Leadership Styles and Organizational Effectiveness in Small Construction Businesses in Puebla, Mexico

By Méndez, Rafaela Martínez; Muñoz, José Gerardo Serafín Vera et al. | Global Journal of Business Research, September 1, 2013 | Go to article overview

Leadership Styles and Organizational Effectiveness in Small Construction Businesses in Puebla, Mexico


Méndez, Rafaela Martínez, Muñoz, José Gerardo Serafín Vera, Muñoz, María Antonieta Monserrat Vera, Global Journal of Business Research


ABSTRACT

This paper analyzes types of leadership and their relationship with organizational effectiveness in small construction enterprises of Puebla. An analysis of various literature related to the topic was examined, for a theoretical basis. Next, some aspects were measured through a Likert-scale questionnaire, using a sample of 49 small construction businesses. The goal is to describe how leadership styles, in small construction businesses located in Puebla, are perceived, along with how to determine their relationships with the organizational effectiveness. The following research question arose: What type of leadership dominates the small construction businesses of Puebla? What is the relationship among organizational effectiveness and the types of leadership? The results of the investigation show a positive and significant correlation between effectiveness, and democratic leadership, and Laissez-faire (liberal) leadership. The regression model used explains 69.1% of the variations in effectiveness. In addition, there is no statistical evidence of omitted variables (the constant test = 0.914).

JEL: L26, M5, M12

KEY WORDS: Styles of Leadership, Organizational Effectiveness, Small Businesses

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

The economy is characterized by globalization and rapid technological progress which creates challenges and problems for small businesses. Directors face these challenges and their competitors in order to prevail in the market and grow. In this context the results of strategic choices and performance are partially predetermined by the characteristics of those involved in their administration.

Texts on leadership styles include investigations by Ogbonna and Harris (2000). They examined the relationship among organizational culture, leadership styles and the performance of one thousand of UK's large and medium-sized enterprises. They found that leadership style is only indirectly linked to performance, but that competitive and innovative values and traits are linked directly, and that, contrary to what was expected, the clan and bureaucratic or hierarchical traits were not directly related to performance. Pedraja, R. and Rodriguez P. (2004) studied a sample of 42 executives belonging to 10 public institutions from the Region of Tarapacá, by observing the relation among the participatory, collaborative and instrumental leadership styles, and effectiveness. The results show that, in public organizations, participative and collaborative leadership styles which positively influence effectiveness.

Mendoza and Ortiz (2006), showed the dimensions that make up transformational leadership and how its application impacts both organization culture and organization effectiveness, resulting from the dynamic interactions that occur between the leader and the group within a certain determined context or situation. Valentín y Rivas (2006) identified the management style proposed by Bass best characterizes the Board of Directors of a business school and established the relationship with values such as: extra effort, effectiveness, personnel satisfaction, as well as the satisfaction and influence by the Board of Directors. Three directors, sixteen supervisors and 71 staff were surveyed. The results show that transformational direction (stimulating interest among colleagues and followers to see their job with new perspectives) is predominant in business school. Transformational leadership (characterized by having a radically new vision, which is attractive and motivating to people) showed a substantial correlation to the value of extra effort. Rodriguez Ponce (2010) provides an explanatory study which uses a sample of 68 senior managers of small and medium-sized Chilean enterprises. The results show there is a relationship among the leadership styles of the transformational, the transactional and the "laissez faire" (liberal). Leadership style explains the 46. …

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