سبک رهبری تحول گرا، رقابت در بازار و عملکرد دپارتمان: شواهدی از هتل های لوکس در استرالیا

This study examined the relationship between hotel departments’ financial and non-financial performance, market competition, and transformational leadership style. A self-administered postal survey was used to collect the data. Completed and usable questionnaires were received from rooms and food and beverage department managers of 56 hotels and resorts. The transformational leadership style, market competition, and departmental performance were measured using instruments adapted from previous studies [Bass, B., Avolio, B., 1994. Improving organisational effectiveness through transformational leadership. Sage Publication, Thousand Oaks, CA; Gupta, A., Govindarajan, V., 1984. Business unit strategy, managerial characteristics and business unit effectiveness at strategy implementation. Academy of Management Journal, 27 (1), 25–41; Khandwalla, P., 1972. The effects of different types of competition on the use of management control. Journal of Accounting Research, Autumn, 275–285]. The results of the study indicated that transformational leadership style was positively associated with the non-financial performance, which, in turn, was positively associated with the financial performance of the departments. However, no such relationship was found between market competition and the non-financial, and financial performance.

All businesses today, including hotels, operate under intense market competition. This is due to rapidly changing technology, heightened customer awareness of quality and availability of a wide range of products and services (Atkinson and Brander Brown, 2001, Brander Brown and Atkinson, 2001, Harris and Mongiello, 2001 and Sanchez, 1997). It is argued that one way to manage intense market competition is for senior managers to focus on practicing transformational leadership (Boerner et al., 2007, Hinkin and Tracey, 1994, Lockwood and Jones, 1989, Tracey and Hinkin, 1996, Xenikou and Simosi, 2006, Zetie et al., 1994 and Zohar, 1994). According to Bass (1985) transformational leaders possess clear vision and have the flair to effectively convey it to their employees. These leaders act as role models and inspire employees to put the good of the organisation above self-interest. Bass (1985) pointed out that transformational leaders exhibit five main characteristics: idealised attributes (i.e., having a high level of trust in employees); idealised behaviour (i.e., having the ability to communicate a sense of purpose); inspirational motivation (i.e., having the ability to communicate important purpose in simple ways); intellectual stimulation (i.e., having the ability to promote intelligence, stimulation and problem solving); and individualised consideration (i.e., having the ability to promote individuality among employees). The above characteristics of transformational leadership have had particular success in motivating employees who, in turn, make better decisions and achieve improved performance. For instance, Xenikou and Simosi (2006) reported that the effect of transformational leadership and the organisations’ performance is positively influenced by the subordinates’ high level of motivation. Similarly, Boerner et al. (2007) found that the organizational behaviour of subordinates had some influence on the relationship between transformational leadership and performance. However, subordinates’ ability to communicate task-oriented behaviour influences the relationship between transformational leadership and improvements in job processes. Davidson (2003), Wilkins et al. (2007) and Zetie et al. (1994) argue that motivated employees are more likely to deliver superior quality products and customer services. Hinkin and Tracey (1994) and Tracey and Hinkin (1996) highlight that, despite the intense market competition, senior managers in hotels have traditionally shown a tendency to practice a transactional leadership. Bass (1985) describes transactional leadership style as being focused on clarifying roles and guiding subordinates to achieve pre-determined goals based on rewards. Indeed, transactional leadership offers employees only limited (if any) participation in decision-making or even none at all. Hinkin and Tracey (1994) and Tracey and Hinkin (1996) contend that, while transactional leadership style is likely to provide favourable results in a stable environment, its continual use under intense market competition is somewhat questionable. Research indicates that in people-oriented industries like hotels, the reliance of senior managers on a transactional leadership style can cause employees to develop lower job satisfaction and organisational commitment, leading to the delivery of poor customer service and a declining overall performance (Lockwood and Jones, 1989 and Zohar, 1994). This is because a transactional leadership style restricts the employee development in terms of innovative and creative skills, and hinders self and organisational growth (Banker et al., 1998 and Boerner et al., 2007). In contrast, transformational leadership style has been shown to succeed in effectively communicating the organisational vision, and inspiring and stimulating employees. These, in turn, encourage employees to become more innovative, and devote their energy for the benefit of the organisation (Boerner et al., 2007, Xenikou and Simosi, 2006 and Zetie et al., 1994). Moreover, performance assessment is an essential control mechanism that assists in improving the success of different management practices (Eccles, 1991, Evans, 2005, McPhail et al., 2008 and Fitzgerald et al., 1991). According to Evans (2005) and Kaplan and Norton (1992), a comprehensive performance assessment system offers constructive feedback to both superiors and subordinates concerning the use of different resources, processes and strategies. Given the people oriented nature and the competitive environment of hotels, the significance of transformational leadership cannot be emphasised enough.

This study was designed to examine the relationship between hotel general managers transformational leadership style, department managers perception of market competition and their department’s non-financial and financial performance. The results provided a partial support for the study’s hypotheses. The results revealed that a hotel’s rooms and food and beverage departments’ financial performance is influenced by the departments’ non-financial performance, which in turn is influenced by the hotel general manager’s practice of transformational leadership style. The results presented in Table 2 (Panel A) indicated that the overall model of the study was significant (F = 13.51; p < .001) and explained a reasonable amount of variance in the financial performance of the hotels and resorts in the study. The findings of this study are consistent with Brewer (2002), Evans (2005) and Kaplan and Norton, 1992 and Kaplan and Norton, 1993 findings that non-financial performance drives the financial performance. For instance, the Marriott Hotel and Hilton Hotel Corporations found that the BSC allowed them to assess the performance in more comprehensive manner and assisted in identifying operational deficiencies well before a negative effect on financial performance was felt (Denton and White, 2000). Indeed, the relevant literature (Bass and Avolio, 1994, Bass and Avolio, 1997 and Burns, 1978) suggests that general managers’ practice of transformational leadership style creates a work environment conducive to sharing the organisational vision, inspiring and intellectually stimulating and instilling higher order ideals and values among subordinates. Much of the literature reports that empowered employees experience high job satisfaction, greater organisational commitment and increased levels of performance (Arnold et al., 2001, Boerner et al., 2007, Conger and Kanungo, 1987, Xenikou and Simosi, 2006 and Zwingman-Bagley, 1999). In particular, transformational leadership style is only effective in terms of improving the performance when subordinates are motivated (Xenikou and Simosi, 2006) by senior manager’s display of fairness, cooperativeness and conscientiousness within the organization (Boerner et al., 2007). In the context of the hotel industry, Davidson (2003), Hinkin and Tracey (1994) and Tracey and Hinkin (1996) highlight that customers in luxury hotels expect highly personalised customer service, because these hotels and resorts are supposed to be the best. According to Hirst (1992), Martin and Bush (2006), Oh and Parks (1997), Voss et al. (1998) and Xenikou and Simosi (2006), employees who are highly satisfied and motivated, tend to better respond to customers’ needs and avert service quality breakdown. As a result, empowered subordinates are able to achieve higher level of motivation and job commitment. Barsky (1992), Becker and Olsen (1995), Davidson (2003) and Wilkins et al. (2007) support this view, adding that excellent customer service is the key to sustaining customer loyalty, which then translates into improved financial performance. The findings of this study are consistent with those reported in the broader transformational leadership literature as well as in BSC literature. Therefore, we contend that this study supports and extends the body of knowledge in these areas. The lack of a relationship between market competition and the hotel departments’ financial performance through non-financial performance is in line with the relevant literature. Duncan (1972) for instance, pointed out that intense market competition reduces managers’ ability to accurately predict market behaviour and warned that under such conditions, managers often end up making wrong decisions. Particularly in hotels, during intense competition times, competitors offer price reductions for their products and services to maintain and or secure a share of the market (Baum and Haveman, 1997, Buckhiester, 2003, Roginsky, 1995 and Wall Street Journal, 1997). This is because, as previously noted in this paper, that the hotel’s products and services are highly perishable in nature; if a hotel room is not sold on a particular night or a restaurant seat is not occupied during a particular meal service, the possibility of selling the same is lost. Hence, managers are under significant pressure to reduce their rates, leading to declined sales revenue. Another plausible explanation for lack of the relation in the current study is that while the managers have little or no control over reducing the fixed costs in the short-term, the literature suggests that it is a common practice among hotel managers to cut back on the level of services (i.e., introducing lower staffing levels) to effectively manage financial resources (Buckhiester, 2003 and Kim et al., 2004). We contend that by doing so the managers effectively neutralise the effect of market competition on performance, at least in the short-run.