As there are few empirical studies analysing how styles of leadership influence perceptions of social responsibility (SR), this present research project seeks to help offset that shortcoming. This correspondingly strives to identify whether leadership styles (transformational, transactional and laissez-faire) influence employee perceptions as regards the SR developed by their companies. The research took place at a consultancy through the application of a questionnaire. The results demonstrate how every leadership style returns a positive result in terms of employee SR perceptions. However, transformational leadership was the style that obtained the highest overall average. This is in line with how such leaders may influence their members of staff through development of a collective vision, and inspiring others to look beyond their own respective interests in seeking to generate improvements for the organization and the community.

5.1. Introduction

Leaders perform a fundamental role not only in implementing social responsibility (SR) practices but also in the way employees perceive the organization’s respective SR. These perceptions, in conjunction with building a positive image of the organization, hold relevance as they generate significant influence over the attitudes and behaviours of workers, which in turn impacts on their personal performance and that of the organization. Companies developing social responsibility policies gain higher levels of involvement from their members of staff, possess more participative organizational climates and display greater capacities to attract talent, with employees frequently expressing a preference for working at such companies. Therefore, this also emphasizes the importance of discovering new means of improving SR perceptions and better understanding how employees perceive the social activities and performance standards of their organizations.

Despite growing recognition of the importance of leadership in this field, there remains a lack of research analyzing just how styles of leadership influence perceptions held by employees about the SR ongoing in their firms [DU 13]. In order to meet this shortcoming, this research project correspondingly studies the influence of leadership in this domain with the specific purpose of responding to the following question: In what way do styles of leadership influence the perspectives of employees as regards the SR practices of their company? Furthermore, the objectives include characterizing different styles of leadership (transformational, transactional and laissez-faire), identifying the range of perceptions on SR and studying what influence styles of leadership hold over perceptions of the prevailing SR practices, in order to identify the variables with the greatest explanatory power.

The relevance of this study also derives from returning a better understanding of the ways in which different leadership styles influence how employees perceive the company’s practices in terms of sustainability. Furthermore, companies may be able to develop more assertive and concrete strategies so as to boost levels of involvement of their own staff members in SR development processes.

This chapter is structured into six parts. The first details the purpose of the research and justifies its respective relevance, before advancing with a literature review that sets out the theoretical model and the working hypotheses. The following section sets out the methodology applied and analyzes the results before the final section provides the conclusions, specifying the contribution made by this study, its limitations, alongside recommendations for possible future research.

5.2. Styles of leadership and SR perceptions

5.2.4. Research model and hypotheses

Despite the sheer extent of the academic literature on both leadership and SR, there are only a handful of studies interrelating the styles of leadership with the SR activities of the organization [STR 11, DU 13]. According to [STR 11], this scarcity of research may stem, partially, from two challenges. On the one hand, this reflects how they are two particularly broad and multifaceted fields and, on the other hand, this arises due to the lack of defined, clear and consensual definitions of leadership and SR. The present study strives to understand whether the styles of leadership influence worker perceptions of the SR practices that the company develops. Studies published on the theme report that the style of leadership (transformational, transactional and laissez-faire) does influence SR practices, as well as the perceptions held by members of staff. Within the scope of responding to the research questions, the conceptual framework that structured the research carried out (Figure 5.1) classifies the perception of SR as a dependent variable, with the transformational, transactional and laissezfaire styles of leadership as the independent variables.

This aims to report on the impact of the styles of leadership (transformational, transactional and laissez-faire) on the perceptions employees hold about the SR practices that their companies engage in, for a series of reasons. Firstly, based upon the existing literature [WAL 06, LUU 12, DU 13, NAZ 14, GRO 14], we expect transformational leadership to positively shape perceptions on company SR practices. Secondly, there is the further expectation that transactional leadership reports a negative relationship with the prevailing SR perceptions. Some studies (for example, [NAZ 14, DU 13]) conclude that transactional leadership weakens the SR perceptions of members of staff. This assumption is also supported by the findings of the [DU 13] study, affirming that there is no relationship between transactional leadership and SR with this style incorporating utilitarian values and norms of reciprocity that hinder the generation of strong employee belief in the respective company’s SR. Thirdly, there is also the expectation for the laissez-faire leadership style to return a negative relationship with SR perceptions. The authors [ROM 15, THO 11] analyze the laissez-faire style and SR before concluding in favour of a negative association. Based on the aforementioned statements, we arrive at the following research hypotheses:

H1: transformational leadership positively relates to the SR perceptions prevailing in companies;

H2: transactional leadership negatively relates to the SR perceptions prevailing in companies;

H3: laissez-faire leadership negatively relates to the SR perceptions prevailing in companies.

5.3. Method

This study opted to take a quantitative approach, essentially of the correlational or explanatory type. This derives primarily because the core objective of this research is to analyze the relationship existing between leadership styles (transformational, transactional, laissez-faire) and the perceptions of employees about the SR of their companies. In order to achieve the objectives and research hypotheses, we used a questionnaire as our means of data collection. In turn, this questionnaire was divided up into three sections. The first section applied the SR scale put forward by [BAL 11] with its 16 classification items. This choice derived from this questionnaire having already been applied to a Portuguese sample and having returned satisfactory results, in terms of its internal consistency. The second section spans 45 affirmations designed to measure the prevailing perceptions of the styles of leadership. In this case, we made recourse to the Multifactor Leadership Questionnaire, designed by [AVO 04], which characterizes the transformational, transactional and laissez-faire styles of leadership by evaluating the behaviours of leaders in accordance with the perceptions of those they lead. According to its authors, [AVO 04], this questionnaire returns advantages due to its applicability across every organizational sector. Furthermore, the core model easily portrays the interrelationship between the styles of leadership and the expected results. The final section ensured the characterization of the sample both at the individual level, taking into consideration gender, nationality and academic qualifications and, at the organizational level, detailing the profession and length of service in the company.

The questionnaire was subject to pre-testing in order to verify both the relevance of its questions [FOR 00] and whether the items were easy to understand. The questionnaire was conducted at a Portuguese management software solutions firm. Unable to survey the entire population, we opted to use a stratified sample and correspondingly sent out 250 online questionnaires. Of these, we received and validated 54 completed responses that made up the final sample. Finally, we processed the data obtained through the Qualtric platform, followed by analysis using SPSS (Statistical Package for the Social Sciences).

Based on the data collected between June 11–29, 2018, we can report that of the 54 respondents, 59% are male and 41% female. In relation to their ages, we note that 46% of these employees are aged between 31 and 40, with 37% aged either 30 or younger. As regards their academic level of education, the vast majority have obtained higher education qualifications (81%), with 19% holding secondary school diplomas. In terms of their professional categories, almost a majority of respondents are senior technical staff (48%), followed by 26% classified as other, 9% are assistants, 7% are managers, 6% operational technicians and 4% directors. Finally, in terms of their respective length of service, 44% of respondents report between 5 and 10 years with the organization, 24% have been there for one year or less, with 7% having spent between 10 and 15 years at the company.

5.4. Results

5.5. Discussion of the results

This study set out to understand how styles of leadership influence employee perceptions regarding the SR engaged in by their company. This correspondingly reports the positive and significant correlations existing between the dimensions of transformational, transactional and laissez-faire leadership and the perceptions of SR. Approaching each hypothesis in turn, we may therefore conclude:

Hypothesis 1: transformational leadership positively relates to SR perceptions.

This hypothesis received confirmation through analysis by the Pearson correlation, reporting a positive correlation (R = 0.891) between the transformational style and SR perceptions. These results align with the existing literature [WAL 06, LUU 12, DU 13, NAZ 14, GRO 14]. The characteristics of the transformational leadership style closely intertwine with SR practices [DU 13] as transformational leaders hold broader visions of the organization and tend to exhibit higher levels of ethical development [VER 04]. To this end, they perform important roles in facilitating engagement in SR practices. Hence, the results affirm how the transformational style of leadership helps foster high levels of SR perception.

Hypothesis 2: transactional leadership negatively relates to SR perceptions.

This hypothesis was not subject to confirmation. There was no negative relationship reported between transactional leadership and prevailing SR perceptions. The Pearson correlations confirm a positive correlation (R = 0.699) between these factors. These results thus run counter to the findings of [NAZ 14] which conclude in favor of transactional leadership weakening the perceptions of SR prevailing among employees. This assumption is also fundamental to the study by [DU 13] that affirms how transactional leadership does not interrelate with SR; and, that the transactional leadership process is based on utilitarian values and norms of reciprocity that are unlikely to generate strong beliefs in SR among members of staff.

Hypothesis 3: laissez-faire leadership negatively relates to SR perceptions.

This hypothesis also went unconfirmed as, according to the Pearson correlations, there is a positive link between laissez-faire leadership and the existing SR perceptions (R = 0.680). These results thus run counter to the research by [ROM 15] who studied the impact of the laissez-faire leadership style on SR perceptions and reported a negative relationship between these factors. Similarly, [THO 11] also advanced study findings attributing the laissez-faire style with a negative influence on SR perceptions. According to [ALM 18], this leadership style is the least efficient style of leadership, perceived more as a posture of abandoning leadership with a differing perspective resulting from these research findings.

We deployed multiple regression to obtain a model that might enable predictions of SR perceptions in accordance with the respective style of leadership (transformational, transactional and laissez-faire). Analysis of the regression coefficients reports that every style of leadership, with particular emphasis on the transformational style, facilitates the emergence of SR perceptions. These findings identify transformational leadership as the most effective, productive and satisfactory style for members of staff, to the extent that both parties strive for the good of the organization within the scope of shared visions and values, backed up by reciprocal trust and respect [LO 10].

Hence, we conclude that the transformational, transactional and laissez-faire styles of leadership generate positive impacts in terms of SR perceptions. However, in the specific case of SR, the transformational style emerges as the most productive. Therefore, business leaders should strive to adopt a transformational style of leadership and involve their team members in decision-making processes, for example, given that this confirms how this leadership style best enhances the SR perceptions of their employees.

This research seeks to report and emphasize how the styles of leadership bear an influence on the building up of employee perceptions on the SR practices of their companies. The study carried out demonstrates how leadership represents a determinant factor at this level, generating very significant impacts on SR perceptions. Within this framework, there is a need to deepen their potential, especially through further research into the relationships prevailing between styles of leadership, the perceptions of SR and the corresponding affective implications.

5.6. Conclusion

Throughout recent years there have been increasing pressures on companies to integrate SR in every area of their business within the framework of the Triple Bottom Line, which takes into account not only the financial wellbeing of the company but also positive impacts on the surrounding environment and society as a whole [ELK 04]. Building and maintaining strong and sustainable relationships with the different stakeholders is highly important to companies remaining competitive. However, SR is not only a significant factor for boosting company reputations [GRI 09] among consumers, as suggested and studied by [MOH 05, OPP 06]. This also enables the attraction and retention of better qualified human resources. Studies have reported how employees serve as active agents for SR, in line with how achieving the objectives defined in this area depends, in large part, on their commitment and collaboration [COL 07]. This furthermore conveys how they hold central importance to the implementation of any SR strategy. However, it remains no less true that the success of any strategic SR implementation also depends on the stimuli provided by the leadership and the actual perceptions held by members of staff towards the SR initiatives and practices engaged in by their companies. Within this framework, achieving high standards of performance in terms of SR greatly depends on the actions and involvement of company leadership. The profile of these leaders and their leadership styles may influence not only employee perceptions about these practices, and consequently their greater or lesser involvement in the implementation of the respective SR strategy, but also their attitudes towards their work, including their affective commitments and levels of performance.

In order to offset the scarcity of studies within this area, here we approach the association between the styles of leadership (transformational, transactional and laissez-faire) and the perceptions towards the SR practices ongoing in the company. The findings, as regards hypothesis 1, report a positive interlink between the transformational style of leadership and the prevailing SR perceptions. This is furthermore highlighted by the Pearson correlation result that obtains strong significance (R = 0.720). This result is in line with the existing literature, given that according to the findings of studies by [NAZ 14, GRO 14, GRO 11, DU 11, WAL 06], transformational leadership generates positive connections with SR perceptions.

As regards hypothesis 2, this was not subject to confirmation as the transactional style of leadership turned out to return a positive impact on employee perceptions towards SR, reflected in a strong correlation result of R = 0.699. Despite the conclusions of [NAZ 14, DU 13] pointing to transactional leadership weakening the perceptions of social responsibility among members of staff, research results from [LUU 12] reported the opposite, with transactional leadership correlating with legal and economic SR, thus conveying how transactional leaders tend to support SR practices whenever such are capable of raising product quality and/or security, as well as whenever these practices emphasize the key parties interested in the organization.

As regards hypothesis 3, this also failed to be confirmed. Through analysis of the Pearson correlations, we verified the existence of a positive correlation between laissez-faire leadership and SR perceptions (R = 0.680). This relationship also runs counter to other findings in the literature, such as the conclusions of [ROM 15, THO 11]. However, we would emphasize that leaders who adopt this style do not give up on assuming responsibility for their actions but rather attribute greater scope for manoeuvre to those under their management [GUI 91]. This style of leadership may facilitate employees gaining freedom in decision-making over the implementation of SR practices.

Leadership styles hold important relevance to the management of businesses and companies. There are added gains returned by managers and leaders adopting appropriate styles of leadership reflecting the respective situation and the values and attributes of those they manage, in order to ensure their respective motivation and commitment to the organization’s goals so as to obtain better levels of performance [ZAR 15]. Ethical questions and community involvement deserve greater association with business success over the long term. Taking into account the rising interest in sustainable societies, there is a corresponding need for styles of leadership capable of nurturing the ideas and principles around SR.

This research project faced certain limitations that may have held implications for the results returned. The first limitation stems from the fact that the research focuses upon professionals from a consultancy firm located in Lisbon and, as such, hinders any generalization of results, which are correspondingly restricted to the universe studied. This is in combination with the lack of time available for the collection of data, which influenced the size of the sample, it being smaller than would otherwise be desired. In turn, the fact of having measured perceptions through recourse to a questionnaire with closed questions did not enable the collection of further knowledge about the motivations underlying those perceptions. Furthermore, the application of the Likert scale in the questionnaire may have influenced respondent answers to the extent that there is the tendency to select the central option in the scale. Finally, it is important to highlight that the questionnaires have a previously established scale and thus, without any further feedback from respondents – in a situation compounded by the potential for different interpretations of the respective questions – this further raises subjectivity, as well as the eventual occurrence of the halo effect, with the potential of introducing bias into the results.

Within the scope of achieving better results, both in organizations and in society in general, there is a fundamental need to analyze and deepen our awareness about the role that leaders assume as potential drivers or obstacles in achieving success in the relationship between SR and the affective implications. This correspondingly recommends future studies that attempt to broaden the scale of the sample, as well as extend the study into other sectors of activity, so as to enable the potential for the comparison of results among organizations with different structural characteristics and confirm the scope for establishing relationships between styles of leadership and perceptions of SR. Another suggestion involves undertaking a qualitative study on SR perceptions as a complement to a quantitative study, as this would generate deeper knowledge about the motivating factors that underpin these perceptions. Finally, we would also propose the study of different variables including, for example, gender and the number of years spent relating directly with the management. Despite the existing limitations, we consider that we obtained the objectives set and that this current research project contributes to the better understanding of the theme under study.

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