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The Impact Toxic Or Severe Dysfunctional Leadership Has On The impact Toxic or Severe Dysfunctional Leadership has on the effectiveness of an organisation. Edward Leet MBA, MHRM This thesis is presented for the degree of Doctor of Philosophy of Murdoch University, March 2011. Page 1 of 279 Abstract The topic of toxic leadership has received tremendous attention in recent times, mainly from the popular media and to a much smaller degree from the research community. The recent rise in corporate failures due to toxic leaders is alarming and the resulting concomitant consequences catastrophic. The phenomenon of toxic leadership has sparked an almost unprecedented and intensive debate on why such leaders were allowed to preside over such disasters to their organisations and to the global business community at large. I investigated the definition of toxic leadership through a Delphi study of senior executives, gathering a comprehensive list of potentially toxic behaviours. From this list I developed a survey instrument of 65 items, administered to 177 respondents. Factor analysis of the data revealed a three factor solution with leadership competency, toxic leadership and indulgent leadership factors. Further, the survey findings demonstrated that toxic leadership and indulgent leadership have different effects on measures of organisational health. Leadership competency can be measured Toxic leadership can be measured Indulgent leadership can be measured Toxic leadership is different from indulgent leadership A Delphi Study can be invaluable as a qualitative tool in the process of developing a test instrument. Page 3 of 279 An instrument can measure organisational health by means of surrogate constructs such as job satisfaction, intention to stay, intention to leave and organisational retention. I discuss implications and consequences of the findings for organisations and offer some suggestions for future areas of research. Page 4 of 279 Acknowledgements Foremost, I would like to express my sincere gratitude to my supervisors, Professor Leland Entrekin and lecturer Geoff Baker for their continuous support of my Ph.D. research, for their patience, motivation, enthusiasm, and considerable knowledge in their respective fields. Their guidance helped to keep me on track and focused on the core issues of the research, and prevented me from pursuing every issue that emerged during the research and analysis stages. Without their collective guidance and wisdom, I could not have completed this research in the manner required. In addition to my present supervisors, I would also like to thank Dr. Brenda Scott- Ladd for encouraging me to commence on this long journey and for her valuable contributions during the initial development stages. My sincere thanks also goes to the nameless group of busy academic and business leaders who agreed to spare some of their precious spare time to the constituted Delphi Panel. Their collective contributions formed the important groundwork for my research. Their individual and collective knowledge, experiences, opinions and comments, established the foundation for this research. I thank the many friends and colleagues who participated in the initial trial survey stages that led to the development of the final survey questionnaire. Last but not least, I would like to thank my family: my wife Catherine, children Amanda and Edward for their support over the last six years. Pursuing a PhD was one of the most challenging, interesting and rewarding experiences I have undertaken. Although it is a personal indulgence, I acknowledge that it could never have been achieved without a lot of input from others. For this I thank them all. Page 5 of 279 Table of Contents Abstract .................................................................................................................. 3 Acknowledgements ................................................................................................ 5 Table of Figures ................................................................................................... 10 Table of Tables ..................................................................................................... 11 Introduction .......................................................................................................... 12 1.1. Leadership Definition .................................................................................. 15 1.2. Why is the quality of leadership relevant today? ........................................ 17 1.3. What is Bad Leadership............................................................................... 22 1.4. Research Question ....................................................................................... 26 1.5. Conceptual Framework ............................................................................... 27 1.5.1. Hypotheses Framework ........................................................................ 28 1.6. Research Hypotheses ................................................................................... 30 1.7. Research Method ......................................................................................... 31 1.8. Contribution to Knowledge ......................................................................... 33 2. Literature Review ........................................................................................ 36 2.1. Leadership Perceptions ................................................................................ 36 2.2. The Structure of Chapter Two ..................................................................... 39 2.3. Leadership ................................................................................................... 42 2.3.1. Definitions of Leadership ..................................................................... 43 2.4. Bad Leadership ............................................................................................ 45 2.5. General Definitions ..................................................................................... 49 2.6. Leadership Objectives ................................................................................. 51 2.6.1. Effectiveness ........................................................................................ 52 2.6.2. Productivity .......................................................................................... 53 2.6.3. Profitability .......................................................................................... 54 2.6.4. Conclusion to the Leadership Section .................................................. 56 2.7. Timeframe of Leadership Classifications .................................................... 57 2.7.1. Historical Classifications of Leadership Theories (Pre 1930) ............. 58 2.7.2. Modern Leadership Theory Development ........................................... 59 2.7.2.1. Importance of Leadership ................................................................. 60 2.7.3. Leadership Theory Classifications ....................................................... 63 2.7.3.1. Trait Theories ................................................................................... 63 2.7.3.2. Behavioural Theories........................................................................ 65 2.7.3.3. Situational and Contingency Theories.............................................. 68 2.7.3.4. Transactional and Transformational Theories .................................. 70 2.7.3.5. Toxic or Severe Dysfunctional Leadership ...................................... 73 2.7.4. Leadership Types ................................................................................. 73 2.7.5. Leadership Theories (1930 - 1950) ...................................................... 75 2.7.6. Leadership Theories (1950 - 1970) ...................................................... 76 2.7.7. Leadership Theories (1970 - 1990) ...................................................... 77 2.7.8. Leadership Theories (1990 - 2005) ...................................................... 77 2.7.9. Conclusion to the Leadership Classification Section ........................... 78 2.8. Writings on Leadership Theories ................................................................ 79 2.8.1. Contingency Theory ............................................................................. 79 2.8.2. Path-Goal Theory ................................................................................. 81 2.8.3. Situational Theories ............................................................................. 85 2.8.4. Transactional and Transformational Theories ..................................... 85 2.8.4.1. Transactional Leadership Theory ..................................................... 86 2.8.4.2. Transformational Leadership Theory ............................................... 87 2.8.5. Toxic Leadership .................................................................................. 89 2.8.6. Dysfunctional Leadership .................................................................... 89 Page 6 of 279 2.8.7. Conclusion to the Leadership Theory Section ..................................... 90 2.9. Leadership Relationships............................................................................. 92 2.9.1. Leaders and Followers ......................................................................... 92 2.9.2. Leaders and their Peers ........................................................................ 94 2.9.3. Leaders and their Superiors .................................................................
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