CHAPTER 6

“Sustainability Leader Attributes” New Model

Chapter Objectives

Provide new model to illustrate the sustainability leader attributes and dimensions of measuring sustainability performance (Figure 6.1.).

The qualitative analysis from the in-depth interviews developed a conceptual framework for the leader’s attributes (attitude, behavior, and competencies) that may determine successful business sustainability in terms of the environment for SMEs in Egypt (Figure 6.1.). After data collection and analysis three factors emerged that have a correlation effect on sustainable SMEs: (1) sustainability leader, (2) firm capabilities, and (3) governmental policies. The major factor is sustainability leader. Eight major thematic categories emerged for the sustainability leader attributes. Three dimensions measuring SME sustainability performance emerged. Before data collection the author expected that SMEs leaders would be mainly concerned with sustainability as an additional cost with no significant benefits to the business. After data collection, this perception had slightly changed. It was observed that some of the participants considered implementing sustainability concepts which, apart from being a charitable deed, can be a source of opportunities and competitive advantage.

Figure 6.1 New model illustrate the sustainable leader attributes and dimensions of measuring sustainability performance

While the participating companies have already undertaken activities to improve society and the environment, these efforts have not been nearly as productive as they could be. This was especially observed during the author’s visits to those companies; for example, two of the companies choose suppliers who use raw materials that are not environmentally harmful and which have recycling programs for their waste. Some of the companies hoped to implement environmental-friendly programs but lacked actual activities. This was further evidenced through their use of the word “they” instead of “I” or “we” during the interviews. There are no significant differences between the Turkish company and the other Egyptian companies, especially companies which have the same industrial nature and the same classification for sustainability performance measurement. One considered the size of his business as not big enough to take social and environmental responsibilities and considered taking that role in case his company became larger. The above points might imply that SMEs leaders believe that sustainability concepts are much more feasible in larger companies than they are in smaller ones. The researcher concluded that the business sustainability concept is new for Egyptian SMEs. Awareness campaigns are required for this concept to be effectively incorporated in business strategies and operations.

Eight categories were used to create a framework in order to answer the following question: “What are the leaders attributes (attitude, behavior, and competencies) that may determine successful business sustainability in terms of the environment for SMEs?”

In addition to leaders’ attributes, three different sustainability performances measurement dimensions emerged: financial, internal sustainability process dimension, and value dimension. Two of these dimensions match with two of the conventional balanced score card (BSC) aspects (financial and internal process dimensions) mentioned in the literature review chapter (Figure 3.1., Section 2.3.1). This is supported by Wisner, Epstein, and Bagozzi (2006) when they summarized the different dimensions that can be used to create BSC for sustainability reporting results as follows:

• • Financial dimension (sales revenues from sustainable products, energy cost saving, and the avoidance of the future regulatory cost)
• • An internal business process dimension (supplier certification and toxic or hazardous waste reduction)
• • Stakeholder dimension (customer and community satisfaction; awards received for green/sustainability practices; charitable donations to environmental organizations)
• • A learning and growth dimension (sustainability-trained employee, hours volunteered to the community, and environmental projects employee)

The BSC sustainability performance measurement was used as a basis for selecting the SMEs participants in the study where applying at least one of the BSC model-mentioned dimensions renders an SME feasible for the theoretical sample.

Phenomenological experience related to sustainability leader attributes. These antecedents had eight categories: systemic thinking, individual consideration, authoritarian, expertise and knowledge, persistence, charismatic, democratic, and personality. Each is discussed in detail below.

Systemic Thinking

Literature showed that strategic thinking plays an important role in strategic management, strategic development, and strategic planning. However, there is no clear or common definition for the strategic thinking term. Zabriskie and Huellmantel (1991) argue that it is important to detect the prompt description of strategic thinking.

In this study, systemic thinking was a major category during the open coding phase. It encloses recovering direction detractions to goals, and the logical and systemic following of rules as well as commitment to them.

The majority of participants in this study felt that the systemic thinking attribute was a requirement for sustainability leaders. For example, the CEO of one of the companies said, “The adaption of environmental sustainability activities needs logical and systemic following rules.”

In order to cope with the advancements in a modern business environment, The organization needs to increasingly adopt strategic concepts and take advantage of qualified strategic thinkers. Thus, thinking strategically necessitates thinking techniques, thinking concepts, thinking styles, and thinking skills (Hanford 1995).

Moreover, for a company to manage future difficult situations, it has to depend on a clear strategic vision and how to achieve its goals.

From the above, we can suggest that business leaders require the strategic thinking attribute to set strategic plans for their business, the application of goals of their strategic plans, and strategic management. Concomitantly, Sveiby (2001) said that “knowledge-based strategy formulation starts with the competence of people.” Thus, the research focused on capacities and qualities which are necessary to achieve strategic management tasks.

The conclusion history Table 5.2 illustrates competences and skills required for performing strategic managerial tasks which were stated in the review literature.

A longitudinal study was carried out depending on interviews with 35 senior executives attributed to 35 of the 100 largest Australian organizations between the mid-1980s and mid-1990s, interrogating their opinions in variations in the processes of strategic planning, strategic management, and corporate development. The interview focused on the problems they faced during their work regarding strategic planning and strategic management tactics five years before (Nuntamanop et al. 2013).

Strategic thinking was one of the main problems faced regardless of whether the company adopted a formalized strategic planning approach or used a no formalized one.

“Our senior executives tend to get carried away by details and lose their strategic perspective” was an example of a phrase stated by a senior executive in a formalized strategic planning system company (Nuntamanop et al. 2013).

Garratt (1995a) shows that the lack of strategic thinking is worldwide, not only in Australia, but also in London, Europe, East Asia, New Zealand, and the United States. He elaborated, adding “Around 90% of managers and vice-presidents had no induction, inclusion or training to become a competent direction giver of their business.” Bonn (2001) discovered that absence of strategic thinking leads to lack of better decisions and value-adding processes. However, if strategic thinking is present, better corporate decisions would have been made and greater value provided to constituents.

There is a clear difference between strategic thinking and strategic planning as they represent different stages in the strategy development process.

Since, Strategic planning focuses on analysis and deals with the articulation, elaboration and formalization of existing strategies, Strategic thinking—on the other hand—emphasizes on synthesis, using intuition and creativity to create an integrated perspective of the enterprise. (Mintzberg 1994)

Mintzberg also suggests that strategic thinking precedes strategic planning.

Garratt (1995b) defined strategic thinking as a procedure which senior executives use to deal with daily managerial activities and emergencies. Moreover, Liedtka (1998) argues that strategic thinking has been known as an individual activity influenced by the framework of the organizations. The literature mentioned a number of major notions of strategic thinking: it is an essential element for strategic planning and strategic development and that it has a mental mechanism, perspectives, and actions. This agrees with the point of view that strategic thinking and strategic planning are two different hypotheses. In addition, Liedtka supports the concept that strategic thinking is a process which comes first before strategic thinking.

Over the past 25 years, studies showed that there was a difference between strategic thinking and operational thinking. Strategic thinking leads to an interruption of long-term and analytical planning activities, while operational thinking is issues and tasks oriented (Honford 1995). According to Tovstiga (2010), strategic thinking might occur all the time before, during, or after strategic planning and operation stages.

As Chatman et al. (1986) have argued:

When we look at individual behavior in organizations, we are actually seeing two entities: the individual as himself and the individual as a representative of this collectivity … Thus the individual is not only acting on behalf of the organization in the usual agency sense, but he is also acting, more subtly “as the organization” when he embodies values, beliefs, and goals of the collectivity.

Thus we can suggest that there are two different levels of strategic thinking: the individual level and the organizational level. That may open an argument about the influence effect of the individual characteristics, thinking, and behavior, and how they can influence the organization culture and performance, while, on the other side, there is the influence of the organizational context on individual thinking and behavior.

From the above, we can suggest that understanding strategic thinking necessitates two approaches that explore the character of a strategic thinker and the culture and actions that take place within the organizational context which the individual controls (Nuntamanop et al. 2013). Thus, to find a near true picture of the effects of different leadership attributes on sustainability development in the SMEs, the researcher looked at their impact on individual leaders and on the approach by which they influence their surrounding wider organizations, mood, environment, activities, culture, and structure.

Individual Consideration

Individual consideration was formerly conceptualized as the surrounding support and personalized concentration utility. The second category is individual consideration which involves caring about others. Participants refer to the individual consideration attribute by certain codes, including transferring ideas to others, inspiring others, the ability to discover skills in others, the ability to develop skills in others, and persuading others. Moreover, employees training involvement, observing employees’ skills development, challenged delegation tasks, career advancement, discovering employees’ needs, and knowing suitable motivational tools need to be considered by the leader for each employee. We have seen a move to define individual consideration as concomitant with servant leadership. This was supported by Avolio and Bass (1995) when they stated that a “leader displays more frequent individualized consideration by showing general support for the efforts of followers.” Rafferty and Griffin (2006) studied the similarities and dissimilarities between developmental and supportive scopes of individual consideration, in addition to focusing on discovering the supportive leadership style which is defined as “occurring when leaders express concern for, and take account of, followers’ needs and preferences when making decisions.” Developmental leadership includes support for training, career counseling, and examining and monitoring employees’ skill improvement (Rafferty and Griffin 2006).

The above highlights the importance of better understanding of this attribute and how it is practiced by leaders on a daily basis.

In order to be a sustainability leader having the individual consideration attribute, which is an assignment and not an honor, one may be required to put employees’ needs above one’s own. For example, in terms of support, the leader will spend time and effort to develop an employee if there is a training opportunity and if it is limited, a leader might promote an employee to a training opportunity versus going himself/herself (Arnold and Laughlin 2010).

A grounded theory study about transformational leadership behaviors in the context of Indian culture, conducted by Singh and Krishnan (2005), revealed a special apparatus that arose from their data, “self-sacrifice.” The grounded theory approach is limited for studying transformational leadership. In addition, self-sacrifice is an important characteristic of transformational leadership, not only in the Indian context, but also in other cultures like North America. Self-sacrifice in an organizational setting was defined as “the total/partial abandonment, and/or permanent/temporary postponement of personal interests, privileges, or welfare in the division of labor, distribution of rewards, and/or exercise of power” (Choi and Mai-Dalton 1999).

From the studies emerged an active factor which may affect individual consideration and self-sacrifice; this factor is leader gender. It is suggested that female leaders may experience more confrontation than male leaders in being perceived as exemplary leaders. Moreover, studies showed that individualized consideration is significantly more correlated with femininity than masculinity (Arnold and Laughlin 2010). For example, van Knippenberg’s (2005) study found that individual consideration (e.g., a supervisor’s enthusiasm to take on a larger part of the workload, to give up a day off in favor of a follower) is most necessary for the effectiveness of leaders who are not ideal in their groups. In addition, their study showed that female leaders are believed to require connection in more group-oriented (i.e., individual consideration) behavior to demonstrate their commitment to the group and be authorized as leaders. According to Eagly and et al., (2003), meta-analytic studies showed that female leaders seem to endorse individual consideration more frequently than male leaders. In order to connect a theory building implement related to refining construction of individual consideration, the author conducted interviews with senior SMEs leaders across the private sector, because they had a rich background, experience, and history of practicing leadership in general and individual consideration specifically. Yet at the same time, the lack of conceptual clarity around the sustainability leader attributes suggested a grounded approach to theory development. Because of these considerations, the research utilized a blended grounded theory method in order to “bring a new perspective and new theorizing to [this] mature established theoretical area” (Locke 2001, p. 97). The individual consideration attribute is one of the constructions that emerged from the grounded approach.

Authoritarian

Authoritarian leaders probably employ control by setting structure, ground rules, and promising rewards for fulfillment and intimidating punishment for defiance or breaking the rules (Aryee et al. 2007). The literature suggests that SMEs leaders prefer to control and supervise each activity by their own interactions (Be dell et al. 2006). This led to the suggestion that managers’ authoritarian leadership in turn influences their employees’ performance (Schuh et al. 2013). This was supported by Aryee (2007) as he argued that an authoritarian leadership style is to be allied with employees’ perceptions of critical tasks which require full supervision.

In the research under study, the participants proposed that leaders at the application phase of adopting sustainability activities should use their authority power, for example, by making decisions with little or no participation or creative input from their subordinates or team members and directly supervised group members. The authoritarian attribute is important in the industrial field where decisions need to be made effectively and efficiently.

From the subordinates’ point of view, violence and leader’s personal benefits are always associated with absolute power (Sivanathan et al. 2008). Authoritarian leaders’ willingness to declare their personal supremacy over employees and control employees’ performance primarily via threats and intimidation makes them especially likely to be perceived as abusive, as also using behaviors which highlight unilateral decision making by the leader and endeavoring to maintain the distance between the leader and his/her subordinates (Aryee et al. 2007). In addition, they believe that authoritarian leadership behavior belongs to the old school of management which is centralization management. Moreover, a number of scholars have suggested that authoritarian leadership behaviors indicate a strong disregard for the benefit and point of view of their subordinates (Chan et al. 2012). For example, authoritarian leaders tend to pay no attention to subordinates’ ideas and ignore their inputs in the decision-making process (Aryee et al. 2007). However, managers see that authoritarian leaders who use power with their subordinates guarantee accuracy of doing business tasks and activities (Tsui et al. 2004). These behaviors guarantee the leader’s authority over the path of the team directing them to achieve his/her objectives. Specifically, authoritarian leadership has been defined as “leader’s behavior that asserts absolute authority and control over subordinates and [that] demands unquestionable obedience from subordinates” (Schuh et al. 2013).

White and Lippitt (1960) acknowledged the autocratic leader as the authoritarian leader. Other literature has cited that “autocratic leader” and “authoritarian leader” have the same meaning without distinguishing between them (Schuh et al. 2013). Authoritarian leaders depend on their power to force and their ability to influence (Bass 1990).

Persistence

The participants proposed that the leader in the initial phase of adopting the sustainability concept needs to make his/her team members (employees) aware of it. As they become aware, the leader must be persistent through the implementation phase. The leader should take on the role of planning, organizing, and mentoring. Finally, the leader must be patient and resolute (Schwalb 2011).

Holland and Shepherd (2013) defined entrepreneurial persistence as moments “when the entrepreneur chooses to continue with an entrepreneurial opportunity regardless of counterinfluences or enticing alternatives.”

Williams (2017) showed that many factors affect entrepreneurs’ persistence. Besides individual factors, environmental and situational factors (e.g., difficult and unconventional opportunities) (Holland and Shepherd 2013) and uncertain financial, competitive, and operational environments (Liao and Gartner 2006) influence entrepreneurs’ choices to persist. Thus persistence is based on both the individual entrepreneur and the environment (DeTienne et al. 2008).

McMullen and Shepherd (2006, p. 134) defined entrepreneurial action, which is crucial for entrepreneurial persistence, as “behavior in response to a judgmental decision under uncertainty about a possible opportunity for profit.” Persistence helps start-up companies to survive (Gartner and Shaver 2012). One of the factors that increase persistence is when entrepreneurs follow specific activities (e.g., gestation activities). Liao and Gartner (2006) confirmed that early planning leads to persistence in ambiguous situations.

Thus, entrepreneurial persistence research progression focuses mainly on understanding the methodology of its application rather than just defining it.

Charismatic

It is known from literature that charismatic leadership probably takes place in situations that are vague and stressful for the employees and the company (Yukl 1999). By their attitudes and actions, charismatic leaders push employees to accomplish big objectives (Dvir et al. 2002). Charismatic leadership gives rise to ethical matters. The purpose of leadership is the main norm for assessing the ethical manners of the charismatic leader (Paulsen et al. 2009).

The leader needs to be charismatic to support team dynamics and practices to build a sense of character that encourages the required sense of society, belief, and teamwork to turn sustainability concepts and theories into innovative products and activities in their companies (Keller 2006; Somech 2006). The charismatic leader motivates employees with their own self-belief and communicates the logic of purpose and vision (Howell and Shamir 2005). Compared with other leadership styles, charismatic leaders boost employees’ efficacy as they encourage a belief in the company’s vision and inspire belief in team members’ skills (Keller 2006).

All participants had at least two codes within this category. From the participants’ point of view, the sustainable leader should be charismatic and the charisma will be built when the leader is trustable, is modest, has consistency, and is an exemplar in applying the sustainability concept in the firm by treating employees equally as much as possible. The leader should be authentic in action and speech and demonstrate the kind of behavior that he would like to see (Paulsen et al. 2009). Moreover, the leader should answer the question, what the firm would like to achieve in the future or what we aspire to be in the future; thus, he should be a visionary.

Paulsen et al. (2009) found that there was significant correlation between charismatic and coaching leadership and employees’ outcomes.

Figure 6.2. illustrates an integrative conceptual model of the relationship between charismatic leadership, team identity, cooperation, and team innovation. The framework emphasizes that charismatic leadership affects team identity, while team identity endorses cooperation within groups.

Figure 6.2 Expertise and Knowledge

Expertise and Knowledge

Expertise and knowledge refer to the leader beliefs; they include the awareness of the leader toward globalization and sustainability concepts and whether the leader has a background about sustainable development. Participants suggested that the leader should be well educated, a continuous learner, and well cultured.

For leaders gathering knowledge, it is very important that the knowledge is about their industry and business activities, which will make a positive impact on their companies. An initial logic embraces a belief that effective, knowledgeable and expert leaders support modern business concepts which positively influence instructional practices and learning opportunities for all employees (Steven 2014).

The concept of knowledgeable leader formation has conclusively found a target population in the sphere of business (Nonaka 1991). As leaders in knowledge construction processes convert data into knowledge, the resulting suggestion supports well-versed decision making in SMEs, and knowledge conception was considered an important process on the part of SMEs and sustainability leaders (Katz et al. 2009). In the organization environment, knowledge was created as leaders’ synthesized information by illustration of their values and understandings and was equipped for action (Breiter and Light 2006). As the leaders formed and shared knowledge with others at diverse levels of the company, knowledge was augmented and mobilized, as knowledge is stimulated through individuals and clusters (Robinson 1995). For example, the importance of expertise and knowledgeable leaders was highlighted as they played an arbitration role between the vision of the company and the realities of those working on the front line—the “employees” (Steven 2014).

Taking into consideration a learning area, it fundamentally also represents an essential leadership position by endorsing knowledge formation within the factors of the area as set out by structure leaders, actions that take place on a day-to-day basis without consciousness, and the specific context of the company. A development of organizational learning arises when the contemporary knowledge of leaders becomes an element of the organization.

To explore knowledge within a company culture, it is necessary to think that employees bring values and actions to the information arising from the company environment.

As knowledge influencers, leaders had to guarantee that newly acquired knowledge in the company did not stay remote from actions (Steven 2014).

According to Nonaka and Takeuchi (1995), knowledge influencers were defined as

leaders, who have access to knowledge creating groups at the local and system level. Beyond acting as conduits to move knowledge between teams and levels of the organizations, a process of cross-leveling, knowledge influencers actively engaged in the knowledge creation process within teams.

Also, the practical experience which promotes effective leaders is very important. York-Barr and Duke (2004) proposed that leaders’ expertise can be followed from the individual stage to the collaborative stage through skilled leaders sharing effective practices.

In this research, expert and knowledgeable leaders supported shared efforts that allowed the exchange of knowledge, information, experiences, and skills between all the company levels. One of the leader roles is to maintain knowledge mobilization processes in their company and not to prevent any experience or knowledge from moving between teams and different levels of the company. According to Steven (2014), “These linkages between levels of the company presented opportunities to bypass possible learning cycle breakdowns such as fragmented learning.”

From the field work, most subordinates surely highlighted the participation of leaders in sharing work, bringing to the team different perceptions; thus they were knowledge influencers.

Example discussions follow for the data selection phase (at the in-depth interviews) with well-educated expertise participants (SMEs owners).

The author opened a discussion about the basic steps in strategic planning for applying environmental sustainability activities.

Answer:

One of them said:

Any company that determines it is indeed ready to begin strategic planning must perform four tasks to cover the way for a planned, controlled, and structured process:

1. 1. Identify specific objectives.
2. 2. Clarify roles (who do what in the process).
3. 3. Develop organizational benefits and outcomes.
4. 4. Identify the resources and information that must be collected to help make sound decisions.

Author one mentioned:

Before starting on the basic steps in a strategic plan for applying environmental sustainability activities, we must first answer the questions below:

• • Purpose—why should the company apply environmental sustainability activities? And what does it seek to accomplish?
• • Business—The main method or activity through which the company tries to fulfill this purpose.
• • Values—the principles or beliefs that guide company members as they pursue the company’s purpose.

He continued once a company has been committed to why it should apply environmental sustainability activities and what it seeks to accomplish, identifying a clear method answers about how it can apply the objectives. For this it must take a clear look at its current situation. Remember that a part of strategic planning, thinking, and management is an awareness of resources and an eye to the future environment, so that a company can successfully respond to changes in the environment. Situation assessment, therefore, means obtaining current information about the company’s strengths, weaknesses, and performance—information that will highlight the critical issues that the company faces and that its strategic plan must address. These could include a variety of primary concerns, such as funding sustainability issues, new environmental sustainability activities, and changing regulations or changing needs in the client population. The point is to choose the most important issues to address.

Democratic

Since leadership plays an essential role in modern business activity ­movements, understanding the features of democratic leadership is vital (Choi 2007). However, the definition of democratic leadership is unclear (Gastil 1994).

According to White and Lippitt (1960), democratic leadership

Emphasizes group participation, discussion, and group decisions encouraged by the leader. On the other hand, an autocratic leader keeps tight control over group decisions and activities. The autocratic leader determines all policies, techniques, and activity steps and dictates the particular work tasks and work companions of each member.

Thus we can say that the vital trait of democratic leadership is sharing and participation; they are a basic function of democratic leadership (Choi 2007).

Also, the leadership literature has paid no attention to democratic leadership in the context of environmental sustainability in Egypt within small groups and organizations. In this study, the participants said that attribute is important at the initial phases when the leaders are ready to prioritize training and team development and take the time needed to give everyone a chance to contribute. The employees share the responsibility for making decisions and changes for a sustainable environment. The leader effectively communicates with his employees, respects others, builds positive relations with the work force, delegates a great deal of the work, seeks regular feedback, and looks to create a harmonious and productive work force.

Personality

It is known that personality is assumed to be quite stable over time, mostly in adults. Studying personality is beneficial in improving our understanding of particular character. Scholars have suggested a limitation of employing a person-centered approach to personality research (Merz and Roesch 2011).

Referring to leaders’ variation in competences models of thoughts, beliefs, and attitudes, researches of personality focus on understanding leaders’ differences in particular personality characteristics, such as friendliness.

Innovative, honest, and ambitious were suggested by the participants to be personal attributes for the sustainability leader. The participants’ suggestion input identifies leaders with similar levels in the rest of their personality characteristics and define their character profiles.

Conclusion

Eight categories were used to create a framework in order to answer the following question: “What are the leaders attributes (attitude, behavior, and competencies) that may determine successful business sustainability in terms of the environment for SMEs?” In addition to leaders’ attributes, three different sustainability performance measurement dimensions emerged: financial, internal sustainability process dimension, and value dimension. Two of these dimensions match with two of the conventional BSC aspects (financial and internal process dimensions) mentioned in the literature review chapter.