Companies' Ownership Structure and Humane Leadership
Abstract
A socially responsible company is expected to treat its employees in a humane way. We tested the hypotheses that a) the managers of familial businesses have a stronger humane orientation than the managers of non-familial businesses and b) a humane orientation has no negative effect on profitability. We conducted a questionnaire survey among managers in Hungarian manufacturing industry. A total of 197 managerial responses were received. We measured the humane orientation of the managers using the Leadership Competence Questionnaire module consisting of 36 items, which we grouped into the following factors beforehand: Self-efficacy, Performance motivation, Relationship orientation, Power motivation, Innovation, Openness. The group with the highest value for the humaneness factor was the group of highest productivity familial businesses. The ownership structure was found to have a greater influence on humane management than the domestic/foreign nature of the companies. At the same time, humane leadership was not typical for small businesses. We interpreted our results within the framework of situational leadership theory. A specific feature of this theoretical approach is that there is no single leadership style that can be said to be excellent, and that different leadership styles can be good if they are appropriate to the situation. We characterised leaders' relationship orientation as an indicator of humaneness, which is an effective leadership competence when used in appropriate situations.