonstrates the results of environmental classification. The firms were split

into two types of environmental conditions; stable and turbulent environments by the

following methods. Firstly, Q-type cluster analysis: seventy-one cases were categorised

in stable conditions and fifty-two were categorised in turbulent environments. Secondly,

by the use of the median break: sixty-one cases had a score below 4.30 and labelled

stable, and sixty cases had a score above 4.30 and thus considered turbulent.

142


Table 5.15

Environment Classification

Cluster Analysis Median Break

Environment Final Cluster

Centres

Distance No. of Cases Median Number of

Cases

Stable 3.98 - 71 <4.30 61

Turbulent 5.27 1.59 52 >4.30 60

Missing - 2

Total 123 123


This study used Miles and Snow’s (1978) strategy typology for the measurement of

business strategy. Miles and Snow’s adaptive cycle including entrepreneurial, engineering

and administrative problems provides a solid foundation for specifying the character of

the activities for various strategic classes of firm. They operationalised their theory by

classifying firms by adaptive decision patterns ranging from the aggressive prospector,

through analysers, and defenders to the least adaptive classification, the reactor.

CEOs were requested to indicate their opinions on the most appropriate description

from four paragraph descriptions as defender, prospector, analyser, or reactor (refer

Table 5.15) in the present study. This self-typing paragraph measurement is logically

appealing and should be effective since top managers (or the respondents) perceptions

and opinions largely determined strategy. It also allows the rapid collection of

substantial databases (Snow and Hambrick 1980). There are several studies (e.g.

Conant, Mokwa and Varadarajan 1990; Shortell and Zajac 1990; James and Hatten

1995), which indicated that the self-typing approach was a useful measurement

instrument, which allows a reasonable convergent validity. Hambrick (2003) suggested

that of the several strategy classification systems introduced over the past 25 years, the

Miles and Snow typology has been the most enduring, the most scrutinised, and the

most used. This typology has been subjected to numerous tests of its validity in a wide

array of settings, including hospitals, banking, and colleges etc. However, there are a

143


few arguments against this measurement instrument. First, it may measure intended

strategy rather than realized strategy (Snow and Hambrick 1980). Second, there is a

tendency to over simplification of the multi-dimensionality of strategic types.

Table 5.16

Strategy Dimensions and Descriptions Strategy Dimension Description

Defender 1. This type of organisation attempts to locate and maintain a secure niche in a

relatively stable product or service area. The organisation tends to offer a

more limited range of products or services than its competitors, and it tries to

protect its domain by offering higher quality, superior service, lower prices,

and so forth. Often this type of organisation is not at the forefront of

developments in the industry – it tends to ignore industry changes that have no

direct influence on current areas of operation and concentrates instead on

doing the best job possible in a limited area.

Prospector 2. This type of organisation typically operates within a broad product-market

domain that undergoes periodic redefinition. The organisation values being

“first in” in new product and market areas even if not all of these efforts prove

to be highly profitable. The organisation responds rapidly to early signals

concerning areas of opportunity, and these responses often lead to a new

round of competitive actions. However, this type of organisation may not

maintain market strength in all of the areas it enters.

Analyser 3. This type of organisation attempts to maintain a stable, limited line of products

or services, while at the same time moving out quickly to follow a carefully

selected set of the more promising new developments in the industry. The

organisation is seldom “first in” with new products or services. However, by

carefully monitoring the actions of major competitors in areas’ compatible

with its stable product-market base, the organisation can frequently be

“second in” with a more cost-efficient product or service.

Reactor 4. This type of organisation does not appear to have a consistent product-market

orientation. The organisation is usually not as aggressive in maintaining

established products and markets as some of its competitors, nor is it willing

to take as many risks as other competitors. Rather, the organisation responds

in those areas where it is forced to by environmental pressures.

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Since the present research utilised the strategic types of organisation as contingency

factors or intervening variables rather than as dependent variables or independent

variables, and given the above reasoning, it was decided to adopt strategic typology of

Miles and Snow (1978).

5.7 Data Analysis Methods

The Statistics Package for Social Science (SPSS) version 11 was used to analyse the

data in this research. The statistical techniques were carefully selected with attention

being paid to the nature of the data and the purpose of the study.

The data analysis method applied a number of statistical procedures. The first technique

was univariate analysis, which provided information about the distribution of each

single variable. The variables were evaluated in terms of range and outliers, central

tendency and variance, skewness and kurtosis, and missing data. The results from these

analyses were used to make decisions about the subsequent tests to be undertaken. They

are not reported in this thesis to avoid an unnecessary overload of information.

The next level of analysis was to construct scales and test the scale reliability.

Crobach’s alpha was used as the indicator to test the internal consistency (reliability) of

the scales. It is the most popular reliability coefficient test in social science research.

The next level of analysis involved a wide range of analysis techniques including

Pearson correlation coefficient, ANOVA, t-test, chi-square and association analysis.

Finally, the next level of analysis, utilised multivariate techniques in particular Q-type

cluster analysis, factor analysis, and multiple regression to analyse complicated data sets

in this survey.

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5.8 Chapter Summary

This chapter has described the research methodology, which was used to investigate the

research questions. It has given a detailed outline of the selection criteria for the

population, the survey approach, the survey instrument development, the questionnaire

pre-testing, the respondent contact approaches and sequence, the data collection

procedures and also described the details of instrument measurement, scale construction

and finally the statistical techniques for the data analyses.

This study selected publicly listed companies of Thailand by employing four selection

criteria: time period of firm listed in SET, headquarter’ location, company size and a

single CEO/MD. In total, two hundred and forty were selected as the final population

sample. However, four companies were eliminated from this research during the

fieldwork since they were selecting new CEOs and none had been appointed. Therefore,

the selected population was reduced from two hundred and forty four to two hundred

and forty companies. Since Thai society is made up of positions, which are hierarchically

related the decision was therefore made that, the use of personal interviews arranged

with the assistance of a prominent Thai politician and Thai government authorities

would be the most appropriate approach for this study. A response rate of 51.25 per cent

was achieved after completing the fieldwork.

This chapter also presents details of the survey instruments and how the dependent,

independent, and control variables were operationalised and measured. Three sets of

measurement for CEO role behaviour and organisational performance were developed

for the subsequent analyses. The next part of this thesis presents the data analyses that

were undertaken.

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PART FOUR

RESEARCH RESULTS

Chapter 6 Analysis of Respondent Companies

Chapter 7 Thai Replication of Hart and Quinn’s (1993) Study

Chapter 8 Thai Replication of Zakliki’s (1996) Study

Chapter 9 Comparison of Findings from Extended Thai Study with

Hypotheses

Chapter 10 Additional Perspectives on Executive Leadership in Thailand

147

Part four of this thesis discusses the major research findings from this research.

Chapter 6 reports the characteristics of respondent companies and the background of the

respondents who participated in this research. Chapter 7 discusses the results of the Thai

replication of Hart and Quinn’s (1993) study. The same analytical tools and techniques

that were used by Hart and Quinn (1993) were employed for this data analysis. The

results of Zakliki’s (1996) study that also used the same instruments are included to

facilitate the comparisons among the three studies. Chapter 8 discusses the results of the

Thai replication of Zakliki’s (1996) study. The Thai replication of Zakliki’s (1996)

study employed the same analytical tools and techniques that were used by Zakliki

(1996). This chapter also compares CEO demographic characteristics and leadership

style (autocratic vs. democratic) between the Thai and the Australian study. Chapter 9

discusses the major findings from the extended Thai study for each of the seven

proposed hypotheses generated for this research. Chapter 10 contains the additional

findings on other dimensions of executive leadership in Thailand.

148

Chapter 6: Analysis of Respondent Companies

Chapter 6

Analysis of Respondent Companies

6.1 Introduction

This chapter aims to provide a picture of the demographic variables of the respondent

companies, and the background of the respondents who participated in this research.

The analysis of the respondent companies consists of industries represented, SET

classification, company size, and the number of years listed on the Thai stock exchange.

The backgrounds of the respondents are discussed, which consist of respondents’

gender, age, educational level, functional background, CEO experience, work experience,

and origin of appointment.

6.2 Profile of Respondent Companies

6.2.1 Industries Represented

Table 6.1 is a summary of the distribution of company activities by SIC code. A total of

one hundred and twenty three companies participated in this survey. The most

frequently cited industry types were manufacturing (29.27%), finance and insurance

(17.07%), property and business services (8.94%), agriculture, forestry and fishing

(8.13%), and communication services (8.13%) respectively. Of the remaining companies

wholesale trade were (6.5%), accommodation, cafes and restaurants (4.07%), transports

and storage (4.07%), retail trade (3.25%), cultural and recreational services (3.25%),

health and community services (2.43%), mining (1.63%), electricity, gas and water

supply (1.63%), and construction (1.63%) respectively.

149


150

Table 6.1

Distribution of Company Activities by SIC Code

Industries Represented N %

Agriculture, forestry and fishing 10 8.13

Mining 2 1.63

Manufacturing 36 29.27

Electricity, gas and water supply 2 1.63

Construction 2 1.63

Wholesale trade 8 6.50

Retail trade 4 3.25

Accommodation, cafes and restaurants 5 4.07

Transports and storage 5 4.07

Communication services 10 8.13

Finance and insurance 21 17.07

Property and business services 11 8.94

Health and community services 3 2.43

Cultural and recreational services 4 3.25

Total 123 100

N: number of companies; %: percentage within total number of respondent companies.

6.2.2 SET Classification

Table 6.2 details the distribution of company activities based upon the classification by

SET code. The non-response bias with regard to industry classification was analysed to

validate the representative nature of the participants to the population sampled. The

results showed that the response rate was consistent over the industry classification. The

differences between population and respondent columns were very minimal across all

the industries. Overall, there was no important difference between the respondents and

non-respondents in term of industry classification.


Table 6.2

Distribution of Company Activities by SET Code

N (n): number of population (respondent) companies; %: percentage within total number of population (respondent)

companies.

Population Respondents Section SET Classification

N % n %

1 Agribusiness 12 5 8 6.50

2 Banking 12 5 6 4.88

3 Building and furnishing materials 12 5 5 4.07

4 Chemicals and plastics 10 4.17 5 4.07

5 Commerce 12 5.00 6 4.88

6 Communication 6 2.50 4 3.25

7 Electrical products and computer 8 3.33 6 4.88

8 Electrical components 3 1.25 1 0.81

9 Energy 6 2.50 5 4.07

10 Entertainment and recreation 7 2.92 4 3.25

11 Finance and securities 14 5.83 7 5.69

12 Food and beverages 17 7.08 10 8.13

13 Health care services 5 2.08 3 2.44

14 Hotels and travel services 8 3.33 3 2.44

15 Household goods 5 2.08 3 2.44

16 Insurance 21 8.75 8 6.50

17 Companies under rehabilitation 0 0 0 0

18 Jewellery and ornaments 2 0.83 1 0.81

19 Machinery and equipment 3 1.25 1 0.81

20 Mining 1 0.42 1 0.81

21 Packaging 7 2.92 1 0.81

22 Pharmaceutical products and cosmetics 2 0.83 1 0.81

23 Printing and publishing 7 2.92 5 4.07

24 Professional service 2 0.83 2 1.63

25 Property development 20 8.33 11 8.94

26 Pulp and paper 4 1.67 3 2.44

27 Textiles, clothing and footwear 18 7.50 4 3.25

28 Transportation 7 2.92 4 3.25

29 Vehicles and parts 4 1.67 2 1.63

30 Warehouse and silo 3 1.25 2 1.63

31 Others 2 0.83 1 0.81

Total listed companies 240 100 123 100

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6.2.3 Company Size

Table 6.3 is a summary of the number of fulltime employees employed by the

population and respondent companies. The number of employee was used to measure

company size in this survey. Again non-response bias was analysed with regard to size

of companies. The results showed that the response rate was consistent over the size

categories. Population and respondent columns showed minimal differences across all

size categories. Overall, there was no important difference between the respondents and

non-respondents in terms of company size.

Of the one hundred and twenty three companies, two-fifth (39%) of companies

employed up to five hundred employees. Slightly over 15% employed over two

thousand people. The number of employees for the rest of companies was between five

hundred and two thousand.

Table 6.3

Company Size Measured by Number of Employees

Population Respondents Size Category

N % n %

=, < 500 employees 107 44.60 48 39.00

501-1000 employees 59 24.60 34 27.60

1001-1500 employees 25 10.40 15 12.20

1501-2000 employees 12 5.00 7 5.70

2001-2500 employees 5 2.10 2 1.60

2501-3000 employees 5 2.10 3 2.40

> 3000 employees 27 11.30 14 11.40

Total Listed Companies 240 100 123 100

N (n) = number of population (respondent) companies; %: percentage within total number of population (respondent)

companies.

152


6.2.4 Number of Years Listed on the Thai Stock Exchange

Table 6.4 is a summary of the number of years that the companies had been listed on the

Thai stock exchange. It showed that one hundred (81.30%) companies had operated in

the Thai stock exchange for 15 years and less. The longest company listing was for

three companies, which was 27 years. The shortest listing was approximately 5 years

and four companies were classified in this category. The average years for companies

listed in the Thai stock exchange market was 12.08 years with a standard deviation of

5.67 years.

Table 6.4

Number of years Listed on the Thai Stock Exchange

Length of Experience in Years N %

Under 6 4 3.25

6 - 10 50 40.65

11 - 15 46 37.40

16 - 20 9 7.32

21 - 25 10 8.13

Above 25 4 3.25

Total 123 100


6.3 Background of Respondents

6.3.1 Gender

Table 6.5 is a summary of respondents’ gender. A total of one hundred and twenty three

respondents participated in this research. The vast majority of respondents were male

(92.68%), while only nine respondents were female (7.32%).

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Table 6.5

Summary of Respondents’ Gender

Gender N %

Male 114 92.68

Female 9 7.32

Total 123 100

N: number of respondents; %: percentage within total number of respondents.

6.3.2 Age

Table 6.6 is a summary of the respondents’ age. The result showed that two-thirds

(68.39%) of respondents were primarily middle aged ranging between the ages of 36 to

55. Slightly below one-third (31.71%) of respondents were aged above 56 years.

Table 6.6

Summary of Respondents’ Age

Age Range N %

Less than 35 0 0

36 – 45 24 19.51

46 – 55 60 48.78

Above 56 39 31.71

Total 123 100


6.3.3 Educational Level

Table 6.7 is a summary of respondents’ highest education level completed. The sample

comprised a highly educated group of respondents; the vast majority (90.24%) had

either completed a university’s degree (39.83%) or had received postgraduate education

(50.41%) (master’s degree and doctorate degree) while only a few (9.76%) respondents

154


were a high school, certificate and diploma graduate. Of the fifty-three respondents who

had a master’s degree, thirty-four (64.15%) respondents had completed business

administration training (MBA).

Table 6.7

Summary of Respondents’ Educational Level

Educational Level N %

High school 3 2.44

Certificate/ diploma 9 7.32

Bachelor’s degree 49 39.83

Master’s degree 53 43.09

Doctorate’s degree 9 7.32

Total 123 100


Table 6.8 is a summary of respondents’ overseas study (outside Thailand). The result

indicated that about two-third (65.04%) of the respondents had completed overseas

education, while about one-third (34.96%) of the respondents had completed education

in Thailand.

Table 6.8 Summary of Respondents’ Overseas Education

Education N %

Thailand 43 34.96

Overseas 80 65.04

Total 123 100


155


6.3.4 Functional Background

Table 6.9 is a summary of respondents’ functional background. Forty-five (36.59%)

respondents indicated that their main functional background was sales and marketing,

while forty-four (35.77%) were planning and management, forty-three (34.96%) were

finance and accounting, thirty (24.39%) were engineering and production, twelve

(9.76%) were others (e.g. insurance, agriculture, general practice etc.) and ten (8.13%)

respondents were in the area of human resource and personnel, respectively.

Seventy-one (57.72%) respondents were specializing in only one area. Forty-two

(34.15%) respondents specified that their functional background were across two

different disciplines. Only ten (8.13 %) respondents’ functional background was related

to three disciplines.

Table 6.9

Summary of Respondents’ Functional Background

Yes No Total Discipline

N % N % N %

Finance and accounting 43 34.96 80 65.04 123 100

Engineering and production 30 24.39 93 75.61 123 100

Human resource and personnel 10 8.13 113 91.87 123 100

Sales and marketing 45 36.59 78 63.41 123 100

Planning and management 44 35.77 79 64.23 123 100

Others (e.g. insurance, agriculture,

general practice, etc.)

12 9.76 111 90.24 123 100

Total 184 554 - -

N: number of respondents; %: percentage within respondents’ functional discipline.

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6.3.5 CEO Experience

6.3.5.1 Current Organisation

Table 6.10 is a summary of respondents’ CEO tenure in their current firm. Fifty-five

(44.72%) respondents had CEO tenure in their current firms for 5 years and less. The

shortest CEO tenure was approximately 1 year, and thirteen respondents were classified

in this category. The longest CEO tenure was for one respondent, which was 39 years.

The average respondents’ CEO tenure in current office was 8.75 years with a standard

deviation of 7.85 years.

Table 6.10

Summary of Respondents’ CEO Tenure in Current Firms

Length in Years N %

=, < 5 55 44.72

6 – 10 34 27.64

11 – 15 14 11.38

16 – 20 8 6.50

Above 20 12 9.76

Total 123 100

N: number of respondents, %: percentage within total number of respondents.

6.3.5.2 Other Organisations

Table 6.11 is a summary of respondents’ CEO experience in other firms. Fifty-two

respondents indicated that they had CEO experience in other firms. The shortest CEO

experience elsewhere was 2 years, and four respondents were classified in this category.

The longest CEO experience elsewhere was 30 years for one respondent. The average

CEO experience of the fifty-two respondents in other firms was 4.37 years with a

standard deviation of 6.72 years.

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Table 6.11

Summary of Respondents’ CEO Tenure in Other Firms

Length in Years N %

=, < 5 13 25.00

6 – 10 22 42.31

11 – 15 8 15.38

16 – 20 4 7.69

Above 20 5 9.62

Total 52 100


6.3.6 Work Experience

The respondents’ work experience is discussed in this section including the number of

years they had worked for their current organisations, for other organisations in

overseas countries (outside Thailand), and the total numbers of years they had worked

in the industry.

6.3.6.1 Organisational Experience

Table 6.12 is a summary of the number of years the respondents had worked for their

current organisations. Twenty-seven (21.95%) respondents had worked for 5 years or

less. The shortest working experience was approximately 1 year for nine respondents,

and the longest was 40 years for one respondent. The average years the respondents had

worked for their current organisations was 13.95 years with a standard deviation of 9.55

years.

158


Table 6.12

Number of Years Respondents’ Stayed in Current Firms

Length in Years N %

=, < 5 27 21.95

6 - 10 26 21.14

11 - 15 25 20.33

16 - 20 18 14.63

21- 25 8 6.50

26 - 30 13 10.57

Above 30 6 4.88

Total 123 100


6.3.6.2 Overseas Work Experience

Table 6.13 is a summary of respondents’ overseas work experience (outside Thailand).

Seventy-seven (62.60%) respondents indicated that they had no work experience in

other countries than Thailand and only forty-six (37.40%) respondents had overseas

work experience. Of the forty-six respondents who had overseas work experience,

nineteen (41.30%) respondents specified that the main country they had overseas work

experiences was America, while seventeen (36.96%) was Asian countries (i.e.

Indonesia, Malaysia, Singapore, China and Hong Kong), eight (17.39%) was European

countries (i.e. London and Germany), and two (4.35%) was Argentina and New Zeland,

respectively.

Table 6.13

Summary of Respondents’ Overseas Work Experience

Work Experience N %

Thailand 77 62.60

Overseas 46 37.40

Total 123 100


159


6.3.6.3 Industry Experience

Table 6.14 is a summary of respondents’ industry experience. Eighty-one (65.85%)

respondents specified that they had more than 15 years experience in the industry. The

shortest time period was about 1 year for one respondent, and the longest time was 40

years for two respondents. The average industry experience of the respondents was

20.15 years with a standard deviation of 9.56 years.

Table 6.14

Summary of Respondents’ Industry Experience

Length in Years N %

=, < 5 9 7.31

6 - 10 15 12.20

11 - 15 18 14.64

16 - 20 23 18.70

21 - 25 20 16.26

26 - 30 24 19.51

Above 30 14 11.38

Total 123 100


6.3.7 Origin of Appointment

Table 6.15 is a summary of origin of appointment. The origin of appointment was

classified into two groups for analysis. CEOs appointed from outside current firms are

defined as Externals whereas CEOs promoted from within firms are defined as

Internals. The results show that sixty-three CEOs (51.22%) were Internals, and the other

sixty (48.78%) CEOs were Externals.

160


Table 6.15

Summary of Respondents’ Origin of Appointment

Origin of Appointment N %

Internal 63 51.22

External 60 48.78

Total 123 100


6.4 Chapter Summary

The data in this chapter has shown that a total of one hundred and twenty three

companies participated in this survey. It can be concluded that there were no important

differences between the respondents and non-respondents in term of industry or size

classifications in this study. The overall response rates were similar across categories

and hence the samples can be considered unbiased.

About two-fifth of companies employed up to five hundred employees and less than

one-fifth employed over two thousand people. The rest of companies employed between

five hundred and two thousand people. The average years for respondent companies

listed on the Thai stock exchange was 12.08 years.

The majority of respondents were male, primarily middle aged between 36 to 55 years

of age and had completed undergraduate or postgraduate level education with the

exception of twelve respondents whose highest education was at certificate/diploma

and high school level. About two-thirds of respondents had completed education in

overseas countries (outside Thailand). The majority of them had a sales and marketing

background followed by planning and management, finance and accounting, and

engineering and production. Only ten of them had a human resource background and

twelve of them had other functional disciplines. The average respondents’ CEO tenure

in their current firm was 8.75 years and in other organisations was 4.37 years. It was

also found that the average years the respondents had worked for their current firms was

161


13.95 years and their industry experience was 20.15 years. Over half of the respondents

had no work experience in other countries than Thailand. About half of the respondents

were promoted from within firms to be CEOs. All the respondents provided meaningful

information regarding their companies and demographic characteristics when the

interviews were conducted.

162

Chapter 7: Thai Replication of Hart and Quinn’s (1993) Study

Chapter 7

Thai Replication of Hart and Quinn’s (1993) Study

7.1 Introduction

This chapter aims to replicate the original study by Hart and Quinn (1993). The same

analytical tools and techniques used by Hart and Quinn (1993) were employed for data

analyses. The goal was to test the relationship between executive leadership roles and

organisational performance in Thai publicly listed companies. The discussions are

organized into three main sections. Section 7.2 investigates the degree of relative

importance of each of the leadership roles with respect to each of the organisational

performance factors. Section 7.3 examines the effect of the four leadership roles on

single organisational performance dimension. Section 7.4 focuses on the impact of high

behavioural complexity on organisational performance. This chapter also provides the

Australian results by Zakliki (1996) that used the same instruments into each analysis in

order to facilitate meaningful comparisons.

7.2 Impact of Executive Leadership Roles

To examine the relative importance of each leadership role on the three dimensions of

organisational performance, multiple regression analysis was performed using the

leadership roles and the control variables as the independent variables and the three

performance factors as the dependent variables in three separate regression equations.

Table 7.1 shows the results of this analysis and compares the results of three studies.

163

Table 7.1

Multiple Regression: Organisational Performance on Executive Leadership Roles a


Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study Roles/Controls

Financial Business Effectiveness Financial Business Effectiveness Financial Business Effectiveness

Vision setter .20 .11 .16 .01 .12** .12** -.12 -.17 -.11

Motivator -.02 .10 .26* .10* .09* .23*** .01 .19* .01

Analyser .07 .19 -.12 -.06 .12** .09* .02 -.04 -.02

Task master -.01 -.04 .02 .02 .01 -.04 .08 .05 .18

Dynamism -.02 .07 -.11 -.06 -.01 -.06 -.09 .06 -.05

Complexity -.12 -.09 -.03 -.02 -.06 -.01 -.27* -.23* -.19

Munificence .15 .21* .29** .03 .19*** -.05 .04 -.14 .01

Size .01 .10 .11 .12** .19*** -.11** .04 -.10 -.05

Adj R2 .01 .09 .17 .01 .16 .11 .05 .12 .01

F 1.12 2.57 4.06 2.06 15.65 10.39 1.72 2.66 1.10

P .35 .01 .000 .04 .000 .000 .10 .01 .37

SE 1.18 .89 .66 1.46 1.13 .80 1.46 .90 .87

N 123 123 123 604 604 604 111 103 109 a Data reported in the table are standardised beta coefficients. *: p < .10, **: p < .01, ***: p < .001.

164


In the Thai replication (H&Q), the results indicated that the only control variable that

was a significant predictor of performance was munificence of environment. Firms

operating in a munificent environment had better business performance (p=.02) and

organisational effectiveness (p=.001). However, it was not found that size was an

important predictor of performance. Net of the control variables, leadership roles had

little influence on the three dimensions of organisational performance. Three of the four

leadership roles (vision setter, analyser and task master) were not predictive of

performance on any dimensions. Only the motivator role was a significant predictor of

organisational effectiveness (p=.01). In interpreting these results it is important to note

that the predictive power of the three equations was dramatically different. All

independent variables explained only 1% of the variance in financial performance. They

explained 9% and 17% of the variance in business performance and organisational

effectiveness. Organisational effectiveness was the performance dimension most

influenced by the executive leadership roles. When compared to the two previous

studies, the results provided the same evidence that executive leadership roles had little

to do with the short-term financial performance.

7.3 Leadership Profiles of Organisation

To understand better the relative importance of leadership roles on organisational

performance, the effect of the four roles on a single firm performance dimension was

examined in this section. To examine the leadership profiles of organisations, the firms

were classified on the basis of their performance level as low, high and unbalanced

performers by median value (median=5.00 for financial performance, median=4.67 for

business performance, median=5.33 for organisational effectiveness performance). By

this classification the low performers were those firms whose mean scores on all three-

performance dimensions were below median. On the contrary, the high performers had

mean scores above the median on all three-performance dimensions. The rest of the

cases were classified as unbalanced. Table 7.2 summarises the distribution of firms

according to this classification.

165


166

Table 7.2

Firms Classification on Their Performance Level Basis

Firm Group N %

Low performers 25 20.33

Unbalanced 77 62.60

High performers 21 17.07

Missing - -

Total 123 100


To explore the effect of leadership roles on organisational performance, mean scores on

the four leadership roles were compared, using ANOVA for the high and low performer

groups as the independent variables and the four leadership roles as the dependent

variables. Table 7.3 demonstrates the leadership profiles of high and low performing

firms.

The Thai replication (H&Q) of this analysis partially confirmed the original H&Q study

that “high performers require greater emphasis on all four roles” (Hart and Quinn 1993,

p.569) as there was a significant difference between high performers and low

performers for only two leadership roles: motivator role (p=.003), and analyser role

(p=.02). No significant differences were found in vision role and task master role

performed by these firms. The Thai results also partially supported the Australian

findings that “there were no significant differences in the means of roles performed by

these groups”, which was supported by Zakliki’s (1996, p. 141) data.

Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study

Group N Vision Motivator Analyser

Task

Master N Vision Motivator Analyser

Task


Task

Master

1.High

performers

21 4.05 3.95 3.76 3.68 94 4.27 4.25 4.57 4.67 20 3.60 3.73 3.86 3.76

2.Low

performers

25 3.75 3.37 3.36 3.38 106 2.58 2.45 2.93 3.48 29 3.91 3.56 4.01 3.64

N 46 46 46 46 46 199 199 199 199 49 49 49 48 48

F 2.24 10.02 6.29 2.69 548.35 568.97 510.44 409.38 2.72 0.54 0.52 0.51

P .14 .003 .02 .11 .000 .000 .000 .000 .11 .47 .47 .48


ANOVA: Leadership Profiles of High and Low Performing Firms aTable 7.3

167

a Data reported in the table are the mean values.


168

7.4 Leadership Types and Organisational Performance

In the previous section the firm performance was classified and the relationship of these

groups in regard to leadership roles was examined. These results still showed little

about which types of roles are related with high performance. In this section it is

necessary to specify types of leadership roles and examine the impact of possible types

that would have the most influence on each of the three organisational performances.

Two different methods were used to classify executive leadership roles. Firstly, Q-type

cluster analysis was performed to categorise cases into distinctive leadership behaviours

on the basis of four leadership roles. Secondly, the leadership roles were classified into

three groups– high, medium and low complexity– according to their percentile breaks.

7.4.1 Classifying Executive Leadership Roles: Q-Type Cluster Analysis

The Q-type cluster analysis was carried out sequentially, solving for 2, 3, 4 clusters, to

classify leadership role behaviour. The Q-Type cluster program by itself automatically

classify groups, which are statistically different from one another. The three-cluster

solution was selected as the best among them based upon interpretability of the clusters.

The results showed that high complexity group (cluster 1) had consistently high scores

on each of the four roles, while low complexity group (cluster 2) scored consistently

low on the roles. The third group (cluster3) constituted an unbalanced category of

leadership behaviour since this group had high scores on motivator role, analyser role,

and task master role but low scores on vision role. This pattern emerged in the original

H&Q study as the third group had high scores on analyser role and task master role but

low scores on vision role and motivator role. In the Zakliki replication study; however,

the third group was labeled as medium complexity as all the groups had either high or

low scores on all roles. Table 7.4 details the three clusters of distinctive leadership

behaviours with their associated scores on the four roles in comparison with the results

of two previous studies.

169

Table 7.4

Q-Type Cluster Analysis on Roles a



Cluster N Vision Motivator Analyser

Task


Task


Task

Master

1. Cluster 1 45 4.44 4.17 4.09 4.08 402 3.84 3.96 4.09 4.05 72 4.13 4.01 4.13 3.88

2. Cluster 2 29 3.63 2.82 3.05 3.09 160 2.95 2.69 2.61 3.58 5 2.13 2.13 1.93 2.13

3. Cluster 3 49 3.57 3.92 3.25 3.44 109 2.60 2.48 3.82 4.13 34 3.33 3.31 3.68 3.53

Missing - - 7

Mean 123 3.90 3.75 3.51 3.59 671 3.42 3.40 3.70 3.93 118 3.76 3.64 3.88 3.71 a Data reported in the table are the mean values.


170

To test the relationship between these leadership types on all three-performance

dimensions, ANOVA was performed with the three leadership types as the independent

variables and the three performance factors as the dependent variables. The results are

detailed in Table 7.5. The Thai replication (H&Q) suggested that there were statistically

significant difference for the variables of business performance performed by these

leadership types. The Scheffe contrasts test indicated that the score of high complexity

group (mean=4.94) significantly differed from the unbalanced group (mean=4.44) at .05

(p=.03) level on business performance. There was also a significant difference between

high complexity group (mean=5.40) and low complexity group (mean=4.98) with

respect to organisational effectiveness in the mean scores at .05 (p=.046) level.

Statistically, there was no significant difference among the groups on the mean of

financial performance. The Thai replication (H&Q) partially supported the original

findings where significant differences were identified for all three-performance

dimensions. Nevertheless, the Thai results also provided similar evidence with the

Zakliki data that there was no significant difference among the groups on the mean of

financial performance.

Since the effects of control variables (size and environmental conditions) might have

strong moderating effects on leadership types, multiple regression analysis was

performed including these variables as controls along with the dummy variables.

Dummy variable coding was used with the low complexity group serving as the

comparison group. The results are presented in Table 7.6. The Thai replication (H&Q)

suggested that the only control variable that appeared to be a predictor of firm

performance was munificent environment, which had a positive effect on business

performance (p=.03) and organisational effectiveness (p=.001). Net of control variables,

the high complexity group was statistically predictive of business performance (p=.06)

and organisational effectiveness (p=.01) in comparison with the low complexity group.

The unbalanced group was not a significant predictor of any performance factors. All

independent variables explained 7% of the total variance in business performance and

14% in organisational effectiveness but none of the variance of financial performance.

The comparisons showed that high complexity group appeared to have little to do with

the financial performance in all three studies. The munificent environment was strongly

predictive of business performance and organisational effectiveness in both the Thai

replication (H&Q) and the original H&Q study.

Table 7.5

ANOVA: Leadership Types (Q-Type Cluster Analysis) and Organisational Performance a


Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study Leadership Type


1. High complexity 4.91 4.94

(3)

5.40

(2)

4.51

(3)

4.72

(2, 3)

5.65

(2,3)

4.67 4.65 5.16

2. Low complexity 4.48 4.49 4.98

(1)

4.45 3.97

(1)

5.29

(1)

3.70 4.92 5.25

3. Unbalanced 4.58 4.44

(1)

5.18 4.06

(1)

4.16

(1)

5.21

(1)

5.02 4.62 5.10

N 123 123 123 650 651 661 111 103 109

F 1.44 4.00 3.26 3.96 24.84 17.03 1.89 .16 .08

P .24 .02 .04 .02 .000 .000 .16 .85 .92 a Data reported in the table are the mean values and the significant (p < .08) Scheffe contrasts (in parentheses). For example, in the Thai replication (H&Q) the high complexity group

is significantly different from the unbalanced group with respect to business performance.

171

172

Table 7.6

Multiple Regression: Organisational Performance on Executive Leadership Types a


Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study Leadership

Types/Controls Financial Business Effectiveness Financial Business Effectiveness Financial Business Effectiveness

High complexity .18 .21* .28** .01 .21**** .20**** -.09 -.03 .01

Unbalanced .03 -.03 .12 -.12*** .06 -.05 - - -

Dynamism -.01 .04 -.14 -.05 .02 -.04 -.07 -.07 -.02

Complexity -.10 -.04 -.01 -.01 -.04 .01 -.29*** -.27*** -.22**

Munificence .12 .20** .30*** .03 .20**** .08** .04 .16 .02

Size .03 .12 .14 .11*** .18**** -.09** .05 -.07 -.06

Adj R2 -.003 .07 .14 .02 .13 .06 .07 .10 .01

F .94 2.61 4.30 3.03 16.57 7.36 2.68 3.34 1.08

P .47 .02 .001 .006 .000 .000 .03 .008 .37

SE 1.19 .90 .67 1.45 1.17 .84 1.45 .91 .87

N 123 123 123 621 621 621 111 103 109 a Data reported in the table are standardised beta coefficients.

*: p < .10, **: p<.05,***: p < .01, ****: p<.001.


173

7.4.2 Classifying Executive Leadership Roles: Percentile Breaks

The Q-type cluster analysis provided a general test to discover the possible impact of

leadership types that would have the most influence on each of the three performance

factors. To facilitate a specific test of leadership types on organisational performance, it

is necessary to define a more restrictive set of leadership types. The leadership roles

were partitioned into thirds – high, medium, and low – according to their percentile

breaks (refer Table 7.7). CEOs who had scores in the upper third on all four of

leadership roles were placed in the group labeled high complexity. Similarly, those who

had scores at the medium level were labeled medium complexity and those who had

scores at the bottom third on all four roles were labeled low complexity. The remaining

CEOs were assigned to a category labeled unbalanced. According to the Table 7.7, this

is a much more restricted classification system than the Q-type cluster analysis. There

were only fifteen cases defined as high complexity and six cases as low complexity

versus forty-five cases and twenty-nine cases respectively through Q-type cluster

analysis. The vast majority of cases (102 cases) fell into the unbalanced category.

To examine the relationship between these groups (high, low and unbalanced

behaviourally complexity) on all three-performance dimensions, ANOVA was again

performed with the three leadership types as the independent variables and the three

performance factors as the dependent variables. The results are presented in Table 7.8.

The results revealed a similar pattern with the Australian study where the high

complexity behaviour group tends to have higher mean scores on all firm performance

dimensions in comparison with the low complexity behaviour group based upon this

classification. However, there were no significant differences among the groups on the

means of all firm performance factors. The leadership profiles showed only a few

significant relationships to the firm performance dimensions.

Table 7.7

Percentile Breaks of Leadership Roles a



Types N Vision Motivator Analyser

Task


Task


Task

Master

High complexity 15 >4.00 >4.00 >3.67 >3.75 52 >3.67 >4.00 >4.00 >4.25 6 >4.00 >4.00 >4.33 >4.00

Medium

complexity

- <4.00

>3.67

<4.00

>3.33

<3.67

>3.33

<3.25

>3.25

14 <3.67

>3.00

<4.00

>3.00

<4.00

>3.33

<4.25

>3.75

<4.00

>3.67

<4.00

>3.33

<4.33

>3.67

<4.00

>3.67

Low complexity 6 <3.67 <3.33 <3.33 <3.25 31 <3.00 <3.00 <3.33 <3.75 6 < 3.67 <3.33 >3.67 <3.67

Unbalanced 102 N/A N/A N/A N/A 578 N/A N/A N/A N/A 97 N/A N/A N/A N/A

Mean 3.90 3.75 3.51 3.59 - 3.42 3.40 3.70 3.93 - 3.76 3.64 3.88 3.71 a Data reported in the table are the mean values.

174

175

Table 7.8

ANOVA: Leadership Types (Percentile Breaks) and Organisational Performance a


Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study Leadership Types


1. High complexity 5.10 5.16 5.58 4.71 4.83

(3)

6.17

(3,4)

4.58 5.00 5.44

2. Medium complexity

- - - - - - - - -

3. Low complexity 4.42 4.22 4.94 4.61 3.74

(1,4)

5.11

(4)

3.50

(4)

4.53 5.27

4. Unbalanced 4.63 4.59 5.17 4.40 4.46

(3)

5.49

(3)

4.81

(3)

4.64 5.12

N 123 123 123 675 677 687 111 103 109

F 1.18 3.20 2.57 0.78 6.47 10.11 2.26 0.44 0.43

P .31 .04 .08 .51 .000 .000 .11 .64 .65

a Data reported in the table are the mean values and the significant (p < .08) Scheffe contrasts (in parentheses). For example in the Hart and Quinn study the high complexity group is

significantly different from the low complexity group and the unbalanced group with respect to organisational effectiveness.


176

To control the effect of environmental factors and size of firm, multiple regression

analysis was again performed with dummy variables for leadership types and the

control variables included as the independent variables and three performance factors as

the dependent variables. Dummy variable coding was used with the low complexity

group serving as the comparison group. The results are presented in Table 7.9. The

munificent environment appeared to be important predictors of business performance

(p=.02) and organisational performance (p=.000). Similarly, like the previous

classification, high complexity group was a significant predictor of business

performance (p=.04) and organisational effectiveness (p=.05) in comparison with the

low complexity group. The unbalanced group was not a significant predictor of any firm

performance factors.

177

.

Table 7.9

Multiple Regression: Leadership Type (Percentile Breaks) on Organisational Performance a


Thai Replication (H&Q) Hart and Quinn Study Zakliki Replication Study Leadership

Profiles/Controls Financial Business Effectiveness Financial Business Effectiveness Financial Business Effectiveness

High complexity .20 .33** .30* .01 .09 .17*** .04 .20 .01

Low complexity - - - .02 -.14**** -.15**** -.08 -.11 .05

Unbalanced .07 .13 .10 -.06 -.01 -.02 .11 .22 -.12

Dynamism .01 .06 .13 -.04 -.04 .02 -.08 -.10 -.04

Complexity -.09 -.03 .01 -.01 -.03 .01 -.26** -.18** -.21**

Munificence .13 .21** .32**** .04 .22**** .11*** .03 -.20*** .03

Size .04 .14 .15 .13*** .21**** -.05 .03 -.05 -.05

Adj R2 -.01 .08 .14 .01 .12 .05 .07 .09 0

F .88 2.64 4.30 1.87 12.89 5.00 2.27 2.49 1.03

P .52 .02 .001 .07 .000 .000 .03 .02 .41

SE 1.19 .89 .67 1.46 1.18 .85 1.4 .96 .87

N 123 123 123 621 621 621 118 118 118

a Data reported in the table are standardised beta coefficients.

*: p < .10, **: p < .05, ***: p < .01, ****: p<.001.


7.5 Chapter Summary

This chapter described the data analyses undertaken to replicate the original H&Q

study. The same instrument and techniques were used so as to provide comparisons.

Zakliki’s (1996) results that used the same analytical tools and procedures were also

incorporated into each analysis. The goal was to test the relationship between executive

leadership roles and organisational performance and compare the results with those of

previous studies. Nevertheless, the Thai replication (H&Q) was only partially in

agreement with the original H&Q study and the Australian findings. The data analyses

revealed evidence for the following conclusions:

1. The three studies showed little relationship between leadership roles played by CEOs

and organisational performance. The only significant result in the Thai replication

(H&Q) was a positive relationship between motivator role and organisational

effectiveness. Hart and Quinn findings showed that particular roles played by CEOs

were important predictors of organisational performance. In Zakliki replication study,

there was a positive association between motivator role and business performance.

In these three studies, the amount of variance explained by executive leadership roles

was low.

2. The Thai replication (H&Q) suggested that high behavioural complexity of the CEOs

was predictive of higher firm performance with respect to business performance and

organisational effectiveness. Similarly, Hart and Quinn (1993) showed that the highest

levels of firm performance were achieved by CEOs with high levels of behavioural

complexity particularly to business and organisational effectiveness factors. On the

other hand, Zakliki (1996) reported that high behavioural complexity of the CEOs was

not associated with higher firm performance in his Australian study. In all three studies,

high behavioural complexity of the CEOs had little to do with financial performance of

firms.

3. The situational context was important to organisational performance. The munificence

of environment was predictive of business performance and organisational effectiveness

178


in the Thai replication (H&Q). Hart and Quinn (1993) showed that a munificent

environment was a significant predictor of both business performance and organisational

effectiveness, but was not related to financial performance. However, Zakliki (1996)

found that only complexity of environment was related to financial and business

performance and organisational effectiveness in his Australian study.

179

Chapter 8: Thai Replication of Zakliki’s (1996) Study

Chapter 8

Thai Replication of Zakliki’s (1996) Study

8.1 Introduction

This chapter aims to examine the results obtained from the Australian study by Zakliki

(1996) with comparisons being made against the Thai survey. The same analytical tools

and techniques were employed for data analyses. These comparisons are organized into

three main sections. Section 8.2 investigates the relationship between executive

leadership and organisational performance. Section 8.3 focuses on the impact of

behavioural complexity on organisational performance. The analyses also incorporated

the appropriate contingency factors including size, environmental conditions and

business strategy into each analysis. Section 8.4 compares the CEO demographic

characteristics and leadership style (autocratic vs. democratic) between the Thai and the

Australian study.

8.2 Relative Importance of Executive Leadership

8.2.1 Impact of Executive Leadership Roles

To assess to what extent the value of organisational performance can be affected by

different roles and conditions, multiple regression analysis was performed using the

leadership roles and control factors as the independent variables and the three

performance factors as the dependent variables in three separate regression equations.

(refer Table 8.1). In the Thai replication (Z), all independents variables explained none

of the variance in financial performance, while they explained 9% and 18% of the

variance in business performance and organisational effectiveness, respectively. It was

found that organisational effectiveness was the performance factor most influenced by

leadership roles whereas in the Zakliki study business performance appeared to be most

180


effected by leadership roles. The only control variable that was a significant predictor of

performance was a munificent environment, which had a positive effect on business

performance (p=.004) and organisational effectiveness (p=.004). However, it was found

that size was not an important predictive variable of performance in both studies. Net of

control variables, two leadership roles had some influence on organisational

performance. Statistically, motivator role was strongly associated with organisational

effectiveness (p=.003), and analyser role was a significant predictor of business

performance (p=.03). In the Zakliki study the task master role was the only significant

predictor of organisational effectiveness. However, both studies supported the claim

that executive leadership had no impact on financial performance.

Table 8.1

Multiple Regression: Organisational Performance on Executive Leadership Roles a


Thai Replication (Z) Zakliki Study Roles/Controls

Financial Business Effectiveness Financial Business Effectiveness

Vision .12 .04 .17 .01 -.11 .09

Motivator .11 .08 .30** -.04 -.03 -.13

Analyser .02 .24* -.03 .09 .02 .02

Task master -.05 -.01 -.03 -.03 .10 .20*

Dynamism -.09 -.08 -.13 -.09 -.11 -.02

Complexity .04 .002 .09 -.28* -.16 -.18

Munificence .11 .26** .25** .02 .21* -.07

Size .05 .08 .14 .09 .05 .04

Adj R2 -.02 .09 .18 .03 .07 .03

F .75 2.56 4.31 1.57 2.11 1.55

P .64 .01 .000 .15 .05 .16

SE 1.12 .97 .68 1.42 1.22 .83

N 123 123 123 110 104 109 a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.

181


8.2.2 Impact of CEO Characteristics

To provide information as to what extent organisational performance can be altered by

CEO characteristics, multiple regression analysis was performed using CEO

characteristics as the independent variables and the three performance factors as the

dependent variables in three separate regression equations.

This section examines the degree of influence of each of the selected characteristics on

organisational performance. The coding utilised were with internal appointment,

holding bachelor’s degree and above, holding MBA degree, autocratic style, and age

more than 45 years old as dummy variables, and external appointment, no university

degree, democratic style, no MBA degree, and age equal or less than 45 years old as

control groups. Table 8.2 shows the results of these analyses. In the Thai replication (Z),

among the CEO characteristics, internal appointment was a significant predictor of

organisational effectiveness. All independent variables explained 4% of the total

variance in financial performance, 3% in business performance and 6% in organisational

effectiveness. Table 8.2 also compares the results of two studies and it is clear that CEO

characteristics had little influence on financial performance in both studies. On the other

hand, organisational effectiveness was the performance dimension most influenced by

CEO characteristics. Both studies were only able to explain a low level of variance

between the traits of the CEOs and organisational performance.

182


Table 8.2

Multiple Regression: Organisational Performance on CEO Characteristics a


Thai Replication (Z) Zakliki Study Characteristics

Financial Business Effectiveness Financial Business Effectiveness

CEO tenure in the

current position

.20 .15 .22 -.01 0 .24*

CEO experience in

other firms

.11 -.04 -.01 .02 .04 -.04

Tenure in the firm .01 -.05 -.04 .12 .44** -.11

Industry experience -.03 .05 .09 .17 -.15 .10

Origin of appointment .08 .10 .28* -.11 -.24* .19*

Level of education .09 .17 .14 -.02 -.17 -.09

Holding an MBA -.18 -.15 .04 .08 .24* 0

Leadership style -.19 -.17 -.12 .14 .08 .07

Age -.19 .21 .09 -.11 -.05 .11

Adj R2 .04 .03 .06 -.03 .05 .09

F 1.56 1.38 1.81 .67 1.68 2.18

P .14 .21 .07 .74 .10 .03

SE 1.09 1.00 .72 1.44 1.29 .80

N 123 123 123 118 118 118 a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.

In conclusion, the above data provides evidence that executive leadership roles had

more impact on organisational effectiveness than on the other performance dimension in

the Thai replication (Z) whereas in the Zakliki study business performance appeared to

be the most influenced by leadership roles. However, organisational effectiveness was

the performance dimension most effected by CEO characteristics both in the Thai

replication (Z) and Zakliki study. Similarly, both studies suggested that executive

leadership, leadership roles or CEO characteristics, had no influence on financial

performance.

183


8.3 Impact of Behavioural Complexity on Performance

This section aims to test the extent to which the simultaneous mastery of four roles was

related to high firm performance. Executive leadership roles were classified and then

the association of these configurations of roles with firm performance was investigated.

8.3.1 Classifying Executive Leadership Roles:

Constructing Behavioural Complexity Index

Leadership roles were scored on the basis of their percentile breaks, and then the cases

were scored by summing the score of four leadership roles. The results were classified

as low level, medium low level, medium high level, and high level of behavioural

complexity. Table 8.3 presents the distribution of leadership profile according to this

classification.

Table 8.3

Classifying Cases:

Scoring the Level of Performing Leadership Roles

Thai Replication (Z) Zakliki Study Profile Score

N % N %

1. Low complexity 4,5 29 23.60 23 19.50

2. Medium low complexity 6,7 22 17.90 33 28.00

3. Medium high complexity 8,9 41 33.30 33 28.00

4. High complexity 10,11,12 31 25.20 22 18.60

Missing - - 7 5.90

Total 123 100 118 100

N: number of respondents; %: percentage within leadership profile.

To examine the impact of behavioural complexity on organisational performance,

ANOVA was performed with behavioural complexity as the independent variables and

the three performance factors as the dependent variables (refer Table 8.4). The Thai

184


replication (Z) showed that there were significant differences among the behavioural

complexity group on the means of business performance and organisational

effectiveness, whereas in the Zakliki study significant differences were identified only

for organisational effectiveness. The Scheffe contrasts test indicated that the scores for

low complexity group (mean=4.24) significantly differed from that for high complexity

group (mean=4.98) with respect to business performance, and the difference was

significant at .05 level (p=.04). However, both studies suggested that that there were no

significant differences between the outcomes of these groups on financial performance.

Table 8.4

ANOVA: Behavioural Complexity and Organisational Performance a


Thai Replication (Z) Zakliki Study Behavioural

Complexity N Financial Business Effectiveness N Financial Business Effectiveness

1. Low complexity 29 4.24 4.24

(4)

4.97 23 4.58 4.50 4.90

(4)

2. Medium low

complexity

22 4.47 4.55 4.98 33 4.73 4.50 4.89

(4)

3. Medium high

complexity

41 4.61 4.55 5.26 33 4.63 4.63 5.09

(4)

4. High complexity 31 4.84 4.98

(1)

5.44 22 4.53 4.71 5.57

(1,2,3)

N 123 123 123 123 111 110 104 109

F 1.53 2.84 3.84 .09 .16 3.6

P .21 .04 .04 .96 .92 .02 a Data reported in the table are the mean values and the significant (p<0.5) Scheffe contrasts (in parenthesis).

For example in the replication the low complexity group was significantly different from high complexity group with

respect to business performance.

185


8.3.2 Contingency Factors

To clarify the specific relationships between behavioural complexity and organisational

performance, the analyses incorporated the contingency factors. The firms were split;

firstly according to size (small or large), secondly according to the environmental

conditions (stable or turbulent), and thirdly on the basis of the nature of business

strategy (defender, prospector, analyser). The reactor type was dropped from the

analysis because of the small number of respondents following this strategy. Then the

analyses were performed for each of the subsets in the subsequent sections.

8.3.2.1 Size

To investigate the impact of behavioural complexity on organisational performance for

different sized firms and to control for the environmental factors, multiple regression

analysis was performed with behavioural complexity and environmental factors as the

independent variables and the three-performance dimensions as the dependent variables

(refer Table 8.5). The Thai replication (Z) showed that munificence of environment was

positively associated to business performance (p=.004) and organisational effectiveness

(p=.002) whereas in the Zakliki study complexity of environment was negatively related

to financial performance and munificent of environment was negatively related to

business performance. However, both studies showed that behavioural complexity had a

significant relationship with organisational effectiveness (p=.01) but not with the other

performance dimensions.

When the cases were split into small and large firms, the Thai replication (Z) showed

that all independents variables explained differing amounts of variance of dependent

variables between small and large firms (with large firms having more variance

explained). In small firms, munificence of environment was positively related to financial

performance (p=.03), but behavioural complexity was not significantly predictive of

organisational effectiveness. In large firms, munificence of environment was positively

related to both business performance (p=.03) and organisational effectiveness (p=.003).

and behavioural complexity had a significant relationship with organisational

186


187

effectiveness (p=.004). The comparisons found that both studies highlight the

importance of behavioural complexity on organisational effectiveness in large firms.


Since size of firms might have moderating effects on the behavioural complexity and

organisational performance, multiple regression analysis was performed including the

size of firms along with behavioural complexity as the independent variables and the

three-performance dimensions as the dependent variables for each environment group

(refer Table 8.6). In the Thai replication (Z), the results suggested that size was not

related to any firm performance dimensions in both stable and turbulent environment,

but behavioural complexity was a statistically significant predictor of business

performance in a turbulent environment (p=.01) whereas in the Zakliki study,

behavioural complexity had a significant influence on organisational effectiveness in

turbulent environments and on business performance and organisational effectiveness in

a stable environment.


To investigate the relationship of behavioural complexity in different strategic types on

organisational performance and to examine the effects of control variables, multiple

regression analysis was performed, including environmental factors and size of firms

along with behavioural complexity as the independent variables and the three-

performance dimensions as the dependent variables (refer Table 8.7). According to the

Thai replication (Z), in the prospector group, complexity of environment was related to

organisational effectiveness (p=.03) and munificence of environment was related to

financial performance (p=.04). In the analyser group, munificence of environment was

related to organisational effectiveness (p=.000) and behavioural complexity was related

to organisational effectiveness (p=.003) whereas in the Zakliki study complexity of

environment was negatively associated with business performance and behavioural

complexity was positively associated with business performance and organisational

effectiveness.

Table 8.5

Multiple Regression:

Behavioural Complexity and Organisational Performance by Size a


Total Small Large

Financial Business Effectiveness Financial Business Effectiveness Financial Business Effectiveness Roles/Controls T Z T Z T Z T Z T Z T Z T Z T Z T Z

Behavioural

complexity

.17 -.03 .17 .05 .23** .23* .06 -.06 .09 -.05 .13 .16 .19 -.01 .25 .18 37** .31*

Dynamism -.09 -.08 -.03 -.11 -.11 -.03 -.20 -.23 -.20 -.18 -.14 -.34* -.04 .10 .11 -.02 -.14 .39*

Complexity .04 -.26* -.01 -.16 .12 -.18 .22 -.19 .08 -.08 .13 -.11 -.04 -.35* -.04 -.22 .13 -.37*

Munificence .12 .03 .26** -.20* .27** -.03 .28* .08 .25 -.23 .21 -.12 -.05 -.06 .30* .20 .39** .10

AdjR2 .01 .06 .07 .09 .12 .07 .07 .05 .04 .06 .03 .17 -.03 .03 .10 .09 .21 .17

F 1.41 2.69 3.24 3.39 5.28 3.01 2.17 1.72 1.60 1.79 1.41 3.85 .61 1.42 2.61 2.25 4.73 3.53

P .24 .04 .02 .01 .001 .02 .08 .16 .19 .15 .24 .01 .66 .24 .046 .08 .002 .01

SE 1.11 1.39 .98 1.22 .70 .81 1.12 1.29 1.07 1.34 .74 .84 1.09 1.52 .89 1.08 .66 .70

N 123 118 123 118 123 118 65 64 65 64 65 64 58 54 58 54 58 54

Note: T: Thai replication (Z), Z: Zakliki study. a Data reported in the table are standardised beta coefficients. *: p < .05, **: p < .01, ***: p < .001.

188

Table 8.6


Behavioural Complexity and Organisational Performance by Environmental Conditions a


Total Stable Turbulent


Behavioural

complexity

.16 -.02 .17 .05 .23** .24* .14 .17 .05 .32* .22 .30* .20 -.13 .36** -.12 .22 .26*

Size .03 .09 .05 .03 .11 .04 .11 -.03 -.01 .07 .06 .07 -.02 .11 .14 0 .12 .04

AdjR2 .01 -.01 .02 -.02 .06 .04 .01 -.01 -.03 .06 .03 .05 -.001 0 .11 -.02 .02 -.04

F 1.72 .43 2.08 .17 4.52 3.20 1.28 .70 .07 2.22 1.93 2.04 .98 .92 4.28 .42 1.62 2.16

P .18 .65 .13 .84 .01 .04 1.29 .50 .93 .12 .15 .14 .38 .40 .02 .66 .21 .12

SE 1.11 1.45 1.01 1.28 .73 .82 1.02 1.21 1.05 1.10 .67 .80 1.23 1.54 .93 1.28 .80 .84

N 123 118 123 118 123 118 71 49 71 49 71 49 52 64 52 64 52 64


189

190

Table 8.7


Behavioural Complexity and Organisational Performance by Business Type a


Defender Prospector Analyser


Behavioural

complexity

.23 .05 -.08 .10 .20 .20 .31 .05 .27 -.09 .22 .21 .23 .01 .25 .28* .38** .34*

Dynamism -.31 -.29 -.09 -.44 -.38 .09 -.06 -.18 -.01 -.05 -.20 -.09 .25 .27 -.01 0 .16 .03

Complexity -.15 -.20 -.04 -.31 .11 -.01 0 -.23 04 -.04 .37* .19 -.20 -.29 .01 -.38* .22 -.23

Munificence -.11 .13 .40 .07 -.06 -.24 .33* -.04 .21 -.16 .14 .15 .08 -.32* .18 -.21 .49*** -.05

Size .07 .32 .10 .18 .21 .01 .18 .08 .18 -.04 .06 -.16 -.24 .10 -.04 .06 -.05 .09

AdjR2 -.01 .03 -.03 .04 -.05 -.14 .11 -.03 .04 -.13 .14 -.01 .003 .07 .000 .28 .34 .12

F .96 1.16 .87 1.20 .77 .43 1.97 .82 1.30 .25 2.29 .96 1.03 1.69 1.00 4.24 6.07 2.18

P .46 .37 .52 .35 .58 .83 .11 .54 .29 .93 .07 .46 .41 .16 .43 .004 .000 .08

SE 1.17 1.35 1.20 1.52 .70 .91 1.08 1.55 .99 1.47 .62 .98 1.000 1.24 .95 .74 .66 .71

N 28 27 28 27 28 27 42 38 42 38 42 38 50 47 50 47 50 47


Chapter 8: Thai Replication of Zakliki (1996) Study

Table 8.8 summarises the results of Thai replication (Z) and Zakliki study by

incorporating contingency factors to examine the relationship of behavioural complexity

on organisational performance.

Table 8.8

Behavioural Complexity and Organisational Performance: Contingency Approach


Organisational Performance Factor Contingency

Factors

Controls/Behavioural

Complexity Financial Business Effectiveness

Total cases Complexity

Munificence

Behavioural complexity

-a

-a, b

b

a,b

Size of firms

Small

Dynamism

Munificence

b

-a

Large Complexity

Dynamism

Munificence


b

-a

a

b

a,b

Environments

Turbulent


b

Strategy types

Prospector

Munificence

Complexity

b

b

Analyser

Munificence

Complexity


-a

a

b

a,b

Note: a = significant relationship according to Beta Coefficient (p<.05) in Zakliki study

b = significant relationship according to Beta Coefficient (p<.05) in Thai replication study (Z)

- = negative association

In the Thai replication (Z), munificence of environment had predictive power on

business performance and organisational effectiveness in general, in large firms and in

191


firms with an analyser type of business strategy whereas behavioural complexity was

associated with organisational effectiveness when firms were large and for firms

following an analyser type strategy. Behavioural complexity also had a significant

impact on business performance in turbulent environments. When compared to the

Zakliki study, both studies showed a similarity in that behavioural complexity had a

positive significant relationship with organisational effectiveness and not the other

performance dimensions especially for large firms and for firms following an analyser

type of strategy. The same results also revealed that there was no association between


8.4 Comparisons of CEO Characteristics

This section aims to make a comparison of some important aspects of the demographic

characteristics of CEOs in the Thai study with those of the CEOs in the Australian study

by Zakliki (1996).

8.4.1 CEOs’ Age

Table 8.9 is a summary of CEOs’ age. Both studies showed that the vast majority of

CEOs were aged more than 45 years old, with a greater percentage of older CEOs in the

Thai study.

Table 8.9

Summary of CEOs’ Age

Thai

Study

Australian

Study Age

N % N %

Less than and equal 45 years old 24 19.51 34 28.81

More than 45 years old 99 80.49 84 71.19

Total 123 100 118 100


192


8.4.2 CEOs’ Educational Level

Table 8.10 is a summary of CEOs’ educational level. About half of the CEOs in the

Thai study had postgraduate qualifications (master’s degree and doctorate degree) while

approximately 40% of CEOs in the Australian study had postgraduate qualifications.

Table 8.10

Summary of CEOs’ Educational Level

Thai

Study

Australian

Study Educational Level

N % N %

Bachelor and under 61 49.59 69 58.47

Postgraduate 62 50.41 49 41.53

Total 123 100 118 100


Table 8.11 is a summary of how many CEOs’ hold an MBA degree. Both studies

showed that approximately one-fourth of CEOs had completed training in business

administration (MBA).

Table 8.11

Summary of CEOs’ Holding an MBA Degree

Thai

Study

Australian

Study Hold an MBA Degree

N % N %

Yes 34 27.64 24 20.33

No 89 72.36 94 79.67

Total 123 100 118 100


193


8.4.3 CEOs’ Functional Background

Table 8.12 is a summary of CEOs’ main functional background. The most frequently

mentioned functional background of the CEOs in the Thai study were sales and

marketing (36.59%), planning and management (35.77%), finance and accounting

(34.96%), engineering and production (24.39%), others (9.76%) and human resource

(8.13%) whereas others (33.05%) appeared to be the most frequently cited functional

background by CEOs in Australian study followed by engineering and production

(30.89%), financing and accounting (22.88%) and sales and marketing background

(17.80%), respectively.

Table 8.12

Summary of CEOs’ Functional Background

Thai

Study

Australian

Study Functional Background

N % N %

Finance and accounting 43 34.96 27 22.88

Engineering and production 30 24.39 38 30.89

Human resource and personnel 10 8.13 - -

Sales and marketing 45 36.59 21 17.80

Planning and management 44 35.77 - -

Others 12 9.76 39 33.05

Total 184 125

N: number of respondents; %: percentage within respondents’ functional discipline.

8.4.4 CEO Experience

This section discusses the CEO tenure in their current position and CEO experience in

other firms for both the Thai study and the Australian study.

194


Table 8.15 is a summary of CEO tenure in the current position. The majority of CEOs

in both studies had CEO tenure of less than 5 years followed by 5-10 years and more

than 10 years respectively.

Table 8.13

Summary of CEO Tenure in the Current Position

Thai

Study

Australian

Study CEO Tenure in Current Position

N % N %

Less than 5 years 48 39.03 65 55.09

5-10 years 41 33.33 34 28.81

More than 10 years 34 27.64 18 16.10

Total 123 100 118 100


Table 8.14 is a summary of CEO experience in other firms. About 60% of CEOs in both

studies had no CEO experience in other firms. However, CEOs in the Thai study were

more likely to have CEO experience in other firms of more than 5 years compared with

the CEOs in the Australian study.

Table 8.14

Summary of CEO Experience in Other Organisations

Thai

Study

Australian

Study CEO Experience in Other Organisations

N % N %

No experience 71 57.72 69 58.48

Less than 5 years 9 7.32 23 19.49

More than 5 years 43 34.96 26 22.03

Total 123 100 118 100


195


8.4.5 Work Experience

This section discusses CEOs’ work experience in the Thai study and the Australian

study including the number of years they had worked in their current organisations and

the total number of years they had worked in the industry.

Table 8.15 is a summary of CEOs’ total tenure in the firm. Seventy CEOs (56.91%) in

the Thai study specified that they had worked for their current organisations more than

10 years whereas in the Australian study sixty-five CEOs (55.09%) had worked 10 or

less years for their current organisations.

Table 8.15

Summary of CEOs’ Total Tenure in the Firm

Thai

Study

Australian

Study Total Tenure in the Firm

N % N %

Less than 5 years 26 21.14 37 31.36

5-10 years 27 21.95 28 23.73

More than 10 years 70 56.91 53 44.91

Total 123 100 118 100


Table 8.16 is a summary of the CEOs’ industry experience. The majority of CEOs in

both studies indicated that they had industry experience of more than 20 years. In the

Thai study, sixteen CEOs (13.01%) had industry experience of less than 10 years and

forty-nine CEOs (39.84%) had experience of between 10 to 20 years. On the other hand,

in the Australian study, thirty-five CEOs (29.66%) had industry experience of less than

10 years and thirty CEOs (25.42%) had experience of between 10 to 20 years.

196


Table 8.16

Summary of CEOs’ Industry Experience

Thai

Study

Australian

Study CEOs’ Industry Experience

N % N %

Less than 10 years 16 13.01 35 29.66

10-20 years 49 39.84 30 25.42

More than 20 years 58 47.15 53 44.92

Total 123 100 118 100


In summary, there were no large differences in both the CEO tenure in current position

and work experience of the CEOs in both studies (refer Table 8.17). CEOs in both

studies had a similar pattern of experience.

Table 8.17

Summary of CEO Tenure and Work Experience

Mean (years)

CEO Tenure and Work Experience Thai

Study

Australian

Study

CEO tenure in current position 8.75 6.89

CEO experience in other firms 4.37 3.49

Total tenure in the firm 13.95 13.36

Industry experience 20.15 19.69


8.4.6 Origin of Appointment

Table 8.18 is a summary of CEOs’ origin of appointment. CEOs in the Thai study were

more likely to be appointed from outside the organisation than CEOs in the Australian

197


study. On the other hand, CEOs in the Australian study were more likely to be promoted

from within the organisation than CEOs in the Thai study.

Table 8.18

Summary of CEOs’ Origin of Appointment

Thai

Study

Australian

Study Origin of Appointment

N % N %

Internal 63 51.22 69 58.47

External 60 48.78 49 41.53

Total 123 100 118 100


8.5 Comparisons of Leadership Style

This section aims to compare the leadership style of CEOs between the Thai study and

the Australian study. Table 8.19 shows the results of the comparison and it would

appear that CEOs in both studies were more likely to adopt an autocratic style than a

democratic style of leadership.

Table 8.19

Summary of Leadership Style

Thai

Study

Australian

Study Leadership Style

N % N %

Democratic 53 43.09 50 42.37

Autocratic 58 47.15 65 55.09

Missing 12 9.76 3 2.54

Total 123 100 118 100


198


Table 8.20 compares the dimensions of leadership between the Thai study and the

Australian study. The data shows that the mean scores for all categories were lower for

the Thai study than those of the Australian study. The Australian CEOs were more

likely to share information and objectives to their subordinates than the Thai CEOs. The

Thai CEOs believed that the average subordinates need to be provided only information

which is necessary for them for their immediate tasks (mean=3.32). However, the Thai

CEOs believed in internal control (mean=3.74), encouraging participation by

subordinates (mean=3.40) and capacity for leadership and initiative of subordinates

(mean=3.37) respectively whereas Australian CEOs believed in sharing information

(mean=3.99), internal control (mean=3.76), participation (mean=3.64) and capacity for

leadership and initiative (mean=3.42) respectively. Zakliki (1996, p.185) noted that

Australian CEOs approved of participative and democratic management without a

corresponding belief in the capacity for leadership and initiative.

Table 8.20

Dimensions of Leadership

Mean

Category Dimensions Thai

Study

Australian

Study

A Capacity for leadership & initiative 3.37 3.42

B Sharing information & objective 3.32 3.99

C Participation 3.40 3.64

D Internal control 3.74 3.76

Note: Based on a 5-point scale; Higher mean scores representing democratic beliefs.

8.6 Chapter Summary

This chapter described the data analyses undertaken to replicate the Zakliki Australian

study. The same instrument and techniques were employed for data analyses so as to

provide comparable comparisons. The comparisons were organized into three main

aspects. Firstly, the relationship of executive leadership and organisational performance

was investigated. Secondly, the impact of behavioural complexity on organisational

199


performance was tested. The analyses also incorporated the appropriate contingency

factors into each analysis. The last section examined the CEO demographic

characteristics and the leadership styles. The findings of these analyses provided

evidence for the following conclusions:

1. The findings from the Thai replication (Z) showed that particular roles played by

CEOs are important predictors of organisational performance. The replication results

identified the importance of the analyser role to business performance and motivator

role to organisational effectiveness. In the Australian study, the only significant result

was a positive association between the task master role and organisational effectiveness.

Importantly, the findings found that executive leadership roles had more influence on

organisational effectiveness than on the other performance dimension in the Thai

replication (Z) whereas in the Australian study business performance appeared to be the

most influenced by leadership roles. However, organisational effectiveness was the

performance dimension most affected by the CEO characteristics both in the Thai

replication (Z) and the Australian study. Similarly, both studies found that executive

leadership, leadership roles or CEO characteristics, all had no impact on the financial

performance dimension.

2. In the Thai replication (Z), CEO behavioural complexity was associated with higher

firm performance for organisational effectiveness in general, and for large firms and for

firms following an analyser type of strategy. Behavioural complexity also had a

significant impact on business performance in a turbulent environment. When compared

to the Australian study, both studies showed a similarity in that CEO behavioural

complexity had a positive relationship with organisational effectiveness and not the

other performance dimensions especially for large firms and for firms following an

analyser type of strategy. Both studies also revealed that there was no association

between CEO behavioural complexity and financial performance regardless of

situational factors.

3. Both Thai and Australian studies suggested that the vast majority of CEOs were older

than 45 years. Approximately half of them had a postgraduate qualification (master’s

200


degree and doctorate degree) and about a quarter had completed an MBA degree. The

top three functional backgrounds in the Thai study were sales and marketing (36.59%),

planning and management (35.77%), finance and accounting (34.96%), whereas others

(33.05%) engineering and production (30.89%), financing and accounting (22.88%)

were the top three functional backgrounds of CEOs in the Australian study.

Additionally, both studies showed that the majority of CEOs had tenure in their current

position of less than 5 years followed by 5 to 10 years and then more than 10 years and

about 60% of CEOs had no CEO experience in other firms. However, CEOs in the Thai

study were more likely to have CEO experience elsewhere of 5 years or more than

CEOs in the Australian study. About 60% of CEOs in the Thai study had worked for

their current firms for more than 10 years whereas in the Australian study slightly less

than 60% of CEOs had worked 10 years or less for their current firms.

Both studies indicated that about 45% of CEOs had industry experience of more than 20

years and there were no large differences in both the CEO tenure in current position and

the work experience of CEOs. CEOs in both studies had a similar pattern of experience.

CEOs in the Thai study were more likely to be appointed from outside the firms

whereas CEOs in the Australian study were more likely to be promoted from within

their firm.

It would be appear that CEOs in both studies were more likely to adopt an autocratic

style of leadership than a democratic style of leadership. The Thai CEOs were less

likely to share information and objectives to their subordinates than the Australian

CEOs. The Thai CEOs believed that the average subordinates need to be provided only

information which is necessary for them for their immediate tasks, they believed in

internal control followed by encouraging participation by subordinates and capacity for

leadership and initiative of subordinates. On the other hands, Australian CEOs believed

in sharing information followed by internal control, participation, and capacity for

leadership and initiative respectively.

201

Chapter 9: Comparison of Findings from Extended Thai Study with Hypotheses

202

Chapter 9

Comparison of Findings from Extended Thai Study with Hypotheses

9.1 Introduction

This chapter aims to discuss the data analyses for each of the seven hypotheses

generated for this research. To test these hypotheses, the discussions are organised into

five main sections. Section 9.2 examines the relationship of executive leadership and

organisational performance. Section 9.3 tests the extent to which the behavioural

complexity was related to high organisational performance. Section 9.4 explores CEO

attributes of high performing firms. Section 9.5 investigates the relationship between

CEO attributes and behavioural complexity. Section 9.6 examines the specific

relationship between CEO attributes and contingency factors. The results in this chapter

are based on the modified instrument as detailed in chapter 5: Table 5.4 and Table 5.10.

9.2 Executive Leadership and Organisational Performance

This section aims to examine the relationship between executive leadership and

organisational performance according to the first hypothesis.

Hypothesis 1: Executive leadership will have more impact on organisational

effectiveness than on business and financial performance.

The discussion is organised as follows. Firstly, the degree of relative importance of each

of executive leadership role on the three dimensions of organisational performance,

controlling for the size and the environmental variables, is examined. Secondly, the

relative importance of each of the CEO attributes with respect to each dimension of

organisational performance is assessed. Thirdly, the overall results are summarised.


203

9.2.1 Impact of Executive Leadership Roles

To test the first hypothesis, multiple regression analysis was performed to examine the

impact of leadership roles as the independent variables on the three dimensions of

performance as the dependent variables, controlling for size and the three environmental

variables in the three separate regression equations. Table 9.1 shows the results of these

analyses.

In interpreting these results it is important to note that the predictive power of the three

equations was different. All independent variables explained 10% of the variance of

business performance and 19% of organisational effectiveness but none of the variance

of financial performance. The only control variable that was an important predictor of

performance was munificence of environment, which had a positive effect on business

performance (p=.02) and organisational effectiveness (p=.004). However, size,

dynamism and complexity were not found to be important predictive variables of

performance. Net of the control variables, two of the four executive leadership roles

were significant predictors of performance. As expected, the analyser role was a

significant predictor of business performance (p=.01) but was not related to financial

performance and organisational effectiveness. The motivator role was strongly

associated with organisational effectiveness (p=.002) and was unrelated to financial

performance and business performance. However, the vision role and the task master

role were not predictive of firm performance on any dimensions.


204

Table 9.1


Organisational Performance on Executive Leadership Roles a

Organisational Performance Measure Roles/Controls

Financial Business Effectiveness

Vision setter .06 -.01 .12

Motivator .07 .10 .30**

Analyser .06 .25* -.02

Task master -.02 .39 .02

Dynamism -.09 -.10 -.15

Complexity .04 .02 .11

Munificence .12 .21* .25**

Size .06 .15 .12

Adj R2 -.03 .10 .19

F .54 2.69 4.66

P .83 .009 .000

SE 1.13 .88 .65

N 123 123 123 a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.

9.2.2 Impact of CEO Attributes

To further test the first hypothesis, multiple regression analysis was performed to assess

the impact of each of CEO attributes as the independent variables with respect to each

dimension of organisational performance as the dependent variables.

Before investigating the data, codings were utilised with overseas work experience,

older age (more than 45 years), holding bachelor’s degree and above, holding an MBA

degree, internal appointment, overseas study and autocratic style as dummy variables,

and no overseas work experiences, younger age (equal and less than 45 years), no

university degree, no MBA degree, no overseas study, democratic style and external

appointment as control groups.


205

Table 9.2 shows the results of these analyses. All independent variables explained 7%

of total variance in financial performance, 6% in business performance, while they

explained 18% in organisational effectiveness. Among the CEO attributes, older (more

than 45 years) and democratic CEOs and had a significant negative effect on financial

performance (p=.046 and p=.045 respectively). CEOs with high need for achievement

were positively related to organisational effectiveness (p=.000). The results showed that

these attributes did not have any influence on business performance. Organisational

effectiveness appeared to be the most influenced performance dimension by these CEO

attributes.

Table 9.2

Multiple Regression: Organisational Performance on CEO Attributes a

Organisational Performance Measure CEO Attributes


CEO tenure in the current position .06 .21 .03

CEO experience in other firms .12 -.02 .02

Total tenure in the firm .10 -.06 .13

Industry experience -.09 -.01 -.01

Overseas working experience -.02 .13 .02

Age -.22* .11 .02

Level of education .10 .16 .15

Holding an MBA degree -.19 -.15 -.01

Origin of appointment .04 .15 .22

Overseas study -.09 -.13 -.10

Leadership style -.20* -.18 -.11

Need for achievement .16 .19 .35*

Locus of control -.18 -.09 -.14

Adj R2 .07 .06 .18

F 1.59 1.52 2.79

P .10 .12 .002

SE 1.08 .90 .66

N 123 123 123 a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.


206

In conclusion, the data revealed evidence that executive leadership (leadership roles and

CEO characteristics) had greater impact on organisational effectiveness than on the

other performance dimensions. Executive leadership had little influence on financial

performance and business performance. Consequently, the first hypothesis was

confirmed.

9.3 Behavioural Complexity and Organisational Performance

This section aims to explore the relationship between behavioural complexity and

organisational performance. One of the objectives was to investigate the extent to which

the simultaneous mastery of four leadership roles was related to high firm performance

according to the second and third hypotheses.

Hypothesis 2: High behavioural complexity or the simultaneous use of the vision setter,

motivator, analyser and task master roles by CEOs will be associated with high

performance on all three performance dimensions namely financial, business, and


Hypothesis 3: High behavioural complexity will be positively associated with all three

domains of organisational performance regardless of contingency factors including size


To test these hypotheses, the index of behavioural complexity was developed, and then

the association of these role configurations with firm performance was examined. The

findings were also re-examined by incorporating a contingency approach in order to test

whether the results were universal or contingent on contingency factors including size



207

9.3.1 Constructing Behavioural Complexity Index

In this section the roles were scored on the basis of their percentile breaks and then the

behavioural complexity index was constructed by summing of scores on the basis of

four roles. By this classification, the leadership roles were partitioned into low level,

medium level and high level of behavioural complexity. Table 9.3 summarises the

distribution of behavioural complexity group.

Table 9.3

Scoring the Level of Behavioural Complexity

Group Score N %

1. Low complexity 3,4,5 32 26.00

2. Medium complexity 6,7,8 56 45.50

3. High complexity 9,10,11,12 35 28.50

Missing - -

Total 123 100.00


To explore the impacts of behavioural complexity on organisational performance,

ANOVA was carried out with behavioural complexity as the independent variables and

the three performance factors as the dependent variables (refer Table 9.4). The data

suggested that there was a pattern in that high complexity groups tended to have slightly

higher means on all three-performance factors compared to the low complexity group.

Nevertheless, the differences were statistically significant only for the variables of

organisational effectiveness. The Scheffe contrasts test indicated that the score for high

complexity (mean=5.53) significantly differed from that for medium complexity

(mean=5.02), and the differences were significant at.01 (p =.004) levels.


208

Table 9.4

ANOVA Results:

Behavioural Complexity and Organisational Performance a

Organisational Performance Measure Behavioural

Complexity N


1.Low complexity 32 4.38 4.42

5.11

2.Medium complexity 56 4.58 4.58 5.02

(3)

3.High complexity 35 4.69 4.92

5.53

(2)

Mean 4.56 4.64 5.19

N 123 123 123

F .67 2.73 5.95

P .52 .07 .003 a Data reported in the table are the mean values and the significant (p<0.05) Scheffe contrasts in (parenthesis). For

example the high complexity group was significantly different from the medium complexity group with respect to


9.3.2 Contingency Approach

To clarify the specific relationship between behavioural complexity and organisational

performance, the cases were split; firstly according to the size of firm (small vs. large),

secondly on the basis of perceived environmental conditions (stable vs. turbulent), and

finally according to the types of business strategy (defender, prospector, analyser).

Reactor type was dropped from the analysis due to the small sample size.

9.3.2.1 The Effect of Size

Since environmental conditions might have strong moderating effects on behavioural

complexity, multiple regression analysis was performed including the environmental

factors as controls along with dummy variables for high complexity and medium

complexity. Dummy variable coding was utilised with the low complexity serving as


209

the comparison group. The results are presented in Table 9.5. Munificence of

environment was a significant positive predictor of business performance (p=.02) and

organisational effectiveness (p=.004). Net of control variables, high complexity group

had a significant relationship with business performance (p=.04) and organisational

effectiveness (p=.03)

The split between small firms and large firms did not produce any statistically

significant results on control factors. Munificence of environment was significantly

predictive of organisational effectiveness regardless of the size of firm. In small firms,

medium complexity was a statistically significant predictor of organisational

effectiveness (p=.02). In large firms, high behavioural complexity was positively related

to business performance (p=.02) and organisational effectiveness (p=.005). The results

showed the importance of high behavioural complexity in large firms on business

performance and organisational effectiveness.

9.3.2.2 The Effect of Environmental Factors

To examine the relationship of behavioural complexity with performance in different

environmental conditions and to control for size of firm, multiple regression analysis

was performed including behavioural complexity group and size as the independent

variables and the three performance factors as the dependent variables. The results are

presented in Table 9.6. When the firms were split according to Q-type cluster analysis

by environmental dimensions as either stable or turbulent environments. Size was not

found to be a significant predictor of any performance dimensions but high behavioural

complexity had statistically significant predictive power on organisational effectiveness

in a stable environment (p=.039).

9.3.2.3 The Effect of Business Strategy

To test the relationship of leadership configuration in different types of strategy on firm

performance, and to examine the effects of control variables, multiple regression

analysis was performed including environmental factors and size as controls along with


210

leadership configuration as the independent variables and the three-performance factors

as the dependent variables. The results are presented in Table 9.7. In the prospector

group, complexity of environment and high behavioural complexity were a statistically

significant predictor of organisational effectiveness (p=.009, p=.043) respectively. In

the analyser group, munificence of environment was positively related to organisational

effectiveness (p=.001). Statistically significant relationships were identified between

high complexity group and all three-performance dimensions (financial: p=.049,

business: p=.024; organisational effectiveness: p=.02) for firms following an analyser

type of strategy. Given that this is the first time a significant association between

behavioural complexity and financial performance has been found, namely for firms

following an analyser type of strategy additional analyses were undertaken to explore

the characteristics of the firms who have an analyser strategy. Table 9.8 shows that

firms pursuing an analyser type strategy have a higher proportion of high performing

firms than do the firms pursuing either a prospector or defender strategy.

In conclusion, the data provided evidence that high behavioural complexity was

significantly associated with higher business performance and organisational

effectiveness in general, and for large firms and for firms following an analyser type of

strategy. High complexity group also had a positive association with organisational

effectiveness both for firms in a stable environment and for firms pursuing a prospector

strategy. However, there was no relationship between high behavioural complexity and

financial performance regardless of any situational factors except for the analyser firms.

It was shown that CEOs with high behavioural complexity in firms following an

analyser type of strategy were positively related to all three-performance dimensions

namely financial performance, business performance, and organisational effectiveness.

Thus, the second and third hypotheses were partially confirmed.

211

Table 9.5



(Comparing Small and Large Firms)

Total Small Large Roles/Controls


High complexity .12 .23* .24* -.01 .13 .11 .30 .38* .46**

Medium complexity .09 .10 -.07 .01 .11 -.32* .18 -.03 .20

Dynamism -.08 -.05 -.14 -.19 .30 -.26 -.03 .17 -.14

Complexity .04 .02 .17 .23 .12 .25 -.06 -.03 .12

Munificence .12 .21* .25** .29* .21 .23* -.09 .19 .28*

AdjR2 -.01 .05 .15 .05 .03 .17 -.03 .18 .18

F .67 2.23 .34 1.66 1.45 3.70 .69 3.64 3.52

P .65 .06 .000 .16 .22 .006 .63 .007 .008

SE 1.12 .91 .66 1.13 .96 .66 1.09 .78 .63

N 123 123 123 65 65 65 58 58 58 a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.

212

Table 9.6



(Comparing Stable and Turbulent Environment)

Total Stable Turbulent Roles/Controls


High complexity .13 .24* .26* .08 .17 .27* .11 .31 .23

Medium complexity .08 .06 -.10 .19 .07 -.18 .11 .05 .01

Size .05 .14 .18 .14 .05 .20 -.04 .23 .11

AdjR2 -.01 .04 .10 .00 -.02 .13 -.05 .06 0

F .53 2.58 5.55 1.01 .52 4.60 .12 2.16 .97

P .67 .06 .001 .39 .67 .006 .95 .11 .42

SE 1.12 .91 .68 1.03 .91 .61 1.27 .94 .79

N 123 123 123 71 71 71 52 52 52

a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.

213

Table 9.7



(Comparing Business Types)

Defender Prospector Analyser Roles/Controls


High complexity .44 .15 -.03 .13 .17 .38* .36* .41* .35*

Medium complexity .16 .02 -.15 .25 .14 .11 .04 .15 -.06

Dynamism -.40 -.29 -.31 .06 .10 -.26 .21 .01 .09

Complexity -.26 -.02 .07 .06 .14 .43** -.11 0 -.05

Munificence -.17 .32 0 .29 .07 .10 .04 .19 .45**

Size .13 .16 .31 .15 .26 .10 -.20 -.01 .49

AdjR2 0 -.08 -.12 .04 0 .23 .05 .06 .37

F 1.02 .65 .54 1.25 1.03 3.03 1.39 1.48 5.69

P .44 .69 .78 .31 .43 .02 .24 .21 .000

SE 1.17 1.13 .73 1.12 .94 .59 .97 .84 .61

N 28 28 28 42 42 42 50 50 50 a Data reported in the table are standardised beta coefficients. *: p < .05; **: p < .01; ***: p < .001.

214

Table 9.8

Business Strategy

(Comparing High Performers vs. Low Performers)

Low Performers High Performers Strategy Type

N % N %

Defender 17 30 11 17

Prospector 19 33 23 37

Analyser 21 37 29 46

Total 57 100 63 100

N: number of companies; %: percentage within total number of companies. Low Performers High Performers Total

Strategy Type N % N % N %

Defender 17 61 11 39 28 100

Prospector 19 45 23 55 42 100

Analyser 21 42 29 58 50 100

N: number of companies; %: percentage within total number of strategy type.


215

9.4 CEO Attributes and Organisational Performance

This section aims to examine the relationship between CEO attributes and

organisational performance. To discover appropriate CEO attributes that contribute best

to high performing firms, two different methods were used to classify performance;

constructing a performance index and Q-Type cluster analysis.

This section also repeats the data analysis by incorporating a contingency approach. The

primary goal was to examine whether the results were universal attributes or contingent

on either size of firm, environmental conditions, or business strategy. The fourth and

fifth hypothesis related to the CEOs attributes of high performing firms.


particular attributes e.g., greater tenure in position, tenure in firm and industry

experience, higher need for achievement, and more internal locus of control than those

in lower performing firms.


particular attributes e.g. greater experience, higher need for achievement, more

internal locus of control regardless of organisational size, business strategy and

environmental conditions.

9.4.1 Comparing CEO Attributes of High and Low Performers:

Constructing Performance Index

To explore the association of firm groups with CEO attributes, the firms were classified

according to their performance level. They were classified into high and low performers

according to their median breaks (median= 4.67 for finance, median=4.67 for business,

median=5.20 for organisational effectiveness). By this classification, the high

performers were those firms, whose mean score were above the median on all three-

performance factors. On the contrary, the low performers had mean scores below


216

median scores on all three factors. The rest of cases were considered as unbalanced.

Table 9.9 shows the distribution of firms according to this classification.

Table 9.9

Firm Classification Based on Performance Level

Firm Group N %

Low performers 29 23.60

High performers 20 16.30

Unbalanced 74 60.20

Missing - -

Total 123 100


To examine the relationship of CEO attributes to firm groups, ANOVA was conducted

with the performance level of firms (low, high, and unbalanced) as the independent

variables and the CEO attributes as the dependent variables. Table 9.10 summarises

ANOVA results showing the differences among the firm groups on the CEO attributes.

The results showed that there was a statistically significant difference for the variables

of tenure in position by firm groups. The Scheffe contrasts test indicated that the score

for low performers (mean=9.79) significantly differed from that for high performers

(mean=16.6) and unbalanced (mean=14.86), and the differences were all significant at

.05 level (p=.046 and .049, respectively).

The results showed that the difference in the mean score for the variable of need for

achievement by firm groups was statistically significant. The Scheffe contrasts test

indicated that the score for high performers (mean=5.96) significantly differed from that

for low performers (mean=5.37) and unbalanced (mean=5.49), and the differences were

significant at .01 (p=.006) and .05 (p=.014) levels respectively.


217

The results also suggested that there was a statistically difference in mean score for the

variable of locus of control by firm groups. The Scheffe contrasts test indicated that the

mean score for high performers (mean=4.50) significantly differed from that for low

performers (mean=6.83) at 0.5 level (p=.038).

Table 9.10

ANOVA Results for CEO Attributes a

Firm Group N Tenure in

Position

CEO Exp.

elsewhere

Tenure in

Firm

Industry

Experience.

Need for

Achievement

Locus of

Control

1. Low

performers

29 6.21 4.24 9.79

(2,3)

19.62 5.37

(2)

6.83

(2)

2. High

performers

20 9.00 4.90 16.60

(1)

23.50 5.96

(1,3)

4.50

(1)

3. Unbalanced 74 9.68 4.28 14.86

(1)

19.46 5.49

(2)

6.16

Mean 8.75 4.37 13.95 20.15 5.54 6.05

N 123 123 123 123 123 123

F 2.09 0.07 4.05 1.48 5.85 3.48

P .13 .93 .02 .23 .004 .03 a Data reported in the table are the mean values and the significant (p<.05) Scheffe contrasts (in parentheses). For

example the high performers was significantly different from the low performers with respect to the tenure in firm.

Because of sample size this classification had limitations in examining the impact of

other CEO attributes on firm groups. For this reason, another classification was

developed in the following section based on Q-Type cluster analysis.

9.4.2 Comparing CEO Attributes of High and Low Performers:

Q-Type Cluster Analysis

The Q-type cluster analysis was performed sequentially asking for 2, 3 and 4 clusters to

classify performance. Since the program automatically produces groups, which were

statistically different from one another, the two-cluster solution was selected as the most

suitable based upon the interpretability of the clusters. Table 9.11 demonstrates the final


218

cluster centre and descriptive statistics for each cluster. The first cluster had consistently

high scores on each of the three-performance factors, while the second cluster had

consistently lower scores on each of the firm performance. Therefore, they were labeled

as high performers and low performers respectively.

Table 9.11

Q-Type Cluster Analysis:

Final Cluster Centre and Descriptive Statistic in Each Cluster

Performance Measure Clusters N


1. Cluster 1 65 5.36 5.07 5.50

2. Cluster 2 58 3.66 4.16 4.84

Missing -

Mean 4.56 4.64 5.19

To explore the relationship of CEO attributes with performance, t-tests were performed

with the two groups of firm performance (high performers and low performers) (refer

Table 9.12). The results suggested that the differences between high performers and low

performers for the variables of tenure in the firm and need for achievement were all

significant at .01 level (p=.008 and p=.002 respectively). The mean score difference

between high performers and low performers was significant at .05 level (p=.04) for the

variable of tenure in position. High performers scored higher for tenure in firm, need for

achievement and tenure in position than did low performers.


219

Table 9.12

T-Test Results for CEO Attributes a

CEO Attributes Sample

Mean Low Performers High Performers Sig. Level

Tenure in position 8.75 7.19 10.14 .04*

CEO experience elsewhere 4.37 3.88 4.82 .44

Tenure in the firm 13.95 11.55 16.09 .008**

Industry experience 20.15 18.67 21.48 .11

Need for achievement 5.54 5.34 5.70 .002**

Locus of control 6.05 6.62 5.54 .06 a Data reported in the table are the mean values. *: p<.05; **: p<.01; ***: p<.001.

To investigate further other CEO attributes, cross tabulation and Cramer’s V test were

performed for each of the following variables, age, level of education, holding an MBA

degree, overseas study, functional background, overseas work experiences, origin of

appointment and leadership style (refer Table 9.13). The data suggested that origin of

CEO appointment was related to firm group [r=.186, p<.05 (p=.039)]. High performing

firms were more likely to appoint internals to be CEOs, while low performing firms

were more likely to appoint externals to be CEOs.

The data also showed that leadership style was associated with firm group [r=242, p<.05

(p=.011)]. It can be inferred that CEO’s serving in high performing firms predominantly

had autocratic styles. On the other hand, most of the CEOs in low performing firms had

democratic styles.


220

Table 9.13

Comparing High Performers vs. Low Performers

Low Performers High Performers Cramer’s V CEO Attributes

N % N % Value Sig.

Age

<= 45 years old

> 45 years old

10

48

17

83

14

51

22

78

.054

.55

Level of education

Bachelor and under

Postgraduate

27

31

47

53

34

31

52

48

.057

.52

.

Holding an MBA degree

Yes

No

16

42

28

72

18

47

28

72

.001

.99

Overseas study

Yes

No

40

18

69

31

40

25

62

38

.078

.39

Functional background

Finance and accounting

Engineering and production

Sales and marketing

Planning and management

22

14

21

20

38

24

36

35

21

16

24

24

32

25

37

37

.059

.006

.007

.025

.51

.95

.93

.78

Overseas work experience

Yes

No

24

34

41

59

22

43

34

66

.078 .39

Origin of appointment

Internal

External

24

34

41

59

39

26

60

40

.186 .04*

Leadership style

Autocratic

Democratic

21

32

40

60

37

21

64

36

.242 .01*

*: p<.05; **: p<.01; ***: p<.001.

In conclusion, the above analyses suggest that there were associations between CEO

attributes and firm group. Comparing the high performing firms with low performing

firms showed that the CEO’s in the high performing firms had relatively longer tenure

in position, longer tenure in current firm, higher need for achievement, more internal

locus of control, internal origin of appointment and autocratic leadership style.


221

Statistically, there was no significant difference between high performers and low

performers for the variables of tenure in the existing position, CEO previous experience,

industry experiences, age, level of education, holding an MBA degree, overseas study,

functional background, and overseas work experiences. Hence, the fourth hypothesis

was partially confirmed.

9.4.3 Contingency Approach

To test the fifth hypothesis, the relationship between CEO attributes and organisational

performance were re-examined by applying a contingency approach. Each analysis was

performed in respect to the contingency factors; size of firm, environmental conditions,

and business strategy.

9.4.3.1 Size

Table 9.14 is a summary of t-test results of CEO attributes between high performing

firms and low performing firms. The firms were split at the median number of

employees; cases below 700 employees were classified as small and above 700

employees as large. When the firms were split according to their sizes, there was a

statistically significant mean score difference between high performers and low

performers, and these were significant at .01 level for the variables of tenure in position,

(p=.004) and tenure in the firm (p=.004) in small firms. The differences between high

performers and low performers for the variables of need for achievement and locus of

control were found in large firms and these were all significant at .05 level (p=.02 and

p=.01 respectively)


222

Table 9.14



Small Large

CEO Attributes Low

Performers

High

Performers

Sig.

Level

Low

Performers

High

Performers

Sig.

Level

Tenure in position 5.2 10.16 .004*** 10.00 10.12 .96

CEO experience elsewhere 2.79 6.19 .030* 5.42 3.56 .35

Tenure in the firm 8.19 14.77 .004*** 15.29 17.29 .46

Industry experience 16.62 18.35 .425 21.58 24.32 .29

Need for achievement 5.36 5.63 .075 5.33 5.38 .02*

Locus of Control 6.38 6.32 .940 6.96 4.82 .01* a Data reported in the table are the mean values.

*: p<.05; **: p<.01; ***: p<.001.


performed for small firms and large firms. Table 9.15 shows that for large firms the

high performing firms tended to have CEOs with a sales and marketing background

than those in low performing firms [r=.261,p<.05 (p=.047)]. Statistically, there was no

significant difference between high performers and low performers for other variables

regardless of the size of firm.


223

Table 9.15

Cramer’s V Test for CEO Attributes


Small Large

CEO Attributes Low

Performers

(%)

High

Performers

(%)

Cramer’s V

Sig.

Low

Performers

(%)

High

Performers

(%)

Cramer’s V

Sig.

Age

<= 45 years old

> 45 years old

27

73

19

81

.50 - - -

Level of education

Bachelor and under

Postgraduate

32

68

48

52

.19

67

33

56

44

.41


Yes

No

38

62

32

68

.62

13

87

23

77

.29

Overseas study

Yes

No

74

26

58

42

.19

63

37

65

35

.86




Sales and marketing


35

29

50

35

36

19

32

32

.98

.35

.15

.80

42

17

17

33

29

29

41

41

.33

.26

.047*

.54


Yes

No

42

58

26

74

.19

43

58

41

59

.97

Origin of Appointment

Internal

External

38

62

55

45

.18

46

54

65

35

.15

Leadership Style

Autocratic

Democratic

45

55

70

30

.05

32

68

57

43

.08

*: p<.05; **: p<.01; ***: p<.001.



firms and low performing firms in stable and turbulent environments. In turbulent


224

environments, there was a statistically significant mean score difference between high

performers and low performers for the variable of tenure in firm and locus of control

and these were significant at .05 level (p=.03 and p=.02 respectively). The data also

found there was a statistically difference in mean score for the variable need for

achievement by firm groups in turbulent environments, the CEOs of high performing

firms having a higher need for achievement at 0.1 level (p=.005).

Table 9.16



Stable Turbulent

CEO attributes Low

Performers

High

Performers

Sig.

Level

Low

Performers

High

Performers

Sig.

Level

Tenure in position 6.56 8.46 .20 8.23 12.10 .15

CEO experience elsewhere 2.72 4.06 .28 5.77 5.70 .98

Tenure in the firm 10.44 12.51 .23 13.36 20.27 .03*

Industry experience 17.72 18.54 .71 20.23 24.90 .07

Need for achievement 5.30 5.50 .17 5.43 5.94 .005*

Locus of control 6.28 5.58 .15 7.18 5.20 .02*

a Data reported in the table are the mean values.

*: p<.05; **: p<.01; ***: p<.001.


performed for the stable and turbulent environment group. Table 9.17 shows that there

was a strong relationship between leadership style and firm groups in a stable

environment, CEOs serving in high performing firms predominantly had autocratic

leadership styles (p=.002). In the turbulent environment, the data showed that there

were significant relationships between firm groups and overseas study. Surprisingly,

CEOs in low performing firms were more likely to graduate from overseas countries

(p=.002). The data also suggested that financing and accounting background was

associated with the firm groups. The low performers were more likely to employ CEOs

with financing and accounting background (p=.04). According to the Crammer’s V test,

there were associations between firm groups and overseas working experiences. The


225

results showed that CEO of low performing firms more likely to have overseas working

experience than those of high performing firms (p=.04).

Table 9.17

Cramer’s V Test for CEO Attributes


Stable Turbulent

CEO Attributes Low

Performers

(%)

High

Performers

(%)

Crammer’s V

Sig.

Low

Performers

(%)

High

Performers

(%)

Cramer’s V

Sig.

Age

<= 45 years old

> 45 years old

22

78

34

66

.230 - - -

Level of education

Bachelor and under

Postgraduate

47

53

49

51

.91

46

54

57

43

.42


Yes

No

22

78

37

63

.17

36

64

17

83

.11

Overseas study

Yes

No

58

42

77

23

.09

86

14

43

57

.002**




Sales and marketing


28

31

33

36

40

29

26

46

.28

.86

.48

.41

55

14

41

32

23

20

50

27

.02*

.55

.52

.69


Yes

No

33

67

40

60

.56

55

45

27

73

.04*


Internal

External

39

61

57

43

.12

45

55

63

37

.20

Leadership style

Autocratic

Democratic

34

66

74

36

.002**

48

52

52

48

.77

*: p<.05; **: p<.01; ***: p<.001.


226



firms and low performing firms for different types of business strategy. In the

prospector strategy group, the t-test showed there was a significant difference of CEO

attributes between high performers and low performers for the variable need for

achievement, and the difference was significant at .05 level (p=.01). In the analyser

strategy group there was also a significant mean difference between high performers

and low performers for the variable locus of control (p=.03). Interestingly, the results

also showed that for firm pursuing an analyser type of strategy, CEOs in high

performing firms tended to have a higher score on the variables of tenure in firm and

need for achievement than CEOs in low performing firms.

To examine further other CEO’s attributes, cross tabulation and Cramer’s V test were

performed (refer Table 9.19). The results revealed that there was a significant

relationship between leadership style and firm groups in the defender strategy group.

CEOs serving in high performing firms predominantly had autocratic styles (p=.02). In

the prospector strategy group, there were significant relationships between firm groups

and origin of appointment (p=.01). It can be inferred that internal CEOs tend to be

employed in high performing firms.

In conclusion, the above analyses for each of the contingency factors suggested


attributes with the specific attribute requirements being dependent on the situations.

Consequently, the fifth hypothesis was rejected.

227

Table 9.18


(Comparing Business Strategy)


CEO attributes Low

Performers

High

Performers

Sig.

Level

Low

Performers

High

Performers

Sig.

Level

Low

Performers

High

Performers

Sig.

Level

Tenure in position 6.12 10.73 .21 8.42 8.87 .84 7.24 10.97 .13

CEO experience else. 2.88 2.64 .88 5.74 5.96 .93 3.19 4.72 .41

Tenure in the firm 10.06 13.73 .33 11.63 14.57 .27 13.19 18.66 .06

Industry experience 16.18 19.82 .39 18.95 23.43 .09 20.14 20.72 .84

Need for achievement 5.29 5.67 .15 5.47 5.96 .01* 5.27 5.56 .12

Locus of control 6.71 5.18 .19 5.42 5.48 .95 7.76 5.66 .03* a Data reported in the table are the mean values.

*: p<.05; **: p<.01; ***: p<.001.

228

Table 9.19

Cramer’s V Results for CEO Attributes a



CEO Attributes Low

Performers

(%)

High

Performers

(%)

Crammer’s V

Sig.

Low

Performers

(%)

High

Performers

(%)

Crammer’s V

Sig.

Low

Performers

(%)

High

Performers

(%)

Crammer’s V

Sig.

Age

<= 45 years old

> 45 years old

12

88

27

73

.30

5

95

13

87

.39

33

67

28

72

.66

Level of education

Bachelor and under

Postgraduate

41

59

45

54

.82

53

47

44

56

.55

48

52

59

41

.44


Yes

No

29

71

36

64

.70

42

58

26

74

.27

14

86

28

72

.26

Overseas study

Yes

No

71

29

82

18

.50

63

37

65

35

.89

71

29

52

48

.16




Sales and marketing


41

41

24

41

18

46

18

46

.20

.82

.74

.82

26

11

42

37

30

13

48

35

.77

.18

.71

.29

48

19

43

29

38

28

31

38

.49

.49

.39

.49

*: p<.05; **: p<.01; ***: p<.001.

229

Table 9.19 (continued)

Cramer’s V Results for CEOs Attributes



CEO Attributes Low

Performers

(%)

High

Performers

(%)

Crammer’s V

Sig.

Low

Performers

(%)

High

Performers

(%)

Crammer’s

V

Sig.

Low

Performers

(%)

High

Performers

(%)

Crammer’s V

Sig.

Overseas working experience

Yes

No

41

58

27

73

.45

47

53

39

61

.59

33

67

35

65

.93


Internal

External

41

59

36

64

.80

32

68

70

30

.01*

52

48

66

34

.35

Leadership style

Autocratic

Democratic

33

67

80

20

.02

53

47

65

35

.46

35

65

56

44

.16

*: p<.05; **: p<.01; ***: p<.001.


230

9.5 Behavioural Complexity and CEO Attributes

This section aims to examine the extent to which the simultaneous mastery of four

roles- behavioural complexity – was related to the CEO attributes according to the sixth

hypothesis.

Hypothesis 6: CEOs who demonstrate greater behavioural complexity will be more

likely to have particular attributes e.g. greater experience, higher level of education,

and more internal locus of control than less behaviourally complex CEOs.

To discover appropriate attributes that would have the most effect on behavioural

complexity of CEOs, two different methods were used to classify executive leadership

roles. Firstly, Q-Type cluster analysis was performed to classify leadership roles.

Secondly, leadership roles were partitioned into high, medium high, medium low and

low complexity by scoring cases on the basis of four roles. Then, the relationship of

these role configurations with performance was examined.

9.5.1 Q-Type Cluster Analysis on Leadership Roles

The Q-type cluster analysis was performed sequentially asking for 2, 3 and 4 clusters to

classify leadership roles. Since the program automatically produces groups, which were

statistically different from one another, the three-cluster solution was selected as the

most suitable based upon the interpretability of the clusters. Table 9.20 demonstrates the

final cluster centre and descriptive statistics in each cluster. The data showed that the

cluster one had consistently low mean scores on each of the four roles, while the cluster

two and the clusters three had consistently high and higher mean scores on each of the

four roles. Therefore, they were labeled as low, medium, and high behavioural

complexity.


231

Table 9.20

Q-Type Cluster Analysis:

Final Cluster Centre and Descriptive Statistic in Each Cluster

Clusters N Vision Motivator Analyser Task Master

1. Cluster 1 26 3.06 3.42 3.38 3.13

2. Cluster 2 60 4.07 3.63 3.58 3.42

3. Cluster 3 37 4.44 4.28 4.26 4.20

Missing -

Mean 123 3.97 3.78 3.74 3.59

To explore the relationship of behavioural complexity with CEO attributes, ANOVA

was performed with three groups of behavioural complexity as the independent

variables and CEO attributes as the dependent variables. Table 9.21 presents the results

of these analyses. The data showed that CEOs who had higher behavioural complexity

tended to have higher means for tenure in position, CEO experience elsewhere, tenure

in firm, industry experience, need for achievement and a lower mean for locus of

control. However, the differences were statistically significant only for the variables

need for achievement and locus of control.

The Scheffe contrasts test indicated that the mean score for high complexity

(mean=5.87) significantly differed from that for low complexity (mean=4.33) and

medium complexity (mean=5.42), and the differences were all significant at .01 level

(p=.004. and p=.003 respectively) for the variable need for achievement. There was

also a significant mean difference (p= .004) between high complexity (mean=4.76) and

low complexity (mean=7.38) for the variable locus of control.


232

Table 9.21

ANOVA Results:

Leadership Types and CEO Attributes a

Leadership

Types N

Tenure in

Position

CEO Exp.

Elsewhere

Tenure in

Firm

Industry

Experience

Need for

Achievement

Locus of

Control

1. Low

complexity

26 6.38 4.08 12.08 18.81 5.33

(3)

7.38

(3)

2. Medium

complexity

60 9.88 4.12 14.73 20.43 5.42

(3)

6.27

3. High

complexity

37 8.57 5.00 14.00 20.65 5.87

(1,2)

4.76

(1)

Mean 8.75 4.37 13.95 20.15 5.54 6.05

N 123 123 123 123 123 123

F 1.84 .23 .70 .33 7.92 6.04

P .16 .80 .50 .72 .001 .003 a Data reported in the table are the mean values and the significant (p<0.5) Scheffe contrasts in (parenthesis). For

example the high complexity group was significantly difference from the low complexity group with respect to need

for achievement.

9.5.2 Constructing Behavioural Complexity Index on Leadership Roles

To provide a direct test of the hypothesis, it was necessary to define a more restrictive

set of leadership types. To accomplish this end, the roles were scored on the basis of

their percentile breaks, and the cases were scored by summing the score of four

leadership roles. The leadership roles were partitioned into four groups – low, medium

low, medium high, and high level of behavioural complexity. Table 9.22 presents the

frequency statistics for this classification.


233

Table 9.22

Scoring the Level of Performing Leadership Roles

Leadership Types Score N %

1. Low complexity 3,4 22 17.89

2. Medium low complexity 5,6, 41 33.33

3. Medium high complexity 7,8,9 41 33.33

4. High complexity 10,11,12 19 15.45

Missing - -

Total 123 100.00

To explore the relationship of CEO attributes on leadership types, ANOVA was

performed with the leadership types; low level, medium low level, medium high level

and unbalanced level of behavioural complexity as the independent variables and the

CEO attributes as the dependent variables (refer Table 9.23).

As with the previous classification, the results suggested that there was a statistically

significant relationship for the variables of need for achievement and locus of control.

CEOs who demonstrate greater behavioural complexity have a higher need for

achievement and more internal locus of control. The Scheffe contrasts test indicated that

the mean score for high complexity (mean=5.75) significantly differed from that for low

complexity (mean=12.05) and medium complexity (mean=5.71), and the differences

were all significant at .05 level (p=.039, p=.017 respectively) for the variable of need

for achievement. There was also a significant mean difference (p=.042) between high

complexity (mean 4.63) and low complexity (mean=7.41) for the variable of locus of

control.


234

Table 9.23

ANOVA Results:

Leadership Types and CEO Attributes a

Leadership

Types N

Tenure in

Position

CEO Exp.

Elsewhere

Tenure in

Firm

Industry

Experience

Need for

Achievement

Locus of

Control

1. Low

complexity

19 7.82 3.59 12.05 20.73 5.17

(3, 4)

7.41

(4)

2. Medium low

complexity

41 9.39 4.76 14.68 19.22 5.46 6.61

3. Medium high

complexity

41 8.63 4.12 14.17 21.17 5.71 (1) 5.41

4. High

complexity

22 8.68 5.00 14.11 19.32 5.75 (1) 4.63 (1)

Mean 8.15 4.37 13.95 20.15 5.54 6.05

N 123 123 123 123 123 123

F 0.19 0.21 0.35 0.38 4.50 3.89

P 0.90 0.89 0.79 0.77 0.005 0.01 a Data reported in the table are the mean values and the significant (p<0.5) Scheffe contrasts in (parenthesis). For

example the high complexity group was significantly different from the low complexity group with respect to need

for achievement.

To further examine other CEO attributes, cross tabulation and Cramer’s V test were

performed for each of the following variables, age, level of education, holding an MBA

degree, overseas study, functional background, overseas work experience, origin of

appointment and leadership style (refer Table 9.24). The results revealed that planning

and management backgrounds were related to behavioural complexity groups [r=.287

p<.01(p=.001)]. High complexity CEOs were less likely to come from a planning and

management background.

The results also showed that leadership style was associated with behavioural

complexity groups [r=.209, p<.05 (p=.028)]. The emerging pattern was that high

behaviourally complex CEOs were more likely to have autocratic leadership style than

less behaviourally complex CEOs.


235

Table 9.24

CEO Attributes of High vs. Low Complexity

Low Complexity High Complexity Cramer’s V CEO Attributes

N % N % Value Sig.

Age

<= 45 years old

> 45 years old

13

50

21

79

11

49

18

82

.029 .75

Level of education

Bachelor and under

Postgraduate

35

28

56

44

26

34

43

57

.122 .18


Yes

No

14

49

22

78

20

40

33

67

.124 .17

Overseas study

Yes

No

38

25

60

40

42

18

70

30

.101 .26




Sales and marketing


21

17

24

31

33

27

38

49

22

13

21

13

37

22

35

22

.035

.062

.032

.287

.70

.49

.72

.001**


Yes

No

25

38

40

60

21

39

35

65

.048 .59


Internal

External

29

34

46

54

34

26

57

43

.106 .24

Leadership style

Autocratic

Democratic

24

43

42

58

34

20

63

37

.209 .03*

*: p<.05; **: p<.01; ***: p<.001.

In conclusion, the results of above analyses provided evidence that CEOs who

demonstrate higher behavioural complexity had some common attributes: higher need

for achievement, more internal locus of control, autocratic leadership style and were less

likely to come from planning and management backgrounds. Statistically, there was no

significant difference between high complexity group and low complexity group for the


236

variables of tenure in position, CEO experience elsewhere, tenure in firm and industry

experience. Consequently, the sixth hypothesis was partially supported.

9.6 CEOs Attributes and Contingency Factors

This section aims to investigate the relationship between CEO attributes and

contingency factors. It tested whether the qualities required in CEOs were universal or

contingent on either size of firm, environmental conditions, or type of business strategy

according to the seventh hypothesis.

Hypothesis 7: The qualities required in CEOs will be determined to a large extent by

organisational size, environmental conditions and business strategy

To clarify the contingency nature of CEO attributes, the cases were split according to

size of firm, environmental dimensions and type of business strategy in each analysis.

9.6.1 Comparison between Small and Large Firms

This section scrutinises the association between a variety of CEO attributes and size of

the firms. It focused on the differences between small firms and large firms. The cases

were split at the median number of employees; cases below 700 employees were

classified as small and above 700 employees as large.

Two sets of analyses were carried out to investigate significant variables that

differentiated small firms and large firms. First, t-tests were conducted to compare the

mean scores of four experiences related variables and two personalities variables. Then,

cross tabulation and Cramer’s V were performed for the other CEO attributes.

Table 9.25 summarises the results of t-tests between small firms and large firms on six

variables of CEO attributes. The t-tests indicated that there was a significant difference

between small firms and large firms for the variables of industry experience, and tenure

in firm.


237

The differences of CEO attributes between small firms and large firms for the variables

of industry experience and tenure in firm were significant at .01 level (p=.001) and

(p=.005) respectively. Large firms scored higher for these two variables than did small

firms.

Table 9.25

T-Test Results for CEO Attributes

Mean CEO Attributes

Small Firms Large Firms Sig. Level

Tenure in position 7.57 10.07 .08

CEO experience elsewhere 4.42 4.33 .94

Tenure in the firm 11.71 16.47 .005**

Industry experience 17.45 23.19 .001**

Need for achievement 5.49 5.59 .40

Locus of control 6.35 5.71 .26 *: p<.05; **: p<.01; ***: p<.001.

Table 9.26 summarises the results of cross tabulation and Cramer’s V test between

smalls firms and large firms on the other CEO attributes. The data clearly showed that

level of education was associated with size of firm. The CEOs with postgraduate

qualifications were more likely to be appointed in small firms [r=.203, p<.05(p=.024)].

The results also suggested that there was an association between CEOs’ holding an

MBA degree and size of firm. The emerging pattern was that small firms tended to

employ more CEOs who hold an MBA degree than large firms [r=.183, p<.05

(p=.042)].


238

Table 9.26

Relationship between CEO Attributes and Firm Size

Small Firms Large Firms Cramer’s V CEO Attributes

N % N % Value Sig.

Age

<= 45 years old

> 45 years old

15

50

23

77

9

49

16

84

.095 .29

Level of education

Bachelor and under

Postgraduate

26

39

40

60

35

23

60

40

.203 .02*


Yes

No

23

42

35

65

11

47

19

81

.183 .04*

Overseas study

Yes

No

43

22

66

34

37

21

64

36

.025 .78




Sales and marketing


23

16

27

22

35

25

42

34

20

14

18

22

34

24

31

38

.009

.006

.109

.043

.92

.95

.23

.64


Yes

No

22

43

34

66

24

34

41

59

.078 .39


Internal

External

30

35

46

54

33

25

57

43

.107 .23

Leadership style

Autocratic

Democratic

35

26

57

43

23

27

46

54

.113 .23

*: p<.05; **: p<.01; ***: p<.001.

Hence, the above findings suggested that CEOs in small firms were more likely to hold

an MBA degree, and have completed postgraduate studies whereas CEOs in large firms

tended to have a longer tenure in current position, greater industry experience and have

a bachelor degree and under. Statistically, there was no significant difference between


239

small firms and large firms for the variables of age, overseas study, functional

background, overseas work experience, origin of appointment, and leadership style.

9.6.2 Comparison between Stable and Turbulent Environment

This section investigates the differences between CEO attributes in less and more

turbulent environments. The firms were split according to Q-type cluster analysis by

perceived environmental dimensions as either stable or turbulent environments. Again

two sets of analyses were carried out to explore the differences between stable

environment and turbulent environment on CEO attributes; t-tests and Cramer’s V test.

Table 9.27 summarises the results of t-tests between CEO’s attributes and

environmental conditions. The t-tests suggested that there were significant differences

between stable environment and turbulent environment on all attributes required in

CEOs with the exception of the variable of locus of control.

The results show that there was significant differences for CEO attributes between

stable environment and turbulent environment for the variables of tenure in firm,

industry experience and need for achievement, and the differences were all significant at

.01 level (p=.001, p=.006, and p=.006, respectively).

Table 9.27

T-Test Results for CEO Attributes

Mean

CEO Attributes Stable

Environment

Turbulent

Environment

Sig. Level


CEO experience elsewhere 3.38 5.73 .07

Tenure in the firm 11.46 17.35 .001**

Industry experience 18.13 22.92 .006**

Need for achievement 5.40 5.72 .006**

Locus of control 6.06 6.04 .975 *: p<.05; **: p<.01; ***: p<.001.


240

Table 9.28 summarises the results of cross tabulation and Cramer’s V test between

stable environment and turbulent environment on the other CEO’s attributes. The results

indicated that age was associated with environmental conditions [r=.225, p<.01(p=.005)].

The younger CEOs (equal and less than 45 years) were most likely to be employed in

firms operating in a stable environment.

Table 9.28

Relationship between CEO Attributes and Environmental Conditions

Stable

Environment

Turbulent

Environment Cramer’s V

CEO Attributes

N % N % Value Sig.

Age

<= 45 years old

> 45 years old

20

51

28

72

4

48

8

92

.225 .005**

Level of education

Bachelor and under

Postgraduate

34

37

48

52

27

25

52

48

.040 .66


Yes

No

21

50

30

70

13

39

25

75

.051 .56

Overseas study

Yes

No

48

23

68

32

32

20

62

38

.063 .49




Sales and marketing


24

21

21

29

34

30

30

41

19

9

24

15

37

17

46

29

.028

.141

.170

.124

.75

.12

.06

.17


Yes

No

26

45

37

63

20

32

39

61

.019 .84


Internal

External

34

29

48

52

29

23

56

44

.078 .39

Leadership style

Autocratic

Democratic

34

29

54

46

24

24

50

50

.039 .68

*: p<.05; **: p<.01; ***: p<.001.


241

Overall, the findings suggest that CEOs in turbulent environments were more likely to

be older (more than 45 years), stay longer in the firm, have greater industry experience

and a higher need for achievement whereas CEOs in stable environments tended to be

younger (equal and less than 45 years). Statistically, there was no significant difference

between firms operating in a stable environment and firms operating in a turbulent

environment for the variables of tenure in position, CEO experience elsewhere, locus of

control, level of education, holding an MBA degree, overseas study, functional

background, overseas work experience, origin of appointment and leadership style.

9.6.3 Comparison Between Business Strategy

This section scrutinises the association between a variety of CEO attributes and

business strategy of firms. It focused on the differences among defender, prospector,

and analyser types of strategy. The reactor was dropped from the analysis because of the

small sample size.

Two sets of analyses were carried out to investigate significant CEO attributes that

differentiated defender, prospector and analyser firms. Firstly, ANOVA procedure was

conducted to compare the mean scores of four experience related variables and two

personalities variables. Then, cross tabulation and Cramer’s V were performed for the

other CEOs attributes.

Table 9.29 is the summary of ANOVA results showing the differences among the

defender, prospector and analyser firms on CEO attributes. ANOVA was conducted to

explore the impacts of CEO attributes on business strategy of firms. The Scheffe

contrasts test (when equal variance within group is assumed) and Games-Howell test

(when equal variance within groups is not assumed) were employed to investigate

where differences lie among three groups of business strategy. The results suggested

that there was no significant difference between the business strategy of firms and CEO

attributes.


242

Table 9.29

ANOVA Results:

CEO Attributes and Business Strategy

Firm Group N Tenure in

Position

CEO Exp.

Elsewhere

Tenure in

Firm

Industry

Experience

Need for

Achievement

Locus of

Control

1. Defender 28 7.93

2.79 11.50

17.61 5.44 6.11

2. Prospector 42 8.67 5.86 13.24 21.40 5.74

5.45

3. Analyser 50 9.40

4.08 16.36

20.48 5.44

6.54

Mean 8.80 4.40 14.30 20.13 5.54 6.06

N 120 120 120 120 120 120

F 3.22 1.86 2.70 1.36 2.94 1.36

P .76 .16 .07 .26 .06 .26

Table 9.30 summarises the results of cross tabulation and Cramer’s V between the

business strategy of the firms and CEO attributes. The results showed that the business

strategy had association with age [r=.225, p<.05 (p=.048)]. The emerging pattern was

that younger CEOs (45 and less years) were more likely to be employed in analyser

firms and older CEOs (greater than 45 years) were more likely to be employed in

prospector firms.

The results also showed that engineering and production background was related to the

business strategy of firm [r=.271, p<.05 (p=.012)]. It can be inferred that the majority of

CEOs with engineering and production background were employed in defender firm.

Nevertheless, there was no other particular pattern within business strategy groups.


243

Table 9.30

Relationship between CEO Attributes and Business Strategy

Defender Prospector Analyser Cramer’s V CEO Attributes

N % N % N % Value Sig.

Age

<= 45 years old

> 45 years old

5

23

18

82

4

38

10

90

15

35

30

70

.225

.048*

Level of Education

Bachelor and under

Postgraduate

12

16

43

57

20

22

48

52

27

23

54

46

.089 .62


Yes

No

9

19

32

68

14

28

33

67

11

39

22

78

.119 .43

Overseas study

Yes

No

21

7

75

25

27

15

64

36

30

20

60

40

.122 .41




Sales and marketing


9

12

6

12

32

43

21

43

12

5

19

15

29

12

45

36

21

12

18

17

42

24

36

34

.127

.271

.186

.073

.38

.01*

.13

.73


Yes

No

10

18

36

64

18

24

43

57

17

33

34

66

.082 .67


Internal

External

11

17

39

61

22

20

52.4

47.6

30

20

60

40

.160 .21

Leadership style

Autocratic

Democratic

13

12

52

48

22

15

59.5

40.5

22

25

47

53

.110 .51

*: p<.05; **: p<.01; ***: p<.001.

Hence, the above findings suggested that the majority of CEOs with engineering and

production background were more likely to be employed in defender type group, while

younger CEOs (equal and less than 45 years) were more likely to be employed in

analyser type group and older CEOs (greater than 45 years) were more likely to be

employed in prospector type groups. Statistically, there was no significant difference

among three types of business strategy for the variables of tenure in position, CEO


244

experience elsewhere, tenure in firm, industry experience, need for achievement, locus

of control, level of education, holding an MBA degree, overseas study, functional

background, overseas work experience, origin of appointment and leadership style.

In conclusion, it was found that the pattern of CEO attributes differed with the

requirements of different situations. The results suggest that the attributes required

in CEOs were determined by the situational context such as size of firm, environmental

conditions and business strategy. CEO attributes differed in smaller firms compared to

larger firms, in the stable environments compared with turbulent environments as well

as for defender firms compared with prospector firms and analyser firms. Consequently,

the last hypothesis was confirmed in this research.

9.7 Chapter Summary

This chapter has examined the results of the extended Thai study for each of the seven

proposed hypotheses. The findings of the above data analyses provided evidence for the

following conclusions:

1. Executive leadership (leadership roles and CEO characteristics) had greater impact on

organisational effectiveness than other performance dimension. Executive leadership

had little influence on financial performance and business performance.

2. High behavioural complexity was significantly related to higher firm performance

particularly business performance and organisational effectiveness in general, in large

firms and for firms following an analyser type of strategy. High complexity group also

had a positive relationship with organisational effectiveness in a stable environment and

for firms pursuing a prospector strategy. Statistically, there was no relationship between

high behavioural complexity and financial performance regardless of any situational

factors except for the firms pursuing the analyser strategy. It was shown that CEOs with

high behavioural complexity in firms following an analyser type of strategy were

positively related to all three-performance dimension namely financial performance,

business performance, and organisational effectiveness. This is the first time a


245

relationship has been shown behavioural complexity and financial performance, namely

for firms following an analyser type strategy.

3. CEOs in the high performing firms had relatively longer tenure in the existing

position, longer tenure in current firm, higher need for achievement, more internal locus

of control, internal origin of appointment and autocratic leadership style. Further, by

employing the contingency factors the results suggested that high performing firms

tended to be associated with CEOs who have particular attributes which depend on the

size of firm, environmental conditions and business strategy.

4. High behavioural complexity CEOs had some common attributes: higher need for

achievement, more internal locus of control, autocratic leadership style and were less

likely to come from a planning and management background.

5. Attributes required in CEOs to be effective were determined by the situational

context such as size of firm, environmental conditions and business strategy. CEO

attributes differed in smaller firms compared to larger firms, in stable environments

compared with turbulent environments as well as for the defender firms compared with

prospector firms and analyser firms.

Chapter 10: Additional Perspectives on Executive Leadership in Thailand

Chapter 10

Additional Findings: Additional Perspectives on Executive Leadership in Thailand

10.1 Introduction

This chapter aims to provide some additional findings on other leadership aspects apart

from the major research results reported in chapters 6 to 9. It focuses on four

dimensions of executive leadership in Thailand from the perspectives of CEOs.

Additionally, leadership style and CEOs’ origin of appointment were examined. The

primary goal was to compare autocratic leaders and democratic leaders as well as

internal CEOs and external CEOs in terms of their attributes. Section 10.2 explores the

key success attributes for Thai executive leadership. Section 10.3 examines the

strengths and weaknesses of CEOs in their current position. Section 10.4 focuses on

CEO succession criteria. Section 10.5 investigates knowledge and skills required for

executive development. Section 10.6 examines the relationship between leadership style

and CEO attributes. Section 10.7 explores the relationship between CEOs’ origin of

appointment and CEO attributes. The data analyses were also performed with respect to

firm groups, contingency factors (size of firm, environmental conditions, business

strategy), behavioural complexity group, and leadership style.

This chapter draws on information gathered during the personal interviews with CEOs

especially from open-ended questions.

10.2 Key Success Attributes for Thai Executive Leadership

Table 10.1 is a summary of the key success attributes for Thai executive leadership. The

respondents were requested to indicate the key essential attributes, in their opinion,

required to be an effective leader in Thailand. The main key success attributes for Thai

leadership identified were strategic thinking and vision capabilities (36.59%), followed

246


by assertiveness and decisive decision making (35.77%), integrity, ethics and social

responsibility (34.15%), management by inspiration (30.89%), network building ability

(29.27%), management by example and role model (17.89%), humility (12.20%),

communication and negotiation skills (12.20%), credibility and proven track record

(11.38%), hug vs. kick style (4.07%) and others (i.e. open-minded, foreign language

expertise, self continuous learning and sympathetic) respectively.

Table 10.1

Key Success Attributes for Thai Executive Leadership

Attributes N %

Strategic thinking and vision capabilities 45 36.59

Assertiveness and decisive decision making 44 35.77

Integrity, ethics and social responsibility 42 34.15

Management by inspiration 38 30.89

Network building ability 36 29.27

Management by example and role model 22 17.89

Humility 15 12.20

Communication and negotiation skills 15 12.20

Credibility and proven track record 14 11.38

Hug vs. kick style 5 4.07

Others (i.e. open-minded, foreign language expertise,

self-continuous learning and sympathetic)

4 3.25

N: number of respondents; %: percentage within key success attributes. Total N=123.

10.3 Strengths and Weaknesses of CEOs

This section examines the strengths and weaknesses of CEOs. The respondents were

requested to reveal both their strengths and weaknesses as CEOs in their current

position. Data analyses were also performed with respect to type of firm groups, firm

size, environmental conditions, business strategy, complexity groups and leadership

style.

247


10.3.1 Strengths of CEOs

Table 10.2 is a summary of CEOs’ strengths. A total of one hundred and eighteen

respondents (95.93%) were willing to reveal their strengths in this research. However,

five respondents (4.07%) refused to disclose their strengths since they preferred their

subordinates to assess their strengths rather than self-assessment. Sixty-three (53.39%)

respondents identified their strengths as CEOs in their current position as high

commitment, dedication and enthusiasm, while forty-three (36.44%) were employee-

oriented management (winning employees’ hearts and getting the jobs done through

people), thirty-eight (32.20%) were industry and company business expertise, thirty-

seven (31.36%) were strategic thinking and vision capabilities, thirty-two (27.12%)

were assertiveness and decisive decision making, thirty (25.42%) were network

building ability, twenty-three (19.49%) were integrity, ethics and social responsibility,

twenty-one (17.80%) were perseverence and thirteen (11.02%) were credibility, proven

track records and shareholder/BOD approval respectively.

Table 10.2

Summary of CEOs’ Strengths

CEOs’ Strengths N %

High commitment, dedication and enthusiasm 63 53.39

Employee-oriented management 43 36.44

Industry and company business expertise 38 32.20


Assertiveness and decisive decision making 32 27.12

Network building ability 30 25.42

Integrity, ethics and social responsibility 23 19.49

Perseverence 21 17.80

Credibility, proven track records and shareholder/ BOD approval 13 11.02

N: number of respondents; %: percentage within CEO strengths.

Total N=118.

248


Table 10.3 is a summary of CEOs’ strengths by firm groups. To investigate CEOs’

strengths, cross tabulation and Cramer’s V test were performed for low performers and

high performers. Interestingly, the data suggested that there was an association between

perseverence and firm groups [r=.231, p<.05 (p=.01)]. It can be inferred that low

performers were more likely to employ persistent CEOs than high performers.

Statistically, there was no significant difference between low performers and high

performers for other variables.

Table 10.3

CEOs’ Strengths by Firm Groups

Low

Performers

High

Performers Cramer’s V

CEOs’ Strengths

N % N % Value Sig.

High commitment, dedication and enthusiasm 30 55 33 52 .022 .81

Employee-oriented management 21 38 22 35 .034 .71

Industry and company business expertise 18 33 20 32 .010 .91

Strategic thinking and vision capabilities 14 26 23 37 .119 .20

Assertiveness and decisive decision making 14 26 18 29 .035 .70

Network building ability 15 27 15 24 .040 .67

Integrity, ethics and social responsibility 14 26 9 14 .141 .13

Perseverence 15 27 6 10 .231 .01*

Credibility, proven track records and shareholder/

BOD approval

5 9 8 13 .057 .53

*: p<.05; **: p<.01; ***: p<.001.

Table 10.4 is a summary of CEOs’ strengths by size of firm. To investigate CEOs’

strengths, cross tabulation and Cramer’s V test were performed for small firms and

large firms. The data suggested that no statistically significant differences were

identified for CEOs’ strengths by size of firm. However, high performers were more

likely to employ CEOs with high commitment, dedication and enthusiasm, employee-

oriented management, assertiveness and decisive decision-making, integrity,

ethics/social responsibility and credibility, proven track record and shareholder/BOD

249


approval, while low performers tended to employ CEOs with industry and company

business expertise, strategic thinking and vision capabilities, and perseverence.

Table 10.4

CEOs’ Strengths by Size of firm

Small

Firms

Large

Firms Cramer’s V

CEOs’ Strengths

N % N % Value Sig.








Perseverence 11 18 10 17 .014 .88


BOD approval

5 8 8 14 .087 .34

*: p<.05; **: p<.01; ***: p<.001.

Table 10.5 is a summary of CEOs’ strengths by environmental conditions. To investigate

CEOs’ strengths, cross tabulation and Cramer’s V test were performed for the stable

environment group and the turbulent environment group. Interestingly, the results

showed that employee-oriented management was statistically significantly associated

with environmental conditions [r=.203, p<.05 (p=.03)]. Firms in a turbulent

environment seemed more likely to employ CEOs who cared for their staff, respected

their ideas and tried diligently to develop human resources than firms in a stable

environment. The results also show that credibility was significantly related to

environmental conditions [r=.191, p<.05 (p=.04)]. Firms in a turbulent environment

were more likely to employ CEOs with a proven track record and shareholder/BOD

approval than firms in a stable environment.

250


Statistically, there were no significant differences between the stable group and the

turbulent group for the remaining variables of CEOs’ strengths.

Table 10.5

CEOs’ Strengths by Environmental Conditions

Stable

Environment

Turbulent


CEOs’ Strengths

N % N % Value Sig.


Employee-oriented management 19 28 24 48 .206 .03*






Perseverence 10 15 11 22 .094 .31


BOD approval

4 6 9 18 .191 .04*

*: p<.05; **: p<.01; ***: p<.001.

Table 10.6 is a summary of CEOs’ strengths by type of business strategy. To investigate

CEOs’ strengths, cross tabulation and Cramer’s V test were performed for defender

firms, prospector firms and analyser firms. The results found that strategic thinking and

vision capabilities was significantly associated with business strategy [r=.236, p<.05

(p=.04)]. Prospector firms seemed more likely to employ CEOs with strategic thinking

and vision capabilities than defender firms and analyser firms respectively.

However, there were not statistically significant differences among the three business

strategy groups for the remaining variables of CEOs’ strengths.

251


Table 10.6

CEOs’ Strengths by Business Strategy

Defender Prospector Analyser Cramer’s V CEOs’ Strengths


High commitment, dedication and enthusiasm 17 63 19 49 24 49 .120 .44

Employee-oriented management 10 37 15 39 18 37 .016 .99

Industry and company business expertise 11 41 13 33 13 27 .120 .44

Strategic thinking and vision capabilities 4 15 17 44 14 29 .236 .04*

Assertiveness and decisive decision making 7 26 12 31 13 27 .047 .88

Network building ability 8 30 5 13 16 33 .206 .09

Integrity, ethics and social responsibility 4 15 8 21 11 22 .075 .73

Perseverence 5 19 8 21 7 14 .073 .73

Credibility, proven track records and

shareholder/ BOD approval

2 7 3 8 8 16 .137 .34

*: p<.05; **: p<.01; ***: p<.001.

Table 10.7 is a summary of CEOs’ strengths by behavioural complexity group. To

investigate CEOs’ strengths, cross tabulation and Cramer’s V test were performed for

low complexity CEOs and high complexity CEOs. No significant difference was

identified between two groups of leadership types for all variables of CEOs’ strengths.

However, high complexity CEOs tended to have higher scores for the variables of

employee-oriented management, industry and company business expertise, strategic

thinking and vision capabilities, assertiveness and decisive decision-making, and

credibility proven track record and shareholder/ BOD approval.

252


Table 10.7

CEOs’ Strengths by Behavioural Complexity Group

Low

Complexity

High

Complexity Cramer’s V

CEOs’ Strengths

N % N % Value Sig.








Perseverence 10 17 11 19 .030 .74


BOD approval

5 8 8 14 .087 .34

*: p<.05; **: p<.01; ***: p<.001.

Table 10.8 is a summary of CEOs’ strengths by leadership style. To investigate CEOs’

strengths, cross tabulation and Cramer’s V test were performed for autocratic leaders

and democratic leaders. The results showed that there was no statistically significant

relationship between leadership style and CEOs’ strengths. However, democratic

leaders tended to have higher scores for the variables of high commitment, dedication

and enthusiasm, employee-oriented management, assertiveness and decisive decision-

making, integrity, ethics and social responsibility, perseverence and credibility, proven

track record and shareholder/ BOD approval.

253


Table 10.8

CEOs’ Strengths by Leadership Style

Autocratic Democratic Cramer’s V CEOs’ Strengths

N % N % Value Sig.








Perseverence 7 13 12 23 .135 .16


BOD approval

6 11 6 12 .010 .92

*: p<.05; **: p<.01; ***: p<.001.

Overall, the findings in this section highlighted that the major strengths of CEOs were

high commitment, dedication and enthusiasm, employee-oriented management, industry

and company business expertise, and strategic thinking and vision capabilities

respectively. The findings also found that CEOs in low performing firms seemed more

likely to be persistent than those in high performing firms. CEOs with both employee-

oriented management and credibility tended to be employed within firms in a turbulent

environment. Prospector firms were more likely to have CEOs with strategic thinking,

and vision capabilities than those in defender firms and analyser firms. No statistically

significant differences were found by either size of firm, complexity group or leadership

style for CEOs’ strengths.

10.3.2 Weaknesses of CEOs

Table 10.9 is a summary of CEOs’ weaknesses. A total of eighty-six respondents

(69.92%) were willing to disclose their weaknesses in their current position in this

research, while thirty-seven respondents (30.08%) refused to reveal their weaknesses

254


since they mentioned that they preferred their subordinates to evaluate their weaknesses

rather than self-assess. Accordingly, thirty-five (40.70%) respondents specified that

their weaknesses were being too sympathetic (caring a lot for other people), while

twenty-seven (31.40%) were hot tempered and impatient, seventeen (23.26%) were

lacking human management skills, eleven (12.79%) were risk avoiding, eight (9.30%)

were no political connection and inflexible, and five (5.81%) were over confident

respectively.

Table 10.9

Summary of CEOs’ Weaknesses

CEOs’ Weaknesses N %

Too sympathetic 35 40.70

Hot tempered and impatient 27 31.40

Lacking human management skills 20 23.26

Risk Avoiding 11 12.79

No political connection and inflexible 8 9.30

Over confident 5 5.81

N: number of respondents; %: percentage within CEOs’ weaknesses.

Total N=86.

Table 10.10 is a summary of CEO weaknesses by firm groups. To investigate CEO

weaknesses, cross tabulation and Cramer’s V test were performed for low performers

and high performers. The data suggested that there was no statistically significant

difference between low performers and high performers for CEOs’ weaknesses.

However, CEOs in high performing firms seemed more likely to be lacking human

management skills, while CEOs in low performing firms tended to be too sympathetic,

hot tempered and impatient, risk avoiding and with no political connection and

inflexible.

255


Table 10.10

CEOs’ Weaknesses by Firm Groups

Low

Performers

High


CEOs’ Weaknesses

N % N % Value Sig.

Too sympathetic 18 46 17 36 .101 .35

Hot tempered and impatient 15 39 12 26 .139 .20

Lacking human management skills 7 18 13 28 .114 .29

Risk Avoiding 6 15 5 11 .071 .51

No political connection and inflexible 4 10 4 9 .030 .78 *: p<.05; **: p<.01; ***: p<.001.

Table 10.11 is a summary of CEO weaknesses by size of firm. To investigate CEOs’

weaknesses, cross tabulation and Cramer’s V test were performed for small firms and

large firms. The results showed that no significant differences were identified by size of

firm. However, large firms tended to employ CEOs who were too sympathetic, lacking

human management skills and with no political connection and inflexible, whereas

small firms were more likely to employ CEOs who were hot tempered and impatient

and risk avoiding.

Table 10.11

CEOs’ Weaknesses by Size of Firm

Small

Firms

Large

Firms Cramer’s V

CEOs’ Weaknesses

N % N % Value Sig.

Too sympathetic 19 40 16 42 .025 .81



Risk Avoiding 7 15 4 11 .060 .58


256


Table 10.12 is a summary of CEO weaknesses by environmental conditions. To

investigate CEOs’ weaknesses, cross tabulation and Cramer’s V test were performed for

the stable group and the turbulent group. The results found that there were no

statistically significant differences between CEOs’ weaknesses and environmental

conditions. Firms in a turbulent environment tended to employ CEOs who were too

sympathetic, hot tempered and impatient and with no political connection and

inflexible, whereas firms in a stable environment were more likely to employ CEOs

lacking of human management skills and risk avoiding.

Table 10.12

CEOs’ Weaknesses by Environmental Conditions

Stable

Environment

Turbulent


CEOs’ Weaknesses

N % N % Value Sig.

Too sympathetic 18 39 17 43 .034 .75



Risk Avoiding 8 17 3 8 .148 .17


Table 10.13 is a summary of CEO weaknesses by business strategy. To investigate

CEOs’ weaknesses, cross tabulation and Cramer’s V test were performed for three

groups of business strategy. The results showed that there were no statistically

significant differences among CEOs’ weaknesses and the three types of business

strategy. However, CEOs in defender firms were more likely to be risk avoiding, while

CEOs in prospector firms were more likely have no political connections and inflexible

and CEOs in analyser firms were more likely to be too sympathetic.

257


Table 10.13

CEOs’ Weaknesses by Business Strategy

Defender Prospector Analyser Cramer’s V CEOs’ Weaknesses


Too sympathetic 6 35 10 35 18 47 .128 .50

Hot tempered and impatient 6 35 10 35 11 29 .062 .85

Lacking human management skills 3 18 8 28 8 21 .091 .70

Risk Avoiding 4 24 2 7 5 13 .176 .27

No political connection and inflexible 1 6 5 17 2 5 .191 .22 *: p<.05; **: p<.01; ***: p<.001.

Table 10.14 is a summary of CEO weaknesses by behavioural complexity group. To

investigate CEOs’ weaknesses, cross tabulation and Cramer’s V test were performed for

low complexity group and high complexity group. The results showed that there were

no statistically significant differences between types of CEOs for all CEOs’ weaknesses

variables. High behavioural complexity CEOs tended to have higher scores for being

too sympathetic, lacking human management skills and for no political connection and

inflexible than low behavioural complexity CEOs.

Table 10.14

CEO Weaknesses by Behavioural Complexity Group

Low

Complexity

High

Complexity Cramer’s V

CEOs’ Weaknesses

N % N % Value Sig.

Too sympathetic 17 40 18 42 .024 .83



Risk Avoiding 7 16 4 9 .104 .33


258


Table 10.15 is a summary of CEO weaknesses by leadership style. To investigate CEO

weaknesses based on leadership style, cross tabulation and Cramer’s V test were

performed for autocratic leaders and democratic leaders. The results showed that being

too sympathetic was associated with leadership style [r=.244, p<.05, (p=.03)]. The

pattern was that the democratic leaders were more likely to be too sympathetic than the

autocratic leaders.

The results also found that there was a significant association between lacking of human

management skill and leadership style [r=.250, p<.05, (p=.03)]. It can be inferred that

the autocratic leaders were more likely to lack human management skills than the

democratic leaders.

Statistically, there was no significant difference between autocratic leaders and

democratic leaders for the other CEOs’ weaknesses.

Table 10.15

CEO Weaknesses by Leadership Style

Autocratic Democratic Cramer’s V CEOs’ Weaknesses

N % N % Value Sig.

Too sympathetic 13 33 21 57 .244 .03*


Lacking human management skills 11 28 3 8 .250 .03*

Risk Avoiding 6 15 5 14 .021 .85


Overall, the findings in this section highlighted that the main CEOs’ weaknesses were

being too sympathetic, hot tempered and impatient and lacking human management

skills respectively. The results also showed that there was a significant association

between CEOs’ weaknesses and leadership style. It can be inferred that democratic

leaders were more likely to be too sympathetic, whereas autocratic leaders tended to

lack human management skills. No statistically significant differences were found by

259


either firm groups, size of firm, environmental conditions, business strategy, and

behavioural complexity group for CEOs’ weaknesses.

10.4 CEO Succession Criteria

This section focuses on CEO succession criteria. Data analyses were also performed

into type of firm groups, size of firm, environmental conditions and business strategy.

Table 10.16 is a summary of CEO succession criteria. A total of one hundred and

twenty three respondents were requested to identify the most important criteria in

determining CEO succession in their organisations. Most of the answers given were

CEOs’ attributes. The most important CEO succession criteria were strategic thinking

and vision capabilities (56.91%) followed by industry and company business expertise

(45.53%), leadership (40.65%), credibility, proven track records and shareholder/BOD

approval (35.77%), integrity and business ethics (30.08%) and communication and

negotiation skills (22.76) respectively.

Table 10.16

CEO Succession Criteria

CEO Succession Criteria N %


Industry and company business expertise 56 45.53

Leadership 50 40.65

Credibility, proven track records and shareholder/ BOD approval 44 35.77

Integrity and business ethics 37 30.08


N: number of respondents; %: percentage within CEO succession criteria.

Total N=123.

Table 10.17 is a summary of CEO succession criteria by firm groups. To investigate

CEO succession criteria, cross tabulation and Cramer’s V test were performed for low

260


performers and high performers. The results found that there was no statistically

significant relationship between firm groups and CEO succession criteria. However,

high performers tended to select CEOs with industry and company business expertise,

leadership and management skills, credibility, proven track records and shareholder/

BOD approval and communication and negotiation skills, while low performers seemed

more likely to select CEOs with strategic thinking and vision capabilities and integrity

and business ethics.

Table 10.17

CEO Succession Criteria by Firm Groups

Low Performers High Performers Cramer’s V CEO Succession Criteria

N % N % Value Sig.



Leadership 23 40 27 42 .019 .83

Credibility, proven track record and


20 35 24 37 .025 .78

Integrity and business ethics 20 35 17 26 .091 .32

Communication and negotiation skills 11 19 17 26 .086 .34 *: p<.05; **: p<.01; ***: p<.001.

Table 10.18 is a summary of CEO succession criteria by size of firm. To investigate

CEO succession criteria, cross tabulation and Cramer’s V test were performed for small

firms and large firms. The results found that there was no statistically significant

relationship between size of firm and CEO succession criteria. However, the large firms

were more likely to select CEOs with industry and company business expertise,

credibility, proven track record and shareholder/ BOD approval and communication and

negotiation skills, while the small firms seemed more likely to select CEOs with

strategic thinking and vision capabilities, leadership and management skills and integrity

and business ethics.

261


Table 10.18

CEO Succession Criteria by Size of Firm

Small Firms Large Firms Cramer’s V Succession Criteria

N % N % Value Sig.



Leadership 29 45 21 36 .085 .34



19 29 25 43 .144 .11

Integrity and business ethics 20 31 17 29 .016 .86

Communication and negotiation skills 14 22 14 24 .031 .73 *: p<.05; **: p<.01; ***: p<.001.

Table 10.19 is a summary of CEO succession criteria by environmental conditions. To

investigate CEO succession criteria, cross tabulation and Cramer’s V test were

performed for the stable group and the turbulent group. The results showed that

communication and negotiation skills was statistically significantly associated with

environmental conditions [r=.203, p<.05 (p=.03)]. The firms operating in a turbulent

environment are more likely to select CEOs with communication and negotiation skills

than the firms operating in a stable environment.

Statistically, there were no significant differences between firms operating in less and

more turbulent environments for the remaining variables. However, the results showed

that the firms operating in a turbulent environment were more likely to select CEOs

with strategic thinking and vision capabilities, credibility, proven track record,

shareholder /BOD approval, and integrity and business ethics, whereas the firms

operating in stable firms tended to select CEOs with industry and company business

expertise, and leadership qualification.

262


Table 10.19

CEO Succession Criteria by Environmental Conditions

Stable

Environment

Turbulent


Succession Criteria

N % N % Value Sig.



Leadership 32 45 18 35 .105 .24



23 32 21 40 .082 .36

Integrity and ethics 18 25 19 37 .120 .18

Communication and negotiation skills 11 15 17 33 .203 .03*

*: p<.05; **: p<.01; ***: p<.001.

Table 10.20 is a summary of CEO succession criteria by business strategy. The reactor

strategy was dropped from the analysis because of the small sample size. To investigate

CEO succession criteria, cross tabulation and Cramer’s V test were performed for the

defender group, the prospector group and the analyser group. The results found that

there was no statistically significant relationship between the business strategy and CEO

succession criteria. However, CEOs with industry and company business expertise, and

leadership qualification were more likely to be selected in the defender firms, whereas

CEOs with communication and negotiation skills were more likely to be selected in the

prospector firms and CEOs with strategic thinking and vision capabilities, credibility,

proven track record, and shareholder/BOD approval and integrity and business ethics

were more likely to be selected in the analyser firms.

263


Table 10.20

CEO Succession Criteria by Business Strategy

Defender Prospector Analyser Cramer’s V CEO Succession Criteria


Strategic thinking and vision capabilities 14 50 24 57 30 60 .078 .69

Industry and company business expertise 17 61 15 36 24 48 .189 .12

Leadership 13 46 17 41 20 40 .053 .84



9 32 13 31 20 40 .089 .62

Integrity and ethics 5 18 13 31 19 38 .169 .18

Communication and negotiation skills 4 14 12 29 12 24 .127 .38 *: p<.05; **: p<.01; ***: p<.001.

Overall, the findings in this section highlighted that the main criteria for appointing

CEOs in their organisations were all attributes of CEOs, the firms selected CEOs with

strategic thinking and vision capabilities, industry and company business expertise and

leadership. The analyses in this section found that there was a statistically significant

difference for communication and negotiation skills between firms in a stable

environment and firms in a turbulent environment. CEOs in firms in a turbulent

environment were more likely to be selected for communication and negotiation skills

than those of firms in a stable environment. No statistically significant differences for

CEO succession criteria were found by either firm groups, size of firm, and business

strategy.

10.5 Knowledge & Skills Required for Executive Development

This section deals with the knowledge and skills required for executive development.

Data analyses were also carried out into type of firm groups, size of firm, environmental


Table 10.21 is a summary of knowledge and skills required for executive development.

A total of one hundred and twenty three respondents were requested to identify what

types of knowledge and skills were required for the development of senior executives in

264


their organisations. Fifty-four (43.90%) respondents specified that the knowledge and

skills mostly required for the development of their senior executives were leadership,

while forty-eight (39.02%) identified strategic thinking and vision capabilities, forty-

one (33.33 %) industry knowledge and new business techniques, thirty-seven (30.08%)

integrity, business ethics and social responsibility, thirty-one (25.20%) communication

and negotiation skills, twenty-four (19.51%) teamwork building ability, twenty-three

(18.70%) marketing, nineteen (15.45%) finance, eight (6.50%) information technology

and seven (5.69%) were language skills (English and Chinese) respectively.

Table 10.21

Knowledge and Skills Required for Executive Development

Knowledge and Skills N %

Leadership 54 43.90


Industry knowledge and new business techniques 41 33.33

Integrity, business ethics and social responsibility 37 30.08


Teamwork building 24 19.51

Marketing 23 18.70

Finance 19 15.45

Information technology 8 6.50

Languages (English/Chinese) 7 5.69

N: number of respondents; %: percentage within knowledge and skills.

Total N=123.

Table 10.22 is a summary of knowledge and skills required for executive development

by firm groups. To examine knowledge and skills, cross tabulation and Cramer’s V test

were performed for low performers and high performers. The results suggested that

there was a significant relationship between leadership and firm groups [r=.212, p<.05

(p=.02)]. High performers tended to require more training on leadership for the

development of their executives compared to low performers.

265


Statistically, there was no significant difference between low performers and high

performers for the remaining variables. However, high performers were more likely to

require training on leadership, strategic thinking and vision capabilities, industry

knowledge and new business techniques, marketing, and foreign languages whereas low

performers were more likely to require training on integrity, business ethics and social

responsibility, communication and negotiation skills, teamwork building, finance and

information technology.

Table 10.22


by Firm Groups

Low

Performers

High


Knowledge and Skills

N % N % Value Sig.

Leadership 19 33 35 54 .212 .02*


Industry knowledge and new business techniques 16 28 25 39 .115 .20

Integrity, business ethics and social responsibility 19 33 18 28 .055 .54

Communication and negotiation skills 16 28 15 23 .052 .57

Teamwork building 14 24 10 15 .110 .22

Marketing 8 14 15 23 .119 .19

Finance 9 16 10 15 .002 .98

Information technology 5 9 3 5 .081 .37

Languages (English/Chinese) 2 3 5 8 .091 .31 *: p<.05; **: p<.01; ***: p<.001.


by size of firm. To investigate required knowledge and skills, cross tabulation and

Cramer’s V test were performed for small firms and large firms. The results revealed

that there was no statistically significant relationship between size of firm and

knowledge and skills required for executive development. However, the results suggest

that the small firms were more likely to require training on leadership, strategic thinking

266


and vision capabilities, industry and new business techniques, communication and

negotiation skills, teamwork building, finance and information technology, while the

large firms more likely to require training on integrity, business ethics and social

responsibility, marketing and foreign languages.

Table 10.23


by Size of Firm

Small Large Cramer’s V Knowledge and Skills

N % N % Value Sig.

Leadership 29 45 25 43 .015 .87






Marketing 11 17 12 21 .048 .59

Finance 12 19 7 12 .088 .33




by environmental conditions. To investigate required knowledge and skills, cross

tabulation and Cramer’s V test were performed for the stable group and the turbulent

group. The results showed that there was a significant relationship between strategic

thinking and vision capabilities and environmental conditions [r=.193, p<.05 (p=.03)].

Firms operating in a turbulent environment tended to require more training on strategic

thinking and vision capabilities for the development of their senior executives compared

to firms operating in a stable environment.

267


Statistically, there was no significant difference between firms operating in less and

more turbulent environments for the other variables. However, the broad pattern was

that the firms operating in a turbulent environment were more likely to require training

on leadership, strategic thinking and vision capabilities, integrity, business ethics and

social responsibility whereas firms operating in a stable environment were more likely

to require training on industry knowledge and new business techniques, communication

and negotiation skills, teamwork building, marketing, finance, information technology

and foreign languages.

Table 10.24


by Environmental Conditions

Stable

Environment

Turbulent


Knowledge and Skill

N % N % Value Sig.

Leadership 30 42 24 46 .039 .67






Marketing 14 20 9 17 .031 .74

Finance 13 18 6 12 .093 .31



Table 10.25 is a summary of knowledge and skill required for executive development

by business strategy. To investigate required knowledge and skills, cross tabulation and

Cramer’s V test were performed among the defender firms, the prospector firms and the

analyser firms. The results showed that there was no statistically significant difference

between business strategies and knowledge and skills required for executive

268


development. However, defender firms were more likely to require training on industry

knowledge and new business techniques, teamwork building and finance, while

prospector firms were more likely to require training on leadership, strategic thinking

and vision capabilities, integrity, business ethics and social responsibility and

information technology, and analyser firms were more likely to require training on

communication and negotiation skills, marketing and foreign languages.

Table 10.25


by Business Strategy

Defender Prospector Analyser Cramer’s V Knowledge and Skills


Leadership 13 46 20 48 18 36 .111 .47

Strategic thinking and vision capabilities 7 25 19 45 22 44 .169 .18

Industry knowledge and new business

techniques

11 39 11 26 18 36 .114 .46

Integrity, business ethics and social

responsibility

4 14 17 41 16 32 .213 .07

Communication and negotiation skills 5 18 10 24 14 28 .092 .60

Teamwork building 8 29 8 19 8 16 .123 .41

Marketing 5 18 4 10 14 28 .206 .08

Finance 6 21 4 10 8 16 .127 .38

Information technology 1 4 5 12 2 4 .154 .34

Languages (English/Chinese) 2 7 1 2 4 8 .109 .49 *: p<.05; **: p<.01; ***: p<.001.

Overall, the findings in this section highlighted that the main knowledge and skills

required for executive development were leadership, strategic thinking and vision

capabilities, industry knowledge/new business techniques, integrity, business ethics

and social responsibility, and communication and negotiation skills respectively.

Interestingly, the results showed that there was a significant difference for the variable

of leadership between low performers and high performers. CEOs in high performing

firms were more likely to require leadership training for their executive development

269


than those in low performing firm. No statistically significant differences were found by

either size of firm, environmental conditions and business strategy.

10.6 Leadership Style and CEO Attributes

This section aims to explore the relationship between leadership style and CEO

attributes. The objective was to compare autocratic leaders vs. democratic leaders on

their attributes. Table 9.26 is a summary of t-test results for leadership style. The t-test

results indicated that there were no statistically significant differences between

autocratic and democratic leaders for all six CEO attributes. The data shows that

autocratic leaders tended to have higher means on tenure in position, CEO experience

elsewhere, need for achievement and locus of control, while democratic leaders tend to

have higher means on tenure in firm, and industry experience.

Table 10.26

T-Test Results for Leadership Style

Mean CEO attributes

Autocratic Democratic Sig. Level

Tenure in position (years) 9.17 8.51 .66

CEO experience elsewhere (years) 5.14 3.74 .21

Tenure in firm (years) 13.90 14.06 .93

Industry experience (years) 19.90 20.42 .78


Locus of control 6.33 5.98 .58 *: p < 05; **: p < .01; ***: p < .001.


performed for each of the following variables; age, level of education, holding an MBA

degree, overseas study, functional background, overseas work experiences, and origin of

appointment (refer Table 9.27). The results showed that there were no particular CEO

attributes significantly associated with leadership styles.

270


Table 10.27

Relationship between Leadership Style and CEO Attributes

Autocratic Democratic Cramer’s V CEO Attributes

N % N % Value Sig.

Age

<= 45 years old

> 45 years old

10

48

17

83

10

43

19

81

.021 .82

Level of education

Bachelor and under

Postgraduate

30

28

52

48

24

29

45

55

.064 .50


Yes

No

20

38

35

66

10

43

19

81

.176 .06

Oversea study

Yes

No

39

19

67

33

34

19

64

36

.033 .73




Sales and marketing


22

14

20

16

38

24

35

28

18

13

18

24

34

25

34

45

.041

.005

.005

.184

.66

.96

.95

.05


Yes

No

22

36

38

62

20

33

38

62

.002 .98


Internal

External

28

30

48

52

28

25

53

47

.045 .63

*: p < 05; **: p < .01; ***: p < .001.

Overall, no statistically significant differences were found between leadership styles and

all CEO attributes.

10.7 CEOs’ Origin of Appointment and CEO Attributes

This section aims to explore the relationship between CEOs’ origin of appointment and

CEO attributes. Table 9.28 is a summary of t-test results for CEOs’ origin of

271


appointment. The t-test results indicated that there was a significant difference between

internals and externals for the variables of CEO experience elsewhere and tenure in

firm. The differences between internals and externals for the variables of CEO

experience elsewhere and tenure in firm were all significant at .001 level (p=.000 and

p=.000 respectively). Externals scored higher for the variable of CEO experience

elsewhere, while internals scored higher for the variable of tenure in firms.

Statistically, there was no significant difference between internal CEOs and external

CEOs in the means for the remaining attributes.

Table 10.28

T-Test Results for CEO’s Origin of Appointment

Mean CEO attributes

Internals Externals Sig. Level


CEO experience elsewhere 2.00 6.87 .000***

Tenure in firm 17.40 10.33 .000***

Industry experience 20.62 19.67 .59


Locus of control 6.05 6.05 .98 *: p < 05; **: p < .01; ***: p < .001.


performed for each of the following variables; age, level of education, holding an MBA

degree, overseas study, functional background, overseas work experiences, and origin of

appointment (refer Table 9.29). The results suggested that age was associated with

origin of appointment [r=.357, p<.001 (p=.000)]. The younger CEOs (equal and less

than 45 years) were more likely to be promoted from within the firms, while the older

CEOs (more than 45 years) tended to be appointed from outside the firms. However, no

significant differences were identified between internal CEOs and external CEOs for the

remaining attributes.

272


Table 10.29

Relationship between Origin of Appointment and CEO Attributes

Internals Externals Cramer’s V CEO Attributes

N % N % Value Sig.

Age

<= 45 years old

> 45 years old

21

42

33

67

3

57

5

95

.357

.000***

Level of education

Bachelor and under

Postgraduate

32

31

51

49

29

31

48

52

.025 .79


Yes

No

16

47

25

75

18

42

30

70

.051 .46

Oversea study

Yes

No

39

24

62

38

41

19

68

32

.067 .46




Sales and marketing

Planning and GM

23

13

25

19

37

21

40

30

20

17

20

25

33

28

33

41

.033

.090

.066

.120

.71

.32

.47

.18


Yes

No

21

42

33

67

25

35

42

58

.086 .34

Leadership style

Autocratic

Democratic

28

28

50

50

30

25

55

46

.045 .63

*: p < 05; **: p < .01; ***: p < .001.

Overall, the data revealed that there were significant differences for the variables of

CEO experience elsewhere, tenure in firm and age between internal CEOs and external

CEOs. External CEOs seemed more likely to have longer stays in CEO position

elsewhere, less tenure in current firms and to be older (more than 45 years) than internal

CEOs.

273



This chapter has explored the additional findings apart from the main findings reported

in chapters 6 to 9. It has described four dimensions of executive leadership in Thailand

from the perspective of CEOs; key success attributes of effective leaders in Thailand,

strengths and weaknesses of CEOs, CEO succession criteria; and knowledge and skills

required for executive leadership. The attributes of either autocratic vs. democratic

leaders and internal CEOs vs. external CEOs were also examined. The data analyses

revealed evidence for the following conclusions:

1. The key success attributes required for effective leaders in Thailand were strategic

thinking and vision capabilities, followed by assertiveness and decisive decision-

making, integrity, ethics and social responsibility, management by inspiration, and

network building ability.

2. The major strengths of CEOs in Thailand were high commitment, dedication and

enthusiasm, employee-oriented management, industry and company business expertise,

strategic thinking and vision capabilities, respectively. The results showed statistically

significant differences for CEOs’ strengths by firm groups, environmental conditions

and business strategy. CEOs in low performing firms were more likely to be persistent

than those in high performing firms. Firms operating in a turbulent environment were

more likely to employ CEOs with employee-oriented management (cared for their staff,

respected their ideas and tried diligently to develop human resources) than those in a

stable environment. Prospector firms seemed more likely to employ CEOs with

strategic thinking, and vision capabilities than defender firms and analyser firms. No

statistically significant differences were found by either size of firm, complexity group

and leadership styles for CEOs’ strengths.

3. The major weaknesses of CEOs in Thailand were being too sympathetic, hot

tempered and impatient and lacking human management skills. The results showed only

one significant association between CEOs’ weaknesses and leadership styles. Democratic

leaders were more likely to be too sympathetic, whereas autocratic leaders tended to

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lack human management skills. Overall, there were no statistically significant

differences found by either firm groups, size of firm, environmental conditions,

business strategy, and behavioural complexity group for CEOs’ weaknesses.

4. The main criteria for appointing CEOs were all CEO attributes, and were people with

strategic thinking and vision capabilities, industry and company business expertise, and

leadership. The results showed a statistically significant association between the

variables of communication and negotiation skills and environmental conditions. Firms

in a turbulent environment were more likely to select CEOs with communication and

negotiation skills than in a stable environment. Overall, there were no statistically

significant differences for CEO succession criteria found by either firm groups, size of

firm and business strategy.

5. The important knowledge and skills required for executive development in Thailand

were leadership, followed by strategic thinking and vision capabilities, and industry

knowledge/new business techniques, integrity, business ethics and social responsibility,

and communication and negotiation skills respectively. The results showed that there

was a significant difference for the variable of leadership between low performers and

high performers. CEOs in high performing firms seemed more likely to require

leadership training for their executive development than those in low performing firm.

Overall, no statistically significant differences were identified by either size of firm,

environmental conditions and business strategy.

6. The results showed that there were no particular CEO attributes significantly

associated with leadership styles. There was a significant association for the variables of

CEO experience elsewhere, tenure in firm and age with origin of appointment. External

CEOs seemed more likely to have longer stays in CEO positions elsewhere, less tenure

in current firms and to be older (more than 45 years).

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PART FIVE

CONCLUSIONS

Chapter 11 Conclusions and Implications

Chapter 12 Limitations and Future Research Directions

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Chapter 11: Conclusions and Implications

Part five of this thesis consists of the conclusions from this research, the implications

from the findings, the limitations of this research and the scope this research suggests

for the future research. Chapter 11 presents the conclusions and implications. Chapter

12 identifies the limitations and suggests directions for future research.

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Chapter 11

Conclusions and Implications

11.1 Introduction

This chapter aims to bring together the key empirical findings of this research reported

in chapters 6 to 9, and to discuss the implications of the research findings to both

theory and practice. A summary of the additional finding contained in chapter 10 and

important implications are also reported. The implications of the fieldwork methodology

to researchers who may wish to conduct research fieldwork in Thailand are also

discussed. Section 11.2 highlights the characteristics of respondent companies. Section

11.3 presents the results of the Thai replication of both the Hart and Quinn and the

Zakliki studies. Section 11.4 summarises the major findings of the extended research

undertaken in Thailand. Section 11.5 provides a summary of additional findings on

other dimensions of executive leadership in Thailand. Section 11.6 discusses the

implications of the findings from this research. Section 11.7 provides a big picture for

the reader with a final overview of the findings from the research in this thesis.

11.2 Characteristics of Respondent Companies

This section summarises the main conclusions drawn from the data analysis in chapter 6,

on the characteristics of respondent companies.

Industries Represented

The major industry types by SIC code of the firms who participated in this survey were

manufacturing, finance and insurance, property and business services, agriculture,

forestry and fishing, and communication services respectively.

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Non–Response Bias Analysis

A total of one hundred and twenty three companies participated in this survey. It can be

concluded that there was no important difference between the respondents and non-

respondents in term of industry and size classification.

Company Size

The majority of the respondent companies employed full time employees between 500

and 2000.

Time Listed on the Thai Stock Exchange

The majority of companies had been listed on the Thai stock exchange from between 6

to 15 years. The average was 12.08 years with a standard deviation of 5.67 years.

Background of Respondents

A total of one hundred and twenty three CEOs/MDs of publicly listed companies of

Thailand participated in this research equipped with the following characteristics:

Gender

The vast majority of CEOs were male.

Age

The majority of CEOs were aged between 36 to 55 years.

Educational Level

The vast majority of CEOs had either a completed bachelor’s degree or postgraduate

qualification with the exception of a few CEOs whose highest education was a high

school level.

Functional Background

The major functional background represented by CEOs was sales and marketing

planning and management, and finance and accounting respectively.

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CEO Experience

The average tenure of CEOs in their current position was 8.75 years with a standard

deviation of 7.85 years and in other organisations was 4.37 years with a standard

deviation of 6.72 years.

Work Experience

The average time CEOs had worked for their current firm was 13.95 years with a

standard deviation of 9.55 years and in industry was 20.15 years with a standard

deviation of 9.56 years. Over half of the CEOs had no work experience in any other

country than Thailand.


Approximately half of CEOs were promoted to the CEO position from within the

firm.

11.3 Results of Thai Replication

This section aims to review the results of Thai replication drawn from the data analysis

in chapters 7 to 8. It is organised into two sections based upon the research objectives of

this study. One purpose is to review the results of Thai replication (H&Q) with

comparisons against the U.S. study conducted by Hart and Quinn (1993). The Australian

results undertaken by Zakliki (1996) that used the same instruments of Hart and Quinn

(1993) are also reviewed. The second purpose is to review the results of Thai

replication (Z) by employing the same instruments with the Zakliki’s (1996) study

with comparisons against the Australian study conducted by Zakliki. Demographic

characteristics and leadership styles identified in these two studies are further

summarised at the end of this section.

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11.3.1 Results of Thai Replication (H&Q)

The theoretical background for this research was traced back to Quinn’s (1988) work.

Quinn presented a conceptualisation of role behaviours as the Competing Values

Framework and argued that leaders who demonstrate behavioural complexity, in that

they demonstrate the ability to balance competing roles, will be more effective leaders

than those who are less behaviourally complex. Additionally, the firms led by more

behaviourally complex leaders should be more effective than those firms who are led by

less behaviourally complex leaders.

Hart and Quinn (1993) characterised four fundamental roles for CEOs: vision setter,

motivator, analyser, and task master, which correspond with the four quadrants of the

Competing Values Framework. Each role represents a major conceptual base derived

from either the open system model, rational goal model, internal process model, or

human relation model (see chapter 3, section 3.3.6 and 3.3.7 for details). In an empirical

study, 916 CEOs from a Midwestern industrial metropolitan area of the U.S. were

administered a questionnaire to determine their propensity to behave according to the

four quadrants of Quinn’s (1988) Competing Values Framework. The dependent

variables were three dimensions of organisational performance namely financial,

business and organisational effectiveness performance. The results of this study argued

that CEOs who are more behaviourally complex have a significantly greater impact on

organisational performance particularly with respect to business and organisational

effectiveness performance.

Zakliki (1996) subsequently conducted an empirical study on the effect of behavioural

complexity on firm performance in Australian publicly listed companies. His initial

replication of Hart and Quinn’s (1993) study with the same instrument and techniques

indicated that CEO behavioural complexity was not associated with higher firm

performance. He argued that the lack of consistency between the two studies might be

due to the nature of instruments and sample population. He did however find that by

using a modified instrument behavioural complexity contributed to firm performance –

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(these results will be elaborated in the subsequent section when being compared with

Thai replication (Z)’s study).

Since few research studies have so far focused on behavioural complexity and its impact

on firm performance, it was decided to replicate the Hart and Quinn’s (1993) study in

Thailand. The findings drawn from Zakliki’s (1996) replication of Hart and Quinn are

also compared in this section.

The Thai replication (H&Q) with the same instrument and methods showed partial

support for both the original H&Q study and the Zakliki Australian replication. The data

concludes:

Executive Leadership Roles

Three studies showed little relationship between leadership roles played by CEOs and

organisational performance. The only significant result in the Thai replication (H&Q)

was a positive relationship between motivator role and organisational effectiveness.

Hart and Quinn’s (1993) findings showed that particular roles (vision, motivator and

analyser) played by CEOs were important predictors of business performance and

organisational effectiveness in the U.S., whereas in the Zakliki’s (1996) study, there

was a positive association between motivator role and business performance in

Australia. In these three studies, the amount of variance explained by executive

leadership roles was low.

Behavioural Complexity

The Thai replication (H&Q) suggested that high behavioural complexity of the CEOs

was predictive of higher firm performance with respect to business performance and

organisational effectiveness. This finding is consistent with Hart and Quinn’s (1993)

views concerning the mastery of paradoxical demands in that the highest levels of

performance were achieved by CEOs with high levels of behaviourally complexity

particularly to business and organisational effectiveness factors. On the other hand,

Zakliki (1996) reported that high behavioural complexity of the CEOs was not

associated with higher firm performance in his Australian study. In all three studies high

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behavioural complexity of the CEOs had little to do with financial performance of

firms.

Situational Context

The situational context was important to organisational performance. The munificence

of environment was predictive of business performance and organisational effectiveness

in the Thai replication (H&Q). Hart and Quinn (1993) showed that a munificent

environment was a significant predictor of business performance and organisational

effectiveness, but was not related to financial performance. However, Zakliki (1996)

found that only complexity of environment was related to financial and business

performance and organisational effectiveness in his Australian study.

11.3.2 Results of Thai Replication (Z)

This section summarises the main conclusions arrived at from the data analysis in

chapter 8 based on the comparison between the Thai replication (Z) with the Australian

study (Zakliki 1996). The Thai replication (Z) used Zakliki’s modified instrument,

which also incorporated CEO characteristics and contingency variables. The main

conclusions are:

Executive Leadership Roles

The Thai replication (Z) reported the importance of the analyser role to business

performance and the motivator role to organisational effectiveness, whereas there was a

positive association between the task master role and organisational effectiveness in the

Australian study. Importantly, executive leadership roles had more influence on

organisational effectiveness than on the other performance dimensions in the Thai study

whereas business performance appeared to be the most influenced by leadership roles in

the Australian study.

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CEO Characteristics

Organisational effectiveness was the performance dimension which most affected by

CEO characteristics in both the Thai study and the Australian study.

Executive Leadership

Both studies found that executive leadership, either executive leadership roles or CEO

characteristics, had no impact at all on financial performance dimension.

Behavioural Complexity

CEO behavioural complexity was associated with higher firm performance in the Thai

replication for organisational effectiveness in general, and for large firms and for firms

following an analyser type of strategy. Behavioural complexity also had a significant

impact on business performance in a turbulent environment. When compared to the

Australian study, both studies showed a similarity in that CEO behavioural complexity

had a positive relationship with organisational effectiveness and not the other

performance dimensions especially for large firms and for firms following an analyser

type of strategy. Both studies also revealed that there was no relationship between


CEO Characteristics between Thai CEOs and Australian CEOs:

Age

The vast majority of CEOs in the Thai study and the Australian study were older than

45 years.

Educational Level

About half of the CEOs in the Thai study and the Australian study had completed

postgraduate qualifications with about a quarter holding an MBA degree.

Functional Background

The top three functional backgrounds of CEOs in the Thai study were sales and

marketing, planning and management, finance and accounting, whereas others (e.g.

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planning and management, human resource management), engineering and production,

finance and accounting background were the top three functional background of CEOs

in the Australian study.

CEO Experience

The majority of CEOs had tenure in their current position of less than 5 years followed

by 5 to 10 years and more than 10 years in both the Thai study and the Australian study.

CEOs in the Thai study were more likely to have CEO experience elsewhere of 5 years

or more than CEOs in Australian study.

Work Experience

About 60% of CEOs in the Thai study had worked for their current firms for more than

10 years, whereas slightly less than 60% of CEOs in Australian study had worked 10

years or less for their current firms. About 45% of CEOs in both studies had industry

experience of more than 20 years and there were no large differences in both the CEO

tenure in current position and the work experience of CEOs.


CEOs in Thai study were more likely to be appointed from outside the firms whereas

CEOs in the Australian study tended to be promoted within their firms.

Leadership Style

It would be appear that CEOs in both studies were more likely to adopt an autocratic

style of leadership than a democratic style of leadership. The Thai CEOs were less

likely to share information and objectives to their subordinates than the Australian

CEOs. The Thai CEOs believed that the average subordinates need to be provided only

information which is necessary for them for their immediate tasks, they believed in

internal control followed by encouraging participation by subordinates and capacity for

leadership and initiative of subordinates. On the other hands, Australian CEOs believed

in sharing information followed by internal control, participation, and capacity for

leadership and initiative respectively.

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11.4 Major Findings From Extended Thai Study

Since the results of the factor analyses on CEO role behaviour and firm performance

were in partial agreement with the previous studies, further work was done to construct

appropriate scales used in the extended Thai study. This extended study used a

theoretical framework (refer chapter 4, figure 4.1), which integrated new construct

scales for CEO role behaviour (refer section 5.4) and organisational performance (refer

section 5.10) as well as incorporating contingency factors, and CEO attributes including

demographic characteristics, personality aspects and leadership styles. The theoretical

framework provided a solid base for investigation into executive leadership and firm

performance in Thailand.

This section summarises the major findings from the extended Thai study as discussed

in chapter 9 regarding the research questions identified in chapter 4 section 4.4 and

arranged into five main categories. Section 11.3.1 focuses on the impact of executive

leadership on organisational performance (refer research question 1). Section 11.3.2

deals with the impact of behavioural complexity on organisational performance (refer

research questions 2 and 5). Section 11.3.3 examines CEO attributes and organisational

performance (refer research questions 3 and 6). Section 11.3.4 focuses on the

relationship between behavioural complexity and CEO attributes (refer research

question 4). Section 11.3.5 summarised the relationship between CEO attributes and

contingency factors (refer research question 7).

11.4.1 Executive Leadership and Organisational Performance

The data analysis, which examined research question 1, namely “Do CEOs make

a difference on organisational performance?” showed that executive leadership

(leadership roles and CEO attributes) had greater impact on organisational effectiveness

than other firm performance dimensions. Results showed that executive leadership

explained little variance in terms of financial and business performance. Thus, CEOs

make a difference but there is a limited connection between executive leadership and

organisational performance.

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Many factors that impact organisational performance are beyond the control of the

leaders. As Liberson and O’ Corner (1972) argued, more variance in firm performance

(e.g. sales, earnings and profit margins) could be related to environmental factors than

to leadership. The leader is embedded in a social system that constraints behaviour and

they are also constrained by the external forces in which the organisation operates

(Pfeffer 1977). As Pfeffer (1981) argued, leaders usually have little influence on

organisational performance such as sales market shares and profitability. It would

appear that organisational outcomes often depend on external factors beyond leaders’

control such as economic, political, and technological conditions.

This study is consistent with past research (e.g. Pfeffer 1981; Meindl, Ehrlich and

Duckerich 1985) in that executive leadership had its greatest impact on the social

domains of performance through the symbolic aspects of managerial behaviour such as

belief, attitude and value of organisational members. It would appear that organisational

effectiveness (e.g. employee satisfaction, quality, public image and goodwill) is the

dimension of organisational performance most immediately influenced by executive

leadership rather than complex domains such as market shares or short-term profitability.

Leaders through their impact on organisational performance may however have greater

impact on other dimensions of performance such as business performance and financial

performance over the longer term. The impact, however, is time dependent. Similarly,

as Romanelli and Tushman (1988) argued, executive leaders have timing effects on

organisational activities. The leaders have an impact on the level of employee

commitment, which may then result in increased productivity and eventually affect the

financial position of an organisation (Yukl 2002). “The farther along in the causal chain

of variables, the longer it takes for the effect to occur” (p.9). With respect to financial

performance, Day and Lord’s (1988) noted that it is unrealistic to expect immediate

results, suggesting a lag effect between leadership and profit. Financial performance

reflects the short-term profitability of an organisation and may not be immediately

influenced by executive leaders but rather over the longer term (Hart and Quinn 1993;

Zakliki 1996).

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11.4.2 Behavioural Complexity and Organisational Performance

Research questions 2 and 5 deal with the relationship between CEOs’ behavioural

complexity and organisational performance.

Research question 2 examines “What types of CEOs’ behaviour pattern contributed

most to higher firm performance?” and research question 5 examines “Is the effect of

behavioural complexity on organisational performance, universal or contingent on the

situational conditions?”. The results showed that behavioural complexity had a positive

association with higher business performance and organisational effectiveness in

general. This finding supports the views discussed by Hart and Quinn (1993) that leader

who are more behaviourally complex act as accelerators on organisational performance.

It can be inferred that CEOs who are more behaviourally complex are better able to lead

their companies in a way that can balance the requirements of internal organisational

focus as well as external focus and then perform a diverse set of roles and skills.

Previous empirical works have provided some evidence for the notion that effective

managers are more behaviourally complex than ineffective manager (e.g. Quinn,

Spreitzer, and Hart 1992; Hooijberg and Quinn 1992; Hooijberg 1996).

This study further clarifies the specific relationship between behavioural complexity and

organisational performance by examining contingency factors. The finding from this

research supports the contingency nature of the executive-performance relationship as

previously discussed by several researchers (e.g. Gupta 1984,1988; Zakliki 1996). It

was found that behavioural complexity had a positive relationship with firm

performance particularly business performance and organisational effectiveness in

general and in large firms and for firms following an analyser type of strategy. CEOs

with high behavioural complexity had a positive relationship with organisational

effectiveness in a stable environment and for firms pursuing a prospector type of

strategy. However, there was no relationship between CEOs with high behavioural

complexity and financial performance regardless of the situational context except for

analyser firms.

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The finding that behavioural complexity is positively associated with financial

performance for firms following an analyser strategy is very interesting, as it is the first

time such a relationship has been shown. On further examination, it was also found that

firms following an analyser strategy had a higher proportion of high performing firms

than the firms following the other types of strategy. Similarly CEOs in high performing

firms were more likely to have an internal locus of control especially in the firms

following an analyser strategy.

The explanation for this finding may be partly due to the refinement of the instruments

used in this study and partly due to the adoption of a contingency approach. In other

words, this relationship may not have been detected in previous studies due to the

research approach adopted, namely not using a contingency approach and possibly

limitations in the measuring instruments used.

Overall, this finding is very interesting as it implies that high behavioural complexity

CEOs who lead firms pursuing the most sophisticated strategy (i.e. analyser strategy)

are able to outperform low behavioural complexity who lead firms pursuing less

complex strategies.

11.4.3 CEO Attributes and Organisational Performance

Research questions 3 and 6 deal with the relationship between CEO attributes and

organisational performance. Research question 3, examines “What are the common

attributes of CEOs in the high performing firms?” and research question 6, examines

“Which CEO attributes are associated with high performing firms regardless of

situational conditions including size, environmental conditions and business strategy?”

The results showed that CEOs in high performing firms had some common attributes:

longer tenure in position, longer tenure in current firm, higher need for achievement,

more internal locus of control, internal origin of appointment and an autocratic

leadership style.

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Tenure of CEOs refers to the period that CEOs stay in their current position. This study

adds support to the view that tenure may impact positively on leaders in that they learn

and enhance their behaviour and performance. Finkelstein and Hambrick (1990)

identified the importance of tenure and its positive effect on performance. They

concluded from their study that the longer tenures of executives, the higher the

performance of their firms. However, some researchers (e.g. Miller 1991) found that

organisations led by CEOs with many years of CEO tenure do not perform as well as

they performed in their earlier year. CEOs with longer tenure are “stale in the saddle”.

This study provides further evidence that CEOs having a longer tenure in their current

position contribute to better firm performance. Work experience refers to the growth of

capabilities and skills that CEOs have developed in their careers. It refers to job-related

experience rather than general experience. McCauley (2001) found that experience

indicates how effective leader behaviours are, what impacts they have on their

organisations and what competences they possess. Fiedler (1996) claimed that more

experienced leaders contribute to a better performance under very stressful conditions.

CEOs having a high need for achievement are ambitious, hard working and place a high

value on achievements. They spend a great deal of time pursuing challenging goals and

seeking recognition of achievements. There are several studies documenting the

importance of a high need for achievement to growth rate of firm (Smith and Miner

1984), to firm growth among small businesses (Davidson 1989) and to a firm’s

technological innovation (Papadakis and Bourantas 1998).

It was found that CEOs with an internal locus of control also had a strong association

with organisational performance. This finding is in line with the findings from

early researchers (e.g Miller and Toulouse 1986a, 1986b) who found that CEOs with

internal locus of control were related with high organisational performance.

This research also provided support for the view that CEOs who were promoted from

within firms tended to have more firm experience and were associated with better firm

performance (e.g Zajac 1990). Internal CEOs usually have a better network for

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information exchange (Kotter 1982) and tend to have greater stability in policies

(Helmich 1974) than external CEOs. They also provide for the continuity of existing

programs, management practice, and organisational stability (House and Singh 1987).

Surprisingly, an unexpected finding was the significant relationship between CEOs with

autocratic leadership style and firm performance. This finding suggests that CEOs who

place a greater focus on internal control, and exercise authority in directing subordinates

are more likely to contribute to higher firm performance.

When this study explored the specific relationship between CEO attributes and

organisational performance by applying contingency factors. It found that CEO

attributes differ with different situations in high performing firms. The main findings

are:

Size

In small firms, CEOs in high performing firms tended to have longer tenure in their

position, longer CEO experience elsewhere, longer tenure in current firm, whereas in

large firms, CEOs in high performing firms seemed more likely to have a higher need

for achievement, an internal locus of control and come from a sales and marketing

background.

Environmental Conditions

In a turbulent environment, CEOs in high performing firms tended to have longer tenure

in current firm, a higher need for achievement, an internal locus of control, no overseas

work experience and to have received education in Thailand only.

Business Strategy

In firms following a prospector strategy, CEOs in high performing firms had a higher

need for achievement and an internal origin of appointment whereas in firm pursuing an

analyser strategy, CEOs in high performing firms were more likely to have an internal

locus of control. It was also found for firms pursuing a defender strategy that CEOs in

high performing firms had an autocratic leadership style.

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11.4.4 Behavioural Complexity and CEO Attributes

The analysis, which investigated research question 4, “What kinds of CEO attributes are

associated with higher behavioural complexity?” has shown that the high complexity

CEOs had some common attributes: a high need for achievement, more internal locus of

control, possibly an autocratic leadership style and were less likely to come from a


Behavioural complexity is an ability of effective managers who are not only cognitively

complex but who are also able to perform a diverse set of roles and behaviours that

circumscribe the requisite variety implied by an environmental and organisational

context (Denison, Hooijberg and Quinn 1995). The managers need to strike a balance

among the various roles that they play to a greater extent (Hooijberge and Quinn 1992).

Behavioural complexity requires them to balance the demands from a complex set of

paradoxical roles.

This research found that CEOs with a high need for achievement and an internal locus

of control were strongly associated with high behavioural complexity. As noted earlier,

high need for achievement people desire to control events, which affect them

(McClelland 1961). These people prefer a difficult task in which success depends on

their own ability rather than chance factors that are beyond their control (Yukl 1994).

Similarly, people with an internal locus of control believe that they can influence the

outcome of events through the effectiveness of their own behaviour. Rotter (1966)

explained that people with a strong internal locus of control believe that events in their

lives are within their control. Consequently, it can be inferred that the capabilities of

CEOs to have a diversity and balance among leadership role behaviours in complex

organisations setting probably requires these two distinct personality traits, a high need

for achievement and an internal locus of control.

It was also found that CEOs with an autocratic leadership styles were more likely to

have high behavioural complexity. It can be suggested that the CEOs who focus on

internal control and are involved in organisational activities are more likely to have the

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capacity to balance competing role demands. The results also suggested that CEOs with

a planning and management background are less likely to demonstrate high behavioural

complexity.

11.4.5 CEO Attributes and Contingency Factors

The analysis, which investigated research question 7 “Based on this research, which are

the important attributes required for CEOs in different situational settings?” has found

that the pattern of CEO attributes differed with the requirements of different situations.

The qualities required in the CEOs were determined by the situational context such as

size of firm, environmental conditions and business strategy. This study concluded that

CEO attributes differed in large firms compared to smaller firms; in stable environments

compared with turbulent environments as well as for defender firms compared with

prospector firms and analyser firms. It can be inferred that any CEO selection should be

based on situational needs. These results are consistent with findings on contingency

nature of the attributes-size relationship (e.g. Dalton and Kesner 1983; Guthrie and

Datta 1997), the attributes-environment conditions relationship (e.g. Gupta and

Govindarajan 1982; Miller and Toulouse 1986b; Papadakis and Bourantas (1998) and

the attributes-strategy relationship (e.g. Miller and Toulouse 1986a; Smith and White

1987; Govindaraja 1989; Thomas and Ramswamy 1996). The main findings are:

Size

CEOs in small firms were more likely to hold an MBA degree, and complete

postgraduate qualifications whereas CEOs in large firms tended to have a longer tenure

in their current position, greater industry experience and to have completed a bachelor

degree’s or less.

Environmental Conditions

CEOs in a turbulent environment were more likely to be older (more than 45 years),

stay longer in the firm, have greater industry experience and a higher need for

achievement whereas CEOs in stable environment tended to be younger (equal and less

than 45 years).

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Business strategy

The majority of CEOs with an engineering and production background were more likely

to be employed in defender type firms, while younger CEOs (equal and less than 45

years) were more likely to be employed in the analyser type firms and older CEOs

(greater than 45 years) were more likely to be employed in prospector type firms.

11.5 Summary of Additional Perspectives on Executive

Leadership in Thailand

This section summarises the main conclusions arrived at from the data analysis in

chapter 10 and provides some additional findings on other leadership aspects in

Thailand apart from the major research results reported in chapters 6 to 9. They include

key success attributes for Thai executive leadership, strengths and weaknesses of CEOs,

CEO succession criteria, knowledge and skills required for executive development,

leadership styles and origin of CEO appointment.

Key Success Attributes for Thai Executive Leadership

The key success attributes required for effective leaders in Thailand were strategic

thinking and vision capabilities, followed by assertiveness and decisive decision-

making, integrity, ethics and social responsibility, management by inspiration, and

network building ability.

The Strengths and Weaknesses of CEOs in Thailand

The major strengths of CEOs in Thailand were high commitment, dedication and

enthusiasm, employee-oriented management, industry and company business expertise,

strategic thinking and vision capabilities, respectively. The results showed statistically

significant differences for CEOs’ strengths by firm groups, environmental conditions

and business strategy. CEOs in low performing firms were more likely to be persistent

than those in high performing firms. Firms operating in a turbulent environment were

more likely to employ CEOs with employee-oriented management (cared for their staff,

respected their ideas and tried diligently to develop human resources) and credibility

than those in a stable environment. Prospector firms seemed more likely to employ

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CEOs with more strategic thinking, and vision capabilities than defender firms and

analyser firms. No statistically significant differences were found by either size of firm,

complexity group and leadership styles for CEOs’ strengths.

The major weaknesses of CEOs in Thailand were being too sympathetic, hot tempered

and impatient and lacking human management skills. The results showed only one

significant association between CEOs’ weaknesses and leadership styles. Democratic

leaders were more likely to be too sympathetic, whereas autocratic leaders tend to lack

human management skills. Overall, there were no statistically significant differences by

either firm groups, size of firm, environmental conditions, business strategy, and

behavioural complexity group for CEOs’ weaknesses.

CEO Succession Criteria

The main criteria for appointing CEOs were all found to be attributes of CEOs, and

were people with strategic thinking and vision capabilities, industry and company

business expertise, and leadership. The results showed a statistically significant

association between the variables of communication and negotiation skills and

environmental conditions. Firms in a turbulent environment were more likely to select

CEOs with communication and negotiation skills than those of firms in a stable

environment. Overall, there were no statistically significant differences for CEO

succession criteria found by either firm groups, size of firm and business strategy.


The important knowledge and skills required for executive development in Thailand

were leadership, followed by strategic thinking and vision capabilities, and industry

knowledge/new business techniques, integrity, business ethics and social responsibility,

communication and negotiation skills respectively. The results showed that there was a

significant difference for the variable of leadership between low performers and high

performers. CEOs in high performing firms seemed more likely to require leadership

training for their executive development than those in low performing firm. Overall, no

statistically significant differences were identified by either size of firm, environmental


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Leadership Style and CEO Attributes

There were no particular CEO attributes significantly associated with leadership style.

CEOs’ Origin of Appointment and CEO Attributes

There was a significant association for the variables of CEO experience elsewhere,

tenure in firm, and age with origin of appointment. External CEOs seemed more likely

to have longer stays in CEO positions elsewhere, less tenure in current firms and to be

older (more than 45 years) than internal CEOs.

11.6 Implications of Results

This section discusses the implications of the findings from this study to both

researchers and practitioners. The implications of the fieldwork research methodology

for those who wish to conduct fieldwork in Thailand is also discussed.

11.6.1 Implications to Theory

This research has several implications for top management theory and executive

leadership literature. Firstly, there has been limited research into understanding the

effectiveness of top leaders in developing country such as Thailand particularly in

publicly listed companies. The findings of this research are, therefore, a significant

contribution to the theory of top management, and provide a foundation for further

research into developing countries.

Secondly, this research study has supported Hart and Quinn’s (1993) study that more

behaviourally complex leaders namely leaders who are able to play at a high level all

four roles tended to have a positive impact on organisational performance particularly

business performance and organisational effectiveness.

Thirdly, this study investigates the conditions under which behavioural complexity has

a significant relationship with firm performance. The findings support the contingency

nature of the executive-performance relationship discussed by several researchers (e.g.

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Gupta 1984,1988; Zakliki 1996). This research showed that situational situation was

important to the relationship between leaders and firm performance. For example, in the

analyser strategy group, CEOs with high behavioural complexity were related to all

three firm performance dimension namely financial performance, business performance,

and organisational effectiveness.

Fourthly, This study also explored CEO attributes, which were related to behavioural

complexity and firm performance. The results showed that high complexity CEOs had a

need for achievement, more internal locus of control, possibly an autocratic leadership

style and were less likely to come from a planning and management background. CEOs

in high performing firms had longer tenure in position, longer tenure in current firm,

higher need for achievement, internal locus of control, internal origin of appointment

and an autocratic leadership style. This study provides a number of contributions to

executive leadership theory and in particular to understanding behavioural complexity.

Fifthly, this study provides support for a contingency theory on determining the

necessary executive leaders’ attributes to be effective in a given situation. As discussed

earlier, the pattern of CEO attributes differed with the requirements of different

situations in the Thai survey. Several scholars (e.g. Miller and Toulouse 1986a,b; Smith

and White 1987; Guthrie and Datta 1997; Papadakis and Bourantas 1998) have

suggested the link between executive leaders’ attributes and contingency factors.

Finally, this research study has demonstrated the benefits of replication studies to test

the generalisability of Hart and Quinn (1993) and Zakliki (1996) findings and helped to

improve behavioural complexity research by testing the validity and reliability of the

instruments and measures.

11.6.2 Implications to Practice

There are a number of important implications for practice. The findings from this study

have significant implications for organisations, executive development, CEO selection,

and management education.

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Firstly, the findings have a major implication for organisations and top executives. This

research has shown that behavioural complexity of CEOs is a significant contributor to

organisational performance. This means that CEOs need the ability to develop or

adapt to the evolving demands of their jobs over times. They are required to

demonstrate paradoxical skills. One group of skills focuses on innovativeness, while

another focuses on rationality. The third group emphasises human relation skills while

the fourth group focuses on control skills. The more CEOs play their competing roles,

the more effective they are. Emphasis on behavioural complexity as a key aspect of

organisational development of more effective leaders is supported by several scholars

(e.g. Quinn 1988; Bullis 1992; Quinn, Spreitzer, and Hart 1992; Hart and Quinn 1993;

Denision, Hooijberg, and Quinn 1995; Hooijberg 1996).

Secondly, another implication of the findings is for executive development. In the

highly completive and fast changing environment of the 21st century, organisations need

to emphasise training and human development particularly at the executive level. The

findings provide crucial clues on a suitable leadership model for those senior executives

who want to improve their knowledge and skills and for human resource departments to

be able to focus their human development strategies. Importantly, this study supports

the need for continuity of learning as critical to success of leaders beyond that of formal

training programs. Organisations need to create a learning work environment, which

motivates employees.

Thirdly, the findings have implications for CEO selection. This research supports a

contingency view in determining the attributes required for the CEO’s position. The

qualities required in CEOs are determined by the situational context such as size of

firm, environmental conditions and business strategy. Thus, any CEO selection should

be based on an understanding of relevant situational factors.

The final implication is for management education. Leaders in the future will face

increasingly complex organisations and rapid changes in the environment. Management

education needs to emphasize the type of knowledge and skills required for CEOs to

more effectively handle their position, and shape the future of their organisations.

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11.6.3 Implications to Research Methodology

There are a number of implications for researchers who plan to conduct research

fieldwork particularly with senior executives of the companies in Thailand. These are

summarised below:

Firstly, the use of personal interviews is the preferred methodology over the use of

mail questionnaires for fieldwork in Thailand particularly when seeking sensitive

information from chief executives of publicly listed companies. Since Thai society is

made up of positions, which are hierarchically related, the seniority system is a crucial

factor in a Thai culture and tradition. Any request to top executives to participate in

personal interviews must highlight that the researcher has a real interest in the research

and will respect their ideas and perspectives. In Thailand, chief executives receive many

mail questionnaires from time to time, and they are not happy to find time to respond to

them. Many chief executives’ secretaries commented to the researchers that “there are a

pile of questionnaires on their tables, and their boss don’t have time to fill them”.

Secondly, since most chief executives are very busy and difficult to access, phone calls

seeking interviews are usually screened by executive secretaries. The need for executive

secretaries to perceive the researchers as credible and the proposed research worthwhile

is particularly important. This research has benefited from good relationships built up

with executive secretaries in increasing the number of chief executives who agreed to

participate.

Thirdly, the length of interview is important for a research with top executives. For this

research the length was based on a maximum of one hour as most top executives have

limited time to participate. In practice, it was found that the length of interview varied

based on the CEOs interest in the topic concerned, and their desire to explore. The

longest interview for this research was about two and a half hours. Some CEOs also

shared their knowledge on particular business aspects, relevant business documents and

even their published autobiography. This researcher also believes that good manners,

smart dress, good communication skills and extensive preparation before interviews (i.e.

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understanding clearly all questions and researching general information about the

respondents and their organisations) are important to create a supportive environment

during the interviews.

Fourthly, most of the interviews were pre-arranged and conducted in the CEOs’ office

during normal business hours. Since CEOs are very busy with corporate meetings,

external meetings and overseas travel, to make a date and time for interviews was often

a complex and time-consuming process. On a number of occasions, the researcher had

to re-schedule the interviews because of the CEOs’ time availability. This research has

found that researchers need to be flexible and well organised in seeking time to make

appointments.

Finally, the use of personal networks is crucial to the success of research fieldwork in

Thailand. This research gained the assistance of a prominent Thai politician, Thai

government authorities, former Thai governors, and Thai top executives of private

companies. It was found that the assistance of senior people both in private and public

positions is necessary to gain the participation of the top leaders of publicly listed

companies in Thailand. In some case using personal connections from employees at

lower levels of organizations to gain participation from CEOs is also important.

11.7 A Final Overview

This section provides a final overview of the findings from the research described in

this thesis.

The findings showed that there was a low significant relationship between the

roles played by CEOs and organisational performance. The amount of variance

explained by leadership roles was low in all three research studies.

All three research studies demonstrated that behavioural complexity of CEOs is a

significant contributor to organisational performance. However, none of the two

previous studies have shown an association between behavioural complexity and

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financial performance. This research study is the first time that such a relationship has

been shown in certain specific situations. The findings in this thesis was able to show

that for firms following an analyser type of strategy, CEOs with high behavioural

complexity CEOs had a positive association with all performance dimensions namely

financial performance, business performance, and organisational effectiveness. This

finding is very interesting as it implies that high behavioural complexity CEOs who lead

firms pursuing the most sophisticated strategy (i.e. analyser strategy) are able to

outperform low behavioural complexity CEOs who lead firms pursuing less complex

strategies.

This research identified that CEOs in high performing firms had a relatively longer

tenure in the existing position, a longer tenure in the current firm, a higher need for

achievement, a greater internal locus of control, an internal origin of appointment and

an autocratic leadership style. Further by applying contingency factors, the results found


attributes with the specific attribute requirements being dependent on the situation.

High behavioural complexity CEOs had a higher need for achievement, more internal

locus of control, autocratic leadership style and were less likely to come from a


Attributes required in CEOs to be effective were determined by the situational context

namely firm size, environmental conditions and business strategy. CEO attributes

differed in the smaller firms compared to the larger firms, in the stable environments

compared with the turbulent environments as well as for the defender firms compared

with the prospector firms and the analyser firms.

This research has also provided some qualitative findings obtained from the personal

interviews with the Thai CEOs. Specifically the CEOs identified what they believed

were:

(a) the key success CEO attributes for effective leaders in Thailand,

(b) the major strengths of CEOs in Thailand,

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(c) the major weaknesses of CEOs in Thailand,

(d) the main selection criteria for appointing CEOs,

(e) the necessary knowledge and skills required in executive development programs.


This chapter concludes the key findings of this research as well as the implications of

this study to the theory, to practice and for further research methodology. The next

chapter points out research limitations and future research directions.

302

Chapter 12: Limitations and Future Research Directions

Chapter 12

Limitations and Future Research Directions

12.1 Introduction

This final chapter highlights the limitations of the research in this thesis and suggests

the scope for further research.

12.2 Limitations of This Study

There are three main limitations that exist with respect to this study.

Firstly, the population for this research was limited to publicly listed companies of

Thailand. Therefore, the findings of this research can only be used to explain the

relationship between executive leadership and organisational performance in this

particular population. This finding may not apply to other types of organisations such as

public organisations, non- profit organisations or small family businesses.

Secondly, another constraint on this study was the lack of financial support and

consequent inability of the researcher to conduct personal interviews with top

executives of publicly listed companies in other provinces than Bangkok, which is the

capital city of Thailand. Hence, this research is in one constrained geographic area.

Thirdly, this research relied on the data from a single respondent (self-reports) in the

sample companies. CEOs may have introduced bias to their data particularly for their

role behaviour. Senior executives may have very different perspectives on the behaviour

and style of their CEOs. Ideally, data from a wider range of senior executives in each

company would have been preferred, however, cost and time constraints limited the

research to one personal interview per company.

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12.3 Future Research Directions

This research has developed a database and provided the foundation for further

research. Several avenues for future research directions are identified below:

Firstly, research on executive leadership of non-publicly listed companies to allow a

comparison of CEO role patterns and CEO attributes between publicly listed companies

and non-publicly listed companies would provide a valuable extension.

Secondly, to further understand the nature and managerial characteristics of top

executives, additional work on developing the conceptual framework by adding more

variables on CEOs’ personality attributes such as risk taking, tolerance for ambiguity,

assertiveness and decision making processes would be valuable. Future research in this

area may also look at the link between personality traits and demographic characteristics

and their impact on firm performance.

Thirdly, while the present research did incorporate organisational, environmental and

strategy control variables, further research is desirable to clarify the specific relationship

between executive leadership and firm performance by expanding the contingency

factors explored. For example, do organisations in different industries or with different

cultures call for different executive leadership types? Similarly, do different types of

firm characteristics such as age or types of ownership require different executive

leadership behaviour? It would also be desirable to collect data from multiple

respondents in firms to validate the CEOs’ perceptions about their role behaviour.

Similarly, where possible, the use of secondary data of firm performance to further

validate the top executives’ perception of their organisational performance would be of

value.

Fourthly, future research may also expand this study by replicating these results in

another context other than just in Thailand and with further refined measures of

executive leadership roles in order to generalise. Much more research work is required

304


to develop more reliable measures of executive leadership and to test them in specific

organisational settings.

Finally, as no previous research had been conducted on the relationship between

executive leadership and organisational performance in Thailand particularly in publicly

listed companies of Thailand, this research has provided an important benchmark and

valuable database for future research in Thailand and likewise in other developing

countries.


This chapter summarises the limitations of this study as well as the scope it affords for

further research.

305

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323

APPENDIX A

LIST OF PUBLICLY LISTED COMPANIES OF THAILAND

324

List of Publicly Listed Companies of Thailand 1. Asian Seafood Coldstorage Public Company Limited 2. Seafresh Industry Public Company Limited 3. Chiangmai Frozen Foods Public Company Limited 4. Charoen Pokphand Foods Public Company Limited 5. Chumporn Palm Oil Industry Public Company Limited 6. GFPT Public Company Limited 7. Lee Feed Mill Public Company Limited 8. Pakfood Public Company Limited 9. Patum Rice Mill And Granary Public Company Limited 10. Sri Trang Agro-Industry Public Company Limited 11. Thailuxe Enterprises Public Company Limited 12. United Palm Oil Industry Public Company Limited 13. Bank of Ayudhya Public Company Limited 14. Bangkok Bank Public Company Limited 15. Bank of Asia Public Company Limited 16. The Bank Thai Public Company Limited 17. The DBS Thai Danu Bank Public Company Limited 18. The Industrial Finance Corporation Of Thailand 19. Krung Thai Bank Public Company Limited 20. Standard Chartered Nakornthon Bank Public Company Limited 21. The Siam Commercial Bank Public Company Limited 22. Siam City Bank Public Company Limited 23. The Thai Farmers Bank Public Company Limited 24. The Thai Military Bank Public Company Limited 25. Dynasty Ceramic Public Company Limited 26. WiikK & Hoeglund Public Company Limited 27. The Siam Cement Public Company Limited 28. Siam City Cement Public Company Limited 29. Southern Concrete Pile Public Company Limited 30. Sahaviriya Steel Industries Public Company Limited 31. Tipco Asphalt Public Company Limited 32. Thailand Carpet Manufacturing Public Company Limited 33. Thai Gypsum Product Public Company Limited 34. TPI Polene Public Company Limited 35. The Union Mosaic Industry Public Company Limited 36. Vanachai Group Public Company Limited 37. The Aromatics (Thailand) Public Company Limited 38. National Fertilizer Public Company Limited 39. National Petrochemical Public Company Limited 40. Pato Chemical Industry Public Company Limited 41. Thai Carbon Black Public Company Limited 42. Thai Central Chemical Public Company Limited 43. Thai Plastic And Chemical Public Company Limited 44. Union Plastic Public Company Limited 45. Vinythai Public Company Limited 46. Yong Thai Public Company Limited 47. Big C Supercenter Public Company Limited

325

List of Publicly Listed Companies of Thailand (Continued) 48. Berli Jucker Public Company Limited 49. I.C.C. International Public Company Limited 50. Loxley Public Company Limited 51. Siam Makro Public Company Limited 52. Minor Corporation Public Company Limited 53. Newcity (Bangkok) Public Company Limited 54. O.C.C. Public Company Limited 55. Robinson Department Store Public Company Limited 56. Saha Pathanapibul Public Company Limited 57. Saha Pathana Inter-Holding Public Company Limited 58. White Group Public Company Limited 59. Advanced Info Service Public Company Limited 60. The International Engineering Public Company Limited 61. Shin Corporations Public Company Limited 62. Telecomasia Corporation Public Company Limited 63. TT&T Public Company Limited 64. United Communication Industry Public Company Limited 65. Compass East Industry (Thailand) Public Company Limited 66. Charoong Thai Wire & Cable Public Company Limited 67. Furukawa Metal (Thailand) Public Company Limited 68. Kulthorn Kirby Public Company Limited 69. Muramoto Electron (Thailand) Public Company Limited 70. Metro Systems Corporation Public Company Limited 71. Singer Thailand Public Company Limited 72. S.V.O.A. Public Company Limited 73. Circuit Electronic Industries Public Company Limited 74. Hana Microelectronics Public Company Limited 75. KCE Electronics Public Company Limited 76. Banpu Public Company Limited 77. The Bangchak Petroleum Public Company Limited 78. Electricity Generating Public Company Limited 79. Lanna Resources Public Company Limited 80. PTT Exploration And Production Public Company Limited 81. Siam United Service Public Company Limited 82. BEC World Public Company Limited 83. City Sports And Recreation Public Company Limited 84. CVD Entertainment Public Company Limited 85. Digital Onpa International Public Company Limited 86. GMM Grammy Public Company Limited 87. Safari World Public Company Limited 88. United Broadcasting Corporation Public Company Limited 89. Asia Credit Public Company Limited 90. Ayudhya Investment And Trust Public Company Limited 91. Adkinson Securities Public Company Limited 92. ABN Amro Asia Securities Public Company Limited 93. The Book Club Finance Public Company Limited 94. Bangkok First Investment And Trust Public Company Limited

326

List of Publicly Listed Companies of Thailand (Continued) 95. Capital Nomura Securities Public Company Limited 96. Kiatnakin Finance & Securities Public Company Limited 97. MFC Asset Management Public Company Limited 98. National Finance Public Company Limited 99. Phatra Leasing Public Company Limited 100. Scandinavian Leasing Public Company Limited 101. The Siam Sunwa Industrial Credit Public Company Limited 102. Siam Panich Leasing Public Company Limited 103. TISCO Finance Public Company Limited 104. Food and Drinks Public Company Limited 105. Haad Thip Public Company Limited 106. Lam Soon (Thailand) Public Company Limited 107. The Minor Food Group Public Company Limited 108. Kuang Pei San Food Products Public Company Limited 109. President Rice Products Public Company Limited 110. S&P Syndicate Public Company Limited 111. Siam Food Products Public Company Limited 112. S.Khonkaen Food Industry Public Company Limited 113. The Serm Suk Public Company Limited 114. Thai President Foods Public Company Limited 115. The Thai Pineapple Public Company Limited 116. Thai Union Frozen Products Public Company Limited 117. Thai Vegetable Oil Public Company Limited 118. Thai Wah Food Products Public Company Limited 119. Universal Food Public Company Limited 120. United Flour Mill Public Company Limited 121. Bangkok Dusit Medical Services Public Company Limited 122. Krungdhon Hospital Public Company Limited 123. Ramkamhaeng Hospital Public Company Limited 124. Samitivej Public Company Limited 125. Vibhavadi Medical Center Public Company Limited 126. Central Plaza Hotel Public Company Limited 127. Dusit Thani Public Company Limited 128. The Mandarin Hotel Public Company Limited 129. The Oriental Hotel (Thailand) Public Company Limited 130. Pacific Assets Public Company Limited 131. Royal Garden Resort Public Company Limited 132. Rajadamri Hotel Public Company Limited 133. Royal Orchid Hotel (Thailand) Public Company Limited 134. Shangri-La Hotel Public Company Limited 135. Modernform Group Public Company Limited 136. Ocean Glass Public Company Limited 137. Rockworth Public Company Limited 138. Srithai Superware Public Company Limited 139. Sun Wood Industries Public Company Limited 140. The Ayudhya Insurance Public Company Limited 141. Bangkok Insurance Public Company Limited 142. Bangkok Union Insurance Public Company Limited

327

List of Publicly Listed Companies of Thailand (Continued) 143. Charan Insurance Public Company Limited 144. The Deves Insurance Public Company Limited 145. Interlife John Hancock Assurance Public Company Limited 146. Indara Insurance Public Company Limited 147. Khoom Khao Insurance Public Company Limited 148. The Navakij Insurance Public Company Limited 149. Nam Seng Insurance Public Company Limited 150. Phatra Insurance Public Company Limited 151. The Safety Insurance Public Company Limited 152. Siam Commercial New York Life Insurance Public Company Limited 153. The Samaggi Insurance Public Company Limited 154. Syn Mun Kong Insurance Public Company Limited 155. The Thai Commercial Insurance Public Company Limited 156. Thai Reinsurance Public Company Limited 157. The Thai Insurance Public Company Limited 158. Dhipaya Insurance Public Company Limited 159. The Thai Setakij Insurance Public Company Limited 160. Pacific Insurance Public Company Limited 161. Pranda Jewelry Public Company Limited 162. Sawang Export Public Company Limited 163. Patkol Public Company Limited 164. TCJ Asia Public Company Limited 165. Thai Lift Industries Public Company Limited 166. Padaeng Industry Public Company Limited 167. A.J. Plast Public Company Limited 168. NEP Realty And Industry Public Company Limited 169. Nippon Pack (Thailand) Public Company Limited 170. Thantawan Industry Public Company Limited 171. Thai Metal Drum Manufacturing Public Company Limited 172. Thai O.P.P. Public Company Limited 173. Varopakorn Public Company Limited 174. Jack Chia Industries (Thailand) Public Company Limited 175. S & J International Enterprises Public Company Limited 176. Amarin Printing and Publishing Public Company Limited 177. Matichon Public Company Limited 178. Nation Multimedia Group Public Company Limited 179. The Post Publishing Public Company Limited 180. Se-Education Public Company Limited 181. Siam Sport Syndicate Public Company Limited 182. Tong Hua Communications Public Company Limited 183. Far East DDB Public Company Limited 184. Prakit Holding Public Company Limited 185. Amarin Plaza Public Company Limited 186. Amata Corporation Public Company Limited 187. Bangkok Land Public Company Limited 188. CH. Karnchang Public Company Limited 189. Central Pattana Public Company Limited

328

List of Publicly Listed Companies of Thailand (Continued) 190. Golden Land Property Development Public Company Limited 191. Hemraj Land And Development Public Co.Ltd. 192. Italian-Thai Development Public Company Limited 193. Land and House Public Company Limited 194. L.P.N. Development Public Company Limited 195. MBK Development Public Company Limited 196. M.K.Real Estate Development Public Company Limited 197. Noble Development Public Company Limited 198. Property Perfect Public Company Limited 199. Quality-Houses Public Company Limited 200. Rojana Industrial Park Public Company Limited 201. Sammakorn Public Company Limited 202. Sansiri Public Company Limited 203. Supalai Public Company Limited 204. Thai Factory Development Public Company Limited 205. Advance Agro Public Company Limited 206. Phoenix Pulp & Paper Public Company Limited 207. The Siam Pulp & Paper Public Company Limited 208. Thai Cane Paper Public Company Limited 209. Asia Fiber Public Company Limited 210. The Bangkok Nylon Public Company Limited 211. Bangkok Rubber Public Company Limited 212. Boutique New City Public Company Limited 213. Castle Peak Holdings Public Company Limited 214. Hantex Public Company Limited 215. Luckytex (Thailand) Public Company Limited 216. New Plus Knitting Public Company Limited 217. Pan Asia Footwear Public Company Limited 218. People's Garment Public Company Limited 219. Saha-Union Public Company Limited 220. Thanulux Public Company Limited 221. Textile Prestige Public Company Limited 222. Thai Rayon Public Company Limited 223. TTL Industries Public Company Limited 224. Thai Toray Textile Mills Public Company Limited 225. Tuntex (Thailand) Public Company Limited 226. Union Pioneer Public Company Limited 227. Union Textile Industries Public Company Limited 228. Thai Wacoal Public Company Limited 229. Bangkok Expressway Public Company Limited 230. Jutha Maritime Public Company Limited 231. Precious Shipping Public Company Limited 232. Regional Container Lines Public Company Limited 233. Thai Airways International Public Company Limited 234. Thoresen Thai Agencies Public Company Limited 235. Unithai Line Public Company Limited 236. Goodyear (Thailand) Public Company Limited 237. Swedish Motors Corporation Public Company Limited

329

List of Publicly Listed Companies of Thailand (Continued) 238. S.P. Suzuki Public Company Limited 239. Thai Rung Union Car Public Company Limited 240. Krungdhep Sophon Public Company Limited 241. Sab Sri Thai Warehouse Public Company Limited 242. United Standard Terminal Public Company Limited 243. DTC Industries Public Company Limited 244. Eastern Water Resources Development And Management Public Company Limited

330

APPENDIX B

INTRODUCTORY LETTER, REFERENCE LETTER AND RESEARCH

QUESTIONNAIRES

331

«Title» «Name» «Surname»«JobTitle»«Company»<<Address 1»

«City», THAILAND

28 February 2003

Dear «Title» «Surname»,

We are seeking your participation and cooperation in the first major survey of "ExecutiveLeadership and Organisational Performance in Publicly Listed Companies of Thailand". Thestudy focuses on how the most senior executives see their jobs and on matters that are ofparticular concern to top management. We believe that chief executives as leaders are veryimportant, that they collectively shape organisational outcomes and have a crucial impact onthe performance of an organisation.

This is an academic study and is being conducted under my research supervision, byMiss Panpilai Vajanapoom, a full-time Ph.D. candidate. The results will help inform seniorexecutives about leadership effectiveness and assist human resource development in yourorganisation, as well as management education and leadership programs in Thailand.

Your support is crucial to our study and we would greatly appreciate your valuableparticipation. Miss Vajanapoom will return to Thailand for this study. She will contact youfor an appointment to conduct a personal interview, which is expected to take one hour.

On completion of this study, we will send you a report summarizing the major researchfindings. We are confident that you will find the research results both interesting and useful.All the information gathered during the study will be treated as strictly confidential. Thefmdings will be reported in aggregated form so that no individual company or person can beidentified.

We trust that you will be able to participate in this important study. If you require furtherinformation, please do not hesitate to contact either myself on 61-3-98596072, (E-mail:[email protected]) or Miss Vajanapoom on: 01-8469119, 02 589-1019 (Thailand),61-3-92145974 (Australia), (E-mail: [email protected]).

Thanking for your cooperation.

Your sincerely

«Signed»

Chris ChristodoulouProfessor of ManagementAustralian Graduate School of EntrepreneurshipSwinburne University of Technology, Australia

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334

Thanking you for participating in our survey into how chief executives as leaders see their jobs. In this questionnaire, we will be seeking your opinions about matters that are of particular concern to top management. In particular, we are looking for the extent to which dimensions of firm performance can be consequently affected by the roles and attributes of top executive leader. The company in this questionnaire means the entity of which you are the most senior executive, whether it be a division, a subsidiary, or an independent organisation. All the information you provide will be treated as strictly confidential. The data will be coded to ensure that no unauthorized person can identify or interpret an organisation’s return. The findings will be reported in aggregated form, so that no company or person can be identified. This questionnaire will be used for academic purpose only. On completion of the study, we will send you a summary of the main research findings for further reference. Company code: Survey conducted on:

Survey of Executive Leadership and Organisational Performance in Publicly Listed Companies of Thailand

QUESTIONNAIRE

Swinburne University of Technology

Section I: General Questions

1. What is the approximate number of full-time employees in your company? _________

2. How long have you served as CEO/MD/President? In this organisation _____years In other organisations _____years

3. How many years have you been employed on full-time basis? In this organisation _____years In this industry _____years

4. Have you had overseas working experience?

Yes No

If “Yes”, please provide us your details (e.g. length of experience, country, and your opinion on differences between Thai and foreign CEO/MD/President)

5. Were you an internal appointment to your present position?

Yes

6. Please specify your age range

35 years or less 46 – 55 years

7. What is your main functional background?

Finance and Accounting Human Resource Management Others (please specify) ____________________

8. What is your educational background? Yes No Field/ School

Engineering and Production

No

36 – 45 years

Sales and Marketing

56 or more years

Bachelor’s degree _______________________________________ Master’s degree _______________________________________

Doctorate degree _______________________________________ Certificate/ Diploma _______________________________________

Others (please specify) _______________________________________

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9. Below is the Standard Industrial Classification (SIC). In which SIC category would you judge your company to be primarily located? If more than one category applies, please select the number, which is the largest area of your business by revenue. 1. Agriculture, Forestry and Fishing 10. Communication Services 2. Mining 11. Finance and Insurance 3. Manufacturing 12. Property and Business Services 4. Electricity, Gas and Water Supply 13. Government Administration and Defence 5. Construction 14. Education 6. Wholesale Trade 15. Health and Community Services 7. Retail Trade 16. Cultural and Recreational Services 8. Accommodation, Cafes and Restaurants 17. Personal and Other Services 9. Transports and Storage

Section II: The Roles of Chief Executives

10. Listed below are some statements that describe top management roles and behaviours. Please use the following scale to indicate how often you engage in these activities by selecting the appropriate number. 1 2 3 4 5 6 Very infrequently Occasionally Very frequently Not applicable In my job as Chief Executive (CEO/MD/President), I: 1. Concentrate on our firm’s basic purpose and general direction. 1 2 3 4 5 6

2. Nurture contacts with people external to the company. 1 2 3 4 5 6

3. Try to create a sense of excitement within the company. 1 2 3 4 5 6

4. Emphasize important company values through ceremonies and other events. 1 2 3 4 5 6

5. Use my position to influence decisions made at lower levels. 1 2 3 4 5 6

6. Contribute specific knowledge and opinions about problems 1 2 3 4 5 6

7. Make trade-off decisions and allocate resources accordingly. 1 2 3 4 5 6

8. Focus on results-“getting the job done today”. 1 2 3 4 5 6

9. Communicate a sense of where the company might be in 20 years. 1 2 3 4 5 6

10. Study emerging social and economic trends. 1 2 3 4 5 6

11. Challenge our people with new goals and aspirations. 1 2 3 4 5 6

12. Short-circuit the hierarchy by talking to people throughout the firm. 1 2 3 4 5 6

13. Ask questions which force subordinates to think about problems in new ways. 1 2 3 4 5 6

14. Evaluate critically proposed projects and programs. 1 2 3 4 5 6

15. Work to integrate conflicting perspectives and unpopular views. 1 2 3 4 5 6

16. Set specific, operational targets for our company. 1 2 3 4 5 6

17. Assess records and reports against stated goals. 1 2 3 4 5 6

18. Involve myself with daily operations to enhance efficiency. 1 2 3 4 5 6

19. Show concern for the needs of the staff. 1 2 3 4 5 6

20. Analyse the competitors’ policies and actions. 1 2 3 4 5 6

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337

Section III: Managerial Attributes

11. Below are listed statements that describe various things people do or try to do on their jobs. Please select the appropriate number, which best describes your own actions when you are at work. There are no right or wrong answers.

1 2 3 4 5 6 7

Never Almost Seldom Sometimes Usually Almost Always Never Always 1. I do my best work when my job assignments are fairly difficult. 1 2 3 4 5 6 7

2. I pay a good deal of attention to the feelings of others at work. 1 2 3 4 5 6 7

3. I try very hard to improve on my past performance at work. 1 2 3 4 5 6 7

4. I take moderate risks and stick my neck out to get ahead at work. 1 2 3 4 5 6 7

5. I express my disagreements with others openly. 1 2 3 4 5 6 7

6. I try to avoid any added responsibilities on my job. 1 2 3 4 5 6 7

7. I consider myself a “team player” at work. 1 2 3 4 5 6 7

8. I try to perform better than my co-workers. 1 2 3 4 5 6 7

Section IV: Managerial Style

12. The following statements are about managerial beliefs. Would you please indicate to what extent you agree or disagree with them by selecting the appropriate number. 1 2 3 4 5

Strongly agree Strongly disagree 1. The average of human being prefers to be directed, wishes to avoid

responsibility, and has relatively little ambition. 1 2 3 4 5

2. Leadership skills can be acquired by most people regardless of their particular inborn traits and abilities.

1 2 3 4 5

3. The use of rewards (pay, promotion, etc) and punishment (failure to promote, etc.) is not the best to get subordinates do their work.

1 2 3 4 5

4. In a work situation, if subordinates cannot influence me then I lose some influence on them.

1 2 3 4 5

5. A good leader should give detailed and complete instructions to subordinates, rather than giving them merely general directions and depending upon their initiative to work out the details.

1 2 3 4 5

6. Group goal setting offers advantages that cannot be obtained by individual goal setting.

1 2 3 4 5

7. A superior should give his subordinates only that information which is necessary for them to their immediate tasks.

1 2 3 4 5

8. The superior’s authority over his subordinates in an organisation is primarily economic.

1 2 3 4 5

Section V: Environmental Conditions

13. Please indicate the extent of your agreement with each of the following statements by selecting the appropriate number.

1 2 3 4 5

Strongly agree Strongly disagree 1. The business environment for our company is changing very rapidly. 1 2 3 4 5

2. The business environment we face is very complex with many organisations whose actions can affect us.

1 2 3 4 5

3. The markets for our main product will grow next year. 1 2 3 4 5 14. Please select the number in each scale that best approximates the actual condition in your main industry. 1. Our firm must rarely change its marketing

practices to keep up with the market and competitors.

Our firm must change its marketing practices extremely frequently (e.g. semiannually).

1 2 3 4 5 6 7

2. The rate at which products/services are getting obsolete in the industry is very slow (e.g. basic metal like copper).

The rate of obsolescence is very high (e.g. in some fashion goods).

1 2 3 4 5 6 7

3. The production/service technology is not subject to very much change and is well established (e.g. in steel production).

The modes of production/service change often and in a major way (e.g. advanced electronic components).

1 2 3 4 5 6 7

4. Demand and consumer tastes are fairly easy to forecast (e.g. for milk companies).

Demand and tastes are almost unpredictable (e.g. high-fashion goods).

1 2 3 4 5 6 7

5. Actions of competitors are quite easy to predict (e.g. in some primary industries).

Actions of competitors are unpredictable (e.g. in retail trade).

1 2 3 4 5 6 7

6. Market activities of our key competitors have become far more hostile.

Market activities of our key competitors have become far less hostile.

1 2 3 4 5 6 7

7. Customers’ buying habits are about the same for all products.

Customers’ buying habits vary a great deal from one line to another.

1 2 3 4 5 6 7

8. The natures of the competition are about the same for all products.

The nature of the competition varies a great deal from one line to another.

1 2 3 4 5 6 7

9. Required methods of production/ service are about the same for all products.

Required methods of production/ service vary a great deal from one line to another.

1 2 3 4 5 6 7

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Section VI: Organisational Strategy

15. Which one of the following descriptions most closely fits your organisation? Please consider your organisation as a whole and note that none of the types listed below are inherently “good” or “bad”. Please select one number. 1. This type of organisation attempts to locate and maintain a secure niche in a relatively stable

product or service area. The organisation tends to offer a more limited range of products or services than its competitors, and it tries to protect its domain by offering higher quality, superior service, lower prices, and so forth. Often this type of organisation is not at the forefront of developments in the industry – it tends to ignore industry changes that have no direct influence on current areas of operation and concentrates instead on doing the best job possible in a limited area.

2. This type of organisation typically operates within a broad product-market domain that undergoes

periodic redefinition. The organisation values being “first in” in new product and market areas even if not all of these efforts prove to be highly profitable. The organisation responds rapidly to early signals concerning areas of opportunity, and these responses often lead to a new round of competitive actions. However, this type of organisation may not maintain market strength in all of the areas it enters.

3. This type of organisation attempts to maintain a stable, limited line of products or services, while at

the same time moving out quickly to follow a carefully selected set of the more promising new developments in the industry. The organisation is seldom “first in” with new products or services. However, by carefully monitoring the actions of major competitors in areas’ compatible with its stable product-market base, the organisation can frequently be “second in” with a more cost-efficient product or service.

4. This type of organisation does not appear to have a consistent product-market orientation. The

organisation is usually not as aggressive in maintaining established products and markets as some of its competitors, nor is it willing to take as many risks as other competitors. Rather, the organisation responds in those areas where it is forced to by environmental pressures.

Section VII: Organisational Performance

16. Over the past 5 years, how would you rate your company’s performance against your industry? Please select the number that best represents your opinion.

1 2 3 4 5 6 7 Low High

1. Profitability level/ return on assets 1 2 3 4 5 6 7 2. Cash flow (liquidity and ability to raise financial resources) 1 2 3 4 5 6 7 3. Share price 1 2 3 4 5 6 7 4. Sales growth 1 2 3 4 5 6 7 5. Market share 1 2 3 4 5 6 7 6. Technical product/ service design and development 1 2 3 4 5 6 7 7. Quality of product/ service 1 2 3 4 5 6 7 8. Employee satisfaction 1 2 3 4 5 6 7 9. Overall company performance 1 2 3 4 5 6 7 10. Personnel development 1 2 3 4 5 6 7 11. Public image and goodwill 1 2 3 4 5 6 7

Section VIII: Personal Beliefs

In this section, we will be exploring your personal beliefs in a broad environmental context. 17. Please select the one statement of each pair (and only one), which you more strongly believe to be the case as far as you are concerned by selecting the letter a or b. In some instances you may discover that you believe both statements or neither one. In such cases, please select the one you more strongly believe. There are no right or wrong answers. 1. a. Children get into trouble because their parents punish them too much. b. The trouble with most children nowadays is that their parents are too easy with them. 2. a. Many of the unhappy things in people’s lives are partly due to bad luck. b. People’s misfortunes result from the mistakes they make. 3. a. One of the major reasons why we have wars is because people don’t take enough interest

in politics. b. There will always be wars, no matter how hard people try to prevent them. 4. a. In the long run people get the respect they deserve in this world. b. Unfortunately, an individual’s worth often passes unrecognized no matter how hard he

tries. 5. a. The idea that teachers are unfair to students is nonsense. b. Most students don’t realize the extent to which their grades are influenced by accidental

happenings. 6. a. Without the right breaks one cannot be an effective leader. b. Capable people who fail to become leaders have not taken advantage of their opportunities. 7. a. No matter how hard you try some people just don’t like you. b. People who can’t get others to like them don’t understand how to get along with others. 8. a. Heredity plays the major role in determining ones personality. b. It is one’s experiences in life which determine what they’re like. 9. a. I have often found that what is going to happen will happen. b. Trusting to fate has never turned out as well for me as making a decision to take a definite

course of action. 10. a. In the case of the well prepared student there is rarely if ever such a thing as an unfair test. b. Many times exam questions tend to be so unrelated to course work that studying is really

useless. 11. a. Becoming a success is a matter of hard work, luck has little or nothing to do with it. b. Getting a good job depends mainly on being in the right place at the right time. 12. a. The average citizen can have an influence in government decisions. b. This world is run by the few people in power, and there is not much the little guy can do

about it. 13. a. When I make plans, I am almost certain that I can make them work. b. It is not always wise to plan too far ahead because many things turn out to be a matter of

good or bad fortune anyhow.

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341

14. a. There are certain people who are just no good. b. There is some good in everybody. 15. a. In my case getting what I want has little or nothing to do with luck. b. Many times we might just a well decide what to do by flipping a coin. 16. a. Who gets to be the boss often depends on who was lucky enough to be in the right place

first. b. Getting people to do the right thing depends upon ability, luck has little or nothing to do

with it. 17. a. As far as world affairs are concerned, most of us are the victims of forces we can neither

understand, nor control. b. By taking an active part in political and social affairs the people can control world events. 18. a. Most people don’t realize the extent to which their lives are controlled by accidental

happenings. b. There really is no such thing as “luck”. 19. a. One should always be willing to admit mistakes. b. It is usually best to cover up one’s mistakes. 20. a. It is hard to know whether or not a person really likes you. b. How many friends you have depends upon how nice a person you are. 21. a. In the long run the bad things that happen to us are balanced by the good ones. b. Most misfortunes are the result of lack of ability, ignorance, laziness, or all three. 22. a. With enough effort we can wipe out political corruption. b. It is difficult for people to have much control over the things politicians do in office. 23. a. Sometimes I can’t understand how teachers arrive at the grades they give. b. There is a direct connection between how hard I study and the grades I get. 24. a. A good leader expects people to decide for themselves what they should do. b. A good leader makes it clear to everybody what their jobs are. 25. a. Many times I feel that I have little influence over the things that happen to me. b. It is impossible for me to believe that chance or luck plays an important role in my life. 26. a. People are lonely because they don’t try to be friendly. b. There’s not much use in trying too hard to please people, if they like you, they like you. 27. a. There is too much emphasis on athletics in high school. b. Team sports are an excellent way to build character. 28. a. What happens to me is my own doing. b. Sometimes I feel that I don’t have enough control over the direction my life is taking. 29. a. Most of the time I can’t understand why politicians behave the way they do. b. In the long run the people are responsible for bad government on a national as well as on a

local level.

Section IX: Additional Questions

18. Which are the most important factors to take into consideration in determining CEO/MD/President succession in your organisation? 19. What do you consider to be both your strengths and weaknesses as a CEO/MD/President? 20. In your opinion, what types of knowledge and skills are required for the development of senior executives in your organisation?

342

21. In your opinion, which are the essential attributes required to be an effective leader in Thailand? 22. Are there any other comments you would like to make with regard to the subjects covered in this survey?

343

Thank you for your valuable time in completing this questionnaire. Your spontaneous assistance was greatly appreciated. As mentioned earlier, all that information that you provided for this survey will be treated as Strictly Confidential and for Academic Purpose Only.

Professor Dr. Chris Christodoulou and Panpilai Vajanapoom Australian Graduate School of Entrepreneurship Swinburne University of Technology, Australia

344

Swinburne University of Technology

แบบสอบถาม

การวิจัยภาวะผูนําผูบริหารระดับสูงและผลการดําเนินงานของ บริษัทจดทะเบียนในตลาดหลักทรัพยแหงประเทศไทย

ขอขอบพระคุณทานที่ใหความอนุเคราะหในการตอบแบบสอบถามการวิจัยเกี่ยวกับความคิดเห็นของผูบริหารระดับสูงที่มี ตอลักษณะงานของตนเองและสาระสําคัญในการบริหารงาน การวิจัยนี้มีจุดมุงหมายที่จะคนหาบทบาทและคุณลักษณะ ของผูบริหารระดับสูงที่มีผลกระทบตอผลการดําเนินงานขององคกร รวมไปถึงรูปแบบการบริหารงานของผูนําที่มี ประสิทธิภาพ องคกรในแบบสอบถามฉบับนี้หมายถึง หนวยงาน บริษัทลูก หรือ บริษัทอิสระ ที่ทานดํารงตําแหนง ผูบริหารสูงสุดทางฝายบริหาร

ขอมูลท้ังหมดที่ไดจากกการวิจัยครั้งนี้จะถูกปกปดไวเปนความลับและถูกใชเพ่ือวัตถุประสงคในการศึกษาเทานั้น ขอมูลตางๆ ที่ไดจากการตอบคําถามของทานจะถูกรายงานเปนภาพรวมและไมสามารถระบุเจาะจงไดวามาจากองคกรใด ขาพเจาจะจัดทํารายงานสรุปผลการวิจัยและจัดสงใหกับทานหลังจากการศึกษาเสร็จส้ินสมบูรณ

รหัสบริษัท: __________________________ วันที่: __________________________

345

สวนที่ ๑ : คําถามทั่วไป

1. องคกรของทานมีพนักงานประจําทั้งหมดประมาณเทาใด? _________คน

2. ทานดํารงตําแหนงกรรมการผูอํานวยการ/กรรมการผูจัดการ(ใหญ)เปนระยะเวลานานเทาใด? ในองคกรปจจุบัน ______ ป ในองคกรอื่นๆ ______ ป

3. ทานมีประสบการณทํางานประจําเปนระยะเวลานานเทาใด? ในองคกรปจจุบัน ______ ป ในอุตสาหกรรมที่เกี่ยวของกับธุรกิจขององคกร ______ ป

4. ทานเคยมีประสบการณทํางานในตางประเทศหรือไม?

เคย ไมเคย

ถา “เคย” กรุณาใหรายละเอียดของทาน เชน ระยะเวลาและประเทศทีท่านทํางาน รวมท้ังความคิดเห็นของทานเกี่ยวกับความ

แตกตางระหวางผูบริหารระดับสูงสุดของไทยกับตางประเทศ

5. ทานไดรับการแตงตั้งมาดํารงตําแหนง กรรมการผูอํานวยการ/กรรมการผูจัดการ(ใหญ) โดยการเลื่อนตําแหนงภายในองคกร ใชหรือไม?

ใช ไมใช

6. กรุณาระบุชวงอายขุองทาน

35 ปหรือต่ํากวา

46 – 55 ป

36 – 45 ป

56 ปหรือสูงกวา

7. ทานมีประสบการณทํางานหลักในสาขาใดดังตอไปน้ี?

วศิวกรรมและการผลิต การขายและการตลาด

การเงินและการบัญชี บริหารบุคลากร อื่น ๆ (กรุณาระบุ) _______________

8. กรุณาระบุประวัติการศึกษาของทาน?

ใช ไมใช สาขา/สถาบัน

ป ริญญาตรี _________________________________________

ปริญญาโท _________________________________________ ปริญ ญาเอก _________________________________________

ประกาศนียบัตร _________________________________________ อื่น ๆ (กรุณาระบุ) _________________________________________

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9. ทานคิดวาองคกรของทานจัดอยูในอุตสาหกรรมประเภทใดตามการแบงประเภทของอุตสาหกรรมที่ระบุขางลาง หากทานคิดวาองคกรทาน จัดอยูในหลายประเภทอุตสาหกรรม กรุณาเลือกประเภทอุตสาหกรรมที่เกี่ยวของกับธุรกิจหลักของทานเพียงขอเดียว โดยพิจารณาจากรายได

1. การเกษตร ปาไม และ ประมง 10. บริการดานสื่อสาร 2. เหมืองแร 11. การเงิน และการประกันภัย 3. อุตสาหกรรมการผลิต 12. บริการธุรกิจอสังหาริมทรัพยและธุรกิจตางๆ 4. ไฟฟา กาซ และ นํ้าบริโภค 13. การปกครองและปองกันประเทศ 5. กอสราง 14. การศึกษา 6. ขายสง 15. บริการดานสุขภาพและชุมชน 7. ขายปลีก 16. บริการดานวัฒนธรรมและนันทนาการ 8. ที่พัก และรานอาหาร 17. บริการสวนตัว และอื่นๆ 9. ขนสง และโกดังเกบ็ของ

สวนที่ ๒ : บทบาทผูบริหารระดับสูง

10. ทานมีสวนเกี่ยวของกับลักษณะงานตางๆ ตามที่ระบุขางลางมากนอยเพียงใด 1 2 3 4 5 6 ไมบอยมาก บางครั้ง บอยมาก ไมเก่ียวของ

ในฐานะที่ขาพเจาดํารงตําแหนงกรรมการผูอํานวยการ/กรรมการผูจัดการ(ใหญ) ขาพเจา

1. ใหความสําคัญของเปาหมายและทิศทางขององคกร 1 2 3 4 5 6

2. สรางสัมพันธภาพที่ดีกับบุคคลภายนอกองคกร 1 2 3 4 5 6

3. พยายามสรางบรรยากาศของการกระตือรือรนภายในองคกร 1 2 3 4 5 6

4. เนนคุณคาขององคกรผานงานพิธีการและงานกิจกรรมตางๆ 1 2 3 4 5 6

5. ใชตําแหนงของขาพเจาชี้นําการตัดสินใจของผูบริหารระดับลาง 1 2 3 4 5 6

6. มีสวนในการแสดงความคิดเห็นและความรูเฉพาะเจาะจงในปญหาตางๆ 1 2 3 4 5 6

7. ตัดสินใจโดยคํานึงถึงผลไดผลเสีย และจัดสรรทรัพยากรอยางเหมาะสม 1 2 3 4 5 6

8. เนนผลลัพธของงานตามคํากลาว “ทํางานใหเสร็จส้ินภายในวันน้ี” 1 2 3 4 5 6

9. ใหขอมูลขาวสารเกี่ยวกับทิศทางขององคกรในอีก 20 ปขางหนา 1 2 3 4 5 6

10. ศึกษาแนวโนมทางเศรษฐกิจและสังคมที่กําลังเกิดข้ึน 1 2 3 4 5 6

11. ทาทายพนักงานดวยเปาหมายและแรงบันดาลใจใหมๆ 1 2 3 4 5 6

12. ลดชองวางของลาํดับชั้นตําแหนงโดยพูดคุยกับพนักงานทั่วทั้งองคกร 1 2 3 4 5 6

13. ตั้งคําถามซึ่งบังคับใหผูใตบังคับบัญชาคิดเกี่ยวกับปญหาตางๆในแนวทางใหมๆ 1 2 3 4 5 6

14. ประเมินโครงการและแผนงานที่เสนอมาอยางพินิจพิเคราะห 1 2 3 4 5 6

15. ทํางานประสานความคิดเห็นที่ขัดแยงและมุมมองตางๆที่ไมไดรับการสนับสนุน 1 2 3 4 5 6

16. ตั้งเปาหมายการดําเนินงานที่ชัดเจนสําหรับองคกร 1 2 3 4 5 6

17. ประเมินผลบันทึกและรายงานโดยเทยีบกับเปาหมายทีต่ั้งไว 1 2 3 4 5 6

18. มีสวนรวมในการปฏิบัติงานประจําวันเพ่ือเพิ่มประสิทธิภาพขององคกร 1 2 3 4 5 6

19. แสดงความสนใจตอความตองการของพนักงาน 1 2 3 4 5 6

20. วิเคราะหนโยบายและการปฏิบัติการของคูแขง 1 2 3 4 5 6

347

สวนที่ ๓ : คุณลักษณะการบริหารงาน

11. ทานคิดวาลักษณะการทํางานของทานเปนอยางไร ไมมีคําตอบใดถูกหรือผิด

1 2 3 4 5 6 7

ไมเคยเลย แทบจะไมเคย นานๆ ครั้ง บางครั้ง เปนประจํา เกือบตลอดเวลา ตลอดเวลา

1. ขาพเจาทํางานสุดความสามารถเมื่อไดรับงานที่ยาก 1 2 3 4 5 6 7

2. ขาพเจาใหความใสใจตอความรูสึกของผูอื่นในการทํางาน 1 2 3 4 5 6 7

3. ขาพเจาพยายามอยางมากเพื่อที่จะปรับปรุงผลงานของขาพเจาที่ผานมา 1 2 3 4 5 6 7

4. ขาพเจายอมรับความเสี่ยงพอประมาณเพื่อความกาวหนาในหนาที่การงานของขาพเจา 1 2 3 4 5 6 7

5. ขาพเจาแสดงความคิดเห็นที่ขัดแยงตอผูอื่นอยางเปดเผย 1 2 3 4 5 6 7

6. ขาพเจาพยายามหลีกเลี่ยงความรับผิดชอบในงานที่เพิ่มข้ึน 1 2 3 4 5 6 7

7. ขาพเจาพิจารณาตัวเองเปนทีมงานคนหน่ึงในการทํางาน 1 2 3 4 5 6 7

8. ขาพเจาพยายามทํางานใหดีกวาคนอืน่ๆ 1 2 3 4 5 6 7

12. ขอความตามที่ระบุขางลางนี้เกี่ยวของกับความเชื่อในการบริหารงาน กรุณาแสดงความเห็นของทาน

1 2 3 4 5

สวนที่ ๔ : รูปแบบการบริหารงาน

เห็นดวยอยางยิ่ง ไมเห็นดวยอยางยิ่ง 1. โดยทั่วไป คนชอบทําตามคําสั่ง ปรารถนาที่จะหลีกเลี่ยงความรับผิดชอบ

และมีความทะเยอทะยานต่ํา 1 2 3 4 5

2. ทักษะความเปนผูนําสามารถเกิดข้ึนไดในคนสวนใหญโดยไมข้ึนกับความสามารถและพรสวรรคที่ติดตัวมาต้ังแตกําเนิด

1 2 3 4 5

3. การใหรางวัล (เชน การใหเงินเดือน การเลื่อนตําแหนง)และการลงโทษ (เชน ไมเลื่อนตําแหนง) ไมถือวาเปนวิธีที่ดีที่สุดที่ทําใหลูกนองทํางาน

1 2 3 4 5

4. ในสภาพแวดลอมการทํางาน หากลกูนองไมสามารถมีอิทธิพลตอทานได ทานจะลดบทบาทที่มีอิทธิพลตอพวกเขาลง

1 2 3 4 5

5. ผูนําที่ดีควรใหขอแนะนําอยางละเอียดและสมบูรณแกลูกนอง มากกวาที่จะใหเพียง คําแนะนําทั่วไป โดยปลอยใหลูกนองศึกษารายละเอียดดวยตนเอง

1 2 3 4 5

6. การตั้งเปาหมายรวมของกลุมมีขอไดเปรียบมากกวาการตั้งเปาหมายรายบุคคล 1 2 3 4 5

7. ผูบังคับบัญชาควรใหเพียงขอมูลที่จําเปนแกลูกนองสําหรับงานเฉพาะหนา 1 2 3 4 5

8. ผูบังคับบัญชามีอํานาจเหนือลูกนองในองคกรเน่ืองจากเปนผูใหคาตอบแทนทางการเงิน 1 2 3 4 5

348

สวนที่ ๕ : สภาพแวดลอมขององคกร

13. ทานมีความเห็นอยางไรตอสภาพแวดลอมขององคกรทาน

1 2 3 4 5

เห็นดวยอยางยิ่ง ไมเห็นดวยอยางยิ่ง 1. สภาพแวดลอมทางธุรกิจขององคกรทานกําลังเปลี่ยนแปลงอยางรวดเร็วมาก 1 2 3 4 5

2. สภาพแวดลอมทางธุรกิจที่องคกรทานเผชิญน้ัน ซับซอนและหลากหลายไปดวยองคกรตางๆ ที่มีผลกระทบตอธุรกิจของทาน

1 2 3 4 5

3. ตลาดสําหรับสินคาหลักของทานจะเติบโตในปหนา 1 2 3 4 5

14. กรุณาเลือกตัวเลขที่เหมาะสมกับสภาวะเงื่อนไขในอุตสาหกรรมหลักของทาน 1. องคกรของเราแทบจะไมตองเปลี่ยนวิธีปฏิบัติทางการตลาด

เพื่อใหทันกับตลาดและคูแขงขัน องคกรของเราตองเปลี่ยนวิธปีฏิบัติทางการตลาดบอย

คร้ังมาก เชน ทุกครึ่งป 1 2 3 4 5 6 7

2. อัตราการลาสมัยของสินคา/บริการในอุตสาหกรรมต่ํามาก เชน โลหะจําพวกทองแดง

อัตราการลาสมัยของสินคา/บริการสูงมาก เชน สินคาแฟชั่น

1 2 3 4 5 6 7

3. เทคโนโลยีในการผลิต/การบริการไมเปลี่ยนแปลงมาก และถูกติดตั้งมาอยางดี เชน การผลิตเหล็ก

เทคโนโลยีในการผลิต/การบริการเปลี่ยนแปลงบอยคร้ัง เชน ชิ้นสวนอิเล็คโทรนิคที่ทันสมัย

1 2 3 4 5 6 7

4. ความตองการและรสนิยมของผูบริโภคงายตอการคาดการณ เชน เครื่องดื่มจําพวกนม

ความตองการและรสนิยมของผูบริโภคแทบจะไมสามารถ คาดการณได เชน สินคาแฟชั่นนําสมัย

1 2 3 4 5 6 7

5. การปฏิบัติการของคูแขงงายตอการคาดการณ เชน ธุรกิจที่เพิ่งเร่ิมตน

การปฏิบัติการของคูแขงไมสามารถคาดการณได เชน การคาปลีก

1 2 3 4 5 6 7

6. กิจกรรมทางการตลาดของคูแขงขันหลักรุนแรงมาก กิจกรรมทางการตลาดของคูแขงขันหลักไมรุนแรง 1 2 3 4 5 6 7

7. พฤติกรรมการบริโภคของลูกคามีลักษณะเดียวกันหมด สําหรับทุกประเภทสินคา

พฤติกรรมการบริโภคของลูกคามีลักษณะแตกตางกันมาก ตามแตละประเภทสินคา

1 2 3 4 5 6 7

8. ธรรมชาติการแขงขันมีลักษณะเดียวกันหมดสําหรับ ทุกประเภทสินคา

ธรรมชาติการแขงขันมีลักษณะแตกตางกันมาก ตามแตละประเภทสินคา

1 2 3 4 5 6 7

9. วิธีการผลิตสินคา/บริการมีลักษณะเดียวกันหมด สําหรับทุกประเภทสินคา

วิธีการผลิตสินคา/บริการมีลักษณะแตกตางกันมาก ตามแตละประเภทสินคา

1 2 3 4 5 6 7

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สวนที่ ๖ : กลยุทธองคกร

15. กรุณาเลือกกลยุทธที่ระบุขางลางนี้เพียงขอเดียว ตามที่ทานคิดวาเหมาะสมกับองคกรของทาน โปรดพิจารณาองคกรเปนภาพรวม (หมายเหต:ุ ไมมีกลยุทธใดทั้ง 4 รูปแบบ ถูกพิจารณาวา ดี หรือ ไมดี)

1. องคกรลักษณะนี้พยายามวางรูปแบบและรักษาชองทางธุรกิจทั้งสินคา/บริการที่เฉพาะเจาะจง และมีแนวโนมที่จะเสนอสินคา/บริการที่ จํากัดใหมากกวาคูแขงขัน รวมถึงปองกันขอบเขตทางธุรกิจของตนเองโดยเสนอคุณภาพและการใหบริการที่เปนเลิศ อีกทั้งราคาที่ต่ํา กวาคูแขง องคกรลักษณะนี้ไมจัดวาอยูในแนวหนาของการพัฒนาในอุตสาหกรรมกลาวคือองคกรไมสนใจตอการเปลี่ยนแปลงใน อุตสาหกรรมที่ไมมีอิทธิพลโดยตรงตอการปฏิบัติการขององคกร และใหความสําคัญตอการดําเนินงานใหดีที่สุดเฉพาะขอบเขตของ ตนเองเทานั้น

2. องคกรลักษณะนี้ดาํเนินงานภายในขอบเขตของสินคา/ตลาดที่กวางและมกีารเปลี่ยนแปลง คุณคาขององคกรอยูที่การเปนรายแรกใน สินคา/ตลาดใหมๆถึงแมวาจะไดผลลัพธในรูปกําไรไมสูงมากก็ตาม องคกรลักษณะนี้จะตอบสนองอยางรวดเร็วกับโอกาสที่เขามา ซ่ึงการตอบสนองดังกลาวมักจะนําไปสูการแขงขันในอุตสาหกรรม อยางไรก็ตาม องคกรอาจจะไมสามารถรักษาความแข็งแกรงทาง การตลาดในทุกกรณีที่เขาดําเนินการได

3. องคกรลักษณะนี้พยายามรักษาสินคา/บริการที่มีชนิดจํากัดและม่ันคงแลวในตลาด ขณะเดียวกันองคกรมีการเคลื่อนไหวอยางรวดเร็ว เพื่อติดตามการพัฒนาใหมๆในอุตสาหกรรมอยางระมัดระวัง นอยครั้งมากที่องคกรจะเขามาเปน “รายแรก” ในสินคา/บริการใหมๆ อยางไรก็ตาม โดยการตรวจตราการปฏิบัติการของคูแขงขันหลักๆที่มีฐานสินคา/ตลาดในลักษณะที่เปนไปในทางเดียวกันอยาง พินิจพิเคราะห องคกรสามารถเขามาเปน “รายที่สอง” ในสินคา/บริการใหมๆ ซ่ึงมีตนทุนที่มีประสิทธิภาพมากกวาคูแขงไดบอยคร้ัง

4. องคกรลักษณะนี้ไมมีความแนชัดในในสินคา/ตลาด โดยปกติแลวองคกรจะไมใชวิธีการรุนแรงในการรักษาสินคา/ตลาดและไมยินดีที่ จะรับความเสี่ยงสูงเหมือนคูแขงอื่น ในทางกลับกัน องคกรมักจะโตตอบในเรื่องดังกลาวเฉพาะเมื่อเผชิญเหตุการณคับขันจาก สภาพแวดลอม

สวนที่ ๗ : ผลการดําเนินงานขององคกร

16. ในระยะ 5 ปที่ผานมา ทานคิดวาผลการดําเนินงานขององคกรทานเปนอยางไรเม่ือเทียบกับองคกรอื่นๆ ในอุตสาหกรรมเดียวกัน 1 2 3 4 5 6 7

ต่ํา สูง

1. ระดับผลกําไรและผลตอบแทนตอสินทรัพย 1 2 3 4 5 6 7

2. กระแสเงินสดหมุนเวียน 1 2 3 4 5 6 7

3. ราคาหุน 1 2 3 4 5 6 7 4. การเจริญเติบโตของยอดขาย 1 2 3 4 5 6 7 5. สวนแบงทางการตลาด 1 2 3 4 5 6 7 6. การพัฒนาสินคาและบริการ 1 2 3 4 5 6 7 7. คุณภาพสินคาและบริการ 1 2 3 4 5 6 7 8. ความพึงพอใจของพนักงาน 1 2 3 4 5 6 7 9. ผลการดําเนินงานโดยรวมขององคกร 1 2 3 4 5 6 7 10. การพัฒนาบุคลากร 1 2 3 4 5 6 7 11. ภาพพจนตอสาธารณชนและชื่อเสียงทางการคา 1 2 3 4 5 6 7

350

สวนที่ ๘ : ความเชื่อเฉพาะบุคคล

ในสวนน้ี จะเก่ียวของกับความเชื่อเฉพาะบุคคลของทานในเหตุการณตาง ๆ

17. กรุณาเลือกเพียงประโยคเดียวในแตละขอที่ทานเชื่อมากที่สุด (ก หรือ ข) ในเร่ืองทั่วๆไปตอไปน้ี ในบางขอทานอาจพบวาทานเชื่อ ทั้งสองประโยค หรือ ไมเชื่อแมแตประโยคเดียว ในกรณีดังกลาวกรุณาเลือกประโยคที่ทานเชื่อมากกวา ไมมีคําตอบใดถูกหรือผิด 1. ก. เด็กมีปญหาเน่ืองจากผูปกครองลงโทษมากเกินไป ข. ปญหาของเด็กทุกวันน้ีเกิดจากการที่ผูปกครองตามใจมากเกินไป 2. ก. ความผิดหวังตางๆที่เกิดข้ึนในชีวิตคนสวนหน่ึงมาจากความโชคราย ข. ความโชครายที่เกดิข้ึนเปนผลมาจากความผิดพลาดที่พวกเขาเหลานั้นทําข้ึน 3. ก. เหตุผลหลักอันหน่ึงของการเกิดสงครามเพราะคนสนใจการเมืองไมเพียงพอ ข. สงครามเกิดข้ึนเสมอไมวาคนจะพยายามปองกันมันมากนอยเพียงใด 4. ก. ในระยะยาวคนจะไดรับความนับถือตามที่เขาสมควรจะไดรับ ข. นับวาเปนการโชครายที่คุณคาของคนจะผานไปโดยไมไดรับการนับถือไมวาเขาจะพยายามเพียงใด 5. ก. ความคิดที่วาครูไมยุติธรรมตอนักเรียนเปนเร่ืองไรสาระ ข. นักเรียนสวนมากไมตระหนักวาคะแนนที่ไดรับเปนผลมาจากความบังเอิญ 6. ก. หากปราศจากการพักผอนที่เหมาะสมก็จะไมสามารถเปนผูนําที่มีประสิทธิภาพ ข. คนที่มีความสามารถแตไมไดข้ึนมาเปนผูนําเพราะไมฉวยโอกาส 7. ก. ไมวาทานจะพยายามแคไหน ก็ยังมีบางคนไมชอบทาน ข. คนที่ไมสามารถทําใหผูอื่นมาชอบไดเพราะไมเขาใจวิธีการคบคาผูอื่น 8. ก. พันธุกรรมเปนปจจัยสําคัญมากในการสรางบุคลิกภาพ ข. ประสบการณชีวิตเปนตัวกําหนดวาคนๆนั้นจะเปนอยางไร 9. ก. บอยครั้งที่ขาพเจาพบวาอะไรจะเกิดมันก็ตองเกิด ข. การเชื่อในโชคชะตาไมเคยใหผลดีเทากับการตัดสินใจดวยตัวเอง 10. ก. นักเรียนที่เตรียมตัวมาอยางดีแทบจะไมพบวาการสอบไมยุตธิรรม ข. หลายครั้งที่พบวาขอสอบไมสัมพันธกับแบบฝกหัดที่ใชในการเรียน ทําใหการเรียนดูไมมีประโยชน 11. ก. การประสบความสําเร็จเปนผลจากการทํางานหนัก โชคมีสวนเล็กนอยหรือแทบจะไมมีผลเลย ข. การไดงานทําที่ดีข้ึนอยูจังหวะและโอกาสที่เหมาะสม 12. ก. ประชาชนโดยทั่วไปสามารถชี้แนะการตัดสินใจของรัฐบาลได ข. โลกอยูในมือคนที่มีอาํนาจเพียงไมกี่คนและคนที่ไมมีอํานาจไมสามารถทําอะไรได 13. ก. เม่ือขาพเจาทําแผน ขาพเจาแนใจวาแผนนั้นจะปฏิบัติได ข. เปนการไมฉลาดที่ทําแผนลวงหนาเปนระยะเวลานานๆ เพราะอยางไรก็ตาม ส่ิงตางๆเที่กิดข้ึนเปนเร่ือง

ของความโชคดีโชคราย

351

14. ก. มีคนจํานวนหน่ึงที่เปนคนไมดี ข. คนทุกคนจะมีสวนดี 15. ก. ในกรณีของขาพเจา ส่ิงที่ขาพเจาตองการแทบจะไมเกี่ยวของกับโชค หรือไมเกี่ยวของเลย ข. บอยครั้งที่เราอาจตัดสินใจไดดีในเร่ืองที่จะทํา โดยการโยนเหรียญ

16. ก. คนที่ไดเปนใหญเปนโตมักจะข้ึนอยูกับความโชคดีที่ไดไปอยูในจังหวะที่เหมาะสมกอน ข. การไดคนมาทํางานที่เหมาะสมขึ้นอยูกับความสามารถ โชคแทบจะไมมีสวนเกี่ยวของ หรือไมเกี่ยวของเลย 17. ก. ตราบเทาที่คํานึงถึงเร่ืองตางๆของโลก ทุกคนเปนเหยื่อของอํานาจที่ไมเขาใจและไมสามารถควบคุมมันได ข. คนสามารถควบคุมเหตุการณของโลกได โดยการมีสวนรวมในกิจกรรมทางการเมืองและสังคม 18. ก. คนสวนใหญไมตระหนักถึงขอบเขตชีวิตของตนเองที่ถูกควบคุมโดยความบังเอิญ ข. จริงๆแลว ไมมีส่ิงที่เรียกวา “โชค”

19. ก. คนควรเต็มใจยอมรับความผิดพลาดที่เกิดข้ึนเสมอ ข. เปนการดีที่สุดที่จะปกปดความผิดพลาดของตนเองไว 20. ก. เปนการยากที่จะรูวาคนอื่นชอบทานจริงๆ หรือไม ข. การที่ทานจะมีเพื่อนมากนอยข้ึนอยูกับความเปนคนดีของทาน 21. ก. ในระยะยาวสิ่งไมดีที่เกิดข้ึนกับเราจะสมดุลดวยส่ิงที่ดีๆ ข. ความโชครายสวนมากเปนผลมาจากการขาดความสามารถ การละเลย และความขี้เกียจ หรือทั้งสามอยางรวมกัน 22. ก. เราสามารถกําจัดคอรัปชั่นทางการเมืองได หากมีความพยายามเพียงพอ ข. เปนการยากที่ประชาชนจะเขาไปควบคุมส่ิงที่นักการเมืองทํา 23. ก. บางครั้งขาพเจาก็ไมสามารถเขาใจวาไดวาครูใหคะแนนแบบนั้นมาไดอยางไร ข. มันเกี่ยวเน่ืองกันโดยตรงระหวางการเรียนหนักกับคะแนนที่ไดรับของขาพเจา 24. ก. ผูนําที่ดีคาดหวังใหคนอื่นตัดสินใจดวยตนเองวาควรจะปฏิบัตเิชนไร ข. ผูนําที่ดีควรอธิบายงานใหชัดเจน 25. ก. บอยครั้งที่ขาพเจารูสึกวาขาพเจาสามารถควบคุมส่ิงตางๆ ที่เกิดข้ึนกับตัวขาพเจาไดเพียงเลก็นอย ข. สําหรับขาพเจา เปนไปไมไดเลยที่จะเช่ือวาโอกาสหรือโชคมีบทบาทสําคัญในชีวิตของขาพเจา

26. ก. คนที่โดดเดี่ยวเพราะวาเขาไมพยายามที่จะมีไมตรีตอผูอื่น ข. ไมจําเปนที่จะตองพยายามมากในการเอาใจผูอื่น เพราะถาเขาชอบทาน เขาก็ชอบทาน 27. ก. มีการเนนการฝกกีฬามากเกินไปในโรงเรียนมัธยม ข. กีฬาประเภททีมเปนวิธีที่ดีในการสรางลักษณะนิสัย 28. ก. อะไรที่เกิดข้ึนกับขาพเจามาจากการกระทําของขาพเจาเอง ข. บางครั้งขาพเจารูสึกวาขาพเจาไมสามารถควบคุมทิศทางในชีวิตของขาพเจาได 29. ก. ตลอดเวลา ขาพเจาไมเคยเขาใจวาทําไมนักการเมืองถึงประพฤติปฏิบัติตนเชนน้ัน ข. ในระยะยาว ประชาชนจะรับผิดชอบตอรัฐบาลที่ไมดีทั้งในระดับชาติและระดับทองถ่ิน

352

สวนที่ ๙ : คําถามเพิ่มเตมิ

18. ทานคิดวาปจจัยสําคัญในการพิจารณาการสืบทอดตําแหนงกรรมการผูอํานวยการ/กรรมการผูจัดการ(ใหญ)ในองคกรของทานไดแกอะไร?

19. ในฐานะที่ทานดํารงตําแหนงกรรมการผูอํานวยการ/กรรมการผูจัดการ(ใหญ) ทานคิดวาตัวทานมีจุดแข็ง และจุดออน อะไรบาง?

20. ทานคิดวาความรูและความชํานาญแบบไหนที่มีความจําเปนตอการพัฒนาผูบริหารระดับสูงในองคกรของทาน?

353

21. ทานคิดวาอะไรคือคุณลักษณะทีจํ่าเปนสําหรับผูนําที่มีประสิทธิภาพในประเทศไทย?

22. ทานมีคําแนะนําอะไรที่ทานตองการเพิ่มเติมเกี่ยวกับเร่ืองที่ทําการวิจัยน้ี

354

ขอขอบพระคณุทานที่กรุณาสละเวลาอันมีคาในการตอบแบบสอบถามชุดนี้ ตามที่กลาวไวขางตน ขอมูลทั้งหมดที่ไดรับจากการวิจัยจะถูกเก็บไวเปนความลับ และ เพ่ือวัตถุประสงคในการศึกษาเทานั้น

ศาสตราจารย ดร. คริส คริสโทดูลู และ นางสาว พรรณพิไล วัจนะภูมิ Australian Graduate School of Entrepreneurship Swinburne University of Technology, Australia

355

APPENDIX C

FACTOR ANALYSIS

Appendix C1: Executive Leadership Roles

(Thai Replication of Hart and Quinn’s (1993) Study)


(Thai Replication of Zakliki’s (1996) Study)


(Extended Thai Study)

Appendix C4: Organisational Performance

(Thai Replication of Hart and Quinn’s (1993) Study)


(Thai Replication of Zakliki’s (1996) Study)


(Extended Thai Study)

356


Replication of Hart and Quinn’s (1993) Study

1. Introduction

This section aims to provide the results of factor analysis of the sixteen items (the same

instrument employed by Hart and Quinn, 1993) included in CEO roles behaviour. The

purpose of this analysis was to test the underlying dimensions (factors) developed by

Hart and Quinn, 1993. The analysis procedure was performed through the evaluation of

data, factor extraction, and factor rotation.

2. Data Evaluation

The initial PCA was performed and gave the descriptive statistics to evaluate the

existing data. The results suggested that it was reasonable to proceed with the factor

analysis as follows:

1. 48 correlations coefficient between pairs of variables were greater than 0.3.

2. KMO was .822, which is meritorious.

3.The value of Bartlett’s test was large and significant [665.534 (p=. 000)].

3. Procedures and Results

The initial PCA was performed for sixteen role items. The adequacy of extraction and

the number of factor were evaluated in several tests. Figure C1.1 revealed that the

maximum number of factors with eigenvalue larger than one was four factors. Almost

60.08% of the total variance was attributed to the first four factors, and the remaining

factors together accounted for the rest of the variance. The scree plot in Figure C1.2

demonstrates the steep slop of the curve around the fourth factor.

357

The result of the first run with PCA and Varimax rotation is presented in Figure C1.3.

Six items (R1, R13, R6, R7, R9, R4) were loaded on more than one factor. Two of

theses items (R13, R9) were complex and loaded ambiguously. The results of rotated

factors were interpretable since most of the items loaded on the factors that theoretically

were sensible. However, some items were loaded differently when compared to the

original study. For example, the first factor contained three high loading items (R2, R1,

R10) that belonged to vision role, while in the Hart and Quinn study the three loading

items of vision role were R1, R9, R10. Since these run did not generate the same items

as predicted, to test the proposition developed by the original study, the same structure

and the same items that they used were constructed. The replication column in Table 5.2

(p.129) refers to these factors that were calculated by summing the same items that they

used. The descriptive statistics for these factors is presented in Figure C1.4. They were

used to replicate Hart and Quinn study in chapter 7.

358

Figure C1.l

Total Variance Explained

~"

Extraction Method: Principal Component Analysis.-~ "


Extraction Method: Principal Component Analysis.

359

InitialEiQenvauesComponent Total % of Variance Cumulative %1 5.189 32.428 32.4282 1.620 10.124 425523 1.510 9.439 51:9914 1295 8..092 60.0835 .924 5.774 65.8576 .843 5.267 71.1247 .682 4261 75.3858 .661 4.133 " 79.5189 .635 3.971 83.48910 .524 3.273 86.76111 0487 3.M3 89.80512 0402 2.512 " 92.31613 .381 2.382 94.69814 .3"10 1.937 96.63415 .289 1.805 9844016 .250 1.560 100.000 "

Extraction Sumsof SauaredLoadinas Rotation Sums of Sauared LoadinQsComponent Total % of Variance Cumulative %" Total % of Variance Cumulative %1 5.189 32.428 32.428 2.462 15.388 15.3882 1.620 10.124 42.552 2.399 14.995 30.3833 1.510 9.439 51.991 2.383 14.892 45.2754 1.295 8.092 60.083 2.369 14.808 60.0835678910111213141516

Figure Cl.2

Scree Plot6

5

4

3

2

CD::J

g! 1"C:Q)C>ill 0

~

1 3" 4 52

Component Number

6 7

360

8 9 "10 11 12" 13 14 15 16

Figure Cl.3. . ... ..

Rotated Component Matrix a

-~)

Extraction Method: Principal Component Al'!alysis.Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.

Component Transfonnation Matrix

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.

361

Com onent1 2 3 4

R2:V2: Nurturing external .830contactR1:V1:Concentrating onbasic purpose and .799 .382directionR10:V4:Studyingemerging social and .797economic trendsR16:A4:Settingoperational targets for .811firmsR14:A2: Evaluating .727criticallyproposed projectR15:A3: Integrating .657conflictingpespectivesR13:A1: Questioningsubordinates to think

.394 .449 .355about problem in newwaysR5:T1: Influencing .718decisions at lower levelsR6:T2: Contributingspecific knowledge on .390 .709problemsR7:T3: Makingtrade off .319 .698decisionR8:T4: Focusing on .594resultsR9:V3: Communicating asense of where the firm .401 .420willbe in 20 yearsR11:M3:Challengingpeople with new goals and .809aspirationR3:M1: Creating a sense .709of excitementR4:M2: Emphasizingcompany value through .351 .694events.Rt2:M4: Short-circuit the

.594hierachy

Component 1 2 3 41 .518 .500 .507 .4742 -.612 .047 -.145 .7763 .001 ' -.774 .612 .1624 -.597 .385 .590 -.384

Figure C1.4

Statistics

362

H&Q: Mean H&Q: Mean H&Q: Mean H&Q: Mean ofof vision of motivator of anlvser task master

N Valid 123 123 123 123Missing 0 0 0 0

Mean 3.9024 3.7507 3.5095 3.5915Std. Error of Mean .05807 .06458 .05966 .05463Median 4.0000 3.6667 3.3333 3.5000Mode 4.00 4.00 3.33 3.50Std. Deviation .64406 .71618 .66163 .60587Variance .41481 .51292 .43775 .36708Skewness -.054 -.338 .114 .061Std. Error of Skewness .218 .218 .218 .218Kurtosis -.498 .011 -.325 -.121Std. Error of Kurtosis .433 .433 .433 .433Range 2.67 3.33 3.00 3.00Minimum 2.33 1.67 2.00 2.00Maximum 5.00 5.00 5.00 5.00Sum 480.00 461.33 431.67 441.75



1. Introduction

This section aims to provide the result of factor analysis of the twenty items (the same

instrument used by Zakliki, 1996) included in CEO roles behaviour. The purpose of this

analysis was to test the underlying dimensions (factors) developed by Zakliki (1996).

The analysis procedure was performed through evaluating the existing data, extracting,

and rotating the factors.

2. Data Evaluation


existing data. The results suggested that it was reasonable to proceed with the factor






The initial PCA was performed for twenty role items. The results of the first run with

PCA revealed that the maximum number of factors with eigenvalue larger than one was

five factors (refer Figure C2.1). Given the number of factors should reflect a theoretical

foundation, a second run was conducted based on a four factor extraction. The adequacy

of extraction and the number of factor were evaluated in several tests. Figure C2.2

showed that 56.84% of the total variance was attributed to the first four factors, and the

363

remaining factors together accounted for the rest of the variance. The scree plot in

Figure C2.3 demonstrates the steep slop of the curve on the fourth factor.

The result of second run with PCA and Varimax rotation is presented in Figure C2.4.

Six items (R18, R1, R9, R13, R7, R6) were loaded more than one factor. Three of these

items (R18, R9, R13) were complex and loaded ambiguously. The results of rotated

factors produced partial agreement with Zakliki’s (1996) study. Since these run did not

generate the same items as the previous study, to test the proposition developed by

Zakliki study, the same structure and the same items that Zakliki used were constructed.

The replication column in Table 5.3 (p.130) refers to these factors that were calculated

by summing the same items. The descriptive statistics for these factors is presented in

Figure C2.5. They were used to replicate Zakliki study in chapter 8.

364

Figure C2.1


)

~

. Extraction Method: Principal Component Analysis.



365

InitialEiaenvaluesComponent Total % of Variance Cumulative %1 6.058 30.289 30.2892 2.020 10.100 40.3883 1.783 8.915 49.3034 1.507 7.536 56.8395 1.022 5.111 61.9506 .949 4.746 66.6967 .909 4.546 71.2428 .775 3.874. 75.1169 .706 3.529 78.64510 .636 3.181 81.82611 .551 2.757 84.58312 .497 2.483 87.06613 .462 2.312 89.37914 .452 2.259 91.63815 .361 1.805 93.44316 .322 1.611 95.05417 .294 1.470 96.525

) 18 .261 .1.307 97.83219 .235 1.173 99.00520 .199 .995 100.000

Extraction Sums of Sauared Loadinqs Rotation Sums of Sauared LoadinasComponent Total % of Variance Cumulative % Total % of Variance Cumulative %1 6.058 30.289 30.289 2.985 14.925 14.9252 2.020 10.100 40.388 2.858 14.289 29.2143 1.783 8.915 49.303 2.704 13.522 42.7364 1.507 7.536 56.839 2.317 11.586 54.3225 1.022 5.111 61.950 1.526 7.628 61.95067891011121314151617181920

Figure C2.2





366

I InitialEiqenvaluesComponent Total % of Variance Cumulative %1 6.058 30.289 30.2892 2.020 10.100 40.3883 1.783 8.915 49.3034 1.507 7.536 56.8395 1.022 5.111 61.9506 .949 4.746 66.6967 .909 4.546 71.2428 .775 3.874 75.1169 .706 3.529 78.64510 .636 3.181 81.82611 .551 2.757 84.58312 .497 2.483 87.06613 .462 2.312 89.37914 .452 2.259 91.63815 .361 1.805 93.44316 .322 1.611 95.05417 .294 1.470 96.525

; 18 .261 1.307 97.83219 .235 1.173 99.00520 .199 .995 100.000

Extraction Sums of Sauared Loadinas Rotation Sums of Sauared Loadinas

Component Total % of Variance Cumulative % Total % of Variance Cumulative %1 6.058 30.289 30289 3.012 15.058 15.0582 2.020 10.100 40.388 2.982 14.910 29.9673 1.783 8.915 49.303 2.884 14.420 44.3874 1.507 7.536 56.839 2.490 12.451 56.8395678910111213141516171819 ".

20

Figure C2.3

Scree Plot7

6

5

""',

4

3

CD 2::J

ca~ 1CD.Q>w 0.

1 3 5 7 9 11 13 15 17 192 4 6 8 10 12 14 16 18 20

-,)Component Number

367

Figure C2.4

Rotated Component Matrix-



Component Transformation Matrix


368

Component1 2 3 4

R16:A4: Settingoperational targets for .780firmsR17:A5: Assessingrecords against standard .715goalsR14:A2: Evaluating

.667criticallyproposed projectR15:A3: Integrating

.642conflictingpespectivesR18:T5: Involvingwith

.558 .401daily operationsR1:V1: Concentrating onbasic purpose and .369 .787directionR10:V4: Studyingemerging social and .770economic trendsR2:V2: Nurturing extemal

.768contactR20:V5 : Analysing the

.735competitors's policiesR9:V3: Communicating asense of where the firm .476 .346willbe in 20 yearsR13:A1: Questioningsubordinates to think

.383 .417 .310about problem in newwaysR11:M3: Challengingpeople with new goals and .792aspirationR19:M5: Showingconcerns for the needs of .770staffsR3:M1: Creating a sense

.699of excitementR4:M2: Emphasizingcompany value through .685eventsR12:M4: Short-circuit the

.552hierachyR7:T3:Mangtradecff

.304 .765decisionR5:T1: Influencing

.696decisions at lower levelsR6:T2: Contributingspecific knowledge on .343 .667problemsR8:T4: Focusing on

.576.results

Component 1 2 3 41 .526 .519 .495 .4562 .437 -.695 .507 -.2633 -.726 .007 .682 .0904 -.070 -,497 -.182 .845

Figure C2.5

Statistics

369

-----------------------------------

z: Meanof Z: Meanof Z: Meanof Z: Meanofvision motivator analyser taskmaster

N Valid 123 123 123 123Missing 0 0 0 0

Mean 3.9004 3.8354 3.6878 3.5081Std. Errorof Mean .05941 .05698 .05321 .05032Median 4.0000 3.7500 3.6000 3.5000Mode 4.00 3.75 3.60 3.25Std. Deviation .65891 .63199 .59016 .55804Variance .43416 .39942 .34829 .31141Skewness -.273 -.294 .224 .251Std. Errorof Skewness .218 .218 .218 .218Kurtosis -.131 .546 -.380 -.321Std. Errorof Kurtosis .433 .433 .433 .433Range 3.00 "3.50 2.60 2.75Minimum 2.00 1.50 2.40 2.00Maximum 5.00 5.00 5.00 4.75Sum 479.75 471.75 453.60 431.50


Extended Thai Study

1. Introduction

This section aims to provide the results of factor analysis of the twenty items of CEO

roles behaviour in the extended Thai questionnaire. Since the results provided only

partial agreement with the previous research, further work was performed to construct

appropriate scales used for the extended Thai study. The analysis procedure was

performed through evaluating the existing data, extracting, and rotating the factors.

2. Data Evaluation


existing data. The preliminary analysis suggested the same results as Zakliki’s

replication study as follows:





The initial PCA was performed again for twenty role items. The results of the first run

with PCA revealed that the maximum number of factors with eigenvalue larger than one

was five factors (refer Figure C3.1). Thus, the second run was based on four factor

extraction consistent with the theoretical framework. The adequacy of extraction and the

number of factor were evaluated in several tests. The preliminary results showed that

56.84% of the total variance was attributed to the first four factors, and the remaining

370

factors together accounted for the rest of the variance (refer Figure C3.2). The scree plot

in Figure C3.3 demonstrates the steep slop of the curve nearly on the fourth factor.

The result of second run with PCA and Varimax rotation is presented (refer Figure

C3.4). Six items (R18, R1, R9, R13, R7, R6) were loaded on more than one factor.

Three of these items (R18, R9, R13) were complex and loaded ambiguously. Further

analysis was carried out for this research.

The third run with PCA and Oblimin rotation is presented in Figure C3.5. The results

produced nearly the same pattern as the second run with PCA and Varimax rotation and

two variables (R18, R13) loaded on different factors that theoretically were not related.

Both runs provided the same agreement that theses two variables loaded ambiguously.

Thus, the deletion of these two variables was conducted for the next run.

The fourth run with PCA and Varimax rotation was performed for eighteen role items.

The results of this run revealed that the maximum number of factors with eigenvalue

larger than one was four factors (refer Figure C3.6). Approximately 58.86% of the total

variance was attributed to the first four factors, and the remaining factors together

accounted for the rest of the variance. The scree plot in Figure C3.7 demonstrates the

steep slop of the curve on the fourth factor. The result of this run with PCA and

Varimax rotation is presented in Figure C3.8. Four items (R4, R1, R9, R6) were loaded

on more than one factor. Only one variable (R9) was complex and loaded ambiguously.

Therefore, a fifth run with PCA and Oblimin was again performed to clarify the results

(refer Figure C3.9). The difference between the fourth run and the fifth run was not

considerable. R9 item still loaded ambiguously. Thus, it was decided to drop this

variable from the analysis.

A PCA was performed again and gave the descriptive statistics to evaluate the existing

data. The final results suggested that it was reasonable to proceed with the factor


371




The final run with PCA and Varimax rotation was performed for seventeen role items.

The results of this run indicated that the maximum number of factors with eigenvalue

larger than one was four factors (refer Figure C3.10). Approximately 60.61% of the

total variance was attributed to the first four factors, and the remaining factors together

accounted for the rest of the variance. The scree plot in Figure C3.11 demonstrates the

steep slop of the curve on the fourth factor. Figure C3.12 reveales the interpretation of

four factors since all items loaded on the factors that were theoretically sensible. The

result of the final statistics and rotated factors with PCA and Oblimin rotation is shown

in Figure C3.13. The difference between the run with PCA and Varimax rotation and

PCA and Oblimin rotation was not found. Table 5.4 (p.131) was developed to construct

the reliability and mean of scales as well as describe each role items in this research.

The descriptive statistics for these factors is presented in Figure C3.14. They were used

to examine the relationship of executive leadership and organisational performance in

chapter 9.

372

Figure C3.1


)

~.




373

InitialEiaenvaluesComponent Total % of Variance Cumulative %1 6.058 30.289 30.2892 2.020 10.100 40.3883 1.783 8.915 49.3034 1.507 7.536 56.8395 1.022 5.111 61.9506 .949 4.746 66.6967 .909 4.546 71.2428 .775 3.874 75.1169 .706 3.529 78.64510 .636 3.181 81.82611 .551 2.757 ) 84.58312 .497 2.483 87.06613 .462 2.312 89.37914 .452 2.259 91.63815 .361 1.805 93.44316 .322 1.611 95.05417 .294 1.470 96.525

I 18 .261 1.307 97.83219 .235 1.173 99.00520 .199 .995 100.000

Extraction Sums of Sauared Loadings Rotation Sums of Squared LoadinasComponent Total % of Variance Cumulative % Total % of Variance Cumulative %1 6.058 30.289 30.289 2.985 14.925 14.9252 2.020 10.100 40.388 2.858 14.289 29.2143 1.783 8.915 49.303 2.704 13.522 42.7364 1.507 7.536 56.839 2.317 11.586 54.3225 1.022 5.111 61.950 1.526 7.628 61.95067891011121314151617181920

Figure C3.2


i>:.




374

Initial EiqenvaluesComponent Total % of Variance Cumulative %1 6.058 30.289 30.2892 2.020 10.100 40.3883 1.783 8.915 49.3034 1.507 7.536 56.8395 1.022 5.111 61.9506 .949 4.746 66.6967 .909 4.546 71.2428 .775 3.874 75.1169 .706 3.529 78.64510 .636 3.181 81.82611 .551 2.757 84.58312 .497 2.483 87.06613 .462 2.312 89.37914 .452 2.259 91.63815 .361 1.805 93.44316 .322 1.611 95.05417 .294 1.470 96.525

) 18 .261 1.307 97.83219 .235 1.173 99.00520 .199 .995 100.000

Extraction Sums of Squared Loadinas Rot;ltion Sums of Squared LoadinqsComponent Total % of Variance Cumulative % Total % of Variance Cumulative %1 6.058 30.289 30.289 3.012 15.058 15.0582 2.020 10.100 40.388 2.982 14.910 29.9673 1.783 8.915 49.303 2.884 14.420 44.3874 1.507 7.536 56.839 2.490 12.451 56.839567891011121314151617181920

Figure C3.3

Scree Plot7

6

5

4

3

Q) 2:JroE: 1Q)0)ill 0.

1 3 5 7 9 11 13 15 17 192 4 6 8 10 12 14 16 18 20

)Component Number

375

Figure C3.4Rotated Component Matrixa





376

Comeonent1 2 3 4R16:A4:Setting

operational targets for .780firmsR17:A5:Assessingrecords against standard .715goalsR14:A2:Evaluating .667criticallyproposed projectR15:A3:Integrating .642conflictingpespectivesR18:T5:Involvingwith .558 .401daily operationsR1:V1:Concentrating onbasic purpose and .369 .787direction

cR10:V4:Studyingemerging social and .770economic trendsR2:V2:Nurturingextemal

.768contactR20:V5:Analysingthe .735competitors's policiesR9:V3:Communicatingasense ofwhere the firm .476 .346willbe in20 yearsR13:A1:Questioningsubordinates to think

.383 .417 .310about problem in newwaysR11:M3:Challengingpeople withnew goals and .792aspirationR19:M5:Showingconcems for the needs of .770staffsR3:M1:Creating a sense

.699of excitementR4:M2:Emphasizingcompany value through .685eventsR12:M4:Short-circuitthe

.552hierachyR7:T3:Makingtrade off .304 .765decisionR5:T1:Influencing

.696decisions at lower levelsR6:T2:Contributingspecific knowledge on .343 .667problemsR8:T4:Focusing on

.576results

Comconent 1 2 3 41 .526 .519 .495 .4562 .437 -.695 .507 -.2633 -.726 .007 .682 .0904 -:070 -.497 -.182 .845

Figure C3.5

Pattern Matrix3

"-,

Extraction Method: Principal Component Analysis.Rotation Method: Obliminwith Kaiser Normalization.


377

Comc:onent1 2 3 4

R16:A4: Settingoperational targets for .771firmsR17:A5: Assessingrecords against standard .715goalsR14:A2: Evaluating .633criticallyproposed projectR15:A3: Integrating .606conflicting pespectivesR18:T5: Involvingwith .533 .402daily operationsR1:V1: Concentrating onbasic purpose and -.831directionR2:V2: Nurturing external -.780contactR10:V4:Studyingemerging social and -.779

I economic trendsR20:V5 : Analyzing the -.773competitors's policiesR9:V3: Communicating asense of where the firm. -.447willbe in 20 yearsR13:A1: Questioningsubordinates to think

-.366about problem in newwaysR11:M3:Challengingpeople with new goals and .805aspirationR19:M5: Showingconcems for the needs of .789staffsR4:M2: Emphasizingcompany value through .707events.R3:M1:Creating 'a sense .697of excitementR12:M4: Short-circuit the .568hierachyR7:T3: Making trade off .756decisionR5:T1: Influencing .713decisions at lower levelsR6:T2: Contributingspecific knowledge on .671problemsR8:T4: Focusing on .544results

Figure C3.6


"'"

). 'Extraction Method: Principal Component Analysis.



378

Initial EiqenvaluesComponent Total % of Variance Cumulative %1 5.414 30.078 30.0782 2.004 11.135 41.2133 1.723 9.575 50.7874 1.453 8.072 58.8595 .951 5.282 64.1416 .841 4.675 68.8157 .772 4.291 73.1068 .741 4.119 77.2269 .657 3.648 80.87310 .585 3.253 84.12611 .530 2.944 87.07012 .458 2.545 89.61513 .399 . 2.219 91.83414 .373 2.072 93.90615 .330 1.832 95.73816 .277 1.541 97.27817 .253 1.407 98.68518 .237. 1.315 100.000

Extraction Sums of Squared Loadinas Rotation Sums of Sauared LoadinasComponent Total % of Variance Cumulative % Total % of Variance Cumulative %1 5.414 30.078 30.078 2.801 15.563 15.5632 2.004 11.135 41.213 2.783 15.464 31.0273 1.723 9.575 50.787. 2.612 14.514 45.5404 1.453 8.072 58.859 2.397 13.319 58.85956789101112131415161718

Figure C3.7

Scree Plot6

5

4

3

2ID::s .~ 1cID0)ill 0 ,

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

") Component Num.ber

379

Figure C3.8Rotated Component Matrix a





380

Comonent1 2 3 4

R11:M3: Challengingpeople with new goals and .787aspirationR19:M5: Showingconcerns fer the needs of .778staffsR3:M1: Creating a sense .711of excitementR4:M2: Emphasizingcompany value through .661 .345eventsR12:M4: Short-circuit the

.580hierachyR1:V1: Concentrating onbasic purpose and .793 .360directionR10:V4: Studyingemerging social and .770economic trendsR2:V2:Nurturing external

.763contactR20:V5: Analysing the .744competitors's policiesR9:V3: Communicating asense of where the firm .443 .386will be in 20 yearsR16:A4: Settingoperational targets for .805firms

R17:A5: Assessingrecords against standard .768goalsR15:A3: Integrating

.661conflicting pespectivesR14:Evaluating

.655critically proposed projectR5:T1: Influencing

.739decisions at lower levelsR7:T3: Making trade off

.722decisionR6:T2: Contributingspecific knowledge on .369 .689problemsR8:T4: Focusing on

.572 Iresults

Component 1 2 3 41 .520 .524 .482 .4722 .593 -.662 .359 -.2863 . .549 -.050 -.793 .2594 -.275 -.534 .102 .793

Figure C3.9

Pattern Matrixa

)

Extraction Method: Principal Component Analysis.Rotation Method: Oblimin with Kaiser Normalization.


381

Corn!.onent1 2 3 4

R11 :M3: Challengingpeople with new goals and .797aspirationR19:M5: Showingconcerns for the needs of .789staffsR3:M1: Creating a sense .705. of excitementR4:M2: Emphasizingcompany value through .676eventsR12:M4: Short-circuit the

.593hierachyR1:V1: Concentrating onbasic purpose and -.824directionR20:V5 : Analyzing the -.779competitors's policiesR2:V2: Nurturing external -.775contactR10:V4: Stu.dyingemerging social and -.774economic trendsR9:V3: ommunicatinga .sense of where the firm -.414 .313will be in 20 years '. .,

R16:A4: Settingoperational targets for -.806firmsR17:A5: Assessingrecords against standard .. -.777goalsR15:A3: Integrating -.640conflicting pespectivesR14:A2: Evaluating -.633critically proposed projectR5:T1: Influencing .763decisions at lower levelsR7:T3: Making trade off .699decisionR6:T2: Contributingspecific knowledge on -.339 .692problemsR8:T4: Focusing on .537results

Figure C3.10


.~- )Extraction Method: Principal Component Analysis.



382

InitialEiaenvafuesComponent Total % of Variance Cumulative %1 5.234 30.788 30.7882 1.943 11.429 42.2163 1.674 9.847 52.0634 1.453 8.546 60.6095 .880 5.175 65.7846 .834 4.907 70.6917 .754 4.437 75.1288 .692 4.070 79.1989 .589 3.463 82.66110 .564 3.317 85.97811 .469 2.761 88.73812 .416 2.445 91.18313 .377 2.220 93.40314 .331 1.949 95.35215 .296 1.740 97.09216 .255 1.502 98.59417 .239 1.406 100.000

Extraction Sums of Sauared Loadinas Rotation Sums of Squared LoadinasComponent Total % of Variance Cumulative % Total % of Variance Cumulative.%1 5.234 30.788 30.788 2.795 16.439 .. 16.4392 1.943 11.429 42.216 2.628 15.461 31.9003 1.674 9.847 52.063 2.569 15.111 47.0104 1.453 8.546 60.609 2.312 13.599 60.609567891011121314151617

Figure C3.11

Scree Plot6

5

4

"'-,

3

2ID::I~ 1cIDC>ill 0T

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

_.~) Component Number

383

,c.

Figure C3.12Rotated Component Matrix a

.-,




Extraction Method: Principal Component Analysis.Rotation Method:Varimax with Kaiser Normalization.

384

Component1 2 3 4

R11:M3: Challengingpeople with newgoalsand .790aspirationR19:M5: Showingconcerns for the needs of .778staffsR3:M1: Creating a sense .717of excitementR4:M2: Emphasizingcompany value through .666 .335eventsR12:M4: Short-circuit the .578hierachyR1:V1: Concentrating onbasic purpose and .813 .327directionR10:V4: Studyingemerging social and .778economic trends

., R2:V2: Nurturing extemal .777contactR20:V5 : Analyzing the .730competitors's policiesR16:A4: Settingoperational .targets for .789firmsR17:A5: Assessingrecords against standard .774goalsR14:A2: Evaluating .674critically proposed project -R15:A3: Integrating .673conflicting pespectivesR5:T1: Influencing .744decisions at lower levelsR7:T3: Making trade off .736decisionR6:T2: Contributingspecific knowledge on .341 .70problemsR8:T4: Focusing on .565results

Component 1 2 3 41 .535 , .501 .499 .4622 .662 :'.676 .202 -.2513 .448 .077 -.838 .3014 -.272 -.534 .091 .795

Figure C3.13PatternMatrixa

Extraction Method: Principal Component Analysis.Rotation Method: Obliminwith Kaiser Normalization.


385

Com( onent1 2 3 4

R11:M3:Challengingpeople with new goals and .796aspirationR19:M5: Showingconcems for the needs of .783staffsR3:M1: Creating a sense .708of excitementR4:M2: Emphasizingcompany value through .682eventsR12:M4: Short-circuit the .586hierachyR1:V1: Concentrating onbasic purpose and. -.831directionR2:V2: Nurturing external -.794contactR10:V4: Studying

) emergingsocialand -.782economic trendsR20:V5 : Analyzing the -.763competitors's policiesR16:A4:Settingoperational targts for -.799firmsR17:A5:Assessingrecords against standard -.796goalsR14:A2: Evaluating -.663criticallyproposed projectR15:A3: Integrating -.662conflicting pespectivesR5:T1: Influencing .767decisions at lower levelsR7:T3: Makingtrade off .707decisionR6:T2: Contributingspecific knowledge on -.311 .698problemsR8:T4: Focusing on .530results

Figure C3.14

Statistics

~

-'\

386

Extended Extended Extended Extendedstudy: Mean study: Mean study: Mean study: Mean ofof vision of motivator of analvser task master

N Valid 123 123 123 123Missing 0 0 0 0

Mean 3.9654 3.7821 3.7398 3.5915Std. Error of Mean .05966 .05580 .05487 .05463Median 4.0000 3.8000 3.7500 3.5000Mode 4.00 3.40 3.50 3.50Std. Deviation .66169 .61883 .60851 .60587Variance .43783 .38296 .37029 .36708Skewness -.363 -.111 .208 .061Std. Error of Skewness .218 .218 .218 .218Kurtosis -.113 -.049 -.319 -.121Std. Error of Kurtosis .433 .433 .433 .433Range 3.00 3.20 2.75 3.00

\ Minimum 2.00 1.80 2.25 2.00Maximum 5.00 5.00 5.00 5.00Sum 487.75 465.20 460.00 441.75


Thai Replication of Hart and Quinn’s (1993) Study

1. Introduction

This section aims to provide the results of factor analysis of the eight items (the same

instrument employed by Hart and Quinn, 1993) included in the organisational

performance. The purpose of this analysis was to test the underlying dimensions

(factors) developed by Hart and Quinn, 1993. The analysis procedure was performed

through the evaluation of data, factor extraction, and factor rotation.

2. Data Evaluation


existing data. The results indicated that it was reasonable to proceed with the factor



2. KMO was 0.742, which is middling.



The PCA was performed for eight performance items. The adequacy of extraction and

the number of factor was evaluated in several tests. Figure C4.1 revealed that the

maximum number of factors with eigenvalue larger than one was three factors.

Approximately 77.34% of the total variance was attributed to the first three factors, and

the remaining factors together accounted for the rest of the variance. The scree plot in

Figure C4.2 demonstrates the steep slop of the curve on the third factor.

387

Figure C4.3 shows the result of the first run with PCA and Varimax rotation. One item

(P9) was loaded on more than one factor but this run generated a simple and

interpretable structure since all items loaded on the factors that theoretically were

sensible. Most of the items loaded similarly when compared to the original study. These

same items were used to replicate Hart and Quinn study. The replication column in

Table 5.8 (p.136) refers to the factors that were calculated by summing the same items

that they used. The descriptive statistics for these factors is presented in Figure C4.4.

These factors were used replicate Hart and Quinn study in chapter 7.

388

Figure C4.1



it



389

Initial EiaenvaluesComponent Total % ofVariance Cumulative %1 3.629 45.364 45.3642 1.449 18.117 63.4813 1.109 13.862 77.3434 .633 7.915 85.2585 .424 5.297 90.5556 .323 4.038 94.5937 :231 2.884 97.4778 .202 2.523 100.000

Extraction Sums of Squared LoadinQs Rotation Sums of Sauared LoadinasComponent Total % of Variance Cumulative % Total % of Variance Cumulative %1 3.629 45.364 45.364 2.242 28.025 28.0252 1.449 18.117 63.481 2.042 25.523 53.5483 1.109 13.862 77.343 1.904 23.795 77.3434

.5678

Scree Plot4

" ")

3

2

<D 1=-ca>C<D0)ill 0.

1

Figure C4.2

2 3 4 5 6

Component Number

390

7 8

Figure C4.3

. Rotated Component Matrixa

ExtractionMethod:PrincipalComponentAnalysis.Rotation Method: Varimax with Kaiser Normalization.




391

ComDonent1 2 3

P5B: Businessperformance: Market .882shareP4B: Businessperformance: Sales .869growthP6B: Businessperformance:: Technical .728product'servicedevelopmentP80: Organisationaleffectiveness: Employee .823satisfactionP70: Organisationaleffectiveness: Quality of .822product and serviceP90: Organisationaleffectiveness: Overall .721 .405company performanceP2F: Financial .943performance: Cash flowP1F: Financialperformance: Profitability .875levell ROA

Component 1 2 31 .636 .608 .4752 -.578 -.032 .8153 .511 -.793 .331

Figure C4.4

Statistics

a. Multiple modes exist. The smallest value is shown

392

H&Q: Mean of H&Q: Mean of H&Q: Mean offinancial business organisational

performance performance effectivenessN Valid 123 123 123

Missing 0 0 0Mean 4.6789 4.6369 5.2114Std. Error of Mean .10677 .08387 .06488Median 5.0000 4.6667 5.3333Mode 5.00a 4.00 5.33Std. Deviation 1.18413 .93017 .71958Variance 1.40217 .86522 .51779Skewness -.403 .089 -.708Std. Error of Skewness .218 .218 .218Kurtosis -.540 -.410 .171Std. Error of Kurtosis .433 .433 .433Range 5.00 4.67 3.67Minimum 2.00 2.33 3.00Maximum 7.00 7.00 6.67Sum 575.50 570.33 641.00



1. Introduction

This section aims to provide the results of factor analysis of the eleven items (the same

instrument employed by Zakliki, 1996) included in the organisational performance. The

purpose of this analysis was to test the underlying dimensions (factors) used in Zakliki’s

(1996) study. The analysis procedure was performed through evaluating the existing

data, extracting, and rotating the factors.

2. Data Evaluation


existing data. The results indicated that it was reasonable to proceed with the factor



2. KMO was .788, which is middling.



The initial PCA was performed for eleven performance items. The results of the first

run with PCA revealed that the maximum number of factors with eigenvalue larger than

one was three factors (refer Figure C5.1). Approximately 69.31% of the total variance

was attributed to the first three factors, and the remaining factors together accounted for

the rest of the variance. The scree plot in Figure C5.2 demonstrates the steep slop of the

curve on the third factor. Figure C5.3 showed the result of the first run with PCA and

Varimax rotation. Two performance items (P7, P9) were loaded on more than one factor

393

but this run generated a simple structure as predicted or as theoretically interpretable.

However, some items were loaded differently when compared with the Zakliki study.

For example, the first factor contained five high loading items (P10, P7, P8, P11, P9)

belonging to organisational effectiveness performance, while in the Zakliki study the

four loading items of this performance were P7, P8, P9, R11. Since the run did not

generate the same items as Zakliki study, to achieve the replication of Zakliki study, the

same structure and the same items that Zakliki used were constructed. The replication

column in Table 5.9 (p.137) refers to these factors that were calculated by summing the

same items that Zakliki used. The descriptive statistics for these factors is presented in

Figure C5.4. They were used to replicate Zakliki study in chapter 8.

394

Figure CS.1

Total Variance Exptained


Total Variance Exptained


395

Initial Eiqenvalues

Component Total % of Variance Cumulative %1 4.375 39.771 39.7712 1.789 16.262 56.0333 1.460 13.273 69.3064 .752 6.837 76.1445 .735 6.679 82.8236 .453 4.121 86.944 .7 .386 3.511 90.4558 .369 3.357 93.8129 .314 2.857 96.670

.10 .228 2.077 98.74711 .138 1.253 100.000

Extraction Sums of Sauared Loadinqs Rotation Sums of Sauared LoadinasComponent Total % ofVariance Cumulative % Total % of Variance Cumulative %1 4.375 39.771 39.771 2.678 24.344 24.3442 1.789 16.262 56.033 2.6Q6 23.693 48.0373 1.460 13.273 69.306 2.340 21.269 69.30645 0

67891011

-\) 5

Scree Plot

4

3

2

ID

~ 1>CIDenill 0

T

1 2 3

Component Number

Figure C5.2

4 5

396

6 7 8 9 10 11

Figure C5.3Rotated Component Matrixa





397

Component1 2 3

P100: Organisationaleffectiveness: Personnel .840developmentP70: Organisationaleffectiveness: Quality of .707 .324product and serviceP80: Organisationaleffectiveness: Employee .698satisfactionP110: Organisationaleffectiveness: Public .668image and goodwillP90: Organisationaleffectiveness: Overall .654 .438company performanceP1F: Financialperformance: Profitability .921level! ROAP2F: Financial

.863performance: Cash flowP3F: Financial

.815performance: Share priceP5B: Businessperformance: Market .875shareP4B: Businessperformance: Sales .863growthP6B: Businessperformance: Technical .738product/servicedevelocment

Component 1 2 31 .615 .568 .5472 .591 -.791 .1573 .522 .227 -.822

Figure C5.4

Statistics

~

~ ./

398

z: Meanof Z: Meanof Z: Meanoffinancial business organisational

performance performance effectivenessN Valid 123 123 123

Missing 0 0 0Mean 4.5556 4.5854 5.1890Std. Errorof Mean .10055 .09176 .06740Median 4.6667 4.5000 5.2500Mode 5.00 4.00 5.75Std. Deviation 1.11511 1.01769 .74750Variance 1.24347 1.03569 .55875Skewness -.384 .037 -.547Std. Errorof Skewness .218 .218 .218Kurtosis -.368 -.349 -.108Std. Errorof Kurtosis .433 .433 .433Range 5.00 5.00 3.50Minimum 1.67 2.00 3.00Maximum 6.67 7.00 6.50Sum 560.33 564.00 638.25


Extended Thai Study

1. Introduction

This section aims to provide the results of factor analysis of the eleven items of

organisational performance in the extended Thai questionnaire. Since the results were in

partial agreement with the previous research, further work was performed to construct

appropriate scales for the Thai extended study. The analysis procedure was performed

again through evaluating the existing data, extracting, and rotating the factors.

2. Data Evaluation

The initial PCA was performed again and gave the descriptive statistics to evaluate the

existing data. The initial results indicated the same data as Zakliki’ replication study as

follows:


2. KMO was .788, which is middling.



The initial PCA was performed again for eleven performance items. The result of the

first run with PCA revealed that the maximum number of factors with eigenvalue larger

than one was three factors (refer Figure C6.1). Approximately 69.31% of the total

variance was attributed to the first three factors, and the remaining factors together

accounted for the rest of the variance. The scree plot demonstrates the steep slop of the

curve on the third factor (refer Figure C6.2). The result of the first run with PCA and

Varimax rotation is shown (refer Figure C6.3). Two performance items (P7, P9) were

399

loaded on more than one factor but this run generated a simple structure as predicted or

as theoretically interpretable. However, further analysis was carried out for this

research.

The final run with PCA and Oblimin rotation is presented in Figure C6.4. The results

produced nearly the same pattern as the second run with PCA and Varimax rotation and

only one variable (P9) was loaded on more than one factor. This run also generated the

same structure and the same items. The difference between the run with PCA and

Varimax rotation and PCA and Oblimin rotation was not considerable. Table 5.10

(p.138) was developed to construct the reliability and mean of scales as well as describe

each firm performance items in this research. The descriptive statistics for these factors

is presented in Figure C6.5. They were used to examine the relationship of executive

leadership and organisational performance in chapter 9.

400

Figure C6.1


Extraction Method: Principal Component Analysis. ",.


Extraction Method: Principal Component Analysis. .

401

.. Initial EiQenvaluesComponent Total % of Variance Cumulative %1 4.375 39.771 39.7712 1.789 16.262 56.0333 1.460 13.273 69.3064 .752 6.837 76.1445 .735 6.679 82.8236 .453 4.121 86.944 .7 .386 3.511 90.4558 .369 3.357 93.8129 .314 2.857 96.67010 .228 2.077 98.74711 .138 1.253 100.000

Extraction Sums of Sauared LoadinQs Rotation Sums of Squared LoadinQsComponent Total % of Variance Cumulative % Total % of Variance Cumulative %1 4.375 . 39.771 39.771 2.678 24.344 24.3442 1.789 16.262 56.033 2.606 23.693 48.0373 1.460 13.273 69.306 2.340 21.269 69.3064567891011

Scree Plot- .) 5

4

3

2

Q)

~ 1>c:Q).0>ill 0

T

1 2 3

Component Number

Figure C6.2

4 5 6

402

7 8 9

...

10 11

Figure C6.3

Rotated Component Matrixa





403

Comoonent1 2 3

P100: Organisationaleffectiveness: Personnel .840developmentP70: Organisationaleffectiveness: Quality of .707 .324product and serviceP80: Organisationaleffectiveness: Employee .698satisfactionP110: Organisationaleffectiveness: Public .668image and goodwillP90: Organisationaleffectiveness: Overall .654 .438company performanceP1F: Financialperformance: Profitability .921leveV ROAP2F: Financial .863performance: Cash flowP3F: Financial .815performance: Share priceP5B: Businessperformance: Market .875shareP4B: Businessperformance: Sales .863growthP6B: Businessperformance: Technical .738product'servicedevelocment

Component 1 2 31 .615 .568 .5472 .591 -.791 .1573 .522 .227 -.822

Figure C6.4

Pattern Matrixa

Extraction Method: Principal Component Analysis.Rotation Method: Oblimin with Kaiser Normalization.


404

Component1 2 3

P100: Organisationaleffectiveness: Personnel .885developmentP110: Organisationaleffectiveness: Public .697image and goodwillP80: Organisationaleffectiveness: Employee .681satisfactionP70: Organisationaleffectiveness: Quality of .681product and serviceP90: Organisationaleffectiveness: Overall .601 -.360company performanceP1F: Financialperformance: Profitability -.927levell ROAP2F: Financial

-.894performance: Cash flowP3F: Financial

-.813performance: Share priceP4B: Businessperformance: Sales -.903growthP5B: Businessperformance: Market -.897shareP6B: Businessperformance: Technical

-.746product/servicedevelopment

Figure C6.5

Statistics

405

Extended Extended Extendedstudy: Mean of study: Mean of study: Mean of

financial business organisationalperformance performance effectiveness

N Valid 123 123 123Missing 0 0 0

Mean 4.5556 4.6369 5.1886Std. Error of Mean .10055 .08387 .06503Median 4.6667 4.6667 5.2000Mode 5.00 4.00 5.80Std. Deviation 1.11511 .93017 .72125Variance 1.24347 .86522 .52020Skewness -.384 .089 -.587Std. Error of Skewness .218 .218 .218Kurtosis -.368 -.410 .048Std. Error of Kurtosis .433 .433 .433Range 5.00 4.67 3.40Minimum 1.67 2.33 3.00Maximum 6.67 7.00 6.40Sum 560.33 570.33 638.20

APPENDIX D

INDUSTRY CLASSIFICATION

406

Industry Classification by SET Code

Code Industry Type 1 Agribusiness 2 Banking 3 Building and Furnishing Materials 4 Chemicals and Plastics 5 Commerce 6 Communication 7 Electrical Products and Computer 8 Electrical Components 9 Energy 10 Entertainment and Recreation 11 Finance and Securities 12 Food and Beverages 13 Health Care Services 14 Hotel and Travel Services 15 Household Goods 16 Insurance 17 Companies Under Rehabilitation 18 Jewelry and Ornaments 19 Machinery and Equipment 20 Mining 21 Packing 22 Pharmaceutical Products and Cosmetics 23 Printing and Publishing 24 Professional Services 25 Property Development 26 Pulp and Paper 27 Textiles, Clothing and Footwear 28 Transportation 29 Vehicles and Parts 30 Warehouse and Silo 31 Others

407

Industry Classification by SIC Code

Code Industry Type 1 Agriculture, Forestry and Fishing 2 Mining 3 Manufacturing 4 Electricity, Gas and Water Supply 5 Construction 6 Wholesale Trade 7 Retail Trade 8 Accommodation, Cafes, Restaurants 9 Transports and Storage 10 Communication Services 11 Finance and Insurance 12 Property and Business Services 13 Government Administration and Defence 14 Education 15 Health and Community Services 16 Cultural and Recreational Services 17 Personal and Other Services

408

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