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1 Managerial Economics and Strategy

EC: 15 30 July 2017

The Effect of Leadership Style on Team Performance

Wen Gai 11085711

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ABSTRACT

This study aspires to extend the systematic research on the effect of leadership style on team performance through unconventional source – reality TV show. The candidates, before putting into diversified challenges, have been strictly screened to make sure they have an above-average level of business knowledge. Interested in how leadership style, as a key branch of leadership, acts on the probability of winning the task, this research investigates the connection between authoritarian, democratic and laissez-faire leadership and winning, by controlling for other factors such as leadership experience, individual capability, and sex difference. The results from the statistical analysis provided no solid evidence for a direct linkage between leadership style and team performance, but showed significant correlation between task success and experience and ability of project managers, and proved certain leadership style more effective under specific type of task.

I. INTRODUCTION

As failure of efficiency maximization of resources has been a primary potential cause of sales decline or even bankruptcy of companies, increasing attention has been given to managerial supervision that takes either responsibility of bad judgments or credit for uniting the monetary and human resources through coherent strategies. Even fairly equal economy entities vary in the rate of economic growth under different presidency. Similarly, a team may get varying results for homogeneous tasks with different project managers, as there are many ways to approach the art of leadership. What brings different outcomes, given all project managers in the observation group reach an average level of business knowledge, is the style of leadership he/she follows in the interaction with people, planning and decision-making process. However, one’s style of leadership can either form naturally as personality, or developed through years of experience. Hence, understanding of the linkage between leadership styles and team performance can be intriguing to both businesses and scholars for bringing a potential enhancement of efficiency and employee morale by hiring a suitable person to a company, and generating fresh thoughts on academic subjects such as managerial economics, behavioral science and even gender equality. The aim of

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Figure 1

Managerial Grid, by Blake and Mouton, 1964, retrieved from http://psycnet.apa.org. Copyright 2016 by APA.

this study is to test previous findings about the effectiveness of different leadership styles on team performance using media resources under the assistance of statistical modeling approach.

Before thinking of how different styles work, what is the leadership style to look at? Over the past 40 years, there has been considerable concern in identifying leadership style. There is a wide variety of emphasis for frameworks. In terms of morality and motivation, for example, the Managerial Grid (Blake et al. 1964) in Figure 1 gives a graphic explanation of the distinction between task-oriented leadership and people-oriented leadership by expressing concern for production on the horizontal axis, and concern for people on the vertical axis on a scale ranging from 1to 9. The former leadership, appears as a 1,1 style on the axis, pay no extra effort on a relationship as long as minimum effort is enough to get the task done, while the latter leadership, appears as a 9,9 style on the axis, think highly of people’s commitment and see trust and respect within the team a crucial part of task accomplishment. On the other hand, as leadership is always

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being judged under circumstances with more than a person, the chemistry between individuals may to some extent influence their performance and even afterwards if there are future cooperation opportunities for the same group of people. Taking into account the interdependency between relationship, efficiency and satisfaction, Burns (1978) introduced the concept of “transforming leadership” and “transactional leadership”. According to Burns, transforming leadership is a mutual process where leaders manage to “transform” something and leaders and followers “raise each other to advance to a higher level of morale and motivation”. Transactional leaders, on the contrary, are more interested in maintaining the status quo - the accomplishment of the current task. And instead of stimulating intrinsic motivation of people as transformational leaders do, they secure followers’ compliance using rewards or punishments.

Psychologist Kurt Lewin and his colleagues made the first systematic study of leadership styles and mentioned three styles of leadership - authoritarian, democratic, and laissez-faire - in their experiments regarding patterns of aggressive behavior. While there is no firmly established way to identify leadership styles, the extraordinary aspects of the distinctions between leadership styles in this paper lie in its helping us to understand the approaches and consequences of different leadership by simply focusing on the level of delegation reflected in leaders’ verbal expressions and strategic decision-making process as well as its building a foundation for future studies following the interest of aggression and artificial "social climate" (Lewin et al, 1939). Convinced by the arguments in this study and interested in their applicability on other population, this paper is going to adopt its framework of the three leadership styles, and extend the previous study in the effect of leadership styles upon performance by investigating the consequences of three leadership styles on team performance in a public setting – a reality TV show. Contestants face a weekly challenge regarding business issues and they will be assigned to one of the two teams/leaders either predetermined by the boss or elected democratically by contestants within a team. At the end of each task, teams report back at the boardroom and the winning team will be decided by the boss, according to the amount of net profit (cash/credit) they bring back, or feedback from professionals involved in the task arrangements. Every week at least one candidate including the project manager from the losing team will get “fired”, till the final two fight it out in week twelve. The setting enables researchers to observe how, conditional on the average level of business skills/knowledge, leadership styles affect team performance and push forward to win the task over the other team.

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Rather than analyzing delicate emotional change in some frameworks, the simplicity of looking at the delegation level makes investigation through TV screen much more feasible and easier, and hopefully provides more precise data for later breakdown. However, on the other hand, other studies using game show as a tunnel found that individual behavior is sometimes inconsistent with expected-utility theory and this unique setting somehow encourages risky behavior of the contestants and overestimation of their own abilities (Gertner, R., 1993; Metrick, A., 1995). The setting also adds uncertainty to the application of the framework in terms of valuable details neglected in the clip due to length limitation of the show and “leader-follower” role play comes along with a competition nature which incentivizes every member to seek for an opportunity for individualistic heroism while at the same time being a team-player. While such strategy sounds contradictory, it makes sense as candidates are generally asked for leadership and teamwork skills as what usually put under a job qualification column, but outstanding individual ability also plays an important part as it makes the one shines distinguishingly. After all, only one candidate will take the first place and get the job offer or the investment fund from the boss. Hence, in addition to the correlation between leadership style and team performance, we are going to test how individual ability influence team performance and the distribution of leadership style adopted by project manager of high individual performance. Classification criteria of leadership styles in this study will, basically, adopt the idea in the paper of Lewin and his colleague, but will be adjusted to fit the public setting more appropriately, and will be discussed in details in later sections.

This study finds that democratic leaders are likely to have 15% higher possibility than authoritarian leaders, and 13% higher chance than laissez-faire leaders in leading the team to win the task, regardless of type of task. Unfortunately, this finding lacks solid support as the correlation coefficient was found insignificant under 90% confidence level. However, this study does find significant results after taking task type into consideration. Authoritarian leadership reduces the winning probability by 63% in a creative task, and laissez-faire leadership can completely write off any advantage and turn an entrepreneurial task into, as described by the boss, a “total shambles”. The role of project manager is demonstrated as his/her individual capability and experience is clearly relevant to task performance, while other factors such as gender and team size are proved to be irrelevant.

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The rest of this paper is organized as follows. Section II shows the predictions based on theoretical analysis. Section III elaborates data characteristic and the measurement of leadership styles. Section IV introduces the regression model and reports the empirical results. Section V summarizes the main findings and offers some discussion on limitations and applications.

II. RELATED RESEARCH AND PREDICATIONS

A. Authoritarian Leadership

Hobbes claimed in his work, Leviathan (1651), that only strongly centralized authority or leader can bring the ideal commonwealth through superior “convenience or aptitude to produce the peace and security of the people”. Indeed, as long as the leader has the talents for governance, authoritarian style of leadership may be the most effective approach to help leaders carrying out their plans, especially in such cases that involve clear hierarchy, for example, where followers are disciplined by law (monarchy), or cases where objects are too immature to conduct deep cognition (children). However, while centralization provides a “fast lane” which encourages accurate implementation of commands (Lewin et al, 1939), this efficiency is not bidirectional as autocratic leaders intend to suppress ideas from others for communication of their own thoughts, and therefore gives a hotbed of negative aspects that may undermine team stability in long-term (M Van Vugt et al, 2004).

Lewin and his colleague described the first type of leader as someone "usually dictated the particular work task and work companions of each member", in other word, autocratic in leading a team and prefer taking control of every step in the process. In the first experiment, they compared the behavior of two groups of 10-year-old children during a three-month-period mask-making task under authoritarian or democratic leadership manner. The result, unsurprisingly, showed that hostility is 30 times and aggression is 8 times more frequent under the former type of leadership than the latter one. Aside with this finding, many other studies found a positive correlation between autocratic leadership and negative affect. Under organizational context, as project managers are equipped with their own style of leadership and supervision, they have the power to influence and develop the working environment (Vartia, 1996). An autocratic leader may create an environment that restricts voice opportunities of followers, discourage autonomy, depresses job satisfaction (Hackman et al., 1976; Greenhaus et al., 1987), regress job performance by enlarging the change in

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followers’ need satisfaction (Sheridan et al., 1975), and finally bring adverse effects to the project performance.

Still, autocratic approach may be favored. Jones (1954) did a research on how authoritarians and nonauthoritarians1 assess a perspective leader by free descriptive comments and a rating scale. The results suggested that people scoring high on authoritarianism prefer the autocratic as a leader, and this finding proved applicable from job-related to even political/religious situations. On the other hand, Page and McGinnies (1959) found a preference of the directive approach of leader in small group discussion with all female members on a mental health film, "The Feeling of Hostility". They discovered that directive leader was rated generally as significantly more interesting, satisfying and persuasive, and noticed a significantly higher tendency of this preference among “low” participants, those who participate relatively less frequent in the discussion. Participation, more specifically, the participation in the key decision-making process was noted positively related to efficiency and innovation in the study by Coch and French (1948) in their experiment regarding managerial solution towards group resistance to change in working methods and jobs of factory workers. Is it paradoxical that autocratic people and laissez-faire ones share a preference on leadership style? When we come down to the need of leadership, however, both groups can be looking for the same characteristics from the project manager. That is, decisive response and clear instructions. Speaking of the needs, researches also find that females are judged more harshly than male when they fail to meet the needs of others (Helgesen 1990; Rusell et al., 1988).

Hypothesis 1: Authoritarian leadership is most effective and preferred in tasks particularly

requiring clear order and discipline, such as tasks regarding entrepreneurship and manufacturing skills.

Hypothesis 2: Female project manager of authoritarian style has a higher probability of losing the

task than male project manager.

B. Democratic Leadership

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Barnard (1938) emphasized the importance of stimulating incentives for members in the administrative management, and noted the necessity to go beyond tangible incentives (money) to intangible incentives (moral) through offering an open channel of communication, which secures a platform for persuasion from the supervisors and understanding from the subordinates. The idea of “zone of indifference”, where orders are accepted unquestionably, is exactly what featured in democratic leadership as decisions made under this style of leadership are co-produced by the entire team. Moreover, instead of weakening the ability of centralization, the transformation from control to empowerment seems to lead to a more sophisticated control of the whole picture (Blase, J., & Anderson, G., 1995).

While taking into consideration that some people may initially think highly of the equal voice, which is most commonly seen under democratic leadership, statistics give evidence to a preference of democratic behavior of project leader by various subjects such as primary school children (Lewin et al., 1939), amateur athletes (Terry, P. C., & Howe, B. L., 1984), language program students with relatively lower socioeconomic background (Hamedoğlu et al., 2012). Meanwhile, democratic appears to be one of the key characteristics for supervisors of more effective managerial achievements (Comrey et al., 1952; Comrey et al., 1955; Argyle et al., 1958), of better career development (Hall, J., & Donnell, S. M., 1979), according to the rating of their employees.

However, there is an existing paradox regarding democratic leadership that has been a topic of interest over the years. While democratic leadership received higher belief of being preferred by most people, the way democracy works sometimes draw to relatively lower satisfaction than other styles of leadership (Foels et al, 2004; Leonardo Morlino, 1998). Such inconsistent preference suggests that followers give frequent feedback towards the managerial approach of the leader, contingent on the short-term effectiveness of his/her leadership. And such inference raises concerns that if project manager cannot give enough confidence to the team before certain time point, some of the members may try to snatch authority and make the leader appear more laissez-faire.

Hypothesis 3: Democratic leadership has generally the highest correlation with winning among

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Hypothesis 4: Democratic leadership is positively effective especially in later stages of the

competition when team size is relatively small and agreement is easier to reach.

C. Laissez-faire Leadership

Lao Tzu summarized in the Tao Te Ching that “A leader is best when people barely know he exists, not so good when people obey and acclaim him, worse when they despise him……But of a good leader who talks little when his work is done, his aim fulfilled, they will say, ‘We did it ourselves’”. Indeed, among the three types of leaders, laissez-faire leaders probably give team members the most self-confidence after they win the task, as delegated authority enables members to exploit the expertise to the full.

Nevertheless, as every coin has two sides, freedom sometimes becomes the breeding ground for the collision because increased interaction encourages activity, as illustrated in the paper by Lewin and his colleagues in figures regarding “space of free movement”. Figure 2 gives an example for movement under autocratic leadership, where free movement (white) was initially bounded only by object factors (black) such as knowledge and accessibility, but further restricted by “social influence of the leader” (grey). Even with the total size of movement unchanged in both groups under laissez-faire leadership and autocratic leadership, removing boundary of interaction (grey) did effectively cause more aggressive behavior in the group. Therefore, rather than “zero-leadership”, laissez-faire leadership can even be destructive under certain circumstances (Skogstad et al., 2007). For this reason, laissez-faire leaders need to be able to see the big picture and know characteristics of team members before delegating authority; otherwise, they will be judged by team members as “invisible” or even “useless”.

Hypothesis 5: Laissez-faire leadership is positively correlated to team performance in tasks

requiring freedom for thought, such as tasks regarding advertising and selling skills.

Hypothesis 6: Laissez-faire leadership is negatively correlated to team performance in tasks

requiring clear order and discipline, such as tasks regarding entrepreneurship and manufacturing skills.

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Figure 2

“Space of Free Movement” under autocratic leadership, by Kurt Lewin, Ronald Lippitt & Ralph K. White, 1939, retrieved from http://www.tandfonline.com. Copyright 2010 by Taylor & Francis Group.

Prior organizational studies pointed out the necessity and importance of a deep understanding of project manager related factors (coordination, competence, etc.) and team member related factors (commitment, satisfaction, etc.) as they are listed top of the most critical project success factor for most of the industries2 (Belassi, W., & Tukel, O. I., 1996) and the factors themselves are key criteria of successful projects and management approach in the viewpoint of contractors and stakeholders (Lim, C. S., & Mohamed, M. Z., 1999). Furthermore, Bloom and Van Reenen (2006) found in their survey of 732 medium-sized firms in the United States, France, Germany, and the United Kingdom that the management approach of corporate leaders is highly associated with firm

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performance. Bloom and Van Reenen (2007) reinforced their prior findings on the direct connection between management practices and firm performance, and the correlation was statistically valid. The connection between these two elements can be tricky due to the confusion of the most relevant management practice to enterprise performance. Hence, investigating strategy selection, allocation decision and decision-making process of leaders turn out to be a solution by means of ambiguous focus. Nevertheless, given the paradoxical nature and the complexity of individual’s leadership attitude, a summary of the effectiveness of the three leadership styles on group performance can hardly be formed from the mixed results in prior findings. Therefore, the effort of this study goes to learn the effect of leadership styles on team performance, taking advantage of the public setting of this study where project managers, group members and individuals they interact with are real, and look at specific factors such as individual ability, adoption, task variety and group dynamics by controlling the corresponding dummy in the empirical analysis to decide whether one of them can short-term destabilize performance. I believe this study will open a new channel of understanding of this specific show, and provide some fresh thoughts for team orientation and organization management.

III. METHODOLOGY A. The Apprentice UK

The study addresses data from 64 episodes of the reality TV series “The Apprentice UK” broadcast since 2005. In the beginning of each series, 14 or 16 candidates are split into two teams, usually by gender3, in which they pick a team name that reflects their business spirit as a brand. Every week one contestant from each team, either nominated by team members or suggested by the boss, will be the project manager (PM) of the challenge of the week. The project manager of the losing team will bring two other team members he/she believes share the responsibility for the failure into boardroom, and at least one member including the project manager of the losing team will be eliminated. The next week, teams will be rearranged so as to maintain balance of team size, fairly distribute people with specific skills required for the task (language, relevant experience, etc.) and give everyone a chance to work with different people. However, if team sized turn out to be equal after the elimination, it is possible for no trade happens between two

3 Teams of all male and female only appear in the beginning of each series, and normally remain no longer after the third

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teams. In the last episode the final two choose team members from eliminated contestants and bring the game to the final stage.

The prize for the final winner changed between the episodes used in this study. For 84% of the subjects in our observation (series1-6), the prize was to become the boss, Alan Sugar’s "apprentice" and get a six-figure-salary job at one of his companies. While for the rest 16% of the subjects, the prize was to get a £250, 000 investment in his/her business plan, with the boss as a 50% owner. Hence, the show is essentially a 12-week interview where candidates, as interviewees/future business partners, must try their best to show how “good” they are in terms of outstanding leadership, salesmanship, team spirit, negotiating and organizing skills.

According to the BBC website and relevant articles, the business prospects, before filming the first episode, have gone through the first round of open auditions across the country and jumped out of the crowds during the second round of regional interviews where they are tested for business skills and psychological qualities by producers and psychotherapists. Candidates vary extensively in their education and employment background. Some of the candidates were recently graduated MBA students with barely any working experience, some left school early and became successful entrepreneurs later, some were bankrupted talents or unemployed ex-managers, and others had been working many years4 in industries such as Finance, Healthcare, Hospitality, Law, Real Estate, Retail, Transport, Business Services, Military Services, and Information Technology Services, summarized in Table 1. And from the next column in this table, we learn that most of the finalists have their previous occupation in business service. Under this category, Consultancy and Sales share the same amount of 18.5%, followed by Management, which has 14.8% finalists working in this field before. However, as all final candidates have passed several rounds of tests, we assume everyone in the contest is supposed to have no less than the average level of business related knowledge. Therefore, giving a balanced capability of each team, the leadership style of the project manager becomes crucial to the success of the task.

4 The fact that most of the final candidates quit their job for a chance to work in Alan Sugar’s company or be his business

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Table 1

Summary Statistics of the Candidates

Industry Total (%) Finalists’ previous job (%)

Finance 5.43 7.4 Healthcare 3.26 7.4 Hospitality 2.17 0 Law 2.17 0 Real Estate 4.35 7.4 Retail 2.17 3.7 Transport 2.17 3.7

Business Service - Accountancy Business Service - Consultancy Business Service - Development Business Service - HR

Business Service – Management Business Service - Sales

1.09 13.04 1.09 4.35 19.57 14.13 0 18.5 0 7.4 14.8 18.5 Military Service 2.17 0

Information Technology Service 6.52 3.7

Others 16.3 7.4

Total 100 100

Notes: Occupations such as MBA graduates and entrepreneurs are classified into “Others”. “Business Service”, as a wide category, will be broke into business related accountancy, consultancy, development (product), HR, management and sales. Finalists are those who made into the group interview, which in most cases happen in the second to the last episode of a season.

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14 B. Measure of Leadership Styles

Lewin, K., Lippitt, R., and White, R. K. (1939) claimed the clear distinction of autocratic style and laissez-faire style in delegating authority, which is, group or individual led by the former style has no right to take any action until leader’s command while those led by the latter style have complete freedom to make decisions without any leader participation. However, such distinctions may be less applicable to our contest setting as on one hand that project managers are always on the firing line makes them reluctant to delegate full authority, and on the other hand team members crave for opportunities standing in the spotlight, sometimes steal authority from the project manager. In response to this situation, this study integrated a classification criteria of leadership style based on thoughts inspired by previous frameworks plus observations during this research, and formulated a relatively loose scale for identifying each type of leadership, presuming that leadership styles of the project manager remain consistent.

Each project manager is rated from one (laissez-faire) to six (autocratic) using a classification criteria developed in the foundation of previous studies in respect of general definitions and distinctions among the three categories. Leaders scored 1 and 2 belong to the laissez-faire style, 3 and 4 go to the democratic style, and finally 5 and 6 are considered as the authoritarian style. Table 2 presents details about various directions leaders of the three leadership styles go in delegating authority, making decisions, and interacting with team members. After the analyzing and grading process, we create three categorical variables-“authoritarian”, “democratic”, “laissez-faire”- and put each project manager into the corresponding category.

C. Measure of Performance

Factors such as individual ability, individual personality, creativity, and team work spirit can impact the general performance of a team. Besides, previous research also found correlations between a manager’s leadership style and qualification and performance of organizations and companies. Therefore, in this study team performance will be evaluated on both “successfulness as a team” and “objective performance of the task”, considering the fact that it is literally composed by the word “team” and “performance”. As for “team”, the collaboration level will be measured based on frequency of aggressive behavior during the task and general satisfaction towards the

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Table 2

Description of Leadership Styles

Authoritarian Democratic Laissez-faire

Authority PM have absolute authority PM delegate partial authority

Everyone has equal authority

Decision making All decisions are made by PM regardless of team agreement

All decisions are made by PM after consulting with team members

Decisions are made by individuals to whom PM delegated authority to

Task assignment PM assign task and

whom to work with to each member without consulting member’s opinions

PM consult group opinions and then assign task and whom to work with to each member PM give suggestions and encourage group to excel in their expertise

Task follow-up PM frequently check

progress and ask members to prosecute with precision

Frequent bidirectional contact between PM and members to check progress

Members take the initiative to contact PM to report progress

Verbal Frequent usage of words

such as “I”, “Me”

Frequent usage of words such as “We”, “Us”

Frequent usage of words like “You”

Notes: Structure of classification criteria of leadership styles follows the framework founded by Lewin, K., Lippitt, R., & White, R. K. (1939), but additions and adjustments have been made to adapt for the public setting used in this paper.

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project manager reported back to the boss. As for “performance”, the single task performance will be measured by both the effectiveness of leadership reflected through the winning/losing status announced by the boss and the frequency of being on the winning side of the leader before the current task, regardless of the case that some contestants, who were lucky enough to have strong team members, “free-ride” success of difficult tasks. However, while the “free-riding” problem may raise some potential concerns regarding the validity of the regressor of individual ability and the necessity of including it in the regression, it is less likely to happenin reality for the reason that teams are followed by advisors of the boss, who silently noted down observations and opinions toward each contestant during the task. Apparently, every time when someone strategically hunkers down during challenging tasks, reports on such behavior will be delivered to the boss, resulting in that he/she would be made the project manager very soon to prove worthy.

IV. LEADERSHIP STYLE AND TEAM PERFORMANCE

This study basically intends to find out evidence about whether leadership styles, conditional on capability regarding other relevant business skills, can influence team performance and as a consequence direct the team to a “win” of the task. Team performance can be evaluated on many factors, for instance, collaboration, efficiency and productivity. While some candidates may be so firmly convinced of their own capabilities that they prefer the project manager to be more laissez-faire, people play more supportive roles or those with limited self-discipline may find an autocratic leader more beneficial (House, 1971). There are also cases where a candidate does not shine individually, but show outstanding leadership as a project manager. Moreover, as candidates have various backgrounds, they may adopt the knowledge from previous successful experience to relevant challenges. Finally, we are interested in gender difference in project managing ability and leadership styles. Therefore, it is necessary to control for team size, leading experience, individual strength and sex as the leadership style dummy may pick up the effect from either of the variables.

A. Leadership Style and Task Performance

We first look for the relationship between success in the task and factors that have potential impact on team performance by running a probit regression model and an OLS model (LPM) like

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17 (1) 𝑌𝑌� = Φ( β𝚤𝚤𝚤𝚤 � + β′�X0 ij) = Φ(z)

(2) 𝑌𝑌𝑖𝑖𝑖𝑖 = β0+ β′Xij+ uij where:

- predicted value (𝑌𝑌�) is the predicted probability that Y𝚤𝚤𝚤𝚤 ij = 1(win) given Xij

- Xij is a vector of attributes (authoritarian leadership, laissez-faire leadership, gender, etc.) and uij is the error term. The coefficient β' refers to the change in the probability that Y =1 (z-value for probit model) for a unit change in the independent variable of interest, holding everything else constant

- Dummy of democratic leadership is omitted in both regressions for collinearity

We estimate four sets of regressions, aiming to find out whether a team has a higher probability of winning the challenge with an autocratic/laissez-faire project manager than with a democratic one. Columns 2 and 5 in Table 3 suggest that compared to democratic leadership, authoritarian leadership reduces the likelihood of winning by 15%, and laissez-faire leadership results in a deduction of a close amount of 13%. With a close difference of 2%, team led by an autocratic leader is even more unlikely to win a task than a team with a laissez-faire leader.

Then we take a closer look at the correlations between the regarding characteristics and winning, by looking at coefficients displayed in column 4 and 6 in Table 3. After controlling for those variables, the precision of the model is slightly increased as reflected in the higher (Pseudo) R-squared. From column 6 we see something familiar that having a democratic leader results in an 18% higher probability of winning the task than having an autocratic leader and a 16% higher probability of winning the task than having a laissez-faire leader. This is also consistent with the result displayed in column 4, where standard deviation of the elements is taken into consideration when we calculate the marginal effect of the changes in leadership style. Team size seems to have little to do with team performance in either situation, but still, it is positively correlated to winning with a coefficient of 0.02. Nevertheless, most of the results are insignificant under 90% confidence level for regressions with or without controls. Hence, there is no credible evidence for hypothesis 3 and 4.

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Table 3

Attributes and Performance of the Task I

(1) (2) (3) (4) (5) (6) Autocratic -0.38 -0.15 -0.47 -0.19 -0.15 -0.18 (0.28) (0.28) (0.11) (0.11) Laissez-faire -0.33 -0.13 -0.41 -0.16 -0.13 -0.16 (0.27) (0.28) (0.11) (0.11) Male -0.29 -0.12 -0.11 (0.23) (0.09) Team size 0.05 0.02 0.02 (0.12) (0.05)

Times being leader -0.37 -0.15 -0.14

(0.26) (0.09)

Times in the winning team

Constant 0.17 (0.10) 0.07 0.57 0.07* (0.04) 0.56 (0.06) (0.37) Number of observations 128 128 128 128 128 128 R2 0.02 0.06 Pseudo R2 0.01 0.05

Method Probit Probit Probit Probit OLS OLS

Notes: Standard errors in parentheses. Column 2&4 display the corresponding marginal effects of the regressor in a probit regression. Key independent variables include dummies for fitting the category of Autocratic, Democratic or Laissez-faire. Other controlled variables include dummy for gender, variables for team size, leadership experience and frequency in the winning team of project manager. *p<0.10.

B. Leadership Style and Individual Performance

As task performance is considered to be well reflective of the managerial skills of project manager, the leader's individual ability is, as a reflection of candidate’s confidence and influence over the task, also highly correlated with team performance (Fiedler, F. E., 1964). To deal with the limited

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Figure 3

Stacked line graph with intersection data displayed in a table, by Leadership Style. Cumulated values are represented on the y-axis and frequency of being in the winning team of project manager at the beginning of each episode on the x-axis.

statistics regarding individual’s material or immaterial contribution5 to the group, this study chose to construct a measure of objective capability of each contestant, by recording the winning history at the beginning of the next task.

According to the corresponding coefficients in column 4 and 6 of Table 3, one more time being in the winning team for the project manager can boost current task performance by 7% and the result is significant under 90% confidence level with a p-value of 0.08.

Even if there is no correlation between leadership style and task performance, it could be the case that leadership style indirectly influences the team winning chance through demonstrating individual skills that are crucial to certain tasks. Since winning history has been proven to be positively correlated to winning in the future, we are curious about the cumulative winning status of previous tasks of the project manager of different leadership styles.

As calculated from the data in the table in Figure 3, Laissez-faire leaders have on average 3 wins in the pocket, while autocratic leaders have won on average 2.65 times and democratic leaders

5 Individual contribution can be easily evaluated in tasks with clear monetary target (high sales revenue, lower cost, etc.), but

tricky in tasks with consumer-oriented nature (design a new product, advertising, etc.).

0 1 2 3 4 5 6 7 8 9 Laissez-faire 4 4 8 3 9 3 1 1 0 1 Democratic 12 8 14 10 5 8 3 3 0 0 Authoritarian 4 8 4 3 5 5 2 0 0 0 0 5 10 15 20 25 30

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have on average 2.62 times before they start leading the current task. The stacked line graph shows the trend of the contribution of each value over frequency of being in the winning team of project manager at the beginning of each episode. Intriguingly, while laissez-faire leaders seem to have relatively better cumulated record of winning at the beginning of the challenge compared to leaders of the other two styles, the correlation findings in the previous section granted democratic leaders the highest likelihood to bring a win. One possible explanation of this contradiction falls in the skewed distribution of frequency under democratic leadership. Since 0 win only happen during the first few episodes when rules and competitors are newly introduced, it is possible that the project manager of other managerial style decides to act democratically to strangers as a tentative step.

Then it brings up a concern that leaders may adapt their styles to how the task is going. On one hand, we can hardly prove or test the existence of this endogeneity problem due to limited access to the full process and the complexity of human thoughts. On the other hand, most of the project managers in our observation are, intriguingly, quite consistent with their style of leading the team. Moreover, a naturally democratic leader does not turn fully authoritarian, even if the task gets out of hand. Instead, he/she will remain the democratic way of communication and decision-making is still going through everyone in the team. Similarly, an autocratic leader does not begin to delegate even if the task is going well, but sees the smooth going as an approval of centralization. Therefore, it is more common to see leaders of either leadership style trying to make team members adapt their styles rather than leaders adapt their styles to task progress. There are possible endogeneity issues, but the influence is not significant at observable level.

C. Leadership Style and Adoption

People, as directed by social learning system, acquire new patterns of behavior through direct experience or by observing the behavior of others (Bandura, A., &Walters, R.H., 1977). While there is no correlation between the experience of being project manager and the probability of winning the next task, as reported in column 4 and 6 in Table 3, it can be the case that candidates adopt successful move of previous successful project managers. However, on the other hand, survived through two rounds of audition, the final candidates are believed to have an above average level of business knowledge and depth of entrepreneurial minds. Still, having people who have substantial relevant experience in a specific area, for example, a 5-year-experienced car sales

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manager for a car-selling challenge, as project managers will bring tremendous advantage to the team. To investigate to what extent can candidates adopt their expertise to specific tasks, we first introduce another dummy regarding whether the project manager has his/her latest occupation in the target field of the task.

Column 2 and 5 in Table 4 report an intriguing finding of negative correlation between previous experience in a certain field and the winning chance of the next task targeting the same field, and the result is significant under 95% confidence level. However, the significance faded after adding four more control variables to the regression. It is hard to judge whether the advantage of having experience is dominated by other factors that affect task performance, not saying that candidates, even have relevant skills, may not exert perfectly under various circumstances.

As introduced in the previous section, the content of the tasks varies from advertising, bargaining, design, manufacturing, to selling. Yet, advantageous skills for each challenge are not fixed as most tasks require a combination of skills. For example, in an ice-cream-design challenge, candidates need to come up with a new flavor, manufacture the product by themselves, and then pitch to local retailers. We already know that having relevant experience does not necessarily benefits task performance, regardless of the leadership style of the project manager. Will leadership style affect performance under tasks emphasizing on different type of skill? Even if most tasks, as the ice-cream example, are looking for diversified skills, there is always a critical one (manufacturing in dinning related tasks) that takes the decisive role in a challenge.

Table 5 reports ordinary least square estimates, where winning chance of the team under various types of tasks is predicted for different leadership styles. We got some notable results. That is, an autocratic leader reduces the winning chance by 63% in a challenge emphasizing on the design and a laissez-faire leader can destroy the team in an entrepreneurial task. It makes sense as in the former case centralization may isolate voice from other members and the outcome relies heavily on the intuition of the project manager; in the latter case, on the contrary, full and decisive decisions from the project manager. Hence, hypothesis 6 proved to be correct. Autocratic leadership increases the probability of winning by 44% in tasks requiring manufacturing skill, and laissez-faire leadership the probability of winning by 6% in tasks requiring advertising skill. However, these coefficients are insignificant under 90% confidence level. Therefore, there is no credible evidence to prove the validity of hypotheses 1 and 5.

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Table 4

Attributes and Performance of the Task II

(1) (2) (3) (4) (5) (6) Autocratic -0.38 -0.15 -0.47 -0.19 -0.15 -0.18 (0.28) (0.29) (0.11) (0.11) Laissez-faire -0.31 -0.12 -0.39 -0.16 -0.12 -0.15 (0.27) (0.28) (0.11) (0.11) Male -0.29 -0.12 -0.11 (0.23) (0.09) Team size 0.04 0.02 0.02 (0.12) (0.05)

Times being leader -0.27 -0.11 -0.10

(0.27) (0.10)

Times in the winning team

Target field experience

-0.47 -0.19** 0.13 (0.10) -0.36 0.05 -0.15 -0.18** 0.05 (0.04) -0.14 (0.24) (0.25) (0.09) (0.10) Constant 0.57 0.60 (0.05) (0.36) Number of observations 128 128 128 128 128 128 R2 0.05 0.08 Pseudo R2 0.04 0.06

Method Probit Probit Probit Probit OLS OLS

Notes: Standard errors in parentheses. Key independent variables include dummies for fitting the category of Autocratic, Democratic or Laissez-faire. Other controlled variables include dummy for gender, variables for team size, leadership experience, frequency in the winning team, related experience of project manager. **p<0.05.

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Table 5

Leadership Style and Task Performance, by Skill

Advertising Bargaining Design Entrepreneurship Manufacturing Selling

Autocratic -0.17 -0.75 -0.63*** -0.4 0.44 -0.10 (0.34) (0.59) (0.20) (0.35) (0.27) (0.2) Laissez-faire 0.06 -0.32 -0.25 -1** 0.14 -0.10 (0.23) (0.33) (0.33) (0.38) (0.30) (0.2) Constant 0.5 0.75 0.75 1 0.36 0.55 (0.15) (0.26) (0.13) (0.29) (0.15) (0.11) Number of observations 24 12 22 10 20 40 R2 0.02 0.18 0.34 0.52 0.13 0.01

Notes: Standard errors in parentheses. Key independent variables include dummies for fitting the category of Autocratic, Democratic or Laissez-faire. ***p<0.01, **p<0.05.

D. Leadership Style and Gender

Speaking of individual difference, gender, as a construction factor that brings variance in physical function and socialization, has been in the spotlight of research for long. While such variance may bring concerns that sex differences cast shadow on the equality in leadership, researchers state that male and female actually share more similarities than differences in the managerial behaviors (Shimanoff & Jenkins, 1991).

With mutual interest regarding differences in managerial style and winning chances between male and female candidates, we test the correlation between corresponding coefficients using probit and ordinary least square models.

Even if Column 4 and 6 in Table 3 indicated that there is no remarkable difference between a male project manager and a female project manager on winning a task, the winning statistics in Table 6 gives a more systematic view of male and female leaders of the three leadership styles. By comparing Column 2 and 6 in Table 6, we conclude that authoritarian leadership is less likely to benefit female project manager, and male project manager may find laissez-faire leadership the least effective approach to improve team performance. Hypothesis 2 therefore proved to be true.

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Table 6

Winning Statistics of Project Manager, by Leadership Style and Gender, in Percentage of Total Number of People in each Leadership Style Category

Autocratic Democratic Laissez-faire

(1) (2) (3) (4) (5) (6)

Win Lose Win Lose Win Lose

Male 16.1% 22.6% 30.2% 28.6% 17.6% 32.4%

Female 25.8% 35.5% 27.0% 14.3% 26.5% 23.5%

Total 31 63 34

Notes: A total number of 66 males and 62 females are put into the analysis. A candidate can be counted repeatedly for being project manager more than once. Needless to mention, a project manager may have different leadership styles for diverse tasks.

V. DISCUSSION AND CONCLUDING REMARKS

The main finding of this study regarding the effect of leadership style on team performance is that leadership style has no decisive effect on the task performance of a team, and the result remains unchanged after controlling for gender, team size, and leadership experience. Nevertheless, the results suggest that between diversified individuals, persons with more wins in the past tasks have a higher chance of grabbing the trophy for the next task they lead. Previous relevant experience to task contents, surprisingly, has a negative effect on the task performance, but can be negligible after adding controls to the regression. While authoritarian leadership undermines team performance in tasks focusing on creativity through dogmatically rejecting ideas or flattering a single risky idea, laissez-faire leadership grants excessive freedom to members and loses control in tasks requiring spontaneous entrepreneurial minds.

While this study may have some noteworthy points for its testament of previous researches by unconventional source, and findings regarding task-specific effect of leadership style, it should be kept in mind that even if the data is gathered through careful observation, the credibility is undermined by the errors came along with subjective judgment. And a bad judgment in scoring the leadership style of the project manager will put the data in the wrong category. Moreover, although the classification criteria are handy in identifying the distinction between managerial

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styles, the fact that the audience has limited access to all details during tasks brings up the uncertainty and brings down the precision of the model. Leadership styles, for the purpose of research, are presumptively consistent throughout a single task. Endogeneity problem, though, appears infrequently, still need to be aware of as it somehow restricts the validity of this study and there is little we can do here to improve the situation.

Extended personal information (age, education, etc.), team composition and numerical measures of the ability of both sides of project manager and team members should be further examined for a more comprehensive understanding of the relationship between leadership style and team performance. Also, although the framework of authoritarian, democratic and laissez-faire leadership is ample for this paper, norms that extensively exploit social aspects of leadership should be used, given the increasing attention on sustainable development from organizations as well as society.

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