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THE RELATIONSHIP BETWEEN LEADERSHIP STYLE & EMPLOYEE PRODUCTIVITY



This article was written by Mike Hebert as part of a research paper on Leadership Styles in Southeast Asia for the Executive MBA program of University of Quebec at Montreal (HCMC Campus).

 

The Leadership Styles that Impact Employee Productivity


The Problem. Vietnam's Labor productivity is one of the lowest levels in Southeast Asia. We look at how a change in leadership style may impact this level of productivity.



As businesses evolve and new global markets emerge in places like Vietnam, Malaysia, Myanmar, and Cambodia, the need for improving employee performance and engagement are of utmost importance to their success. With globalization and advances in technology, local businesses are now competing with international entrants who use e-commerce as a means of competing. Emerging markets must also think about how their leadership styles impact employees and overall performance of their organizations.


The concept of different leadership styles was first introduced by Lewin in 1939, whereby he explains that there are three main types of leadership styles; democratic, autocratic, and laissez-faire.


Leadership is defined as the process of influencing the activities of an organized group toward goal achievement (Rauch & Behling, 1984). The idea of autocratic leadership focuses on having one person who makes all small and large decisions for the group. In cases of conflict with a leader, the employees must choose to allow the leader to make all decisions and ensure that they keep the peace, even if that means letting the autocratic leader continue with his or her decision (Billig, 2015). Employees working for an autocratic leader most often face disengagement, work stress, and lack of self-esteem.


Democratic leadership focuses on allowing all employees to have their opinion and having an equal share of voting power in a formal or informal way. These leaders always treat their employees in a fair, ethical, and in an inclusive manner. Democratic leaders empower their teams to voice their opinions and provide feedback when available however the Democratic leader still has slightly more power than the employees. The Democratic leader can be seen as a captain who steers the ship or strategy and the employees work in alignment together to execute and achieve the common team goal.


Laissez-faire leadership style is seen in groups where the leader relinquishes power and allows the employees to choose their own direction and make their own rules or regulations. These types of leaders usually avoid making decisions or leading with a vision or goal-oriented mindset for the team (Billig, 2015). Employees working for a Laissez-faire leader may experience frustrations when their role is not clearly defined or their expertise level has not reached a high enough level.


Research methodology

In order to properly measure the impact of the three leadership styles, Basit, et al. (2017) focused on building a model that used the three leadership styles as independent variables and employee productivity as the dependant variable (Basit, et al., 2017). From here the researchers created a questionnaire using a five-point Likert scale to collect all the required data and collected 100 survey responses (Basit, et al., 2017).



Key Findings & Discussion

Through their analysis, researchers have been able to conclude that democratic leadership style had the most impact on employee performance followed by laissez-faire. As for the autocratic leadership style, the data indicated that this style had a negative impact on performance of employees in Malaysia (Basit, et al., 2017). Based on the results, the researchers believe that the Malaysian organizations should begin to employ a more democratic leadership style which will help employees in Malaysia to perform at a higher level. Management teams should focus team work activities and creative tasks which allow employees to feel valued and thus their performance will increase (Basit, et al., 2017). In 2017, many Malaysian organizations still employed an autocratic leadership style however this form of leadership is no longer an effective way to drive performance and as employees become more educated they no longer have the willingness to work under autocratic leaders (Basit et al., 2017). Surprisingly laissez-faire leadership style did have a positive impact on performance albeit at a lower level than democratic leadership. This style is best used in organizations in which employees are well aware of their job role, company vision, and can easily be self-motivated (Basit et al., 2017).


IMPACT ON THE VIETNAMESE WORK ENVIRONMENT

In 2018, a report was published which identified that although Vietnam’s economy has continued its growth, the Vietnamese workforce was the least productive in Asia and for every one Malaysian employee it would require sixteen Vietnamese employees to match the same level of productivity (Nguyen, 2018). As a result, it is important to understand the history behind the Vietnamese culture and how as a country, its political and business leaders can work towards improving their leadership style.


The Vietnamese cultural norms are similar to Malaysia in terms of a hierarchical society that value the knowledge and wisdom passed on by people of seniority over the creative new ideas of the youth. It is common to hear of leaders exacting their power over younger less experienced employees in Vietnam.


As such, following the researchers views, Vietnamese leaders could also benefit in moving to a more diplomatic leadership style focused on treating individuals with equal rights, more freedom to express their ideas, and employing teamwork mentality to make decisions and lead their organizations to a brighter future.


SUMMARY

If Vietnam, wishes to continue its rise as an economy capable of being recognized as a strong country with many opportunities it will need to find a way to shift its leadership style to a more democratic or laissez-faire style. New technologies and social media are educating the Vietnamese people of other ways of working and leading and as they increase their knowledge so to will their leaders need to evolve in order to positively impact their employees overall performance within their organizations.

 

At MDT we have been building leadership programs for over 4 years in Vietnam that aim to create a learning and coaching culture with impact full results. Our proven task-based blended leadership programs are driving productivity and improving employee retention and engagement. To learn more about MDT Training's leadership programs and past case studies please visit our courses page and client stories.

 

Sources

Basit, A. Sebastian, V. and Hassan, Z. (2017). Impact Of Leadership Style On Employee Performance (A Case Study On A Private Organization In Malaysia). International Journal of Accounting & Business Management. Retrieved from https://www.researchgate.net/publication/325734954_impact_of_leadership_style_on_employee_performance_a_case_study_on_a_private_organization_in_malaysia


Behling, O. and Rauch, C.F., O. (1984). Functionalism: Basis for an Alternate Approach to the Study of Leadership. Leaders and Managers: International Perspectives on Managerial Behavior and Leadership, 45-62. Retrieved from http://dx.doi.org/10.1016/B978-0-08-030943-9.50012-7


Billig, M., 2015. Kurt Lewin's leadership studies and his legacy to social psychology: is there nothing ISSN: 2289-4519 Page 127 as practical as a good theory?. Journal for the Theory of Social Behaviour, 45(4), pp. 440- 460. Retrived from https://onlinelibrary.wiley.com/doi/abs/10.1111/jtsb.12074


Nguyen, D (2018, May 10). Vietnamese labor productivity among lowest in Asia despite growth: report [Online News Report]. Retrieved from https://e.vnexpress.net/news/business/data-speaks/vietnamese-labor-productivity-among-lowest-in-asia-despite-growth-report-3747080.html

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