PROMOTING LEADERSHIP COMPETENCIES IN HIGHER EDUCATION

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1 PROMOTING LEADERSHIP COMPETENCIES IN HIGHER EDUCATION (Paper at the DEHEMS Conference. Vienna, September 2011) Carmen Delia Dávila Quintana (University of Las Palmas de Gran Canaria) Jose-Gines Mora Ruiz (Institute of Education, University of London) Luis E. Vila Lladosa (MC2 - University of Valencia) INTRODUCTION From a very general perspective, leadership can be defined as the process in which an individual directs, encourages and guides others to perform group tasks oriented to achieve objectives that are shared by all the members of the group (Armstrong, 1990; Cole, 1996). This type of definition highlights the fact that leadership is a functional process that can be applied to any type of human activity involving more than one person to achieve a goal. At corporate level, successful leadership would occur when the characteristics of the leader, the tasks to be performed, the objectives to be achieved and the human team fit together within the context where the organization operates (Hardy, 1985). Understanding the process of leadership requires an inquire into the complex interaction between the individual who leads the human team and the organizational, economic, and social environments where the process goes on. However, for effective leadership to occur there must be always one person, the leader, whose role is precisely to make the very process of effective leadership happen. Therefore, leadership development requires that some individuals acquire and deploy specific knowledge, abilities and attitudes that favour the process of leading other members of the team towards the corporate objectives. So far, research on leadership development has been based on two assumptions: first, that more effective leadership can be achieved through the development of individual leaders; and, second, that leadership can be brought into organizations to improve their operational effectiveness (Spendlove, 2007). A major line of research in leadership development has focused on identifying the leaders and the competencies 1

2 possessed by individuals that exert leadership functions in working environments. Within this line, competencies are defined as the knowledge, skills, abilities and attitudes that favour effective leadership behavior at work. Competency models offer the means to identify the abilities, attitudes and experiences of actual leaders in their current work environments. The competencies of those who lead can be used in turn to infer what equipment of competencies is required to become an effective leader. Additionally, competency development models aim at clarifying what are the best ways to enhance the acquisition by individuals of those competencies required for effective leadership (Hollenbeck et al., 2006). Broadly speaking, education and experience are the main sources for individual competency development; however, it should be noticed that not all competencies are equally suitable to be learned at educational institutions nor equally suitable to be acquired through work experience. The analysis of competency development for leadership treats competency profiles as outcomes generated by diverse types of actions explicitly oriented to the development of leadership capacity by individuals (McDaniel, 2002; Turnbull and Edwards, 2005). The varied nature of human abilities suggest that some of competencies for leadership can be more effectively developed in an educational environment while other leadership capacities should be developed by means of learning-by-doing and on-thejob training. Research about the particular competencies related to leadership behaviour, on the one hand, and about the best ways to foster its acquisition by individuals, on the other hand, would provide valuable evidence to guide the decision making processes at individual and corporate levels towards improved individual and corporate performance. The purpose of this paper is to gain insight on the relevance of teaching and learning modes used in higher education regarding later leadership behavior of graduates at the workplace. Professional competencies related to leadership are considered here as a transmission mechanisms for higher education contribution to work performance regarding leadership development. Consequently, the profile of leadership competencies of graduates shall be evaluated twice: first, at the time of graduation from higher education institutions (retrospective evaluation); second, five years later once the graduate is working (contemporary evaluation). 2

3 Structural equation models (SEM) are used to estimate the effects of higher education modes and initial work experiences after graduation on the development of professional competencies related to leadership behavior at work on a sample of recent graduates from Spanish universities. The results show that individual leadership capacity depends on the development of specific professional competencies. Those competencies related to leadership are partially provided by means of higher education and developed further through later work experience. The analysis also identifies what teaching and learning modes used in higher education have stronger effects on the development of leadership competencies. The main implication is that the promotion of adequate learning environments in higher education may foster the level of graduates regarding leadership skills at the time of graduation, which in turn would improve their chances of further development of leadership competencies in earlier career stages, thus increasing the propensity of graduates to work as leaders for the organizations that employ them. The rest of the paper is organized as follows. Section two establishes the conceptual framework and provides the research hypotheses. Section three describes the data and the models used in the empirical analysis. Section four discusses the results including the goodness-of-fit measures corresponding to the accepted model. Finally, section five concludes. CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESES It is generally accepted that human competency development emerges, born talent apart, from the interaction of two main sources: formal education and life experience. Regarding professional capacities required to accomplish specific functions within an organization, as is the case of leadership, understanding the interaction between both sources of competency involves an inquire into the complex relationship between higher education and initial graduate work experience. 3

4 At time of graduation, the profile of competencies displayed by graduates may be considered as a multidimensional outcome of higher education production, where different types of educational resources were applied to students in order to help them to develop, among other things, their equipment of professional capacities. The competency profile held by graduates at the time of graduation is likely to influence their subsequent job-search strategies as well as the real opportunities they face in the labor markets as higher education graduates. The interaction between graduates jobsearch approach and the job-openings they face in the labor market determines graduates earlier career choices, that is, the path of initial jobs after graduation and, therefore, their later path for further competency development by means of learning by doing during the transition from education to work. Later on, once integrated in the labor market, graduates equipped with higher levels of leadership competences would tend to choose and/or to be assigned by firms and organizations to jobs and positions where the graduate must perform leadership functions as a part of the job itself. Graduates with high levels of leadership competencies are willing to be assigned to positions where they have better chances to exert effective leadership within the organizations that employs them. Organizations are willing to assign the leading position of work teams to individuals that show higher levels of leadership competencies. To lead a human team or a to lead a project are the explicit tasks and contents of certain positions; in general, graduates that act as leaders in their current work environments are those who direct, encourage and inspire the other members of the organization to achieve expected or planned objectives. Within this conceptual framework, the following five research hypotheses are jointly analysed using Structural Equation Models. H 1 : Graduates development of competencies for leadership during higher education depends other things being equal- on the combination of teaching/learning modes actually used in higher education institutions. H 2 : Graduates level of competencies for leadership some years after graduation is directly and positively related to the level developed during higher education 4

5 H 3 : Competencies for leadership developed during higher education are still positively related to leadership behaviour at the workplace even after some years of labor market experience H 4 : Graduates own level of competencies some years after graduation is positively related to contemporary leadership behaviour at the workplace H 5 : Teaching/learning modes for leadership influence later leadership behaviour mediated through the development of competencies for leadership. The structure of the hypotheses examined in this paper is shown in Figure 1 Figure 1: Research hypotheses structure According to the structure of relationships shown in Figure 1, we hypothesize that those graduates who have been more exposed to teaching-learning modes specifically addressed to the generation of leaders (ATL) will acquire during study higher levels of competencies for leadership (UCL). Graduates with higher levels of competencies for leadership at the time of graduation will be in a better starting position to develop those competencies further through early work experiences (OCL) which will contribute to enhance their propensity to act as leaders at the workplace (LW). It should be noted that all the elements involved (ATL, UCL, OCL and LW) are unobservable factors that would be expressed as latent constructs derived from observable indicators. 5

6 EMPIRICAL ANALYSIS The Data Set The data used in the empirical analysis come from REFLEX (The flexible professional in the knowledge society), a graduate survey including some 40,000 individuals of fourteen countries who graduated from higher education institutions in 1999/2000 and who answered the survey questionnaire in 2005 ( To analyze the relationship between the prevalence of diverse teaching and learning modes used in higher education and later leadership behaviour at the workplace we use the information corresponding to some 5000 individuals who graduated from Spanish universities. REFLEX sections addressed graduates higher education, transition to education to work, earlier career stages, and current professional situation, including a section focused on competencies. Defining Latent Factors and Covariance Structure The behavior of graduates as leaders at the workplace is incorporated in the structural model as an unobserved or latent factor labelled "Leadership in the workplace (LW)" that has to be explained by means of latent constructs and observable indicators. Churchill (1979) recommended that each latent factor should be measured by at least two observable indicators highly correlated to the latent concept. Consequently, the factor LW is measured in our model through two indicators contained in the Reflex questionnaire that explicitly consider two key aspects of the functions performed by graduates that lead at work. The first indicator considers whether the graduate has a responsibility to establish objectives in the organization (answer to the question Are you responsible for setting goals for the organization? ). The second one considers whether the graduate is responsible for deciding the ways work is organized (answer to the question Are you responsible for deciding work strategies for the organization? ). For empirical purposes we assume that those graduates whose jobs include decision about objectives and strategies are those actually leading the 6

7 organization. Therefore, graduates declaring that their current jobs included the responsibilities for deciding objectives and work strategies are identified as actual leaders. The following step is to analyse the competencies profile of leading graduates to identify the abilities that characterize them as leaders from the rest of graduates who have not leadership responsibilities at work. In the section on competencies, respondents to Reflex-Spain were asked three questions regarding a list of 19 human capacities. The questions were the following: A. How do you rate your own competence level? B. What is the required level of competence in your current work? C. What was the contribution of the programme completed (in higher education) to your competence development? Answers to question A may be viewed as a self-assessed measure of the human capital accumulated, in terms of competencies, by graduates at the time of the interview, that is, five years after graduation from a higher education institution. The answers to all 19 capacities generate a graduate's competency profile. Answers to question B inform us about graduates view on the human capital requirements of their current jobs in terms of competence. The answers to the 19 items generate a job profile. Answers to question C contain graduates retrospective evaluation of the value added by their higher education to their human capital equipment in terms of competencies, and can be used to represent the competency profiles of graduates at the time of graduation, that is, before they began to develop their competencies by means of learning by doing and on-the-job training. Consequently, we use the answers to question A to evaluate the competencies profile held by graduates five years after they left higher education. By looking at the profile of those leading for their organization, which have been identified in the previous step, the equipment of competencies required for leadership may be inferred. In turn, the answers to question C corresponding to the competencies for leadership, identified in 7

8 the previous step, are used here to evaluate the profile of leadership competencies at the time of graduation, before leading graduates developed them further through work experience. Graduates profile of competencies at time of graduation is considered as an outcome of higher education production, a process where diverse combinations of educational resources are applied within diverse study programmes to students from varied backgrounds and who behave in different ways. In the survey all questions on competencies offer a Likert-style response format with a seven-point scale from very low to very high. From the list of 19 items, we focus on those competencies more likely to be required in order to perform the activities involved in leadership at the workplace. The analysis of Reflex-Spain data suggests that the relevant competencies for leadership are following: Negotiate effectively, Alertness to new opportunities, Assert your authority, Mobilize the capacities of others, Question your own and other's ideas, Come up with new ideas and solutions, Coordinate activities, and Make your meaning clear to others. Mean values for the leadership competencies at the time of the interview as well as the time of graduation are collected in Figure 2. The average level of competencies acquired in higher education are lower than those of the corresponding levels five years later, suggesting that initial work experience after graduation is a relevant source for the development of leadership competencies once graduates have started their professional careers. The contribution of higher education to the development of the diverse competencies is not equal for all of them; however, the proportion of competency level emerging directly from higher education is substantial in all cases, confirming that higher education is the main source of the leadership competencies held by graduates five years after graduation. "Make your meaning clear to others" with values of 5.5 and 3.9 respectively on a scale of 1 to 7 is the competency that graduates have developed further; "Negotiate effectively" is the competency with lower average levels of 4.6 and 2.8 respectively. 8

9 Figure 2.- Mean values of own level of competencies (contemporary) and of university learned competences (retrospective) Negotiate effectively 6 Make your meaning clear to others 5 4 Alertness to new opportunities 3 2 Coordinate activities 1 Assert your authority Come up with new ideas and solutions Mobilize the capacities of others Question your own and other's ideas Own level of competency University-learned competency level For empirical purposes, the eight indicators of leadership competency are used to define a factor capturing the level of leadership competencies possessed by graduates five years after graduation (answers to question A) labelled Own Competencies for Leadership (OCL), which reflects the result of combining what was learned during university education with what was developed later during initial work experiences regarding leadership competencies. Similarly, graduates profile in terms of the contribution of higher education to the development of leadership competencies enters the model as a latent factor named University Competencies for Leadership (UCL) which is measured through the answers in question C for the corresponding indicators. Since both UCL and OCL constructs are defined over the same group of indicators, the structure of correlation among the measures of competency needs to be considered in the model. The development of a particular competency at a given time depends not only on the contemporary level of development of the other competencies but also on the past level of development of all the competencies analysed. Consequently, in the model each indicator of competency is allowed to be 9

10 correlated with the other indicators in the contemporary construct as well as with the corresponding indicator in the other competency construct. The inclusion of correlated error terms between the observed variables used to measure similar constructs is consistent with existing SEM literature (Byrne, 1994; Bollen, 1989). The fourth construct in the model is labelled "Approaching to teaching for leadership (ATL)". It represents the most proactive creation of competence for leadership during higher education. In REFLEX respondents were asked to rate the emphasis made on eleven different modes of teaching and learning during their studies. The variables were measured in a five-point Likert scale capturing the intensity with which these methods were used for teaching and learning during the time graduates were higher education students. The three indicators selected to measure the latent construct named "Approaching to teaching for leadership (ATL)" factor: Group assignments, Written assignments, and Oral presentations written by students Empirical Model Building All the variables selected for the analysis and their correspondence with the four hypothesized latent factors are listed in Table 1, which also provides results of convergent validity of the research instruments. Table 1 Results of the convergent validity and correspondence between indicators and factors Factor - Cronbach Construct reliability Indicators Approaching to teaching for leadership (ATL) 0,80 0,72 A7GROASG Group assignments 10

11 A7WRIASG A7ORALPR University Competencies for Leadership (UCL) 0,90 0,82 H1NEGOTC H1ALERTC H1COORDC H1MOBOTC H1CMEANC H1AUTHOC H1SOLUTC H1QUESTC Own Competencies for Leadership (OCL) 0,86 0,86 H1NEGOTO H1ALERTO H1COORDO H1MOBOTO Written assignments Oral presentations by students Ability to negotiate effectively Alertness to new opportunities Ability to coordinate activities Ability to mobilize the capacities of others Ability to make your meaning clear to others Ability to assert your authority Ability to come up with new ideas or solutions Willingness to question the own and others ideas Ability to negotiate effectively Alertness to new opportunities Ability to coordinate activities Ability to mobilize the capacities of others 11

12 Ability to make your H1CMEANO H1AUTHOO H1SOLUTO H1QUESTO Leadership in the Workplace (LW) 0,86 0,76 G16GOALO G16STRAT meaning clear to others Ability to assert your authority Ability to come up with new ideas or solutions Willingness to question the own and others ideas Responsible for setting goals for the organization Responsible for deciding work strategies for the organization All values for -Cronbach are all higher than 0.80 suggesting that all constructs are acceptable to represent the latent factors and, consequently, valid for the analysis. The convergent validity of the measurement instruments used was also evaluated through a measure of the reliability of the construct. According to Fornell and Larcker (1981) construct reliability has been calculated as the sum of square factor leadings divided by the sum of square factor leadings plus the summation of error variances. Nunnally (1978) suggested a minimum of.80 for strong evidence of convergent validity. In our case, the constructs "Approaching to teaching for leadership (ATL)" and "Leadership in the Workplace (LW)" take values higher than 0.7, while the two constructs for the competencies of graduates take even higher values in convergent validity. In order to find additional evidence that the observed variable indicators are related to the underlying factors, we carried out a Principal Component Analysis with varimax rotation, where the four factors retained matched exactly with the constructs defined above. Table 2 shows the results of the PCA and how the four latent factors considered in the model jointly capture up to 60.5% of total variance. 12

13 Table 2 Components University Own Approaching to teaching Leadership Competencies Competencies for in the for Leadership for Leadership Leadership Workplace Indicators (UCL) (OCL) (ATL) (LW) H1ALERTC=Alertness to new opportunities 0,778 0,111-0,026 0,080 H1MOBOTC=Ability to mobilize the capacities of others 0,776 0,121 0,175 0,085 H1AUTHOC=Ability to assert your authority 0,775 0,110 0,061 0,125 H1COORDC=Ability to coordinate activities 0,772 0,124 0,122 0,016 H1SOLUTC=Ability to come up with new ideas or solutions 0,735 0,127 0,058-0,052 H1CMEANC=Ability to make your meaning clear to others 0,730 0,139 0,191-0,044 H1NEGOTC=Ability to negotiate effectively 0,722 0,089 0,018 0,133 H1QUESTC=Willingness to question the own and others ideas 0,708 0,156 0,093-0,088 H1SOLUTO=Ability to come up with new ideas or solutions 0,117 0,740 0,016 0,033 13

14 H1COORDO=Ability to coordinate activities 0,082 0,730 0,083 0,099 H1AUTHOO=Ability to assert your authority 0,088 0,709 0,024 0,146 H1MOBOTO=Ability to mobilize the capacities of others 0,137 0,707 0,019 0,077 H1CMEANO=Ability to make your meaning clear to others 0,082 0,696 0,068-0,040 H1QUESTO=Willingness to question the own and others ideas 0,099 0,678-0,007-0,059 H1ALERTO=Alertness to new opportunities 0,164 0,667-0,036 0,150 H1NEGOTO=Ability to negotiate effectively 0,138 0,648 0,002 0,176 A7WRIASG=Written assignments 0,094 0,031 0,846 0,024 A7GROASG=Group assignments 0,184 0,021 0,821-0,015 A7ORALPR=Oral presentations by students 0,139 0,041 0,816 0,064 G16GOALO=Responsible for setting goals for the organization 0,066 0,170 0,026 0,904 G16STRAT=Responsible for deciding work strategies for the organization 0,060 0,192 0,049 0,894 14

15 ESTIMATION RESULTS The structural equation model specified in the previous section was used to judge whether there was sufficient evidence on the hypothesized relationships between independent and dependent variables and to infer the causal direction of the relationships. Specifically, to observe the influence of the teaching-learning environment (ATL) in the acquisition of skills for leadership in university (UCL) and, mediated by the competencies owned by graduates five years after graduation (OCL), the effects on graduates' performance as a leader in the market work (LW). The structural model accepted was reached after contrasting the validity of diverse measurement models regarding the assumptions involved in the analysis. The final econometric analysis was carried out after removing from the sample those individuals with missing values in the key variables to facilitate estimation of the parameters in the model by robust methods using AMOS 6.1, v.18 EQS. The final valid sample size was individuals. Coefficient estimates for the accepted model are shown in Figure 3. All parameter estimates in the model are statistically significant at p <0.05 as indicated by the corresponding t-values. Figure 3 Structural model with standarized parameters estimates 15

16 In general, the results show that keeping constant the rest of elements included in the specifications, the panoply of teaching and learning modes deployed during university studies has a substantial influence on the propensity of graduates to act as leaders at the workplace through the development of specific competencies which, in turn, explains the transmission mechanism from higher education input to labor market outcome in the form of graduates who effectively lead for the organizations they work for. The final structural equation model represents the expected relationships between learning environments (ATL), graduates competency profiles at time of graduation (UCL), competency profiles five years after graduation (OCL), and current graduates behaviour as leaders at the workplace (LW). Table 3 presents the total, direct and indirect effects calculated from the parameter estimates for the model. Table 3. Direct, indirect, and total effects 16

17 Standarized effects Descriptions H 0 Direct Indirect Total effects effects Effects Approaching to teaching University for Leadership (ATL) Competencies for H 1 0,341 0,341 Leadership (UCL) Approaching to teaching Own Competencies for Leadership (ATL) for Leadership (OCL) 0,112 0,112 University Competencies for Leadership (UCL) Own Competencies for Leadership (OCL) H 2 0,329 0,329 University Competencies for Leadership (UCL) Leadership in the Workplace (LW) H 3 0,063 0,107 0,170 Own Competencies for Leadership (OCL) Leadership in the Workplace (LW) H 4 0,325 0,325 Approaching to teaching for Leadership (ATL) Leadership in the Workplace (LW) H 5 0,058 0,058 The direct effect of learning environments (ATL) on the generation of competencies for leadership in university education (UCL) is significant and positive (0.341) suggesting that if higher education study is intended to specifically help graduates to develop leadership competencies (UCL), then specific proactive methods to reach this objective need to be emphasized. This confirms the postulate in H1. 17

18 Additionally, graduates who have developed higher levels of competence during higher education (UCL) are in a better position to develop further their competences after graduation (OCL) once they are inserted into the labor market. This results is pointed out by the positive and significant coefficient of the relationship (0.329), thus confirming H2. Moreover, the development of competences after graduation is still conditioned by its development during higher education, as captured by an indirect effect (0.112) of ATL on OCL. It should be noted that the indirect effect of leadership competencies acquired in higher education (UCL) on leadership behavior in the labor market (LW) as mediated by the competencies accumulated by work experience (OCL) is greater in magnitude than the corresponding direct effect (0.063), thus reflecting that the equipment of competency acquired in higher education is the basis for the development of further levels of leadership competency trough learning by doing at the workplace, resulting in higher current levels of leadership competency after five years of labor experience(ocl). Finally, the last element is the effect of graduates own leadership competency (OCL) on their behavior as leaders at work (LW) as postulated by H4 which, according to model estimates, is significant and positive with magnitude In addition, ATL also influences indirectly (0.058) the attitudes of the leader in the workplace (LW) as postulate by hypothesis H5. Once model estimation is carried on, the accepted model has to be validated using statistical instruments to analyze the quality of adjustment of the model to the data. Table 4 shows some alternatives proposed by Bollen (1989) Byrne (2001) and Cheung and Rensvold, (2002) to provide multiple measures of fit of the structural equation model accepted. The usual Satorra-Bentler statistic is not suitable as a goodness-of-fit measure in our case because the valid sample size is very large. The goodness-of-fit indexes considered are the Adjusted Goodness of Fit Index (AGFI) and the Goodness of Fit Index (GFI) which are measures of the relative variance and 18

19 covariance amounts accounted for by the structural equations model. The AGFI takes into account the number of degrees of freedom relative to the number of indicators. The values for the Normed Fit Index (NIF) and the Comparative Fit Index (IFC) are also presented in Table 4. The model fit (Hu and Bentler, 1999; Hair et al, 1999), as indicated by these estimates was excellent with all values above 95% (AGFI = 0.951, NFI = 0.961, CFI = and GFI =.964). Table 4 also contains the Root Mean Squared Error (RMSEA): the point estimate and the confidence interval confirming a good approximation of the model to the data. Table 4 Fit statistics for measurement models Approaching to teaching for Leadership (ATL) S-B(df) AGFI NFI CFI GFI (173) RMSEA (90%CI) (0.042;0.046) CONCLUSIONS We have used structural equation models to examine the complex relationship between competency development by means of higher education and later leadership behaviour of graduates at the workplace. The results of the analysis show that graduates who where relatively more exposed to a specific combination of teaching/learning modes including group assignments, written assignments and oral presentations by students in higher education acquired higher levels of competencies for leadership at time of graduation. Consequently, they entered the labor market with a particular competency profile differentiated by relatively higher leadership capacities. Once at work, graduates better equipped to lead at the workplace developed further their own levels of competencies for leadership by means of learning by doing at the workplace. Five years after 19

20 graduation, individuals with a high profile of leadership competency show greater propensity to be operating as leaders in their current work activities The results of the analysis point out that greater emphasis on specific teaching and learning modes used in higher education practice does influence later performance of graduates regarding leadership at work, and that the relationship is channeled in terms of competencies for leadership. First, the use of group assignments, written assignments and oral presentations by students as more prevalent teaching/learning modes appears to help graduates in their development of leadership competency during higher education. Second, graduates who emerge from higher education with better competencies for leadership appear to be able to develop those competencies further during their initial career stages. The levels of leadership competency developed during higher education promote further development of competencies for leadership after graduation by guiding individuals to make the right labor market choices in order to find paths that expand their capacity to lead. Those better equipped with leadership competency at graduation time would search for work environments that allow them to build higher levels of competency for leadership. Third, the analysis confirms that graduates own current level of leadership competency is a key determinant of the propensity to operate as a leader within the organization they work for in terms of setting goals and deciding work strategies at organization level five years after graduation. The main conclusion from our analysis is that leadership capacity can be promoted through more effective development of specific competencies in potential leaders by means of appropriate teaching and learning modes in higher education; in turn, increased leadership capacity at individual level would improve organizational and social effectiveness. 20

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