Labour flexibility in SMEs: the impact of leadership
| Date | 28 December 2012 |
| Published date | 28 December 2012 |
| Pages | 120-138 |
| DOI | https://doi.org/10.1108/01425451311287835 |
| Author | Jos Mesu,Maarten Van Riemsdijk,Karin Sanders |
| Subject Matter | HR & organizational behaviour |
Labour flexibility in SMEs: the
impact of leadership
Jos Mesu
HRM Academy, Saxion University of Applied Sciences, Utrecht,
The Netherlands
Maarten Van Riemsdijk
School of Management and Governance, University of Twente, Enschede,
The Netherlands and HRM Academy, Saxion University of Applied Sciences,
Utrecht, The Netherlands, and
Karin Sanders
Behavioural Sciences Faculty, University of Twente, Enschede, The Netherlands
Abstract
Purpose – The purpose of this paper is to investigate the relationship between transformational and
transactional leadership, and labour flexibility within small to medium-sized enterprises (SMEs).
Using a sample comprising 755 employees, rating 121 supervisors within 50 Dutch small and
medium-sized companies, the authors examined the relationship between transformational and
transactional leadership on the one hand, and temporal and functional flexibility on the other. Further,
to test whether the expected associations could be perceived as a social exchange between supervisor
and employees, this study investigated the mediating role of affective organisational commitment.
Design/methodology/approach – Because data were nested, the authors used multilevel analysis
for hypothesis testing.
Findings – Both dimensions of transformational leadership, visionary leadership and coaching, were
positively related to temporal flexibility; also two dimensions of transactional leadership, contingent
reward and active management by exception, were also positively associated with temporal flexibility.
All of these associations were mediated by affective organisational commitment, indicating social
exchange relationships. As opposed to expectations, passive management by exception, representing
poor transactional leadership, was positively related to temporal and functional flexibility. Affective
commitment did not mediate these relationships.
Practical implications – SMEs are therefore advised to improve visionary leadership, coaching
skills, contingent reward, and active management by exception.
Originality/value – The paper shows that, remarkably, labour flexibility can be increased by both
effective and poor leadership. On the one hand, effective leadership seems to promote temporal
flexibility by creating employees’ commitment to the organisation. Poor leadership, on the other hand,
does not call for people’s affective commitment and thus seems to be forcing employees into
demonstrating flexible behaviours, as a way of compensating for bad management.
Keywords The Netherlands, Employees behaviour, Leadership, transformational leadership,
Transactional leadership, Small to medium-sized enterprises, Labour flexibility, Commitment
Paper type Research paper
Introduction
In order to survive, it is argued that small- and medium-sized enterprises[1] (SMEs)
have to be more flexible than their larger competitors, mainly in the sense
of responding more quickly to customer needs (Delmotte et al., 2002; Koch and
Van Straten, 1997). If this statement is true, it may help if the individuals in these
companies are also very flexible. Moreover, as suggested by Koch and Van Straten
(1997) in their qualitative study among 20 Dutch small firms, employee flexibility is a
normal and often a compulsory feature of smaller comp anies. Goudswaard (2003) and
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Employee Relations
Vol. 35 No. 2, 2013
pp. 120-138
rEmeraldGroup Publishing Limited
0142-5455
DOI 10.1108/01425451311287835
120
ER
35,2
Kerkhofs et al. (2008) nevertheless found that labour flexibility, defined as the labour
force’s quantitative and qualitative adaptability to the company needs, is more
common in larger than in smaller firms. This would give owner-managers of smaller
companies all the more reason to search for the key to success: by asking themselves
what they can possibly do to improve flexible behaviour in their employees.
Unfortunately, social scientists know very little about how labour flexibility can be
influenced, particularly through leadership behaviour. As such, there is ample reason
and space to investigate this matter more deeply.
A study by Mesu et al. (2012a) indicated that, within the context of SMEs, both
transformational and transactional leadership are related to organisational citizenship
behaviour (OCB) (Organ, 1988). Transformational leadership, defined as leader
behaviour which inspires and motivates people to perform beyond expectation (Bass,
1985), was positively related to citizenship behaviour, often labelled as “extra effort”.
Transactional leadership, defined as leader behaviour focused on standard
performance (Bass, 1985), was also related to OCB. Since labour flexibility is also
related to extra-ordinary employee behaviour, its affiliation with transformational and
transactional leaderships may show similar patterns. Owners and managers of SMEs
could well be interested in knowing if leadership can indeed have a positive effect on
labour flexibility, as it could then be a viable way to improve their much needed
flexibility in the market place. This expectation, naturally, has to be tested. The first
aim of this research is therefore: to investigate the relationship between
transformational and transactional leadership, and labour flexibility within SM Es.
Social exchange theory (Blau, 1964) seems to offer a promising set of explanations
as to why and how transformational and transactional leaderships influence employee
behaviour. According to Blau, beneficial leadership behaviour will be reciprocated with
a growing commitment by employees, who will eventually feel obliged to put their
commitment into practice by offering several services to the organisation, here
represented as labour flexibility. Particularly in SMEs, this kind of social exchange
may be common practice since it is often impossible to financially reward extra
employee effort within such businesses (Koch and Van Straten, 1997). From earlier
studies of both large and small organisations (Bass and Riggio, 2006; Mesu et al., 2012b;
Meyer et al., 2002; Pillai et al., 1999; Sanders et al., 2011) we know that transformational
and transactional leadership styles, as well as task- and people-oriented leadership
are related to affective organisational commitment, defined as voluntary emotional
attachment to the organisation (Allen and Meyer, 1990). However,it i snot known whether
affective commitment is related to labour flexibility, nor whether it actually connects
labour flexibility to leadership. Since flexibility is an indispensable asset for SMEs (Koch
and Van Straten, 1997), it is worth investigating the mechanisms through which it is
specifically stimulated. For example, is it something that a company need s to solicit by
carefullybonding employees; in other words, is labour flexibility a part of a social rather
than an economic exchange? To determine whether the relationship between leadership
and labour flexibility is indeed a social exchange, as suggested above, we have
investigated the mediating role of affective commitment within this relationship. The
second aim of this study is therefore: to investigate whether, within SMEs, affective
organisational commitment mediates the relationship between transformational and
transactional leadership on the one hand, and labour flexibility on the other.
This paper starts with a brief discussion of the literature related to labour flexibility,
leader behaviour and organisational commitment,including the hypotheses we wereable
to derive from it. Following this, we describe the methodological aspects and the results
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Labour
flexibility
in SMEs
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