Impact of leader adaptability on organizational change and adaptation: the case of Savecom Communication
| Date | 03 August 2015 |
| DOI | https://doi.org/10.1108/JABS-05-2012-0023 |
| Pages | 213-231 |
| Published date | 03 August 2015 |
| Author | Melody Seah,Ming Huei Hsieh |
| Subject Matter | Strategy,International business |
Impact of leader adaptability on
organizational change and adaptation:
the case of Savecom Communication
Melody Seah and Ming Huei Hsieh
Melody Seah is based at
the Chih Lee Institute of
Technology, Taipei City,
Taiwan. Ming Huei Hsieh
is based at the
Department of
International Business,
College of Management,
National Taiwan
University, Taipei,
Taiwan.
Abstract
Purpose –This paper aims to explore the impact of leadership on organizational change and
adaptability in a Chinese business context. Drawing on case data, this study seeks to uncover the
factors that would predispose the leaders of Chinese family firms to initiate and implement
organizational change and adaptation.
Design/methodology/approach –This study is based on 16 in-depth interviews held with key
informants from the case firm. Evidence is presented in the form of interview extracts.
Findings –Research findings indicate that Chinese firm leaders can successfully facilitate
organizational change by adapting their styles to match the changes in the business environment.
Research limitations/implications –The issues identified are explored within a single case study
setting, hence future research might replicate these findings to other samples or settings.
Practical implications –To lead organizational change, leaders must first be able and willing to adjust
their leadership styles to match the demands of their changing business environments.
Originality/value –This paper adds insight to existing literature on leadership, organizational change
and firm turnarounds. This paper also provides an in-depth insight into the factors that influence the
leadership and management Chinese family firms.
Keywords Grounded theory, Organizational change, Adaptive leadership, Firm turnarounds,
Organizational adaptation
Paper type Research paper
1. Introduction
Firms today must keep pace with the changes in their external and internal environments
to survive and grow. Those that cannot adapt quickly enough will either perish or face the
insurmountable task of a turnaround. Under these circumstances, leaders play a central
role in ensuring the well-being of their firms (Drucker, 1954) because their decisions
ultimately shape, guide and influence firm performance (Child, 1972).
Given the important role of leaders, researchers have gone on to develop a substantial
body of work to examine their influence on firm outcomes. For example, Goleman (2000);
Hershey and Blanchard (1977);House (1971);Vroom and Yetton (1973) assert that the
effectiveness of a leader is contingent on how well their styles match characteristics of the
situation at hand. Building on this theory, researchers House et al. (1997) go on to suggest
that these leadership actions work best when they are consistent with social norms and
group expectations. Although these studies offer useful advice that leaders can use to
adapt their firms to changing business environments, they do not proffer sufficiently
detailed and context-specific suggestions to demonstrate how leaders can match their
styles to different business environments. As such, the actual applicability and impact of a
situational approach to leadership remains vague and aspirational. Further, because most
of these research are based in a Western context (Goleman, 2000;Hershey and Blanchard,
1977;House, 1971;Vroom and Yetton, 1973), our understanding of how cultural subtleties
and nuances affect a leader’s adaptation efforts remains limited.
Received 11 May 2012
Revised 31 July 2014
21 November 2014
Accepted 17 December 2014
DOI 10.1108/JABS-05-2012-0023 VOL. 9 NO. 3 2015, pp. 213-231, © Emerald Group Publishing Limited, ISSN 1558-7894 JOURNAL OF ASIA BUSINESS STUDIES PAGE 213
Unlike their Western counterparts, Chinese leaders tend to favor a paternalistic leadership
style (Chan et al., 2013;Chen and Farh, 2010;Cheng et al., 2004;Wu et al., 2012).
Consistent with the ideologies of paternalism, Chinese leaders tend to assume a parental
role (authoritative yet benevolent) in their organization and are also more likely to see it as
their personal obligation to ensure the well-being of their employees. Further, in line with the
ideological values of paternalism, Chinese leaders are also expected to serve as role
models for their employees. And this entails keeping to a high degree of moral and ethical
standards (Cheng et al., 2004). Last but not least, Chinese firms are usually tightly
controlled by their family owners (Ahlstrom et al., 2010;Heugens van Essen and Van
Oosterhout, 2009;Liu et al., 2012;Schulze and Gedajlovic, 2010), and there is usually a
strong overlap between the firm’s family owners and top management (Jiang and Peng,
2011). Leaders of such firms not only have more leeway to manage the business in their
own interests, but are also more likely to take a long-term view of the business (Block,
2010). Under these circumstances, we expect these leaders (Chinese family firms) to
respond and adapt differently to the changes in their business environment.
Using a case study approach, this paper analyzes how the leader of a Taiwanese
telecommunications firm, Savecom Communications Incorporated, adapted his leadership
style and approach to match his firm’s evolving needs. The study then created a
three-stage evolutionary process model of leader adaptation to link the observed changes
in the chief executive officer’s (CEO’s) leadership to his firm’s evolving dominant logic
(corporate objectives), which are in turn shaped by the dynamic interaction between
Savecom’s internal and external environments. Next, the study examines the impact of his
leadership style and influence tactics on organizational effectiveness. Finally, the
implications of these theoretical contributions are discussed.
2. Leadership
Initial investigations on the impact and importance of leadership used individual attributes
(traits and characteristics) to distinguish leaders from non-leaders. However, subsequent
studies show that while certain traits are common across a number of studies, leadership
effectiveness is contingent upon situational factors (Mann, 1959;Stogdill, 1974). This
subsequently led to the development of situational and contingency models of leadership.
Both models of leadership prescribe for leaders to match their styles to the demands of the
situation (Fiedler, 1964;House, 1971;Vroom and Yetton, 1973;Hershey and Blanchard,
1977). Specifically, the situational model prescribes for leaders to adapt their styles
according to the developmental needs of their subordinates (Tannenbaum and Schmidt,
1973;Hershey and Blanchard, 1977). This leadership model is based on the assumption
that leaders are flexible enough to appropriately adapt their styles to the situation at hand
(Tannenbaum and Schmidt, 1973;Hershey and Blanchard, 1977). We define leadership
style as the way in which a leader provides direction, implement strategies and motivate
people (Hemphill, 1949).
Unlike the situational model which focuses too narrowly on follower needs, the contingency
model of leadership considers the impact of contingency factors, i.e. varying levels of
follower maturity and changing business needs on leadership effectiveness (Fiedler et al.,
1976). This model of leadership goes on to assert that because one’s leadership style is
relatively fixed, the best solution to a mismatched leader-situation would therefore be for
firms to replace the leader with someone more appropriate (Fiedler, 1964,1967;Fiedler
et al., 1976).
Although both theories provide practical strategies for enhancing leadership effectiveness,
we are not sure if they are applicable in other cultural realms, i.e. collectivist societies of
Asia. Unlike in the West, most Chinese firms are not only family owned and controlled
(Ahlstrom et al., 2004;Carney and Gedajlovic, 2000), their family owners also dominate
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