Journal of Business & Leadership: Research, Practice, and Journal of Business & Leadership: Research, Practice, and

Teaching (2005-2012) Teaching (2005-2012)

Volume 3 Number 1 Journal of Business & Leadership Article 6

1-1-2007

An Empirical Test of Stewardship Theory An Empirical Test of Stewardship Theory

James Davis University of Notre Dame

Steven Frankforter Winthrop University

David Vollrath Indiana University South Bend

Vanessa Hill University of Louisiana , Lafayette

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Recommended Citation Recommended Citation Davis, James; Frankforter, Steven; Vollrath, David; and Hill, Vanessa (2007) "An Empirical Test of Stewardship Theory," Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012): Vol. 3 : No. 1 , Article 6. Available at: https://scholars.fhsu.edu/jbl/vol3/iss1/6

This Article is brought to you for free and open access by the Peer-Reviewed Journals at FHSU Scholars Repository. It has been accepted for inclusion in Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012) by an authorized editor of FHSU Scholars Repository.

l)al i'. l'raniJ ortcr. Vo ll rath . and II II I Journal or Business ~nd L~aclcrship : Research. Practi ce . and Teaching 2007. Vol. 3. No. I . 40-50

AN EMPIRICAL TEST OF STEWARDSHIP THEORY

James l);w is, Uni versity o iN otre Da me Steven Fra nkfo rt e r. Winthrop Uni versity Da vid Vo llrath, Indiana Uni ve rs ity South Bend Vanessa llill , Uni ve rs ity o l Loui s iana , Lalayette

This slu t~)' 1es1s !h e model of Davis, Sc hoormau , aud Drmaldsou (/ 99 7) llwl proposed delermiuaul.\' of a company's govemau ce .\'lruc/Ure. lu parlicular, we focus uu I he slewardship 1/wury a.\pecls of !he model a uri ils ability to predict th e presence of a slewarrf .l·hip-orieulatiou CEO at publicly listed U.S. companies. Using survey based data obtained from CL'O.~ all(/ directors of I 00 compaui e.1· iu a mat ch-pair desixu, we identified three va riables that predicted th e occurrence of stewardship-orient ed be havior.\· by th e company's CEO. These result s feud support for th e mod el's ability to predict tl1e conditions under which steward.l11ip-orieut erl iudividua/.1· becom e CEOs.

INTRODUCTION

Wor ldco m. Ad lphi a, T yco, :J ttd Em on, an,; among th e

numerous example s of wanton opportu nism leading to th e

dec I inc or demi se o f large, imp ort ant ecott otn ic insti tuti ons.

Thi cri sis o f integrit y poses h<trd shi ps !' or multiple

constitu enc ies, and w ill continu e to rece i ve le gal il m l regulil! Or)

att enti On lo r yeat·s 10 CU tll C 'I he C0 111111 0tl ll't Sdom 0 1' tuc by' '

do minant co rporat e govcm ancc th co rt cs (e g. :Jgc ncy th eOI"y)

pre~c r ibc stronge r monit Ot"i ng ~tn d tn o t·c lucrative ali gnm ent

incenti ves in th e hope of di mitti shin g th e dangers opportuni sti c

manager !> pose to soc iety (17ama & Jensen , 1983) . ll owever,

questi ons rega rdin g w heth er such stt ·uctur al remedies ca n cove r all poss ible threats continue to persist . For exa mple, DeA nge lo ( 1988) fo und that managers manipu late inco me to achi eve

bonus targets 111 th e presence of incenti ve ali gnm ent

mec

ha

ni sms, bringing int o ques ti on w hether ince ntive

ali gnment mec hani sms can rel iabl y at tili n their intended goals.

Simil arl y, Willi il mson ( 1985) argued th at man agers pursuing sel r- interes t w ith guil e may be suf'fi c icntl y in venti ve a11d

ingeni ous to thwart eve n well -conceived monit orin g

mec hani sms. In such li ght , it i ~ doubtfu l thiit stru ctural

protec ti ons could success ful ly guat·d against all threa ts atl

in ve nti ve exec uti ve co u ld improv ise.

A n alt ern ative approach to cottt rn ll ing th e appeti te of th e

opport utti sti c shark s that may n1an agc a g ive n co rporati on is to

avo id emp loy in g such indi vi duals it t leadership positil)t l S.

Dav t-, ct a l. ( 1997) proposed il heur isti c to identir y e:-.c:c uti vcs

n: lkct tn g an oppo rtuni ~ t ori etil : lli on o1 · st <.:ll 'il rdsh ip

ortc: ntat ion to th e li nn . l hey C\> nl ended th at ex ccuti 1e

p'>yc lwlog tGil and flm t '> ituattOtl :tl l <~c t ms cou ld l)L' meas ur ed

attd ev: ilu :J tcd to detu nttne th e appr tl :tch th e c::-.ec ttttve would

c tnp lny at th e lin n . Thtt s, tl upportunt sts :tn d olcw<tl ·ds catt he

rc l t:tbl y d ist ingu ished, opt im ;il gove l'll<l tiCe Stl'ltC iur es <I lid

po li cie'> lnr either <tppmach could be implem ented . Whil e th e ntode l prov id es a va luab le heut ·i-; ti c, th e <Ju th ors 1·ccog ni ze d a

need rm th e empiri cal testing o r its components. In thi s paper

11c

em p

ir ica ll y cx:~ min c th e propo sed psycho log icil l and

st lu

<Hi \l nal

<J nt cccdcnts to stewa rdship-or ientated co rpo rate

gO\c rn<J ncc that Da v is c t al. ( 1997) proposed .

I he crea t ion il nd mil intenance o r il 111ana gerial system based

on ste11<trd s hip pr inc ip les al igns exec utiv e psycho log ica l and

40

compan y situati onal va riabl es so th at EO s can be empowered, rather th an contm ll ed (Dilv is et al. , 1997) . Wi II iamson ( 1985) acknow ledges thi s poss ibilit y but sides in favor o f employi ng

stru ctut·il l protec tions aga inst opportuni sm , arguing that th e

tru ·tw orthin ess of' a p:t rti cu lilr manager may not be known w i th

contplete :1ssur ance . l lowcvc r, o thers il t·gue th at tru stworthin ess is reliabl y recogniza bl e, and w hen unfett ered wi th undue

contro l \ truUut ·es, tn: ty lea d to pro litabl c opponunit ies thar

wo uld o th c rw t ~e tl O be pt ·cscnt ( Frattk , 1988; Qu inn & Jones,

1995 ; a i. 1997) . D<~vi s et al. ( 1997) nrgue th at opportunist­

o t· steward -o ri ent ed govern <J n ce Ci1 n be success fu l w hen

princ ipals co rrec tl y identify under ly in g age nt psycho logy and firm - leve l. situat ional factors.

Stewardship T heo r y

Steward ship theory (Dav is c t al. , 1997 ; D onaldson & Dav is,

1989, 199 1) pro v ides il norm at ive per pective int o th e nillur e of

th e managers th at se rves as il n altern<Jti ve to agency th eory.

Whi le stewa rdship th eory h <:~ s borrowed some of th e Silme

terms co mm on ly used in agency th eory research, such as "agent ," "pt ·in cip al, " and " <J ii g nm ent," r:tdi call y different ro les

arc ilSS Utlt ed . T h ese term s wi ll be used to desc r ibe executi ve­

shJr eho iJer relations under either <tn agency o r steward ship

govern ance stru cture. G t·o tmd ed in psyc ho logy, soc io logy, and

leadershtp th eori es, steward ship th eory argues lo r the poss ib le

ali gnment bc tii'Ce tt prin cip als and agents w hi ch is rc n cc ti ve o f

a psyc ho logica l contract (Sc hetn , I % 5; Y an, Z hu , & II all ,

2 00 2) ur a c lthe re l :~t i o n s hip (U v: i , 1996) , w ith agents

hclta v ing 111 a co mmunity- loc used tnilnn er, d irec ting

tru -, tw< H·tlt ; ~ tn d ur mora l behav iors towa t·ds th eir finn s and its

~ t ock lt o ld e r\. Stew ardship -o ri ented lead ers der ive utilit y by se rv tn g tlt c need<; o l· til l' cmpora ti on a11d it s stak eho lders rath er

thatt by put·s uitl g shon - tcnn opportuni sm at th ei1 · e mploye t·s '

expense ( l ) ;tv is, c t al. , 199 7; Ft·il nk . 1988) . T he primary

obsta c le to e!Tectively imp le111e ntin g a steward ship approach to

govern att ce is to acc un11 ely distin gui sh ing between

opportuni sts ilnd stew<J rd s. Misa li gning corpo rate governance st t·uctur es w ith executi ve ori entati on could res ult in seve re losses to th e llrtn . Dav is et a l. ( 1997) identified psychologica l

and situati onal antecedents that wou ld permit principa ls to

di stin guish between opportuni sti c and tru stworth y agents. The y

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argue that when situati ons at a compa ny favo r a stewardship­oriented govern ance stru cture, th en steward-or iented execut ives should be employed as CEOs.

Quinn and Jones ( 199 5) and Uzz i ( 1996, 1997) argued that, with experi ence, one can identify trustworth y agent s and then sa fely rely on th ese agents to behave w ith se l f- r·es trai nt and to serve the good of the company. Such individu als forge relati onships wherein they create uni que competit ive advantages through investment in relati onship-spec i fi c assets (Jones, 1995), pursuit of long-term val ue-bui ld ing strateg ies (Davis et al. , 1997), access to propr ietary and/or fi ne-grained inform ation (Uzzi, 1996), increased commitment and invo lvement in the affairs of th e firm (Yan et al. , 2002), and improved access to key resources (Uzz i, 1996).

H ypotheses: Testing Dav is, Schoorman, and Donaldson' s Heuristic

We test the mode l that Dav is, et al. ( 1997) proposed to predict the conditions fo r a stewardshi p-ori ented co rporate governance to flourish. We obtained survey responses and then assoc iated CEO-report ed psycholog ical and situa ti onal factors aga inst direc tor-reported obse rv:-~ ti o n s o f the steward shi p attribu tes o f th eir CEOs.

Psychological Factor s

M oti vation: Steward s are primaril y moti va ted by higher ord er needs, such as opportunity o f growt h, achievement . affili ati on , and se l f-actu ali za t ion (Dav is, et al. , 1997). T his di ffers fro m opport unists, who are mot iva ted by ex tr insic fac tors I ike tangible rell'a rds and incenti ves possess ing a measurab le market va lue. CEOs pr imar i ly moti va ted by higher order needs fi nd per fo rm ance o f or·ga niza ti onal wo rk itse l f to be a strong moti va ting factor. The basis for the ass umpti on lin k ing the pursuit o f hi gher· order needs to a stewardship ori entati on can be found in most of the estab li shed theori es o f moti vati on, in parti cular, higher Ol'dcr needs as descri bed by M aslow's hierarchy ( 1970), A lder fer's growth need ( 1972). and th e achievement and affili ati on needs of M cClelland ( 1975) and M cG regor ( 1967). O pportuni sts, look at work instrumentall y, expend ing effo rt s when there is materi al compensati on for their effo rts (Fama & Jensen, 1983) .

A steward w ill tend to be int r insica ll y moti va ted and wi ll form internal chall enges th :-~ t lead to hi gher leve ls of performance as well as sa t i s f;:~ c ti o n w ith hi s/her wo r" . Hackman and O ldham ( 1976) argued th at three psycholog ica l states (experi enced meani ngfu lness o f work, ex peri enced responsib ility for outcomes. and know ledge o f actual results) mediate the relati onship between task character isti cs and intern al work mot iva ti on. T his model o f wo r·k moti va t ion i ~ one o f th e foundati onal ass umpt ions o f stewil rdshi p th eo ry M:~ n z ( 1986) argued th at se l f- e fl~ caC). se l f-determinati on. and fee lings of purpose are ch :~ rac t c ri zcd as bt> ing n it ica l determinants of intr insic moti va ti on. Conve r·sc ly, th e age ncy approach emphas ize the ro le or ex tr insic rewards in moti va ting a CEO, employ ing a tit - lo r- tat perspec tive in which rewards are conti ngent on eff ort and tang ib le result s. Absent

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ex trin sic moti va tors. agents would tend to shirk their res pons ibi I it ies .

H ypoth es is I : Execut ives reportin g higher order needs mot ivat ion w i ll be positi ve ly assoc iated with d irector observat ion of stewardship-or iented CEO behav ior .

H y poth es is 2: Exec ut ives reporting low ex tr in sic moti va ti on w ill be pos it ive ly assoc iated w ith director observat ion of stewardship-ori ented CEO behav ior .

I dentifica tion: M anagers ident i fy w ith an organi zati on when they de fin e themse lves in terms o f an organ izat ional membershi p wherein they accept it s miss ion, vi sion, and objecti ves ( K elman, 1958; M ae l & A shfot1h, 1992) . Under these condit ions, the organi za ti on becomes an extension o f the manager's psycholog ica l structure (B rown, 1969). A n identi fy ing manager interprets comm ents about the organi zati on as referrin g also to himse l f or hersel f, allow ing managers vicar iously exper ience the organi za ti on's successes and failu res (e .g. , Katz & K ahn , 1978 ; T urn er, 198 I ) . T his v iew of organizational identi fi ca t ion is consistent w ith steward ship.

When managers ex tern al ize 01·ganiza ti onal prob lems to avo id b lam e or sh ift responsib il it y to others (D ' A veni & MacMi llan , \990) they cl o not identify w ith the organi za ti on nne! he/she w i ll v iew the organi zati on onl y in instrumental term s, foc using on how using it may personall y benefit him or her (Jenst> n & M eck l in g, 1976) . T hus, an orga ni zati onal foc us required fo r identifi ca ti on is lac k ing. T his is consistent wi th the agency theory perspect ive .

H y poth esis 3: Execut ives reportin g h igh identifi ca ti on ll' it h the mga ni zati on w ill be positi ve ly assoc iated w ith cl irectm observa ti on of stewa rdshi p-ori ented CEO behav ior.

Va lu e co mmitm ent: Va lue commitment is th e beli ef in and :~ccep t an ce of orga nizational goa ls and va lues (Mayer and Schoorm an, 1992). T he se l f- image o f orga ni zat ionall y va lue­comm itted managers refl ects the company ' s image (Ecc les & Nohr ia, l ':t J2) . Va lue co mm itted executi ves dctine themselves in term s of th eir membership in their parti cul ar organi zati ons (Mae l & A shforth , 1992), produc ing a sati sfy ing relati onship (S uss man & V ecchio. 1982). V alue comm itted executi ves possess a psycho log ica l al ignment w ith their organ izati ons or pri ncipals because they shar·e the same v ision. values. and mi ss ion, and exert considerab le eff ort to sec that th e o rg;:~ni za ti o n succeeds (D::tv is, et al .. 1997). Converse ly, opport unists tend to p lace import ance on m::t teri al ga in ra th er th :1 r1 va lues . Th e) la ck commitment or all egiance to orgar1i zat ions. v iew ing the fi rn1 as an instrum ent 11·ith w hi ch to achieve per·so r1 :1 lm atc r·i:J I grt in (Fa ma and Jensen, 1983).

H y po tl11:s is ~: Exec uti ves report ing hi gh va lue comm itm t> nt 11 i ll be positi ve !) assoc iated w ith direc tor observa ti on o f steward ship-ori ented CEO behav io r-.

Pe rso nal Power : G ibson, l van cev ich ::tnd Donnell y ( 199 1) classified power as either personal or instituti onal . A manager's

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perso nal power is developed w ithin the context of th e interperso nal relati onship s rather th an the manager's position within the fi rm. and is grounded upon the subord inate's identi fi ca t ion w i1h and respect for their lea der's competence and abi l ity . T his form o f power inc ludes French and Raven's ( 1959) referent and ex per1 power . Director·s w ill perceive CEO stewardship when 1hey observe th eir managers utili z ing persona l power to modify the behav ior o f their fo ll owers ( Dav is et al. , 1997). Converse ly, opporluni sts wi ll tend to employ differenl types o f power than do steward s. For instance, they wi ll tend to use coercive or instituti onal power that is deri ved by v inu e o f their form al author-il y in the orga ni za ti on ( Dav is, et al, 1997).

H y poth es is 5 : Execul ive repon ing hi gh perso nal power w ill be pos il ive ly assoc ia1ed w ilh d ir·ec tor· observa ti on o f stewardship-ori ented C EO beha vior.

Sit uati ona l Factor s

M an agem ent philosoph y: /\ rgy ri s ( 1973 ) argued fo r ihc deve lopment o f norm al iw models of organ iza l ion based on se l f-ac tu al izing ass umpl ions to create an organizati onal cu ltur e

that supported the development of sleward ship types of relationshi ps between excc ul ivcs and their firm s. T he position advocated by A rgyr is ( 1973) was sim i lar to the argum ent s advanced ear lier by McGregor ( 1960) in hi s d iscuss ion o f T heory Y manage ment and by Likert ( 196 1) in his compari son of Sys tem ~ managern cnl w ith more contro l-o ri ent ed systems. Each o f these iheori sts advocated the deve lopment of normalive mode ls o r organi za1i on. break ing w il h tr adi1i onal

mana gement phil osophies to fac i I ilatc the se l f-actuali zin g behav iors that arc consistent wi 1h stewardshi p th eory.

Walton ( 1980, 1985) advoca ted high-commitm ent rna nagemcnl ph i loso phv that was char·actcr ize d by high parti c ipati on. open comm unica ti on, empowerm ent o f wor·kers. and th e estab l ishment of trust. Law ler ( 1986 , 1992) elaborated on this vi ew by contrasl ing the manage ment phil osophies he described as contro l-ori ented ve rsus in vo lve ment -or ienleu . Acco rdin g to Law ler. the co n1r·o l-mi cn1 ed approach is based 0 11

a rnanagc ment phi losophy th ilt the think in g am i controll ing pa 1·1 or the work must be: sepa rated from the doing pn rt o f the work Invo lve ment -o ri ent ed ::tp pi'Oac hes cnlphasi; e scll' -conlr·o l and <;c

l r- manage mcnt ::t nd do not crc:at c a scp<ll ·a t ion a1 nong

thin k ing. contro l ling. ::t nd do ir 1g th e wol'k . T he key ass ump tion in invo lve ment-ol'i ented appi'Oach cs is that when emp loyees ar·e

giv en chall cnoe s and responsib i l it y they wi ll deve lop se l f­con tro l of th eir he hJv ior.

T he manage ment phi losophy of an organi za tion can create a context in whi ch a stewa rdship approach is maintained. Th e creati on o f the invo lve ment -o r ienl ed management "'ill lea d to the emerge nce o f orga ni;:a ti onal behav iors consistent w ith stc11 ard sh ip theory.

Hypothes is 6: Exec ut i ves reponing high in vo lve ment situat ions at th eir · co mpa nies w ill be positi ve ly assoc iated w ith d irecto r observati on o f steward ship­ori ented CEO behav ior.

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C ulture: Hofstede ( 1980, 199 1) described an indi v iduali sm- collectiv ism d imension of culture that 1vould support a stewardship-oriented governance structure. The individuali sm dimension emphasizes personal goa ls over group goals whi le th e co llec ti v ist d imension defines the se lf as a part of th e group. One's group memberships are an important statement o f identi ty and achievement. Co ll ectivi sts have very positi ve allitudes toward harm ony w ithin groups, avo iding conn ict and confrontati on, wh ile indi v iduali sts see confrontati on as an opportunity to acti vely reso lve conflict by communicating more directl y. Co ll ect ivi sts prefer long-term relati onships and wil l frequentl y require more time and expend grea ter effot1to become fami li ar w ilh others prior to a business transacti on. Indiv iduali sts are more short-term oriented, choos ing to conduct business independentl y of persona l re i ~Hi o n s hi p s, using a cost-benefit approach to eva luate busin ess exchanges, and auempt ing to reduce the ri sks of doing business through form al conlr·acts. li enee. coll ecti v ist cultures arc mor-e co nducive to stewardship govern ance structures while in

d iv idual ist ic cultures tend to foster opportu nism.

H y poth es is 7: Executi ves reportin g co llectivi st culture s at their · co mpanies w ill be pos iti ve ly assoc iated w ith director observa t ion of stewa rd ship-o ri ented C EO behav ior.

Power di l ance: A second d imension developed by Hofstede ( 1980, 199 1) to characteri ze the cross-cu ltur al di fferences thi s is parti cul arl y releva nt to stewardship is the concept of power distance . Power d istance is generall y defined as " th e ex tent to which less powerf ul members o f in stitutions and orga ni zati ons w ithi n a country expec t and accept that power is d istri butcd unequall y " ( Ho fstede, 199 1: 28) . In certain cultures, relative ly large differences in power among members are accepted and to leraled. In a cultur e w ith hi gh power distance, th ere is an acceptance that less powerful members w ill be dependent on more powerful members and privil eges and statu s symbo ls arc both ex pec ted and popu lar. In low powe r· d istance cu lt ures , inequaliti es are minimi zed, the independe nce o f th e less power ful is va lu ed and encouraged, and status and c las s sy mbo ls are frow ned upon ( Hodgell s & L uth <llh , 1993) In high powe r- d istancc cultures, organi za ti ons ar·c cc ntr;tlrze d. and they include large diff erences in authorit y, sal<11·y. a nd perqui sites . T he oppos it e wo uld be true in a low power di ~ t an ce or·ga ni za ti on. Low power d istance cultur es are more conduci ve to the deve lopment of steward shi p relati ons because their members p lace greater va lue on th e esse ntial

equalit y o f all people.

H y pothesis 8 : Execuli ves reporti ng low power distance at th eir compani es wi ll be positi ve ly assoc iated w ith director observa t ion o f steward ship-o ri ented CEO behav ior.

M EA SUR ES AND METHODS

Sampl e

We created and mai led a survey to 500 randoml y se lected pub lic ly li sted co rporati ons, ta rgeting both the C EO and the

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boards of directors of these companies in 1997 . The result o f the initial mailing and fo llow- ups is th at 16 1 d irectors and 135

CEOs responded. Stati sti ca l tests comparin g th e mean response for the vari ables between waves o f data co llection were insignificant , sugges tin g th at later respondents we1·e similar to earli er respondent s. We y ielded I 02 matched pairs o f CEO and director responses. Miss ing data reduced th e number o f companies in our analys is to 100. T his stud y mee ts the minimum acceptable response rate o f 20% for sm vey-base d research ( H itt . Hosk inson, Johnson. & M oese l, 1996) . Unmatched responses were used in our fac tor an::ll ys is. but were di scarded before we tested hypotheses.

Dependent Variable

We measured the dependent va ri able with d irector surveys. We deve loped an eight-item scale assessing th e leadershi p approach their C EO exhibited. A princ ipal-co mponents factor analysis determined w heth er a reduced set o f the component sca le items could be extracted. T he th re ho ld estab li shed in advance for the se lecti on of factor items were a fac tor load ing of .50 or greater and at least a .20 diffe rence between the item 's loading with its factor and each o f 1he other fac tors. T he analys is o f th e eight co mponenl i tems ind ica ted a two­component so lution th at ex piJin ed 56 .-l 0 o o r th e 1·ari ance. T he first component possessed fi ve items refl ectin g a stewardshi p­orientati on. T hese items were totaled for th e subseq uent analys is. T he second co mponent consisted of th ree i tems unrelated to stewa1·dship and wa s not used.

Independ ent Variables

T he independent va1·iab les we re mea sured 11 ith CEO surveys. We employed pre-p ub li shed scales to measure th e five of th e independent va ri ab les (hi gh order needs. ex trin sic mot ivati on, va lue commitment , personal power . :J nd p0 11e r d istance) and crea ted new sca les to r th e three remai ning independent va ri ab les ( identificat ion. i111 o lvemcnt , and culture) using factor analys is.

First, we se lected the fi ve pre-pub li shed scales. For the first two, we used Frankfort er, Dav is, & V ollr ath 's (:~00 1 ) 10- item

high order needs sca le and th eir 9- it em ex trin sic moti va ti on scale. The third was a I 0-i tem sca le deve loped by Schec hter

( 1985) measured va lue co mm itm ent. The fourth and firth were scales developed by Frost and Stahelski ( 1988) to measure power and power distance . T hese sca les arc b:Jscd upon French and Raven's ( 1959) bases o f soc ial powe r and correc ts se veral sca le form at confounds found in prev ious research. Referent and expert power subsca les were co mbined to fo rm an 11 - item scale representing pe1·sonal power. Coerc ive. legitimate, and reward powe r subscak s were co mbined to for m a 12-item sca le representi ng po,ver di sta11 Ce. Si11 ce th es e scales had p1·ev iously-estab l ished rel iabil i t) (a lpha) 1neas u1·e<>. factor analy is was not necessary to formul ate these ll1 c measures .

Second, we applied factor analys is to til t: CEO surve) S fo r the three remaining independent va r iab les. empl oy ing th e same decision rul es w ith th e independent va ri ables as we did 111 determinin g th e dependent va ri able. T he analys is o f th e 1-1

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component items indicated a three -component so lut ion. The first component ( identifi cati on) had six items and ex plai ned 23.4% o f th e va ri ance, th e second ( in vo l vement) had three items and ex p lained an additional 16.9% of the vari ance, and th e third (cul tu re) had fi ve items and explained an add itional 15.4% o f th e va1·iance. The sca les for th e dependent and independent va ri ab les appear in appendi x A .

C ontr o l Vari ables

We inc luded se ven contro l va ri ab les co mm only found in co rporate govern ance research: Pro fitabilit y, cap ital ex pend itures, stock ownership, dualit y, fir m size, lo ng-term compensati on. and board tenure. They are co ntro l va ri ab les in the usual, stati sti ca l sense o f th e term. In multi ple regress io n analys is, th ey may compete wi th our hypothesized co rrelates to account fo1· vari ance in the dependent va ri ab le. A lthough we do not frame form al hypotheses in vo l v ing th ese vari ab les, we note th at each may serve as a mechanism to contro l CEOs.

Pro fit ab ility: Dav is et al. ( 1997) predicted th at firms wi th good alignment between th e CEO phi losophy and the fi rm 's govern ance stru cture would tend to have superi or pro fit abi lit y . We measured pro fi tabil it y as th e diffe rence between fi nn and th e mean industry relllrn s on equit y, ba sed on four-d ig it SICs. Data we 1·e co llected from Rese:J rch Insight.

Capit al Ex penditures: Dav is. et al. ( 1997) argued that C EOs w ith a stewa rd ship perspecti ve wi l l possess a lo ng-term perspecti ve fm th e firm and w ill pur ue strateg ies th at suppo rt long-term perf o rm ance , lik e makin g cap it al in vestmen ts. Ca pi tal ex pend itur es we r·e com puted as a fi rm 's capi tal expe ndi tu res d iv ided by i ts total asse ts and subt rac t ing th e equi va lent ind ustr) mea n, aga in based on fou1 ·-di g it SICs. Data 11e

re co lle cted from Research Insight. tock Ow nershi p: W here CEO's ho ld greater proporti ons

Of StOCk. th ere II ill be grea ter degreeS Of al ig nment ll' itiJ the interests o f th e firm and it s shareho lders (Ei senhardt . 1988: Jensen & M eck l ing, 1976) . We comp uted stoc k ow nerships as the percentage o f th e firm 's comm on shares held by th e C EO /Pr e' ;de nt. Data were co ll ected from proxy statements.

Du ali ty: W hen the CEO also serves as chair man of th e board (comrn onl v refe rred to as the dual govc rn:J nce structure), he/she ma) lim it the board's contro l o f manage ment ( Donaldson & Da1·is. 1989 , 199 1: \.Vi ll iamso n. 1985). Dual it y is a dic hotomous va ri ab le in 11hich 0 represe 111 s out side board leadership (kn ow n as the independent governance structure) and I rcrr ese nt s i n ~ t a nces 11 here th e CEO also ser ves as th e chai rm an o f the board. Data we 1·e co l lec ted f rom proxy statements.

Firm size: I' ll<.: siLc of th e firn1 ma y 1ntlucncc the fo rm o f powe 1· a Ct::O uses. l-or exa n1p le. a L'EO in a vny large firm

1 11a) not h:11e as much opportunit ) to ha ve th e d i1·ec t contac t nccessa1·) tL) t'Stabli sh personal pown . We co lll wll ed to r firm size by takin g the log o f the totn l numbe r of em ployees ( F1·ank to n er. et <d., 200 I ). Data 11 ere co l l ec 1cd from Research Insight.

Lu

ng- te

rm comp ensati on : E:-.ecuti vc co m pensa ti on th at is long-term in natu re mi ght be use d to ueate ali gnment w hen a CEO is ass umed to be opportuni sti c, rather th an possess 3

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D:" >S. Fr: 111k lon er. Vo ll ra th . and IIIII

stcwa t·dshi p ori entati on (Jensen & M eck l ing, 1976) . We ca lculated long-term compensati on as the percentage of shon term to total executi ve compensati on. T hese data were co llec ted from proxy statements.

Board tenure: With stewardship's emphas is on deve loping and maintaining long-term relati onships, we anticipate that CEO's wi th steward ship philosophies will tend to have served on th e board for a relati ve ly long peri od of time. Board tenure was measured as :he year the CEO first began service on the board . Da ta were co llec ted from proxy statements.

.l oun wl or Ousin css and Lc~ ders hip · Research. Practi ce. and Teaching 2007. Vo l. 3. No. I. 40-50

Method

The data for all but one of the dependent, independent, and control vari ab les were continuous. The other one was dichotomous. T herefore, we conducted hypothes is testing using multiple regress ion analys is.

Res ults

Figure I displays a v isual representati on of the control and ex perimental vari ab les.

FIGURE I : Visua l Representation of the Control and Ex perimental Va ri ables

C unlro l \ 'ariahtc s: l'ro llt:~hli>l y

Cap ll al c.xpe nd>tur cs

Slock ownersl11p Du:~ l >l )'

Fmn \ I ll'

I ll ll g_- l l: llll CU1llp C11 '\ ill 10 11

I)OaHJ IC i llll\..'

Ex pnimtnlal \ 'a ria hl cs ll>

gh Order Needs Extnn; >c Mo

i> Vii i> On I dcnl>l icai> On

Va lue

COilllll>llll CIII Pcr...,o na l J>o w~r

ln vn lvcmc111 C ullurc

Tab le I be low shows the descri pti ve stati st ics, alph as, va ri ati on in nat ion factors (V I Fs), and the co rrelati on matri x. W e measured reliabilit y by comput ing alpha scores . A ll alphas exceeded the minimum standard o f . 50 fo r ex perim ental va ri ab les and were deemed acceptable

(N unnall y, 1967) . Addit iona ll y, we obse rved no multi­co llinearit y problems that would affec t th e result s, with only one va ri able (high order needs) ex hibited a V IF that exceeded 2.0, far from the criti ca l I im it of I 0 (Nett er, Wasserman, & Kut ner, 1989) .

Table 1: D esc r· iptiv e S tati st ics, Alph as, Variation Infl a tion Fa c to r·s (VI F s), an d t h e Co n e lat io n Matr· ix

rvh.:all .S I) Alp II :~ VI I' Sie \\:il'd - ll >gh Ex tnns1c ld enlli i-Va lu ~ l'c.rso 11al 'h'I J ord c1 111 U I I V; I{1 01l CCIII Oil Cll llll1l - power

II CCd \ 11111C nl Sicw:l rlb lllp ~ I 2 1 2 02 7<)

ll> t: h nnki 11 ccd' 43 ~ I ~ :\8 X3 ~ ()J 10*

F\1 11 11 '\ IC 111 0(1\ ill lOll 2') 92 ) 62 X(, I (,<) 07 41 *'

ld

enlill c

ai> Oil 20 62 -11 9 71 I 35 -O:i 04 - 06

Valu._; C {) llllllltlll ~ tll 45 ()(, 3 <JX 86 I 75 2x•,.. 31 ** - 10 .Jo•• Pc r~un t ll po wer 39 S5 5 I 0 8 1 I 48 19 47'. 23 ' . 05 t6 lii \0 \ VC il\ Cill 10 21 I 97 71 I 16 26** 04 . 0 1 ()<_) 18 . 09

Cul ture 20 20 2 37 50 I 6 1 50*** 20 . 25* .09 44*'* . 18

\ \l\VI: r Cli \U II lCC 25 c I 5 88 8 1 I 20 - 14 -.08 II 03 - 20 ' 12

l'>ulilahllil ) o c9 n49 1.3 1 09 26 '* 08 12 . 02 .08

C'<

>p

ll al cx pend>lllr es - 14 60 5 1 36 1.1 6 - 13 . OJ - 09 Oc 04 . 13

Slock O\\ nn sl11p R 08 12 6 I 12 10 - II - 13 14 0 1 -.00

D11 a l11 y 60 .49 1.33 -O S .02 - 2 1 * II 19 -.05

F i1111 St tc 2 66 76 I 46 -04 08 - I~ 24' 06 .06

Ln ng-lcr m compe nsat ton 23 20 1. 50 06 09 - 13 34* ** 27 ** 03

llnard tmurc c4 76 9 t 8 I 43 -.0 1 07 36*** - 25** -.08 OS

44

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Davis et al.: An Empirical Test of Stewardship Theory

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Continued tabl e I

Journal o r Business and Leadership : Research. Practi ce. and Teachin g 2007. Vol. J. No . I. 40-50

In volve - Culture lll Cill

Powe r di St (l ll Cc.!

Pro fi ta­bi lit y

Capital Stoc k Duality Expendi - owners hip

S ize Long-term Co mpen­sati on

Inv olvement Culture . I 5 Power di stance -.10 -.24* l'rotit abilit y 09 21 * - 05 Capital expenditures .05 . I 0 -01 .07 Stock ownership .05 .16 ()) . 19 Duality I 7 . II -.23 * - 08 Finn size ()() 08 10 II Long·tern l cumpL: nsation -.06 12 06 I 0 Board tenur e - I t} -. 20 . 0~ - 16 • r < .05

.. p < .0 1 ••• r < .oo 1

Tab le 2 shows the mu ltip le regression results. Mode l I eva luates only the regress ion results measuring th e effect o f the contro l var iables on the dependent va riab le (s tewardship) . Thi s allows us to distinguish between the effect of the con trol and th e experimental vari ab les on th e dependent variabl e. In thi s model, if the control va ri ab les have no exp lanatory power over

lures

- 16 07 . 12

26* -.02 .22. I ~ - OJ 2 1 *

-.06 -.23 * -.28 ** -. 14 -.04

the dependent vari ab le, the F stati sti c w ill not be stati st ica ll y sionifi cant The results for model I show no exp lanatory power fo~ any of the control variab les over the dependent va ri ab le. Sim ilarl y, the overal l mode l ' s exp lanatory power over the dependent va ri able shows an in significan t F of 1.5 8 and an adjusted R2 of - .04 .

Table 2: Mu ltiple Reg ress ion Results

Variabks Constant H ig.h o rd er needs Ex trinsic mo ti vati on ldelllilicati on Va lue commitllh.: ll t

Perso na l power l ll vo lv..;ment

Cultu re 1\lwc r di .S l1 11 lCe

Pwli tahilit y Capita l e~ pcnclitun.::-.

Stnc h: ownersh ip Dualit y

Firm size Long-{ crm comp cnsati0 11

Boa rd tenure Adjusted R2

df • p < 05

** p < .0 I ... Jl < .0111

t\lode l I Beta 22 .3 I 9.13* **

()I () 6 7 -0 1 -1 OR 0 1 () 66

-.32 - 68 - 09 - 28

77 65 - 0 1 - 48

- 04 .54

M odel 2 eva luates onl y the regression results measuring the ef fec t of the ex perim ental va ri ab les on th e dependent va ri ab le. exc luding the effects of th e contro l va ri ab les. I f th e experimental va ri ables have ex planatory power· over th e dependent va ri ab le. the F stati sti c wi ll be stati sti call y signifi cant. We find th at mode l 2 shows good exp lan:1 tory power of the ex perim ental va r·iab les over th e dependent vari ab le, w ith in vo lvement and cultur-e achiev ing stat isti ca l signifi cance. The overall mode l 's ex planatory power over the dependent va ri ab le y ielded a stati sti ca ll y signifi cant F of 6.29 and an adjusted R2 of .30 .

Mode l 3 disp lays t·c sults f' or th e full model. includ in g both groups of control and ex perim ental va ri ab les . I f th e contro l

45

i\ lodcl 2 i\ l odl'l J Beta Beta 7.20 2.54* 8 73 2.50* .06 1.19 09 I 68 * .04 1.28 OJ .34 - 06 -138 -.07 - 1 .57 .02 .38 .02 -.37 0 1 . 15 .0 1 20 20 1 19* 19 2 I 3* .J I .J 68*** . .J 7 523*** 0 I 0 1 - 02 - 73

- 0 1 - 1.08 -O J - I 69 - 0 1 76 - 62 - I )7 - 12 -.45 1.1

7 I 16

-.0 I -. 18 10 .36

6 29*** 4.53 *** 15

vMiab les do not interac t wi th the ex perim ental vJriab les. then the results found in mode l 3 w ill be sim i lar to th ose foun d in mode l 2 and mode l I . In thi s mode l, in vo lve ment and cu ltu re contin ued to be stati sti ca ll y significant , whi le hi gher mde r needs was stJt isti ca ll y signifi ca nt onl y in th is model. The overall model 's ex planatory power over the depende nt var iable was simii Jr to tha t o f model 2 , wi th a stati sti cal ly significa nt F of 4 .53 and an adj usted R2 of .36 .

We conducted hypoth es is tes ting using one-ta iled tests because d irecti on was predicted. Hypoth eses 6 and 7 achi eved clea t· suppon in models 2 and 3, whil e hy po th es is I was support ed onl y in model 3. Th us. one of the five psycho log ica l and two of th e tlll'ee situat ional were stati sti ca ll y significant. Of

6

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I )," " l 1:111k l o • 1 ~ 1 . VP III :i lh . alld IIIII

lli

c psycho log ical variab l

es , (' I ~Os 1 ursuil o r higher orckr 11<.:e

d'> ( li ypo lli es is I ) was posili ve ly ass oci:11 cd w ilh

~ l e wa rd s h ip . O r

lli e SiiU:lliOnaJ V:J r iab lcs, inVO iVe lll Cnl ( li ) pOihes is 6) and cullur c ( li ypolli csis 7) we re posil i ve ly a~soc i a l ed w ill! sleward ship . Over::~ ll , lli c Davi s el al. ( 1997)

slew<l rd sliip model y ielded good exp lallitl ory power, ex plaining highl y signifi canl leve ls o l'va ri ancc in models 2 ::~ nd 3.

llbcuss iou am

i F

uture Hesean :h

l)a

v is

el al. ( 1997 ) argued I hal slewa rdship - and ::~ ge n cy­l(l cuscd rcla1i onsliip s rcsull as a maier ol' choice bel wecn

ag<::nls and pri nc ipals. Our slud y find s 11ic CEO-repon .:: d a nl cc~.:d c n! s

ror ~ 1 -:: wards liip ass ocia1 ed wi lh dirc c10r

pc rcc pli o n ~ of' C I:O I) pe, c u n s i ~ l c nl wi11i c.:: II 4 o r I li e Dav is cl ;II ( 199 7) pr inc ipal -1n nna ge r cll(li cc model. 1-'1 ·o1n our rcs u lh ,

we C811 conc lude il lil l :1 slew ardsli ip-ori enl ed ali gn111e 111 h.:: ! wee n prin c ip<ds :1 11d C I ~Os ca11 c!\ i ~ l.

l' li c l lndin g~ o r thi s < llll ck :1r e -, ignillc alll i1 1l wo addi1i onal ilr<::

a'> . 1-'ir~ l . i 11 l cs ! ing !lie :1111eccd .:: nl s o i' <, lcw; Jr cbliip , we

conllnn cd lli al !h ose 1:1cl<1rs 11 dll c11d be pl·e ~c lll when dlrl·C IO I''> perceive !hal !lie c 1:0 I'> ;1 '> lew;m l W hil e W dli< llmo ll ( 1')~ 5 )

<trg 11 ed 11! :11 011e cal lll OI known u ur c whi ch lll(lll :t gcrs will acl oppn nuni sl ic; ill y am i so agc ncy CO illr ols should bc un ivc rsall y

appli cd, l'ra1 1k ( 1 9~X) . () ui1111 :111d Jun es ( 1995) . ami IJ ;; i ( 1996) prov ide ar:.- u1ncnh : u1d /or cv idcncc 10 I li e C\l lllr ary . Our findin gs

show Ili a! d irec l urs percc i vc slcll':l rdslii p !r ail s i11 !lie

C I:O 11 li en I li e C I:O rc po n ~ psycho logical am i silllali onal

li 1c1ors consisl <.: lll wi11J Dav i s' cl al. ( 1997) n10dcl. Second , 1hi ~ s llld y :1 dds lo prc v iuus rese arch by C111ploy i11g

'> UI vcy-ha

sc d d:11:1 p1 ov idcd by bo il! dircc l o r~ and C I :O~ al lli e s:

unc CQ IIIJ1:1 n) . Corporal c govcm : tn cc rc sc:1rch IS l<tr ._:e ly

dn vcn by dal :t <t vai l :thilil ) <1 11d is lli crerm c li111il cd i 11 il ~

lil'cdi ctive <thi l il y. Thi s is I ru e u i" prev ious rcsc: 1rc li o i' age ncy llieo

ry, whi ch lias bce 11 pl agucd hy inconsislc lll llndings ovu

1 1111e. We be l ic1c 111 ,11 our sl ud y ' s ' " '..: orprim :1r y dal<~ scrvcs as dll e:-.a mplc or lli c hcnclll s or using pri lllill' )' d:ll:l ovcr sec

onda ry da l:l , prov idin g :1 ~ liiiiU:Ird rur lli c C\llll iuclill g o r

l'11111rc co rpOI' :I Ic gm <.: l'llilll Cc rc.'>c:l l·cli

REFEltE NC

ES t\ ldc1 lcr . (' I '> T2 E' istt'l ll'l' , n:l:itnlncs , , :111tl g nm t lr : Jlnn1<111 lll'l' ti'> in orgilniJ.ation :tl '>t:ll ings . N..:11 \'t11k l 1cc

I'I 'CSS

A l!.!.) l l'> , ( ' 1'>7 1 O rg: llll /:l ll< l ll 111 :111 1\ ;IIIO II :II :1 11d ~..: 11 -,lc!uall ltn g. l'uhlil' t\d miuistration l<ni cw, .11: 15"1-357 .

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Sussman, M .. & Vecc hi o, R. 1982 . A soc ial innuence interpretation o f worker moti va tion . Academ y of Manage ment Rev iew, 7: 177 -1 86 .

T urner, J. 198 1. The ex periment a l soc ia l psycho logy o f intergroup behavi or. In J. Turner & II. Gi les, (Eds. ). Int ergroup behavio r : 66- 10 I. Chi cago : Uni\ e rs ity o f Chi cago Press.

Uzzi. B. 1996 . The sources and con sequ ences of embedded ness for the economic perfo rm ance of orga ni za ti ons· The net\\ Ork e ffect. American Soc iol og ica l Re,i cll , 61 . 67-1 -698 .

ll u i, 13. 1997. Soci<ll structure <1nd compet ition in interfim1 r1

et11 o rk s· 'I he p<ir<ldO\ or embeLkledn css . Admini strativ e

Scicrrl'C Q rrarter l) , -1 2 35-67

\\'

a

lt on. R. 1980 . Eswbl1 shing <1m f mJint ainin g hi gh-co rlllllrtme rH 1\ '0rh. s ~ ~ te m s. In J . l' imberl ). H. 1\ fil es, & Assoc ia tes. (eels. ). T he organiza ti onal life cycle: b ,ucs in ih e crea ti on, tran sfor ma ti on, and dec line of orgllnization s. San Francisco: Josse)- Bass: 2 8-290 .

Wa lt

on,

R. 1985 . From co nt m l to co rn rni tr llCill in the 11

0rh.p lace . ll arvard Bu siness Revi e\\ , 63: 76 -8-1 .

Willi amson. 0 . 1985. T h(' eco no mic in stitutions of cap it a lis rn. Nell' Yo rh. : 1: ree P re 's

Yan , A , Z hu , ( I , & 11 <1 11 . D. 200 2. Int ernati onal ass ignm ents lo r ca ree r bui lding: A model o f agenc: rel atio nships and

psycho log ica I contract s. Acad c my o f M a nagc mcn I Rev iL '" , 27. '73-39 1

James Dllv is is an assoc iate pro fessor o l' rn anagcment <l t No tre Dame Univers it ), ll'her·e he teac hes bus in es' poli cy and int ern ati onal bus in ess . l ie is th e James r . O'S haughn eSS) Chair · of Fami l) Ent erpri es and scl'l e' as th e direc tor of th e Gigo t Cent er for Entrepreneuri :tl tuJie s. li e r(!CC il ed hi s l'h .D. in rll ill lagc mer ll fro rn th e Ll nil crs ity' or 1011'<1. I lis rese:-Jr ch int erests inc lu de ste>va rcl ship th eo r·y and trust.

47 8

Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012), Vol. 3 [2007], No. 1, Art. 6

https://scholars.fhsu.edu/jbl/vol3/iss1/6

IJ .11 " · Frnnkli >ncr. Vo llrat h. ;mel I till Journal o rnu sincss an d Leadership : Research . Practi ce. and Teaching 2007. Vol. J. No . I . 40-50

Steven Fra nkfort er i an il ss ociil te professor at Wi nthrop Un ive rsit y. where he teaches business po licy . He rece ived his Ph .D. in managent cnt from th e Uni versity of Was hington. llis research interes ts include diversit y , stakeho lder theory, corporate govern il ncc, and stewardship theory.

David Vo llrath is a professor of mannge ment at Indiana Uni versity South Bend , where he teaches organizati onal behav ior and business ethi cs . li e received his Ph .D. in soc ial psycho logy from th e U ni versit y o f Illino is (Champaign-Urbana). His research interests focus on group compos ition, performa nce, and deci sion-mak ing.

Va ness; • Hill is an nss istant professor o f management at Uni versit y of Louisiana, Lafayett e, where she teaches organizational behav ior and human resource management. he received her Ph .D. in business from Carn egie M ellon U niversit y. Her research interests inc lude stakeho lder theory and bu incss ethi cs.

48

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Davis et al.: An Empirical Test of Stewardship Theory

Published by FHSU Scholars Repository, 2007

Davis. rrankfoner. Vo ll rat h. and Hill Journal o f 13u sin.: ss and Leade rship Resea rch. Practi ce. and Teach111g 2007. Vol J . No I. 40-50

Appendix A

Scales Dependent Variabl e (Ans\\ ercd b) directo" )

Please indicate yo ur reac ti on to each o f th e foll ow in g statement s

Stewardship I . M y s trategic initialt vcs serve th e co mpa n) 's inte res ts 2. My hudget initi ati ves serve th e companJ 's interests J. f\1 y initiatives rcgnrdin g Ill ) p o ,H.: r and authori t) sen c the Cll lllp ll ll ) 's int c 1 c-,~.:-.

4. My initiati ve s regard ing my pe t!..:' '\c rv c the compill l) \ tll! C t c ~ t ~

5. I prov ide aclcqu(ltc. tim ~ l y comp;Hl ) ttli {Hm :ll tCHl to ho;~rd dtt \:C tOr'\

Strongly Di

sagree

SD SD

SD \I) S l)

D I)

I)

I )

I )

llllkpcnJcnt Van:d1lcs (A'""c rcd b) l" l (h)

Please es timate how important each item is to yo u

High Order Needs I. Exceeding hoard expectati ons of you 2. The challenge of the work itsc l f 3. Seeing the results o f yo ur wo rk 4. Your findin g a so lution to a pr oblem 5. Your agreement with company va lues 6. Your agreement with board interests 7. Increas in g company va lue 8. Your being a company t eam-p l ay~ r

9. Perfor mance is on par w ith manag~ r s in similar si tu :1ti ons 10. Your loya lt y to the comp any

Extrinsic Motivation I. Recognition fo r yo ur success

2. Your status within the compan y 3. Your job securit y 4. Wages which compare favo rabl y wi th others doing sim i 1M or same job 5. R~s pec t and re cognition from out sid e the compa ny lo r yo ur "or k

6. Amount of yo ur salar) 7. Opportunit y lo r yo ur advancement

8. Rece ivi ng praise fr om th e bo:~rcl lo r a .i <' h we ll cl one 9. Your pcrso nCJI eco nomi c gr~ in

ldcntilication I. The longer I sta y with thi s orga ni zati on. the harlk r it is to b n c 2. It wou ld be dirti cult lo r me to adapt to a nc·w orga ni za ti on 3. I wo uld give up a lot by leavin g thi s orga1ti zati on 4. I would be wil ling to stay wit h thi s orga ni nti on until I retire 5. If I dec ided to leave thi s organi zati on. it would be dirti cultt o C\plai n to Ill )

fri ends and family 6. Man y changes wo uld have to occur in 111 ) present c ircumstances to cause

me to leave thi s orga niuni on

Value Commitment I. My va lues and th e organi zation's va lues arc very s imil ar 2. I am willing to put in a great deal or c11 o rt beyond th at normall ) ex pected

in order to help thi s organi zati on be succe>s ful 3. This orga ni zati on inspires my hcstjob pcr lo nnance 4 . I usually agree with thi s organi zati on's po l i c i ~s on important personn el mn tt crs 5. I car~ about the fat e of thi s orga ni zati on 6. I tell my fri ends that thi s orga ni zation i> a good pl ace to '""' 7. This is one o f th e bes t o f all orga ni zations lor" hich to 11 0rl-8. I am glad I chose th is organi za ti on to "or!- fo r ove r otkr s I wa s consideri ng

at the time I jo ined 9. I am proud to tell oth ers th at I am part o f thi > organir.Hi on 10. I el l> not intend to k <tvc th is o rgani ;_..1 t io n in the fore~e\!abk: future

NOT Im

portant

~trongl~

D1

s

ag.rc:L·

SD I)

SD I)

SD D so I)

so 0

so I)

SD I)

SD I)

SD I)

so 0 SD I)

SD I)

so I) so D

SD I) SD I)

Please estimate how ofl L:n ) ou used each heh :: n ior to c\c.TCISC: control ()\ er ) our subordinates.

49

u A A

u A lJ \

ll A

u !\

u !\

u !\

u ;\

ll A

l l !\

u A u !\

ll A u A

ll

A u ,, Ll ,, Ll ,,

l l A l l !\

Strong.!) Agree

SA SA

S ;\

S 1\ S!\

VERY Im

portant

Strong!) t\ greL'

SA SA SA SA SA

s,,

SA SA

SA SA SA SA ';/\

S .· \

:0, •\

St\

10

Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012), Vol. 3 [2007], No. 1, Art. 6

https://scholars.fhsu.edu/jbl/vol3/iss1/6

Davis. Frank fort er. Vollrath . and Hill

P~rsona l Power Pro mote th em or reco1nm end th e1n lor pro mot ion

2. Recomm end th em fOr l\ward s or comm endation

Give th em high I"K::iiOnnancc ril tin gs 4 . Praise th em

Give them ex tra time off ('- Adv ise and ass ist them 7. Give them good ass ignm ent s 8. Rel y on his/her good relations with them to get the job done 9. Rel y on his/her people getting the job done because they do because they don' t

want to let him/her down I 0. Set the exampl e and rel y upon hi s/her peo pl e to lo ll ow hi s/her example II . Rely on them thinking that it's to their advantage as much as it is to his/her to r

them

to cooperate with him/her

Power Distance I. Demote them or recommend them lo r demoti on 2. Recommend them lo r di sciplinary acti on or repr imands J. G ive th em low perfor mance ratin gs 4. Chew tl1 em out 5. Give th em ex tr a wo rk as punishm c111 (, Let tl1 em kn ow th at I hav e the ri ght to ex pec t to have my orders fo ll owed 7. Expec t th at my orders and requests will be carri ed out because I am th e

boss and they will not ques ti on an ord er fr om a supai or Fxp ec t them to fo ll ow my orders because they rea li ze th at I pr obably ha ve inform at ion they don't have and th erefO re a good reaso n for issuing (lil Y order

9. Ge t them to accompl ish th e wo rk by demonstrating th at I kn ow how to perlilrm the task

I 0 Impress th em with my overall w mpctencc And ab ilit y I I Make on the sp0t co rr ect lOllS

12. Gi ve th em had assignm ent s

Pleas«.: indic at e your re~1 c t io n to each i.) r the 1t1 ll owin g s t ~lt ~; IJ l e nt s .

111\'0 I VC IIIl 'rtl

Within a year. the hoard will be come more in volve d in how the company spends money (R)

2. Within a ycQr . the iJOQrd wi ll become more in vo lve d wi th my deci sions. (R) J. Wit hin a yea r. the boa rd will act to promote ri skier strateg ic dec isions. (R)

C ultur e I The board sees my initiati ves QS cre di ble Qnd attracti ve 2. The boa rd generall y accepts or complies with my initiati ves J. The hoard reli cs on trust more than on mechani sms to control me

The hoa rd wkes a long-t erm more th an a short -term view of its relati onship wi lh rn c Within a year. the boa rd will not change my pc >wcr an d Qutl lOr it y

(R) =It em is reve rse-scaled

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Journ al of Business and Leadership: Research, Practice. and Teaching 2007. VoL 3. No. I. 40-SO

Se ldom

Strongly Disagree

SD D u

SD D u SD D u

SD D u SD D u SD I) u SD D u

SD D u

4 4

A

A A

A A A A

A

Otien

Strongly . Agree

SA

SA SA

SA SA

SA SA

SA

11

Davis et al.: An Empirical Test of Stewardship Theory

Published by FHSU Scholars Repository, 2007