TOPIC:

Paternalistic leadership

RESEARCH METHODOLOGY

Final Report

DATED: 16 December, 2019

Submitted by: Rahat Karim

Submitted to: Dr. Zia Ur Rehman

FACULTY OF CONTEMPORARY STUDIES

LEADERSHIP AND MANAGEMENT STUDIES

 NATIONAL DEFENCE UNIVERSITY, ISLAMABAD

Abstract

Paternalistic leadership (PL) is an indigenous Chinese leadership style that is rooted in China's
patriarchal tradition and has been found to be prevalent in overseas Chinese family businesses.
Farh and Cheng (2000) proposed a model of PL that has three components: authoritarianism,
benevolence, and moral leadership. Since then, a series of empirical studies have been conducted
by Cheng and his colleagues to examine the validity of Farh and Cheng's PL model using a
variety of samples from Taiwan and mainland China. In this chapter, we review this body of
research and identify promising areas for future research. Introduction. In the second half of the
twentieth century, entrepreneurship among overseas Chinese exploded not only in Chinese-
dominated communities such as Hong Kong, Singapore, and Taiwan, but also in South-east
Asian countries, such as Indonesia, Malaysia, Thailand, and the Philippines, where the Chinese
are in the minority. Scholars who were intrigued by this phenomenon embarked on a series of
studies of the practices of overseas Chinese businesses. They discovered a distinct
management/leadership style called paternalism, widely practiced among the owners/managers
of overseas Chinese family businesses . Paternalism, which is rooted in the traditional Chinese
family structure, has crossed the boundary of families and generalized to the workplace.

1.Introduction

In the face of rapid technological advancement and fierce competition in the market
environment, enterprises need to use both exploratory and exploitative innovation strategies to
improve competitiveness and viability Exploratory innovation refers to radical innovation that is
“designed to meet the needs of emerging customers or markets,” whereas exploitative innovation
is incremental innovation that is “designed to meet the needs of existing customers or markets”.
It has been found that organizational innovation activities are profoundly influenced by
organizational leadership styles. However, most of the studies on the relationships between
leadership styles and innovations are conducted in the contexts of Western cultures .it is still left
unclear whether the findings apply in other cultures, which might be dramatically different from
the Western cultures, such as in the Chinese culture Leadership is culturally dependent. Cultures
define the expectations for effective leaders; thus, the effectiveness of a particular leadership
behavior or style depends to a large degree on the culture where it is practiced. The preferred
leadership styles in the Western cultures,such as transformational leadership and participative
leadership, do not necessarily lead to positive outcomes in other culture. China is a developing
country characterized by high power distance. In such a cultural context, people tend to accept an
unequal distribution of power and status in organizations. Leaders, therefore, often enjoy more
authority. Meanwhile, they are also expected to take more responsibilities for both supporting the
subordinates and making the right decisions. In fact, research has found that in developing
countries with high power distance, instead of participative leadership that suppresses leaders’
roles and allows subordinates voices in decision-making processes, a paternalistic leadership
style that combines autocratic decision making, strong discipline and leader’s supportive and
benevolent behaviour’s is often Preferred.

Paternalistic leadership indeed has been found to be prevalent in organizations in China as well
as in Chinese family business organizations in other countries). In Farh and Cheng’s (2000)
seminal research, they argued that paternalistic leadership stemmed from the traditional Chinese
culture based on Confucianism and legalism. They then conceptualized paternalistic leadership
as including three elements: authoritarianism,benevolence and moral leadership . How do the
three components of paternalistic leadership style affect organizational innovation? This question
has largely been left unanswered so far. This is unfortunate, as without understanding the
relationship between paternalistic leadership and organizational innovation, we would lack a
decent understanding of the leadership–innovation relationship in the Chinese context and in
many other countries where paternalistic leadership style has been found prevalently present. To
fill this gap, this study examines the effects of the three elements of paternalistic leadership on
both exploratory innovation and exploitive innovation, respectively, in Chinese enterprises.

Furthermore, we also examine the interaction effects of paternalistic leadership with the external
environment that companies are facing. Previous studies have demonstrated that the external
environment which companies are facing has great implications for their adaptation mechanisms,
which in turn affects their development and the chances of ssurvival. However, the impact of
environment on organizational outcomes to a large extent depends on how leaders perceive,
interpret and respond to it . Therefore, it is reasonable to expect an interaction effect between
leadership and external environment on innovation. The extant research has examined the
moderating effects of team/organizational context, follower attributes, relationship attributes,
leader attributes on the relationship between leadership and innovation. there is rarely any
evidence that shows the moderating effect of external environment. By examining the interaction
effect between paternalistic leadership and external environment, we strive to deepen our
understanding of how paternalistic leadership can affect organizational innovation.

In this study, we aim to develop a theoretical model for understanding the relationship between
paternalistic leadership and organizational innovation in the Chinese context. We contribute to
the leadership literature in two ways. First, we develop a theoretical model to explore the
relationship between paternalistic leadership and organizational innovation and empirically test
the model. While existing literature has studied the effect of paternalistic leadership on employee
ccreativity, not much research has explored its effect on organizational innovation. Second, we
explore the different interaction effects of the three elements of paternalistic leadership with
external environment on organizational innovation. Although there is some evidence that
external environment moderates the relationship between leadership and organizational
iinnovatio. we still lack an understanding of how it moderates the relationship between
paternalistic leadership and innovation.

1.1problem statement
1.2Research questions
o Why paternalistic leadership is important in Organizations?
o How paternalistic leadership can bring innovation to organization?
o Is there any relation between paternalistic leadership and employees motivation?
o Are Companies with paternalistic leadership are more innovative as compare to
companies without paternalistic leadership?
1.3paternalistic leadership

Paternalistic leadership is a leadership style that is very different from those leadership in
Western cultures. It is deeply rooted in the traditional Chinese culture. It integrates
(benevolence)” of Confucianism with the Legalist “wei (authoritarianism)” and Taoist“de
(morality)” thoughts. Through extensive case studies, researchers have observed that
paternalistic leaders play a farther-like role in organizations, as the typical father figure in
traditional Chinese families. They possess strong authority and absolute power over others, keep
distance from their subordinates and tend to hide their true feelings and intentions. These
behaviours inspire awe or fear of subordinates, which enforces their obedience. But at the same
time, paternalistic leaders also show genuine kindness and holistic care to their subordinates,
thereby generating gratitude and indebtedness on the part of subordinates, which can in turn
further strengthen their compliance and obedience. Moreover, paternalistic leaders also serve as
a role model for their subordinates, featured by superior personal virtues, high integrity, self-
discipline and selflessness. The morality of leaders is especially important in a context with
underdeveloped institutional structures. Compared to many developed countries with a
comprehensive legal system, China keeps a strong legacy of personalise. People, therefore, tend
to expect that their leaders protect their rights and well-being. Combining these aspects of
paternalistic leaders’ behaviours defined paternalistic leadership as a style that “combines strong
discipline and authority with fatherly benevolence and moral integrity couched in a personalistic
atmosphere. According to this definition, paternalistic leadership consists of three elements:
authoritarianism, benevolence and moral leadership, corresponding to the behaviours of “li-wei
(awe inspiring)”, “shi-en ( favour granting)”, and “shu-de (setting a moral example)” described
above. Recently, paternalistic leadership has received increasing scholarly attention. Empirical
research has explored its relationships with various outcomes, such as employee performance
organizational commitment, employee voice and employee creativity. Despite the variation in
the outcomes that these studies focus on, we can observe two common patterns. One is that the
three elements of paternalistic leadership seem to have different effects on a given outcome. This
suggests that it might be inappropriate to treat paternalistic leadership as a holistic construct as
some researchers do as this can mask the divergent effects of different aspects of paternalistic
leadership. The other common pattern is that most of the existing research focuses on the
outcomes at the individual employee level. We still lack an understanding of how paternalistic
leadership is related to outcomes at the organizational level. To fill this gap, we examine the
effect of paternalistic leadership on organizational innovation, including both exploratory
innovation and exploitative innovation.

1.4paternalistic leadership and innovation

Employee creativity is a premise of organizational innovation. The effects of paternalistic
leadership on employee creativity have been explored. However, its effect on organizational
innovation remains unexplored. In this section, we build on several leadership theories to
develop our hypotheses that explains how paternalistic leadership affect exploitative and
explorative innovation from the perspectives of benevolent, authoritarian and moral leadership,
respectively. Benevolent leaders show genuine and continuous care to followers’ well-being, not
only at work, but the care also extends to their personal arena. At work, benevolent leaders allow
subordinates to make mistakes, and offer them the chance to correct. Outside the workplace, they
treat their subordinates as family members, helping them to overcome hardships in their life.
Their behaviours of granting favors can generate gratitude of the subordinates. As a return to
leaders’ kindness, compassion and understanding, the subordinates tend to demonstrate higher
level of commitment and involvement, strive for higher performance and be more willing to
devote their time and energy to go above and beyond their formal job duties. All of these can
contribute to organizational innovation, because innovative activities are non-routinized, which
usually requires stronger motivation and extra efforts. The long-lasting reciprocity between
benevolent leaders and their subordinates can also lead to a harmonious relationship
characterized by affective bond and high level of trust. This can form an internal environment in
which subordinates feel safe and relaxed. They trust their leaders and believe that the leaders will
not take advantage of them or treat them unfairly. Working in such an environment, the
subordinates feel more comfortable to take risks to experiment new ideas, as it is ensured that
they will be protected from the negative consequences resulting from potential failures in the
process of innovation. Moreover, in such an environment, subordinates are also motivated to
express their opinions freely, thereby participating in knowledge-sharing processes, in which
they inspire and learn from each other. Knowledge sharing contributes to knowledge
combination, which in turn will lead to innovation. Furthermore, employees’ involvement in
innovation activities will enhance their understanding of organization’s innovation strategies and
further foster their creativity to achieve higher level of organizational innovation. Therefore, we
expect that both exploratory innovation and exploitative innovation will benefit from benevolent
leadership. Hence, it is hypothesized that:
H1a. Benevolent leadership is positively associated with exploratory innovation.

H1b. Benevolent leadership is positively associated with exploitative innovation.

2. Research methodology

1. Research Methodology

It is a process which relies on the schemes, techniques and procedures in order to make research
more objective and balanced. The whole procedure helps the researcher gain a base and truth
regarding the argument. If the methodology is applied precisely in social sciences research,
biases can be eliminated. This can give the research a firm base and the research can be
authentic.

2.1 Methods

Sample

The data are collected from two sources: supervisors and their subordinates. The questionnaires
for supervisors provide values for the dependent variables, moderators and control variables,
whereas those for subordinates contain the information about the independent variables. The
supervisor questionnaires are distributed to 256 part-time MBA students who are managers from
different firms in a famous university in Hefei, China. After collecting the supervisor
questionnaires, a subordinate questionnaire is provided to these supervisors to distribute to their
subordinates to complete. The supervisor and subordinate questionnaires collected from the same
firm have the same ID code so that they can be matched in the analysis. We receive 202
subordinate questionnaires from the 256 supervisors who complete the supervisor questionnaires.
After 12 incomplete records being removed, the final sample consists of 190 supervisor–
subordinate dyads, with an effective response rate of 74.2 percent. Among supervisors, 62.63
percent are male. Among all respondents, 6.32 percent have an education of high school or
below, 13.68 percent receive a specialist degree, 60.53 percent have an undergraduate degree,
and 19.47 percent have a master’s or higher degree. In total, 15.26 percent are aged from 18 to
23, 70.53 percent are aged from 24 to 29, 13.16 percent are aged from 30 to 39, and 1.05 percent
are aged 40 or above. All the companies included in the sample have over 100 employees.
Among them, the proportion of private enterprises is 58.95 percent, the proportion of state-
owned enterprises is 29.47 percent and the proportion of foreign-invested enterprises is 11.58
percent. Due to the fame of the university’s MBA program, it attracts a large number of
corporate managers across several provinces in the south-eastern area of China, mainly in Anhui,
Jiangsu and Zhejiang. Even though these regions might not be able to fully represent the whole
China, there is considerable variance among them. Compared to Zhejiang and Jiangsu, the two
provinces at the south-eastern coastline with higher level of openness and development, Anhui is
an inland province and is relatively underdeveloped. The differences among those provinces
included in our sample to some degree reduce the sampling bias.

Measures

The questionnaires consist of scales mostly established in the management literature in English,
except for the three dimensions of paternalistic leadership. The scales of paternalistic leadership
were originally developed in Chinese by Cheng , who later took out two items from the scale of
moral leadership in another study published in English. The latter contains 6 items to measure
moral leadership, 9 items to measure authoritarian leadership and 11 items to measure
benevolent leadership. It has been widely used by scholars who conduct research on paternalistic
leadership and is also what we adopt in this study. We measure organizations’ exploratory and
exploitative innovation using the scales developed in the research of Lubatkin. Both scales ( for
exploratory and exploitative innovation, respectively) contain six items. We capture
environmental dynamism using the revised four-item scale used in Jansen . For each of the above
measures, a five-point Likert scale is used with 1 representing strong disagreement and 5
indicating strong agreement. Finally, we include corporate ownership, the superior’s education,
age and gender as our control variables. The questionnaires distributed to respondents are in
Chinese, due to the fact that many of them do not have a sufficient understanding of English. We
first translate the questionnaires from English to Chinese and then ask several experts –
professors and graduate students who does research in this area – to provide feedback about our
translation. After incorporating the feedback into the Chinese version, we translate it back to
English to make sure the consistency between the Chinese and the English versions.

Theory and hypotheses

Main effects of the dimensions of paternalistic leadership contend that paternalistic leader-ship
has deep roots in traditional Chinese culture. An important aspect of Chinese culture is
Confucian politics in social organization, which highlights the centrality of the vertical
relationship between superiors and followers. It endorses the leader’s dominance, concern for the
followers and moral self-cultivation, as well as the followers’ submission to authority,
obligations to reciprocate favours, and acceptance of the leader’s moral teachings. This cultural
tradition has also impacted the construction of the roles of the leaders and the subordinates in the
contemporary Chinese organizations. When both leaders and subordinates willingly accept and
respect the paternalistic prescriptions in their respective roles, paternalistic leadership is often
accompanied by positive employee responses, which, in turn, predict an increase in subordinates’
work motivation. Specifically, authoritarianism is expected to promote sub-ordinate compliance
and dependence, leaders’ benevolence is expected to increase subordinates’ gratitude and
reciprocation, whereas leaders’ morality is expected to promote subordinates’ respect and
identification; all three paternalistic leadership dimensions are expected to increase subordinates’
work motivation. To elaborate, leaders practicing authoritarian leadership would promote
dependency and compliance by imposing strict discipline and high performance standards on the
subordinates while providing firm guidance and instructions to the subordinates. Leaders
practicing benevolent leadership would enhance reciprocity by helping subordinates when they
encounter difficulties and personal emergencies, expressing interest in the subordinates’ welfare
even out-side the work settings, and rewarding subordinates who display appropriate or desirable
behaviours. Finally, leaders practicing moral leadership would increase identification by being a
role model for the subordinates; these leaders would keep promises, be fair to all subordinates
and would not take advantage of the subordinates. Consistent with these ideas, there is good
evidence from previous studies for the positive relationship between leader benevolence and
employee outcomes, and that between leader morality and employee outcomes. However, there
is little evidence for the positive relationship between authoritarianism and employee outcomes.
Contrarily, authoritarianism was found to be negatively related to satisfaction with supervisor,
job performance, intention to stay organizational citizenship and organizational commitment. To
explain these unexpected results, speculated that globalization and the fairness values that
accompany it might have weakened the relevance of some control strategies used by
authoritarian leaders to assert their authority in traditional Chinese societies (e.g. concealing and
manipulating critical information, ignoring subordinates’ suggestions and underestimating
subordinates’ contributions.

3.Theoretical framework

Adopting the theoretical framework of social exchange, the authors used the two
dominant Confucian values—hierarchy and relationalism—to theorize the mediating role
of affective trust in the relationship between paternalistic leadership and employee in-
role and extra-role performance in the Chinese organizational context. Data from 601
supervisor–subordinate dyads of 27 companies in a Taiwanese conglomerate revealed
that while the benevolence and morality dimensions of paternalistic leadership are
positively associated with both in-role and extra-role performance, the authoritarian
paternalistic leadership dimension is negatively related to subordinate performance.
Furthermore, affective trust mediated the relationship between benevolent and moral
paternalistic leadership and employee performance but did not mediate the relationship
between authoritarianism and employee performance. The theoretical and practical
implications of these findings are discussed in the Chinese context and beyond.

4.Conceptual framework

Compassion

Empowerment Decisiveness
 Paternalistic Good
Influence
leadership organizational skills

4.1 Dimensions of paternalistic leadership

Autocratic leadership

Benevolent leadership Moral leadership

Paternalistic leadership
Reference

https://scholar.google.com.pk/scholar?
q=paternalistic+leadership+problem+statement&hl=en&as_sdt=0&as_vis=1&oi=scholart

https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-839X.2004.00137.x

https://link.springer.com/chapter/10.1057/9780230511590_5