Chapter 12-14 in the Social Psychology 11th Edition-Saul Kassin, Markus, & Fein Text; Morgan & Siebert Articles Linking Developmental Experiences to Leader

PERSONNEL PSYCHOLOGY 2017, 70, 357–397

LINKING DEVELOPMENTAL EXPERIENCES TO LEADER EFFECTIVENESS AND PROMOTABILITY: THE MEDIATING ROLE OF LEADERSHIP SELF-EFFICACY AND MENTOR NETWORK

SCOTT E. SEIBERT University of Iowa

LEISA D. SARGENT University of Melbourne

MARIA L. KRAIMER University of Iowa

KOHYAR KIAZAD Monash University

We developed and tested a model linking developmental experiences to leadership effectiveness and promotability through 2 mediating pro- cesses based on social cognitive and social capital theories. We hypoth- esized that a manager’s exposure to 3 types of developmental expe- riences (formal development programs, developmental job challenges, and developmental supervision) would positively relate to supervisor’s assessment of the manager’s leadership effectiveness in the current job role and promotability within the organization through the manager’s leadership self-efficacy and size and quality of the manager’s mentor network. Results based on a sample of 235 retail managers showed that leadership self-efficacy and mentor network fully mediated the rela- tionship between job challenges and promotability, whereas leadership self-efficacy also fully mediated the relationship between job challenges and leadership effectiveness. Developmental supervision was indirectly related to promotability through mentor network. In addition, a 3-way interaction analysis revealed that participation in formal development ac- tivities had a positive indirect relationship with leadership effectiveness and promotability mediated by leadership self-efficacy when a manager experienced either lower levels of job challenge and developmental su- pervision, or higher levels of both. Our findings contribute to leadership

This research was supported by an Australian Research Council Linkage Grant LP0882114 in partnership with Deloitte Touche Tohmatsu Australia. We thank Lisa Barry from Deloitte for her sustained support for this research along with the participating orga- nizations. The paper was partly completed while Maria Kraimer was a Professorial Fellow in the Department of Management and Marketing, University of Melbourne.

Correspondence and requests should be addressed to Scott E. Seibert, Department of Management & Organizations, 108 John Pappajohn Business Building, University of Iowa, Iowa City, IA 52242; [email protected]

C© 2015 Wiley Periodicals, Inc. doi: 10.1111/peps.12145

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knowledge by examining how both formal and informal developmental experiences relate to leadership effectiveness and promotability through social processes.

Introduction

A recent survey of over 500 executives found that two-thirds identi- fied leadership development as their number one “human capital” priority (The Conference Board and McKinsey, 2012). This concern is reflected in reports indicating that over $13 billion is spent annually on leadership training in the U.S. alone (Loew & O’Leonard, 2012). Although schol- arly discussions and reviews of leadership development practice continue to proliferate (Avolio, Reicherd, Hannah, Walumbwa, & Chan, 2009; Day, 2000, 2012; Day, Fleenor, Atwater, Sturm, & McKee, 2014; Galli & Müller-Stewens, 2012), most of this work reviews formal leadership train- ing interventions or lacks empirical testing. To date, organizations lack an evidence-based understanding of the way formal development programs and informal employee work experiences work together to develop more effective leaders. This is an important oversight because informal expe- riences at work are likely to be a major influence on development due to being pervasive and ongoing. The field also lacks a clear understanding of how or why developmental practices and experiences develop more effec- tive and promotable leaders, limiting our ability to target developmental experiences to the individual’s developmental needs. We begin to address this issue by testing a mediated model, grounded in social cognitive and social capital theories, linking employees’ formal and informal develop- mental experiences to their leadership effectiveness and promotability.

Three broad sources of developmental experience have been identified in the leadership literature (Day, 2012; McCauley, Moxley, & Van Vel- sor, 1998; Yukl, 2010). Formal development programs include off-the-job training and educational activities designed to promote leader develop- ment and effectiveness. Developmental job challenges reflect the extent to which leaders face new or unique issues, problems, or responsibilities during the performance of their regular job duties (McCauley, Ruderman, Ohlott, & Morrow, 1994; McCauley, Van Velsor, & Ruderman, 2010). Fi- nally, developmental supervision is informal coaching and role modeling provided by one’s direct supervisor during the performance of one’s job duties (Arnold, Arad, Rhoades, & Drasgow, 2000). Because these devel- opmental experiences reflect three primary contextual influences found in organizations: formal organizational programs, the job itself, and supervi- sors (Katz & Kahn, 1978; Kozlowski & Klein, 2000), we include all three in our model.

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The purpose of this study is to test a mediated model that links man- agers’ exposure to these three types of developmental experiences, formal development programs, developmental job challenges, and developmen- tal supervision, to their leadership effectiveness and promotability. We propose that leadership self-efficacy and the quality and size of man- agers’ mentor networks mediate the relationship between the develop- mental experiences and leadership outcomes. We also examine whether job challenges and developmental supervision moderate the effects of participation in formal development programs on leadership self-efficacy, expecting formal development programs to have their strongest effect when the other two experiences are low. A test of our theoretical model contributes to the leadership development literature by addressing three limitations in the existing literature.

First, to date, the three sources of leadership development have not been examined together in a single model (Avolio, 2007; Day, 2000), which means we do not know the unique effect of each developmen- tal practice on leadership outcomes when experienced together, as they are likely to be in field settings (Avolio, 2007). Furthermore, it is the- oretically reasonable to expect these three sources of development to interact to supplement or inhibit each other when experienced simultane- ously. For example, formal development programs may be less impactful when the individual has already faced many developmental challenges and received developmental supervision. Thus, we currently have a lim- ited understanding of how to best configure a collection of leadership development experiences to have the strongest impact. By incorporating the three developmental experiences in a single model, we can examine the unique effect of each source after accounting for the effects of the other two in addition to theorizing and testing for the moderating effects among the three sources of development. In short, our study makes an important contribution to the literature by allowing us to examine the way these three sources of development work together to promote effective leadership.

A second limitation of the leadership development literature that we address is the lack of theoretical knowledge regarding the underlying mechanisms that explains how and why leadership development activi- ties relate to leadership effectiveness (Day, 2012; Day & Zaccaro, 2004; Van Velsor, Moxley, & Bunker, 2004). Indeed, Day (2000) describes re- search on leadership development as a collection of best practices that, as a set, lack theoretical coherence. Day (2012) further suggests that the field has failed to answer the basic question, what develops in leader- ship development? Failure to understand the mediating mechanisms that link participation in developmental activity with effectiveness in a lead- ership role is thus an important theoretical shortcoming of the current

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literature. Based on social cognitive theory (Bandura, 2001) and social capital theory (Coleman, 1990; Burt, 1992), we propose leadership self- efficacy and the size and quality of the individual’s network of mentors as the explanatory mechanisms linking developmental experiences to the leadership outcomes. These two mechanisms represent two broad sets of individual and interpersonal resources that previous theorists argue under- lie the development of leadership effectiveness (e.g., Avolio, 2007; Day, 2012; Mumford, Campion, & Morgeson, 2007). Understanding the mech- anisms that link developmental practices to leadership effectiveness and promotability will provide a more integrated theoretical understanding of the leadership development process and allow organizations to design and generate more potent leadership development interventions.

Finally, a third limitation of the leadership development literature is that the two informal sources of development—developmental job chal- lenge and developmental supervision—have not been empirically linked to the leadership effectiveness of individuals in a leadership role, as we do here. Developmental job challenges have been shown to positively re- late to leadership role attainment (e.g., Arvey, Zhang, Avolio, & Krueger, 2007) and supervisor ratings of subordinates’ skills and competencies, such as cognitive skills, interpersonal skills, and strategic business knowl- edge (e.g., DeRue & Wellman, 2009; Dragoni, Tesluk, Russell, & Oh, 2009) but not to the manager’s effectiveness in a leadership role. Like- wise, developmental supervision and empowering leadership (a broader construct that includes developmental supervision as one dimension) has been positively related to time spent leading others (Dragoni, Park, Soltis, & Forte-Trammell, 2014) and ratings of the empowering leader by the subordinate (Amundsen & Martinsen, 2014; Hassan, Mahsud, Yukl, & Prussia, 2013) but not to the leadership effectiveness of followers who themselves hold leadership roles. This is an important gap because ef- fectiveness in a leadership role is the ultimate criteria against which to evaluate leadership development activities (Day et al., 2014). In sum, by testing a mediated model linking the three sources of developmental experiences to leadership effectiveness and promotability through social cognitive and social capital mediators, we answer the call for more in- tegrated approaches to leadership development (Avolio, 2007; Avolio & Gardner, 2005; Day et al., 2014).

Theoretical Model

Our theoretical model links three sources of developmental expe- riences to leadership capacity, which we define in terms of supervi- sor ratings of the subordinate manager’s effectiveness as a leader and promotability to higher levels of responsibility, reflecting both current and

SCOTT E. SEIBERT ET AL. 361

Promotability Ratings

Leadership Effectiveness

Ratings .23**

.23**

Formal Development

Programs

Developmental Supervision

Developmental Job Challenges

Leadership Self-efficacy

Mentor Network

.10

.03

.22**

.20*

.28**

.16*

.11

.69**

Motivation to Lead (control variable)

.39**

High Potential Participant

(control variable)

Age (control variable)

.14* -.23**

Figure 1: Results for Hypothesized Model.a

Note. aCompletely standardized path estimates are shown from the model including “supervisor” as a Level 2 variable. For the sake of clarity, only the significant paths for the control variables are shown; N = 235. *p < .05. **p < .01.

future leadership potential (see Figure 1). Our model seeks to encompass the two major capabilities that previous models of leader development have identified as the target of development efforts: individual leadership skills and capabilities and interpersonal resources (Day et al., 2014; Galli & Müller-Stewens, 2012; Marshall-Mies et al., 2000; Mumford et al., 2007). We ground our model in two theories, social cognitive theory (Bandura, 2001) and social capital theory (Burt, 1992; Coleman, 1990; Lin, Ensel & Vaughn, 1981), which focus on these capabilities and pro- vide the theoretical explanation for the relationship of the developmental experiences to the leadership outcomes. These theories are captured in two mediating constructs: leadership self-efficacy and size and quality of the individual’s mentor network. According to social cognitive theory, it is self-efficacy that allows one to apply what one has learned to new situations and challenges. Likewise, according to social capital theory, it is one’s social network of relationships that allows one to take productive action within a social context. Together, these two constructs explain how and why developmental experiences are linked to leadership effectiveness

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and promotability. We next introduce the key constructs of our model in detail before proposing the specific hypotheses to be tested.

Developmental Experiences

Formal development programs. Formal training and development pro- grams are perhaps the most widely used leadership developmental practice in organizations (Loew & O’Leonard, 2012), yet the evidence supporting their effectiveness as a source of leadership development is modest. Burke and Day (1986) and Collins and Holton (2004) meta-analyzed previous research on leadership and managerial training and reported moderate ef- fects for leadership development (“human relations”) interventions on a range of criteria but located very few studies that included performance or leadership effectiveness as an outcome. Instead, the studies they reviewed focused primarily on learning, expertise, or knowledge acquisition related to the content of the program itself. Avolio et al. (2009) meta-analyzed over 200 experimental or quasi-experimental leadership interventions and found that training programs (a subset of the studies) have a positive, but modest, effect on followers’ affective, behavioral, and cognitive out- comes. The authors of all three articles note the need for further research to determine both mediating constructs that explain what is developed as a result of formal leadership development programs and moderating constructs that explain when formal training may be more or less strongly related to leadership outcomes. We therefore include participation in for- mal development programs as an important but as yet not fully understood developmental experience, which we expect to be related to leadership capacity through its relationship with leadership self-efficacy. We further expect the strength of the association between formal development pro- grams and leadership self-efficacy to be moderated by the extent to which the individual engages in other developmental activities.

Developmental Job Challenges. We also include on-the-job experience as an informal developmental experience we expect to be linked to leader- ship capacity. Experience is considered one of the most potent sources of learning related to leadership (DeRue & Wellman, 2009; Dragoni et al., 2009). However, experience is not equivalent to simple time on a job; rather, it is variety in the qualitative types of challenges faced on the job that provides opportunities for new learning (Tesluk & Jacobs, 1998). Leadership researchers (e.g., DeRue & Wellman, 2009; McCall, Lom- bardo, & Morrison, 1988; McCauley et al., 1994) have identified five dimensions of developmental challenge: unfamiliar responsibilities, high levels of responsibility, creating change, managing boundaries, dealing with employee problems, and managing diversity. Empirical studies have shown the experience of job challenge relates to a number of important out- comes among middle- to senior-level managers, including self-reported

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learning (McCauley et al., 1994; Ohlott, 2004), supervisors’ perceptions of leadership skill development (i.e., cognitive, business, interpersonal, and strategic skills; DeRue & Wellman, 2009), supervisors’ ratings of broad managerial competencies (Dragoni et al., 2009), and subordinates’ ratings of leaders’ transformational leadership behaviors (Courtright, Colbert, & Choi, 2014). Among junior managers, exposure to job challenges has been related to managers’ promotability (De Pater, Van Vianen, Bechtoldt, & Klehe, 2009; Dong, Seo & Bartol, 2014). However, the experience of developmental job challenge has not been empirically linked to effective- ness in the leadership role nor have the mechanisms explaining this link been empirically examined. As our model shows, we include developmen- tal job challenge as an important developmental experience, linking it to leadership capacity through its relationships with leadership self-efficacy and the manager’s mentor network.

Developmental supervision. Another source of informal development is developmental supervision. Many scholars have argued that one’s im- mediate supervisor is one of the most important sources of development available within an organization (Dragoni et al., 2014; Kraimer, Seibert, Wayne, Liden, & Bravo, 2011; McCauley et al., 2010). However, super- visors are likely to vary considerably in the extent to which they provide developmental support and may provide different levels of support to dif- ferent followers (Frankovelgia & Riddle, 2010; Scandura & Williams, 2004). Two leader behaviors that have been identified with developmental supervision are leading by example (i.e., role modeling) and coaching (Arnold et al., 2000; Bass & Avolio, 1995; Yukl, 2010). Leading by ex- ample involves supervisor behavior that demonstrates that the supervisor sets high personal standards and is committed to the work of the team or work unit (Arnold et al., 2000). Coaching refers to behaviors designed to improve the skills and self-reliance of followers, such as identifying areas in need of improvement and providing suggestions on strategies the follower can use to improve his or her performance (Arnold et al., 2000). Although these leadership behaviors have been associated with the effec- tiveness of the leader using them, they have not been empirically linked with the leadership effectiveness or potential of the junior manager that is the target of development (Amundsen & Martinsen, 2014; Hassan et al., 2013). We included developmental leadership in our model because we expect it to be related to the junior manager’s leadership capacity through both mediators.

Mediating Mechanisms

Leadership self-efficacy. Social cognitive theory is a learning theory based on the idea that individuals learn from the observation of others in a social context (Bandura, 1986, 1997). A central component of the

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theory is self-efficacy, which is one’s belief in one’s capability to execute the courses of action necessary to perform successfully in a particular context or situation. It is, according to social cognitive theory, the de- velopment of higher self-efficacy that allows one to learn the behavioral strategies necessary to face new challenges and achieve difficult goals. Leadership self-efficacy refers to leaders’ beliefs about their “perceived capabilities to organize the positive psychological capabilities, motiva- tion, means, collective resources, and courses of action required to at- tain effective, sustainable performance across their various leadership roles, demands, and contexts” (Hannah, Avolio, Luthans, & Harms, 2008, p. 2). Researchers have identified a number of specific activities involved in leadership, which include planning, setting overall direction, delegat- ing, coordinating tasks, communicating, and motivating others (Chemers, Watson, & May, 2000; Ng, Ang, & Chan, 2008). Leadership self-efficacy captures the individual’s beliefs about his or her own capability to perform these activities effectively and is likely to provide the drive and persis- tence to get better at these activities over time. We propose that leadership self-efficacy is one important mediator in our model because it captures the manager’s confidence in his/her leadership abilities and is likely to be shaped by developmental experiences (e.g., Day et al., 2014; Mumford et al., 2007).

Mentor network. Scholars have argued that leadership development must involve the acquisition of not only individual skills but also social resources because both are necessary to take effective action in a social context (Avolio, 2007; Day, 2012; Mumford et al., 2007). Social capi- tal theory is concerned with the way the pattern of social relationships provides access to social resources (Burt, 1992; Coleman, 1990; Lin, et al., 1981). According to this perspective, one’s network of social re- lationships provides timely access to information, resources, and support (Burt, 1992; Lin, 1982; Seibert, Kraimer & Liden, 2001). A growing body of research examines the ways one’s social network facilitates effective leadership. For example, empirical research has shown that one’s social network is related to perceived charisma and reputation as an effective leader (Balkundi, Kilduff & Harrison, 2011; Kilduff & Krackhardt, 1994; Mehra, Dixon, Brass & Robertson, 2006), perceived power and influence (Brass & Burkhardt, 1992, 1993), and the performance of the leader’s team (Balkundi et al., 2011).

One way to assess one’s social capital is through the examination of that individual’s ego network, which is the network of relationships or ties around a single individual (e.g., Lin, 1982; Seibert et al., 2001). In this study, we focus on the size and quality of one’s mentor network within the organization. The quality of the mentor network is defined as the amount of career and psychosocial support received from the set of people who act as

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one’s mentors (Kram, 1983; Noe, 1988). The mentor network is expected to be an important mediator in our model because it provides access to the types of social resources likely to facilitate leadership effectiveness and is likely to be shaped by developmental experiences.

Hypotheses

Mediating Role of Leadership Self-Efficacy

We expect leadership self-efficacy to mediate the relationship of for- mal development programs to leadership capacity. Social cognitive theory suggests that self-efficacy is the mechanism through which learning is translated into effective behavior in new and challenging situations (Ban- dura, 2001). According to the theory, self-efficacy plays a major role in how new and challenging tasks are approached and goals accomplished. Leadership self-efficacy will determine the extent to which new leader- ship behaviors acquired from formal development programs are initiated, how much effort will be expended to apply these newly acquired behav- iors, and how long such efforts will be sustained in the face of leadership challenges and setbacks (Hannah et al., 2008). We expect these efforts to apply one’s learning to be related to performance in the leadership role. Below we explicate the specific steps in this mediation process.

First, we expect participation in formal development programs to build one’s leadership self-efficacy. According to social cognitive the- ory, four processes influence self-efficacy perceptions: enactive mastery, role modeling, social persuasion, and one’s ability to manage emotional states during task performance (Bandura, 1986, 2001). Formal develop- ment programs may be a positive source for all four of these efficacy- enhancing processes. For example, many formal development programs include case studies, discussions, and interactions with teachers/trainers, and/or coaches, which provide opportunities for participants to engage in vicarious learning about leadership from the leadership role models they read about (Conger, 2010). Some formal training programs and ed- ucational courses may provide opportunities for participants to practice leadership skills through in-class role plays and group discussions. The abstract concepts and principles taught in development programs and pos- itive feedback from teachers or trainers should also provide participants in formal programs with greater confidence in their own abilities and de- crease their anxiety about their capabilities, reflecting the social persuasion and physiological processes of self-efficacy enhancement (Conger, 2010).

Second, we expect leadership self-efficacy to be related to leader- ship effectiveness and promotability. Managers with higher leadership self-efficacy will accurately perceive themselves to have the skills and

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capabilities necessary to be effective leaders and will exert more effort in a more sustained manner to perform effectively in leadership roles based on this belief (Anderson, Krajewski, Goffin, & Jackson, 2008). So- cial cognitive theory suggests that self-efficacy predicts not only effort, but the willingness to approach new and more challenging situations re- lated to the domain tapped by the self-efficacy construct (Bandura, 2001). Thus, managers higher on leadership self-efficacy are also likely to seek promotion to higher levels of leadership responsibility and to demon- strate confidence, persistence, and an ability to learn and grow as leaders. Indeed, empirical evidence demonstrates that leadership self-efficacy is related to a range of positive leader outcomes, including leader and man- agerial effectiveness (e.g., Anderson et al., 2008; Lester, Hannah, Harms, Vogelgesang, & Avolio, 2011), attempts to lead or assume leadership roles (McCormick, Tanguma, & Lopex-Forment, 2002; Paglis & Green, 2002), motivation to lead, and ratings of leadership potential (Chan & Dras- gow, 2001; Chemers et al., 2000). These two links taken together explain how leadership self-efficacy is the mechanism through which participa- tion in formal development programs influences leadership effectiveness and promotability.

Hypothesis 1: Leadership self-efficacy mediates the relationships be- tween participation in formal development programs and supervisor ratings of (a) leadership effectiveness and (b) promotability.

We also expect leadership self-efficacy to mediate the relationship of developmental job challenges to leadership capacity. According to social cognitive theory, self-efficacy is the mechanism through which the learning associated with previous experience is translated into effective behaviors in new and more challenging situations (Bandura, 2001). Below we explain the specific links in this mediated relationship.

Experience, or enactive attainment, is the most important factor driving self-efficacy (Bandura, 2001). Challenging on-the-job experiences offer a potent opportunity for enactive mastery. Managers who face critical developmental challenges related to leadership have both the opportu- nity to experiment with different behavioral strategies and to observe the impact of their behavior on important outcomes in the actual work set- ting. Because they are in their workplaces and are likely to experience real-world consequences from their performance, they should also have greater motivation to engage in learning and growth in response to the novel challenges of their jobs (Kanfer & Ackerman, 1989). Facing devel- opmental challenges in one’s job will also lead to reductions in anxiety related to the future enactment of effective leadership behaviors, another source of leadership self-efficacy beliefs. Recent research has also linked

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developmental experiences to promotability through positive emotional states, providing further support for the link between arousal, one of the antecedents of efficacy, and advancement potential (Dong et al., 2014). Enhanced skill and confidence should be reflected in the managers’ ratings of their own leadership self-efficacy (Bandura, 1986), which, as discussed above, should in turn be related to leadership capacity.

Hypothesis 2: Leadership self-efficacy mediates the relationships be- tween developmental job challenge and supervisor ratings of (a) leadership effectiveness and (b) promotability.

Turning to our third source of development, we expect leadership self-efficacy to mediate the relationship of developmental supervision to leadership capacity. Developmental supervisors are likely to be role models for the junior employee. According to social cognitive theory (Bandura, 2001), it is through enhanced self-efficacy that the individ- ual has the confidence to implement in their own context the successful behaviors displayed by a high-status role model.

In particular, according to Bandura (2001), observational learning is the second most powerful source of self-efficacy beliefs. A supervi- sor who leads by example provides the junior manager with a visible, high status model from whom to learn effective leadership behaviors. Further, coaching is a form of social persuasion that provides feed- back, advice, and verbal support the junior manager can use to enact more effective leadership. Both observational learning and social persua- sion are important sources of information shaping self-efficacy beliefs (Bandura, 1986; Conger & Kanungo, 1988). Indeed, previous research shows that developmental supervision relates positively to employees’ job self-efficacy beliefs (Ahearne, Mathieu, & Rapp, 2005), job knowl- edge (Dragoni et al., 2014), and psychological empowerment, a mul- tidimensional construct that includes competency beliefs (e.g., Seibert, Wang, & Courtright, 2011; Zhang & Bartol, 2010). Thus, we expect de- velopmental supervision to build greater leadership self-efficacy through which it is in turn related to leadership capacity. These two links to- gether explain how leadership self-efficacy is the mechanism through which developmental supervision relates to leadership effectiveness and promotability.

Hypothesis 3: Leadership self-efficacy mediates the relationships be- tween developmental supervision and supervisor ratings of (a) leadership effectiveness and (b) promotability.

We also expect an interaction effect among the three developmental experiences, such that participation in formal development programs will be more strongly related to leadership effectiveness and promotability

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through leadership self-efficacy when both of the informal developmental experiences, developmental job challenges and developmental supervi- sion, are low. This interaction is due to the mediating role of leadership self-efficacy. As we have argued previously, a formal development pro- gram can provide all four sources of efficacy enhancing information. However, informal, on-the-job experiences are likely to provide more salient self-efficacy cues because they provide opportunities to learn and practice skills in one’s actual perfor

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