Validation of a Model Measuring the Effect of a Project Manager's Leadership Style on Project Performance

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KSCE Journal of Civil Engineering (2013) 17(2):271-280 DOI 10.1007/s12205-013-1489-0

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www.springer.com/12205 Construction Management

Validation of a Model Measuring the Effect of a Project Manager's

Leadership Style on Project Performance

Li-Ren Yang*, Kun-Shan Wu**, and Chung-Fah Huang***

Received November 2, 2010/Revised May 7, 2012/Accepted June 19, 2012

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Abstract

This study validates a model for assessing the relationships among a project manager’s leadership style, teamwork, project performance, and stakeholder satisfaction. It determines whether the effect of leadership style on project performance can be mediated by teamwork. An industry-wide survey measured a project manager’s leadership style, teamwork, and project outcomes in project performance and stakeholder satisfaction. Structural Equation Modeling (SEM) approach confirmed this research model. Analyses show that a project manager who adopts transactional and transformational leadership can improve teamwork and capital facility project performance. Additionally, stakeholder satisfaction can be achieved with high levels of project success in schedule, cost, and quality performance. These findings show that teamwork can partially mediate relationships between leadership style and project performance.

Keywords: leadership, project performance, teamwork, SEM (Structural Equation Modeling), stakeholder satisfaction

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1. Introduction

In the highly competitive construction industry, top companies are constantly searching for proven practices that offer a com-petitive advantage. These companies generally avoid practices that do not provide proven added value. Several studies have shown that the role of a project manager is critical to project success. Green (2005) showed that an effective project leader is good at managing relationships across organizational functions and boundaries to break through organization inertia and bu-reaucracy. Sauer (1993) suggested that non-technical factors such as management, organization, and culture are associated with project success. Prior studies have shown that managing relationships is critical to project success (Acharya et al., 2006a; 2006b; Le-Hoai et al., 2010; Lewis, 1993). However, studies on project success factors have largely ignored the impact of project managers and their leadership on project success (Turner and Müller, 2005). Although studies in a number of disciplines other than construction have suggested that leadership style is becom-ing critical to project success, research on the constructionindustry is limited (Giritli and Civan, 2008; Sunindijo et al., 2007; Ozorovskaja et al., 2007; Chinowsky et al., 2007; Wong et al., 2007; Giritli and Oraz, 2004; Fellows et al., 2003).

Despite the adoption of practices, no empirical study has

validated a model to access the impacts of a project manager’s leadership style on project outcomes. In addition, comprehensive industry-wide studies on the mediating role of teamwork regard-ing the relationship between leadership style and project per-formance have not been performed. Because of limited information on leadership benefits and the competitive advantage of teamwork, managers are reluctant to develop different leadership styles.

This study has two objectives. The first objective is to validate a model to access the relationships among a project manager’s leadership style, teamwork, project performance, and stakeholder satisfaction. The second objective is to determine whether team-work has a mediating role on the relationship between leadership style and project performance. A data collection tool was used to assess a project manager’s leadership style, teamwork, stakeholder satisfaction, and the performance of capital facility projects in Taiwan’s construction industry. Data analyzed in this study were project-specific; data represent the levels of teamwork in projects.

2. Literature Review and Research Model

Leadership is the accomplishment of goals through communi-cation with others (DuBrin, 2004). Prior studies on leadership stressed the importance of leadership style. Six schools of leader-ship have been developed over the past decades. The visionary *Professor, Dept. of Business Administration, Tamkang University, Tamsui Dist., New Taipei City, 251, Taiwan (Corresponding Author, E-mail: iry@

mail.tku.edu.tw)

**Professor, Dept. of Business Administration, Tamkang University, Tamsui Dist., New Taipei City, 251, Taiwan (E-mail: kunshan@mail.tku.edu.tw) ***Associate Professor, Dept. of Civil Engineering, National Kaohsiung University of Applied Sciences, Kaohsiung, 807, Taiwan (E-mail: jeffrey@cc.

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school determined two types of leadership: transformational leadership and transactional leadership. Bass and Avolio (1990) identified components of these two leaderships. Transformational leaders focused on the concerns of individual team members. These leaders show charisma and have pride, respect, trust, and a vision. In addition, transformational leadership provides inspiration and intellectual stimulation, motivates followers by having high expectations and modeling appropriate behaviors, and challenges followers with new ideas and approaches (Bass, 1990). Keller (1992) found that transformational leadership can be a predictor of project performance in R&D organizations. Transactional leaders emphasize contingent rewards and show how current needs of subordinates can be satisfied. The transactional leader rewards subordinates for meeting performance objectives. Therefore, transactional leadership offers traditional views on leadership, which focuses on the contractual agreement between the leader and the subordinate on expected performance in return for certain rewards (Thite, 2001). Furthermore, the leader-follower relationship is simply the exchange of a certain quality of work for an adequate price (Wang et al., 2005). When assignments are not followed as planned, leaders take action.

Previous studies have shown that the cost-benefit exchange process only results in ordinary outcomes. Keegan and Den Hartog (2004) suggested that transformational leadership is more suitable for project managers; however, no significant link was determined. In addition, Bass (1985) showed that today’s envi-ronment requires subordinates to perform beyond ordinary expec-tations, which is deliverable by transformational leadership. Leaders with a transformational style appear to be more effective to subordinates and superiors (Fiol et al., 1999; Lowe et al., 1996). Furthermore, certain studies have investigated the inter-action of a project manager’s leadership style with the project type. Müllerand Turner (2007) concluded that different leader-ship styles are appropriate for various types of projects. Frame (1987) and Turner (1999) also suggested that different leadership styles are appropriate at different phases of the project life cycle. Higgs and Dulewicz (2004) showed a preference for transfor-mational leadership style for complex projects and transactional leadership style for simple projects. These studies suggested that transformational and transactional leadership can be effective styles for project managers.

While these studies investigated leadership styles, other studies have also been active in analyzing the impacts of manager leadership on the performance of organizations and companies. Prior studies have shown a correlation between a manager’s leadership style and successful performance in business. Elenkov (2002) showed that leadership can directly and positively predict organizational performance. Leadership behaviors are also con-sidered crucial in creating effective performance among subordi-nates (Tsai et al., 2009; Ogbonna and Harris, 2000; McColl-Kennedy and Anderson, 2002; Berson et al., 2001; Zacharatos et al., 2000). Furthermore, Ahearn et al. (2004) demonstrated the effects of leadership skills on team performance.

Although the relationships between leadership behaviors and

performance in business have received substantial attention, the number of studies on the leadership style of project managers and its contribution to project success is relatively limited. Morris (1988) found that poor leadership is a failure factor in formation, build-up, and close-out phases. Kendra and Taplin (2004) indicated that leadership and personal characteristics of project managers are associated with project success factors. Yang et al. (2010) suggested that the type of project has a moderating effect on the relationship between teamwork dimensions and overall project success. However, previous studies showed that many project managers do not recognize themselves or their leadership style as a contributor to project success (Turner and Müller, 2005). A number of studies have attempted to identify project success factors. However, prior studies have disregarded project managers or their leadership style as a project success factor.

Reviewing these studies shows that the adoption of leadership style for teamwork enhancement has been supported. Earlier studies showed that adopting transactional and transformational leadership styles is beneficial. They also show that the behavior of leaders can be positively related to team interaction and cohesiveness (Zaccaro et al., 2001; Wang et al., 2005; Bass, 1990). The relationships between teamwork and team performance have also been studied. The results of previous studies showed a correlation between teamwork and team performance. Team interaction and cohesiveness are identified as factors influencing team performance; therefore, they can result in the uniformity and effectiveness of team members. In previous studies, team interaction and cohesiveness were associated with a critical determinant of team performance (Kotlarsky and Oshri, 2005; Thamain, 2004; Wang et al., 2005). This study extends previous studies to address the impacts of teamwork on project perfor-mance. Using relevant studies, hypotheses (H1-H3) were formed and tested.

• H1: A project manager’s leadership style has a positive effect on teamwork.

• H2: Teamwork has a positive effect on project performance. • H3: A project manager’s leadership style has a positive effect

on project performance.

Some studies have been conducted on the relationships between a project manager’s leadership and the behavior of team members, and the impact of a project manager’s leadership style on teamwork. These studies show that a manager’s leadership style is the strongest predictor of teamwork. Additionally, the prior studies referenced above indicated that teamwork has enabling roles in team performance. Teams can become successful by im-proving interaction and cohesiveness. Therefore, effective team performance can be derived from team communication, collabo-ration, and cohesiveness (Morris, 1988; Kendra and Taplin, 2004). Some studies have suggested that teamwork has a mediating role on the relationship between leadership style and team performance (Gladstein, 1984; Kahai et al., 1997). A hypothesis (H4) was proposed using leadership theory and empirical research on leadership style, particularly on the relationship of the behavior of team members and team performance.

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Validation of a Model Measuring the Effect of a Project Manager's Leadership Style on Project Performance

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• H4: Teamwork may act as a mediator between leadership style and project performance.

Previous studies have shown that teamwork may contribute to stakeholder satisfaction. In addition, project performance may positively relate to project stakeholder satisfaction. Using these studies, hypotheses (H5 and H6) were developed.

• H5: Teamwork has a positive effect on stakeholder satisfaction. • H6: Project performance has a positive effect on stakeholder

satisfaction.

Based on previous studies, Fig. 1 shows the theoretical model on the relationships among a project manager’s leadership style, teamwork, project performance, and stakeholder satisfaction. This study extends previous studies in two valuable manners. First, it validates a model for assessing impacts of a project manager’s leadership style on project outcomes. Second, it offers valuable results on the mediating role of teamwork on the relationship between leadership style and project performance.

3. Methodology

3.1 Research Instrument

A survey instrument was used to measure a project manager’s leadership style, teamwork, stakeholder satisfaction, and perfor-mance on projects in Taiwan’s construction industry. Study parti-cipants were asked to identify a recent project they were familiar with for assessment. For the subject project, participants are asked to assess a project manager’s leadership style, teamwork, stakeholder satisfaction, and final performance of that project.

The survey comprised four sections: (a) a project manager’s leadership style, (b) teamwork, (c) project performance and stake-holder satisfaction, and (d) project and personal information. These subject projects were categorized using eight data class variables: industry sector, total installed cost, owner regulation, initial site, number of core team member, complexity, project typicality, and international involvement (Müller and Turner, 2007; O’Connor and Yang, 2004).

3.2 Sampling Method and Sample Description

People interested in participating in the study were identified by a search from various industry associations. The targeted respondents were identified as the senior individuals who were familiar with a project manager’s leadership style, teamwork, and project performance. The sample’s respondents consisted of project directors, project planners, and project superintendents. Project responses were collected through personal interviews rather than mail. This allowed the interviewers to investigate a project manager’s leadership style and teamwork from the per-spectives of various types of stakeholders. Although project responses were primarily based on interviews with one person, this study also obtained opinions from the other team members. Because project responses are based on personal interviews with several project members, some biases can be eliminated. This approach can improve the objectivity of the ratings. An industry-wide survey on a project manager’s leadership style, teamwork, and performance in capital facility projects was conducted in Taiwan from May 2008 to August 2008. A data collection tool

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Validation of a Model Measuring the Effect of a Project Manager's Leadership Style on Project Performance

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ations between leadership behavior and project success.

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