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The impact of leader tenure on proactiveness in religious organizations.

Executive Summary

This study empirically assesses the impact that a religious leader's tenure has on his or her use of a proactive strategy. Proactiveness is one component of an entrepreneurial strategy that relies primarily on first mover advantages and typically exploits new markets and services. Proactiveness as a strategic choice is gaining increased attention; however, little is known as to the leader characteristics that drive its implementation in a religious context. The impact of tenure on proactiveness as a strategic choice in a religious context is particularly enlightening given the increased role that legitimacy arguments play in a not-for-profit context. In addition, the importance of trust, and of building relationships that are critical in ethical leadership are also indicated through this study. Therefore this study sets out to evaluate whether a longer tenure with a given organization leads to an increase or decrease in proactive behaviors in a religious organization.

Using a sample of 250 religious organizations in five major metropolitan areas, it was found that low tenure leaders employ a significantly less proactive strategy in leading their organizations than those leaders with moderate or high tenure. These findings support the proposition that in ethics-based organizations such as religious organizations, there may be significant resistance to untested leadership. Although those organizations with high tenure leaders used a slightly more proactive strategy than those with mid-tenure leaders, this difference was not found to be statistically significant. The empirical results are presented and the practical and theoretical implications of these findings are developed. It is proposed that developing a wider base of power and an increased level of trust promotes the ability to act proactively. Several recommendations are offered to increase the proactiveness of leaders in the earlier years of their tenure with an organization.

Introduction

In the literature of strategic management entrepreneurship and organization theory, scholars have long examined and debated the role of managers in assessing and reacting to the environment in order to achieve desirable organizational outcomes. Traditionally, writers have argued that, for various reasons, organizations should require employees to concentrate on those particular aspects of their work necessary for effective performance. Managers and employees are expected to accept the current external environment and adjust to the constraints it puts on their behavior (e.g., Katz and Kahn, 1978). However, in recent years we have witnessed the entry of the concept of proactive behavior into the management lexicon in a vigorous way. Proactive behavior is composed of those actions taken to create new markets and services, rather than merely adjusting existing practices and improving the efficiency of serving the current market and customer base. Proactive behavior encourages the utilization of behaviors that can assist in enacting a new environment rather than merely adjusting to the current one.

Today's organizations are emphasizing autonomy, flexibility and decentralization. A highly competitive and unpredictable environment has compelled managers to place increasingly complex demands on themselves and their employees. They are requiring their members to act beyond their immediate operational tasks by assuming a broad perspective and adopting a proactive role orientation. Increasingly organizations are recognizing the need for proactive individuals--those who:

* Are highly involved in the task environment;

* Are flexible in reacting to circumstances;

* Have a well-developed sense of responsibility; and

* Are willing to show initiative that extends well beyond customary job requirements.

Managers and employees are expected to anticipate problems and opportunities and make appropriate decisions based on the information they have (Frese, Fay, Hilburger, Leng and Tag, 1997). These expectations underlie a determination to influence one's environment, rather than simply adapting to circumstances (e.g., Buss, 1987; Larsen, Diener and Emmons, 1986). Bateman and Crant (1993) argue that proactive people identify and seize opportunities and act on them rather than simply constraining their focus to immediate demands. Proactive individuals become deeply involved in creating progress and persist in creating meaningful change.

Proactive behavior has been defined as "taking initiative in improving current circumstances or creating new ones; it involves challenging the status quo rather than passively adapting to present conditions" (Crant, 2000, p. 436). It has to do with the propensity to engage in action toward influencing one's environment (Bateman and Crant, 1993). Such conduct can be a high-leverage concept and a critical determinant of organizational success (Bateman and Crant, 1999). Clearly, the impact and benefits of moving into new markets is widely accepted in for-profit organizations. However, entering new markets might be viewed as threatening, or even an abandonment of the central mission in a religious organization. Therefore, although religious leaders may feel that proactive behaviors will lead to stronger performance, proactive strategies might still meet with significant resistance from the members and other stakeholders in a religious organization.

Religious organizations stand to benefit from a wide range of proactive behaviors. Such behavior "is an important determinant of individual, organizational and team outcomes, and plays an important role particularly when the environment is challenging or unfavorable" (Gupta and Bhawe, 2007, p. 80). For example, proactive individuals actively create environmental change, while less proactive people take a more reactive approach toward their jobs (Bateman and Crant, 1993). The salience and importance of proactive behavior in a traditional religious context is heightened by the increased pressures that have emerged in the context of declining membership in many mainline traditional churches. Scholars have begun to develop models and empirical results to test the leadership strategies that lead to successful religious organizations. Specifically, Nygren and his colleagues (1994) developed a theoretical model showing a number of important leadership competencies that are needed in religious organizations. The model maintains that proactiveness is a major competency that differentiates effective leaders from ineffective leaders of faith communities. A more rigorous approach was taken by Butler and Herman (1999) in their study of effective ministerial leadership. In their empirical study of the leadership skills of 49 Evangelical ministers who are especially effective pastoral leaders, they found that those with longer tenures and who score significantly higher on the "change agent" scale are more effective ministers. In a recent large scale study of 250 Protestant churches, an entrepreneurial strategy that included a variety of behaviors including proactiveness was found to be correlated with increases in attendance and dollars given to the church (Pearce, Fritz and Davis, 2010).

Over the past two decades, proactive personalities and behavior have received considerable scholarly research attention. Researchers have adopted a number of different approaches toward identifying the antecedents and consequences of proactive behavior. The literature has focused primarily on the impact of proactivity on various outcomes with diverse samples and a variety of occupations and settings. Overall, these investigations show that the possession of a proactive personality is an important element of employee, team and firm effectiveness. The proactive disposition appears to be related to many desirable individual behaviors and organizational outcomes. For example, researchers have demonstrated that proactive employees earn higher salaries, display greater productivity and receive more awards and promotions (e.g., Seibert, Kraimer and Crant, 2001; Thompson, 2005; Van Dyne and LePine, 1998; Van Scotter, Motowidlo and Cross, 2000). A longitudinal study of real estate agents found a close relationship between their proactivity scores and their job performance (Crant, 1995). Successful agents focused on the high-end market and actively solicited new clients. Other studies have investigated the relationship between proactive personality and entrepreneurship. Among undergraduate and M.B.A. students, Crant (1996) found a positive correlation between proactive personality and intentions to own one's own business. Finally, a study of presidents of small businesses reported that proactive personality scores were positively associated with an aggressive entrepreneurial posture, where the firm scans for opportunities and takes a bold market position and entrepreneurial behaviors (Becherer and Maurer, 1999).

Although the relationship between CEO job tenure and organizational performance has interested scholars for many years, one area that has received little attention is the relationship between executive tenure and proactivity. A number of writers have expressed the need to study upper echelon characteristics in order to understand an organization's strategic processes (Leontiades, 1982). Upper Echelon theory asserts that strategic decisions reflect the background of the organization's most powerful managers and what the organization does could be explained, at least in part, by the profile of its top management. Thus the top executive is considered to be a proxy for the organization. In their seminal paper on Upper Echelon theory, Hambrick and Mason (1984) articulated an ambitious research agenda by proposing a number of hypotheses for testing the relationship between organizational outcomes and certain demographic characteristics of top executives. Finkelstein and Hambrick (1996) noted that from 1984 to 1996, more than two hundred studies pertaining to Upper Echelon theory were published. More studies have been published during the last decade.

A number of these studies have shown that leaders' demographic characteristics represent a major antecedent of organizational performance. By virtue of their position, organizational leaders are more capable of perceiving and understanding relevant environmental trends and communicating them to the rest of the organization. They are uniquely positioned to formulate an exciting vision of the future which emphasizes opportunity recognition and exploitation (Yukl, 1998). Although, consistent with Upper Echelon perspective, there has been progress in examining the relationship between leaders' demographic characteristics and various outcomes, one area which has received little attention concerns the linkage between tenure and proactivity. Executive tenure "is usually taken to mean time of continuous service with a single organization" (Lovett and Cole, 2003, p. 4). It is interesting to note that, although it is consistently treated as a demographic variable in the literature, it is different from other variables such as age, race, or gender because it is based on personal choices. One can choose to remain in an organization or leave it.

The role of tenure is particularly appropriate to relate to strategic behaviors in a religious context. Relatively new Church leaders (pastors, priests, etc.) still have "low tenure." If they are interested in progressing to a larger, more affluent congregation (Zech, 2001), they are likely to refrain from implementing challenging and unpopular proactive strategies at the current organization, since new ideas might threaten traditional members of the congregation.

One study on the relationship between tenure and organizational performance was conducted by Cardinal and her colleagues (2002). They report that, in the pharmaceutical industry, top management tenure is positively associated with a number of organizational outcomes. They include product line breadth, the frequency of new product market entry, in-house research and development efforts, as well as strategic alliances (Cardinal, Hatfield, Korn, 2002). In another study, Kessler and Chakrabarti (1999) found a relationship between longer tenure and the speed of new product development among large firms in several industries. The researchers, however, did not focus on top management tenure; rather, they examined the tenure of research and development team members.

The considerable attention to proactive behavior is an ongoing testament to the importance placed on its impact on various individual and organizational outcomes. Yet significant gaps in the literature remain. One area that has been largely overlooked and, therefore, warrants further investigation is the relationship between executive tenure and proactivity, particularly within the context of a religious organization. This study begins a careful examination of this important question. Its purpose is to investigate the role that the executive's tenure plays in the development of proactive strategies in a religious organization. The results have clear implications for the growing number of religious organizations and for many nonprofits in general. Further, this research opens windows of insight into the management of the growing number of social enterprises where the dominant resource is human capital and the organization's success is largely influenced by relationship management.

This study specifically addresses the utilization of a proactive strategy by religious organizations where organizational qualities such as stability and lack of change are often viewed as strengths (Miller, 2002).

Methodology

Setting and Data

The study involved a sample of 250 religious organizations concentrated in five different urban areas. All organizations were Lutheran churches concentrated in five major metropolitan areas (Charlotte, Pittsburgh, Philadelphia, Lincoln, Minneapolis). By controlling for the religious denomination (Lutheran), an enhanced control was added. By limiting the variation of mission and structure of the surveyed organizations, the study design provided direct access to the research question of the leader's impact on strategy selection. Within the five targeted metropolitan areas, 512 potential organizations were identified. The five geographical areas were selected due to the large number of the subject organizations in the same general economic area of opportunity. Organizations that did not have a current leader in place were eliminated from the population prior to mailing the survey. This provided 493 potential organizations in the sample pool. A survey and follow-up post card was mailed directly to the named leader of each of the organizations. A total of 277 surveys were returned; of those, 250 of the surveys were complete and usable (50.7 percent). A comparison of the early and late responders indicated that the sample did not bear a response bias. A brief summary of the sample population demographics follows.
Exhibit 1. Descriptive Statistics

Variable Frequency

Male 195
Female 55
Age: Under 35 19
36-45 37
46-55 89
56-65 96
Over 65 8
Weekly Attendance 197 (Mean) 182 (s.d.)
Tenure 9.9 (Mean) 8.6 (s.d.)
Proactiveness 11.2 (Mean) 4.13 (s.d.)


Tenure. Tenure was a self-reported measure where the leader indicated the actual years that he or she had been leading the current organization.

Proactiveness. Proactiveness was assessed using three survey items that were adapted from Colvin and Selvin's (1987) measures of entrepreneurial orientation. The three items were intended to measure the proactiveness construct and the wording was modified and tested for validity and usefulness in this context.

Results

First, the proactiveness measure was evaluated for validity. Utilizing Lisrel 8.51 a confirmatory factor analysis was performed. All proactiveness questions loaded on the correct factor and the loadings were all above .50, indicating adequate convergent validity (Fornell and Larcker, 1981). In addition, the Cronbach alpha for the three items was examined (alpha = .92). A Cronbach alpha above .70 is desired as an indication of convergent validity (Nunually, 1978). After assessing the construct validity of survey items, the three proactiveness measures were summed to give a composite proactiveness score for each organization. The composite proactiveness scores ranged from a low of three to a high of 21. The mean proactiveness score for the sample population was 11.21 with a standard deviation of 4.13. This indicates that the leaders utilized a wide spectrum of strategies, ranging from avoidance of proactive strategies to highly proactive strategies. The mean score of 11.21 is very close to the neutral proactiveness score of 12.

Second, the tenure data was consolidated to form three groups. The three group methodology was utilized to be consistent with common practice of identifying high, low, and medium levels of the variable of interest. Those leaders whose tenure at the current organization was less than five years were classified as "low." Those leaders who had been at the current organization for more than 15 years were classified as "high." The remaining leaders whose tenure with the current organization ranged between five and 15 years were coded as "medium." This classification resulted in three major groups. These three groups had the following characteristics:

low tenure (mean = 2.4 years; n = 86),

medium tenure (mean = 8.55 years, n = 102),

high tenure (mean = 22.5 years; n = 62).

The primary research question was tested using analysis of variance (ANOVA) to assess the differences in proactive strategies across the three groups. The cell values for the ANOVA analysis are presented in Exhibit 2. The overall F of the ANOVA was significant, F (2, 247) = 13.66, p < .001, which indicated that there were significant differences in the use of proactive strategies based on the leader's tenure at the organization. An examination of the mean proactiveness scores that are shown in Exhibit 2 indicates increasing levels of proactiveness as the tenure of the leader increases.
Exhibit 2: Descriptive Statistics of Proactiveness Across Tenure Groups

 Low Tenure Medium Tenure High Tenure
 (0 to 5 years) (5 to 15 years) (Over 15 year)
 M (SD) M (SD) M (SD)

Proactiveness 9.52 (3.99) 11.67 (3.94) 12.81 (3.86)

N 86 102 62

F= 13.66, p < .001


As shown in Exhibit 3, a post hoc analysis using the Tukey multiple comparison procedure confirmed that there were statistically significant differences between the low tenure group and both the medium and high tenure groups. The use of proactive strategies was slightly higher for those high-tenure leaders than those who were in the mid-tenure group. However, a post hoc statistical analysis did not indicate that the organizations with high tenure leaders and those with mid tenure leaders differed significantly in their use of proactive strategies.
Exhibit 3. Tukey's Studentized Range Test for Proactiveness across
Tenure Levels

Tenure Group Difference Between Simultaneous 95%
Comparison Means Confidence Limits

High to Mid 1.14 -0.356 2.635

Mid to Low 2.14 0.784 3.503 ***

High to Low 3.28 1.736 4.830 ***

*** Comparisons significant at 0.05 level


Discussion

The purpose of this study was to determine the impact of leader tenure on the selection of a proactive strategy with the intention of highlighting the leadership characteristics in organizations with a bias towards ethical behavior and legitimacy. The study found that those leaders who had been in the organization for less than five years utilized a significantly less proactive strategy and had more of a tendency to focus on serving the existing functions and markets. The use of a proactive strategy continued to increase when leaders with mid levels of tenure were compared to leaders having high tenure. These findings are supported by numerous observations.

Low-tenure leaders may need time to develop their power base. In a religious organization, and nonprofits in general, the leader serves multiple constituents. The amount of power that is available to a new leader is often limited at first, and increases over time. Further, the initial power that is conferred on the leader is directed towards the existing markets and services that the leader was hired to manage. Early on, leaders may be constrained to use organizational sources of power. These would include power that is directly related to their formal role. Leadership research would identify these sources as legitimate power as well as coercive and reward power (French and Raven, 1959). Proactive strategies such as expanding the markets served, or the services offered, would arguably require the development of expert power or even referent power. These two forms of power would rely on accumulating experience and repeated positive exchanges with the church members in order for the members to build up the trust and awareness of the positive attributes of the leader.

To address this concern, institutional leaders in ethics-based organizations (like the religious organizations in this study) could take extra efforts to ensure that newer leaders have proper authority and control. New leaders could also take additional steps early in their tenure to communicate their competence and expertise. To increase the possibility of proactive change, new leaders should be encouraged to use transformation types of leadership that build referent power and challenge the organization to view problems in a new light. Arguably, ethics based organizations such as many religious organizations, and by extension not-for-profits in general, will find more utility in transformational leadership than their more secular counterparts.

Proactive change requires a deeper knowledge of the broader environment. Low-tenure leaders may not have developed the knowledge of the local community and the skills and assets present in the organization. Over time as leaders become more aware of the external environment and the local organization's skills, they become more proactive in utilizing these strengths to exploit and expand into new markets. Specific steps to increase the leader's initial knowledge of the local environment should be taken to address this limitation for low-tenure leaders. Joining local organizations and meeting with neighborhood groups could be helpful in improving the leader's awareness of the local environment. Meeting with the existing organizational members early in one's tenure should also be encouraged in order for the new leader to specifically assess the strengths of the organization. Many organizations perform a detailed assessment of the organization prior to selecting a new leader. Perhaps a similar but abbreviated process should be undertaken early in the tenure of a new leader.

Finally, the leader should be aware that proactive change can be viewed as a threat to many of the existing organizational members. All organizations, but in particular religious organizations, develop routines and norms that are not easily changed. Even leaders who have a strong preference for proactive behavior may be reluctant to challenge the existing organization and the existing order. Leaders must plan for unusually strong resistance in the early stages of their tenure in a new organization. Further, low-tenure leaders may lack the level of trust required to implement changes that may threaten the existing organization. In order to build trust, leaders should be vigilant in demonstrating those behaviors that are strongly linked to high levels of trust such as integrity, competence and altruistic behavior (Mayer, Davis and Shoorman. 1995).

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David A. Fritz, Augusta State University dfritz@aug.edu

Nabil A. Ibrahim, Augusta State University nibrahim@aug.edu
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Author:Fritz, David A.; Ibrahim, Nabil A.
Publication:Review of Business
Geographic Code:1USA
Date:Sep 22, 2010
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