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Getting everyone on board: The effect of CEO differentiated transformational leadership on top management team effectiveness and leader-rated firm performance


Zhang, Xin-an; Li, N; Ullrich, Johannes; van Dick, R (2015). Getting everyone on board: The effect of CEO differentiated transformational leadership on top management team effectiveness and leader-rated firm performance. Journal of Management, 41(7):1898-1933.

Abstract

Drawing on the principles of upper echelons theory and team leadership research and using 101 subsidiary top management teams (TMTs), our study revealed that subsidiary CEO transformational leadership that was focused evenly on every TMT member increased team effectiveness and firm performance, whereas leadership that differentiated among individual members decreased both outcomes. By differentiating the amount of individual consideration and intellectual stimulation across TMT members, CEOs unintentionally disrupted the team’s dynamics (team potency), ultimately reducing team effectiveness and subsidiary firm performance ratings. Furthermore, CEO gender and moral inconsistency across executives served as moderators of the detrimental effects of differentiated leadership on the outcomes. The negative effect of differentiated leadership behavior was stronger among female CEOs and those who failed to consistently exhibit moral behaviors that might justify differentiation in transformational leadership.

Abstract

Drawing on the principles of upper echelons theory and team leadership research and using 101 subsidiary top management teams (TMTs), our study revealed that subsidiary CEO transformational leadership that was focused evenly on every TMT member increased team effectiveness and firm performance, whereas leadership that differentiated among individual members decreased both outcomes. By differentiating the amount of individual consideration and intellectual stimulation across TMT members, CEOs unintentionally disrupted the team’s dynamics (team potency), ultimately reducing team effectiveness and subsidiary firm performance ratings. Furthermore, CEO gender and moral inconsistency across executives served as moderators of the detrimental effects of differentiated leadership on the outcomes. The negative effect of differentiated leadership behavior was stronger among female CEOs and those who failed to consistently exhibit moral behaviors that might justify differentiation in transformational leadership.

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10 citations in Web of Science®
5 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:06 Faculty of Arts > Institute of Psychology
Dewey Decimal Classification:150 Psychology
Language:English
Date:2015
Deposited On:12 Feb 2013 16:07
Last Modified:05 Apr 2016 16:32
Publisher:SAGE Publications
ISSN:0149-2063
Publisher DOI:https://doi.org/10.1177/0149206312471387

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