Leadership, Distance, and Performance

Research Question: How does physical distance moderate the relationship between leadership behaviors and business unit performance?

Abstract: Measures of transformational and transactional contingent reward leadership and physical distance were used to predict the business unit performance of 101 managers. Results revealed that transformational leadership positively predicted unit performance, while contingent reward leadership was not related to performance. Physical distance between leaders and followers negatively moderated the relationship between transformational leadership and unit performance, and positively moderated the relationship between contingent reward leadership and performance. Implications for future work on leadership at a distance are discussed.

Model:

Findings: Transformational leadership positively predicted business unit performance over a one-year period. Contingent reward leadership was not positively related to business unit performance. Transformational leadership positively predicted business unit performance under close, but not distant, conditions. Unmoderated performance R2=.11. Moderated performance R2=.14.

Implications: (1) Physical distance may be a potential boundary condition for the effects of transformational leadership on unit-level performance, at least applied to this level of management and within the financial services sector. (2) When followers were distant from their contingent reward leader, unit performance was higher than when they were close. This may have been due to a reduction in ineffective “micromanagement” behaviors; alternatively it may be that distance freed these leaders to manage more effectively.

Citation: Howell, J.M., Neufeld, D.J. & Avolio, B.J. (2005). Examining the relationship of leadership and physical distance with business unit performance, Leadership Quarterly 16(2), pp. 273-285. [link]