Turbulent Chaotic And Challenging

Published Date: 02 Nov 2017

they want it and what they will pay for it (Hammer & Champy, 1993). The historical boundary between customer, supplier and competitors is increasingly becoming blurred (Allio, 1993). Many organizations have responded to these competitive pressures by downsizing, restructuring and transformation, and thus created a less secure organizational climate. Saudi Steel Pipes Company is not an exception to this situation; the company is facing great challenges and high competition in the Saudi market and in Gulf region.

The current environment is accompanied by shortage of skilled, competent and committed employees. Ulrich (2002) argues that the competitive edge of companies no longer lies in its product, but in its people. According to Gunnigle, Heraty and Morley (1971) people are the lifeblood of organizations and they represent the most potent and valuable resources of organizations.

No organization can perform at peak levels unless each employee is committed to the organization’s objectives and works as an effective team member. It is no longer good enough to have employees who come to work faithfully every day and do their jobs independently. Employees now have to think like entrepreneurs while working in teams and have to prove their

worth. Ulrich (2002) regards people as intangible resources which are difficult to imitate. People are becoming a source of competitive advantage for most organizations (Ulrich, 2000). Thus, the commitment of competent employees is critical to the success of the organization.

Saudi Steel Pipe Company (SSP) has been recognized as Saudi Arabia's premier manufacturer of welded steel pipe since its inception in 1980. The company is the kingdom's most versatile producer of HFI (high frequency induction) welded steel pipe serving the region's Oil and Gas, Construction, and many other market demand. The Company today has production capacity of 240,000 metric tons of high quality HFI welded steel pipe drawing from 4 distinct production lines for a size range from 1/2" to 20". A commitment to quality is readily visible in the investment in sophisticated computer controlled technologies that allow operators to monitor all critical welding variables on a real-time basis throughout the production cycle. This capability has been a key factor in SSP's acceptance as a unique producer of welded steel pipe in the Oil and Gas sector (SSP, 2011).

Another first for the kingdom, and the region at large, was the establishment of Hot Induction and Heat Treatment facility capable of producing high quality bends in pipe from 2" to 48" in diameter, with wall thickness up to 50 mm. This investment was applauded by many of the region's key consumers such as Saudi Aramco (Saudi Arabian American Oil Company) and Sabic (Saudi Basic Industries Corporation). In order the company achieves its vision to be a leader in the support industries for oil and gas sector, the company needs to sustain their competent people by building a strong commitment basis among their workforce (SSP, 2011).

1.2 Research Problem

Saudi Steel Pipes Company has well recognized human capital as a competitive advantage. Thus, for SSP’s vision to become a reality, its leadership relies on employees to execute strategic objectives. The employees’ knowledge, experience, skills, expertise, the ability to collectively

innovate and their decision making processes is key to the success of SSP.

However, SSP may face challenges such as losing competent employees to other competitors (such as Alkhorayef Steel Pipes, Arabian Pipe Co., Jazeera Steel, and Rajhi Steel). Turnover among these competent employees results in interruptions in normal operations, loss of efficiency, increased replacement and recruitment cost, project delays, increased customer dissatisfaction, scheduling difficulties. Abbasi and Hollman (2000) argue that when an organization loses a critical employee, there is negative impact on innovation, consistency in providing service to customers may be jeopardized, and major delays in the delivery of services to customers may occur. Bennett and Durkin (2000) states that the negative effects associated

with a lack of employee commitment include absenteeism and turnover. They also found that employee commitment is positively related to organizational outcomes such as job satisfaction, motivation and attendance.

Committed employees usually act in the interests of their organization and/or the customers being served by the organization (Romzek, 1990). Furthermore, they tend to generate high performance business outcomes as measured by increased sales, improved productivity, profitability and enhanced employee retention (Roger, 2001). Consequently, lack of employee commitment threatens the survival of the organization because a loss of a competent employee is a loss of competitive advantage for the organization. It does not take many uncommitted employees to prevent an organization from prospering and ceding competitive advantage to competitors. Thus, the ability of SSP’s leadership to retain competent employees is critical to its success.

Ulrich (1998) states that as modern organization operating in an environment characterized by uncertainty and constant change, the commitment of employees to the organization is a critical determinant in the success or failure of organizations in their quest for competitive advantage.

Pfeffer (1998) states that committed employees who are highly motivated to contribute their time and energy to the pursuit of organizational goals are increasingly acknowledged to be the primary asset available to an organization.

High levels of commitment to the organization are likely to reduce absenteeism, staff turnover and increase levels of job satisfaction and performance. These positive benefits of committed employees are recognized as important determinants of organisational effectiveness (Iverson & Buttigieg, 1998).

Meyer and Allen (1991) conceptualized commitment as a three-dimensional construct: Affective, normative and continuance commitment. They define affective commitment as an emotional attachment to the organization. Employees with affective commitment continue employment with the organization because they want to do so. Meyer and Allen (1991) describe continuance commitment as a form of psychological attachment to an employing organization. Employees are seen to calculate the costs of leaving the organization versus the benefits of staying with the organization. Employees with continuance commitment also continue employment with the organization because they need to do so. Finally, employees who display normative commitment possess a feeling of obligation to continue employment with the organization (Meyer & Allen, 1991). Employees with normative commitment have internal normative pressures to act in a way

that satisfy the organization’s goals and interests.

1.3 Objectives of the Research

The overall objective of the research is to identify different aspects of leadership style that have an influence on employee commitment, and also to be able to determine the relationship between these two variables. The results of the research could shape how future leadership training will be configured within the company being researched. Thus, the main objective of the study is to investigate the relationship between leadership style and employee commitment to a steel company in Saudi Arabia.

The hypothesis is concerned with the relationship between the leadership style being practiced within the organization and its influence on the employee commitment. The null hypothesis states that there is no statistical significant relationship between leadership style and employee commitment to the organization and the alternate hypothesis states that there is a statistically significant relationship between leadership style and employee commitment to the organization.

1.4 Significance of the Research

The question that every leader must address is, what factors contribute to an employee’s desire to remain committed to the organization? This question is very important in order to maintain a competent workforce. The reasons behind employees leave an organization range from lack of job satisfaction, incompatibility with others at work, to a changing family structure (Ackoff, 1999). Liden, Wayne and Sparrowe (2000) pointed out that employees appreciate leaders and organizations that provide opportunities for decision latitude, challenges, responsibility and meaning, impact, as well as self-determination.

Decotiis and Summers (1987) found that when employees were treated with consideration, they displayed greater levels of commitment. These employees are more likely to reciprocate by being more committed to their organizations than employees in more traditional organizations. Bass and Avolio (1994) also suggest that transformational leaders influence followers’ organizational commitment by encouraging them to think critically by using novel approaches, involving followers in decision-making processes, inspiring loyalty, while recognizing and appreciating the different needs of each follower to develop their personal potential. According to Pruijn and

Boucher (1994), transformational leadership is an extension of transactional leadership and that a leader may display various degrees of transactional or transformational leadership style depending on the situation. Committed employees, working in an environment of trust, flexibility, and empowerment, are expected to act in the best interests of an organization (Liden, et al., 2000).

This has sparked the need to enquire about the relationship, between leadership styles and employee commitment to the organization, in order to deal effectively with the problem. Accumulating evidence suggests that leadership style is positively associated with work attitudes and behaviors at both an individual and organizational level (Dumdum, Lowe & Avolio, 2002).

According to Walumbwa and Lawler (2003), there is considerable research available suggesting that the transformational leadership style is positively associated with organizational commitment in a variety of organizational settings and cultures. Bycio, Hackett and Allen (1995) reported positive correlations between leadership behaviors such as charisma, intellectual stimulation, individualized consideration, and contingent reward on the one hand, and affective, continuance, and normative commitment, on the other hand.

The results of this research would help the leadership of Saudi Steel Pipes to practice leadership behaviors that will encourage employee commitment to the organization. The study will also contribute to the body of knowledge by providing information on the relationship between leadership styles and organizational commitment.

1.5 Limitations of the Research

This research investigated the relationship between different leadership styles and three-dimensional construct of organizational commitment; affective, normative and continuance. The research was conducted at one of the steel manufacturing companies in the eastern province of Saudi Arabia. The selection of a single case study brings forth many limitations as far as the generalization of the results of the study is concerned. To study the relationship between leadership styles and organizational commitment through multiple case studies, for example, is clearly one of the future research challenges in this topic. Multiple case studies would enable us to test this relationship of the study further.

Another limitation of the current research is the self-reporter bias. The inherent limitation of self-reporter bias is that the respondent may not have answered each statement in the survey honestly and may have reported their exhibit behaviors they wished they portrayed rather than the actual

behaviors portrayed in their management positions. Another limitation is the comparatively small sample size used. Moreover, English language is the second language for all the respondents which also affected the respondent’s degree of understanding of questionnaire statements, thus

affected the accuracy of results.

Another limitation of the current study relates to the characteristics or demographics of the sample. The study was conducted in SSP dominated completely by male participants. Results might have been different if percentages for race, age, marital status, gender, time with the organization, and education were different.

Thus, these findings may not be generalized to other manufacturing facilities or to other types of organizations. Generalizing the present findings should therefore be reviewed and examined further in future research in other regions, with mixed gender, older and more heterogeneous samples. Despite these limitations this study could contribute in extending the literature on the variables associated with the development of organizational commitment.

Chapter 2: literature review

2.1 Leadership

2.1.1 Introduction

According to Gardner, Leaders have a significant role in creating the state of mind that is the society. They can serve as symbols of the moral unity of the society. They can express the values that hold the society together. Most important, they can conceive and articulate goals that lift people out of their petty preoccupations carry them above the conflicts that tear a society apart, and unite them in pursuit of objectives worthy of their best efforts (as cited by Bennis, 1989). In November 1987, Time newspaper asked in a cover story, "Who’s in Charge?" and answered its own question, saying, "The nation calls for leadership, and there is no one home." A recent Google search on "lack of leadership" produced more than 53.3 million hits up from 27,000 five years ago (as cited by Bennis, 1989).

Leadership is one of the world’s oldest issues. As societies and technologies become more advanced, demand for great leaders in modern times is substantially increased. The turbulent business environment has created high need for leaders who can meet the challenges of the organizations. The world’s hunger for leadership has been growing for years. There is no doubt

that a charismatic new leader took the world stage on November 4, 2008, with the election of Barack Obama as president of the United States (Bennis, 1989). Harvard professors Kotter & Heskett (1992) were among the first to show that the single most important factor in successful organizational change is competent leadership.

The following sections present an overview of the definition of leadership. Leadership is then discussed in terms of the most popular theories; great man theory, trait theory, behavioral theory, participative theory, situational theory, contingency theory, transactional theory, transformational theory, and laissez-faire leadership theory.

2.1.2 Definition of Leadership

The term leadership is a relatively recent addition to the English language. It has been in use only for about two hundred years, although the term leader, from which it was derived, appeared as early as A.D. 1300 (Stogdill, 1974). Scholars who study leadership have struggled to define leadership for many decades and have written a great deal about the nature of leadership (Antonakis, Cianciolo, & Sternberg, 2004; Bass, 1990; Conger & Riggio, 2007). In leadership literature, more than one hundred different definitions of leadership have been identified (Rost, 1991). Handbooks of leadership (e.g. Bass, 1990) contain references to thousands of studies presenting various view points and definitions of leadership. A review of them indicates great confusion.

As leadership guru Burns (1978) put it, Leadership is one of the most yet least understood phenomena on earth. From Plato and Confucius to the litany of today’s management authors, philosophers and theorists through the ages have struggled to define leadership. Bass (1985) advised that as the studies of leadership are wide and varied; one specific definition of leadership is a very complex task. Stodghill (1974) defined leadership as the "process of influencing the activities of an organized group in efforts towards goal setting and goal achievement". Leadership is a process of moving people in a direction that is genuinely in their longterm interests (Rutter, 1995).

Leadership is a process of interaction between leaders and subordinates where a leader attempts to influence the behaviour of his or her subordinates to accomplish organizational goals (Yukl 2005). In other words, leadership is described as the selection of bases of influence (Krause 2004). Kanungo (1998) regarded leadership as exercising influence over others by utilizing various bases of social power in order to achieve organizational objectives.

2.1.3 Leadership Theories

2.1.3.1 Great Man Theory

The Great Man Theory of leadership attempted to explain leadership on the basis of heredity. The underlying concept of the theory is that the leader is genetically endowed with superior qualities that differentiate him from his followers (Dowd, 1936). In the early years of the twentieth century, several leadership theorists were influenced by Galton’s (1870) study of the hereditary background of great men. He proposed that great leaders inherit their ability to lead. Motivated by Galton’s observations, Woods (1913) studied the history of 14 nations over periods of five to ten centuries to determine the effect of the governing ruler’s leadership style upon his

follower’s standard of living. His findings indicated that the conditions of each reign were directly related to the abilities of the rulers present. Thus, a strong leader would precipitate a prosperous era, while a weak leader would be cause for a less comfortable time period. Woods concluded that the leader makes the nation and shapes it in accordance with his abilities (1913).

Wiggam (1931) proposed a method by which superior leaders could be maintained in ample quantity. He calculated that an adequate supply of leaders depended upon a high birth rate among the biologically superior aristocratic classes. Dowd (1936) claimed that leaders are always more

intelligent, energetic, and superior than their followers. Jennings (1960) published a comprehensive survey of the great man theory of leadership. He argued that if the leader is endowed with superior qualities then it should be possible to identify these qualities.

2.1.3.2 Trait Theory

In a comprehensive review of leadership theories (Stogdill, 1974), several different categories were identified that capture the essence of the study of leadership in the twentieth century. The first trend correlates leadership with the attributes of great leaders. Leadership was attributed to the supposedly innate qualities with which a person is born (Bernard, 1926). It was believed that if the traits that differentiated leaders from followers could be identified, successful leaders could be quickly assessed and put into positions of leadership. Researchers examined personality, physical and mental characteristics. The studies were based on the idea that leaders were born,

not made, and the key to success was simply in identifying those people who were born to be great leaders. Though much research was done to identify the traits, researchers were unable to find traits that were consistently associated with great leadership. These traits differentiate leaders from followers.

Researchers, such as Bernard (1926) and Stogdill (1974), have investigated the role of traits in leadership behavior. The main contribution of this approach was to provide evidence that certain characteristics intrinsic in individuals could result in effective leadership. This was essentially the first systematic attempt at a conceptual understanding of leadership. The trait approach tried to explain what made certain people great business, social, political and military leaders. The theory suggested that certain people were born with social traits that made them great leaders. Because the theory holds that leaders and non-leaders are differentiated by a universal set of traits, researchers were challenged to identify the definitive traits of leaders (Bass, 1990a).

This theory was heavily criticized, because it was not possible to define general leadership traits which fitted the situation. Stogdill (1948) suggested that no consistent set of traits differentiated leaders from non-leaders across a variety of situations. Tosi, Rizzo and Carroll (1986) also suggested that the trait theory fails to clarify the relative importance of traits. Further, the approach is too narrow in that it focuses exclusively on the leader and overlooks the need of the follower (Robbins, 1996).

2.1.3.3 Behavioral Theory

This theory focused on people’s actions which was quite different from the trait approach, which centered on a person’s physical and personality characteristics. This theory looked at leadership behaviors in an attempt to determine what successful leaders do, not how they look to others (Halpin & Winer, 1957). Researchers studying the behavior approach, also referred to as the style approach, determined that leadership is composed essentially of two kinds of behaviors: task behaviors and relationship behaviors (Northouse, 2001). The behavior approach attempted to explain how these two types of behaviors interface in a manner that allowed a leader to influence a group to reach a goal.

Hellriegel, Jackson, Slocum, Staude, Amos, Klopper, Louw and Oosthuizen (2004) stated that these models are based on what effective and ineffective leaders actually do, how they delegate tasks to subordinates, where and when they communicate to others and how they perform their roles. The main behavioral models are McGregor’s Theory X and Theory Y (1960), the Ohio State and University of Michigan Models (in Hellriegel et al. 2004) and the Managerial Grid Model of Blake and Mouton (1964).

McGregor’s (1960) Theory X and Theory Y model proposed two distinct theories of leadership behaviors: one negative labeled theory X and the other positive labeled theory Y. His theories contend that leadership behaviors are based on an assumption about employees. His Theory X assumption includes the belief that employees dislike work and will avoid it if possible. McGregor’s (1960) Theory Y assumption includes the belief that employees can view work as a positive experience given the right conditions. Here, managerial behaviors include providing encouragement, positive reinforcement and rewards.

The Ohio State and University of Michigan leadership studies identified two primary, independent factors which are consideration of structure (employee-oriented leadership) and initiation of structure (production-oriented leadership). The researchers focused on the behaviors that leaders enacted and how they treated followers. The impact of this approach dealt with the

broadening of management’s focus to include people-oriented as well as task-oriented activities.

Blake, Shepard and Mouton (1964) developed the managerial grid model and they identified a two-factor model of leadership behavior similar to that found at Ohio State and University of Michigan Models. Blake et al. (1964) called these factors "concern for people" and "concern for output". They later added flexibility as a third variable. According to Blake et al. (1964), leaders

can only exhibit behaviors that fall into two primary categories (task-oriented or people-oriented). Depending on which category is most frequently shown, a leader could be placed along each of the two categories.

Behavioral models made a great contribution to the understandings of leadership, as the focus shifted from who leaders are (traits) to what leaders do (behaviors). This approach demonstrated that unlike traits, behaviors can be seen and learned and also relate directly to the function being performed. This has important implications for management training in that effective behavior, unlike traits, can be learnt. If training works, we could have an infinite supply of leaders (Robbins, 1996).

However, leadership behaviors that are appropriate in one situation aren’t necessarily appropriate in another. Because the behavioral models failed to uncover a leadership style that was consistently appropriate to all situations, other leadership models were devised (Hellriegel et al., 2004).

2.1.3.4 Contingency Theory

Contingency theory is a leader match theory that explains the match of leaders to appropriate situations. The contingency approach suggests that no single leadership style, specific leadership functions or particular leadership qualities are recommended as the best under all circumstances

(Gerber, Nel, & Van Dyk, 1996). The contingency approach represents a shift in leadership research from focusing on the leader to looking at the leader in conjunction with the situation in which the leader works (Fiedler, 1978).

The main contingency models are the Leadership Continuum of Tannenbaum and Schidt, Fiedlers Contingency Model, Hersey and Blanchard’s Situational Leadership Model, House’s Path-Goal Model and the Leader-Member Exchange theory (Bass, 1990a). Fiedler’s (1967) contingency theory posited that effective group performance was dependent upon the appropriate match of the leader’s personality and the situation. Personality orientation of the leader is centered on a task or interpersonal style.

Hellriegel et al. (2004) indicated that leadership depends on matching a leader’s style to a situation’s demand. Hersey and Blanchard’s (1977) situational leadership theory proposed that leaders should vary their behaviors according to the member’s maturity and they classified 22 leader behaviors along two dimensions: directive behavior (similar to initiating structure and production-centered) and supportive behavior (similar to consideration structure and employee-centered).Hersey and Blanchard (1977) also claimed that the levels of directive and supportive leader behavior should be based on the level of readiness of the followers.

The path-goal theory of leadership (House, 1971) postulated that the eventual performance and satisfaction of group members was highly influenced by the appropriateness of leader behaviors in relation to member’s needs and desires as well as the characteristics of the task. Therefore, the function of the leader was to provide coaching, guidance and personal support to members if necessary. The path-goal theory proposed that group members preferred a highly structured regime when presented with ambiguous, varied and interdependent tasks.

The leader-member exchange theory addresses leadership as a process centered in the interaction between leaders and followers. Leader-Member Exchange theory (LMX) was developed by Danserau, Cashman and Hager (1975) as a response to Average Leadership Style (ALS), which assumed that leaders maintain similar relationships with all of their employees. They highlighted the ways leaders differentiate between their subordinates by creating in-groups and out-groups. Subordinates become in group members based on how well they get along with the leader and whether they are willing to expand their roles and responsibilities (Danserau et al., 1975). In-group members receive extra opportunities and rewards, while out-group members receive only standard benefits. Thus, in-group members have high quality exchanges characterized by "mutual trust, respect, and obligation" (Graen & Uhl-Bien, 1995), whereas out-group members have low quality exchanges that have less trust, respect, and obligation.

The weakness of the contingency approach is that it failed to provide some universal principles of leadership (Bass, 1990a). The theory has not adequately explained the link between styles and situation (Rice, 1978). The contingency approach also assumes that leaders are merely shaped by their situation, when it might be possible that truly effective leaders can shape situations around them (Kotter, 1990).

2.1.3.5 Transactional Theory

Transactional leadership theory is an exchange of rewards with subordinates or services rendered. Transactional leadership seeks to motivate followers through extrinsic rewards (Bass, 1990). Transactional leaders provide their followers with vision and take the values, needs, motivations, and purposes of followers as given, unchanging, and fused.

Bass (1985b; 1990a; 1990b) referred to transactional leadership as an exchange relationship between leader and follower. Transactional leadership theory is grounded in the social learning and social exchange theories, which recognize the reciprocal nature of leadership (Deluga, 1990). It is based on the realization that leadership does not necessarily reside in the person or situation, but resides in the social interaction between the leader and the follower (Van Seters & Fields, 1989).

Bass (1985a) and Bass and Avolio (1997) described transactional leadership in terms of two characteristics: the use of contingent rewards and management by exception. They described contingent reward as the reward that the leader will bestow on the subordinate once the latter has achieved goals that were agreed to. Contingent reward is therefore the exchange of rewards for meeting agreed-on objectives. By making and fulfilling promises of recognition, pay increases and advancement for employees who perform well, the transactional leader is able to get things done.

Transactional leaders may also rely on active management by exception which occurs when the leader monitors followers to ensure mistakes are not made, but otherwise, allows the status quo to exist without being addressed (Bass & Avolio, 1995). In passive management by exception, the leader intervenes only when things go wrong. In general, one can conclude that transactional leadership is an exchange relationship that involves the reward of effort, productivity and loyalty.

Bass (1985a) contends that transactional leadership uses satisfaction of lower order needs as the primary basis for motivation. The focus in transactional leadership is on role clarification. The leader helps the follower in understanding exactly what needs to be done in order to meet the organization’s objectives and goals.

2.1.3.6 Transformational Theory

Burns (1978) proposed a new theory of leadership called transformational leadership. According to Burns (1978), transformational leadership occurs when leaders and followers raise one another to higher levels of values and motivations, and this result in a transforming effect on both leaders and followers. In a transformational approach, the purposes of leaders and followers that might have begun as separate become related. Bass (1985) defined a transformational leader as one who motivates followers to do more than they originally expected to do.

A transformational leader influences his or her followers to look beyond their self-interest for the good of the group. From a transformational leadership perspective, leadership is considered to be about doing what has never being done, and it includes visionary and charismatic leadership (Bennis,1989). The transformational approach views leadership as a shared process. The outcome of this process is the ability to transform oneself, others, and the organization to new, unimagined heights of motivation and performance (Northouse, 2001).

For many researchers charismatic leadership and transformational leadership are similar, and sometimes charismatic leadership is viewed as an important component of transformational leadership (Bass & Avolio,1994). Bass and colleagues have identified five factors which represent behavioral components of transformational leadership: 1) idealized influence (attributes); 2) idealized influence (behaviour); 3) inspirational motivation; 4) intellectual stimulation and 5) individualized consideration. Idealized influence attributes occur when followers identify with and emulate those leaders who are trusted and seen as having an attainable mission and vision.

Idealized influence behaviour refers to leader behaviour which results in followers identifying with leaders and wanting to emulate them. Leaders demonstrating idealized influence or charisma instilled pride in their subordinates and command respect (Bass, 1990a; Bass & Avolio, 1990a).

Inspirational motivation implies that leaders behave in ways that motivate and inspire those around them by providing meaning and challenge to their followers’ tasks Intellectual stimulation occurs when leaders encourage their followers to be innovative and creative by questioning assumptions, reframing problems and approaching old situations in new ways. Intellectual stimulation also occurs when the leader prompts the followers to provide alternative solutions to the problems and challenges Individual consideration occurs when leaders relate to followers on a one-to-one basis in order to elevate goals and develop skills. Leaders who display individual consideration treat each employee as an individual and are attentive to the unique needs, capabilities and concerns of each individual (Bass, 1985a).

Transformational leadership is contrasted with transactional leadership by a number of scholars. Burns (1978) articulated a distinction between transactional leadership and transformational leadership. He claimed that transactional leadership involves an interaction between leaders and

followers. Leaders approach followers, under the transactional model, with an eye to exchange one thing for another: jobs for votes or subsidies for campaign contributions. In other words, transactional leadership involves contingent reinforcement. Followers are motivated by the leaders’ promises, praise, and rewards or they are corrected by negative feedback, reproofs, threats, or disciplinary actions. Transformational leadership, on the other hand, is significantly different from transactional leadership in its focus and purpose. Burns (1978) explained that one or more persons engage with others in a way that leaders and followers raise one another to higher levels of motivation and morality.

2.1.3.7 Laissez-Faire Leadership Theory

Deluga (1990) described the laissez-faire leader as an extreme passive leader who is reluctant to influence subordinates’ considerable freedom, to the point of abdicating his/her responsibilities. In a sense, this extremely passive type of leadership indicates the absence of leadership.

Laissez-faire style of leadership is also referred to as management-by-exception (Bass & Avolio, 1990a). Management-by-exception characterizes how leaders monitor negative subordinates’ behaviour and exert corrective action only when subordinates fail to meet objectives. Leaders who manage by exception intervene only when procedures and standards for accomplishing tasks are not met. It can therefore be concluded that by ‘laissez-faire’, it is meant that the leader is not sufficiently motivated or adequately skilled to perform supervisory duties.

Both transformational and transactional leaders are active leaders. They actively intervene and try to prevent problems. When researching these two active forms of leadership, they are often contrasted with extremely passive laissez-faire leadership (Yammarino & Bass, 1990). The laissez-faire leader avoids decision making and supervisory responsibility. This type of leader is

inactive, rather than reactive or proactive. In a sense this extremely passive type of leadership indicates the absence of leadership. Bass (1990a) concludes that there is a negative association between laissez-faire leadership and a variety of subordinate performance, effort and attitudinal

indicators. This implies that laissez-faire leadership is always an inappropriate way to lead. When by 'laissez-faire' it is meant that the leader is not sufficiently motivated or adequately skilled to perform supervisory duties.

2.2 Organizational Commitment

2.2.1 Definition of Organizational Commitment

Generally, organizational researchers agree that a consensus has not yet been reached over the definition of organizational commitment (Mowday, 1998; Scholl, 1981; Suliman & Isles, 2000a; 2000b; Zangaro, 2001). Scholl (1981) indicates that the way organizational commitment is defined depends on the approach to commitment that one is adhering to.

Accordingly, organizational commitment is defined either as an employee attitude or as a force that binds an employee to an organization. According to Suliman and Isles (2000a), there are currently four main approaches to conceptualizing and exploring organizational commitment. There is the attitudinal approach, the behavioral approach, the normative approach and the multidimensional approach.

The attitudinal approach views commitment largely as an employee attitude or more specifically as a set of behavioral intentions. The most widely accepted attitudinal conceptualization of organizational commitment is that by Porter and his colleagues who define organizational commitment as the relative strength of individuals’ identification with and involvement in a particular organization (Mowday, Steers, & Porter 1979). They mention three characteristics of organizational commitment: (1) a strong belief in and acceptance of the organization’s goals and values, (2) a willingness to exert a considerable effort on behalf of the organization and (3) a strong intent or desire to remain with the organization. Within this approach, the factors associated with commitment include positive work experiences, personal characteristics and job characteristics, while the outcomes include increased performance, reduced absenteeism and reduced employee turnover.

The second approach refers to organizational commitment as behavior (Zangaro, 2001). The behavioral approach emphasizes the view that an employee continues with an employing organization because investments such as time spent in the organization, friendships formed within the organization and pension benefits, tie the employee to the organization. Thus an employee becomes committed to an organization because of "sunk costs" that are too costly to lose. The side-bet theory forms the foundation of this approach (Allen & Meyer, 1990). According to Becker (1960), employee commitment is continued association with an organization that occurs because of an employee’s decision after evaluating the costs of leaving the organization. He emphasizes that this commitment only happens once the employee has recognized the cost associated with discontinuing his association with the organization.

The normative approach is the third approach, which argues that congruency between employee goals and values and organizational aims make the employee feel obligated to the organization (Becker, Randall & Reigel, 1995). From this point of view, organizational commitment has been defined as "the totality of internalized normative pressures to act in a way which meets organizational goals and interests" (Weiner, 1982).

O’Reilly and Chatman (1986) developed their multidimensional approach based on the assumption that commitment represents an attitude towards the organization, and the fact that various mechanisms can lead to development of attitudes. Taking Kelman’s (1958) work as their basis, they argue that commitment could take three distinct forms that they call compliance, identification and internalization. They believed that compliance would occur when attitudes and corresponding behaviors are adopted in order to gain specific rewards. Identification would occur when an individual accepts influence to establish or maintain a satisfying relationship.

Lastly, internalization would occur when the attitudes and behaviors that one is encouraged to adopt are congruent with one’s own values. The most popular multi-dimensional approach to organizational commitment is that of Meyer and his colleagues. In 1984, Meyer and Allen, based on Becker’s side-bet theory, introduced the dimension of continuance commitment to the already existing dimension of affective commitment. As a result, organizational commitment was regarded as a bidimensional concept that included an attitudinal aspect as well as a behavioral aspect. In 1990, Allen and Meyer added a third component, that is, normative commitment to their two dimensions of organizational commitment. They proposed that commitment as a psychological attachment may take the following three forms: the affective, continuance and normative forms.

Meyer and Allen (1991) defined affective commitment as "an employee’s emotional attachment to, identification with and involvement in the organization", continuance commitment as "commitment based on the costs that employees associate with leaving the organization" and normative commitment as "an employee’s feelings of obligation to remain with the organization". Each of these three dimensions represents a possible description of an individual’s attachment to an organization.

The focus of the present research is on organizational commitment as a multidimensional concept that represents the relationship between an employee and employer. In order to further explore the multidimensional nature of organizational commitment, the present research will treat it as a dependent variable that can be influenced by organizational factors such as leadership style.