Journal of Health Organization and Management

Transformational, transactional and laissez-faire leadership among physician executives

Sudha Xirasagar
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Sudha Xirasagar, (2008),"Transformational, transactional and laissez-faire leadership among physician
executives", Journal of Health Organization and Management, Vol. 22 Iss 6 pp. 599 - 613
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Leadership
Transformational, transactional among physician
and laissez-faire leadership executives
among physician executives
599
Sudha Xirasagar
Arnold School of Public Health,
Department of Health Services Policy & Management,
University of South Carolina, Columbia, South Carolina, USA
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Abstract
Purpose – The purpose of this paper is to examine the empirical validity of transformational,
transactional and laissez-faire leadership and their sub-scales among physician managers.
Design/methodology/approach – A nation-wide, anonymous mail survey was carried out in the
United States, requesting community health center executive directors to provide ratings of their
medical director’s leadership behaviors (34 items) and effectiveness (nine items), using the Multifactor
Leadership Questionnaire 5X-Short, on a five-point Likert scale. The survey response rate was 40.9
percent, for a total 269 responses. Exploratory factor analysis was done, using principal factor
extraction, followed by promax rotation).
Findings – The data yielded a three-factor structure, generally aligned with Bass and Avolio’s
constructs of transformational, transactional and laissez-faire leadership. Data do not support the
factorial independence of their subscales (idealized influence, inspirational motivation, individualized
consideration, and intellectual stimulation under transformational leadership; contingent reward,
management-by-exception active, and management-by-exception passive under transactional
leadership). Two contingent reward items loaded on transformational leadership, and all items of
management-by-exception passive loaded on laissez-faire.
Research limitations/implications – A key limitation is that supervisors were surveyed for
ratings of the medical directors’ leadership style. Although past research in other fields has shown that
supervisor ratings are strongly correlated with subordinate ratings, further research is needed to
validate the findings by surveying physician and other clinical subordinates. Such research will also
help to develop appropriate content of leadership training for clinical leaders.
Originality/value – This study represents an important step towards establishing the empirical
evidence for the full range of leadership constructs among physician leaders.
Keywords Transformational leadership, Transactional leadership, Clinical governance,
United States of America
Paper type Research paper

The Department of Health Services Policy and Management, University of South Carolina,
Arnold School of Public Health, provided financial support for data collection expenses and
conducting the study.
The author gratefully acknowledges the professional contribution and support of Michael
E. Samuels, DrPH, Distinguished Scholar in Rural Health Policy and Professor of Family Practice
and Community Medicine, University of Kentucky School of Medicine, in planning the study and
facilitating the conduct of the survey. The author is also grateful to Thomas F. Curtin, MD, Chief Journal of Health Organization and
Management
Medical Officer, National Association of Community Health Centers for helpful comments in Vol. 22 No. 6, 2008
adapting the survey instrument for the healthcare setting, and Jong-Deuk Baek, PhD, Research pp. 599-613
q Emerald Group Publishing Limited
Assistant, University of South Carolina, Department of Health Services Policy and Management 1477-7266
for helpful comments and suggestions to present the factor analysis findings. DOI 10.1108/14777260810916579
 JHOM Study purpose and background
22,6 This paper documents the factor structure of a survey that measured perceived
leadership styles and effectiveness of medical directors of the federally-funded
community health centers (CHC) in the United States. Although transformational and
transactional leadership are widely validated in business and industry, the empirical
validity of leadership styles among physicians has not been evaluated empirically. The
600 medical profession is characterized by a degree of autonomy and self-regulation that is
unlike almost any other professional group (Lagoe and Aspling, 1996; Goldsmith, 1993;
Heifetz, 1995). This study contributes to a theory-driven model of physician leadership
development. Developing effective leadership among physicians in executive or
managerial positions (hereafter termed “physician executives”) is essential because of
the need for a professional leader in the diffusion of clinical innovations. The physician
leader is essential not only for the persuasion role but also to facilitate practicing
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physicians through the chasm that lies between reading about a scientific discovery
and applying it in the practical setting of clinical practice which encompasses many
dimensions, so that scientific research actually gets translated into clinical practice
(Greer, 1995). Therefore, developing physician leaders using a reliable, theory-driven
leadership model could emerge as a key strategy to accelerate the wide-spread
adoption of evidence-based practices for long term cost containment and quality
improvement through better care practices and chronic disease management, the two
top-priorities in the healthcare agenda.
Many factors seriously challenge physician leaders’ ability to use their
administrative authority to influence their clinicians to practice evidence-based
medicine. Prominent among these factors are physicians’ professional autonomy,
collegial (rather than authority-driven) relationships, and lack of organizational
allegiance (Greer, 1995; Kendall, 1994; McCall Jr and Clair, 1992; Goldsmith, 1993;
Guthrie, 1999). This is in sharp contrast to other types of businesses, where
organizational hierarchy and bottom-line imperatives drive performance
accountabilities, as well as the associated executive-subordinate relationships.
Physician executives are pressured by managed care, pay-for-performance, and
chronic disease management programs to reduce costs and improve outcomes. But they
find their change agenda subject to the vagaries of each colleague’s professional
inclinations and personal/clinical preferences. Currently they have little or no
understanding about how to bring about a systematic adoption of evidence-based
practices. There is no documented effort on theory-driven leadership development
models for clinical leadership among physicians, with predictive validity for clinical
outcomes. Lacking an empirically validated model, healthcare organizations either
ignore the potential gains to be realized from physician leadership development, or
engage in sporadic trainings that use various combinations of strategic and interpersonal
leadership concepts developed for business and industry. While empirical research on
transformational leadership for managerial and supervisory cadres in the public sector
health system of the UK has been initiated (Alimo-Metcalfe and Alban-Metcalfe, 2001)
there has been no empirical research on clinical leadership in a theory driven framework.

Study setting
This paper presents evidence of the validity of a transformational leadership style
among physician executives, based on ratings provided by their supervisors on the full
 range of leadership (Rater) survey (Bass and Avolio 1990, 1995). The questionnaire Leadership
focuses on interpersonal leadership behaviors, which represent transformational, among physician
transactional, and laissez-faire leadership. The data are drawn from a mail survey that
asked executive directors to rate the leadership behaviors of the medical directors executives
whom they supervise. Community health centers (CHC) in the United States are
publicly funded, non-profit interest entities, providing outpatient care to underserved
rural and minority populations in the inner-cities. Functioning as the nation’s safety 601
net for the poor and underserved within the larger market-driven health system, these
centers are established by local, community-based entities and funded by the federal
government through the US Health Resources and Services Administration’s Bureau of
Primary Health Care. The Bureau has detailed funding, organizational and
accountability guidelines, which ensures a uniform mission (to operate as non-profit
entities, predominantly serving underserved populations), staffing pattern and
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management structures (US Health Resources and Services Administration, 2006).

CHCs also share a common bond through their own membership bodies, the National
Association of Community Health Centers, and National Rural Health Association,
which serve as idea exchange forums to share organizational experiences, learning,
training and other opportunities (National Association of Community Health Centers,
2007; National Rural Health Association, 2007). In view of these commonalities,
community health centers were chosen to evaluate the validity of
transformational-transactional leadership theory for clinicians.
In this study, Bass and Avolio’s model was chosen because their construct of
transformational leadership appears to tap into the forces driving physician practice
behavior. Many authors have noted the multiple, sometimes conflicting
accountabilities that physicians are called upon to fulfill. Shortell et al. (1998) and
Wennberg (1996) noted the accountability conflicts faced by physicians in attempting
to meet their Hippocratic oath-derived fiduciary obligation (to act in the patient’s best
interest), while also being held accountable by payers to maximize the patient
population’s group interest, which calls for care optimization rather than care
maximization for the individual patient. Donaldson (1998) added a third force driving
physicians’ clinical decision-making, market accountability, which demands a
“customer” orientation (which may demand elements of care that may conflict with
individual and group interest accountabilities). Overarching all these accountabilities
is physicians’ individual self-interest as rational, economic human beings, seeking to
maximize their utility (earnings and leisure). Because transformational leadership
involves inspirational motivation, to stimulate followers’ own needs for
self-actualization and progression through Maslow’s need hierarchy, it has the
potential to enable clinicians to reconcile these conflicting forces, to make decisions
that are scientifically tenable, best serve the interests of patients and society, and
minimize dysfunctional or selfishly motivated decisions. Transformational leadership
also permits a leadership process to take place despite the nature of association being
collegial rather then hierarchical, because of the leader’s focus on using inspirational
motivation and intellectual stimulation to drive superior performance, rather than a
“command and control” approach. Collegial relating is not abrogated by a leader using
the tools of transformational leadership.
Burns (1978) first described the concept of transformational leadership, and Bass
and Avolio (1990, 1995) operationalized its measurement as part of a full range of
 JHOM leadership model, using the Multi-Factor Leadership questionnaire (Form 5X). Bass
22,6 and Avolio’s model and instrument have been validated in a large number of for-profit,
not-for-profit and government organizations engaged in diverse businesses and
services. This paper presents the empirical evidence for the constructs of the MLQ-5X
among physician executives exercising clinical leadership. An earlier paper, based on
the data from the same survey, documented that the medical director’s
602 transformational leadership level, as perceived by their executive directors, predicts
the clinic’s achievement of outcomes improvement, which indirectly represents the
medical directors’ effectiveness in steering provider practice patterns towards
predetermined organizational clinical goals (Xirasagar et al., 2005). The current paper
examines the extent to which the MLQ’s empirical factor structure among physician
leaders corresponds to the factor structure demonstrated in other populations.
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The full range of leadership model

Bass and Avolio’s MLQ – 5X Short has 45 questions. Of these, 36 items ask the
respondent to rate the leader’s behaviors, which are aggregated to derive the leader’s
scores of transformational, transactional and laissez-faire leadership styles. The
respondent could be a subordinate, superior or peer. Within transformational
leadership, Bass and Avolio documented five subscales, (often referred to as the five
I’s), idealized influence-behavior, idealized influence-attributed, inspirational
motivation, intellectual stimulation, and individualized consideration. Within
transactional leadership, three subscales are documented, contingent reward,
management-by-exception – active, and management-by-exception – passive.
Laissez-faire is documented as a single scale. Taken as a whole, Avolio et al. (1995)
demonstrated the factorial independence of nine sub-scales measured by 36 items,
among a pooled sample that aggregated survey respondents from diverse
organizations, government, for-profit and not-for-profit organizations. The items
span the full range of leadership, transformational, transactional and laissez-faire
leadership, respectively documented to be highly effective, moderately effective, and
ineffective, in a wide range of business, government, non-profit, and research
organizations (Howell and Avolio, 1993; Keller, 1993; Bettin et al., 1992; Sosik, 1997).
The remaining nine items of the survey measure subjective assessments of the leader’s
effectiveness, subordinate satisfaction, and subordinate extra effort, each calculated as
the mean of three item scores. Bass and Avolio (1995) found evidence for the above
constructs using confirmatory factor analysis on a sample of 1,394 respondents from
diverse settings including government organizations, educational settings, and private
organizations in the United States and Scotland.
According to Bass and Avolio (1990, 1995) transformational leadership includes
behaviors that are thought to activate followers’ higher motivations, and lead them to
act upon these motivations for exceptional performance and ethically-inspired goals,
transcending self-interest. Transactional leadership is an influence process to
exchange valued rewards for performance. Laissez-faire leadership refers to indifferent
(or lack of) leadership.
Within transformational leadership, the sub-scale idealized influence includes
behaviors and attributions that result in follower admiration, respect, and trust. The
measurement items include behavior items that feed into the subscale, idealized
influence-behavior, and attribution items that constitute the subscale, idealized
 influence-attributed. The items ask for the rater’s perceptions about the leader’s Leadership
over-arching vision and mission, putting follower needs over personal needs, instilling among physician
pride, gaining trust and respect, increasing optimism, and manifesting concern for
ethical and moral values in decision-making. Inspirational motivation involves executives
communicating the vision to followers, fostering follower identification with the vision,
focusing follower efforts, arousing their self-awareness of higher goals and
motivations, and sustaining positive emotional arousal and identification with these 603
goals. Intellectual stimulation involves providing followers with a flow of challenging
ideas that stimulate rethinking old ways of doing things. Leaders who stimulate
followers intellectually arouse awareness of problems, and of followers’ own thoughts
and responses, creating a cognitive-emotional milieu for them to explore and
experiment with increasingly challenging goals (Burns, 1978). Intellectual stimulation
may be particularly relevant for physician executives, challenged as they are, to
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influence their cognitively autonomous followers’ clinical decision-making towards

consensual, value-driven goals. Individualized consideration includes mentoring,
coaching, continuous feedback, and linking the individual’s current needs to the
organization’s mission (Bass, 1990).
Transactional leadership, according to Bass and Avolio (1995) has three
sub-constructs, contingent reward and management-by-exception, active and
passive. Contingent reward covers behaviors intended to clarify performance
expectations, and to establish follower credibility that valued rewards (verbal or
tangible) will follow in exchange for good performance. Management-by-exception –
passive includes watching for deviations from the expected performance norms and
standards, and providing feedback to correct deviations from the norm. Management
by exception – active spans behaviors intended to proactively prevent potential
problems before they arise. Laissez-faire is non-leadership, behaviors that imply the
leader’s indifference towards both follower actions and organizational outcomes, as
well as demonstrating an attitude of abdicating responsibility (to make decisions, or
address important issues).
Few studies apart from Bass and Avolio (1995) have supported the independence of
the nine subscales. A number of studies have supported the factorial independence of
the three major scales, transformational, transactional and laissez-faire leadership
(Tracey and Hinkin, 1998; Carless, 1998; Den Hartog et al., 1997).

Objective and methods

The study objective was to examine the factor structure and validity of Bass’s full
range of leadership constructs among physician executives. Survey responses of 269
executive directors (response rate 40.9 percent) of the federally-supported CHCs were
used. Respondents judged how frequently each statement (perceptions of leadership
style and effectiveness) fit their medical director on a five-point Likert scale, 0 ¼ Not at
all, to 4 ¼ Frequently, if not always.
Bass’s 45-item survey (summarized in Table I) was adapted to a 43-item survey
(Table I), based on comments provided by South Carolina’s CHC executive directors
who reviewed the draft survey, and comments provided by national technical
assistance experts (including two trained as physicians) at the National Association of
Community Health Centers. Two items from the original MLQ were deleted as follows:
“Fails to interfere until problems become serious,” and “Concentrates his/her full
 JHOM
I. Transformational leadership items classified by Bass and Avolio’s five sub-scales (sub-scales not
22,6 validated by our data)
Idealized influence – attributed (II-A)
Idealized influence- behavior (II-B)
604
Inspirational motivation (IM)
Intellectual stimulation (IS)
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Proud of him/her (Q9)
Goes beyond self-interest (Q17)
Has my respect (Q20)
Displays power and confidence (Q23)
Talks of values (Q6)
Sense of purpose (Q13)
Considers the moral/ethical (Q21)
Emphasizes the collective mission (Q31)
Talks optimistically (Q8)
Talks enthusiastically (Q12)
Clear vision (Q24)
Expresses confidence (Q33)
Seeking different views (Q1)

Reexamines assumptions (Q3)

Suggests new ways (Q30)
Suggests different angles (Q28)
Individualized consideration (IC) Teaches and coaches (Q14)
Individualizes attention (Q18)
Differentiates among us (Q27)
Helping subordinates develop their strengths (Q29)
II. Transactional leadership scale items (validated by the study) as classified under Bass and Avolio’s
subscales
Contingent reward (CR) Assists based on effort (Q2)a
Responsible for achievement (Q10)
Clarifies rewards (Q15)a
Recognize achievement (Q32)a
Management by exception – active (MBE-A) Concentrates on failures (Q4)
Tracks your mistakes (Q22)
Focuses on your mistakes (Q25)
III. Laissez-faire style items, classified by Bass and Avolio’s sub-scales (sub-scales not validated by our
data)
Management by exception-passive (MBE-P)
(originally assigned to TR by Bass)b Reacts to problems, if chronic (Q19)
If not broke, don’t fix (Q16)
Puts out fires (Q11)
Laissez-faire (the original LF grouping in
b
Bass’s model) Avoids involvement (Q5)
Unavailable when needed (Q7)
Avoids deciding (Q26)
Delays responding (Q38)
Notes: I. Transformational leadership: 20 items; II. Transactional leadership: seven itemsa; III.
Laissez-faire leadership: seven items. An adapted MLQ-Form 5X Short (Copyright 1996, 2003 by
Bernard M. Bass and Bruce J. Avolio. All rights reserved. Published by Mind Garden, Inc., www.
mindgarden.com) was used. The original 45-item survey was reduced to a 43-item survey. Item
summaries above were permitted by the copyright holder, Mind Garden Inc.); a Three items
representing contingent reward were assigned to transactional leadership based on theoretical ground
although they loaded on transformational leadership in this study; b Bass’s sub-constructs of
transactional and laissez-faire leadership are reassigned, based on factor analysis results. Bass’s model
Table I. assigns management-by-exception-passive under transactional leadership. In this sample, these
Leadership items loaded with Bass’s original laissez-faire items, in the three factor model. Therefore the items of
distributed by the three management by exception passive are shown under laissez-faire leadership. Bass and Avolio’s
factors extracted by sub-scales indicated under each leadership style were not validated in the study sample. Only three
factor analysis factors, transformational, transactional and laissez-faire leadership were validated.
 attention on dealing with mistakes, complaints and failures.” These items were deleted Leadership
because several executive directors of South Carolina’s CHCs and the national experts among physician
felt the items were too harsh and negatively worded, which could risk a backlash from
the medical director community. A few other items were re-worded to tone down executives
negative language, and one item was reworded to adapt it for healthcare.
Of the 43 items included in the survey, 34 were leader behavior/attribution items
and nine were leader effectiveness items. The 34 leadership item responses were 605
subjected to exploratory (common) factor analysis, principal factor method to extract
the factors, followed by oblique (promax) rotation. Oblique rotation was judged
appropriate because of significant correlations documented between the constructs
(Avolio et al., 1995). In the first step, a nine-factor model was specified, in line with the
documented factor structure of the instrument in other populations. Based on the
results, the number of factors was progressively reduced, until a clear, approximately
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simple structure, with conceptually interpretable constructs was achieved.

Results
The scale reliability statistics for the originally documented subscales of this
instrument were calculated and are presented in Table II. The table shows that for all
the leadership style and effectiveness scales, except management-by-exception, active
and passive, Cronbach’s alpha values are . 0.70, the critical level suggested by
Nunally (1967) for scale reliability. For management-by-exception, active and passive
alpha values were 0.68 and 0.69 respectively.
To verify evidence for Bass and Avolio’s nine leadership sub-scales, a nine-factor
model was first tested. The resulting item loadings in the rotated factor pattern, and
factor structure matrices are presented in Table III, showing that all items but three
showed significant factor loadings, (. 0.40) on only one factor. One item of contingent
reward (Q2) and one individualized consideration (Q14) showed suboptimal factor
loadings (, 0.40 in the factor pattern matrix), but none showed equivocal loadings on
an additional factor. Bass and Avolio’s management by exception-passive items loaded

Scale and subscale No. of items Mean score Cronbach’s alpha

Leadership style
Transformational leadership
Idealized influence (attributed) 4 2.96 0.80
Idealized influence (behavior) 4 2.98 0.76
Inspirational motivation 4 2.90 0.89
Individualized consideration 4 2.86 0.82
Transactional leadership
Contingent Reward 4 2.72 0.81
Management by exception active 3 2.27 0.68
Management by exception passive 3 1.56 0.69
Laissez-faire leadership 4 1.16 0.77
Leadership effectiveness
Rated effectiveness 3 2.99 0.84
Table II.
Subordinate satisfaction 3 2.80 0.82
Scale statistics for the
Subordinate extra effort 3 2.52 0.92
leadership subscales and
Source: Defined by Bass and Avolio (1995) effectiveness scales
 JHOM
Factors/ Items 1 2 3 4 5 6 7 8 9
22,6
Q1 0.02 0.0 0.03 0.08 2 0.14 0.62a 0.13 0.09 0
Q2 2 0.16 2 0.03 0.10 0.17 0.14 0.55a 0.06 0.15 0.23
Q3 0.18 2 0.08 0.07 0.01 0.03 0.58a 20.9 0.7 2 0.4
Q4 0.10 0.6 0.3 20.2 0.53a 20.01 0.01 0.13 0
606 Q5 2 0.02 0.68a 20.12 0.14 0.08 0.02 20.02 20.08 0.07
Q6 0.48a 0.26 20.01 0.03 0.04 0.12 20.10 0.21 0.04
Q7 0.01 0.41a 20.01 0.07 2 0.12 20.18 0.1 0.09 0.17
Q8 0.78a 0.04 0.02 0.01 2 0.05 20.02 0.05 0.01 0.21
Q9 0.18 0.11 20.02 0.25 2 0.03 0.03 0.59a 0.12 0.06
Q10 0.08 2 0.22 20.06 0.03 0.43a 0.11 0.14 0.04 2 0.01
Q11 2 0.06 0.70a 20.04 0.03 0.02 20.15 0.18 0.12 2 0.14
Q12 0.84a 2 0.08 0.02 20.03 2 0.01 0.01 0.02 20.03 0
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Q13 0.79a 2 0.02 0.08 20.02 0.07 20.03 20.03 20.01 2 12

Q14 0.14 2 0.07 20.12 0.38b 0.10 0.26 0.13 20.06 2 0.02
Q15 0.23 2 0.07 0.11 0.15 0.35b 0.12 0 20.15 2 0.01
Q16 2 0.31 0.47a 0.19 0.01 0.19 20.10 0.31 20.09 0.05
Q17 0.11 2 0.13 0.27 216 0.04 0.21 0.45a 0.03 2 0.09
Q18 0.08 2 0.09 0.59a 20.10 2 0.09 0.08 0.04 20.04 0.24
Q19 0.09 0.71a 0.01 20.23 0 20.05 20.02 0.05 0.05
Q20 0.07 2 0.07 0.12 0.10 2 0.07 0.15 0.55a 0.02 2 0.08
Q21 0.15 0.02 0.45a 20.04 2 0.01 0.06 0.22 0.09 2 0.17
Q22 2 0.09 2 0.01 0.07 0.07 0.67a 20.07 20.20 0.15 2 0.13
Q23 0.24 2 0.10 20.05 0 0.18 0.01 0.14 0.50a 0.01
Q24 0.73a 2 0.09 20.04 0.11 0.08 20.08 0.03 0.09 2 0.07
Q25 0.10 0.06 20.11 20.15 0.70a 0 0.06 0.13 0.02
Q26 0.06 0.84a 0.01 20.06 0.04 0.08 20.10 20.03 2 0.06
Q27 0.04 0.03 0.64a 0.22 0.02 20.04 20.09 20.07 2 0.06
Q28 0.15 0 0.17 0.49a 0.10 0.18 20.05 0.13 2 0.01
Q29 0.10 2 0.02 0.04 0.76a 2 0.07 20.02 0.13 20.07 0.02
Q30 0.12 2 0.09 20.01 0.74a 2 0.02 0.03 20.01 0.03 2 0.04
Table III. Q31 0.50a 0.01 0.09 0.14 0.06 0.04 0.11 0.02 2 0.24
Item loadings from a Q32 0.19 0.03 0.39 0.23 0.10 0.05 0.05 20.04 0.13
nine-factor model Q33 0.57a 2 0.13 0.21 0.10 0 20.07 0.03 0.12 0.22
(Promax rotation): rotated Q38 0.12 0.77a 20.03 20.10 2 0.13 0.11 20.02 20.12 0.01
factor pattern matrix
(standardized regression Notes: a Indicates item loading .0.40; b
indicates item’s highest factor loading, but less than 0.40);
coefficients) n ¼ 229 respondents

on to a common factor, together with their laissez-faire items. Factor 9 had no

significantly loading items, and Factor 8 had only one item. The scree plot showed a
clear break after three factors.
Although the scree plot suggested a three-factor solution, the suggestion of subscale
validation in the factor pattern loadings prompted an attempt to test for eight scales,
with the expectation that Bass and Avolio’s original scales may be supported, except
that management by exception-passive would load on the laissez-faire construct. The
results (table not presented) showed many items loading on multiple factors (. 0.40).
Following this, seven, six, five, and four-factor models failed to yield meaningful
construct definition with simple structure and content validity. Finally, a three-factor
model showed simple structure and interpretable constructs.
 The rotated factor pattern and factor structure matrix of the three-factor model are Leadership
presented in Table IV. Factor pattern loadings represent each factor’s contribution to among physician
the unique variance in the item, and are used to define the item composition of
constructs (Hatcher, 1994). The factor pattern statistics show that none of the items executives
significantly load on multiple factors (. 0.40). Each factor has five or more items each
loading to it (more than the minimal three recommended by Hatcher, 1994).
Examining the item groupings for the underlying constructs, Factor 1 can be 607
identified as transformational leadership, and shows 21 items with loadings . 0.40. Of
these, 19 are Bass and Avolio’s original transformational leadership items, and two are
contingent reward items (Q15 and 32, “clarifying rewards,” and “recognizing
subordinates who meet expectations”). Factor 2 is conceptually closest to the originally
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Items Rotated factor pattern Factor structure

1 2 3 1 2 3

Q1 0.60a 2 0.18 20.21 0.60a 20.46a 0.15

Q2 0.37b 2 0.23 0.14 0.57a 20.49a 0.41a
Q3 56a 2 15 2 66a 2 48a 36
Q4 0.11 0.04 0.44a 0.31 20.17 0.48a
Q5 2 0.07 0.60a 0.14 2 0.35 0.60a 20.10
Q6 0.42a 0.32 0.20 0.34 0.01 0.31
Q7 2 0.11 0.41a 20.03 2 0.36 0.49a 20.22
Q8 0.71a 0.09 0.03 0.67a 20.33 0.36
Q9 0.65a 2 0.01 0.13 0.72a 20.43a 0.46a
Q10 0.17 2 0.27 0.45a 0.55a 20.52a 0.62a
Q11 2 0.04 0.74a 0.14 2 0.40a 0.72a 20.13
Q12 0.78a 0.01 0.06 0.80a 20.46a 0.44a
Q13 0.76a 0.11 0.14 0.76a 20.37 0.48a
Q14 0.44a 2 0.23 0.24 0.69a 20.56a 0.53a
Q15 0.47a 2 0.12 0.30 0.69a 20.49a 0.57a
Q16 0.05 0.39b 0.05 2 0.15 0.35 20.05
Q17 0.74a 2 0.14 20.17 0.73a 20.51a 0.25
Q18 0.66a 2 0.09 20.35 0.54a 20.35 0.01
Q19 2 0.06 0.79a 20.03 2 0.53a 0.84a 20.32
Q20 0.70a 2 0.17 20.06 0.77a 20.55a 0.35
Q21 0.78a 0.10 20.10 0.67a 20.32 0.25
Q22 2 0.18 0.5 0.71a 0.15 20.08 0.60a
Q23 0.20 2 0.02 0.43a 0.43a 20.28 0.54a
Q24 0.63a 0 0.27 0.76a 20.45a 0.58a
Q25 2 0.10 0.09 0.72a 0.21 20.09 0.64a
Q26 0.05 0.86a 0.03 2 0.43 * 0.82 * 20.23
Q27 0.72a 0.07 20.13 0.62a 20.31 0.21
Q28 0.60a 2 0.08 0.09 0.69a 20.46a 0.41
Q29 0.54a 2 0.21 0.17 0.74a 20.57a 0.51a
Q30 0.43 * 2 0.24 0.27 0.71 * 20.58 * 0.57a
Q31 0.73a 0.07 0.16 0.77a 20.41a 0.51a
Q32 0.71a 2 0.03 0.03 0.74a 20.44a 0.40 Table IV.
Q33 0.69a 2 0.09 0.08 0.78a 20.51a 0.45a Item loadings in a
Q38 0.12 0.77a 20.17 2 0.41a 0.75a 20.36 three-factor model:
rotated factor pattern
Notes: a Indicates loading . 0.40; b indicates item’s highest factor loading, but less than 0.40); rotation matrix and factor
method ¼ promax; n ¼ 229 respondents structure matrix
 JHOM documented laissez-faire leadership, showing high and unequivocal loadings for all of
22,6 Bass and Avolio’s original laissez-faire items, with the addition of all the
management-by-exception items. (One of the latter group’s items, Q16, had a loading
of 0.39, its highest among the three factors. See Table I for item description.) Factor 3 is
conceptually closest to transactional leadership, with all of Bass and Avolio’s items of
management-by-exception active, one contingent reward item (Q10), and one of their
608 idealized influence-attributed items (Q23, shows a sense of power and confidence).
Table IV also presents the three-factor model’s factor structure loadings, which
represent the correlation of the item with the factor (Hatcher, 1994). It shows significant
negative correlations of most of the transformational leadership items with laissez-faire,
as postulated by the original authors (Avolio et al., 1995). Examining the two contingent
reward items (Bass and Avolio’s transactional leadership items) that loaded on
transformational leadership in these data, Q15 and Q32, they also show significant
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correlations with Factor 3, transactional leadership (0.57 and 0.40, respectively). Another
contingent reward item (Q2) does not show . 0.40 loading on any factor in the factor
pattern matrix, and shows a correlation of 0.41 with transactional leadership, the
documented home of this item, according to previous authors (Avolio et al., 1995; Tucker,
1991). With the exception of the above mentioned anomalous item loadings,
conceptually coherent constructs of transformational, transactional and laissez-faire
leadership, and their factorial independence were supported.

Discussion
Overall, the data generally support the occurrence of transformational, transactional
and laissez-faire leadership styles among physician executives, and support the
inclusion of management by exception-passive items under laissez-faire in this group.
The factor pattern shows anomalous loadings of three contingent reward items (two at
significant levels, and one, sub-optimal but the highest of all three factors) on
transformational leadership. It is useful to revisit the conceptual meanings of the factor
statistics to evaluate these deviations. Factor pattern loadings indicate the extent of
unique variance in the item scores contributed by the factor, whereas the factor
structure matrix indicates the correlation of the item with the factor as a whole
(Hatcher, 1994). For the two contingent reward items (that loaded significantly on
transformational leadership), we also find significant correlations with transactional
leadership, although their unique variance (represented by factor pattern loading) is
better accounted for by transformational leadership, rather than transactional
leadership. Q2, with suboptimal (though highest) loading on transformational
leadership, shows a correlation of 0.41 with transactional leadership in these data.
The anomalous factor loadings obtained in this study may not necessarily be the last
word on item allocation across the factors. The factor structure statistics along the
reasons discussed below favor their retention within transactional leadership. First, our
survey asked for supervisors’ perceptions of the physician leader’s behaviors with
subordinates. The anomalously loading items represent behaviors that could be
classified as dyadic, which may not be readily observable by a third person, and
therefore disproportionately liable to measurement error. The items are, “. . . assists
subordinates . . . based on efforts” (Q2), “Clarifies to subordinates . . . rewards for
performance” (Q15), and “recognize subordinates’ achievement” (Q32). For example, Q32
purported to measure the extent to which the medical director expresses satisfaction to
 subordinates (verbal rewards) when they meet his/her expectations. Adapting this item Leadership
content from the “subordinate” format of the MLQ to a “supervisor” format could have among physician
resulted in wording that may have confused the respondent (Expresses satisfaction . . .
To whom?), which may have caused measurement error. Another reason for anomalous executives
loading could be that Q2 may be moot in physician leader-follower relationships,
considering the essentially autonomous functioning of physicians.
A third reason to question the measurement accuracy of Q15 (. . . achieving 609
performance goals) and Q32 (. . . clarifies rewards for meeting expectations), is the
potential ambivalence in defining “expectations” about each physician’s performance
goals or clinical outcomes. This could have caused ambivalence for some respondents in
responding to these questions. On the other hand, one could argue that in a dyadic
relationship, each subordinate (provider) implicitly understands when he/she has met
expectations. It is therefore, possible that, better wording of these questions, and directing
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these questions to physician provider subordinates may yet yield a validation of the
contingent reward sub-scale within transactional leadership, among physicians. Finally,
transactional leadership as a theoretical construct is robustly documented in the full
range of leadership research, over 200 studies (Bass and Avolio, 1995). Considering the
above factors, it may not be appropriate to redefine the scope of transactional leadership
for physician executives based on a rigid interpretation of factor loadings from this
exploratory study. In conclusion, this study generally confirms the three factors of
transformational, transactional and laissez-faire leadership among physician executives.
Empirical evidence for the full range of leadership model makes a major case for
further development of this leadership model among physicians, and in general,
leadership development among clinical and non-clinical managers in health care
organizations. Earlier analysis of data from this study had demonstrated significant
predictive validity of transformational leadership (aggregate score of items presented
in Table I) for subjective measures of leadership effectiveness, and for the CHC’s
clinical goal achievements among its chronic disease and prenatal patients (Xirasagar
et al., 2005). Factorial validity, documented in the current paper, and predictive validity
documented in the earlier paper, together make a strong case for deepening this area of
research and exploring other settings for the application of physician leadership.
The findings of Den Hartog et al. (1997), Carless (1998) and Hinkin and Tracey (1994)
are consistent with this study’s finding of a three-factor leadership structure. Den Hartog
et al. could not find evidence for the factorial independence of the subscales of
transformational, transactional and laissez-faire leadership, among 1,200 respondents
pooled from diverse organizations (two commercial businesses, two welfare institutions,
two health care organizations (nursing home and psychiatric hospital), one local
government organization, and two departments of air traffic control. Carless (1998)
reported similar findings with data obtained from 1,440 subordinates of branch managers
of a large international banking organization in Australia. Tracey and Hinkin (1998)
worked with data from 291 lower and middle-level managers from mid to upscale hotels
across the USA. These authors argued that the dimensions of transformational
leadership, while conceptually meaningful, may best be represented as a composite scale.
Despite the above findings of past studies in diverse employee populations, it may
be premature to conclusively dismiss the separate significance of the five
sub-constructs of transformational leadership in the clinical leader-follower
interaction. This is because the current study was an exploratory project that
 JHOM surveyed non-medical executives for their perceptions of the medical director’s
22,6 behaviors. Clinicians who are managed by the target physicians may respond
differently to the survey items, reflecting the leadership components that they respond
to, given their professional socialization and multiple accountabilities. Physicians are
driven by a complex web of fiduciary, scientific, ethical, and economic accountabilities,
among others. Further, clinical autonomy rules supreme as a non-negotiable privilege
610 and foundation of medical practice, unlike most other settings, where organizational
accountability overrides autonomy (Greer, 1995; Kendall, 1994; McCall Jr and Clair,
1992; Goldsmith, 1993; Guthrie, 1999). Intuitively, the components of transformational
leadership seem to address the multiple accountabilities and foundations of clinical
practice (intellectual stimulation for instance) without needing to compromise
physicians’ clinical autonomy. Moreover, the components of transformational
leadership, relevant to influence potential are likely to vary with the practice setting,
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public, private, not-for-profit, or service-driven settings such as CHCs in the USA, or

the NHS in the UK. Therefore, it is possible that physician executives may usefully
exercise the five distinct dimensions of transformational leadership to different
degrees, depending on the practice and ownership setting.
Also similar to this study’s findings, Den Hartog et al. (1997) reported that Bass and
Avolio’s management by exception-passive items loaded on the same factor as (Bass’s)
laissez-faire items, a construct they named “passive leadership.” Further, in their data,
sub-optimal Cronbach’s alpha levels of the above two groupings improved to an
acceptable level after being pooled together. In these data, alpha of 0.69 and 0.77
respectively increased to 0.83 when these two groupings were pooled (table not
presented). It is useful, however, to recall the theoretical underpinnings of separating the
two constructs: “Passive management by exception is not the same as laissez-faire
leadership. The status quo is guarded and respected in passive management by
exception; the status quo is essentially ignored by the laissez-faire leader who essentially
avoids decision-making and supervisory responsibilities” (Hater and Bass, 1988, p. 697).
In this study, two reasons could explain the departure of management by
exception-passive from the originally conceived structure of transactional and
laissez-faire leadership. First, two of the original items were deleted from the survey,
responding to feedback from CHC technical experts. The deleted items were “Fails to
interfere until problems become serious” a management by exception passive item, and
“Concentrates his/her full attention on dealing with mistakes, complaints and failures” (a
management by exception-active item). These items were deleted due to strong reactions
to their “negative, judgmental implications”, as expressed by a sample of CHC executive
directors and national experts providing technical assistance to CHCs. They were
concerned about a potential, adverse backlash from CHC medical directors, who might
discredit the entire leadership survey process as a “judgmental exercise to brand
individuals as good or bad leaders.” Being an exploratory study, it seemed judicious to
accommodate these concerns, in order to maximize the survey response rate, and avoid
jeopardizing the future respectability of physician leadership research. However, the
resulting item combination could have distorted the factor loading patterns.
Second, the loading of management by exception-passive and laissez-faire
leadership items on a single factor could reflect a real unity of these constructs in
physician leadership situations. This is because physicians represent one of the most
autonomously functioning professional groups. As such, the dividing line between
 passive management by exception and hands-off (laissez-faire) leadership behaviors Leadership
may be vague for a physician executive, a natural consequence of the executive’s own among physician
professionalization and expectancies about his/her colleagues mindset. Context of
leadership is documented as an important variable affecting the measurement executives
properties of a leadership model (Antonakis et al., 2003).

Contribution of the study and future research 611

A major contribution of this study is that it empirically validates among physician
executives, a leadership model that closely approximates Bass and Avolio’s full range of
leadership constructs. Earlier, documentation has demonstrated the predictive validity of
these leadership styles not only for subjective measures of leadership effectiveness, but
also objectively measured clinical outcomes of the center, representing the collective
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performance of the clinic’s providers (Xirasagar et al., 2005). Clinical performance was
measured as percent of targeted goal achievement, and most of the priority clinical goals
were population-based clinical indicators, related to the federal government’s chronic
disease and prenatal care collaboratives. Further, management training of physician
executives was demonstrated to significantly predict the three leadership style scores,
which in turn predicted the centers’ clinical goal achievement (Xirasagar et al., 2006).
Factorial validity along with predictive validity make a strong case for expanding
this area of health services research, with significant potential to impact healthcare
costs and quality. New avenues of exploration would include the following:
.
developing a tailored survey instrument that accommodates the unique context
of physician leadership;
.
research on physician provider perceptions and responses to the different
dimensions of transformational and transactional leadership;
.
variations in the salience of each dimension among private versus public and
non-profit providers;
.
variations among institutionally-employed versus independent physicians;
.
variations between physicians versus non-physician subordinates;
.
variations between physician executives versus non-physician executives;
.
testing the validity of the full range of leadership among physician leaders in
other country settings.

Since the current sample was limited to US physicians, a priority area of research should
be to test the generic validity of the Full Range of Leadership constructs for physician
executives in other countries. Another significant priority is to acquire subordinate
assessments of their physician leader’s style. This is because they are in a much better
position to assess leadership than supervisors, being the direct target of the leader’s
efforts. Such explorations could contribute to refining a model suitable for physician
leadership development, and for nursing and other providers’ leadership development.

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About the author

Sudha Xirasagar can be contacted at: sxirasagar@sc.edu

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