Applied Business Problem
Operational environments are dynamic settings with rapidly changing variables, including personnel, equipment, facilities, and more. Leadership styles, such as the situational leadership, emphasize inclusion of consideration for scenario at hand (i.e., the "situation") into decision-making processes and coaching or management methods. Other methods, including path-goal theory, focus more discretely on relationships between the leader and his followers.
This literature review explores the application and evaluation of different leadership styles in different operational environments, including manufacturing, supply chain, and military. The "effectiveness" of each leadership style is assessed using standard financial metrics for commercial operations (e.g., Earnings Before Taxes, Depreciation, and Amortization, revenue, etc.) whereas military operations will be assessed based on successful mission completion (binary) and the friendly casualties incurred (or in the case of active combat, a simple ratio of enemy casualties to friendly casualties). Specific initial research questions include:
1. Do certain leadership styles produce better (or worse) results in each environment (manufacturing, supply chain, and military)?
2. Does a common mixture of approaches (leadership styles) prevail in any specific environment?
3. Are there organizational units within each categorical environment that utilize specific standard leadership styles?
4. Is there a single leadership approach that provides the best universal leadership approach across all three operational environment categories?
The primary purpose of this literature review is to discover if certain leadership styles produce better (or worse) results in each environment, to understand if a common mixture of approaches prevail in any specific environment, and to explore the possibility of a single leadership approach being the best universal approach across all three operational environment categories. Secondary objectives include the identification of the “best” dependent and independent continuous variables to utilize as metrics in the assessment of leadership outcomes.
Method, Standards, and Keywords
In searching for relevant and applicable research materials, key words were utilized in a variety of academic search engines and databases. Boolean search methods were also leveraged to explore key phrases (see “Keywords and Combinations” below).
Keywords and combinations utilized in this literature review include: Leadership, leadership theory, leadership style, leadership effectiveness, manufacturing, supply chain, distribution, military, operations, operational environment, outcomes, performance outcomes, results, metrics, measurement, management, operational excellence, trait approach, skills approach, behavioral approach, situational approach, path-goal theory, leader-member exchange theory, transformational leadership, authentic leadership, servant leadership, adaptive leadership, team leadership, culture, complexity leadership. Logistics, manufacturing environment, supply chain environment, military environment, manufacturing organization characteristics, supply chain organization characteristics, and military organization characteristics.
The precursory search found numerous studies and articles focused on this topic and involves international research subjects (organizations in the United States, Australia, Malaysia, Japan, Germany, and Romania). Additional searching and analysis will need to be performed in an attempt to discover materials that incorporate and apply quantitative (versus qualitative) data, especially outcome and results data rather than survey or subjective assessment tools.
This literature review is organized per industrial cluster (manufacturing, supply chain, and military) and will include the related studies and publications in chronological order, by year, within each cluster.
Literature in the manufacturing category spans from 1996 to 2010 and includes the following publication sources: University of Chicago Press, International Journal of Operations and Production Management, Bell and Howell Information and Learning, and the African Journal of Marketing Management.
Cairns (1996) utilizes a variety of statistical techniques to test “Hersey and Blanchard’s Situational Leadership Theory (SLT) among 151 senior executives at different levels within service and manufacturing businesses of a large Fortune 100 Company” (Cairns, 1996). SLT proports that “a match between the leader’s level of task and relationship behavior and follower readiness should result in a higher level of follower performance” (Cairns, 1996).
According to this study, “there was no statistically significant mean differences between matches and mismatches for follower performance and leader satisfaction” (Cairns, 1996). This may imply that a natural grouping may occur amongst followership and/or leadership categorizations. This is a unique inclusion in this literature review, implying order in random patterns from a clustering perspective. It may also suggest that operational definitions utilized in this study, specifically for the terms “leader”, “follower”, “performance”, and “satisfaction” may require more robust design to guarantee significant differentiation in interpretation by the research participants and analysis by the researcher.
The operational definitions developed in an attempt to analyze leaders and followers at a discrete level may be overlapping. The inclusion of companies (or assets) within a single Fortune 100 Company may involve a systemic, organization-level bias due to the overarching corporate culture or cross-cutting or shared Information Technology (IT), communications, and management systems.
Shea (1999) employs “a three-factor, repeated-measures experiment that tested the effect of leadership style (charismatic, structuring, and considerate) on performance improvement on a manufacturing task over four trials” (p. 407). This study includes various factors (i.e., environmental, behavioral, etc.) and labels them as “interacting determinants of each other”, wherein “individuals exposed to considerate leadership had superior initial performance but that this difference faded overtime” (Shea, 1999). This is the first study in this literature review to describe deterioration of effects over time, possibly similar to the hazard function (the bathtub curve).
This research points out that “the self-regulatory mechanism of self-efficacy has been found to be affected by external factors such as training and to be linked with work outcomes such as employee attendance and management decision making” (Shea, 1999). The suggestion that a follower’s capability and confidence, the application and recognition of “self-efficacy”, is a primary performance driver changes the discussion from a simple cause-and-effect framework (e.g., how do leadership styles affect follower performance?) to a mutually reinforcing systemic view (e.g., how do leadership styles affect follower performance, and how does follower self-efficacy bridge leadership gaps that hinder performance?).
This research involves outcomes such as management decision making as well. The cross-cutting effects between the factors may cause confounding. Further exploration of the definition of and differentiation between leadership styles (charismatic, structuring, and considerate) and any declared assumptions could alleviate some of this confusion. Regarding work outcome definitions, attendance is quantifiable, but decision making is not. It may not be possible, or practical, to track the efficacy of every decision made by a leader.
Lo et al. (2009) explores 156 Multifactor Leadership Questionnaire (MLQ)-based survey responses “from subordinates comprising working executives who are currently reporting to lower and middle level managers” (p. 135) regarding transformational and transactional leadership styles and their “impact on organizational commitment” (p. 135) in Malaysian organizations. While the transformational leadership style does demonstrate “a positive relationship with organizational commitment” (p. 133), the strength of the relationship with the transactional leadership style is stronger.
This is the first direct incorporation of MLQ in this literature review. Other references have not included this assessment mechanism to date. This allows researchers to interpret results and synthesize findings with other studies that do the same. This study also provides an international perspective.
Kathuria et al. (2010) further explores the effects of leadership on performance in 98 manufacturing organizations in the United States. This involves “survey data collected from three levels of respondents in excess of 480 to test the study hypothesis using the cluster analysis (dendogram application) and regression models” (Kathuria et al., 2010).
Findings indicate that “effective manufacturing leadership enhances performance on a host of measures, such as quality, timeliness, efficiency, etc. which are directly influenced by the manufacturing group” (Kathuria et al., 2010). The outcome measures involved also include accuracy, quantity (throughput volume), and productivity as well, and these are best-practice quantitative metrics in the manufacturing industry. However, customer satisfaction, a qualitative measure, is also explored. This metric does not seem to be affected by leadership.
This research incorporates survey data with quantitative analysis (regression, cluster analysis, etc.), and is useful in exploring direct or even correlated relationships between the leadership style exhibited and the outcomes achieved.
Literature in the supply chain category spans from 2019 to 2021 and includes the following publication sources: International Journal of Production Economics, Journal of Business Research, and Computers and Industrial Engineering.
Mokhtar et al. (2019) further examines transformational and transactional leadership theories along with associated outcomes from the perspective of Supply Chain Leadership (SCL). “51 relevant papers were identified and the data analysis was performed by using Microsoft Excel to identify the trends, themes and relevant findings” (Mokhtar et al., 2019). This meta-analysis approach provides a summary assessment combined with agreement analysis and provides insight into the existing research along with each research item’s quantified results (although information utilized may be qualitative).
Similar to the manufacturing research conducted by Lo et al. (2009), this research found that “the most dominant leadership theory used in dealing with SCL is the one based on transformational and transactional leadership theory” (Mokhtar et al., 2019). The exclusive use of Microsoft Excel (i.e., known application corruption) may cause issues in the results or further extrapolation based on the source data.
Birasnav & Bienstock (2019) “collected data from 107 small manufacturing companies and (the data) was analyzed using structural equation modelling” (p. 142). The use of structural equation modeling is unique in this literature review, and it allows the inclusion of latent variables, or things that cannot be directly measured.
“Transformational leadership behavior exhibited in top-level management and advanced manufacturing technology implemented in the shop floor of these companies are positively related to the integration of external supply chain partners” (Birasnav & Bienstock, 2019). This contradicts the findings from Lo et al. (2009) which emphasized transactional leadership style over the transformational leadership style. However, this research is based in the supply chain industry whereas Lo et al. (2009) focused on the manufacturing realm. Also of note, this study is unique to this literature review in that it includes supply chain partner integration as an assessable outcome.
Similar to Mokhtar et al. (2019), Chen et al. (2021) applied a method where “32 empirical journal articles published over the past 10 years have been reviewed and evaluated through a meta-analysis” (p. 1). This study compares transactional and transformational leadership styles and their effect on supply chain firms.
Chen et al. (2021) found that “supply chain leadership is positively related to firm performance; specifically, transformational supply chain leadership has a more significant influence than transactional supply chain leadership on firm performance” and “the effect of leadership varies according to region, industry and performance type. This study provides the first meta-analysis on this relationship” (p. 1). The inclusion of factors and associated levels, including region, industry, and performance type, allow for dissection and comparison of results to research with similar scope or research conducted solely within one or more of the factors listed. In keeping with the findings of Birasnav & Bienstock (2019), this contradicts the findings from Lo et al. (2009) which emphasized transactional leadership style over the transformational leadership style.
Shin & Park (2021) deployed 1,017 surveys “to a large panel of Supply Chain (SC) executives and managers from 10 industries. A total of 228 responses were shortlisted, generating a 22.4% response rate” (p. 6). This study includes the SC network and interactions (or exchanges) within that system as well and found that “the strength of the Leader-Member Exchange (LMX) relationship is positively related to the level of SC flexibility…agility…and…efficiency” (Shin & Park, 2021).
This study includes multiple references to independent studies, most of which report qualitative analyses and associated results. The attempt to utilize hypothesis testing in conjunction with survey data presents issues as well, even though a structural equations model was employed (similar to the method utilized by Birasnav & Bienstock (2019)). From a sampling perspective, it must also be noted that this study was focused on the buyers’ perspectives and did not include sellers. This perspective is necessary to assess the SC network relationships.
Literature in the military category spans from 2013 to 2021 and includes the following publication sources: Canadian Journal of Behavioural Science, Military Psychology, Journal of Leadership and Organizational Studies, and the Journal of Defense Resources Management.
Nichols & Erakovich (2013) designed a simulated approach to the study of leadership theory. “Scenarios were created to operationalize implicit and authentic leadership, manipulate implicit leadership theory (ILT) between followers and leaders, and discover perceptions of leader effectiveness” (Nichols & Erakovich, 2013).
This study includes created scenarios and may be using a derivative of scenario planning. The application and assessment of the effectiveness of authentic leadership theory may be useful in comparison to transformative and transactional styles in all primary industries within this literature review (military, supply chain, and manufacturing). The inclusion of the MLQ is similar to the approach utilized by Lo et al. (2009). “The link between authentic leadership and implicit theory is operationalized in scenarios used in the experiment by describing ethical and transformational leadership using items from the MLQ” (Nichols & Erakovich, 2013).
The findings indicate “that a person’s ILT change as a function of his or her experiences with leaders” (Nichols & Erakovich, 2013). Interactions (between humans, chemicals, etc.) tend to cause change, this is not a new discovery. The method and approach applied, however, is unique to this literature review and may provide a framework for including more holistic considerations and variables, including extreme scenarios, for future studies.
Schulte et al. (2020) designed “an interpretative research approach to explore how a Community of Practice (CoP), a self-organized group of practitioners, emerges and interacts with the formal hierarchy of the German Armed Forces” (Schulte et al., 2020). This study focuses on the relationships between leaders and followers in CoPs, across the German military.
The inclusion of CoPs is unique to this literature review and offers perspective regarding leader-follower relationships at the intra-organizational paired-team level (the German military and the CoP team(s) within). This may provide additional insight to Manzilu (2021) (see below) and an expansion of applicability (the goal is universal applicability) through the inclusion of a European military organization.
Manzilu (2021) conducted documentation review to explore the strategic and tactical management of human resources from the leader’s perspective. The purpose of this research is to emphasize the need for these considerations in Romanian military leadership training. “As Defence implements the First Principles Review, it will focus on developing leadership, accountability and behaviours to drive organizational performance” (Manzilu, 2021).
This study combines the consideration of leader outcomes and the efficacy of leadership behaviors in a foreign military environment. This may be useful in the application of a cross-cultural examination, and this in turn may increase the applicability of any positive gains achieved from the proposed research topic.
Conclusion and Findings