Project Manager’s Leadership Style Linked with

Schedule and Cost Performance

Li-Ren Yang and Yen-Ting Chen

Department of Business Administration
Tamkang University
Taipei, Taiwan
iry@mail.tku.edu.tw

Abstract—The purpose of this study was to investigate the

relationships of the project manager’s leadership style with
teamwork, and their associations with project schedule and cost
performance. The second objective was to determine whether the
effect of leadership style on project performance may be
mediated by teamwork. To address the primary aims, a
questionnaire-based survey was used to measure the project
manager’s leadership style, teamwork in terms of
communication, collaboration and cohesiveness, and project
success in the areas of schedule and cost. The analyses suggest
that project manager’s leadership style, teamwork, and project
performance are highly correlated. The findings also indicate
that teamwork dimensions may partially or fully mediate the
relationships between leadership style and project performance.
Keywords- leadership, teamwork, communication,
collaboration, project performance
I. INTRODUCTION
Several studies have shown that the role of a project
manager is critical to project success. Green [1] pointed out
that a star project leader is good at managing relationships
across organizational functions and boundaries to break
through organization inertia and bureaucracy. Sauer [2]
suggested that non-technical factors such as management,
organization, and culture are associated with project success.
Lewis [3] contended that people issues are absolutely critical to
project success. However, the literature on project success
factors has largely ignored the impact of a project manager and
his or her leadership style on project success [4]. Even though
some practices have been adopted and others abandoned,
however, no empirical study has been done on the associations
between the project manager’s leadership style and teamwork.
The purpose of this research is two-fold. The first objective
of this study was to investigate the relationships among the
project manager’s leadership style, teamwork in terms of
communication, collaboration and cohesiveness, and project
success in the areas of schedule and cost. The second objective
was to determine whether the teamwork dimensions play a
mediating role in the relationship between leadership style and
project performance.
II. LITERATURE REVIEW AND RESEARCH HYPOTHESES
A. Project Manager’s Leadership Style, Teamwork and
Project Success
A review of the literature suggests that the adoption of
leadership style as a means to enhance teamwork has been
supported. Earlier studies supported the notion that adopting
transactional and transformational leadership styles is
beneficial. As indicated by the review of literature, leader’s
behavior may be positively related to team interaction and
cohesiveness [5-7]. The relationships between teamwork and
team performance have also been studied. The results of
previous studies indicated a correlation between teamwork and
team performance. Team interaction and cohesiveness has also
been identified as factors influencing team performance. As
such, team interaction and cohesiveness may result in
uniformity of team members, and makes the team more
effective. In previous research, team interaction and
cohesiveness was found to be associated with a critical
determinant of team performance [5;8;9]. This study extends
previous research by addressing the impacts of teamwork on
project performance. Based on the relevant literature, the
following hypothesis was postulated and tested:
H1: Project manager’s leadership style (including
transactional and transformational leadership), teamwork (in
terms of communication, collaboration and cohesiveness), and
project success (in the areas of schedule and cost) are
correlated.
B. Teamwork as a Mediator
There has been some work conducted on the associations
between the project manager’s leadership and the behavior of
team members. The impact of the project manager’s leadership
style on teamwork has been recognized by previous studies.
The literature suggested that a manager’s leadership style is
viewed as the strongest predictors of teamwork. Additionally,
above prior studies indicated that teamwork is playing
important enabling roles in team performance. Teams can be
made more successful by improving their interaction and
cohesiveness. As such, effective team performance may derive
from team communication, collaboration, and cohesiveness
[10;11]. Finally, some researchers have argued that teamwork
may play a mediating role in the relationship between

978-1-4244-5326-9/10/$26.00 ©2010 IEEE

leadership style and team performance [12;13]. Based on
leadership theory and the empirical research on leadership
style, particularly in relation with behavior of team members
and team performance, the following hypotheses are proposed:
H2: Teamwork (in terms of communication, collaboration,
and cohesiveness) may act as a mediator between leadership
styles (including transactional and transformational leadership
styles) and project performance (including schedule and cost
success).
III. METHODOLOGY
A. Data Collection Tool
A survey instrument was used to measure the project
manager’s leadership style, teamwork, and performance on
capital facility projects in the Taiwanese industry. The data
collection tool was developed based on variables used in
previous studies. Study participants were first asked to identify
a recent project that they were familiar with for assessment. For
the subject project, the survey then asks participants to assess
the project manager’s leadership style, teamwork, and final
performance for that project. The survey was composed of four
sections: 1) the project manager’s leadership style, 2)
teamwork, 3) project performance, and 4) personal
information. The first section assesses aspects of the project
manager’s leadership style, including transactional leadership
and transformational leadership. The second section of the
survey measures level of team communication, collaboration,
and cohesiveness on the subject project. The third section
evaluates project success in terms of schedule performance and
cost performance. The final section obtains information
concerning the respondent and the project. These subject
projects were categorized according to eight data class
variables: industry sector, total installed cost, owner regulation,
initial site, number of core team member, complexity, project
typicality, and international involvement [14].
B. Sample Selection and Data Collection
An industry-wide survey of project manager’s leadership
style, teamwork, and performance on capital facility projects
was conducted in Taiwan between May 2008 and August
2008. The data collection tool was developed to collect
project-based data. Project responses were collected through
personal interviews. Individuals interested in participating in
the study were identified by a search from various industry
associations. In order to obtain a truly representative sample,
not only was the geographic mix of projects intentionally
diverse, but a diverse mix of participation was sought with
respect to sector of industry. Additionally, a specified mix of
project size was targeted in order to obtain a representative
sample of the industry. More than 200 projects were
investigated and some were not included in the analysis
because they contained insufficient information. In addition,
the projects were examined to ensure that no duplicate project
information was collected. Ultimately, 213 survey responses
were used in the analysis.
C. Measurement
The project manager’s leadership style (independent
variable) assessed includes transactional and transformational
leadership. The items used to measure transactional leadership
were based on the questionnaires developed by Bass and
Avolio [15], Thite [16], and Wang [17]. On the other hand, the
scales developed by Podsakoff et al. [18] were adapted to
evaluate transformational leadership. A six-point response
scale was used (from 1=never to 6=always) to measure the
frequency of the transactional and transformational behavior.
Three subscales (team communication, team collaboration,
and team cohesiveness) were used to measure teamwork
(mediator variable). Items used to rate team communication
and collaboration were based on the questionnaires developed
by Tjosvold [19] and Campion et al. [20]. Additionally, items
used to rate team cohesiveness were based on the surveys
developed by Wang et al. [5]. Responses are given on 6-point
scale, from 1 (strongly disagree) to 6 (strongly agree).
Finally, questions from Pinto and Slevin [21] were adapted
to measure project performance (dependent variable). Two
subscales (schedule performance and cost performance) were
used to evaluate project success. Each item was rated on a 6-
point scale, where 1 represented strongly disagree and 6
represented strongly agree.
IV. RESULTS AND ANALYSIS
A. Mediators between Transactional Leadership and Project
Performance
Multiple regression models were developed with
transactional leadership, team communication, and project
performance in order to measure the mediating role of team
communication in the relationship between transactional
leadership and project performance. While project
performance is the dependent variable, transactional
leadership was entered on the first step (Model 1) and team
communication was entered on the second step (Model 2). As
such, transformational leadership is the only independent
variable in Model 1. The second model introduced one more
independent variable (i.e. team communication) into the
equation. Tables I and II present summary of Hierarchical
Regression Analysis. For schedule performance (see Table I),
the first model (i.e. transactional leadership) explained 7.2%
of the variance in project success (F = 11.769, p < .001). The
results indicate that higher levels of transactional leadership
are associated with higher levels of project schedule
performance. Model 2 (i.e. transactional leadership and team
communication) explained 22.5% of the variance in project
schedule performance (F = 21.874, p < .001). Both of
transactional leadership and team communication are
significant variables, indicating that a higher level of
transactional leadership and a greater team communication are
associated with a higher level of project schedule
performance. In other words, an index of team communication
was added in the second model and this explained an
additional 15.3% of the variance. However, with the addition
of team communication, standardized regression coefficients
(β) for transformational leadership decreased by 42% (from
.268 to .156). In summary, subsequent testing for the fourth
condition of mediation shows that the inclusion of team
communication yields significant reductions in the beta-
coefficients for transactional leadership. Although the
transactional leadership index continued to be a significant
explanatory variable, its contribution was reduced. This is
supportive of a mediatory role for team communication. In
other words, team communication partially mediates the effect
of transactional leadership on project schedule performance.
The results also suggest that team communication may
partially mediate the relationship between transactional
leadership and project cost success (see Table II).
On the other hand, multiple regression models (Models 1
and 3) were developed with transactional leadership, team
collaboration, and project performance in order to assess the
mediating role of team collaboration in the relationship
between transactional leadership and project performance.
While project performance is the dependent variable, the first
model includes one independent variable (i.e., transactional
leadership) in the equation and the third model introduced one
more independent variable (i.e. team collaboration) into the
equation. As shown in Table I, Model 1 explained 7.2% of the
variance and Model 3 explained 14.1% of the total variance in
schedule performance scores (F = 12.366, p < .001). With the
addition of team collaboration, transactional leadership was no
longer significant in explaining variance in schedule
performance. However, the beta coefficient for team
collaboration is significant. This suggests that team
collaboration fully mediated the effects of transactional
leadership on schedule performance. In addition, the testing
supports a role for team collaboration as a partial mediator in
the relationship between transactional leadership and project
cost performance (see Table II).
The results also suggest that team cohesiveness fully
mediates the effects of transactional leadership on schedule
performance. In addition, the testing supports a role for team
cohesiveness may act as a partial mediator of the relationship
between transactional leadership and project cost performance.
B. Mediators between Transformational Leadership and
Project Performance
The analysis also assessed the effect of including each
teamwork variable in hierarchical linear regressions where
transformational leadership was the independent variable and
project performance was the dependent variable. Multiple
regression models were developed with transformational
leadership, team communication, and project performance in
order to measure the mediating role of team communication in
the relationship between transformational leadership and
project performance. Similarly, while project performance is
the dependent variable, transformational leadership was
entered on the first step (Model 1) and team communication
was entered on the second step (Model 2). Tables III and IV
present summary of Hierarchical Regression Analysis. For
schedule performance (see Table III), the first model (i.e.
transformational leadership) explained 17.5% of the variance
in project schedule performance (F = 32.132, p < .001). The
results indicate that higher levels of transformational
leadership are associated with higher levels of project
schedule performance. Model 2 (i.e. transformational
leadership and team communication) explained 26.8% of the
variance in project schedule performance (F = 27.581, p <
.001). Both of transformational leadership and team
communication are significant variables. In other words, an
index of team communication was added in the second model
and this explained an additional 9.3% of the variance.
However, with the addition of team communication,
standardized regression coefficients (β) for transformational
leadership decreased by 33% (from .418 to .280). The testing
shows that the inclusion of team communication yields
significant reductions in the beta-coefficients for
transformational leadership. Although the transformational
leadership index continued to be a significant explanatory
variable, its contribution was reduced. This is supportive of a
mediatory role for team communication. As such, the testing
supports a role for team communication as a partial mediator
in the relationship between indices of transformational
leadership and project schedule performance. Additionally,
team communication also partially mediates the effect of
transformational leadership on project cost success (see Table
IV). However, in investigating the mediating roles of team
collaboration, the study found no significant results for project
schedule and cost performance. Finally, the results suggest
that team cohesiveness partially mediates the effect of
transformational leadership on project success in terms of
schedule and cost performance.
V. CONCLUSIONS AND RECOMMENDATIONS
The research provides empirical evidence that supports the
expectation of gaining significant benefits with adoption of a
particular leadership style. This paper reports on the findings
of empirical research and provides recommendations for
improving relationships among team members and project
performance. Findings from this study are helpful to project
managers in deciding whether to adopt certain leadership style
on projects. One limitation of this study is its cross-sectional
design. An objective for future study is to determine how the
associations are changing over time. Survey with a
longitudinal design may be needed to gain deeper insights into
the nature and mediating roles of the relationships.
Additionally, it would be worthwhile to analyze projects
according to different data class variables (such as project size)
in further exploring the associations. Finally, the potential
effects of team members on the project manager’s leadership
style also need to be considered in further research.
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*** *** ***
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TABLE III. MEDIATORS BETWEEN TRANSFORMATIONAL LEADERSHIP
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Variable
Transformational
0.416 a,*** 0.319*** 0.266**
TABLE I. MEDIATORS BETWEEN TRANSACTIONAL LEADERSHIP AND leadership
SCHEDULE PERFORMANCE Team
0.235**
communication
Independent Team
Model 1 Model 2 Model 3 Model 4
Variable collaboration
Transactional Team
0.268a,*** 0.156* 0.160 0.142 0.286***
leadership cohesiveness
Team
0.407*** R-Squared 0.173 0.219 0.232
communication
Team *** F-Statistic 31.721 ***
21.141 ***
22.820***
0.284
collaboration
a **
Team The number denotes the beta coefficient for the particular variable. significant at the 0.01 level;
0.407*** ***
significant at the 0.001 level
cohesiveness
R-Squared 0.072 0.225 0.141 0.222
*** *** ***
F-Statistic 11.769 21.874 12.366 21.495***
a
The number denotes the beta coefficient for the particular variable. *significant at the 0.05 level;
***
significant at the 0.001 level