The Research On The Impact Of Private Entrepreneur's Leadership Behavior On Corporation Performance In China

Along with its reform progress for about 30 years, the Chinese economy has made achievements witnessed by the whole world. Taking an overall look at the cause of the Chinese economic miracle, it is not difficult to find that the fast development of the non-state-operated economy plays an important role in the Chinese economic miracle. By the end of 2006, non-state-operated economy has taken up more than 50% in the national economy and it has made vital contribution to the growth of national economy. The main reason of the rapid development of non-state-operated economy comes from the development and expanding of a great number of private enterprises.Following are the two reasons why private enterprises can get such great success in China. Firstly, the system and mechanism of private enterprise match properly with the system of socialist market economy, and the leadership behavior of private entrepreneurs means much more to the existence and development of private ernterprises than that to state-owned companies, so that pivate entrepreneurs could accept advantage concept and method of administration to promote the management of private enterprises. Secondly, private entrepreneurs in China have taken unique new way of management which fits for the reality in China. Due to the differences of times, system and environment, the development of the Chinese private economy has quite different background and condition when compared with that in the west. Based on the theories of economy and administration from western countries, private entrepreneurs in China have innovatively explored new method of management which suits to Chinese society and culture and contributes a lot to the theories of management in the world as well, so that the study on the success and uniqueness in the development of the Chinese private economy is of realistic significance and theoretic value to the continuing and healthy development of Chinese national economy.The Chinese economic miracle attracted attention from the whole world, which leads to a focused study on Chinese private enterprises. Scholars, from different point of view, have analyzed the causes, laws, problems, challenges, approaches and trends about the success of the Chinese private enterprises. However, few researches have been found working on analyzing the impact of leadership behavior on the development of private enterprise so as to find out the laws of their success. Few entrepreneurs serving as the top leader in the organization have been set as the research objects to find out the impact of these leaders on the organization performance.Thesis starts from the research on the leadership behavior of private entrepreneurs who have both proprietary and operating rights and analyzes its effect and impact on the development and performance of private enterprise so as to find out the causes and laws of the success in Chinese private enterprise management.Based on a broad literature study, the author proposes some conceptual models about the impact of leadership behavior on the development of private enterprises. The research focuses on the three common leadership behavior types in private enterprises:transactional, transformational and paternalistic leadership. Transactional leadership is studied in two dimensions of contingent reward leadership and exception management. Transformational leadership is investigated in four dimensions of morale modeling, articulate vision, individual consideration and charisma. Paternalistic leadership is studied in three dimensions of moral leadership, benevolence leadership and authoritarianism leadership. Models are based on three types of leadership behavior and their impact on corporation performance including the organization performance, employee job satisfaction, employee organization commitment and employee demission tendency. The research also models the relationship between the outlook of value and the leadership behavior of private entrepreneurs and models the relationship between development stages and the leadership behavior and corporation performance. Based on the analysis of conceptual models,75 hypotheses are proposed and tested in the thesis, including the hypotheses on the impact of leadership behavior on the corporation performance, the hypotheses on the impact of outlook of value on the leadership behavior in private enterprises and the hypotheses on the impact of development stages of private enterprises on the leadership behavior in private enterprises and the corporation performance.All the conceptual models and hypotheses proposed in this thesis are verified in empirical study. Questionnaires are sent to 190 private enterprises in Sichuan and Chongqing. After clearing away the invalid questionnaires,1647 copies of valid questionnaires are confirmed. The main conclusions are as follows.1.Leadership behavior and corporation performanceThe models form the influence relationship between the outlook of value and leadership behavior, establish the influence relationship between transactional, transformational and paternalistic leadership and corporation performance, and also build the influence relationship between development stages of enterprise and leadership behavior and corporation performance. Indexes that can reflect corporation performance and the impact of leadership behavior on human resource management, including employee job satisfaction, employee organization commitment and employee demission tendency, are used to illustrate corporation performance. Based on the conceptual models, the thesis has proposed hypotheses and tested all of them according to the empirical study based on conceptual models and research hypotheses.2.The outlook of value and leadership behaviorTraditional outlook of value is little correlated with transactional leadership. Private entrepreneurs with traditional outlook of value are prone to take transformational and paternalistic leadership. Private entrepreneurs with modern outlook of value are prone to take transformational and transactional leadership, but not exclude paternalistic one.3. Transactional leadership behavior and corporation performanceTransactional leadership behavior is slightly correlated with the corporation performance. The relationship between transactional leadership and detailed indexes of cororation performance is that transactional leadership has insignificant correlation with the economic increasing of corporation, but it is positively correlated with employee demission tendency, negatively correlated with employee job satisfaction and employee organization commitment. That means transactional leadership behavior may lead to low corporation performance under the recent environment in China, and employees can barely accept transactional leadership.4. Transformational leadership behavior and corporation performanceTransformational leadership behavior is positively correlated with corporation performance. Detailedly speaking, it is positively correlated with the economic increasing of corporation, employee job satisfaction and employee organization commitment, but negatively correlated with employee demission tendency. That means transformational leadership behavior which has been proved to be effective in the west is efficacious as well in Chinese private enterprises and western modern culture has been accepted by private entrepreneurs and employees. Transformational leadership is good for promoting corporation performance.5. Paternalistic leadership behavior and corporation performancePaternalistic leadership behavior is positively correlated with corporation performance. As to economic increasing of corporation, employee job satisfaction, employee organization commitment and employee demission tendency which are the detailed indexes of corporation performance, paternalistic leadership is positively correlated with economic increasing of corporation, employee job satisfaction and employee organization commitment, but negatively correlated with employee demission tendency. That means Chinese culture has impacted deeply on private enterprises, entrepreneurs and employees. Employees accept paternalistic leadership extremely which contributes to the corporation performance promotion as well.When compared transformational leadership with paternalistic leadership, the former has much more profound influence on corporation performance than the latter. This shows that since the reform and open-up launched around 30 years ago, especially the establishment and perfection of socialist market economy system, leadership behavior of private entrepreneurs who absorb advantage concept of management and connect with the world intensely, has been more and more open under the background of global economic integration.6. Stages, leadership behavior and corporation performanceIn the case of transactional leadership, little impact at all the stages; In the case of transformational leadership, existence>survival>success; While in the case of paternalistic leadership, survival>success>renewal.The innovative points of view in this thesis are ranked as follows:Firstly, the thesis takes the relationship between leadership behavior of top entrepreneurs in private enterprises and corporation performance as the research points of view, explores the influence relationship between leadership behavior of top entrepreneurs in private enterprises and organization performance, and proposes conceptual models and hypotheses which reflect the relationship between leadership behavior of top entrepreneurs in private enterprises and corporation performance based on corporation lifecycle. Models and hypotheses in the thesis aim to probe the impact of transactional, transformational and paternalistic leadership on corporation performance under China's national conditions. This study compensates the deficiency for the research on leadership of top entrepreneurs in private enterprises, enriches the study on the adaptability of transactional and transformational leadership under non-western culture background, substantiates the research on performance of paternalistic leadership in private enterprises of Chinese mainland.Secondly, the study innovatively introduces the outlook of value and phases of enterprise development as indexes which can influence the leadership behavior of private entrepreneurs to conceptual model, explores the relationship between the three leadership behaviors and entrepreneurs'outlook of value, detects the validity of leadership behavior in different phases of enterprise development.Thirdly, according to all the conceptual models and hypotheses proposed in the research, the thesis has positively studied the relationship between transactional, transformational and paternalistic leadership behaviors of entrepreneurs in private enterprises and corporation performance, the relationship between outlook of value and leadership behaviors of entrepreneurs, the validity of leadership behavior in different phases of enterprise development, also enriches the empirical study results for the relationship between leadership behaviors of entrepreneurs in private enterprises and corporation performance.The empirical study indicates that the different outlook of value affects choices of leadership behavior. Entrepreneurs with traditional outlook of value are apt to choose transformational and paternalistic leadership behaviors, while those with modern outlook of value often choose transactional and transformational leadership behaviors. The three types of leadership behaviors have great impact on corporation performance but not the same. Transactional leadership is not effective on improving corporation performance; transformational and paternalistic leadership have obvious effect on developing corporation performance, and the latter is more significant. The relationship between the inner dimensions of three types of leadership behaviors and corporation performance has been studied deeply in this thesis as well. The results of empirical study are as follows. Transactional leadership contains three dimensions, such as contingent reward leadership, active exception management and passive exception management. Contingent reward leadership is conducive to improving corporation performance, active exception management has insignificant impact on it, while passive exception management leads to reduction of corporatioan performance. Morale modeling, articulate vision, individual consideration and charisma, which belong to transformational leadership, are helpful to develop corporation performance. Paternalistic leadership contains moral leadership, benevolence leadership and authoritarianism leadership. Moral leadership and benevolence leadership are conducive to improving corporation performance while authoritarianism leadership can improve corporation performance on the layer of organization, but has insignificant impact on performance on the layer of employees.All results of this thesis compensate the deficiency of empirical study on transactional and transformational leadership, enrich the study on the adaptability of transactional and transformational leadership under different culture background, substantiate the research on the application of paternalistic leadership to private entrepreneurs in Chinese mainland, enrich the research on the relationship between entrepreneurs'outlook of value and their leadership behaviors, also enrich the study on the impact of phases of corporation development on leadership behaviors. The analysis results in the thesis have not been reported in the fields of leadership and corporation performance.