Value Based Leadership

Value Based Leadership
John Rezen

Summary of Findings
The following table identifies the primary traits of a value-based leader from a literature review across six models of value-based leadership.

Although there is a good degree of overlap in these traits, most of them can be placed in one of two categories. The most frequently sited trait of trustworthy, honesty, integrity and ethics belongs to the first group, labeled principled behavior. This group considers a leader’s internal standards and motivations driving his/her behavior. The traits of altruism, humility and principled decision making also fall into this group. In each case these traits will lead an individual to make the right decision. A leader’s consistency in this behavior will cause followers to believe in the leader. This belief in the leader becomes a key element of leadership effectiveness. The second group of traits is labeled relationship behavior. Unlike the first, this group has a focus on the leader’s exchange with others. The traits of caring, empathy and compassion are the most frequently cited in this group. Other traits in this group are authenticity, empowerment, role modeling, appreciation for others and a focus on individual relationships. The hypothesis for this group is that each of these traits will establish a closer, more endearing, relationship between the leader and his/her subordinates. This endearing relationship becomes the second key element of leadership effectiveness as it generates a strong positive bond between leader and follower. Two items in this list of the twelve do not fall into either category. The first, vision, is considered important in effective leadership because it sets direction for the followers. While belief in and endearment with the leader creates magnitude, vision sets the direction. As noted in Frye (2000), vision also provides employees with meaning in their work. The final trait is self-awareness. This trait serves as the foundation for the consistent demonstration of principled behavior and relationship behavior. In the authentic leadership model Avolio and Gardner (2005) focus on the relationship between self-awareness and self-regulation. Here, an individual’s consistent awareness of his/her motives and desires as well as the natural tendency to stray from the right path should serve as an internal control mechanism causing the leader to pause and evaluate a response before acting.

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Introduction
The natural thinking is leadership based on values will guide managers and employees to make sound and ethical business decisions, causing the company to not only achieve financial success but to be a good steward of the resources and relationships that have been entrusted to it. This thinking is supported by the tendency for firms to establish a set of values upon which they will operate. These values are typically listed after the company’s mission and vision statement and are a staple of the new employee orientations. Much literature speaks highly of these value statements. Anderson and Jamison (2015) claim that the company values are the driving force for organizational change. Meanwhile Cadie, Jane and Brodke (2011) claim that value statements serve as a control system for the organization. However, when revisiting Anderson and Jamison (2015) we find that the one hundred largest corporations share many of the same values including integrity, teamwork, and innovation. While some of these firms such as Walmart sustain top size for decades others slip out of this category within a few years. If only a value statement was needed to generate value-based leadership, each of these firms with similar statements should have sustained success. In Anderson and Jamison (2015) we find that it is not necessarily the statement but rather the personal values held by the top executives and their resulting behavior that are the keys to an organization’s success. Research into the value-based leadership of individual leaders reveals a number of different theories on traits and behaviors that fall within the title of value-based leadership. Williams, Novicevic and Ammeter (2015) provides a good overview of these theories as well as definitions and concepts which lay a strong foundation for the study of value-based leadership. They begin by stating that values serve as guiding principles in peoples’ lives. Next, they refer to value-based leadership as a process where leaders try to influence their followers through the communication of their values. This influence can occur at a shallow level of compliance, to a deeper level of values acceptance through identification with a leader, and at the deepest level of values internalization. The following six theories of value-based leadership were identified: authentic, charismatic, ethical, servant, spiritual and transformational. (Williams, Novicevic & Ammeter, 2015). The objective of this literature review will be to identify a core set of values or behaviors that represent a recurring theme across these constructions in order to establish an overarching construct for value-based leadership. Pursuing this objective will require a review of each theory of value-based leadership to gain an understanding of the core traits by which each is identified. While there may be multiple views on each theory this literature review will attempt to focus on the view that is most widely accepted. The study of these value-based leadership models is based on the premise that, if followed, they will serve to improve organizational performance. A second component of the literature review will be a search for evidence of the efficacy of each model, through the reporting of positive outcomes, to confirm this premise.

Authentic Leadership
Avolio and Gardner (2005) represents an early discussion on the construction of authentic leadership. In their efforts to establish the core components of this construct they summarize authenticity into the four elements of self-awareness, balanced or unbiased processing, relational transparency, and authentic behavior. Later they narrow the focus of authentic leadership using the terms of self-awareness and self-regulated positive behaviors and identify authentic leaders as those who do not conform to others’ expectations but are motivated by and take action on their own personal convictions. Bedoes-Jones and Swailes (2015) provide a more recent analysis of authentic leadership. In their article they once again identify self-awareness and self-regulation as “pillars” of this theory, but they also add ethics as a third pillar. This is an important addition as it removes the potential for unethical leaders with strong self-awareness who act on unethical personal convictions from the construction. Bedoes-Jones and Swailes (2015) also add a discussion on the benefits of this type of leadership. The authentic leaders are thought to have greater influence on their employees due to the strong relationships they have formed through their authenticity. This greater influence leads to a higher propensity to act on the leader’s plans.
Effectiveness. Peus, Wesche, Streicher, Braun, and Frey (2012) evaluated the impact of authentic leadership on employee satisfaction, organizational commitment, and extra effort. In surveys of 306 employees from a broad range of industries they found that authentic leadership positively impacted each of these outcome measures. In a second survey study with employees from research organizations Peus, Wesche, Streicher, Braun, and Frey (2012) found that authentic leadership was a significant predictor of perceived team effectiveness. While these two studies present evidence of effectiveness, the results from multiple studies would give us a higher level of confidence in the effectiveness of this value-based leadership approach.

Charismatic Leadership
Charisma has been a characteristic attributed to the success of leaders throughout history. However, the term and the measures of success are rarely defined. Choi (2006) identifies envisioning, empathy and empowerment as the three core attributes of charismatic leadership and discusses the benefits of this leadership style in terms of meeting the followers’ needs. The followers’ need for achievement is met by the leader’s ability to establish a vision. Meanwhile the leader’s empathy meets the followers’ need for affiliation and the follower’s need for power is met through the charismatic leader’s empowerment attribute. Choi (2006) expands on the meeting of employee needs to identify the resulting benefits to the organization. These benefits include high performance on tasks and employee satisfaction due to the pursuit of a shared vision. Next, the benefits of affiliation include high citizenship behavior and group cohesiveness. Choi (2006) sees increased self-leadership as a result of the employee’s need for empowerment being met. However, this benefit could also be partially attributed to the existence of a shared vision. Kaul (2013) points out the “dark side’ to charismatic leadership with influential people leading followers in very negative directions. The absence of an ethical element to this construction opens it up to this vulnerability. Choi (2006) attempts to address this issue by making a distinction between socialized and personalized charismatic leadership. While personalized charismatic leadership is exploitive and self-seeking, socialized charismatic leadership is non-exploitative and seeks to maximize the gains of the organization.
Effectiveness. DeGroot, Kiker, and Cross (2000) conducted a literature search and analysis of over 100 references to find evidence of charismatic leadership effectiveness across five outcome measures. They found that charismatic leadership is positively related to a leader’s effectiveness as well as subordinate performance and organizational commitment. However, they did not find a positive relationship with employee effort and their findings on subordinate satisfaction were not conclusive. However, Kaul (2013) cites research showing a positive correlation between charismatic leadership and both individual employee satisfaction and performance. Kaul (2013) also references research showing a positive correlation between charismatic leadership and organizational performance. Given this small conflict, these efficacy findings are not fully conclusive. More research will be needed to confirm or refute the effectiveness of charismatic leadership, particularly with regard to employee satisfaction.

Ethical Leadership
Attributes such as integrity, honesty, and trustworthiness are identified as the characteristics of an ethical leader (Brown & Trevino, 2006). While these terms are easy to understand it is necessary to identify a broader set of characteristics and behaviors of ethical leaders in order to understand the construction of ethical leadership. Brown & Trevino (2006) pursued this objective by conducting interviews with executives and ethics officers as well as conducting a literature search on ethical leadership. In their findings ethical leadership is broken down into the “moral person” and the “moral manager” aspects. Attributes assigned to the moral person include honesty, trustworthy, fair, and principled, as well as caring about people and society. Meanwhile, the moral manager involves the intentional role modeling of ethical behavior and the active effort to influence employees’ ethical behavior. Through their literature search Brown & Trevino (2006) identified agreeableness, conscientiousness, moral reasoning, and an internal locus of control as individual characteristics positively related to ethical leadership. Agreeableness reflects the traits of altruism, and being cooperative, while being dependable and responsible, are reflections of conscientiousness. Moral reasoning reflects decision making based on internal values and standards. Those with an internal locus of control believe they have a high level of control over their life and take greater responsibility for their actions. A more descriptive model of ethical leadership is provided by Brown, Trevino, and Harrison (2005) in their Ethics Leadership Scale (ELS). This scale consists of ten questions containing factors specifically related to the leader’s ethical personal behavior and business decisions as well as their influence on and relationship with employees. Ethical leadership is expected to benefit organizations by improving employee ethical decision making, citizenship behavior, satisfaction, motivation, and commitment. (Brown & Trevino, 2006).
Effectiveness. Bedi, Alpaslan, and Green (2013) conducted an extensive literature search consisting of 134 articles on studies of the outcomes of ethical leadership. Their research found positive relationships between ethical leadership and employee ethical behavior, self-efficacy, work satisfaction, engagement, effort, performance, and well-being. They also found a positive relationship with trust in and relationship with the leader. Negative relationships were found with work stress, turnover, and counter-productive behavior. Given the magnitude of this study, these findings present strong evidence of effectiveness for this leadership model at the individual level. Research on organizational performance is needed to prove the overall effectiveness of this model.

Servant Leadership
As discussed in Russell (2001) servant leaders have a strong people focus where they not only seek to improve each member’s contribution to the organization but also take an interest in each person’s personal development. In his early work on servant leadership Russell (2001) lists eight attributes of the servant leader including vision, trust, credibility, service, modeling, pioneering, appreciation of others, and empowerment. He then places his focus on trust, appreciation for others and empowerment. Trust seems to be the foundational theme. While the leader’s honesty and integrity are essential to gain the employee’s trust, the behaviors reflective of the leader’s appreciation and respect for employees also generate their trust. The empowerment characteristic, where the leader delegates authority and responsibility to employees, makes trust a two-way process with the leader showing trust in the employee’s competence and integrity. In their more recent work on servant leadership Coetzer, Frederick and Geldenhuys (2017) expanded the construct to include eight characteristics and as well as four competencies. The characteristics are authenticity, humility, compassion, accountability, courage, altruism, integrity and listening. The four competencies are empowerment, stewardship, building relationships and compelling vision.
Effectiveness. In their literature review searching for studies on servant leadership effectiveness, Coetzer, Frederick and Geldenhuys (2017) identified the outcomes of servant leadership at three levels: individual, team and organizational. Individual outcomes included increased work engagement, citizenship, innovation, commitment, trust, self-efficacy, job satisfaction, fit with the organization and work-life balance. Group citizenship as well as a climate of service and procedural justice were outcomes at the team level. At the organizational level servant leadership was found to improve both customer service and sales performance. While the positive impact on employees is considered a worthy goal with an expected positive impact on the organization, these direct findings of improvements to organizational performance are considered the strongest evidence of leadership effectiveness.

Spiritual Leadership
In her discussion on spiritual leadership Crossman (2010) lists twenty-six examples of spiritual descriptors. This list contains many of the characteristics attributed to the other leadership models such as honesty, integrity, trustworthiness, transparency, humility, vision, and self-awareness. Crossman (2010) goes into detail on more specific attributes of spiritual leaders including the proactive nature of spiritual leaders who seek to change people’s perspective and the way they act. She also states that spiritual leaders are motivated by making a difference and are focused on the common good. While other individuals may share spiritual attributes, these characteristics are more evident in the spiritual leader’s behavior. Frye (2003) provides a more structured theory on spiritual leadership with a focus on intrinsic motivation through the dimensions of calling, meaning and membership. The first dimension of spiritual leadership, vision, serves to provide employees with a sense of calling and meaning. Next, membership is established through a culture that is based on a dimension of altruism and love. In this culture there is a sense of caring and appreciation for all members of the organization. Fry (2003) adds to the spiritual leadership dimension of effort, consisting of a combination of faith, hope and work in the establishment of the three dimensions of spiritual leadership. Ultimately these dimensions work together to increase employee organizational commitment and productivity.
Effectiveness. In his research on the outcomes of spiritual leadership Hunsaker (2017) conducted surveys with over 250 biotech employees in Korea and found evidence of a positive relationship between citizenship behavior and workplace spirituality. Meanwhile, Salehzadeh, Javad, Jafar, Dolati, and Jamkhaneh (2015) conducted a spiritual leadership outcomes study across sixty hotels in Iran. The survey-based study found that spiritual leadership had a significant positive impact on employees finding meaning in their work and in their relationships at work. In addition, the study found a positive relationship with organizational performance measured on the four factors of finance, customer service, operational effectiveness, and growth. More than two studies will be required to gain confidence in the evidence for the efficacy of this leadership model. However, the study by Salehzadeh, Javad, Jafar, Dolati, and Jamkhaneh (2015), where they use metrics from a balanced score card to demonstrate organizational performance, provides a strong starting point.

Transformational Leadership
A frequently cited reference on transformational leadership is Leadership and Performance Beyond Expectations, a book by Bernard Bass written in 1985. The structure developed by Bass continues to be the widely accepted model of transformational leadership. In her book review McCall (1986) identifies the four primary factors contained in the Bass transformational leadership model. The first factor is charisma. There are two components to this factor. First, leaders must understand the values, needs, and hopes of their followers and next they must be able to build on these items through their words and actions. The next factor is labeled inspirational leadership. Here transformational leaders are able to utilize emotion to motivate their followers. Individualized consideration is the third factor in the Bass model. Transformational leaders are able to treat each of their followers as individuals by paying attention to each of their concerns and needs. The final factor is labeled intellectual stimulation where there is a significant change in subordinates’ beliefs, values, and problem-solving capabilities. As discussed by McCall (1986), Bass contrasts between transformational leaders and transactional leaders who have a pragmatic interest in efficient processes rather than the more substantive interest of transformational leaders. As noted in the book title, the transformational leader inspires followers to perform beyond expectations. A search for more current literature is conducted to determine if there is evidence for this claim.

Effectiveness. In their discussion on a value centered model of transformational leadership Groves and LaRocca (2011) focus on the distinction between the leader’s values in transactional versus transformational leadership. While transactional leaders are characterized by economic values the transformational leader takes on a stakeholder’s value perspective where the impacts on all those effected by a decision are considered in the decision-making process. The main intent of this reference was to test the impact of transformational leadership on employee organizational citizenship and social responsibility belief. Although there was a significant agreement between leader and follower values under transformational leadership there was not a significant direct relationship between transformational leadership and employee beliefs. Ng (2017) conducted a more expansive evaluation of the outcomes of transformational leadership in his review and analysis of 389 articles related to this subject. This outcome study was focused on job performance which was broken into three components: task performance, organizational citizenship behaviors and innovative behavior. Outcomes were measured at the individual, team, and organizational levels. In the study Ng (2017) found that transformational leadership was positively related to task performance and innovative behavior at the individual, team, and organizational levels. Meanwhile, transformational leadership was positively related to citizenship behavior at the individual and team levels. While the wide breadth of articles studied provides evidence for the effectiveness of transformational research on these metrics, the limited focus on individual behavior leaves questions regarding transformational leadership’s impact on overall organizational performance unanswered.

Consolidation
As discussed earlier, the primary objective in the construct review is to develop an overarching set of value-based leadership traits based on their recurring presence across the six constructs. This consolidation effort leads to a list of twelve sets of attributes required of a value-based leader. The following table identifies the value-based leadership constructs in which each of these categories were sited and the frequency they were cited in each.

Although there is a good degree of overlap in these traits, most of them can be placed in one of two categories. The most frequently sited trait of trustworthy, honesty, integrity and ethics belongs to the first group, labeled principled behavior. This group considers a leader’s internal standards and motivations driving his/her behavior. The traits of altruism, humility and principled decision making also fall into this group. In each case these traits will lead an individual to make the right decision. A leader’s consistency in this behavior will cause followers to believe in the leader. This belief in the leader becomes a key element of leadership effectiveness. The second group of traits is labeled relationship behavior. Unlike the first, this group has a focus on the leader’s exchange with others. The traits of caring, empathy and compassion are the most frequently cited in this group. Other traits in this group are authenticity, empowerment, role modeling, appreciation for others and a focus on individual relationships. The hypothesis for this group is that each of these traits will establish a closer, more endearing, relationship between the leader and his/her subordinates. This endearing relationship becomes the second key element of leadership effectiveness as it generates a strong positive bond between leader and follower. Two items in this list of the twelve do not fall into either category. The first, vision, is considered important in effective leadership because it sets direction for the followers. While belief in and endearment with the leader creates magnitude, vision sets the direction. As noted in Frye (2000), vision also provides employees with meaning in their work. The final trait is self-awareness. This trait serves as the foundation for the consistent demonstration of principled behavior and relationship behavior. In the authentic leadership model Avolio and Gardner (2005) focus on the relationship between self-awareness and self-regulation. Here, an individual’s consistent awareness of his/her motives and desires as well as the natural tendency to stray from the right path should serve as an internal control mechanism causing the leader to pause and evaluate a response before taking action.

Conclusion
While the six models of leadership behavior falling under the heading of value-based leadership each have their own areas of focus and different mechanism hypothesized for the derived benefit, there are common themes throughout these models. The consolidation of these themes results in an overarching list of twelve traits for value-based leadership. These traits fall into four groupings. Principled behavior and relationship behavior establish belief in and endearment with the leader. Meanwhile, setting a vision gives followers direction and meaning. Finally, the trait of self-awareness is thought to serve as an internal control providing for consistency in the demonstration of principles and relationship behaviors.

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