Thesis Chapter 1 - To investigate the impact of leaders’ power to the job performance of employees in selected companies in Malaysia
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CHAPTER ONE. INTRODUCTION
What makes an efficient, effective, and good leader? Or simply, who is a world-class leader? These similar questions pose the greatest challenge to all leaders – regardless of the area of specialization. Today, the rapidity and continuous flow of business transactions and emerging trends in the corporate world requires the most functional and applicable attributes of leaders. Aside from the required outstanding scholastic credentials, very satisfactory personal characteristics and exceptional work knowledge, the style of leadership is one of the most essential factors that contribute to the overall stature of the organization – profit or non-profit in nature.
The advancement of ideas and innovations has been swift, as different organizations have to promote ideas that can meet the demands of the more knowledgeable and sophisticated market. To meet these challenges and achieve a competitive edge, there is a need to formulate and implement strategies based on innovation, technology and the development of intellectual capital. Few companies, even those at the leading edge of international business, have all the management processes, culture and tools in place to create and harness knowledge in a systematic way. Further, the continuous and dynamic competition in the global business arena has been exceedingly stiff and complex. With this consideration, the organization must be able to utilize a strategy and management system that will enhance the performance of the business so as to outgrow its rivals (Pearce & Robinson 2000 and Thompson & Strickland 2003). One of the contemporary management concerns in the business world today is the concept of leadership.
In business industries in Malaysia, leadership practices are crucial for the enhancement of job performances of employees. Actually, there are significant researchers and studies written by business and academic researchers, policymakers and experts that specifically discusses the concept of leadership. Accordingly, leadership is noted to be one of the well-documented topics not only in Malaysia but also from other nations. Bass (1990) stated that there are various authors who provide definition encompassing the concept of leadership. This variety of definition is a product of many scholars’ dedication in undertaking their research on the context of leadership. The definition of leadership that would be widely accepted by the majority of theorists and researchers might say that leadership is a process of social influence in which one person is able to enlist the aid and support of others in the accomplishment of a common task (Chemers 1997). The major points of this definition are that leadership is a group activity, is based on social influence, and revolves around a common task. Other definitions will be presented in the following discussions wherein the examination of key attributes and application will be conducted. Although this specification seems relatively simple, the reality of leadership is very complex. Intrapersonal factors (i.e. thoughts and emotions) interact with interpersonal processes (i.e. attraction, communication, influence) to have effects on a dynamic external environment. Each of these aspects brings complexity to the leadership process. It is then the purpose of this research to attempt to make that complexity a bit more manageable, thus increasing the ability to understand what effective leadership is particularly in relation to job performances of employees in Malaysian businesses.
Malaysia is one of the best countries in Asia in terms of economic growth and development. Thus, understanding the leadership styles employed in this country might be relevant in overcoming the complex and broad ranging challenges and arguments brought about by misunderstandings, disregard or stereotype images from variety of cultures and histories. Also, it will serve as a model in which other countries may imitate especially on the entrepreneurial and economic dealings. The remarkable performance of Malaysia in the global marketplace is attributed to the efficient management and control of authorized figures who lead specified areas. With this fact, the concept of leadership – the act of leading – is not overlooked. Thus, this research predominantly attempts to provide theoretical distinction or comparison of the leadership style in the said country.
According to Hofstede (2001), the notions and context about organizational leadership and management are frequently exported to different nations regardless of the values that these ideas have been developed. Some authors agreed that while the emergence of leadership approaches is widely acceptable to be a common in different cultures, the manner that these styles have been operationalised are commonly observed as culturally specified. There are some arguments that exist regarding the context of leadership styles across different cultures, especially in Malaysia compared to other countries. Moreover, there are also some arguments that leadership styles often affect the job performances of an individual (Thompson & Strickland 2003). Therefore, the primary goal of this research undertaking is to evaluate the leaders’ power and job performances of employees in business industry of Malaysia.
1.2 Research Objectives
The general objective of the study is to evaluate and investigate the performance of employees in accordance to the current leadership styles of managers of the selected companies in Malaysia. This study attempts to review and analyse the type of leadership imposed by managers to their employees. In the recent studies of employee work performance, leadership type is the greatest source of the improvement of a business. Here, it exposes the positive as well as the negative treatment accorded to the employees as a result of an effective/ineffective job performance.
Likewise, it is essential to study the existing leadership practices and status of employee job performance. For this reason the following objectives are formulated:
- To investigate the impact of leader’s power on employees job performance.
- To identify if the perception of the subjects pertaining to leader’s power has significant relationship to their perception towards job performance.
- To identify if the perception of the subjects pertaining to leader’s power has significant impact/effect to their perception towards job performance.
- To make recommendations on the best practices in enhancing employee job performances in accordance to the effectiveness of leader’s power for the business industry in Malaysia.
1.3 Research Questions
With respect to the given objectives of the study, the following research queries are formulated:
- What is the significant impact of leader’s power on employees’ job performances of selected businesses in Malaysia?
- Is there any significant relationship between the perception of the subjects pertaining to leader’s power and their perception towards job performance?
- Is there any significant impact between the perception of the subjects pertaining to leader’s power and their perception towards job performance?
- What are the recommended leadership practices in order to enhance the employee job performances of most businesses in Malaysia?
1.4 Statement of the Problem
The problem can be placed within human resource management perspective as there are issues catering to the lack of support into job performance impact and the problem related to the use of position and personnel power which can play significant impact to the development of Malaysian businesses. From the recent studies about leaders’ power and employee job performance, let’s say in the paper of (Thompson & Strickland (2003), it shows that the presence of too much leadership authority can affect job performance not just in the lower levels but also in the higher ones. Actually, the wide range of studies related to leadership as well as business management, marketing plus various phenomena affecting its totality are extensive. Given with this fact, this research goes over the related literatures conducted on the area of study. By embarking on such pursuit, the research are guided accordingly by firstly discovering where the research is coming from, what and how much have been studied regarding the topic and what it is yet to tackle.
With this, the researcher got an idea of investigating on how these Malaysian HR managers perform well and uses the so-called leader’s power into the work setting and how they possess proper quorum towards other staff in the organization they belong and how this leader’s power could affect the job performances of the staff/employees. Another problem could be limited case situation towards HR perspectives in Malaysian context, as there can lack of supporting resources pertaining to use of position and personnel power towards recognizing in job performance factors and the presence of research barriers to research administration is possible. For this research, the independent variable would be the perception of respondents pertaining to leader’s power and for dependent variables, it would be the perception of respondents pertaining to job performances. In this way, the researcher can assess and evaluate the significant impact of leader’s power to job performance.
1.5 Definition of Key Terms
a) Job performance - Job performance is a commonly used, yet poorly defined concept in industrial and organizational psychology, the branch of psychology that deals with the workplace. It most commonly refers to whether a person performs their job well (Campbell, J. P. 1990; p. 1).
b) Power - Power is defined as the ability or capacity to perform or act effectively, including the situation where not to act is most effective (Montana, P.J. & Charnov B.H. 2008; p.254).
c) Reward Power - It refers to the leader’s ability to control the payment of salaries, wages, commission, fringe benefits etc. it is based on the belief that ‘wealth is power’ (Montana, P.J. & Charnov B.H. 2008; p.255).
d) Coercive Power - It is the capacity of the leader to award punishment to subordinates in the form of suspension, transfer, demotion and so on (Montana, P.J. & Charnov B.H. 2008; p.256).
e) Legitimate Power - It is available to a person by season of his position. It may be formal or informal. Legitimate power is formal in an organization where the superior delegates his authority to the subordinates (Montana, P.J. & Charnov B.H. 2008; p.255).
f) Referent Power - It refers to certain unique qualities of a leader that induce his follower to emulate him (Montana, P.J. & Charnov B.H. 2008; p.257).
g) Expert Power - It accrues to the individual by virtue of his knowledge and skill. It is based on the belief that ‘knowledge is power’ (Montana, P.J. & Charnov B.H. 2008; p.257).
h) Information Power - Information Power is derived from possession of important information at a critical time when such information is necessary to any organisational functions (Montana, P.J. & Charnov B.H. 2008; p.258).
1.6 Significance of Research
The impeding theoretical significance of the research can be found at the ideal composition of research of how it can go or not go beyond the scope of research as the research findings could be at most useful in terms of instilling awareness to Malaysian managers, HR personnel and other involved parties. The audience, the readers of this research will have the utility of driving in personal growth and simple ways of understanding job performance as found in HR positioning and personnel power in certain SMEs in Malaysia thus, there gains acceptance of valuable matters and allowing possibilities of accepting HRM research and development for Malaysia to use as reference tool.
This study is a significant attempt in promoting effective leadership and imposing appropriate leader’s power to the work practices of employees. For practical reasons, this research is helpful to business practitioners for this serves as a guide for them in leading their employees for the success of the businesses, thus resulting to high job satisfaction among employee. Moreover, this research provides recommendations on how to value employees as they are taking a large part in the overall performance of the company.
1.7 Scope of Study
The study intends to investigate the impact of leaders’ power to the job performance of employees in selected companies in Malaysia. In relation to the challenges in business organisation in Malaysia, this research should create effective and efficient strategies that satisfy the needs of modern society in accordance to leader’s power and job performance. Basically, this research study only covers the effect the issues of leader’s power and job performances in Malaysian business organisations. The outcome of this study is limited only to the data gathered from books and journals about leader’s power, job performances, management and business reports and journals and from the primary data gathered from the result of the questionnaire survey and interview conducted by the researcher. In accordance to the validity and reliability of the data, the researcher will provide necessary actions to support the collated data such as proper use of different methods regarding the determination of samples and selection of textual information. Although inconclusive, the results of this survey should be viewed as indicative of the status of leader’s power and job performances in relation to Malaysian business industry at the time of the survey.
Moreover, this study provides a useful role to society since it depicts the future of a certain business with regards to leader’s power and employee job performances which are crucial to business development. Furthermore, this study provides quantitative or statistical treatment for the findings. Additionally, all data will be addressed through interpretation and in-depth evaluation. For further investigation, the researcher also conducted a focus group interview with some of managers and administrators numbering to 10 participants. The questionnaires are used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected. The data are analyzed and compiled for the statistical analysis such correlation and t-test analysis with the help of SPSS (Statistical Packages for Social Science).
1.8 Organization of Chapters
With respect to chapter organization, five chapters have been considered. The first chapter which is shown refers to the introduction chapter which illustrates the overview of the study. It also presented the significance, aims and objectives of the research. Moreover, the general ideas about the way that the study is structured are also presented. On the other hand, the second chapter presents a review and discussion on previous researchers about employee training. In the third chapter, the methods to be used for this study are shown. In the forth chapter, the results of the data gathered are analysed and presented. And finally, in the fifth chapter, the conclusions are formulated as well as recommendation and guidelines.
This study examines the leaders’ power relevance to job performance of employees. The 100 target samples of the study are from managerial level employees of Malaysian companies such as located in the Kuching, as one of the developed place in Malaysia. This allows evaluation of the views of subjects pertaining to leader’s power and job performance. Comparison of these views may lead to the development of new theories that may contribute to human resource management research. In this chapter, the nature of problem is presented and discussed. The backgrounds of different variables related to the study were also featured. Here, the aims, objectives, problem statements and significance of the study were also explained.