Organizational Culture & Leadership An Examination of Authentic Leadership in Non-Profit and For-Profit Organizations Rupert A. Hayles, Jr. Draft Unpublished Working Paper
ABSTRACT
S
ignificant differences exist in the daily operations and cultures of for-profit businesses compared to those of non-profit organizations. The purpose of this study is to explore these differences as they relate to the authenticity of top officials at both types of organizations, and to the levels of job satisfaction among employees in each category. An ex post facto design was used to survey 182 participants within the stated organizational type to determine levels of authenticity within the leadership ranks of both organizations, and to further identify the effects of authentic leadership upon job satisfaction. Findings include: (a) Differences between the self-perceived authentic leadership of non-profit leaders and those of for-profit leaders; (b) Differences in two of the sub-components (internal moral perspective and balanced processing) of authentic leadership in non-profit leaders compared to for-profit leaders; (c) No differences in two (self-awareness and relational transparency) of the remaining four subcomponents of authentic leadership in non-profit and for-profit leaders; (d) Regression model proved to be not significant to predict levels of job satisfaction in non-profit leaders based upon self-perceived authentic leadership, and (e) Regression model proved to be significant to predict levels of job satisfaction in for-profit based upon self-perceived authentic leadership, and (f) Only one element of the for-profit regression model is proven to be significant. KEYWORDS: organizational culture, non-profit, job satisfaction, leadership, authentic leadership,
INTRODUCTION
F
inancial misappropriations have been the downfall of corporate leaders such as Bernard Ebbers (WorldCom), Kenneth Lay (Enron), Dennis Kozlowski (CIT) and John Rigas (Adelphi Communications) (Tasini, 2009). All these executives once headed for-profit businesses. Misuse of funds by leaders at non-profits also may be common. An article in the Washington Post (2013) reports that more than 1,000 non-profit organizations have experienced a “significant diversion” of assets within a recent five-year period. These victimized non-profits include prominent organizations such as the Trustees of Columbia University in the City of New York in 2011; Children’s Hospital of Philadelphia in 2011; American Association of Retired Persons in 2010; Elwyn Charitable Organization in 2011; Boy Scouts of America in 2008; St. John of God Health Care Services in 2011; Faith Ministry Miniseterio De Fe in 2010; and International Orthodox Christian Charities Inc. in 2008. Failures in leadership were common to both non-profit and for-profit entities, and had far-reaching effects on organizational performance and employee satisfaction. But while the consequences of failed leadership were similar in each sector, these unfortunate outcomes were produced by executives from very
different backgrounds. In examining the circumstances that led to their failures, it is important to identify major differences between For-Profit and Non-Profit organizations, and to determine how their respective operations may have contributed to negative outcomes. The differences between non-profit and for-profit organizations are intrinsic. Expectations and levels of performance differ at each. The level of leadership expectation differs because the ultimate for-profit goals of a business are not the same as those of non-profit entities. A non-profit organization by its very title suggests its purpose (Pervez & Daudi, 2005), which is to achieve a community’s goals and enhance the quality of life of its citizens. Profit-making organizations also are defined by their main objective, which is to maximize profits and shareholder value (Pervez & Daudi, 2005). Shareholders may either distribute all profits among themselves or reinvest in terms of retained earnings to the business (McNamara, 1999). Recognizing that there are differences between non-profit and for-profit organizations leads to the question of whether different kinds of leadership should be