SAMVAD: International Journal of Management

Open Access Open Access  Restricted Access Subscription Access

Authentic Leadership and Its Role in Building Psychological Contracts


Affiliations
1 Research Fellow in Organizational Leadership, National School of Leadership, NSL House, Culture Crest, Spine Rd, Moshi Pradhikaran, Sector No. 6, Moshi, Pune - 412105, Maharashtra, India
 

The concept of psychological contract has been gaining importance in the recent times along with the theory of authentic leadership. It is the prerogative of the leaders to understand the psychological contract between themselves and their employees as it provides them with a competitive advantage in creating a motivational work environment where equity is valued. Four companies, namely, Costco, PwC, Southwest Airlines and Aravind Eye Hospital were selected for case study analysis in this study with respect to impact of authentic leadership on the building of psychological contracts. It was found that the leadership style does have a significant positive impact on building of psychological contracts between the employer and employee in an organization.

Keywords

Aravind Eye Hospital, Authentic Leadership, Costco, Organizational Leadership, Psychological Contract, PwC, Southwest Airlines, TATA Group, Work Environment.
User
Notifications
Font Size

  • Arlie, I. (2001). Flexibility versus fairness? Organizational dynamics, 29(4), 260–273. https://doi.org/10.1016/S0090- 2616(01)00032-8

  • Argyris, C. (1960). Understanding Organizational Behavior. Homewood, IL: Dorsey Press. Arnold, J.

  • Avolio, B. J., & Gardner, W. L. (2005). Authentic leadership development: Getting to the root of positive forms of lead- ership. The leadership quarterly, 16(3), 315–338. https:// doi.org/10.1016/j.leaqua.2005.03.001

  • Avolio, B. J., Gardner, W. L., Walumbwa, F. O., Luthans, F., & May, D. R. (2004). Unlocking the mask: A look at the pro- cess by which authentic leaders impact follower attitudes and behaviors. The leadership quarterly, 15(6), 801–823. https://doi.org/10.1016/j.leaqua.2004.09.003

  • Bellou, V. (2009). Profiling the desirable psychological contract for different groups of employees: Evidence from Greece. Int. J. Hum. Resour. Manag. 20, 810–830. https://doi. org/10.1080/09585190902770711

  • Besen, F., Tecchio, E., & Fialho, F. A. P. (2015). Authentic lead- ership and knowledge management. Gestao and Producao, 24(1).

  • Barringer, M., & Sturman, M. (1999). Contingent workers and the multiple foci of organizational commitment: A social exchange perspective. In Academy of Management, Chicago.

  • Bass, B. M. (1985). Leadership and Organization and perfor- mance beyond expectations.

  • Bellou, V. (2009). Profiling the desirable psychological contract for different groups of employees: Evidence from Greece. The Int. J. Hum. Resour. Manag. 20(4), 810–830. https:// doi.org/10.1080/09585190902770711

  • Besen, F., Tecchio, E., & Fialho, F. A. P. (2017). Authentic leader- ship and knowledge management. Gestão & Produção, 24, 2–14. https://doi.org/10.1590/0104-530x898-13

  • Buttner, E. H., Lowe, K. B., & Billings-Harris, L. (2010). The impact of diversity promise fulfillment on professionals of color outcomes in the USA. J. Bus. Ethics, 91(4), 501–518. https://doi.org/10.1007/s10551-009-0096-y

  • Boekhorst, J. A. (2015). The role of authentic leadership in fostering workplace inclusion: A social information pro- cessing perspective. Human Resource Management, 54(2), 241–264. https://doi.org/10.1002/hrm.21669

  • Caldwell, C., & Peters, R. (2018). New employee onboarding– psychological contracts and ethical perspectives. J. Manag. Dev. https://doi.org/10.1108/JMD-10-2016-0202 Chro-bot - Mason DL (2003), Keeping the promise : Psychological Contract Violations for minority employees, Journal of Management Psychology , Vol18,No 1, pp 22-45 Coleman, J. (1990). Foundations of Social Theory. Harvard University Press: Cambridge, Mass.

  • Conway, N., & Briner, R. B. (2005). Understanding psychologi- cal contracts at work: A critical evaluation of theory and research. Oxford University Press. https://doi.org/10.1093/ acprof:oso/9780199280643.001.0001

  • Costa Jr, P. T., & McCrae, R. R. (2008). The Revised Neo Personality Inventory (neo-pi-r). Sage Publications, Inc. Courtemanche, C., & Carden, A. (2014). Competing with Costco and Sam’s Club: Warehouse club entry and gro- cery prices. J. Manag. Psychol., 80(3), 565–585. https://doi. org/10.4284/0038-4038-2012.135

  • Coyle‐Shapiro, J., & Kessler, I. (2000). Consequences of the psychological contract for the employment relationship: A large scale survey. J. Manag. Stud. 37(7), 903–930. https:// doi.org/10.1111/1467-6486.00210

  • Cunningham, M. R., Barbee, A. P., & Mandal, E. (2009). Hurt feel- ings and the work place. Feeling hurt in close relationships, 417–456. https://doi.org/10.1017/CBO9780511770548.021

  • Courtemanche, C. J., & Carden, A. (2011). Competing with Costco and Sam’s Club: Warehouse Club Entry and Grocery Prices. South. Econ. J., 80(3). https://doi.org/10.3386/ w17220

  • DelCampo, R. G. (2007). Understanding the psychological contract: A direction for the future. Management Research News. https://doi.org/10.1108/01409170710751926

  • Ellingson, J. E., Gruys, M. L., & Sackett, P. R. (1998). Factors related to the satisfaction and performance of tempo- rary employees. J Appl Psychol. 83(6), 913. https://doi. org/10.1037/0021-9010.83.6.913

  • Engle, E. M., & Lord, R. G. (1997). Implicit theories, self- schemas, and leader-member exchange. Acad Manage J . l, 40(4), 988–1010. https://doi.org/10.5465/256956

  • Gardner, W. L., Avolio, B. J., Luthans, F., May, D. R., & Walumbwa, F. (2015). Can You See the Real Me? A Self-based Model ofAuthentic Leader and Follower Development. Leadership Quarterly, 16(3), 343–372. https://doi.org/10.1016/j. leaqua.2005.03.003

  • Goldberg, L. R. (1990). An alternative” description of personal- ity”: the big-five factor structure. J Pers Soc Psychol. 59(6), 1216. https://doi.org/10.1037/0022-3514.59.6.1216

  • Göbel, M., Vogel, R., & Weber, C. (2013). Management research on reciprocity: A review of the literature. Business Research, 6(1), 34–53. https://doi.org/10.1007/BF03342741

  • Goldman, B. M. (2012). Making diamonds out of coal: therole of authenticity in healthy (optimal) self-esteem andpsycho- logical functioning. In Self-Esteem Issues and Answers: A sourcebook of current perspectives. pp. 133–139. New York: Psychology Press.

  • Grubbs-West, L. (2015). Lessons in Loyalty: How Southwest Airlines Does It - An Insider’s View (2nd, Ed.). Cornerstone Leadership Institute.

  • Guest, D. (2004). Flexible employment contracts, the psycho- logical contract and employee outcomes: an analysis and review of the evidence. Int. J. Manag. Rev. 5(1), 1–19. https://doi.org/10.1111/j.1460-8545.2004.00094.x

  • Guest, D. E., & Conway, N. (2002). Communicating the psychological contract: an employer perspective. Hum. Resour. Manag. J., 12(2), 22–38. https://doi. org/10.1111/j.1748-8583.2002.tb00062.x

  • Guest, D., & Conway, N. (2009). Health and well-being: The role of the psychological contract. International hand- book of work and health psychology, 9–24. https://doi. org/10.1002/9780470682357.ch2

  • Gupta, P. D., Bhattacharya, S., Sheorey, P., & Coelho, P. (2018). Relationship between onboarding experience and turnover intention: intervening role of locus of control and self- efficacy. Industrial and Commercial Training. https://doi. org/10.1108/ICT-03-2017-0023

  • Güth, W. (1995). On ultimatum bargaining experiments—A personal review. J Econ Behav Organ ., 27(3), 329–344. https://doi.org/10.1016/0167-2681(94)00071-L

  • Hirshleifer, D. (1988). Cooperation in a finitely repeated pris- oner’s dilemma game with ostracism. Los Angeles.

  • Haas, M. R., Criscuolo, P., & George, G. (2015). Which prob- lems to solve? Online knowledge sharing and attention allocation in organizations. Acad Manage J., 58(3), 680– 711. https://doi.org/10.5465/amj.2013.0263

  • Hesse, A. (January 2018). Digitalization and Leadership-How experienced leaders interpret daily realities in a digital world. In Proceedings of the 51st Hawaii International Conference on System Sciences. https://doi.org/10.24251/ HICSS.2018.234

  • Horney, N. (2016). The gig economy: A disruptor requiring HR agility. People and Strategy, Ilies, R., Morgeson, F. P., & Nahrgang, J. D. (2005). Authentic leadership and eudaemonic well-being: Understanding leader–follower outcomes. The leadership quarterly, 16(3), 373–394. https://doi.org/10.1016/j.leaqua.2005.03.002

  • Jago, A. G. (1982). Leadership: Perspectives in theory and research. Management science, 28(3), 315–336. https://doi. org/10.1287/mnsc.28.3.315

  • J, A. B., & Gardner, W. L. (2015). Authentic leadership development: Getting to the root of positive forms of lead- ership. The Leadership Quarterly, 16, 315–338. https://doi. org/10.1016/j.leaqua.2005.03.001

  • Kernis, M. H. (2003). Toward a conceptualization of optimal self-esteem. Psychological inquiry, 14(1), 1–26. https://doi. org/10.1207/S15327965PLI1401_01

  • Krausz, M., Bizman, A., & Braslavsky, D. (2001). Effects of attachment style on preferences for and satisfaction with different employment contracts: An exploratory study. Journal of Business and Psychology, 16(2), 299–316. https:// doi.org/10.1023/A:1011169419048

  • Kreps, D. M., Milgrom, P., Roberts, J., & Wilson, R. (1982). Rational cooperation in the finitely repeated prisoners’ dilemma. J. Econ. Theory, 27(2), 245–252. https://doi. org/10.1016/0022-0531(82)90029-1

  • Klenke, K. (2016). Authentic Leadership: A Self,Leader, and Spiritual Identity perspective. Internationa Journal of Leadership Studies, 3(1), 68–97.

  • Lemmon, G., Westring, A., Michel, E. J., Wilson, M. S., & Glibkowski, B. C. (2016). A cross-domain exploration of performance benefits and costs of idiosyncratic deals. J. Leadersh. Organ. Stud. 23(4), 440–455. https://doi. org/10.1177/1548051816645748

  • Levinson, H., Price, C. R., Munden, K. J., Mandl, H. J., & Solley, C. M. (2013). Men, management, and mental health. Harvard University Press.

  • Marler, J. H., Woodard Barringer, M., & Milkovich, G. T. (2002). Boundaryless and traditional contingent employ- ees: Worlds apart. Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 23(4), 425. https://doi.org/10.1002/job.148

  • McLean Parks, J., Kidder, D. L., & Gallagher, D. G. (1998). Fitting square pegs into round holes: Mapping the domain of contingent work arrangements onto the psychological con- tract. Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 19(S1), 697–730. https://doi. org/10.1002/(SICI)1099-1379(1998)19:1+<697::AID- JOB974>3.0.CO;2-I

  • Moritz, B. The PwC Diversity Journey: Creating Impact, Achieving Results/B. Moritz, A. Hussherr., 2016.–66 с.– (PwC).

  • Neider, L. L., & Schriesheim, C. A. (2011). The authentic lead- ership inventory (ALI): Development and empirical tests. The leadership quarterly, 22(6), 1146–1164. https://doi. org/10.1016/j.leaqua.2011.09.008

  • Nikolaou, I., Tomprou, M., & Vakola, M. (2007). Individuals’ inducements and the role of personality: implications for psychological contracts. J. Manag. Psychol. https://doi. org/10.1108/02683940710820082

  • Novicevic, M., Harvey, M., Buckley, M. G., Brown, M. R., & Evans, R. (2006). Authentic leadership: A historical per- spective. J. Leadersh. Organ. Stud., 13(1), 64–76. https:// doi.org/10.1177/10717919070130010901

  • Oliver E Willamson. (1993). Journal of Law and Economics, Vol XXXVI.

  • Pandey, S. N. (1989). Human side of Tata steel. Tata McGraw- Hill Publishing Company.

  • Porter, L. W., Pearce, J. L., Tripoli, A. M., & Lewis, K. M. (1998). Differential perceptions of employers’ induce- ments: Implications for psychological contracts. Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 19(S1), 769–782. https://doi. org/10.1002/(SICI)1099-1379(1998)19:1+<769::AID- JOB968>3.0.CO;2-1 PwC. (2016). The PwC diversity journey Creating impact, achieving results.

  • Raja, U., Johns, G., & Ntalianis, F. (2004). The impact of per- sonality on psychological contracts. Acad Manage J . 47(3), 350-367. https://doi.org/10.5465/20159586

  • Rego, A., Júnior, D. R., & e Cunha, M. P. (2015). Authentic lead- ers promoting store performance: The mediating roles of virtuousness and potency. “J. Bus. Ethics 128(3), 617-634. https://doi.org/10.1007/s10551-014-2125-8

  • Richter, A., & Wagner, D. (January 2014). Leadership 2.0: Engaging and supporting leaders in the transition towards a networked organization. In 2014 47th Hawaii International Conference on System Sciences (pp. 574–583). IEEE. https://doi.org/10.1109/HICSS.2014.78

  • Robinson, S. L., & Wolfe Morrison, E. (2000). The development of psychological contract breach and violation: A longi- tudinal study. JJ. Organ. Behav. 21(5), 525–546. https:// doi.org/10.1002/1099-1379(200008)21:5<525::AID- JOB40>3.0.CO;2-T

  • Rousseau, D. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Sage publications. https://doi.org/10.4135/9781452231594

  • Rousseau, D. M. (2004). Psychological contracts in the work- place: Understanding the ties that motivate. Academy of Management Perspectives, 18(1), 120–127. https://doi. org/10.5465/ame.2004.12689213

  • Rousseau, D. M. (2001). Schema, promise and mutual- ity: The building blocks of the psychological contract. J. Occup. Organ. Psychol., 74(4), 511–541. https://doi. org/10.1348/096317901167505

  • Rousseau, D. M., & Tijoriwala, S. (April 1996). Perceived legitimacy and unilateral contract changes: It takes a good reason to change a psychological contract. In Symposium at the SIOP meetings, San Diago.

  • Rousseau, D. M., & Tijoriwala, S. A. (1998). Assessing psy- chological contracts: Issues, alternatives and measures. Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 19(S1), 679–695. https://doi. org/10.1002/(SICI)1099-1379(1998)19:1+<679:AID- JOB971>3.0.CO;2-N

  • Sendjaya, S., Pekerti, A., Härtel, C., Hirst, G., & Butarbutar, I. (2016). Are authentic leaders always moral? The role of Machiavellianism in the relationship between authentic leadership and morality. J. Bus. Ethics, 133(1), 125–139. https://doi.org/10.1007/s10551-014-2351-0

  • Shah, S. (2010). Employee and labour welfare at the Tata Group Companies. Management and Labour Studies, 35(3), 311– 336. https://doi.org/10.1177/0258042X1003500301

  • Shah, S. (2014). Corporate social responsibility: A way of life at the Tata Group. J. Hum. Values, 20(1), 59–74. https://doi. org/10.1177/0971685813515591

  • Sharma, M. K., & Jain, S. (2013). Leadership management: Principles, models and theories. Global Journal of Management and Business Studies, 3(3), 309-318.

  • Sherman, U. P., & Morley, M. J. (2015). On the formation of the psychological contract: A schema theory perspec- tive. Group & Organization Management, 40(2), 160–192. https://doi.org/10.1177/1059601115574944

  • Sinha, J. B. P., & Mohanty, S. K. (2006). Tata Steel: becoming world class. Shri Ram Centre.

  • Smidts, A., Pruyn, A. T. H., & Van Riel, C. B. (2001). The impact of employee communication and perceived external pres- tige on organizational identification. Acad Manage J. 44(5), 1051–1062. https://doi.org/10.5465/3069448

  • Smith, A. (1937). The wealth of nations [1776] (Vol. 11937). Sharma, M., & Jain, S. (2013). Leadership management: Principles, Models and Theories. Global Journal of Management and Business Studies, 3(3).

  • Sherman, U. P., & Morley, M. J. (2015). On the Formation of the Psychological Contract: A Schema Theory Perspective. Group & Organization Management, 40(2), 160–192. https://doi.org/10.1177/1059601115574944

  • Terry, R. (1993). Authentic leadership. San Francisco: Jossey- Bass.

  • Tallman, R. R., & Bruning, N. S. (2008). Relating employees’ psychological contracts to their personality. J. Manag. Psychol. https://doi.org/10.1108/02683940810894756

  • Taylor, M. S., & Tekleab, A. G. (2004). Taking stock of psycho- logical contract research: Assessing progress, addressing troublesome issues, and setting research priorities. The employment relationship: Examining psychological and contextual perspectives, 253–283.

  • Terry, R. W. (1993). Authentic leadership: Courage in action (No. 658.409 T2791a Ej. 1 000012). JOSSEY-BASS.

  • Tremlett, N., & Collins, D. (1999). Temporary Employment in Great Britain. Norwich: Department for Education and Employment.

  • Tripathi, R., & Kumar, A. (2020). Humanistic leadership in the Tata group: the synergy in personal values, organisational strategy and national cultural ethos. Cross Cultural & Strategic Management. https://doi.org/10.1108/CCSM-01- 2020-0025

  • Tufan, P., De Witte, K., & Wendt, H. J. (2019). Diversity-related psychological contract breach and employee work behav- ior: insights from intergroup emotions theory. The Int. J. Hum. Resour. Manag. 30(20), 2925–2949. https://doi.org/1 0.1080/09585192.2017.1350733

  • Walumbwa, F. O., Avolio, B. J., Gardner, W. L., Wernsing, T. S., & Peterson, S. J. (2008). Authentic leadership: Development and validation of a theory-based measure. J. Manag. Stud., 34(1), 89-126. https://doi.org/10.1177/0149206307308913

  • Wellin, M. (2016). Managing the psychological contract: Using the personal deal to increase business performance. CRC Press. https://doi.org/10.4324/9781315593661

  • Yuki, G. A. (2010). Leadership in Organizations edition 7th. Zhao, D., Zuo, M., & Deng, X. N. (2015). Examining the fac- tors influencing cross-project knowledge transfer: An empirical study of IT services firms in China. Int. J. Proj. Manag., 33(2), 325-340. https://doi.org/10.1016/j.ijpro- man.2014.05.003

  • Yarbrough, J. R. (2009). Understanding the importance of the employee/employer psychological contract. Journal of Management and Marketing Research, 21, 9.

  • Yuki, G. (2010). Leadership in organizations (7th ed.). Upper Saddle River, NJ: Prentice Hall.


Abstract Views: 153

PDF Views: 94




  • Authentic Leadership and Its Role in Building Psychological Contracts

Abstract Views: 153  |  PDF Views: 94

Authors

Rakesh Rayiramkandath
Research Fellow in Organizational Leadership, National School of Leadership, NSL House, Culture Crest, Spine Rd, Moshi Pradhikaran, Sector No. 6, Moshi, Pune - 412105, Maharashtra, India

Abstract


The concept of psychological contract has been gaining importance in the recent times along with the theory of authentic leadership. It is the prerogative of the leaders to understand the psychological contract between themselves and their employees as it provides them with a competitive advantage in creating a motivational work environment where equity is valued. Four companies, namely, Costco, PwC, Southwest Airlines and Aravind Eye Hospital were selected for case study analysis in this study with respect to impact of authentic leadership on the building of psychological contracts. It was found that the leadership style does have a significant positive impact on building of psychological contracts between the employer and employee in an organization.

Keywords


Aravind Eye Hospital, Authentic Leadership, Costco, Organizational Leadership, Psychological Contract, PwC, Southwest Airlines, TATA Group, Work Environment.

References





DOI: https://doi.org/10.53739/samvad%2F2021%2Fv23%2F165892