![Intellectual stimulation:The leaderisstimulatinghissubordinatestobe creative andto thinkoutof the
box
2.2.3 Leadership & organizational performance
Many researchers talkaboutthe relationshipbetweenleadership&organizational performanceand
prove the directlinkbetweenthem.ForexampleFiedler(1996) statedthat effectiveness&capabilities
of leadersconsideredthe mainreasonsforthe successof anyorganizationsand vice-versa.(Hennessey,
1998) statedthatthe onlywayto withstandthe ambiguityandcontinuouschange inthe environmentis
by trainingthe leadersandimprovingtheirskills&capabilities.(Nicholls,1998; Simms,1997)relatedthe
successof any organizationtothe effectivenessof theirleaders.Althoughall of these opinions,still the
empirical studiesintothe linkbetweenleadership&performance have beenlacking(Quick,1992) in
additionthe studyof the impactof leadershipstylesonorganizationperformance inoil &gascompanies
inEgypt isveryrare and neededtobe investigated.Thisstudyisasteptowardthisdirection.
2.3 Managing Organizational Performance
2.3.1 The Essence of Performance
Organizational performance isdefinedas“the ability toacquire resourcesnecessaryfororganizational
survival andit isdependentonmanyvariables,includingthe nature of the leader’sstrategicchoices,
and the nature of the strategyimplementation process.
there wasan inherenttraditionalpractice amongstfirmstointerchange the term“organizational
performance”with“financialperformance”.“financial performance”alsoreferstothe “profitability”of
an organization.
Marx et al.(1999) advise that“profitability” isdeterminedwhenafirmusesits productive assetsto
generate revenuethateventuallyexceedsitscosts.
organizational performance outcomes,which couldeitherbe statedquantitatively(namely:sales;
profitability;returnoninvestment[ROI],andotherfinancial indicators) ordescribed
qualitatively(namely:efficiency; laborproductivity;responsetimes;customersatisfaction;innovation;
employeesatisfaction;andorganizational culture).
2.3.2 Return on investment( ROI)
Simplyitisthe amountof centsgainfor each dollarinvested.ROI isdefinedas operating incomedivided
by averageoperating assets Atpresent,ROIhasbeenwidelyrecognizedandacceptedinbusinessand
financial managementinthe private andpublicsectors asa performance indicator](https://image.slidesharecdn.com/proposalforathesis-191017152806/85/Proposal-for-a-thesis-7-320.jpg)
Proposal for a thesis
- 1. The impact of Leadership styles on organizational performance In Oil & Gas sector in Egypt By XXXXXXXXXX Proposal for a DBA thesis Submitted to the “Business Administration Department” Faculty of Commerce Ain Shams University The Main Supervisor XXXXXXXX Date: Thursday, October 17, 2019
- 2. The Impact of leadershipstyleson organizational performance in Oil & Gas sector in Egypt 1. Introduction 1.1. Background In the global economyof the 21st century,competitioniscomplex,challengingandfilledwith competitiveopportunitiesandthreats.In orderforany organization tosurvive,trytoachieve itsgoals& gainhighprofits,ithas to enhance itsperformance andbecame superiortoitscompetitors. Globally,there isanargumentaboutthe organizationperformance,measuredfromfinancial aspects& profitabilityindicators (ROI),whetherthe successful performance isgreatlyinfluencedby leadership especiallyinafirm’sseniorpositions oritisrelatedtothe organizationenvironments. The collective researchof the pasttwodecadessuggeststhatthe successful leadershipinspires enthusiasmandcommitment,enhancingbothemployeesandorganizationperformance.Onone hand, some theoristsandmanypractitionershave arguedthatleadership especiallyinafirm’sseniorpositions has an importantimpactonfirm'sperformance andsurvival atall levels Basedonthe ideathatchief executiveofficers(CEOs) wieldthe dominantpowerandenjoyanexposedpositioninthe board,they have an impacton organizational outcomes dependingontheirdecisions. Onthe otherhand, many researchersreferthe successfulorganizationperformance tothe environmentandthe circumstancesto achieve predeterminedorganizational goals. From thisconsideration,thisstudyisintendedto determine whetherornotthe leadershipstyles (namely the laissez-faire,Transactional&Transformational leadershipstyles) have animpact onthe organizational performance inoil &gassector inside Egyptandto whatextent,contribute toempirical studiesonleadershipstyle andbusinessperformance. 1.2. Research importance and justification It's veryobviousthatEgyptianeconomyissuffering.One of the mainincome toegyptianeconomyisthe oil & gas industrybeside SuezCanal,tourism&foreigndirectinvestment. There are manyOil & Gas companiesinEgypt.AlthoughOil &Gas industryis boominginEgyptas a resultof the new explorations inthe Mediterraneansea&redsea,more than70% of these companiesare makinglosswhilethe balance 30% are performing eithersuperiorormedium performance(Accordingtothe data collected fromCAPMAS).The aimof thisresearchisto studythe companieswithsuperiorperformance,moderate
- 3. performance &weekperformance inoil &gassector inEgypt thento evaluate the impact of leadership styles(Laissez-faire,Transactional &Transformationalleadershipstyles)ineachof the three various performances.If one of these three styleshasasignificantimpactoncompanieswithoutstanding performance,thenwe willworkintransferring the skills,traits&rolesof thisstyle to the otherleaders withlow companiesperformance &enhance theirweakperformance andenhance the overall oil &gas industryinEgypt&the Egyptianeconomyasa whole. 1.3. Problem statement Widelycelebratedcasesof adirectleadership - performancelinkmaybe foundinnumerous anecdotal accounts of improvementsof companyperformance inall industriesattributedtochangesinleadership (Nicholls,1988; Simms,1997). However,empirical studiesintothe linksbetweenleadership& performance have beenlacking(Quick,1992).A numberof researcherstheorize thattransformational leadershipislinkedtoorganizational performance(Howell &Avolio,1993).Conceptually,it'sargued that the visionary&inspirational skillsof transformational leadersmotivate followers todeliver superiorperformance (Nicholls.1988; Quick,1992). In summary,muchof the above evidence presented as supportingthe claimiseitherinconclusive orempirical suspect.The limitedorinconclusivecharacter of research findinginthisareasuggeststhe need toinvestigatefurtherthe nature of relationship betweenleadership&performance.Thisstudyisa stepinthisdirection.I'll carrythisstudyon one of the most importantindustrywhich Egyptianeconomyiscountingon whichisthe oil & gas industryso that if we foundsignificantimpactof one of the three studiedleadershipstyles(Laissez-Faire; Transactional & transformational leadershipstyles) onthe organization withoutstandingperformance thenwe can use thisresultintransferringthe traits& character of thisstyle tootherleaderswith differentstyle inordertoenhance the performance of oil &gas industry&the overall Egyptian economy. 1.4 Research purpose Thisstudyinvestigatedthe maineffectsof leadershipstylesonorganizational performance inoil &gas sectorin Egypt.It specificallysoughttodetermine the impactof laissez-faire;transactional& transformational leadershipstylesonorganizational performanceinoil &gas sectorin Egypt.
- 4. 1.5 Research Questions The researchquestionsforthisstudyare as follows: "What's the impactof Laissez-Faireleadershipstyleonorganizationalperformance inOil &Gas sector In Egypt?" "What's the impactof transactional leadershipstyle onorganizational performance inOil & Gas sectorIn Egypt?" "What's the impactof transformational leadershipstyle onorganizational performance inOil &Gas sectorIn Egypt?" 1.6 Research Hypothesis H01: There is nosignificantimpactofLaissez-Faire leadershipstyle onthe performance of Oil &Gas sectorinEgypt. H11: There is significant impactof Laissez-Faire leadershipstyle onthe performance of Oil&Gassector inside Egypt. H02: There is nosignificantimpactof Transactional leadershipstyle onthe performanceof Oil &Gas sectorinEgypt. H12: There is significant impactof Transactional leadershipstyle onthe performance of Oil&Gassector inside Egypt H03: There is nosignificantimpactof Transformational leadershipstyle onthe performanceof Oil &Gas sectorinEgypt. H13: There is significant impactof Transformational leadershipstyle onthe performance of Oil&Gas sectorinside Egypt
- 5. 1.7 Limitations of the study The study utilizedvoluntarysurveycompletionandassuch a givenriskof the studyis the participationlevel. The issue of potential misunderstandingsbythe populationbeingsurveyed.Itispossible that the typesof questionsaskedmightbe interpreteddifferentlybythe readerandcause an insufficientanalysisof theirresponses. The readermay be self biased&wouldhave chosenanswersaffectedbythisbias The surveyinstrumentsthemselves,the shortnumberof questions,andthe time frame utilized mightalsolimitparticipationandpotentiallyevenmake the studyvulnerable tostatistical error (Bryman,2008). Selectionof participantsmaycreate predispositiontowardscertainoutcomes(Creswell,2009) associates participatinginthe studymaycommunicate betweenthemselveshavingapotential impact on the answers and statistical analysis (Creswell, 2009). The studyis not includingthe Jointventure/ForeignpetroleumcompaniesworkinginEgyptdue to unavailability of the records of these companies at CAPMAS 2. Literature Review 2.1 Introduction In thischaptera literature reviewof leadership stylesispresented.The chapterisfocusingon definition of Laissez-faire,Transactional &Transformationalleadership styles,Differentleadershiptheories The factors usedtomeasure themaccordingto thisstudy& the linkbetweenleadershipstyles& organizationperformanceasstatedbysome researchersinadditiontoimportantinformationaboutOil & Gas sectorinEgypt 2.2 Leadershipin general 2.2.1 Types of leaders 2.1.1.1. Laissez-Faire Leaders Thistype of leadersusedtoescape fromresponsibilitiesandhave afear fromtakingdecisions.they've lowcommunicationwiththeirsubordinatesandneverinterfere inanyproblemsolving
- 6. 2.1.1.2. Transactional Leaders Thistype of leadersare mainlyfocusedonmonitoring dailytasks,usedtouse hispowerof positionto rewardor punishhissubordinates.Characterizedbyusingthe conceptof carrot or stick 2.1.1.3. Transformational Leaders Thistype of leadersare trulyinspirational,usedtoarouse otherstoseekextraordinaryperformance accomplishments,theyare focusingonthe sharedvisionandusedto encourage innovation&team work 2.2.2 Leadershipfactors usedin this study (From Multifactor LeadershipQuestionnaire)(Developedby Bass &Avolio) 2.2.2.1 Laissez-Faire Factor Escape from responsibilities & fear of taking decisions 2.2.2.2 Transactional leadership factors Contingentreward:Leaderhastoinformhissubordinateswiththe rolesandresultsexpectedfrom themand thento rewardor punish themaccordingtotheiraccomplishments Managementbyexception(active):Leaderismonitoringhissubordinatesduringcarryingouttheirtasks and interfere earlyif anythingisgoingwrong Managementbyexception(Passive):Leaderdidn'tidentifytohis subordinateswhathe needsfrom themhoweverhe interfere once the problembecome serious 2.2.2.3 Transformational leadership factors: Charisma:The leaderbecome role model tohissubordinates,he isalwaysguidingthemfromthe front side inadditionshe isalwaysshowinghighconcernregardingethics&usedtoput the needsof his subordinatesoverhisneeds. Inspirational Motivation:The leaderusedtoinspire hissubordinatesinordertoachieve extraordinary results,He ismotivating&supportingtheminorderto be committedtothe organization'sgoals& sharedvision.
- 7. Intellectual stimulation:The leaderisstimulatinghissubordinatestobe creative andto thinkoutof the box 2.2.3 Leadership & organizational performance Many researchers talkaboutthe relationshipbetweenleadership&organizational performanceand prove the directlinkbetweenthem.ForexampleFiedler(1996) statedthat effectiveness&capabilities of leadersconsideredthe mainreasonsforthe successof anyorganizationsand vice-versa.(Hennessey, 1998) statedthatthe onlywayto withstandthe ambiguityandcontinuouschange inthe environmentis by trainingthe leadersandimprovingtheirskills&capabilities.(Nicholls,1998; Simms,1997)relatedthe successof any organizationtothe effectivenessof theirleaders.Althoughall of these opinions,still the empirical studiesintothe linkbetweenleadership&performance have beenlacking(Quick,1992) in additionthe studyof the impactof leadershipstylesonorganizationperformance inoil &gascompanies inEgypt isveryrare and neededtobe investigated.Thisstudyisasteptowardthisdirection. 2.3 Managing Organizational Performance 2.3.1 The Essence of Performance Organizational performance isdefinedas“the ability toacquire resourcesnecessaryfororganizational survival andit isdependentonmanyvariables,includingthe nature of the leader’sstrategicchoices, and the nature of the strategyimplementation process. there wasan inherenttraditionalpractice amongstfirmstointerchange the term“organizational performance”with“financialperformance”.“financial performance”alsoreferstothe “profitability”of an organization. Marx et al.(1999) advise that“profitability” isdeterminedwhenafirmusesits productive assetsto generate revenuethateventuallyexceedsitscosts. organizational performance outcomes,which couldeitherbe statedquantitatively(namely:sales; profitability;returnoninvestment[ROI],andotherfinancial indicators) ordescribed qualitatively(namely:efficiency; laborproductivity;responsetimes;customersatisfaction;innovation; employeesatisfaction;andorganizational culture). 2.3.2 Return on investment( ROI) Simplyitisthe amountof centsgainfor each dollarinvested.ROI isdefinedas operating incomedivided by averageoperating assets Atpresent,ROIhasbeenwidelyrecognizedandacceptedinbusinessand financial managementinthe private andpublicsectors asa performance indicator
- 8. 2.4 Petroleum Sector in Egypt Egypt isthe largestnon-OPECoil producerinAfricaandthe second-largestdrynatural gasproduceron the continent.The countryalsoservesasa major transitroute for oil shippedfromthe Gulf to Europe and the UnitedStates. Egypt isthe largestoil producerinAfricaoutside of the Organizationof the PetroleumExporting Countries(OPEC),andthe second-largestnatural gasproduceronthe continent,behind Algeria.Egypt playsa vital role ininternational energymarketsthroughthe operationof the SuezCanal andSuez- Mediterranean(SUMED) Pipeline. The SuezCanal isan importanttransitroute foroil and liquefiednatural gas(LNG) shipmentstraveling northboundfromthe PersianGulf toEurope and NorthAmericaandsouthboundshipmentsfromNorth Africaand countriesalongthe MediterraneanSeatoAsia.The SUMED Pipelineisthe onlyalternative route nearbyto transportcrude oil from the RedSea to the MediterraneanSeaif shipswere unableto navigate throughthe SuezCanal.Feescollectedfromthe operationof these twotransitpointsare significantsourcesof revenue forthe Egyptiangovernment. In Africa,Egypthas the third-largestpopulation,afterNigeriaandEthiopia,andthe second-highestgross national income (GNI),afterNigeria,accordingtothe WorldBank.Egypt’seconomysufferedduringand afterthe 2011 revolutionasthe countryexperiencedasharpdecline intourismrevenueandforeign directinvestment,accordingtothe International MonetaryFund(IMF).Annualgrossdomesticproduct (GDP) growthin Egyptdroppedfrom5.1% in 2010 to 1.8% in 2011 andstill remainsbelow the pre- revolutionlevel,averaging2.1%in2013. Accordingtothe IMF, financial support,particularlyinthe form of oil andLNG shipments,fromsome PersianGulf countrieshashelpedEgypttomeetitsdomestic energydemand. Egypt’seconomyhasnot fullyrecoveredsince the 2011 revolution.The governmentcontinuestofund energysubsidies,whichcostthe government$26 billionin2012, andthishas contributedtothe country’shighbudgetdeficitandthe inabilityof the EgyptianGeneral PetroleumCorporation(EGPC), the country’snational oil company,topayoff its debtto foreignoperators.EGPCowesforeignoiland gas operatorsbillionsof dollars,whichhasledforeignoperatorstodelaytheirinvestments inexisting and newoil andnatural gas projects.EGPC accumulated$6.3 billioninoutstandingarrearstoforeignoil and gas companies,of which$1.5 billionwaspaidbackinDecember2013. The debthas since increased back to $7.5 billionasof June 2014 andcontinuestogrow. In 2000 The ministryof petroleumadoptedanintegratedstrategy,the mostimportantmechanismto implementitistodevelopandamendthe structure of the Egyptianpetroleumsectorthrough
- 9. separatingthe activitiesof the natural gasand petrochemicalsfromthe activitiesof the Egyptian General PetroleumCorporation,andestablishingastrongentityforeach of them, inadditionto focusingthe attentiononUpperEgyptthroughestablishinganindependententity.Afteraddingthe activitiesof the mineral resourcestothe dutiesof the ministryof petroleumandestablishingthe Mineral ResourcesAuthorityonthe 14th of October2004, the petroleumsectornow consistsof five strongentitiescooperatingandintegratingtomake the bestuse of petroleumandmineral resources wealth.Theyare: The EgyptianGeneral PetroleumCorporation “EGPC” The EgyptianNatural Gas HoldingCompany “EGAS” The EgyptianPetrochemicalsHoldingCompany “ECHAM” GanoubEl-Wadi HoldingCompany “GANOPE” The EgyptianMineral ResourcesAuthority. “EMRA”
- 10. 3. Research Methodology Thischapter includedadiscussiononthe appropriatenessof the researchdesign,basedonthe hypothesisselected.Inadditionit'll discuss the datacollectionandthe analysisproceduresused,a reviewof the instruments selectedaswell aspotential limitationsof thisstudy. 3.1 Conceptual Framework and hypotheses development When data is collected, it will be used to test the following hypothesis. Hypotheses H01: There is nosignificantimpactof Laissez-Faire leadershipstyles onthe performance of Oil &Gas sectorinEgypt. H11: There is significant impactof Laissez-Faire leadershipstylesonthe performance of Oil&Gas sector inside Egypt. Egyptian Ministry of Petroleum EGPC EGAS ECHAMGANOPE EMRA
- 11. H02: There is nosignificantimpactof Transactional leadershipstyles onthe performance of Oil &Gas sectorinEgypt. H12: There is significant impactof Transactional leadershipstylesonthe performanceof Oil&Gassector inside Egypt H03: There is nosignificantimpactof Transformational leadershipstyles onthe performance of Oil & Gas sector inEgypt. H13: There is significantimpactof Transformational leadershipstylesonthe performance of Oil&Gas sectorinside Egypt 3.2 InstrumentsSelectedforThis Study The instrumentusedinthisstudywasthe MultifactorLeadership Questionnaire(MLQ).The MLQ was originallydevelopedbyBass(1985) as a seven factormodel fortransactional andtransformational leadershipthe shortformisa validatedinstrumentwith45itemscommonly usedtogatherleader feedbackin identifyingtheirleadershipbehaviorswhichprovidesaconfirmatoryfactoronthe presence of transformationalleadership.The instrumentutilizedinthisstudyisa 45 items surveyutilizinga5-pointLikertscale,rangingfrom5 (frequently)to1 (notat all). Because of itslongevityof use,itisa proveninstrumentinsuccessful assessmentof transformational leadership(Waggoner,2009).The instrumenthasprovenbothreliableandvalidasa leadership assessmentinstrumentforleader-managersinwidelydiverse settings,measuringthe componentsof transformational leadershipinnearly300researchprojects(Bass&Avolio,2000). Reliabilityscoresforthe total itemsandforeachleadershipfactorscale rangedfrom .74 to .94. Bassand Avolio(2000) have definedafull range of leadershipbehaviorsand leadershipoutcomes measuredbythe MLQ. The scalesacross all leadershipdimensions have reliabilitiesthatare generally high,exceedingcutoffsrecommendedinliterature(Bass&Avolio,2000).There are twoformsof the MLQ, a rater formand a leaderform.Thisresearchwill use the leaderformtoassesstheirown leadershipstyle.The MLQForm 5X isa self-reportingquestionnaireconsistingof 45 questions which addresseshowoftenthe leaderdisplaysaspectrumof leadershipbehaviors(Gardner&Stough,2002). Five sub-scalesconsistingof fouritemseachassessthecharacteristicsof transformational leadership includingidealizedinfluence attributes,idealizedinfluence behaviors,inspirational motivation, intellectual stimulation,and individualconsideration.Three sub-scalesof fouritemseachmeasure the transactionalleadershipcomponentsof contingentrewards,active managementbyexception,and passive managementbyexception(Avolio&Bass,1995: Howell &Avolio,1993). TheMLQ 5X also measureslaissez-faire leadershipwithfouritems.The restof the items ratedare extra effort,perceivedleadereffectiveness,andemployee satisfactionwiththe leader. 3.2 Research Design
- 12. We use the multifactorleadership questionnaire tomeasure the practical impactof Laissez-Faire, Transactional & Transformational leadership stylesonvariousoil &gas companiesperformance.Every questionmusthave ameaningrelatedtothe hypothesis.The questionnaire will cover45 questionswill helpusto analyze the impactof the three leadershipstyles onorganizationperformance 3.3 Populationand Sampling A stratifiedrandomsample willbe consideredforcollectingthe data.The studywill be appliedonOil & Gas sector.Three strata will be consideredaccordingtothe level of financial performanceinOil &Gas sectorwhichare listedashigh,moderate &low financial performance accordingtothe formal data received fromCAPMAS 3.4 Data Collection Primarydata will be collectedthroughansweringaquestionnaire thatwill be spreadamong 9Oil & Gas companieswithdifferentperformance accordingtothe data collectedfromCAPMAS (3companieswith highfinancial performance,3companieswithmoderate financial performance &finally3companies withlowfinancial performance).The questionnaire will be answeredby middle &seniormanagers in each of these companies ordertoevaluate theirorganization'sleadershipstyleandthe degree thisstyle impactedthe organizationperformance 3.5 Research Variables DependentVariable:Organizational performance Independentvariable:Laissez-faire Leadershipstyle;Transactionalleadershipstyle&Transformational leadershipstyle ( see belowfigure)
- 13. 3.6 Data Analysis We'll analyze the collecteddatausingStatistical package forsocial science (SPSS).SPSSprovidedthe descriptive and inferentialstatistical analysisapplications.Thisanalysisincludeddataconversionand descriptive statistical analysisincludingmaximums,minimums,means,andstandard deviationforeach groupof data. The focusof the researchhypothesiswasthe correlation betweenthe listedvariablesof interestwhere the independentvariableswillbe the 3 leadershipstyleswhile the dependentvariable will be the organizational performance.We'll checkwhetherthe proposedmodelwhichindicate the impactof the independentvariable (The threeleadership styles)onthe dependentvariable (Organizationperformance)willbe significantornot usingthe following3measures: a. ANOVA test b. T-test c. Coefficientof determination PreliminaryReferences Avolio,B.J.andBass,B.M.(2004),MultifactorLeadershipQuestionnaire:Manual &Samplerset, 3rd Ed.,Mind Garden, RedwoodCity,CA. Bass,B.M. (1985) Leadership&performance beyondexpectation.NewYork:The free press Fiedler,F.E.(1996).Researchonleadershipselection&training:One view of future, administrativesciencequarterly
- 14. Hennessey,J.T.(1998).Reinventinggovernment:Doesleadershipmake the difference?,Public administrationreview Vroom,V.andYetton,P.(1974).Leadership&Decisionmaking.Pittsburgh,PA:Universityof PittsburghPress