"I hope someday you can join us" : effects of charismatic leadership, followers' submissiveness, self-esteem and individual differentiation on turnover intention in multilevel marketing

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"I hope someday you can join us" : effects of charismatic leadership, followers' submissiveness, self-esteem and individual differentiation on turnover intention in multilevel marketing

 

Author: Lee, Siu-mei Salina
Title: "I hope someday you can join us" : effects of charismatic leadership, followers' submissiveness, self-esteem and individual differentiation on turnover intention in multilevel marketing
Degree: D.B.A.
Year: 2010
Subject: Hong Kong Polytechnic University -- Dissertations
Leadership
Direct selling
Department: Graduate School of Business
Pages: vii, 125 leaves : col. ill. ; 30 cm.
InnoPac Record: http://library.polyu.edu.hk/record=b2415806
URI: http://theses.lib.polyu.edu.hk/handle/200/5969
Abstract: The main objectives of this research are to examine how charismatic leadership is associated with turnover intention via the mediating effect of individual differentiation, and how and why individual differences of follower submissiveness and self-esteem affect the charismatic leadership outcome for individual differentiation and turnover intention. The research was conducted in the multilevel marketing industry (MLM), an unconventional direct selling industry which receives little attention on its leadership. The leaders and followers have very frequent interactions, therefore, forming the basis of the network business nature. In this environment, characteristics of charismatic leadership are prominent which provides a good means for the study. However, the high quit rate (Biggart, 1989; Wotruba & Tyagi, 1991) in MLM industry squanders a lot of time and training resources of the leaders. What is more, it gives unfavorable impression and heightens the skepticism from the public. Hence, it is important to address this management concern and understand why and how to retain and develop followers to become leaders. Drawing mainly on social identity theory (Tajfel & Turner, 1986) and sociometer theory (Leary, 1999), I hypothesized a moderated mediation model that charismatic leadership affects follower's turnover intention via the mediation of individual differentiation, and follower submissiveness and self-esteem as the moderators in affecting the strengthen of the mediated relationship. Using a sample of 205 MLM distributors from the eight registered MLM companies in the Hong Kong Direct Selling Association, findings supported that charismatic leadership was negatively associated with turnover intention and was partially mediated through individual differentiation. As predicted, it was found that the mediation relationship between charismatic leadership and turnover intention was stronger when follower self-esteem is low. For submissiveness, it was interesting that the moderation effect on charismatic leadership-individual differentiation relationship was stronger when submissiveness was high, but in the individual differentiation-turnover intention relationship, the moderation effect was stronger when follower submissiveness was low. Moreover, a post hoc three-way interaction analysis showed that when both follower submissiveness and self-esteem were high, the effect of charismatic leadership had the most impact on individual differentiation. It appears that in the MLM industry, both traits of high self-esteem and high submissiveness are favorable in best fitting in the industry culture and to perform high. The present study contributes to the literature in having more understanding on how and why charismatic leadership is effective in business environment. With the findings in the MLM context, implications on theory and practice are discussed.

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