The mediating roles of virtuousness and potency | Researcher: Miguel Pina e Cunha
Authentic Leadership – effective and good
Several scholars argue that the significance of leadership for organizational life depends on how and if leadership impacts organizational performance. Other researchers also contend that leadership must be not only effective but also “good” and able to raise the quality of the “moral fabric” of organizational life.
Authentic leadership (AL) has been considered as both effective and good. AL is a pattern of leader behavior involving four dimensions:
(1) self-awareness (how the leader understands not only his/her strengths, weaknesses, and motives, but also how others view his/her leadership, and how (s)he impacts others);
(2) balanced processing (objectively analyzing relevant data before coming to a decision and soliciting views that challenge deeply-held positions);
(3) internalized moral perspective (taking decisions and acting according to high internal moral standards and values);
(4) relational transparency (expressing true thoughts, feelings, and actions, openly sharing information, and cultivating an environment of openness with others).
Studying AL and group performance
Empirical research about the outcomes of AL and the process by which such effects are produced is scarce. Studies predicting group level outcomes and in particular, objective group performance, are even scarcer. This is where the study performed by Nova SBE’s Professor Miguel Pina e Cunha and colleagues Arménio Rego and Dálcio Reis Júnior is positioned. They tested how AL predicts objective group performance through the mediating role of group virtuousness (i.e., a group climate characterized by high levels of optimism, forgiveness, trust, compassion, and integrity) and group potency (the collectively-shared belief of a group that it can be effective). Sixty eight stores of a Brazilian retail chain were used for testing this model. The main findings are the following:
(a) AL predicts store potency through the mediating role of store virtuousness;
(b) store virtuousness predicts sales achievement through the mediating role of store potency;
(c) AL predicts sales achievement via the mediating role of both store virtuousness and store potency.
Acting authentically pays off
By showing how AL and group virtuousness promote group potency and, in this way, performance, the researchers have taken an additional critical step toward helping leaders to boost group potency and effectiveness.
This is an important contribution to enrich a field in which empirical studies at the collective level are scarce. Investigation of virtuousness in organizations represents an important opportunity in the fields related to the “highest human potential, ennobling qualities, and transcendent purposes” as other authors have recommended. However, concepts like authenticity and virtuousness have been underconsidered and undervalued in both academia and business. Although scholars themselves have started to introduce such topics in their agendas, running the risk of being accused of naïveté, more empirical research is necessary for legitimizing them, in both the scholarly and practitioner communities.
Without empirically demonstrated “pragmatic outcomes”, AL and virtuousness are less likely to capture attention from either community. This study suggests that by acting authentically and facilitating group virtuousness, leaders are more able to promote “pragmatic outcomes”, and group performance is one such outcome. This is an important empirical contribution to enrich the Positive Organizational Scholarship literature.
This article is based on Rego, A., Reis Júnior, D. & Cunha, M. P. (2015) Authentic Leaders Promoting Store Performance: The Mediating Roles of Virtuousness and Potency. Journal of Business Ethics, 128 (3), 617-634.