Transformational Leadership and Marketing Performance

352 Pages·2017·6.31 MB·English

Transformational Leadership and Marketing Performance: The
Mediating role of Organizational Learning and customer
orientation.

by

HAILEMARIAM KEBEDE GELGILE

Submitted in accordance with the requirements
For the degree of

DOCTOR OF BUSINESS LEADERSHIP

at the

UNIVERSITY OF SOUTH AFRICA

SUPERVISOR:
DR. FANTA TESGERA JETU

NOVEMBER, 2017

i
DECLARATION
I, HAILEMARIAM KEBEDE GELGILE, hereby declare and certify with my signature that my
dissertation entitled, “Transformational leadership and marketing performance: the mediating
role of organizational learning and customer orientation” submitted for the Award of Doctor of
Philosophy (PhD) in Business leadership is entirely the result of my own work and has not been
submitted for any other similar titles.
I have faithfully and duly acknowledged all my sources, including, books, journals, handouts, and
the internet.
I understand that I myself could be held responsible for plagiarism, if any declared later on.

HAILEMARIAM KEBEDE GELGELO ____________________________November 2017

ii
ACKNOWLEDGMENTS
First and foremost, praises and thanks to the God, the Almighty! for the strengths and health he
gave me throughout this work.
This dissertation would have not been possible without the encouragements and direction from
my advisor Dr. Fanta Tesgera. For the same reason, my heartfelt thanks and appreciations shall
be extended to my colleagues and friends at Addis Ababa university school of commerce.
I am indebted to my family; my wife Betelhem Dubale, and my two little boys Ijakoo and Bekem,
my mother Tsad kan Mamo and father Kebede Gelgelo, my brother Atanfu , my sisters Mamiye,
Serk, Marta, and Alem, without your support this thesis might not be completed.
I would also thank the amazing people across the four breweries who genuinely supported me in
the ethics clearance and data gathering phases of the study, Mr. Gebresilasie Sifer, deputy
marketing managers of BGI Ethiopia, Mr. Mesfin, HR director of BGI Eth iopia, Mrs. Wintana
Pijado, legal officer of Meta abo brewery, Mr. Antenhe, HR officer at Meta abo brewery, Mr.
Molla Asseffa of Raya brewery, Mr. Tilahun, brand manager of Raya brewery, Mr. Getaneh,
marketing manager of Habesha brewery, Mr. Fitsum, brand manager of Habesha brewery, Mrs.
Yordanos Seyfu of Habesha brewery, and many other whose name is not mentioned here,
without you this project might not be completed.
Finally, my special appreciations shall be extended to the coordinators, examiners, advis ors and
other officers at the university of south Africa, for their tireless support and encouragement
throughout this endeavour.
iii
TABLE OF CONTENTS
DECLARATION .......................................................................................... ii
ACKNOWLEDGMENTS ............................................................................ iii
TABLE OF CONTENTS ............................................................................ iv
LIST OF TABLES ...................................................................................... ix
LIST OF FIGURES ................................................................................... xii
LIST OF ABBREVIATIONS..................................................................... xiv
ABSTRACT ............................................................................................. xvi

CHAPTER ONE .......................................................................................... 1
INTRODUCTION ........................................................................................ 1
1.1. Background of The Study ...................................................................................... 1
1.2. Background to the research problem ........................................................................ 3
1.3. Problem statement--------------------------------------------------------------------------------------------- 27
1.4. Rationale of The Study ......................................................................................... 7
1.5. Research Question .............................................................................................. 8
1.6. Research Aim and Objectives................................................................................. 9
1.7. Research Scope ................................................................................................ 10
1.8. Contributions of the Study ................................................................................... 11
1.9. Limitations of the Study ....................................................................................... 11
1.10. Key Assumptions ............................................................................................... 12
1.11. Operational Definition of Terms............................................................................. 13
1.12. Organization of the Study .................................................................................... 17
1.13. Summary ......................................................................................................... 18

CHAPTER TWO ....................................................................................... 19
THE CONTEXT AND BACKGROUND OF BREWERY INDUSTRY ......... 19
2.1. Introduction ...................................................................................................... 19
2.2. History of African Brewery industry ........................................................................ 19
2.3. The Present and Future of African Beer Industry ...................................................... 22
2.4. Marketing Opportunities ...................................................................................... 26
2.5. History of Ethiopian Brewery Industry ..................................................................... 27
2.6. The Environment of Brewery Industry in Ethiopia ...................................................... 28
2.7. The Leadership Gap in the Ethiopian Brewery Industry .............................................. 30
2.8. Summary ......................................................................................................... 33

CHAPTER THREE ................................................................................... 34
LITERATURE REVIEW ............................................................................ 34
3.1. Introduction ................................................................................................ 34
3.2. Review Approach ..................................................................................... 34
iv
3.3. Theoretical literature review---------------------------------------------------------------57
3.3.1. Dimensions of Organizational Performance .................................................. 35
3.3.2. The Concept and Theory of Marketing Performance .................................... 37
3.3.2.1. The Resource-Based View (RBV) ................................................................................... 40
3.3.2.2. The Dynamic Capability View (DCV) .............................................................................. 42
3.3.2.3. Dynamic Managerial Capabilities View /DMC/ ................................................................ 45
3.3.3. Marketing Performance Measurement/MPM/ ............................................... 47
3.3.3.1. Market-Based and Accounting Based Performance Measures .........................49
3.3.3.2. Financial and non-financial performance measures ..........................................49
3.3.3.3. Multi-Dimensional Performance Measures .......................................................50
3.3.3.4. Summary of MPM Frameworks ........................................................................51
3.3.3.5. Theory Evaluation and Implication ....................................................................52
3.3.4. The Concept and theories of Leadership ...................................................... 52
3.3.4.1. Leadership theories ................................................................................ 53
3.3.4.2. Theory Evaluation and Implication ......................................................... 61
3.3.5. The Concept of Organizational Learning ...................................................... 62
3.3.5.1. Definitions .............................................................................................. 62
3.3.5.2. "Founders" of Organizational Learning. .................................................. 64
3.3.5.3. Debates Shaping Organizational Learning Literature ............................. 67
3.3.6. The Concept of Customer Orientation .......................................................... 70
3.3.6.1. Customer Orientation as A Process ....................................................... 71
3.3.6.2. Challenges with Customer Oriented Marketing Approach ...................... 74
3.4. Empirical literature review -------------------------------------------------------------------97
3.4.1. Direct effect of TL, OL, and CO on MP .................................................................75
3.4.4. Group differences in leaders’ gender, position and brewery sizes ........................85

CHAPTER FOUR ..................................................................................... 91
CONCEPTUAL FRAMEWORK AND HYPOTHESES FORMULATION ... 91
4.1. Introduction ................................................................................................... 91
4.2. Theoretical Background ................................................................................ 91
4.2.1. The Resource-Based View (RBV) ....................................................................................... 94
4.2.2. The Dynamic Capabilities View (DCV)................................................................................ 95
4.2.3. Dynamic Managerial Capabilities View /DMC/ .................................................................... 97
4.3. Theoretical Framework ................................................................................. 98
4.3.1. Marketing Performance ....................................................................................................... 99
4.3.2. Transformational Leadership ............................................................................................ 103
4.3.3. Organizational Learning .................................................................................................... 106
4.3.4. Customer Orientation ........................................................................................................ 110
4.4. Hypothesis Development ............................................................................ 113
4.4.1. Transformational Leadership and Marketing Performance ............................................... 114
4.4.2. Transformational Leadership Style and Organizational Learning ..................................... 115
4.4.3. Transformational Leadership Style and Customer Orientation ......................................... 117
4.4.4. Organizational Learning and Marketing Performance & Customer Orientation ............... 118
4.4.5. Customer Orientation and Marketing Performance .......................................................... 119
4.4.6. Transformational Leadership and Marketing Performance Through Organizational
Learning 120
4.4.7. Transformational Leadership and Marketing Performance Via Customer Orientation ..... 121
4.4.8. The Moderating Effects of Leader’s Experience on The Positive Impacts of
Transformational Leadership on Marketing Performance and Customer Orientation ..................... 122
v
4.4.9. Transformational Leadership Style and marketing performance for Male and Female
leaders 124
4.4.10. Transformational Leadership Style and Marketing Performance for Line and Non -Line
Managers 127
4.4.11. Transformational Leadership Style and Marketing Performance for Big and Small
Breweries 128
4.5. Summary .................................................................................................... 128

CHAPTER FIVE ..................................................................................... 130
METHODOLOGY ................................................................................... 130
5.1. Introduction ................................................................................................. 130
5.2. Paradigm Choice ........................................................................................ 130
5.2.1. Ontology, Epistemology and Axiology Choice .................................................................. 131
5.2.2. Methodology and Approach Choice .................................................................................. 132
5.3. Instrument Design ....................................................................................... 133
5.3.1. Defining the Constructs ..................................................................................................... 134
5.3.2. Producing Sample Measurement Items ............................................................................ 136
5.3.3. Pre-Testing ........................................................................................................................ 139
5.3.4. Pilot Testing ....................................................................................................................... 142
5.4. Population and Sample Design ................................................................... 144
5.4.1. Population of Interest ........................................................................................................ 144
5.4.2. Sample Design .................................................................................................................. 145
5.4.3. Sample Frame ................................................................................................................... 146
5.4.4. Sampling Method .............................................................................................................. 146
5.4.5. Sample Size ...................................................................................................................... 147
5.4.6. Respondents Selection Criteria ......................................................................................... 150
5.4.7. Data Collection Methods ................................................................................................... 151
5.5. Research Ethics .......................................................................................... 152
5.6. Data Analysis .............................................................................................. 153
5.6.1. Data Type .......................................................................................................................... 153
5.6.2. Data Analysis Technique .................................................................................................. 154
5.7. Summary .................................................................................................... 156

CHAPTER SIX ........................................................................................ 157
DATA PREPARATION AND EXAMINATION ........................................ 157
6.1. Introduction ................................................................................................. 157
6.2. Data Cleaning ............................................................................................. 157
6.2.1. Data Entry and Screening ................................................................................................. 158
6.2.2. Missing Data ...................................................................................................................... 159
6.2.3. Handling Outliers ............................................................................................................... 163
6.3. Ensuring Multivariate Assumptions ............................................................. 164
6.3.1. Normality Assumption ....................................................................................................... 164
6.3.2. Multicollinearity Assumption .............................................................................................. 166
6.3.3. Homoscedasticity Assumption .......................................................................................... 168
6.4. Estimating Non-Response Bias .................................................................. 169
6.5. Tests for Common Method Bias.................................................................. 170
6.6. Profile of Respondents ................................................................................ 171
6.7. Testing item reliability ................................................................................. 172
6.8. Summary of The Cleaning and Preparation Procedure .............................. 173
vi
6.9. Summary .................................................................................................... 174

CHAPTER SEVEN ................................................................................. 176
VALIDATING MEASURES AND MODEL .............................................. 176
7.1. Introduction ................................................................................................. 176
7.2. Face Validity ............................................................................................... 176
7.3. Content Validity ........................................................................................... 177
7.4. Measure Purification ................................................................................... 178
7.5. Assessment of scale dimensionality ........................................................... 179
7.6. Assessment of Construct Validity................................................................ 183
7.6.1. Convergent Validity ........................................................................................................... 183
7.6.2. Discriminate Validity .......................................................................................................... 184
7.6.3. Fit Indices and Their Acceptable Thresholds .................................................................... 185
7.6.4. The Measurement Model of MP Construct ....................................................................... 187
7.6.5. The Measurement Model of TL Construct ........................................................................ 194
7.6.6. The Measurement Model of OL Construct ........................................................................ 202
7.6.7. The Measurement Model of CO Construct ....................................................................... 209
7.6.8. Modelling the Full Measurement Model ............................................................................ 212
7.6.9. Final Reliability .................................................................................................................. 218
7.7. Summary .................................................................................................... 219

CHAPTER EIGHT .................................................................................. 220
ANALYSIS, RESULTS AND DISCUSSIONS ......................................... 220
8.1. Introduction ................................................................................................. 220
8.2. Structural Model Fit and Hypothesis Testing .............................................. 220
8.3. Mediation Analysis ...................................................................................... 224
8.3.1. The Indirect Impact of Transformational Leadership on Marketing Performance
Through Organizational Learning. ................................................................................................ 225
8.3.2. The Indirect Impact of Transformational Leadership on Marketing Performance
Through Customer Orientation. .................................................................................................... 227
8.4. Moderation Analysis .................................................................................... 229
8.4.1. The Moderating Role of Experience in Strengthening the Positive Impacts of
Transformational Leadership Style on Marketing Performance ............................................... 230
8.4.2. The Moderating Role of Experience in Strengthening the Positive Impacts of
Transformational Leadership Style on Customer Orientation .................................................. 232
8.5. Comparing the Group Effects for Moderator Variables ............................... 234
8.5.1. Comparing Group Effects for Leaders Gender ............................................................ 235
8.5.2. Comparing the Group Effects for Leaders’ Management Positions .......................... 239
8.5.3. Comparing the Group Effects for Brewery Sizes ......................................................... 243
8.6. Summary of The Research Findings ........................................................... 246
8.7. Discussion of Findings ................................................................................ 248
8.7.1. Transformational Leadership and Marketing Performance ........................................ 250
8.7.2. The Direct Impact of Transformational Leadership on Organizational Learning ..... 255
8.7.3. The Direct Impact of Transformational Leadership on Customer Orientation ......... 257
8.7.4. The Direct Impact of Organizational Learning on Marketing Performance .............. 258
8.7.5. The Direct Impact of Organizational Learning on Customer Orientation ................. 259
8.7.6. The Direct Impact of Customer Orientation on Marketing Performance ................... 261
8.7.7. The Moderating Role of Experience in Strengthening the Positive Impacts of
Transformational Leadership Style on Marketing Performance ............................................... 262
vii
8.7.8. The Moderating Role of Experience in Strengthening the Positive Impacts of
Transformational Leadership Style on Customer Orientation .................................................. 263
8.7.9. The Impact of Gender Differences on The Positive Influence of Transformational
Leadership on Organizational Learning....................................................................................... 265
8.7.10. The Impact of Management Position Differences on The Positive Influence of
Transformational Leadership on Marketing Performance ......................................................... 267
8.7.11. The Impact of Brewery Size Difference on The Positive Influence of
Transformational Leadership on Marketing Performance ......................................................... 268
8.8. Summary .................................................................................................... 270

CHAPTER NINE ..................................................................................... 272
CONTRIBUTIONS, LIMITATIONS AND DIRECTIONS .......................... 272
9.1. Introduction ................................................................................................. 272
9.2. Answering Research Questions and Discovering the New Knowledge ...... 272
9.3. Theoretical Contributions ............................................................................ 275
9.4. Managerial Implications .............................................................................. 277
9.5. Limitations of the Study ............................................................................... 279
9.6. Directions for Future Research ................................................................... 281
9.7. Summary and Concluding Remarks ........................................................... 283

REFERENCE .............................................................................................................. 285
APPENDIXES ............................................................................................................. 308
Appendix-1 – Data Collection Instrument ................................................................ 308
Appendix 2- Research Ethics Clearance Certificate ................................................ 309
Appendix-3 – Support Letters from Breweries and Related Documents .................. 309
Appendix 4- Variance T-Test for Missing Values ..................................................... 309
Appendix 5- Skewness and Kurtosis Values ........................................................... 309

viii
LIST OF TABLES

ix
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