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Leadership’s impact on employee engagement
Differences among entrepreneurs and professional CEOs
Nancy Papalexandris and Eleanna Galanaki
Athens University of Economics and Business, Athens, Greece
Purpose – The purpose of this study is to identify similarities anddifferences between the leadership practices of managing entrepreneurs and professional CEOs and to investigate how these impact on their immediate subordinates’ satisfaction, commitment, motivation, and effectiveness (engagement). Design/methodology/approach – A multiple-respondents survey, aiming at CEOs and their immediate subordinates, was conducted. Factor analysis, correlations and moderatedregression analysis were used in order to reach conclusions. Findings – Two leadership dimensions are found to be most influential: being a good manager/mentor and articulating vision. Although good manager/mentor characteristics prove crucial for both types of CEOs, the effect of vision articulation on subordinates is moderated by the type of company the CEO is leading. No significant differences arefound in the leadership style that the two types of CEOs adopt, except for their calmness and self-possession, which is lower among entrepreneurs. Practical implications – The findings raise questions regarding the differences in subordinate expectations from owners – CEOs, as opposed to professional CEOs; and point at certain characteristics which could be developed in order to enhance leadershipeffectiveness in both groups of top managers. Originality/value – The study underlines the importance of sound vision development and articulation in entrepreneur-run firms, as it appears that people working for such firms expect more direction from the Head. It is also sustained that good management and mentoring are essential in any kind of firm, in order to develop an effective, committed andmotivated top management team, which will bring corporate success. Keywords Leadership, Entrepreneurs, Chief executives, Senior management, Employee involvement Paper type Research paper

Leadership’s impact

Received July 2008 Revised September 2008 Accepted September 2008

Introduction The effect of the Chief Executive Officer’s (CEO) leadership style has been largely debated, as it isconsidered to have multiple level effects on every employee. These effects may be either direct or indirect, through the impact that CEO leadership has on upper management. The CEO is the person from whom it is expected to give direction, vision and identity to the firm. This role may be even more prominent in companies managed by the owner or founder. In this paper we attempt to shed some lighton the effect of the CEO leadership style on employee engagement, in companies run by their owner or founder compared to ones run by professional CEOs. The underlying hypothesis of the study is the assumption that owner/entrepreneur[1] chief executives will not only differ from professional ones in traditional entrepreneurial aspects usually attributed to them, such as risk taking

Leadership &Organization Development Journal Vol. 30 No. 4, 2009 pp. 365-385 q Emerald Group Publishing Limited 0143-7739 DOI 10.1108/01437730910961685

LODJ 30,4


propensity, vision, determination, self-esteem, etc. (Baum and Locke, 2004, Kuratko and Hodgetts, 2004), but also in the way they are perceived and meet the expectations of their immediate subordinates. This means that the teamsurrounding the CEO will expect a different CEO leadership behavior, when the firm is run by the owner, as opposed to when it is run by a professional CEO. The study is based on the data of a 50-CEOs survey carried out in Greece in 2004, as part of Phase II of the GLOBE project (Global Leadership and Organizational Behavior Effectiveness Research Project) (Den Hartog et al., 1999; House et al., 2001a;...