Transformational leadership scale

Transactional leadership scale

Laissez-faire is personalized with a subscale and is described as the most extreme form of passive or non-directive management. It abdicates responsibilities and avoids making decisions.

Outcome variables

Like leadership, the literature shows that social responsibility does not have a single conceptual definition, and some authors even point out that it can be analyzed as a multidimensional construct, i.e., that it does not mean the same thing to everyone. ^{Garriga and Melé (2004)} state its multiple meanings: complying with legal obligations and responsibilities, being socially responsible in an ethical sense, and contributing with donations to social causes, among others.

^{Bowen (1953, p.6)} refers to Social Responsibility as “the obligations of entrepreneurs to carry out those policies, to make those decisions, or to follow those courses of action, which are desirable in terms of the goals and values of our society.”

Image is conceived as the mental representation different stakeholders have of the organization (^{Alvarado & Schlesinger, 2008}). It is considered a strength of an organization that behaves based on certain ethical and innovative standards. It is conceived that image is the starting point for reputation. Image reflects what the organization stands for, as opposed to reputation, which reflects what good or bad it has done in the eyes of those involved (^{Walsh & Beatty, 2007}).

According to ^{Gray and Balmer (1998)}, the image is the mental representation formed by the different stakeholders in relation to the company and is, therefore, considered the mental picture held by the stakeholders.

^{Fombrun (1996)} conceives corporate reputation as the idea generated when past actions are remembered and compared with future expectations. It can be considered that reputation has to do with the capacity to satisfy the expectations formed by the different stakeholders (^{Becker et al., 2020}). For ^{Orviz and Cuervo (2020)}, reputation has two dimensions: objective and subjective. Nevertheless, people take the sum of reputations or each reputation from its subjective aspect.

^{Du et al. (2013)} observed that the interaction of companies that use stakeholder-oriented marketing, in coordination with transformational leadership, influences institutional corporate social responsibility (CSR) measures and, together with transactional leadership, explains organizational results; they reached this conclusion by conducting a national survey among managers of 440 American organizations, contacted through an e-Rewards market research company. The instrument consisted of the following constructs: transformational leadership, by ^{Bass and Avolio (2000)}; stakeholder-oriented marketing, by ^{Brookes and Palmer (2004)}, ^{Coviello et al. (2002)} and ^{Ferrell et al. (2010)}; and institutional CSR measures (^{Maignan et al., 1999}), ^{Turker (2009)}.

The results revealed that transformational leadership is positively and significantly correlated with CSR, while transactional leadership was not significant. On the other hand, the coefficient of stakeholder-oriented marketing was positively and significantly associated with CSR measures and transformational leadership.

^{Manzoor et al. (2019)} studied the influence of transformational leadership on job performance, using corporate social responsibility as a mediating variable, with the participation of 130 employees working in small or medium-sized companies in Pakistan. The socio-demographic data revealed that 37.7% were between 25 and 30 years old, with more than 5 years of work experience (43%), 66.7% were male, and more than half had a master’s degree.

Regarding the instrument’s reliability, Cronbach’s alpha obtained more than 0.60 for all variables. The findings indicated that the transformational leader explains 74% of the variance of work performance and 78% of the variance of corporate social responsibility, correlating positively and significantly in both cases. It was inferred that leadership style is predictive of organizational behavior. The theoretical assumptions that both transformational and transactional leadership had a positive relation with work performance were confirmed. At the same time, a mediating role of social responsibility between transformational leadership and the participants’ job performance was observed.

Meanwhile, the team of researchers led by ^{Allen et al. (2017)} analyzed the mediating effects of perceptions of corporate social responsibility (CSR) and organizational identification in the relation between transformational leadership and affective organizational commitment, for which they surveyed 218 subjects, observing predominance in men; meanwhile, 60% work in companies with staff over 1000 employees and more than 50% had been working in the organization for less than five years.

They used an instrument that included the transformational leadership subscale, that is, only 20 items of the MLQ 5X by ^{Bass and Avolio (2004)}; organizational identification, made up of 6 items, by ^{Mael and Ashforth (1992)}; affective organizational commitment, with 8 items, by ^{Allen and Meyer (1990)}; CSR perception with 8 items, by ^{Glavas and Kelley (2014)}; the instrument was distributed through social network groups with students belonging to two universities in the United States.

The authors demonstrated by testing their research hypotheses that CSR and organizational identification showed a mediating effect between transformational leadership and affective organizational commitment. Moreover, transformational leadership significantly increases the perception of CSR, and CSR significantly increases organizational identification. Additionally, transformational leadership and CSR perception significantly increase affective organizational commitment.

^{Rojas and Di Fiore (2021)} analyzed the influence of transformational leadership on social responsibility in school institutions. This study was analytical, non-experimental, and cross-sectional. 23 directors, 109 teachers, and 15 educational community members participated. Expert judgment and discriminant analysis determined the validity of the instruments used.

Among the findings, the authors noted that similarly to how transformational leadership is observed in the business environment, in academic institutions, management characterized by the process of planning, organization, direction, and control of processes is important, as occurs in the managerial context. The authors stated that there is a slight line of application of transformational leadership in the work context, which is insufficient to move toward implementing social responsibility.

Problem statement

This research analyzes how transformational, transactional, and laissez-faire leadership influence the image and corporate reputation of CSOs in Mexico, taking into consideration relevant elements such as the following: approximately three decades ago, CSOs emerged in Mexico to complement development promotion programs. Not all those focused on health care have social responsibility programs in their strategy, which can affect the organization’s image and affect their effectiveness and institutional reputation due to the distrust generated (^{Willems et al., 2016}). This is a delicate matter, considering that the purpose for which these organizations were created is the preservation of life.

Considering the nature and raison d’être of CSOs in Mexico, strengthening their institutional and leadership capacities is necessary to fulfill the objectives and goals for which they were created. The literature shows studies similar to this one with positive results. Therefore, it is hoped that the results of this study will contribute to the development of CSOs and thus contribute to social development in Mexico.

Therefore, the following research question arises: Which of the structural equation model (SEM) subscales more fully explains the influence of transformational, transactional, and laissez-faire leadership styles on reputation and corporate image in the subjects investigated?

Research objective

To determine the influence of transformational, transactional, and laissez-faire leadership factors on image, reputation, and corporate social responsibility; to subsequently influence the outcome variables (satisfaction, extra effort, effectiveness) in collaborators of foundations with corporate social responsibility philosophy and practice in Mexico.

Research hypothesis

According to the theoretical reference on transformational leadership and corporate social responsibility, the following research hypothesis is presented:

Hi: “Transformational, transactional, laissez-faire leadership factors will impact image and reputation, as well as corporate social responsibility; subsequently, the latter will influence outcome variables.”

From this assessment, the following specific research hypotheses are proposed:

H1: “Transformational leadership makes a significant direct contribution to image and reputation.”

H2: “Transactional leadership has a significant direct influence on image and reputation.”

H3: “Laissez-faire has a significant inverse impact on image and reputation.”

H4: “Transformational leadership makes a significant direct contribution to corporate social responsibility.”

H5: “Transactional leadership has a significant direct influence on corporate social responsibility.”

H6: “Laissez-faire has a significant inverse impact on Corporate Social Responsibility.”

H7: “Image and reputation make a significant direct contribution to the outcome variables.”

H8: “Corporate social responsibility has a significant direct impact on outcome variables.”

Figure 1 presents each of these using the multivariate partial least squares structural equation modeling method, Structural Equation Modeling / Partial Least Squares (PLS / SEM).

Source: created by the authors

Figure 1 PLS-SEM model representing the research hypothesis 

Justification

The present study is relevant in the identification of leadership styles that directly influence the image and reputation, as well as the corporate social responsibility of CSOs in Mexico, for which a theoretical study of these constructs is undertaken, among which it is expected to observe the behavior presented in the research model, which will generate further research in this regard, or even help identify new lines of research.

In the methodological aspect, each stage made it possible to contrast the research hypothesis in question to accept or reject it and to strengthen what is established in the theory that supports the research or contradicts it. In the social aspect, it is urgent to have findings that strengthen the work team and the management within the CSOs, thus contributing to better institutions capable of offering better services and identifying areas of opportunity that will facilitate their daily activities.

Type of study

The present study is ex post facto, non-experimental, cross-sectional, and explanatory, using structural equation models with latent variables (Hair et al., 2022).

Participants

Two groups of 105 managers (middle and senior management) and 198 subordinate workers participated in the study. Their socio-demographic data were: in both groups, there was a higher percentage of women (70 and 71%), the most frequent age range in the “Bosses” group was between 35-55 years old, equivalent to 52%, while the highest percentage in the “Followers” group was 26-35 years, which represents 36% of the total population studied, followed by the 18-25 years category with 21%. 55% of the “Bosses” group were married, while in the “Followers” group, the highest frequency was of single people, with 54%.

The educational level of the “Bosses” group was a bachelor’s degree in half of the cases and a graduate degree in 38%; something similar occurred in the “Followers” group, where 58% had a bachelor’s degree and 19% had a graduate degree. Regarding their work situation, the “Bosses” had between 1 and 20 people in their charge (74%), with between 4 and 10 people being the most common with 32%. For the “Followers” group, 54% had between zero and ten people in their work team. For the group of managers, 60% had more than six years of service in their job, while in the group of immediate workers, it was less than three years, with a frequency of 44%.

In terms of income received, the middle and senior managers earn between 10 and 30 000 pesos (25%), and 32% do not receive any income because their work is voluntary. For the group of immediate workers, 54% have between none and ten people in their work area, half of them have a budget of between 1 000 and 30 000 pesos per year, and, in 45% of the cases, they have no income because they are volunteers in the organization. In the “Bosses” group, more than half have the legal status of civil associations (AC; Spanish: Asociaciones Civiles), and in the “Followers” group, more than half are private assistance institutions (IAP; Spanish: Instituciones de Asistencia Privada).

The instrument was sent to 189 CSOs representing all of Mexico, obtaining responses from 49.6% of CSOs that deal with childhood cancer in the majority of the states. 22.0% were small foundations with 11 to 20 people, and 18.0% with more than 50 people. 23.0% had branches in Mexico, and 9.0% were on an international scale. More than 70.0% had a Unique Registration Key for Civil Society Organizations (CLUNI; Spanish: Clave Única de Inscripción al Registro de Organizaciones de la Sociedad Civil), which allowed them to access public sector resources.

Instruments

The Multifactor Leadership Questionnaire by ^{Bass and Avolio (2000)} was used through the adaptation made by ^{Mendoza and Torres (2008)}. The following subscales were used: transformational leadership, transactional leadership, and laissez-faire. Regarding the “Social Responsibility Measures” (^{Vidales, 2021}), the following subscales were considered: organizational reputation and corporate image, which are written as statements and answered according to a semantic differential scale: 1. Never, 2. Rarely, 3. Usually, 4. Very often, and 5. Always.

Procedure

Employees were invited to participate voluntarily in the study and were asked to answer the instrument designed in Google Forms, which contains the “Adaptation of the MLQ” (^{Mendoza & Torres, 2008}) and the subscales of the “Social Responsibility Measures” (^{Vidales, 2021}).

Considering that the research was carried out during the COVID-19 coronavirus pandemic, it was decided to design and administer the assessment instrument using electronic means (Google form). Its advantages are the reduction of costs and travel time, control over the items by not allowing progress to the next section until all the items have been answered, the uses and customs of social networks derived from the pandemic, and the ease of data capture times. As for its disadvantages, the great challenge was not being able to administer the instrument to both groups (bosses and followers) at the same time; it first had to be sent to the bosses, and once their response was received, the second instrument had to be sent to be distributed among their followers. Despite the complexity of the distribution of the instrument, 198 responses were obtained from the second group of followers. Finally, it helped to get reactions by informing both managers and followers of the absolute confidentiality of their data and the strictly academic use of the same. The information collected was integrated into a database that was edited and analyzed in the statistical package for the social sciences (IBM SPSS), Version 21, and later in SmartPLS, Version 3.

The format for the Bosses evaluated their leadership styles, while the format for the Followers allowed them to assess the leadership styles of the Bosses based on their perceptions.

The sample used in the present study was n = 303 (Bosses and Followers), being appropriate for the use of Structural Equation Modeling under the Partial Least Squares (PLS) method, considering the criteria of ^{Hair (2017)} regarding a statistical power of 80% and with the use of arrows (hypotheses) pointing to the constructs of independent variables toward dependent variables. According to the above, for a maximum of 10 arrows, a sample of 129 would be needed; a sample of at least 200 cases is considered adequate for using PLS, which was exceeded in the present investigation.

Statistical analysis and hypothesis testing

In order to perform the reliability analysis of the instruments, Cronbach’s Alpha, Rho A, and Composite Reliability (CR) coefficients were used, and in order to evaluate the validity of the instruments, the factor load analysis, the analysis of the Average Variance Extracted (AVE), and the discriminant validity were used. The research hypothesis was developed and contrasted using the structural modeling with latent variables PLS-SEM (Hair et al., 2022) using the reflective method according to the established theoretical foundations, integrating the eight specific hypotheses, which allowed the causal influence of the proposed model to be analyzed both graphically and statistically.