Leadership Style, National Culture and Employee Satisfaction : Empirical Evidence from European R&D Companies

Abstract: The purpose: Both academics and practitioners have demonstrated a keen interest in the topics of leadership style and employee performance within research and development (R&D) organisations. Much of the interest in these topics centres on claims that leadership style and local culture are linked to R&D performance. However, while the links between leadership and performance, leadership and culture, and work performance and employee satisfaction have been examined independently, few studies have investigated the association between all of these concepts. This study examines the relationship between leadership study and employee satisfaction in European R&D settings and provides empirical evidence that the leadership style is influenced by the national culture that is present. The paper presents a number of implications for theory and practice. Methodology: A quantitative study was carried out across a number of European R&D organisations, with the primary source of data obtained through the use of established surveys distributed to researchers and R&D leaders. Findings: Transformational leadership was found to be positively correlated with employee satisfaction in European R&D organisations and the scales of individualised consideration and inspirational motivation to exhibit the highest correlations with the researchers’ satisfaction among all of the leadership dimensions. Transactional leadership was found that does not support employee satisfaction, although the dimension of active management by exception contributes to researchers’ satisfaction. Leadership style and its individual dimensions were found to be dependent on the geographic location around Europe as a result of the effect of national culture. Whilst in Northern and Central European R&Ds transformational and transactional leaders have equal share, in the Southern European R&Ds the dominant leadership style was the transaction one, due to the higher power distance and the less flat structure in the society. In Southern European R&Ds the prevalent transformational dimension was idealised influence, while individualised consideration was the dominant one in Northern and Central European R&Ds. Research Implication: This study contributes to the body of knowledge on cross-national effects of leadership styles on employee satisfaction in European R&D organisations since the existing studies focus primarily on leadership style and performance. Practicality of the work: This work provides useful information about the effective leadership style, which brings satisfaction to researchers in European R&D organisations, and the prevalent leadership style in a given country as a result of the influence of national culture. Thus, it provides the knowledge required for a R&D organisation to set up appropriate training programs which will produce leaders who will be able get the best out of their researchers by ensuring high levels of employee satisfaction.