Leadership styles and sustainable organizational energy in family business: modeling non-compensatory and nonlinear relationships

Abstract

PurposeThis study aims to understand the impact of leadership styles on the sustainability of organizational energy, using the mediator role of organizational ambidexterity in family firms in Malaysia. To this end, dual-stage Structural Equation Modeling (SEM) and Artificial Neural Networks (ANN) were adopted to determine the leadership style of family firms in Malaysia.Design/methodology/approachAn exploratory design (i.e. questionnaire) was used to collect data from 528 workers in the family firms in Malaysia.FindingsAccording to the results, leadership styles and long-term organizational energy have a positive and significant relationship. Furthermore, organizational ambidexterity mediates the relationship between leadership styles and organizational energy sustainability. On the other hand, based on nonlinear and compensatory relationships, the ANN method predicted a bureaucratic leadership style typical in Malaysian family businesses. The results of this study indicate transformational, transactional and bureaucratic leadership styles affect sustainable organizational energy. Besides, organizational ambidexterity fully mediates the relationship between leadership styles and sustainable organizational energy. On the other hand, the results of non-compensatory relationships revealed organizational ambidexterity is the most determinant of sustainable organizational energy, followed by bureaucratic leadership. As a result, leadership styles encourage human resources to perform tasks with energy and vitality. In family businesses, bureaucratic leadership increases job immersion and positive motivations toward work challenges.Research limitations/implicationsFrom a practitioner's perspective, leaders and practitioners must encourage creativity and idea generation to give members sufficient strength to work and focus on goals that support building sustainable organizational energy. A family business is a type of capitalism that significantly impacts employees. The family-owned businesses surveyed by first-generation families lack subsidiaries and are ingrained in a paternalistic culture that offers employees greater security at a lower wage. Although there are few details, the study sample size is small and has limitations. This study suggests that understanding the leadership styles on sustainable organizational energy and using the mediator role of organizational ambidexterity in the family business has immense value. Characteristics such as transformational, transactional and bureaucratic leadership styles have a significant role in sustainable organizational energy. Also, organizational ambidexterity is the mediator for the relationship between leadership styles and sustainable organizational energy.Originality/valueThis study sheds light on the effect of leadership styles on sustainable organizational energy through organizational ambidexterity in family firms. In this context, the novelty of this study includes two perceptions. The first explored the impact of exploration and exploitation on sustainable organizational energy. The second investigates linear and nonlinear relationships to predict sustainable organizational energy determinants.