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Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97

11th International Strategic Management Conference 2015

The relationship between paternalistic leadership and business

performance in small tourism businesses: The moderating role of
affective organizational commitment
Pelin Arsezen-Otamis a, Isil Arikan-Saltik a , Sumeyra Babacan a
a
Mugla Sitki Kocman University, Mugla, 48300, Turkey

Abstract

The economic value of small businesses, their role in the global markets and the advantages of being a small business in competition
are subjects that are great interest of both practitioners and researches; and do not lose effect and importance. The performances of
small business, which are managed directly by their owners, seem to be related to the success level of owner-managers. This study
proposes a model that researches the relationships among the paternalistic leadership behaviors of the owner-manager of small
tourism businesses (STB), the affective commitment of the employees to the organization, and business performance. Within the
context of this research; data will be collected from the employees of the STB’s rustling in Fethiye (Mugla, Turkey), where is an
international tourism destianation; through a structured questionnaire. The frequency analysis on demographics and vocational
features of the respondents and descriptive statistics will be completed through SPSS 21. In order to understand whether
demographic and vocational features of the respondents effect T-Test and variance analysis will be used. Through testing the
research model via structural equation model, this research attempts to reveal not only the direct effects of paternalism on affective
organizational commitment and performance; but also the mediator effect of affective organizational commitment on paternalism’s
effect on performance. This research is expected to add in theoretically to the tourism literature in the concept of tourism
development regions; through its approach on economics, entrepreneurship, small businesses, locality and management theories.
In addition, it will provide the policy makers, planners, entrepreneurs and local authorities with important clues to be used in settling
and managing future development strategies of destinations.

©©2015
2015TheTheAuthors. Published
Authors. by Elsevier
Published Ltd. Ltd.
by Elsevier This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the International Strategic Management Conference

Corresponding author. Tel. + 90-252-211 5409 fax. +90-252-211-4907
Email address: isilas@mu.edu.tr

1877-0428 © 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the International Strategic Management Conference
doi:10.1016/j.sbspro.2015.10.150
 Pelin Arsezen-Otamis et al. / Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97 91

Keywords: Small Tourism Businesses, Performance, Paternalistic Leadership, SEM, Fethiye.

1. Introduction

Not only practitioners but also researchers have a keen interest in the economic value of small businesses, their
role in the global markets and the advantages of being a small business in competition; and these subjects seem not to
lose effect and importance. The performances of small business managed directly by their owners appear to be related
to the success level of owner-managers. In relatively small places, which have an underdeveloped manufacturing
industry and a developed tourism industry on the contrary; the performances of small business industries can effect
destination performance (Getz and Karlsen, 2005). This study researches paternalistic leadership behaviors of owner-
managers, the affective organizational commitments of employees and business performances and analyses the cause
and effect relationship among them. The researchers argue that, paternalistic leadership behaviour and affective
organizational commitment will have direct and indirect effects on performance of small businesses and therefore the
performance of tourism destination.
There are several and growing numbers of researches aiming to measure attitudes and behaviors of managers and
employees and focusing on leadership (Daft, 2014). However, the researches aiming to measure attitudes and
behaviors quantitatively and associating them to the business performance rarely exist (Wang et al., 2014). In this
context, this research is original since it analyses the behaivor of owner-manager on leadership aspects peculiar to
Turkish culture; also this research builds links between behavioural approach and subjects of systems approach in
strategic management. There are a small amount of researches on small food-and-beverages firms; and this research
will create an important database while analysing small food-and-beverages firms’ contribution to tourism sector and
effect on destination performance. The completion of an adequate research in places where tourism is developing, will
provide the policy makers, planners, entrepreneurs and local authorities with important clues on settling and managing
future development strategies of destinations. This research is based on systems approach since it treats Small Tourism
Businesses (STB) together with its internal environment and inner circle; and on behavioural approach since it
evaluates the manager on behaviours. The purpose of this study is to analyse the relationships among paternalism,
affective organizational commitment and business performance (Figure1). In this research, STB performance,
paternalistic leadership and affective organizational commitment will be explained primarily, then the research model
and hypothesis will be presented and detailed information about the research method will be provided. After the
completion of the research analysis, results and assessments obtained as a result of findings will be presented to
conference attendants.

2. Literature Review

2.1. STB and Performance

Small businesses make up nearly 99% of all the businesses in European Union (Bengtson, Pahlberg and Pourmand,
2009) and 98.4% in Turkey (Avcı, Madanoğlu, and Okumuş, 2010). Small businesses constitute the biggest portion
in tourism industry (Morrison, 1996; TAMU and TSOT, 1999; Main, 2002). Small tourism business is defined by
Morrison (1996) as tourism businesses that are financed by an individual or a small group of people, and managed by
directly its owners, with a personalized style; not a formal management structure. Small tourism businesses are of
great importance since they can adapt easily to the changing conjuncture and implement innovations, they can provide
more variety of products with less investment, they create more employment opportunities with less investment costs,
they are more inclined toward technological changes, they facilitate balanced development among regions, they foster
personal savings, they provide employment for local people, they support economical variety and stability in the
region, they accelerate regional development and they facilitate social development (TAMU and TSOT, 1999;
Morrison, 2013; Akbaba, 2012). On the other hand, an important portion of STB’s end up with failure in a few years
and they terminate their activities (Getz and Carlsen, 2005). The researches which analyse the challenges and failures
92 Pelin Arsezen-Otamis et al. / Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97

STB’s meet divide them into two as endogenous and exogenous (Ateljevic, 2007). Among the endogenous challenges
and failures which are discussed, those that belong to the business owners are dominant. And among the failure causes
about the business owners, management styles are dominant not only for small tourism businesses but also for all
kinds of small businesses (Ateljevic, 2007; Johns and Mattsson, 2005; Morrison and Teixeira, 2004). According to a
study conducted by Lerner and Haber (2000), among the leading challenges STB’s meet, there exist problems in
management practices, not being able to receive external consultancy and weak performance as a result. These findings
are also consistent with the problems of small businesses regardless of their industry. In order to ensure the sustainable
development of STB’s, these challenges should be overcome and conditions should be improved.
The measurement of the business performance is a necessity since it enables the business to control its own effort
and create customer satisfaction in the target market. Additionally, performance measurement creates the inputs that
shape the decisions of the managers (Öztek, 2005: 22) and influences strategic decision making (Kalkan, 2005: 59).
Business performance and its criteria like profitability, quality, customer satisfaction can be measured via two
methods; subjective and objective. Objective values, which are certain financial performance values are measured
through quantitative data; whereas subjective values are evaluated through asking perceptions and thoughts about
performance according to competitors and expectations (Küçükkancabaş, Akyol and Ataman, 2006: 134). The
traditional measures for business performance are generally financial and focused on profitability, sales and market
value. However, in modern businesses financial performance measurements are not enough for decision making
purposes anymore. Contemporary global competition conditions require non-financial performance measures
(prestige, satisfaction, quality etc.) to be used for business performance (Muller et al., 2014; European Commission,
2015). Performance measures should contain both objective and subjective measurements. In this research, both of
them are used.

2.2. Paternalistic Leadership

Paternalism is defined as the managers’ personal interest in workers’ off-the-job lives and personal problems, and
managers’ effort to support the employees to achieve personal goals and improve welfare (Fikret-Paşa, Kabasakal and
Bodur, 2001: 561). Aycan (2006: 449) states that paternalism is a behaviour style that resembles a father’s approach
to his children. In a paternalist relationship, the person with authority takes the role of a parent and they admit
protecting and paying attention to their subordinates as a duty. In return for this, subordinates are supposed to act in
respect, commitment and compliance (Pellegrini and Scandura, 2006: 275). Paternalism has been a subject of interest
since the emergence of management as an area. While behavioral management philosophers claim that efficiency will
improve if managers show interest in employees (Follet, 1933; Munsterberg, 1913); Weber (1947) states that when
the organizations reach the ideal bureaucratic organization which completely obeys the rules and protects personal
rights, paternalist practices will become unnecessary (as cited in Pellegrini and Scandura, 2008).
Studies on paternalism, which have started in Asian countries and continued in Middle Eastern countries, are
objecting Weber’s approach. They claim that paternalism does not only include authoritarianism; paternalistic
managers provide their subordinates with support, protection and interest; while the subordinates are responding to
this interest with compliance and commitment (Redding vd., 1994; Westwood and Chan, 1992; Aycan vd., 2000; as
cited in Pellegrini and Scandura, 2006). As a result, debates on the relationship of paternalism with cultural context
have arisen. There are opinions stating that paternalism will be perceived more positively in cultures with higher
power distance and higher collectivism (Pellegrini and Scandura, 2006; Aycan, 2006). On the other hand; although
paternalism has been described negatively in Western literature; it has begun to seem as an alternative solution for
some social and organizational problems in contemporary practices (Aycan, 2006).
One of the early studies that aim to conceptualize paternalism belongs to Kim (1994), where paternalism is divided
into two kinds: authoritaritative and benevolent. Authoritaritative paternalism values job and does not include a sincere
generosity. Benevolent paternalism emphasises the commitment of the subordinate and an intimate care of the
manager for the subordinate (as cited in Fikret-Paşa, Kabasakal and Bodur, 2001). Farh and Cheng (2000) propose a
three dimensional model for paternalistic leadership; authoritarianism, benevolence, and morality (as cited in
Pellegrini and Scandura, 2008). In addition, Aycan (2006), based on motivation and behaviour dimensions, proposes
four types as benevolent paternalism, exploitative paternalism, authoritarian approach and authoritative approach.
 Pelin Arsezen-Otamis et al. / Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97 93

Although the number of studies has been increasing after 1990’s, the number of ampricial studies seems not to increase
at the same pace (Pellegrini and Scandura, 2008).

2.3. Organizational Affective Commitment

Organizational commitment is a psychological state that effects the decision of the employee to continue or
discontinue to be a member of the organization and this state characterizes the employee’s relationship with the
organization (Meyer and Allen, 1991: 67). Organizational commitment is composed of three components as affective,
normative and continuance commitment. Affective commitment arises from the employee’s feelings and willings,
normative commitment indicates commitment because of necessities and continuance commitment arises since the
employee thinks it is costly to leave the organization (Allen and Meyer, 1990). Reaching organizational success under
intense competition situations is closely related to employees’ organizational commitment and loyalty (Zeffane, 1994:
978). Employees with a high level of organizational commitment have an important and positive contribution on
business performance under high competition (Feldman and Moore, 1982: 2). The existence of organizational
commitment which adds up to performance is based on the properties of not only the employees but also the manager.
Span of control, reliability, intimacy (Uygur, 2007) and leadership practices (Wu et al., 2006; Liao, Hu and Chung,
2009) are effective on organizational commitment.

2.4. Research Model and Hypothesis

In the developed model, paternalism is taken as the endogeneus variable; whereas affective organizational
commitment and performance are exogeneus variables. The model which will be tested in the research is presented
below with its latent and observed variables in Figure 1.

Proposed Research Model and Hypothesis. Note: X1-is like an elder family member (father/ mother, elder brother / sister) for his employees; X2-is interested in every
aspect of his/her employees’ lives; X3-gives advice to his/her employees on different matters as if he were an elder family member; X4-creates a family environment
in the workplace; X5-takes decisions on behalf of his employees without asking for their approval; X6-knows each of his employees intimately (e.g. personal problems,
family life, etc.); X7-exhibits emotional reactions in his relations with the employees; doesn’t refrain from showing emotions such as joy, grief, anger; X8-participates
in his/her employees’ special days (e.g. weddings, funerals, etc.); X9-tries his/her best to find a way for the company to help his employees whenever they need help on
issues outside work (e.g. setting up home, paying for children’s tuition); X10-expects his/her employees to come to work in emergency situations, at the cost of making
compromises in family life; X11-expects his/her employees to be devoted and loyal, in return for the attention and concern he shows them; X12-gives his/her employees
a chance to develop themselves when they display low performance; X13-emphasizes differences in status (position) and expects his/her employees to act accordingly;
X14-believes he/she is the only one who knows what is best for his employees; X15-consults his/her employees on job matters. Y1-The profitability of the firm is
satisfactory; Y2-The sales of the firm is satisfactory; Y3-The customers are satisfied with the firm; Y4-We present enough new products/menus/services for the
customers; Y5-Relative to the similar firms, market share of the firm is good; Y6-Our firm has a competitive advantage; Y7-We get the worth of our money, labour and
time we spent for the firm; Y8-Our firm can find credits easily when needed; Y9-Our company is successful in general.

Fig. 1. Research Model and Hypothesis

94 Pelin Arsezen-Otamis et al. / Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97

The structural equation model that will be tested in this study is overidentified which means that the information
owned is more than the information the model aims to reveal. As Şimşek (2007: 29) stated, this situation is the most
desirable situation for structural equation modelling. Not only the direct effect of paternalism on affective
organizational commitment but also its indirect effect on performance through affective organizational commitment
will be attempted to reveal. Basic hypothesis founded on this concept are listed below:

H1: There is a significant relationship between paternalistic leadership and performance.

H2: There is a significant relationship between paternalistic leadership and affective organizational commitment. H3:
There is a significant relationship between affective organizational commitment and performance.
H4: Between paternalistic leadership and performance, there is the mediating effect of affective organizational
commitment.

3. Methodology

3.1. Research Goal

The purpose of this research is to analyse the cause and effect relationships among the paternalistic leadership
behaviour of owner-managers, affective organizational commitment of employees and business performance. In
addition, this research aims to reveal business profiles regarding the management practices of owner-managers of
small food and beverages firms in Fethiye, to measure their performances, to understand the affective organizational
commitment level of the employees and to create an information pool which can be used by government entities,
associations and unions for preparing needs analysis and development plans.

3.2. Universe, Sample and Data Collection

The universe of this research is the small-size food and beverages firms that are active in tourism industry in Fethiye
district of Muğla city. The records of Fethiye Chamber of Merchants and Craftsmen, which has the enrollment of
micro and small-size sole merchants, will be used to identify the universe. According to formal records of the chamber,
there are 472 small food and beverages firms. The universe can be defined as finite population since the items are
countable (Ural and Kılıç, 2005). However, as a result of time limitations, all of the population could not be reached.
Not all of the firms enrolled to the chamber could be considered as a tourism business because of their locations and
customers. Since it is not possible to select firms that are directly related to tourism using formal records, the network
and density of food and beverage firms are identified on scaled maps (Figure 2 and 3).

Fig. 2. (a) Fethiye F&B Businesses’ Density (b) Blue Lagoon F&B Businesses’ Density
 Pelin Arsezen-Otamis et al. / Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97 95

Fig 3. (a) Cordon-Harbour F&B Businesses’ Density (b) Calis Beach Territory F&B Busineses’ Density

The research is conducted in Blue Lagoon, which is one of the three locations with a high density of business
network; Blue Lagoon, Calis, Cordon-Harbour, namely.

3.3. Analyses and Results

This is an Explanatory Research regarding its purpose and Cross-Sectional Research regarding its time dimension
(Karasar, 1991; Aziz, 2008; Neuman, 2013) and quantitative analysis techniques will be used in this research. Data
are being gathered through application of structured questionnaire in face-to-face interviews. The structured
questionnaire is formed based on a former research questionnaire. This scale, which is translated and adapted to
Turkish by Pellegrini (2006), is called “Management Practices”. Paternalistic leadership and affective organizational
commitment components are taken from this questionnaire and performance component is added by the researchers.
Five-point Likert Scale is used in the questionnaire. In order to measure reliability, Cronbach’s Alpha test will be
applied and to verify the factor structure, confirmatory factor analysis (CFA) will be implemented.
Simple relationship analysis and multivariate statistical analysis methods will be used to analyse research data.
First of all, frequency analysis and descriptive statistics related to demographical and occupational properties will be
completed through SPSS 21. In order to understand whether these demographical and occupational properties create
a difference in business performance, T-test and variance analysis will be used. Following the completeion of validity
and reliability analysis on the scales of research model; structural equation model (SEM) will be implemented in order
to analyse the interaction among variables, identify direct and indirect effects on variables and test hypothesis and
research model. SEM is a comprehensive statistical technique to test causal relationships among latent and observed
variables (Yılmaz, 2004: 79). The starting point of SEM studies is always based on theory. After the relationships
among the variables are established by the researchers according to the theoretical framework, it is tested if the data
collected confirms this theoretical structure. The observed variables present in the model are generally the variables
used in the measurement tools; whereas the latent variables are the ones which cannot be observed directly,
theoretically known to exist and can be measured only through specific indicators. Through path analysis, the degree
and direction of the relationships are analysed and visualized via a schema that includes all information about the
analysis (Şimşek, 2007: 1-9).
SEM is composed of two basic parts as measurement model and structural model. Measurement model is the
structural equations that define observed variables and latent variables; in other words, how latent variables are shown
by observed variables or how they are linked. Structural model means structural equations that define the causal
relationships among latent endogeneous and exogeneous variables and identify explained and unexplained variance.
Measurement model is tested through confirmatory factor analysis, while structural model is tested through path
analysys (Yılmaz and Çelik, 2009: 16). The combination of confirmatory factor analysis and path analysis; and
synthesis of latent variables and measurement models composes the basis of SEM (Schumacker and Lomax, 2004: 5).
96 Pelin Arsezen-Otamis et al. / Procedia - Social and Behavioral Sciences 207 (2015) 90 – 97

The decision of to what degree the model fits the information and whether it shoul be accepted or denied, is based
on well-fitting statistics. The goodness of fit of the model is evaluated not only as a whole but also as each and every
parameter (Cengiz and Kırkbir, 2007: 30). There are several well-fitting indexes that have various statistical functions
used to evaluate the goodness of fit of the model. Among the recommended indexes, the most widely used ones are
chi-square statistics (χ2), RMSEA (Root-mean-square error approximation), GFI (Goodness-of-fit index), AGFI
(Adjusted Goodness-of-fit index), PGFI (Parsimony Goodness-of-fit index), NFI (Normed Fit Index), IFI (Incremental
Fit Index) and CFI (Comparative Fit Index) (Jöreskog and Sörbom, 1993).

4. Conclusion

Nowadays, tourism is one of the industries that have a high potential to grow. As a result of not only its high
potential to grow and develop, but also its property of serving products which are consumed on site, tourism has an
important role in local development strategies. Especially, developing countries take tourism as a tool for
development. For example, in Turkey there are thirteen support announcements targeting tourism from different
NUTS’s. The total of the support budget is more than €15 million. Some of these announcements include profit
organizations, and the ones that aim to efficiency and performance in the destinations seem to have a greater portion.
In the world, the vital role of the tourism is leading the researchers and policy-makers to evaluate the effect of tourism
on local development and generate models. These researches have revealed the importance of destination performance
and the performance of the entities that have a part in tourism activities of the destination.
There are several abstract and concrete variables that effect business, destination and region performances. These
variables and their effect are important subjects of destination management and destination marketing. To research
for the quantitative relationship between concrete variables (incoming tourist number, amount spended, tourism
income etc.) and performance is relatively easier than to research for the relationship betweem abstract variables
(tourist satisfaction, tourist loyalty, managerial efficiency etc.) and performance. Similarly, to define the cumulative
success level through approaching each and every entity that exist in the destination and directly and indirectly
contributes to the production of tourism product; is a research that is extremely comprehensive and it requires long
time. The theoretical model that is presented in this research is a starting point for widespread objectives and the field
survey conducted is a precursor to following researches that will focus on destination performance and development.
It is known that the personal, private and public entities in a destination should cooperate and create strategies for the
success of destination. The results of research are expected to contribute to these strategies and cooperation.
As the main limitation of the proposed model is its temporal and regional focus, this is a static model, and
comparisons in time or space depend on its reapplication.
Since the field survey is being conducted and will be completed in May 2015, the findings will be added to study.

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