What is impact of democratic leadership on the success of business organisation? A case study of ABC

Chapter 1.0: Introduction

This chapter of study enclosed the introduction to study and presents research background, thesis statement, practical implication along with research aim, questions and framework.

1.1 Research background

Democratic leadership is normally mistaken to mean political leadership and subsequently many business organisations are reluctant to embrace it. The perception is that embracing democratic leadership will politicise activities of the organisation and this may hinder organisation from achieving their goals and objectives. Organisational politics is taken as a strong control tool by the employees, which may result in lower levels of motivation and efficiency (Cronin and Genovese, 2015).

Additionally, there is fear, especially in the private sector that democratic leadership may render the management and business owners powerless as employees become part of the decision-making team. The perception that by adopting democratic leadership style, may render the management team and business owners powerless, should not be taken as a point of concern (Evans and Qureshi, 2013).

The goal of this study is to determine the impact of democratic leadership on the success of business organisations in private sector. The study aims to determine how democratic leadership affects efficiency, management control and profitability of business, using the case study of ABC as a representative sample.

1.2 Practical Implications for managers

The practical implications for stakeholders involve both members and stakeholders. The managers could improve success of project through participation and achieve operational efficiency. Democratic leadership boosts the efficiency of an organisation by inculcating sovereignty, inclusiveness, equal participation and deliberation. Henceforth, this style of leadership welcomes the contribution of employees in all organisational decisions leading to a more dynamic and successful business environment. Organisational efficiency relies heavily on utilising the least possible resources to generate maximum outputs. It is, therefore, essential for the management to provide governance structures that embrace democratic leadership so that employees can have a platform to contribute to the decision-making process and feel as part of the organisation (Cox, 2016).

1.3 Research importance in theory and practice

According to Gonos and Gallo (2013), democratic leadership means that everybody in the team is given the chance to share ideas and participate in the decision-making process. Democratic leadership empowers employees and encourage them to work hard, which would enhance their performance and consequently lead to successful and profitable organisations. In theoretical context, the research motivation is to evaluate the democratic leadership impact on business and employees.

Firstly, researcher intended to use theoretical foundation and own experience to analyse the impact of democratic leadership towards the success of the business. Secondly, the objective is to develop knowledge through evaluating empirical research to improve an understanding on the effectiveness of democratic style (Bhatti et al., 2012).

Daft (2014) stated that behaviour and actions of leaders have strong impact on the employees and leadership style affects performance of both employee and organisation. In organisation context, the importance of study is to determine how democratic leadership contributes towards the success, profitability and efficiency of business. The focus of study is based on existing leadership style and situation effect and thus expected outcome is likely to demonstrate the impact made on manager and organisation. On the individual level, the study aims to test the impact of democratic leadership implication that how it enables the managers to increase performance (Cronin and Genovese, 2015; Castro, 2016).

1.4 Theoretical perspective and empirical findings

Higgs and Dulewicz (2016) described that leadership is known as social process in which leader intention is to influence behaviour of subordinates through participation and achieve the goal of organisation. Democratic leadership style also known as participative leadership is a process in which leaders have master-master relationship with sub-ordinates and takes consultative approach for decision-making. Leadership is a process to influence the actions of group and achieve organisation goal and democratic leadership offers shared decision-making process between the leaders and its subordinates (Gowtham and Sheriff, 2016).

Democratic leadership focuses on group participation for decision and discussions to ensure decisions are made based on input from subordinates. The advantage of democratic leadership is that it involves everyone in the decision making and the consequently final decision is supported by a majority of group members (goal congruence). In participative style leadership transfer power to subordinates and take joint decision-making approach and thus, this leadership style increases business performance. Participative leaders share values and vision with subordinates and ensure consultation, consensus, involvement and delegation (Bitar and Lowenthal, 2015).

Empirical studies highlight that democratic leadership contributes greatly to efficiency and profitability of business organisations. Businesses can improve their operations and become more profitable if the management embraces democratic leadership at all levels. Democratic leadership provides an open marketplace for the exchange of ideas by yielding maximum, out of the employee’s creativity (Beerbohm, 2015). In literature, the variety of potential benefits offered by democratic leadership is following

  1. It increases profitability of business (Gowtham & Sheriff, 2016; Lee, 2010; Van Wart, 2013; Rustin & Armstrong, 2012)
  2. It increases business efficiency and productivity (Jenlink et al., 2012; Altman, 2013; Keohane, 2016);
  3. It increases overall business performance and contributes towards success of business (Andrews, 2016; Fernando, 2016; Kelly & MacDonald, 2016; Jones, et al 2016; Qadri, 2016);
  4. It offers better knowledge and control for management (Faiz, 2013; Efferin, et al., 2015; Dunleavy, 2014)

1.5 Research Aim and questions

The aim of research is to evaluate the impact of democratic leadership on the success of business organisation. In order to investigate how democratic leadership affects efficiency and profitability, ABC is selected as case sample. The research questions are

RQ1: What is the impact of democratic leadership on the success of profit orientated business organisation?

RQ2: What is the effect of democratic leadership on efficiency and profitability of business organizations?

RQ3: Does embracing democratic leadership in business organizations render business owners and management less influential over the affairs of the business?

1.5.1 Theoretical Research framework

Figure 1: Research Framework

1.5.2 Global Express Services (ABC)

ABC is leading supply chain solution provider in KSA and company offers a wide range of supply chain solutions. The researcher experience of formal and informal communication at ABC has raised interest to understand how to effectively manage the large workforce.

Cox (2016) stated that the performance and control of organisation through right leadership style is crucial for performance and timely services provisions. The diverse leadership style of managers in the ABC has resulted in conflict as well as dissatisfaction in the certain context.

Therefore, the objective is to develop theoretical foundation along with researcher practical experience to evaluate the impact of democratic leadership style on the performance of ABC. The goal is to develop knowledge of democratic leadership style and its impact on profitability, efficiency, control and success of the business (ABC, 2016).

1.6 Arrangement of study

Chapter 2 – Literature review and theory

The second chapter of study provides a detailed review of the literature on leadership theories and style along with effectiveness evaluation of democratic leadership style. In addition, it encloses empirical literature and presents hypotheses’ on democratic leadership and its impact on business success, profitability, efficiency and control of business.

Chapter 3 – Data and methods

The third chapter of study analyses the research methodology used to answer the research question of this study. This chapter enclosed research strategy and measurement techniques to confirm the hypothesis of this study.

Chapter 4 – Findings and Analysis

The fourth chapter of study presents the result from data analysis from both qualitative and quantitative methods to test hypotheses.

Chapter 5 – Conclusion and discussions

The fifth chapter of study includes discussion of results along with theoretical implication, limitation as well as researcher reflections on research process.

Chapter 2.0: Literature review and theory

This chapter of study enclosed literature review on the leadership style and its impact on the business. The contemporary literature and empirical data related to objectives of the study are critically reviewed and discussed to develop Hypotheses. The literature starts with review of leadership theories from the different school of thought to develop an understanding of leadership style and functionality. The aim of literature is to develop the knowledge of democratic leadership style and its impact on profitability, efficiency, control and success of the business.

The literature is organised into three sections. The first section reviews leadership concept and theories. The second section reviews democratic leadership style and functionality. The third section critically evaluates empirical literature on leadership style impact on success, efficiency and control in the organisation and proposed hypotheses. The table below enclosed the taxonomy of literature review for this study

Taxonomy of Literature Review

FocusConceptionsThemeAuthors
Democratic leadershipLeadership Concept and TheoriesConcept of leadershipNohria and Khurana (2013); Northouse (2011);
McGregor Theory X and YGurbuz, Sahin and Koksal (2014); Sahin (2012); Lawter, et al (2015); Lawter, Kopelman and Prottas (2015)
Action-centred leadership modelAdair’s (1973); Rickards (2015); Salehzadeh et al (2015); Western (2013)
Leadership styleDemocratic leadershipHackman & Johnson (2013);  Landis, Hill and Harvey (2014); Hendriks & Karsten (2014); Beerbohm, (2015); Chemers (2014); Doh & Quigley (2014); Bhatti, et al (2012); Fairhurst & Connaughton (2014); Daft (2014); Van Wart (2013); Hendriks and Karsten (2014);  Wahab et al (2016); Scott & Davis (2015)
Role of democratic leadersBitar & Lowenthal (2015); Kane & Patapan (2012);
Empirical LiteratureDemocratic leadership to the success of businessVarma, Budhwar and DeNisi (2008); Helms (2016); Helms (2016); Terzi (2016); Gaikwad (2016); Schultz & Schultz (2015); Puni, et al (2016); Kelly & MacDonald (2016); Lee & Hee (2016); Nguyen, et al (2016); Andrews (2016); Fernando (2016); Kelly & MacDonald (2016); Jones, et al (2016); Qadri (2016); Cox (2016); Solomon, et al (2016); Hilton & Wageman (2016); Castro (2016);
Democratic leadership on efficiency and profitabilityPuni et al (2016);  Solomon et al (2016);  Salman et al (2016);  Salman, Khan and Javaid (2016);  Gowtham & Sheriff (2016); Lee, 2010; Van Wart (2013); Rustin & Armstrong (2012); Reidel & Salinas (2011);  Doh & Quigley (2014);  Kane and Patapan (2014);  Raelin (2012);  Shapiro (2014);  Jenlink et al (2012);  Altman (2013);  Keohane (2016);  Doh & Quigley (2014);
Democratic leadership and control of business owner and managementEgeberg et al (2016);  Adams et al (2012);  Lian & Tui (2012);  Higgs & Dulewicz (2016);  Evans and Qureshi (2013);  Edwards, et al (2015);  Hogg, et al (2012);  Lunenburg (2012);  Faiz (2013);  Efferin, et al., 2015; Dunleavy (2014); Harris (2013); Watson (2013);  Peters (2012);  Cronin and Genovese (2015);  Moos, et al (2013)

Table 1: Taxonomy of Literature Review

Section A – Leadership Concept and Theories

2.1 Concept of leadership

Leadership is a process to include others for actions towards the common goal of organisation. Leadership involves inducing, respect, compliance, and cooperation through exercising power over the subordinates. It involves personal influences to get group or individual to do what leaders want to do. Leaders cope with change through vision whereas management deals with complexities and develops the plan. Leaders set vision and strategy and implement control to achieve the objectives of organisation (Northouse, 2011).

Leadership involves an interaction between group members leading to structuring of situation and perception of the members. Leadership is a process in which one member of group modifies or influences the competencies and perception of other group members. Leadership theories elaborate how effective managers achieve and delegate tasks. Leadership behaviour approach focuses on the leadership style and leadership function in an organisation (Nohria and Khurana, 2013, p.67-68).

2.2 Leadership theories

2.2.1 Leadership behaviour theory – McGregor Theory X and Y

According to Gurbuz, Sahin and Koksal (2014), McGregor theory enclosed two important assumptions related to management practices, which are human behaviour and nature. Theory X elaborates the negative side of human nature through discussing that people are irresponsible, dislike work and require close supervision.

On the other hand, theory Y examines the positive side of human nature through assuming creativity and self-control for the job. The leadership style of managers is depending upon the belief and assumption of manager’s exhibit through theory X and Y.

Table 2: Leadership behaviour theory – McGregor Theory X and Y

Leadership behaviour theory – McGregor Theory X and Y

Lawter, et al (2015) reviewed how assumptions of the theory X and Y affect the manager function of planning and control in an organisation. In relation to planning, theory X results in setting of comprehensive objectives as employees do not participate. On the other hand, theory Y assumption represents employee and managers set the shared objectives to achieve the objectives of the organisation.

In the theory X scenario, managers are likely to face resistance because of top-down communication approach. However, in Theory, Y, leadership style fosters the participative approach through empowering the employees and responsibility. Theory X highlights the role of manager as performance judge and Theory Y offer control based on self-control of subordinate with upwards communication (Lawter, Kopelman and Prottas, 2015).

2.2.2 Leadership contingency theory – Action-centred leadership model

Adair’s (1973) presented ‘Action-centred leadership model’, which elaborates that leaders achieve the results and get the job done based on the relationship between employees and managers.

The three important characteristics of action-centred leader are; 1) task structuring to get job done; 2) monitor and support the people performing the job, and 3) foster the relation among the team members. The model developed by Adair highlights the interaction, simplification and variability of human behaviour. Leaders’ role is to exhibit the behaviours and carry the function as highlighted in figure 1 (Rickards, 2015).

Leadership contingency theory – Action-centred leadership model

Figure 2: Leadership contingency theory – Action-centred leadership model

Salehzadeh, et al (2015) added that the contingent and situational elements require managers to response accordingly and efforts for each circle vary. In task context, the leadership role is to define task, develop plan, allocate resources, and check actual results (variance analysis) and feedback for corrective actions.

Leader effort for the team building is to maintain discipline among the team, motivate team members, develop sense of purpose, facilitate communication and develop groups. Moreover, the role of leader is to understand and resolve the employees’ problems as well as reward and appraise individual’s recognition and capabilities (Western, 2013, p.101).

Section B – Leadership style

According to Hackman & Johnson (2013), leadership style is leader’s behaviour exhibit during the employee supervision. In other words, leadership style defines the way leadership function is carried out and the way manager behaves towards group members. Leadership style theories acknowledge the importance of leadership skills to achieve the objectives. Leadership style enables the leader to perform the task through engaging individual to feel most contented.

McGregor defines the leadership style as a method to deal with the organisation reality, which is deliberate adopted and recognised by the leader. In summary, leadership style is a way of coping with the reality of workplace environment (Landis, Hill and Harvey, 2014).

2.3 Democratic leadership

Hendriks & Karsten (2014) elaborated that democratic leadership involves shared and open style of managing team in which team members discuss in free flowing. Democratic leadership also known as ‘participative leadership’ allows the team members to get involved in the discussions and take more active role in the decision-making.

Empirical data on democratic leadership highlights that participative style results in higher productivity, increase group morale and better contribution from the team member (subordinates) (Beerbohm, 2015; Chemers, 2014; Doh & Quigley, 2014; Bhatti, et al., 2012).

Fairhurst & Connaughton (2014) commented that in democratic leadership style, the focus of power is within the group through greater interaction and coordination. Participative style fits best in situation where member of group are skills and competencies as well as willing to share knowledge. Democratic leadership style is useful in dynamic and rapidly environment to keep group up to date and adapt to constant change. In democratic style, sub-ordinates participate in the problem solving and goal setting which encourage commitment to final decision (Daft, 2014).

Van Wart (2013) analysed that democratic leadership creates the situation, which enables the subordinates to learn and discuss the performance. Democratic leaders show the greater degree of reality, satisfaction and motivation for greater productivity. Democratic leadership style offers encouragement for team member to share ideas and facilitate the conversation through consolidating the ideas and information for effective decision-making.

Democratic leadership style allows the leaders to achieve higher productivity as well as offers flexibility to adapt to the better way of doing things. Democratic leadership style allows consolidating professional and experiencing team and capitalising on skills and talents of team members (Hendriks and Karsten, 2014).

The advantages of democratic leadership include involvement, satisfaction, productivity and commitment. Democratic leadership style enables high-level participation and consultation in decision-making. The greater degree of involvement represents higher motivation and contribution of experiences from group members.

The problems associated with democratic style are that it involves lengthy debate and time-consuming activities which delay decisions. Democratic leadership style is that decisions take longer and possibly limited experience of subordinates. In the matter of urgency, group decision making slows down the decision-making speed which leads to sub-optimal decisions (Wahab et al., 2016).

To summarise, in democratic leadership style, team members participate in the decision-making process but leaders make the final decision. Democratic leadership style encourage setting more challenging goals, exploit opportunities to devise improved method of workflow, recognise achievement, job growth as well as enable the employee to learn from mistakes.

characteristics of democratic leadership

Source: Scott & Davis (2015)

2.3.1 Strengths and weaknesses of democratic leadership

Firstly, democratic leadership involves a high level of participation and consultation in decision-making between manager and subordinate. Secondly, it involves the greater interest and involvement means the higher level of motivation for subordinates. Thirdly, participative approach can improve decision-making through knowledge contribution from the subordinates. Finally, democratic leadership develops subordinates through experience and initiatives of consultations. It engages employees to solve complex problems and promote a creative environment in the organisation (Cronin and Genovese, 2015).

There are number of limitations associated with democratic style. It takes a longer time to reach the decision through consultation approach. The limited experience of subordinates may result in poor decision-making. In addition, the consultation with subordinates with limited experience means the quality of decisions as well as it slows down the decision-making during the period of crisis or time of urgency.  Furthermore, democratic style is time-consuming; decision-making takes longer and creates uncertainty because of indecisive in a certain situation (Gowtham and Sheriff, 2016).

2.4 Role of democratic leaders

Bitar & Lowenthal (2015) stated that leader is a person who realises the need to get the task done through exploiting the opportunity. The leader is an encourager, set vision the future, and leads others as well as willing to take the risk for better tomorrow. An effective leader is a good listener, communicator and coordinator. The role of democratic leader is to encourage group members to share ideas and opinion for innovation and creativity.

The core characteristic of democratic leaders is friendliness and helpful through participation. Kane & Patapan (2012, p.30-31) elaborted the distinctiveness of democratic leadership and stated that it influence motivation, encourage cooperation, logical consequences, self-determination as well as situation-centred.

Democratic leaders empower the group members, distribute responsibilities and facilitate group decision making. Likewise, the role of the democratic leader is to provide information and share knowledge among group members. The two main functions of democratic leaders are participation and control. The function of democratic leadership is top-down management style and directive control, shared decision-making and associated with high morale.

Section C – Empirical Literature — Leadership and Performance

Performance management is a process to translate organisation objectives into the individual objective of an employee for goal congruence. Performance management is important in terms of both individual and organisation in terms of productivity and motivation. The important aspects of performance management are operational factor and control system of organisation.

The role of leader is to build a positive relationship with employees through linking organisation objectives so that employees achieve these objectives. Moreover, performance monitoring involves the mechanism to measure the results achieved by the employees and sustain desire level of performance (Varma, Budhwar and DeNisi, 2008).

2.5 The impact of democratic leadership to the success of business

Helms (2016) analysed that organisation environment has experienced rapid and radical challenges due to globalisation and technology which has increased competition and forced the organisations to streamline operations. The internal organisational challenges include efficiency and productivity and external challenges are economic, political and regulatory issues which affected the competitiveness of organisation.

In such context, success of organisation is marked through how it has placed itself in marketplace to tackle the competition. To manage internal and external challenges and obstacles, organisation leadership plays critical role. Human capital is an important asset of organisation and vital source of competitive advantage through contributing to the performance of organisation. The role of leaders is to accomplish the goal of organisation through organising and managing the planning and control (Helms, 2016).

Terzi (2016) stated that democratic leadership affects the performance of organisation through developing quality workforce and defining the degree to which employee accomplishes the task. Leadership performance reflects in the efficiency of organisation and democratic leaders enable the cooperation and coordination among people in organisation and impact upon the success of the organisation.

Likewise, Gaikwad (2016) added that effectiveness of leadership is marked by execution of strategy and role of democratic leadership is to link the organisation objective with individual through participation (goal congruence) and achieves success for organisation through goal congruence.

Democratic leadership enables group members to perform through facilitation, accommodation and cultivation. Evidences show that democratic leaders build employee morale and develop environment, which enhance group member’s involvement to make contribution towards the success of organisation (Schultz & Schultz, 2015; Puni, et al., 2016; Kelly & MacDonald, 2016).

Lee & Hee (2016) reviewed that success of organisation is dependent on the ability of leader to optimise the human capital of organisation. Democratic leaders understand the value of employee to achieve the goals of organisation. Participative leadership style involves spending time in getting employee idea, build trust, commitment and employee buy-in. Leaders set the goals and strive for the collective performance to contribute towards the success of organisation.

Employees contribute towards decision-making and role of democratic leader is to support employee how to perform the task that drives responsibility and flexibility. Nguyen, et al (2016) discussed that participative style enables to keep employee morale high and promote positive climate in the organisation.

Democratic leaders contribute towards the success of organisation through consensus and employee participation. Employee idea and input are value for collective decision-making and problem resolution. Additionally, democratic leadership fosters positive climate for building team, developing individuals and performing task and contributes towards organisation success.

Andrews (2016) evaluated that leadership role is paramount in today’s competitive world to manage the employees and ultimately mark the success or failure of organisation. Democratic leaders act as ‘change agent’ to ensure organisation achieves its mission. The importance of effective leadership has increased due to shift in the business environment to answer the competitive intensity.

Democratic leadership contributes towards the success of organisation through evaluating the strength and weakness of employee and analysing the impact of actions, decisions and relationships.

Fernando (2016) added that leadership style is a critical factor in the success of organisation and good organisations start with good leaders and success of organisation reflects the ability of the leader. Democratic leadership influences the action and motivation of employee to improve the performance of the organisation in competitive global market. Democratic leaders perform well in continuously growing markets through effectively managing the resources allocation, respond to the fierce market competition, and achieve business success (Kelly & MacDonald, 2016).

Jones, et al (2016) analysed that democratic leadership achieves success of organisation by ensuring that individual and team in organisation embrace vision of organisation. Participative style ensures employee development, team productivity, enforce accountability, employees’ empowerment and job satisfaction to achieve success for the organisation through human capital. Democratic leadership recognises the contribution of individual and team and i.e. develops employees through training to perform their job effectively.

Qadri (2016) highlighted that democratic leaders achieve goal congruence and deliver product and service, which meet the expectation of customers. The availability of information for internal and external stakeholders communicates values of organisation and performs timely decision-making. Employees share ideas and knowledge through involvement and teamwork as well as held accountable for achieving positive results. Democratic leadership ensures organisation success by eliminating unnecessary rules and regulations for timely completion of the task.

Cox (2016) studied the role of democratic leaders in terms of contribution towards the success of organisation through promoting a positive working environment to resolve conflict and disputes.

The ability to address the issues of miscommunication and power struggle, which influence the employee morale and climate, participative leaders communicate vision; promote the positive working environment to overcome the uncertainties and inconsistencies. Democratic leader contributes towards the success of the organisation through promoting the positive working environment for employees to perform a job in an effective manner.

Solomon, et al (2016) added that democratic leadership allocates resources to ensure both employee and organisation function effectively. Leaders promote growth and personal development to motivate employee and thus, employees sharing ideas and knowledge spur innovation. Democratic leadership facilitates team and individual development through knowledge sharing and collaborative decision-making to achieve success of organisation.

Hilton & Wageman (2016) evaluated that democratic leaders ensure that employee feels valued and motivated through promoting culture of respect and trust. Positive working environment encourage employees to share ideas, increase commitment, and thus motivate employees to become part of decision-making process in an organisation.

The goal congruence enables to align the organisation and individual goal to achieve success for organisation. Castro (2016) added that democratic leadership promotes team building through collaboration and leverage the opportunities from group member knowledge and experience. Leadership set achievable goals, the target for the employee, and improves resources effectiveness.

Democratic leadership style drives the success of the organisation through fostering positive working environment in which employees feel valued and part of organisation.

2.6 Effect of democratic leadership on efficiency and profitability of business organizations

Puni, et al (2016) analysed that resource effectiveness of organisation depends upon ability of its leaders in harnessing resources. Leadership plays critical role in allocation and distribution of resources and thus leadership style has significant role in performing roles and tasks.

Democratic leadership role in achieving efficiency and profitability is important and leadership achieves efficiency through resource mobilisation and processes enhancement. The two important factors, which allow elaborating the performance of both employee and organisation, are profitability and employee efficiency.

Solomon, et al (2016) studied that business efficiency and profitability attributed to leadership style linked to execution of strategy. Democratic leadership increases the organisation efficiency through employee accountability and ownership to overcome ambiguity among group members and resolve conflict. Employee involvement increases the ownership of the task and increases the employee commitment. Democratic leadership evaluates the expectation for group members that reduce the ambiguity and increase the efficiency of business.

Salman, et al (2016) examined that participative leadership style encourage setting more challenging goal, exploiting opportunities to devise improved method of workflow, recognise achievement and job growth. Employee efficiency measured as the degree to which employee achieves its target and goals in relation to proportionally of resources. The employee efficiency elaborated through quality and quantity of output, timeliness and cost-effectiveness.

Democratic leadership enables the involvement of employee that allows to clearly defining the task, initiatives and responsibility. The clear communication for deliverable for each task enables to overcome the expectation gaps and accountabilities are clearly defined to achieve organisational goals (Salman, Khan and Javaid, 2016).

Gowtham & Sheriff (2016) reviewed the participative style effectiveness and contribution towards the profitability of organisation through higher throughput, reducing the scrap, timeliness of manufacturing and cost effectiveness to increase the profitability of business. This increases the throughput and process efficiency to improve the profitability of company.

The participative approach ensures that organisational resources are effectively distributed to maximise the efficiency. Empirical evidences show that business profitability and efficiency are linked with leader’s ability to develop long-term relationship with customers, business knowledge; attain higher productivity and dependability, which increase the profitability of organisation (Lee, 2010; Van Wart, 2013; Rustin & Armstrong, 2012; Reidel & Salinas, 2011).

Doh & Quigley (2014) analysed that democratic leadership provides strong support for the employees to improve their skills and knowledge that is important to perform the job. This increases the performance of the employee and consequently affects the process efficiency of business to deliver better results. The development of employee skills portfolio increases the satisfaction and motivation of employee as well as improves the business climate, which enables specific actions required to achieve the results.

Democratic leadership influences efficiency through building positive working climate through motivation and inspiring the employee to ensure business goals are achieved. Participative style increases the business efficiency through an overcoming range of issues such as low morale, absenteeism and high turnover. This reduces the cost for business and increases efficiency that delivers better profitability for business (Kane and Patapan, 2014).

Raelin (2012) highlighted that democratic leadership encourages ideas from employees to improve product and processes that allow re-inventing the products and service and contributing towards the profitability of the organisation. Democratic leaders engage the employee through team building and recognising the completion of milestones, which engage employees and increase staff morale and i.e. better results for the organisation. Participative style encourages open communication and shared decision making which increases the trust among the group members.

Shapiro (2014) added that the strong relationship between the employees and leaders increase trust and employees feel valued which enable quick resolution of the problem. Participative leadership develops positive working climate and motivates employees through feedback and involvement, which increase the sense of self-esteem and positively impact on the efficiency and profitability of business.

Jenlink, et al (2012) stated that leaders provide positive working climate through quality of work, timeliness and discipline to increase the efficiency of business. The success of organisation is recognised for both individual and team performance. The sharing of information and ideas compensates for weaknesses and strength provides support for group members towards the common goal.

The practice of participative style facilitates communication to effectively resolve conflict and develop team which is self-directing, self-governing and problem solving. The two-way communication allows improving the process through feedback as well as increasing the efficiency of business.

Steven Altman (2013) stated that participative style exhibits cohesion, initiative, task-orientated behaviours and cooperation to increase the processes efficiency and increased throughput. The optimum use of human capital improves the relationship between productivity and employee.

Leaders’ confidence in the employees allows collectively setting the company goals at all levels, which result in cooperative work environment. Profitability of business is by-product of business efficiency that achieves through employee alignment and involvement (goal congruence).

Keohane (2016) stated that democratic leadership deploys fiscal measure as well as overhead control and achieves objectives of the organisation. Participative leadership style increases business efficiency through people accountability and develop behaviour, which delivers result for the business. Leaders’ implicitly links the climate of organisation and employee engagement to increase efficiency and productivity of business. Democratic leadership values shared working models and expand capabilities through communicating vision and understanding business complexities. The involvement of individual, reward awareness, empathy and acceptance build positive climate at the workplace and increase the resource efficiency of business.

Doh & Quigley (2014) added that democratic leader engages employee and positive climate facilitates the employee and customers to achieve results. The effective use of human capital through empowerment as well as supporting employees enables profitability of business. Democratic leadership develops an environment where employees have positive work experience and influence their work and customer experience. The business efficiency translates into profitability through people-centred approach.

2.7 Democratic leadership and control of business owner and management

Egeberg et al (2016) stated that democratic leadership in an organisation increases the quality of decision through involving the idea of group members. Hierarchies in organisation help groups to solve the problem through collaborative decision-making. Nevertheless, this unbalanced control in an organisation and few or single member controls decisions and actions of others. The concentration of control allows the few people to make decisions and possible source of conflict.

According to Adams et al (2012), organisational politics have a direct effect on the performance and control of organisation in both formal and informal context. Leadership has direct effect and cause the performance of business through setting vision and implementing strategy through influencing people around them. The employee autonomy and decentralisation of decision making in democratic style result in weak execution and control issue in organisation.

Lian & Tui (2012) analysed that participative leadership style in an organisation affects the performance of employees and manager. In the context of organisational politics, the focus is to maximise the self-interest and i.e. conflict with goals and interest of other individuals in an organisation.

Therefore, the impact of organisation politics is to achieve the best result through games and influence tactics. Leaders in organisation pose powers that have implication for management and business owners. In the context of democratic leadership and control, participative style enables to manipulate the behaviours of others.

Higgs & Dulewicz (2016) evaluated that Leader’s expertise and specialised knowledge for technical matter and activities within an organisation influence the management ability to influence the decision. Leadership style marks the method and ways in which individual and group work towards the common goal.

The technical knowledge and skills portfolio of person is likely to influence the business owner to ensure smooth operations of business. The authority and power of democratic leadership results in high power and affect the management influence on the business (Evans and Qureshi, 2013).

Edwards, et al (2015) evaluted that democratic leadership gives access to wide information pool in relation to the environment and working of the organisation. The access to unique information and group control offers democratic leader power which is vital to make strategic decisions.  Democratic leaders have the capacity to manipulate symbol as well as internalised commitments and norms.

Hogg, et al (2012) added that the control of specialised information gives democratic leadership power to influence the business decision when compared with management or business owner. Democratic leader influences unidirectional power and affects the relationship between the employee and management. The power of democratic leaders give the opportunity to make better decision based on information and thus limits the ability of business owner to make independent decision.

Lunenburg (2012) examined that democratic leaders have authority and power based on coercion, normative and knowledge. This gives democratic leader power to take decision and maintain control of the business. The negative element associated with organisation politics are self-interest and self-serving behaviour of individual for own advantage. The legitimacy of democratic leaders is right in terms of value and this is tantamount to authority. The participative style gives democratic leaders active power through mobilising power for their ends.

Moreover, Faiz (2013) added that monopolising of position raises power, conflict and influence which creates politicised situation. Empirical evidence shows that political structure of organisation provides platform to express motives and interests which managerial positions accumulate power through influence and activities (Efferin, et al., 2015; Dunleavy, 2014).

Human being makes comparison for self-esteem and interest which reflects the attrition in the power base. Therefore, democratic leaders have more power to influence control and affect decisions, which limits the business owners and management less influential over the affairs of the business (Harris, 2013; Watson, 2013).

According to Peters (2012) the connection power of democratic leaders has a significant influence on the leadership power and thus, the role of leader in control of the organisation. The connection power gives information and builds strong coalition in sense of acceptance and approval. The power and authority of individual are made of three elements and define the control system in the organisation.

The foremost element is quantity of authority, expertise and reputation as well as personality of leader. Democratic leadership reflects the capitalisation of power and leader internalise source of power. The realities of experience in organisation show the conflict among the members, particularly in less rationalistic situation (Cronin and Genovese, 2015).

Moos, et al (2013) elaborated that in an organisation, conflict of interest rises because there is no measure for course of action for events such as promotion, succession, mergers and new executives. Participative leaders have high influence on team and individual in organisation to implement strategy and based on right of control and involvement of group members imposes concomitant obligation to obey. Leader ability to influence others creates referent power for the organisation. Democratic leaders match competence and authority to maintain the coalition. The ability and power postures have substantive impact on the decision-making and limit the business owners and management less influential over the affairs of the business.

2.8 Conceptual framework

The completed conceptual framework developed through literature review is presented in diagram below.

Chapter 3.0: Data and methods

3.1 Research design and process

Mixed method studies are useful to analyse a range of outcomes through the inclusion of both qualitative and quantitative methods for data collection and analysis. In this study, mix methods approach is used to generate rich data related to democratic leadership in the context ABC and consequently expand this knowledge in border context to reveal findings (hypotheses) on democratic leadership. The reason behind using mix method is synergistic benefit from integrating both constructive and post-positivist paradigm. Therefore, this research aimed to exploit the benefits of both qualitative and quantitative research to achieve comprehensive results (Creswell, 2014).

3.2 Sequential Exploratory design

Greene et al (1990) have identified five purposes behind using the mixed methodology and for this study, it is development phase because it proposes to use outcome from one method (qualitative) to develop and evaluate the results from other method (quantitative). The first phase of this research involves using qualitative data collection and the second stage involves quantitative data collection (Clark and Ivankova, 2015). Moreover, Creswell (2013) explained sequential study as two-phased approach and benefit of this approach is that both paradigms are clearly separated which enable the researcher to utilise paradigm behind each phase.

Sequential Exploratory design

Figure 4: Sequential Exploratory design

3.2.1 Usefulness of sequential exploratory design for this study

The sequential exploratory design enables the researcher to utilise the qualitative findings as input to the quantitative stage of the study. This approach is particularly useful when there is a need to develop an understanding of emerging issues such as issue arising related to democratic leadership effectiveness in ABC. The qualitative stage for this study involves developing an insight on leadership style understanding in ABC and consequently, develops a questionnaire for the survey among the ABC employees. The mixed method research design for this study allows conceptualization of democratic leadership and explores relationship between democratic leadership, profitability, efficient and control of the organisation.

Sequential exploratory design for this study

Figure 5: Sequential exploratory design for this study

This research divided into two distant phases which are qualitative (phase one) and quantitative (phase two) (Mertler, 2015)

Phase one — Qualitative Research

3.3 Qualitative Research

Qualitative research was the first phase of the study and aims to explore the role of democratic leadership in the ABC. This stage was based on data collection from ‘two senior managers’ using the semi-structure interviews. The data was analysed against the empirical studies to identify the converging and diverging trends relating to democratic leadership.

3.3.1 Interview questions and process

The questions used for the interviews were developed from the literature review. The researcher has used the “convergent interviewing technique” for data collection and analysis at this stage of the study. The interview questions are attached in appendix 1. The convergent process involves interviewing approach whereby actual contents of interviews are structured by the researcher to dedicate the process and direction of a research.

The aim of such interviews is to collect data to refine questions as well as selection right respondent and sample size for the study. During the interviews, brief notes were taken for analysis and further discussion  (King and Horrocks, 2010)

3.3.2 Sampling and Rationale for sample size selection

To develop a deeper perspective on democratic leadership through using the qualitative technique, purposeful sampling was used. According to Emmel (2013), purposeful sampling allows identifying people who best understand the phenomenon. The two senior managers at ABC were interviewed and information was gathered in the context of democratic leadership. The initial sample size proposed in a research proposal for interviews were based on 20 managers.

However, due to report size restriction, access to senior managers (Executive members) and convergent interviewing techniques has allowed to select smaller sample size to ‘2 senior (Executive managers– EM)’. The objective is to identify agreement and disagreement between interviewee and interviewer and issues are explained and discussed.

The knowledge, experience and valuable in-depth perspective (expert opinion) from two senior members have allowed refining the results against literature and completing the first phase of the study in a comprehensive manner. The two executive managers were coded as EM1 and EM2 for this study and original identifies are kept confidential.

3.3.3 Data Analysis

The researcher took brief notes during the interview and analysed against literature to understand the emerging issues. The researcher conducted data analysing without the aid of software’s because only two interviews (Guest, Namey and Mitchell, 2012). The researcher developed a total of 12 questions for interviews (appendix 1) and discusses each question with both participants. This has allowed refining the specific topic and area based on pattern matching and results were compared to determine the pattern of logic.

The advantage of the convergent interview is that data collection and analysis occurs on the iterative and cyclical basis and this allows the researcher to analyse in terms of convergence and divergence (Johnson and Christensen, 2013). The questions have enabled the researcher to discuss specific area in depth and developed insight on democratic leadership along with improvement in questionnaire.

Phase two — Quantitative Research

3.4 Quantitative Research — Survey Questionnaire

The second stage of research was quantitative which involved development and analysis of survey among the employee of ABC. The questionnaire was developed from literature and results from the first phase of the study. The findings from qualitative phase are useful to inform quantitative stage.

The advantage of survey includes data collection through unobtrusive means, flexibility, reducing the bias when researcher is involved and minimising the time and cost associated with data collection because surveys are self-explanatory and well-designed (Muijs, 2010).

3.4.1 Questionnaire design and administration

Fowler (2013) emphasises that the design of survey questionnaire is critical to the success of the research. The three important issues surrounding to questionnaire are coding of variables, question wording and general appearance. The questionnaire design is comprised of four sections. The first section includes demographic data (age, gender, qualification, service length and position). The second section enclosed the questions related to democratic leadership and business success .

The third section evaluates democratic leadership and efficiency and profitability of business. The fourth section of questionnaire examines the democratic leadership and control of the business owner and management context. The respondents were asked to respond to Likert scale (O’Dwyer and Bernauer, 2013). The questionnaire was administrated online for timely data collection. The questionaire for study is attached in appendix 3.

3.4.2 Sample size

Purposive sampling involves a non-probability sampling and researcher judgment is used to select the study sample. The judgement is made on what needs to know and selection of the population is based on their experience and knowledge (Marsden and Wright, 2010).For this study, a sample of 100 respondents is selected among staff members working in different departments of ABC such as finance, sales and customer service. The number of employees selected from supervisory and management positions and lead number role in operational and functional units of ABC systems.

Purposive sampling

Figure 6: Purposive sampling

3.4.3 Data analysis

The data collected was analysed through statistical analysis program SPSS 23. The online data was exported to excel which was loaded to SPSS. The first step performed was examining and cleaning of missing data. Univariate analyses were performed to develop an initial understanding on data collected. Moreover, the reliability of selected variables was tested using Cronbach’s alpha to measure internal reliability and value above 0.6 was considered reliable (Vinzi et al., 2010).

3.5 Ethical consideration

At the start of this study, ethical approval was applied to University of Leicester and study was granted ethical approval. During the phase one, the individuals’ identities were kept confidential by using codes rather original names of respondents. For the survey, no personal information is collected at any stage. The informed consent of participants was gained prior to collection of data. For qualitative phase, individuals were provided with consent form whereas, for phase two, informed consent was gained online before the start of the survey.

Finally, data collection boundaries were a key issue associated with this study. Due to high competitive nature of the business and issue sensitive, no sensitive or company information was collected (Patton, 2014; Ladkin, 2015). The next chapter of study enclosed analysis and finding of the study.

Chapter 4: Results and Analysis

This chapter of the study enclosed data analysis and findings for three research questions which are 1) impact of democratic leadership on the success of profit orientated business organisations, 2) effect of democratic leadership on efficiency and profitability of business organizations, and 3) how democratic leadership in business organizations render business owners and management less influential over the affairs of the business. The data from both qualitative and quantitative is analysed in detail to present study results. The triangulation of data has minimised the chances of researcher bias.

4.1 Data preparation – Qualitative results

There were two interviews conducted with senior managers coded as EM1 and EM2. The interview with EM1 was 34 minutes conduct on 5/12/16 whereas interview with EM2 was 37 minutes conducted on 21/12/16 (consent forms attached in appendix 2). The response of managers was transcribed by the researcher to exclude non-meaningful verbal actions and translate certain words which were not in English. The data was entered into four column excel matrix which included Literature outlines, ID and questions, interviewer and interviewee response to identify and analyse the convergences and divergences from the discussions.

4.1.1 Participants demographics

The data was categorised under three initial constructs proposed by researcher and total 12 questions were prepared. The demographic information for participants was collected and EM1 has Master degree in accounting and finance along with 22 years of experience in management. The second participant EM2 has profession accounting certification and working in management position for nearly 19 years.

4.1.2 Research question 1: Analysis and emerging themes

To analyse the relationship between democratic leadership and profit orientation of business, a total of four questions were designed to analyse the convergence and divergence with literature. The first question asked with the aim to examine the value of input and idea from subordinate and how goal congruence contributes towards the success of the organisation.

The holistic response of managers highlighted that they agreed to fact that subordinates are involved in existing and future plans for input and idea before reaching a decision. EM1 added that “we hold multiple meeting for mid-to-long plans and managers from lower hierarchy are consulted to achieve consensuses”. The data shows that managers emphasis on the need for consultation for both existing and future plans.

The second question was designed to test how to managers develop the quality workforce and set the standard for sub-ordinates to achieve goals. The discussions highlighted the convergences that employee contribution is given importance to get everyone on board. However, the divergence from data showed that employee rather asked for an opinion on issues and not involved in strategic decisions.

EM2 stated that we usually have a more informal meeting with sub-ordinates to get their opinion and perspectives on how to perform a specific task. Nevertheless, “senior management experience and requirement of organisation are core components in goal setting for employees”. The data analysis shows that employee’s opinion considered in an operational perspective and managers themselves take strategic decisions.

The third question was designed to understand how managers develop a working environment in which employee makes a contribution towards project goals while maintaining high morale level. The data analysis shows that managers do consider the value of organisation environment to ensure the morale of employees and importance of employees taking project ownership. The both managers completely agreed to the fact that the attention is given to create an environment in which employee take project ownership and participate in decision making. EM1 added that keeping employee morale high means there is less turnover and innovative ideas coming from employee. The eagerness from employees to accomplish the task reduces the time and cost to complete the project. EM2 stated that “involvement of employees at operational level helps to achieve better profits through increased throughput” (McGregor Y).

The fourth question attempts to understand democratic leadership contribution towards organisation success through employee evaluation. The question emphasis on the literature from Lee & Hee (2016) and reviewed that success of the organisation is dependent on the ability of the leader to optimise the human capital of the organisation. The response of managers highlighted that management tends to consider what and how it should be done by the employees through evaluation of the expectation gaps. EM1 stated that “we sat down to discuss the employee contribution and its shortcoming in achievement with the focus on increasing the speed and reducing cost”.

4.1.3 Research question 2: Analysis and emerging themes

To analyse the effect of Democratic leadership on efficiency and profitability of business organisations, four questions were designed to evaluate relationships and variables related to control and decision making. The fifth question of the study involved analysing how participative leadership style encourage setting more challenging goal, improved method of workflow, and recognises achievements.

EM1 added that we had an informal meeting with subordinates to discuss what should be achieved and how it can improve profitability. These discussions are translated into employee goals and emphasis is given to improved results. In similar, context EM2 stated, “Workflow and goal setting for employees are based on the roles and responsibilities which meet needs of organisation”. The divergence from manager response was that the focus is on requirements of task rather emphasising on long-term perspective and growth of employee.

The goal of the sixth question was to understand how managers use and deploy fiscal measures and interview discussions were based on the application of management control in the context of democratic leadership. The response of managers showed that both EM1 and EM2 strongly agreed to need of fiscal measures for efficiency (financial control). EM2 added that the “fiscal measures are directly related to the profitability of business and time is most critical factor to effect efficiency and budgets”.

For example, the ERP module development for one of the branch office was delayed for two months. The project slippage was based on the lack of agreement and failure to integrate the requirements. Thus, we rather implemented a standard package (cloud) and employees were given short training to ensure workflow. The convergence with literature showed the value of fiscal measure and overhead control to deliver results through addressing slack and enforcing decisions.

This seventh question elaborates the need of communication for deliverable; accountabilities and addressing the expectation gaps in the context of participative leadership. The literature highlighted that managers’ priority is to overcome the differences. EM1 added that priorities are set to ensure service delivery rather overcoming the individual expectation gaps. The priority and guidelines are set for employees to overcome the differences in expectations and increase the timeliness of results. EM1 mentioned that there is less emphasis is given on resolving individual difference or setting challenging goals through participative approach.

EM2 added that priorities are given to tasks which directly related to profitability and employees are guided to ensure budget remains intact. EM1 added that “The participative approach contributes towards profitability in short-term and in long-term rule of game developed through collaborative approach are less effective”.

The eighth question investigates the effect of democratic leadership on efficiency and profitability. The aim is to recognise how participative style manages monitoring of employee and recognises the completion of milestones, engage employees and increases staff morale. The goal is to understand how priorities and Standard Operating Procedure (SOP) are managed in the case of disagreement.

The convergence from response showed that managers’ value employees’ skills and knowledge to perform the job but continuous monitoring is important to ensure cost effectiveness and service delivery.

EM1 stated that “the monthly evaluation of financial targets as well as reviewing the quarterly performance is important to achieve the efficiency and effectiveness”. The participation approach allows discussing the issues, opportunities and short-coming to improve the outcome for future activities. On the other hand, EM2 argued that cost effectiveness is achieved through reviewing quantifying results and monitoring is to increase productivity.

4.1.4 Research question 3: Analysis and emerging themes

The last four questions analyse and evaluate convergences and divergences on how democratic leadership in business organizations render business owners and management less influential over the affairs of the business. The ninth question of study was designed to understand management perspective of decision-making and control during the participative leadership. The aim was to understand how participative leadership influences the ownership power and control.

EM1 added that managers specialised knowledge does affect the decision-making and in particular, technical matters dictate the management to reach the decision. EM2 added that “I hold power over subordinates and do not consider suggestions as I do not have time” but on technical side things are different. On routine issue, we have had informal meeting depending on importance of matter but in urgency, decisions are taken at top of hierarchy.

The tenth question for discussion examines management influence on ownership of the project and understands how specialised information gives democratic leadership power to influence the business decisions. The both managers agreed to the context of retention ultimate decision making and do not consider suggestions which influence the business decisions.

EM1 added that “specialised knowledge directly affecting the decision-making context and without evaluating the technical jargons, it is difficult to reach a consensus. “For instance, developing prototypes requires consensuses from engineer team and it is time-consuming and frustrating to reach consensus”. In a similar manner, EM2 added when it comes to specialised knowledge for technical matter and activities within an organisation, then situation influences the management ability to influence the decision and reducing effectiveness of owners.

The eleventh question in the study analysed the importance of politicised context in an organisation. The question was based on the literature of Faiz (2013) that monopolising of position increases power, conflict, reconciliation and influence the management. The convergence in results shows that managers strongly believe that employees need to be pushed or directed to achieve organisation goals. EM1 stated that informal meeting or a quick chat with subordinates allows understanding the progress on tasks. This is particularly important when performing one-off project and providing direction in such context through analysing the existing scenarios. For example, failure to achieve sales targets mean that employee would not get a bonus. However, this is not true when performing technical task such as development of prototypes or re-engineering the process which requires direction and input from all stakeholders.

The twelve question reviews the control and decision-making in a participative leadership context. The question was aimed to understand employees’ involvement in decision making and its influence on the final decision. The response of managers highlighted that participative leadership is valuable and both managers highlighted that involving employee is important for goal setting and reaching an agreement.

EM2 stated that employee involvement is useful to internalise power and minimise the conflict among the members. The response of managers shows that discussion with employee allows identifying the problems and exploring the possibilities to achieve the task for desired outcome.

However, in order to ensure the task deliver profitability and meet the organisation needs, the final decisions are taken the top of the hierarchy. EM1 further added that employees’ project ownership highlights what and how to manage project but I make final decision for strategic matters.

4.2 Quantitative results

4.2.1 Response rate and data preparation

The survey for this study was administrated online and 147 invitations were sent to ABC staff. The selected members are involved in the various role and departments from junior members, mid-management to managers. The findings (convergences and divergences) from the first phase of the study were integrated into development of the questionnaire. A total of 142 response were received which represent an overall response of 96% and data from online survey tool was exported to excel file which was upload to SPSS 23.

The first step involved was reviewing omission and anomalies through performing ‘univariate analysis’ and it was identified 35 respondent did not answer the survey beyond demographics.

These were discarded in the final analysis and total of 107 usable and only completed responses are reported in this analysis. The results are analysed at two levels. First, responses are analysed for survey population and, then the response is cross-validated against qualitative findings (senior managers response).

4.2.2 Demographics and background information

The first five questions of questionnaire gathered information about the background of respondent including five questions related to gender, education, experience, age and years of working with ABC. The figure 7 below shows that nearly 89% of survey population was made up of males whereas nearly 87% of the population is aged from 20-45.

Moreover, 13% males members involved in the survey are aged above 45 years. Moreover, the 72% of the female population of survey fell within the age bracket of 20-35 and 40% of female has master degree. The education level of respondents were recorded to understand how it impacts upon leadership and so this data grouped into age, gender and education of respondent to develop a perspective on leadership based on education and age of participants. The results showed that only 10 respondents had diploma whereas remaining population has either bachelor or master degree.

Figure 7: Age, Gender and Education information

To further evaluate the leadership style impact, the respondents were classified according to management position and years of experience with ABC. The figure 8 below shows that participants of survey are nearly equally distributed among three hierarchy of management but 63% population have been working with ABC from 6-15 years. On the other hand, only 19% participants have been working with ABC for more than 15 years. The diversity of experience, role and education shows that finding of study includes participations from different layers of management but mostly represent male perspective.

Figure 8: Experience and Role at ABC

4.2.3 Reliability of survey

For reliability of survey, Cronbach’s Alpha was calculated to confirm sufficient reliability for each construct. The Cronbach’s Alpha test for each subscale are summarised below

Table 6: Cronbach’s Alpha results

4.2.4 Hypothesis 1

Impact of democratic leadership on the success of profit orientated business organisation

Question no 1

According to Gaikwad (2016), democratic leadership links the organisation objectives with the individual through participation and organisation achieves success through goal congruence. In figure 9 below, the response of survey shows that 67% of the participants agreed to the fact they involved employees before reaching a decision whereas only 19% participants stated that they do not involve subordinates during decision-making. Likewise, the senior managers responded in similar context, stating that managers from even junior level are consulted to achieve goal congruence across the hierarchy for the success of both existing and future plans. This represents a consensus among the managers that participative style of decision-making contributes towards the success of business organisation.

Figure 9: Question no. 1 – Survey participant’s response

Question no 2

Terzi (2016) elaborated that democratic leadership influences the performance of the organisation through quality workforce and goal setting.  The response of participants (figure 10) shows that nearly 70% agreed to fact that they consultant with the employee to find solutions and identify new opportunities. On the other hand, 16% of respondents stated that they sometimes refer to employees for opinions and suggestions. The survey result is consistent with senior manager’s response adding that they have an informal meeting with sub-ordinates to get their opinion and perspectives on how to perform a specific task. Therefore, managers agreed to importance of participative leadership for business success.

Figure 10: Question no. 2 – Survey participant’s response

Question no 3

Participative leadership is useful to develop a working environment which increases the moral of employee and ensure group members contribute towards the success of the organisation. The response of survey participants in figure 11 shows that 83% agreed to the importance of creating environment in which employees take project ownership and participate in decision making. The response shows that participants believe that positive working environment is a source of project ownership and consequently delivers positive results. There are only 5 respondents stated that they do not consider participative decision making. This confirms to the response of senior managers on project ownership and participative decision making that eagerness of employees to accomplish the task reduces the time and cost and delivers better profits through increased throughput. Therefore, managers agreed to importance of participation approach effect on success of business.

Figure 11: Question no. 3 – Survey participant’s response

Question no 4

The ability of a leader to optimise the human capital of organisation is important for the success of the organisation (Lee & Hee, 2016). The survey response enclosed in figure 12 shows that 81% of participant’s emphasis on the importance of participative leadership to communicate the objectives, for problem discussions and opportunities identification to increase the performance of business. Only 12% of the respondents disagree with value of participative leadership and 5% stated that they do not collaborate at all with employees. Consequently, these results coincide with response of senior managers highlighting that employee contribution is important for success of business.

Figure 12: Question no. 4 – Survey participant’s response

To conclude, the results and findings highlight that there is a positive relationship between democratic leadership and success of profit orientated organisations. Democratic leadership does have positive impact on the success of profit orientated business organisation through consensuses for both existing and future plans, opinion and perspectives on how to perform a specific task, eagerness of employees to accomplish the task which consequently reduces the time and cost associated with activities. The better profits are achieved through increased throughput and discuss the problems and opportunities which increase performance of business.

4.2.5 Hypothesis 2

Effect of democratic leadership to efficiency and profitability of business organizations

Question no 5

According to Salman, et al (2016), participative leadership style allows setting challenging goals, exploiting opportunities and improved workflow. The survey response in figure 12 shows that 80% of survey participants recognised the importance of discussions in order to set guidelines and overcome differences and improve the workflow. In contrast, the senior manager’s response highlight that the priorities are set for an employee with a focus on profits and requirements of the task rather an emphasis on long-term growth of employee. Therefore, the priority and guidelines rather focus on workforce productivity rather growth or opportunities.

Figure 13: Question no. 5 – Survey participant’s response

Question no 6

Participative leadership style gives more autonomy and involvement to employee in decision-making. Helms (2016) stated that leaders accomplish the goal of the organisation through the planning and control. A total of 44% survey participants agreed to need of strict control and agreed that they fairly often dictate employees when things go wrong through the fiscal measure.

Nevertheless, there are 17% of respondents remained neutral but 24% added that they frequently counsel employees. On the other hand, both senior managers emphasised on the need of fiscal measures because it directly affects the profitability of business and time is most critical factor to effect efficiency and budgets. The result showed that participative leadership is less likely to increase efficiency and managers value the fiscal measures and overhead control.

Figure 14: Question no. 6 – Survey participant’s response

Question no 7

According to Salman, Khan and Javaid (2016), setting priorities and guidelines for employees are important to set deliverable, overcoming the expectation gaps and held employees accountable. The survey response shows that 74% participants agreed to importance of setting goals to overcome performance gap. There are nearly 26% of the respondents who remained neutral and nearly 28% of respondents mentioned that they frequently provide guidelines for employees to overcome the difference in expectations to increase the timeliness of service delivery.

In contrast, senior managers gave less emphasis on resolving individual difference and priority is given to tasks which directly related to profitability. The holistic perspective shows that participative approach contributes towards profitability in short-term and in long-term goals developed through collaborative approach are less effective.

Figure 15: Question no. 7 – Survey participant’s response

Question no 8

Democratic leadership provides strong support for the employees to improve their skills and knowledge (Doh & Quigley, 2014) which increase the performance of employee. The response of survey participants showed that 64% agreed to the importance of monitoring employees to ensure task performed correctly for cost effectiveness. The surprising fact is that 25% did not agree to the importance of monitoring and 11% of respondents highlight that sometimes they monitor employee to ensure that task is performed correctly.

In contrast, senior managers strongly agreed to the fact that monitoring through monthly evaluation of financial targets along with reviewing the quarterly performance targets is important to achieve the efficiency and effectiveness. The response of senior managers highlight that review allows discussing the issues, opportunities and short-coming to increase productivity.

Figure 16: Question no. 8 – Survey participant’s response

To conclude, the effect of democratic leadership on efficiency and profitability of business organisations is less evident particularly from the response of survey. The response showed that participative leadership is less likely to increase efficiency and managers value the fiscal measures and overhead control to deliver results through addressing slack and enforcing decisions.

The findings highlight that participative approach contributes towards profitability in short-term and in long-term collaborative approach is less effective.  Managers agreed to importance of monitoring through monthly evaluation of financial targets and reviewing the quarterly performance for efficiency.

4.2.6 Hypothesis 3

 How democratic leadership in business organizations render business owners and management less influential over the affairs of the business

Question no 9                  

Leader’s expertise and specialised knowledge on technical matters and activities within an organisation influence the management ability and influence the decision making process (Higgs & Dulewicz, 2016). The response from survey (figure 17) shows that 7% of participants valued the importance of holding power and ignoring suggestions during the time of urgency. Moreover, 16% of respondents stay neutral on participative style importance.  Nevertheless, 77% of survey participants disagree to fact that they hold power and do not consider suggestions from their subordinates.

On the other hand, the qualitative findings present a different perspective and both senior managers stated that retaining power over subordinates is important and do not consider suggestions. Therefore, the response shows that senior manager’s emphasis on importance of power and democratic leadership is less likely to influence management decision. In contrast, survey response showed that managers are less concerned about power and control.

Figure 17: Question no. 9 – Survey participant’s response

Question no 10         

Hogg, et al (2012) added that the control of specialised information gives democratic leaders power to influence the business decision. The survey results shows that 80% of participants deny the fact that they retain ultimate decision-making and 15% of respondent stay neutral on decision-making power. The significant number of respondents values democratic leadership in business organisations and do not believe participative style makes less influential over the affairs of the business.

Only, 5% of the survey respondents mentioned that they prefer to retain the ultimate power. In comparsion, the senior managers added that specialised knowledge directly affect the decision-making context and without evaluating the technical jargons, it is difficult to reach a consensus. Moreover, the response of managers highlighted that specialised knowledge on technical matter and activities within an organisation influence the management ability and reduce the effectiveness of owners. Therefore, the result showed that participative approach reduces the decision-making power of owners.

Figure 18: Question no. 10 – Survey participant’s response

 Question no 11

To explore the context of power, control and decision making in participative approach, the question examines the views of management on how to achieve goals. The survey response shows that 66% of participants mention that they do not believe employee must be threatened and only 12% of respondents agreed that sometimes it requires threatening the employees to achieve the organisational goals.

Only 10% of respondent agreed to fact that employees should often or frequently be threatened to achieve organisational goals. On the other hand, the response of senior managers shows that to achieve operational efficiency employees must be threatened to achieve target but technical task requires direction and input from all stakeholders. This shows that survey population value the importance of participative approach but senior managers have different perspective.

Figure 19: Question no. 11 – Survey participant’s response

Question no 12

According to Cronin and Genovese (2015), the participative approach allows capitalising internal sources of power and minimises the conflict among the stakeholders. Participant’s response on this question shows that 33% of respondents agreed to fact that they make the final decision and 25% of participants highlighted that sometimes they make the final decision.

Moreover, 22% of respondents stay neutral on the context of power and conflict in the organisation. In comparison, senior manager’s shows that discussions with employee allow identifying the problem and exploring the possibilities to achieve the task for desired outcome but final decisions are taken the top of the hierarchy.

Furthermore, qualitative findings highlight that involving employees to determine what and how to manage a project is important but final decision for strategic matters are taken in isolation. This shows that participative style does not influence management decision-making power and has less influence on power of owners.

Figure 20: Question no. 12 – Survey participant’s response

To conclude, democratic leadership in business organization render business owners and management less influential, the findings highlight that management is less concerned with the loss of power and control through participative leadership. Survey response shows that managers are less concerned about power and control whereas senior managers stated that retaining power over subordinates is important and do not consider suggestions as I do not have time.

However, only in technical aspect participative approach reduces the decision-making power of owners. The discussions with employee allow identifying the problem and exploring the possibilities to achieve the task for desired outcome but final decisions are taken the top of the hierarchy. Therefore, participative style does not influence management decision making power and has less influence on power of owners.

Chapter 5: Discussion and conclusions

5.1 Summary

5.1.1 Research question 1

To analyse the relationship between democratic leadership and its impact on business success, both qualitative and quantitative data were examined. The findings highlight that manager’s emphasis on the need for consultation for both existing and future plans. The divergence from data showed that employees are rather asked for an opinion on issues for consensus but less emphasis given to overcome individual expectation gaps. Management experiences and requirements of the organisation are used to set goals and standards for employees to perform the task.

Managers do consider the value of organisation environment to increase the morale of employees, and resulting employees take project ownership. The eagerness from employees to accomplish the task reduces the time and cost to complete the project. Employees’ participation is considered useful at operational level to achieve better profits through increased throughput.

Manager’s response highlighted the short-termism for the business performance rather looking for career development for employees. The evaluation of expectation gap aims to increase the performance of the business as participation focuses on addressing operational matters and improves workflow.

Democratic leaders do have a positive impact on the success of profit orientated business organisation through consultation on both existing and future plans, opinion and perspectives on how to perform a specific task and eagerness of employees to accomplish the task in order to reduce time and cost. The discussions of problems and opportunities increase the performance of business which delivers better profits through increased throughput. The holistic perspective highlights there is positive relationship between democratic leadership and success of profit orientated business.

5.1.2 Research question 2

To analyse the effect of Democratic leadership on efficiency and profitability of the business organisation, the discussions were based on analysing how participative leadership style encourages setting a more challenging goal, improves workflow, and recognises achievement. The divergences from findings are that managers tend to focus on the requirement of the task rather an emphasis on long-term perspective.

The convergence with literature showed that management emphasises on the value of fiscal measure and overhead control to deliver results through addressing slack and enforcing decisions. There is less emphasis is given on resolving individual difference or setting challenging goals through participative approach. The priorities are set with focus on profitability and management focus on budgetary control.

The response of managers highlight the convergence that employee involvement does improve the efficiency and profitability in the short-term but in divergence from the manager response was that managers tend to focus on the requirement of the task rather an emphasis on long-term perspective and growth of employee. The objective of fiscal measure and overhead control is to deliver results through addressing slack and enforcing decisions.

Moreover, the findings showed that participative approach contributes towards profitability in short-term and in the long-term rule of the game developed through collaborative approach are less effective. Managers’ emphasis on the need of monitoring through monthly evaluation of financial targets as well as reviewing the quarterly performance targets to achieve the efficiency and effectiveness. To conclude, the effect of democratic leadership to efficiency and profitability of business organisation is less evident.

5.1.3 Research question 3

In order to analyse how democratic leadership in business organisation renders business owners and management less influential over the affairs of the business, the discussions were based on management perspective of decision-making and control. The qualitative findings highlighted that specialised knowledge for technical matter and activities within an organisation influence the management ability to influence the decision and reducing the effectiveness of owners.

In addition, informal meeting with subordinates allows understanding the progress on tasks to perform one-off project and set direction in such context through analysing the existing scenarios. The convergence in results shows that managers strongly believe that employee must be threatened or directed to achieve organisation goal and final decisions are taken the top of the hierarchy.

The findings of the study highlight that management is less concerned with the loss of power and control through participative leadership. Survey response showed that managers at lower hierarchy are less concerned about power and control whereas senior managers stated that retaining power over subordinates is an important factor. Senior managers take a decision and do not consider suggestions.

However, only in technical aspect, participative approach reduces the decision-making power of owners. The discussions with employee allow identifying the problem and exploring the possibilities to improve workflow for the desired outcome but final decisions are taken the top of the hierarchy. Therefore, participative style does not influence management decision-making power and has less influence on the power of owners.

5.2 Theoretical implications

The mixed methodology has offered an insight into the effectiveness of democratic leadership from hierarchy and environment perspective and thus, broadens the conceptualization of loose light democratic leadership context. Nevertheless, studying democratic leadership requires a greater degree of flexibility particular in male dominant leadership context of ABC. The democratic leadership is concerned with hierarchies rather behaviours.

The democratic leadership in ABC highlights the flow of information for coordination but the decision making is relatively centralised based on top-down approach. The construct for democratic leadership in collaborative context is loose-tight and this could expand to the non-hierarchical organisation.

Democratic leadership is captured in an operational context and top of the organisational hierarchy is concerned with making strategic decisions based on organisation requirement rather an emphasis on goal congruence or to support employees.

The employees at the lower level of the hierarchy are more inclined towards a participative approach for operation objectives and findings show that democratic leadership contributes toward the success of business. There is more research required in order to elaborate the democratic leadership contribution towards efficiency of business in hierarchy and power context.

The results highlight that democratic leadership does not influence the render business owners and management less influential over the affairs of the business and management significantly used fiscal controls. To summarise, research on democratic leadership can further expound into relationship and distinctions based on authority, hierarchies, technical knowledge, flexibility and power context in organisation.

5.3 Practical and methodological implications

The research experiences and results are based on both qualitative and quantitative design. The taxonomy of finding is useful to help researchers to understand the range of factors and approaches suitable for conducting further research. The exploratory mixed design methodology has allowed collection of qualitative data in order to identify and analyse the convergence and divergence and strengthen the results for the quantitative section which has allowed meeting the expectation of sequentially phased.

The leadership style at a different level of the hierarchy has a different perspective on value and importance of participative approach. The qualitative phase of the study has provided an in-depth perspective on various aspects of leadership, behaviours and organisation context involved in decision making.

The data from qualitative phase allowed to improve data collection during the quantitative phase and increased the reliability of survey. The practical implication for stakeholders involves both members and stakeholders. The director could improve participation for the success of the project and achieve operational efficiency. The blending of methodology along with concurrent timing has allowed timely completion of the study.

The creation of three constructs on democratic leadership and subsequent discussion during qualitative phase has increased the successive testing reliability. The construct is adequate to explore different dimension and relationship of participative style across both phases of research. However, the closed-end questions during the survey phase of study have not allowed elaborating the construct from an organisational perspective.

The study is useful as it provides useful understanding on democratic leadership effect on the success of organisation, efficiency and management control. The findings highlight how participation effect operational context as well as limitations associated with participation at a different level of the hierarchy. The findings show that application of fiscal control ensures the control of management and democratic leadership is less influential over the affairs of the business.

5.4 Limitations

There are limitations attached to this research during each stage/phase of data collection and method used. During the first phase of the study, the sample is based on reflective participants. The executive managers (EM) experience, success and motivation have allowed conducting a practical based research. The vast experience and knowledge of interviewee have limited the negative thinking.

Moreover, the sampling approach used during the first phase of the study is based on purposive approach. The researcher has interviewed two managers which are reachable through personal contact and ignoring the role and governance configurations in ABC. The response of interviews did not provide clear linkage or correlation with leadership and decision in detail in ABC context.

The size of report has limited the exploration of secondary data within ABC documentation and deeper understanding of infrastructure could have improved the understanding of organisation, leadership and performance.

During the second phase of the study, purposive sampling has limited the inclusion of participants from wider organisation context. The characteristic of ABC population in a wider context is unknown and data collected is from identified sources. The generalisation for the study is made for existing population whereas ABC is one of the large business organisations in KSA with employees in thousands.

Therefore, the sample size is at the individual level and small for data gathered at ABC level. The restriction in data to conduct regression analysis has restricted to highlight variance and researcher analysis is based on generalisation approach. Finally, the cross-sectional analysis and univariate approach makes it difficult to accurately estimate democratic leadership effectiveness.

5.5 Directions for future research

This research is useful to provide the foundation for democratic leadership impact on the performance of the organisation and raise additional question at both individual and organisation level to address in future research. The range of issues emerged from phase one such as environment and organisation context influence on the decision making during participative decision making. The hierarchical perspective, power and technical knowledge highlight the need to include other factors rather behaviour aspect only.

The future study could explore how management control and democratic leadership interact and consequently, influence the control and decision-making context. Moreover, the relationship of variables could be tested using confirmatory factor analysis to examine the relationship among variables. The range of factors could be tested based on demographic of participants such as age, education and gender impact democratic style. Finally, organisational factors such as size, industry, culture and level of analysis is useful to analyse the democratic leadership impact on organisation.

5.6 Reflections

5.6.1 Has dissertation fulfilled its objectives?

This dissertation was started with three research questions to understand the impact of democratic leadership on ABC. The three constructs proposed involved analysing the impact of democratic leadership on the success of business, determining the effect of democratic leadership on the efficiency of business and whether democratic leadership affects the decision making of management.

The research was based on a sequential exploratory study using both qualitative and quantitative study. The findings of the study highlighted that democratic leadership contributes towards business success through consensuses for the success of both existing and future plans, opinion and perspectives on how to perform a specific task and the eagerness of employees to accomplish the task reduces the time and cost which deliver better profits.

Moreover, the effect of democratic leadership on efficiency is less evident and managers tend to focus on budgetary control. The findings highlighted that democratic leadership does not affect management ability for decision making or reduces control. Therefore, based on a finding of the study, it is safe to conclude that all three research questions have been answered in a comprehensive way. The study fulfils the requirements of its research questions through confirming the hypothesis.

5.6.2 How do research process and outcome compared with initial expectations

The research process and outcome have presented different perspective at the end of study compared to an initial expectation of researcher. During the phase of literature review, the different views and perspective from multiple studies have changed the initial understanding and perception of democratic leadership. Additionally, the researcher initial plan was to conduct research in more detail through data collection from the large population.

However, the constraints attached to reaching the study population has influenced sample size and population study. The researcher learn that professional values, ethics and interacting with various stakeholders during the course of research require patience and systemic approach. The researcher has learn that setting achievable targets along careful assessment of variables that can be measured must be aligned with expectations. The exploratory design highlighted some report topic in aggregate and relevance of their contribution has provided a new perspective.

5.6.3 What difficulties have you encountered in research process and how these difficulties have been resolved?

The research is a cumbersome and technical process which requires setting an achievable expectation and deliver goals. The researcher has faced a number of challenges during the research process related to organisation and stakeholders. The selection of appropriate research methodology was critical to ensure research achieve its objective with available resources of time and people. The selection of research approach which is resource intensive and incompatible with research objective would have resulted in failure to achieve research objective.

The research approach selection was based from multiple sources including reading a large number of publications, advice from previous academic sources as well as discussion with academic peers have allowed selecting study design which delivers timely results and achieves the objective of the study.

Furthermore, the utmost challenge was data collection phase of the study. The power of leverage the network resources deliver domino effect for completion of the study. Moreover, dealing with data and writing such large requires strong interpersonal and intrapersonal communication skills. The management of large volume of research to connect research questions to patterns emerge from data analysis.

5.6.4 What have you learned from your research project?

This research has provided a valuable learning experience and allowed to understand nature of research process which is messy and cyclical. I have learned three important aspects that researching is a frustrating and tedious process, things do not fit with categories and other occasions research is an exhilarating and rewarding experience.

The research process has allowed me examining my professional values, the experience of dealing projects as well as changing my work practice. The understanding of democratic leadership has allowed developing awareness on theory and practice of participative style and how it affects the processes and outcome by process factor. The research has improved my interpersonal skills through interaction with multiple stakeholders.

Research involves resolving problem and during course of research, the valuable learning is that if one experiment does not work or results are not expected, there is need to find an alternative solution rather giving up. The writing of the final report, the process of data collection and meeting deadline has improved my communication and time management and understanding of the need of completion of the project within the desired time through managing multiple constraints. The research has allowed me to learn and improve knowledge and practice of leadership and after completion of my MBA; it would benefit my career to manage resources in an efficient manner.

5.6.5 How would you improve the project in the light of research experience?

The future research can be improved on a number of fronts and phases. The first improvement involves designing the project which involves wider stakeholders. Moreover, it is learnt that research cannot be completed in short span of time and completion of study presenting big picture requires resources and i.e. using social network can improve the research process. The initial support from research advisor and discussion with academic peers would allow building strong and achievable foundation for research.

Moreover, developing an alternative scenario for selected project and evaluating the potential of selected project from multiple stakeholders’ perspective would allow improving the content and outcome of research. The development of small manageable goals and narrowing scope of research would deliver more fruitful result and experiences.

 

 

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