Journal of Business & Leadership: Research, Practice, and

Teaching (2005-2012)

Volume 3 Article 6
Number 1 Journal of Business & Leadership

1-1-2007

An Empirical Test of Stewardship Theory

James Davis
University of Notre Dame

Steven Frankforter
Winthrop University

David Vollrath
Indiana University South Bend

Vanessa Hill
University of Louisiana , Lafayette

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Recommended Citation
Davis, James; Frankforter, Steven; Vollrath, David; and Hill, Vanessa (2007) "An Empirical Test of
Stewardship Theory," Journal of Business & Leadership: Research, Practice, and Teaching (2005-2012):
Vol. 3 : No. 1 , Article 6.
Available at: https://scholars.fhsu.edu/jbl/vol3/iss1/6

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 l)al. i'. l'raniJ
I o rtcr. Vo ll ra th and II II Davis et al.: An Empirical
Journ al Test of Stewardship Theory
or Business ~nd L~aclcrs hip : Resea rch. Practi ce
. and Teachi ng
2007 . Vol. 3. No. I . 40-50

AN EMPIRICAL TEST OF STEWARDSHIP THEORY

Ja mes l);w is, Uni versity o iN otre
me Da
Stev en Fra nkfo
e r. rt Winthrop Uni versity
Da vid Vo llrat h, In diana Uni ve rs ity So uth Be nd
Van essa llill , Uni ve rs ity o l Loui s iana , Lalayette

This slu t~)' 1es1s !h e model of Davis, Drmaldsou

Sch oormau , aud (/ 99 7) llwl proposed delermiuaul.\' of a company's
govemauce .\'lruc/Ure. lu parlicular, we foc us uu Ihe slewardship 1/wury a.\ pecls of !h e model a uri ils ability to predict th e
presen ce of a slewarrf .l·hip-orieulatiou CEO at publicly listed U.S.
survey
companies.
Usi
based data ong btained from
CL'O.~ all(/ directors of I 00 compauich-pair
e.1· iu desixu,
a matwe identified three va riables that predicted th e occurrence
of stewardship-orient
edhavior.\· be by th e company's
s fe CEO. These res ult ud support for th e mode l's ability to predict
tl1e conditions
iudividua/.under
1· whiche steward.l11ip-orie ut rl becom e CEOs.

INTRODUCTION co mpan y situ ati onal va riabl es so th at EO s ca n be empowe red ,

rath er th an cois ntm ll ed (Dilv et al. , 1997) . Wi II iam so n ( 1985)
Wor ld co ml . Ad phi a, T yco, :J ttd amo Em on, ng an ,; th e
ack now led ges thi s poss ibilit y but sid es in favo r o f empl oyi ng
num erous exa mples of wanton oppo rtu nism leadin g to th e stru ctut·il l protec tions aga in st oppo rtuni sm , arg uin g th at th eaoma ocu
pe
dec I in c or demi se o f large,ortimp ant ecott o tn ic in sti tuti o ns.tru ·tw rthin ss f' :t rti ilr not be known w i th
Thi cri sis o f int egrit y poses psorh<trd shi !' multiple
co ntpl ete :1ss urance r, o. th
l l ers
owcvcil t·gue th at tru st wo rthin ess
co nstitu enc ies, and w coill
e ntinu to rece i ve
entigalOnleil lo
m rl regye atulil! Or) is reliably recogni za bl e, and w hen u nfett ered wi th undu e
a tt ·s 10 CU tll C 'I he C0 111111 S 0 tl ll't dom 0 1' tucb ' y' co ntro l \ truUut·es,
ty
dt l n: ea to pro lit abl c oppo nunit ies th ar
d o minant co rp orat e govc m ancc th co rt cs (e g. :Jgc n cy th eOI"y) o th c r w( Frattk
wo uld ·cscnt t ~e tl O, be pt 1988; Qu inn & Jones,
pre ~c r ib c stronge r mo nitves ng
Ot"i gnmo t·c~tn lud crati
ent tn ve ali 1995 ; a i. 1997) . D<~vi s et al. ( 1997) nrgue th at oppo rtuni st-
nti in th e ho pe of di mitti shin g th e dan ge rs opportuni sti c o t· steward -o ri ent ed govern <JnnceC i1 be success fu l w hen
man ager !> pose to soc iety ( 17 ama & Jensen , 1983) . ll owever, prin c ipa ls co rrec tl y id entify un der ly in g age nt psyc ho logy and
qu es ti o ns rega rdin g w heth er such stt·uctur al remedi es ca n cove r firm - leve
l. situ at io nal fa ctors.
all po ss ibl e threat s co ntinu e to persist . For exa mpl e, D eA nge lo
( 1988) fo und that manage rs manipu late inco me to achieve St ewards hip T h eo r y
bonu s targe ts 111 th e presence of in ce nti ve ali gnm sment
ha mec ni s, bringin g int o q ues ti on w hether in ce ntive Stewathrd eoship
ry (D av is c t al. , 1997 ; D ona ldson & D av is,
a li gnment
sms
ha m ec ni ca n re lniabl t th e y at ili ir int end ed goals. 1989 , 199 1) pro v ides il normi ve at per pec tive int o th e nill ure of
Simililarl m y,
sonW illi ( 1985) argued age rs th at man pursuin g th e manage rs th at se rves as il n ve alt ern<Jti to agency th eo ry.
sel r-
t int eres w ith guil e ma y be suf'fioc us icntl ya1in ve nti ve 1d Whi le stewa rd ship th eo ry h <:~ s bor rowed so m e of th e Silomnely u
ni to thw art eve n w ell -c on cei ve d mo nit orin g ter ms co mm ed in age ncy th eo ry resea rc h, such as
m ecsm hani
ght
In , such s. li it i ~ doubtfu l thiit c tural stru "age nt ,"·in al," c"pt ip and " <J iiy gnm
ent
r:tdi ca ," ll different ro les
pro tec ti o ns co uld success ful l y guat·d again st all threa ts atl arc ilSS Utlt ed . T hese term s wi ll be used to desc r ibe exec uti ve-
in ve nti ve exec uti ve co u ld improv ise. ern appati roac h shJr eho iJ er relations und er eith er <tn agency o r stewa rd ship
A n alt ve to c o ttt rnthllein g th e appeti te of gove rn ance stru c ture. G t·o tmd ed in psyc ho lo gy, soc io logy, and
opport utti sti c shark n sagc thata m g iay n1an ve co rporati on is to leadsershtp
th eos rirye s, teward hip arg ues lo r th e poss ib le
avo id emp loy g viin
suc
du als h it t indileaders hip po sitil)tl S. a li gnm
als andent cbc tii'Ce tt prin ip age nt s w hi ch i s rc n cc ti ve o f
D av ctt-,a l. ( 1997) pro posed il heur isti c to id entir l'il
onyrdsh
· gutie:-.c:c
vcsst ori
a psyc
etil :l ho logica co ntrac t (Sc,heItn % 5; Y an, Z hu , & II all , 2 ) a
at ion:
nl kct tn an op p o rtuni ~ t lli o1 <.:l ip 200 ur the re l :~t i o n s hip (U v: 1996) , w ithused aer,
agecontt sl
to th e 1e l at
linl
tG
nn end
.ilexledcc
hey C\> th uti hclta v in g 111 mmunit y- oc nilnn d irec tin g
'>yc wlog and flm t '> ituattOtl :tl l <~c t m s cou ld l)L' ed measurtcd tru -,H·tlt
tw<; mora ~ tn d
l ur behav iors towa t·ds th eir finn s and its
attd ev: ilu :J to d etu tl:t nttn e th e appr ch n e. s,
thtttt c::-.ec ve wo uld ~ t ock lt o ld e r \. Stew aers
-o
rdris ented
hip le ad d er i ve utilit y by
n y at th e l in Thtt tl u pp ortunt sts :tn d ol·ds cw<tl catt he se r v tng tlt
o l·c need <; til l' cmpora ti o n a11d it s stak eho lders rath er
rc l t:tbl y d ist in g u til'll
es
lished,
Stl'lt
;il Cgo o pt im ve <l Ce iur <I id thatt by put·s uitl g sho n - tcnn oppo rtuni sm at th 'ei1 ·, ec t mpl
a t oye ·s
cie'> lnr e ith er <tppmac h co uld be implem e th eent ed . W ex pense
hil ( l) ;tv i s, l. 199 7; F t·il nk . 1988) . T he primary
prov id es a va luab ti ·ic,le
thdthors
heut
ea 1·ccog -; <Ju ni ze obsta c le to e!Tec tiv ely imp le111e ntin g a stew ard sh ip app roach to
empiri cal testin g o r its co mpon ent s. I n thi s paper ica
ntpsyc
ccc
ll y sdgovern
ho
cntslog
th icil
eatt
cel andis to acc un11e ly di stin gui sh in g betwee n
11c
em <Hip\l nal ir cx:~ min c pro po ed opportuni sts il nd rd stew<J s. Mi sa li gnin g co rp o rat e g overn ance
st lu <J to stewa rdsh ientat ip-or
ed co rpo rate st t·uctur
es w ith exec uti ve ori ent ati o n co uld res ult in seve re
gO\c ncc
rn <J that Da v is c t al. ( 1997) proposed . losses to th e llrtn . Dav i s et a l. ( 1997) ide ntifi ed psyc hologica l
I he crea t ion il nd mil int enan ce o r il 111anagerial sys tem base d and situ ati ona l antecede nts th at wou ld permit principa ls to
on ste11<trd s hip pr in c ip les al igns exec e utiv psycho log ica l and di stin gui sh betw een oppo rtuni sti c and tru st wo rth y agents. The y

Published by FHSU Scholars Repository, 2007 40

1
Journal
DaveVo
is. nkfof
oa .Frand Hirt Business
r. ll ra th & Leadership:
ll Research, Practice, and Teaching
Journ
ess (2005-2012),
sal ao f 13u in nd L~ aders Vol. 3 [2007],
h ip : Resea rch. Prac ti No. 1,Teaching
c~. and Art. 6
2007 . Vo l 3. No . I. 40-50

argue th at wh en situati ons at a co mpa ny favo r a stewardshi p-
ori ented govern ance stru cture, th en steward-or ient ed execut ive s
should be employed as CEOs.
Quinn and Jones ( 199 5) and U zz i ( 1996, 1997) argued that,
with ex peri ence, one can ident ify trustwo rth y age nt s and then
sa fely rely on th ese agent s to behave w ith se l f- r·es
trai nt and to
serve th e good of th e co mpany. Such individu als forge
relati onships w herein th ey crea te uni qu e co mpetit ive
adva ntages through inves tm ent in relati onship-spec i fi c asse ts
(Jones, 1995), pursuit of long-term val ue-bui ldin g strateg ies
( Davi s et al. , 1997), acce ss to propr ietary and/o r fi ne-grain ed
inform ation (Uzzi, 1996) , in creased co mmitm ent and
in vo l vement in th e affairs of th e fir m (Ya n et al. , 2002), and
improved access to key reso urce s (Uzz i, 1996).
H y potheses: Testin g Da v is, Sc hoorman, and D onaldso n' s
Heuristic
We tes t th e mode l that Dav is, et al. ( 1997) proposed to
predi ct th e conditio ns fo r a stewa rdshi p-o ri ented co rporate
govern ance to fl ouri sh. We o btained sur ve y responses and th en
ass oc iated CEO- repo rt ed psycho log ical and situa ti onal factors
aga in st direc tor-report ed ob se r v:-~ ti o n s o f the stewa rd shi p
attribu te s o f th eir CEOs.
Psycholo gical Fa ctor s
M o ti vation : Steward s are prim aril y moti va ted by hi gher
ord er needs, such as opportunity o f growt h, achieve ment .
affili ati on , and se l f-ac tu ali za t ion (Dav is, et al. , 1997) . T his
d iffers fro m opp ort uni sts, w ho are mot iva ted by ex tr in sic
fac tors I ike tangible rell'a rds and incenti ves posse ss ing a
meas urab le market va lue. CEOs pr imar i ly mo ti va ted by hi gher
order needs fi nd per fo rm ance o f or·ga tinonal
i za wo rk itse l f to
be a strong moti va tin g fac tor. Th e basis fo r the ass umpti on
lin k ing th e pursuit o f hi gher· order needs to a stewa rdship
ori entati on ca n be fo un d in m ost of th e estab li shed th eo ri es o f
moti va ti on, in pa rti cul ar, hig her Ol'dcr needs as descri bed by
M aslow's hi erarc hy ( 1970) , A lder fer' s growth need ( 1972). and
th e achi eve ment and affili ati on needs of M cC lelland ( 1975)
and M cG regor ( 1967). O pportuni sts, look at
in strum entall y, expend in g effo rt s w hen th ere is materi al
compensati on for th eir effo rts (Fa ma & Jense n, 1983) .
A steward w ill tend to be int r insica ll y moti va ted and wi ll
form int ern al chall enges th :-~ t lead to hi gher leve ls of
perform ance as w ell as sa t i s f;:~ c ti o n w ith hi s/her wo r" .
Hac k man and O ld ham ( 197 6) argued th at three psycho ica l log
states (experi enced mea ni ng fu lness o f wo rk, ex peri ence d
responsib ility for outcomes. and k no w ledge o f actual result s)
media te th e relati onship betwee n task character isti cs and
int ern al work mot iva ti o n. T his model o f wo r·k moti va t io n i ~ one
o f th e foun dati onal ass umpt ions o f stewil ry rdshi p th eo
( 1986) argued th at se l f- e fl~ caC). se l f-determinati on. and
fee lings of purpose are c h :~ rac t c ri zcd as bt> ing n it ica l
determin ants of intr in sic moti va ti on. Co nve l r ·sc y, th e age ncy
approach emphas ize th e ro le o r ex tr in sic rewa rds in
moti va tin g a CEO, em p inloy
g a tit - lo r- tat perspec tive in w hi ch
rewa rds are conti ngent on effo rt and tang ib le result s. Absent
ex trin sic moti va tors. agent s w o ul d tend to shirk their
respons ibi I it ies .
H y p oth es is I : Exec ut ives reportin g higher order need s
motiva t ion w i ll be positi ve l y assoc iated wit h d irec to r
o bser va t ion of steward ship-or iented CEO behav io r .
H y poth es is 2: Exec utives repo rtin g low ex tr in sic
moti va ti on w ill be pos it ive ly ass oc iated w ith direc tor
obser vat ion of stewa rdship-ori ented CEO behav ior .
I de ntifi ca ti o n : M anage rs id ent i fy w ith an orga ni zati on
w hen th ey de fin e th em se lves in term s o f an orga n iza t ional
membershi p w herein th ey accep t it s m iss io n, vi sio n, and
objec ti ve s ( K elm an, 1958; M ae l & A shfo t1h , 1992) . U nder
th ese co ndit ions, th e orga ni za ti on beco mes an ex tensio n o f th e
manager' s psycho log ica l stru cture (B row n, 1969) . A n
identi fy in g manager inter prets co mm ents abo ut th e
orga ni za ti o n as referrin g also to him se l f or hersel f, all ow in g
manager s vicar iously ex per ience th e orga ni za ti on's successes
and failu res (e .g. , Katz & K ahn , 1978 ; T urn er, 198 I ) . T his
v iew of orga nizational identi fi ca t ion is co nsistent w ith
stewa rd ship .
W hen manage rs ex tern al ize 01·ga tin o iza
na l prob lems to
avo id b lam e or sh ift res po nsib il it y to oth ers (D ' A veni &
MacMi ll an , \ 990) they cl o not id entify w ith th e organi za ti on
nne! he/she w i ll v iew th e orga ni zati on onl y in in strum ent al
term s, foc usin g on how using it may perso na ll y benefit him or
hern (Jenst> & M eck l in g, 1976) . T hu s, an orga ni zati onal foc us
required fo r identifi ca ti on is lac k ing. T h is is co nsistent wi th th e
age ncy theory perspect ive .
H y po th esis 3: Exec ut ive s repo rtin g h igh identifi ca ti on
ll' it h the mga ni zatibe
on w ill positi ve ly assoc iat ed w ith
cl irec tm observa ti on of stewa rdshi p-ori ented CEO
behav ior.
Va lu e co mmitm en t: Va lue co mmitm ent is th e be li ef in and
:~ccep t a n ce o f orga nization al goa ls and va lu es (Mayer and
Schoo rm an, 1992) . T he se l f- im age o f o rga ni zat ionall y va lue-
co m m itt ed managers refl ects t he co m pany ' s im age (Ecc les &
work No hr ia, l ':t J2) . Va lue co mm itt ed exec uti ve s d c tin e th em selves
in term s of th eir mem bership in th eir parti cul ar organi zati ons
(Mae l & A shfo rth , 1992) , prod uc ing a sa ti sfy in g re lati onship
(S uss man & V ecc hi o. 1982) . V alue co m m itt ed exec uti ves
possess a psycho log ica l al ignm ent w ith th eir organ izati ons o r
pri ncipals because th ey shar·e th e sam e v ision. va lues. and
mi ss ion, and exe rt co nsiderab le effort to sec th at th e
o rg ;:~ni z a ti o n succee ds (D::tv is, et al .. 1997). Co nve rse ly,
opport uni sts tend to p lace import ance on m::tal teri ga in ra th er
th :1 r1 va lu es . e)ckTh la co m mitm ent o r all egia nce to
orgar1i zat io ns. v iew ing th e fi rn1 as an in strum ent 11·ith w hi ch to
M:~ n z achi
oI :1in
atc
eve(Fa
r·iper·s
ma ar1 lm :J grt nd Jensen, 1983).
H y po tl11:s
is ~: Ex ec uti ves report ing hi gh i ll va lunte
co mm itm t> 11 be positi ve !) ass oc iated w ith direc to r
obser va ti on o f stewa rd ship-ori ented CEO behav io r-.
Pe r so n a l Power : G ibson, l van cev ich ::tnd Donn ell y ( 1991)
clas sifi ed powe r as eith er perso nal or in stituti
onal . A manage r's

https://scholars.fhsu.edu/jbl/vol3/iss1/6 41 2
 Dm is. F ra n ~ lon er. Vo
h. and
llrat Davis et al.: An Empirical Test of Stewardship
II ill Theory
Journal of Business and Leadership: Research, Practi ce. and Teaching
2007 . Vo l. 3. No . I. 40-SO

personal power is developed w ithin th e context of th e nal s relati C ulture:

ons Hofstede ( 1980
1) , 199 described an
interperso hip rath er th an th e manage r's positi on indis co v iduali
ismm- ll ec tiv d im ension of culture th at 1vo uld
within the fi rm. and is grounded upon th e subord in ate's support a stewa rdship-ori ented govern ance stru cture. The
identi fi ca tion w i1h and res pec t for th eir leader's co mpetence individuali sm dimension emphasizes personal goa ls over group
and abi l ity . T hi s fo rm o f pow er inc ludes French and Raven' s goals w hi le th e co ll ec ti v ist d im ension defin es th e se lf as a part
( 1959) referent and ex per1 power . Director·sw ill perceiv e CEO of th e group . O ne's group m ember ships are an import ant
stewa rdsh ip w hen 1hey obser ve th eir man age rs utili zing stat em ent o f id enti ty and achi evement . Coec ll ststivi have very
persona l power to modify th e behav ior o f th eir fo llo wer s positi ve allitudes tow ard harm ony w ithin groups, avo iding
( Da v is et al. , 1997). Converse ly, o pporluni sts wi ll tend to co nn ict and confrontati on, wh il e stsindi v idu ali see
emp loy differenl ty pes o f power th an do stewa rd s. For instance, co nfrontati on as an oppo rtunity to acti vely reso lve co nflict by
they wi ll tend to use coercive or instituti onal power th at is communi ca tin g more direc tl y. Co ec ll t ivi sts prefer long-term
deri ved by v inu e o f th eir form al author-il y in th e orga ni za ti on relati onships and wil l frequentl y require more tim e and expend
( Dav is, et al, 1997) . grea ter effot1to become fami liar w ilh oth ers prior to a bu sin es s
transac ti o n. Indiv stsidu a li are mo re short-term orie nted,
H y po th es is 5 : Exec ul ive repon ing hi gh nalperso power choos in g to co nduct business in depend y entl of persona l
w ill be posly il ive assoc ia1ed w ilh tor·
d ir·ec obse rva ti on re i ~Hi o n s hi p s, usin g a cost-bene fit approach to eva lu ate
o f stewardship-o ri ented C EO beha vior. bu sin ess exc hanges, and au empt ing to redu ce th e ri sk s of doing
bu siness through en
veco
ist cultures
form al co nlr·acts. li ee. ll cti
Sit ua onati l Fact o r s
arc mo r-e ndu co ci ve to stewa rdship govern ance structu r es w hil e
d ivinid ual ist ic c ultures tend to foster opportu ni sm .
M an age m ent phil osoriph sr y: /\ gy ( 1973) arg ued fo r ih c
deve lopment o f norm al iw models of organ iza l io n base d o n H y poth es is 7: Exec uti ves repo rtin g co ll ectivi st cs ulture
se l f-ac tual izi ng ass um pl ions to create an orga ni zati e onal cu ltur at th eir· co mpani es w ill be pos iti ve ly ass oc iat ed w ith
supported the development of slewa rd ship types of director obser va t ion of stewa rd ship-o ri ented C EO
relationshi ps be twee n excc ul ivcs and th eir firm s. T he positi on behav ior.
advoca ted by A rgy r is ( 1973) wa s sim i lar to th e argum ent s
adva nced ea r li er by McGrego r ( 1960) in hi s d isc uss io n o f Po wer di l ance: A second d im ensio n deve lo ped by
T heo ry Y manage ment and by Like rt ( 196 1) in hi s co mpari son H ofstede ( 19801), 199 to characteri ze t he cross -cu al ltur
of Sys tem ~ manage rn cnl w it h more co ntroed l-o ri ent sys tems. di fferences thi s is parti cul arl y releva nt to stewa rdship is th e
Eac h o f th ese ih eo ri sts advoca ted th e deve lopment of co nce pt of power di stance . Power d istance is ge nerall y defined
normalive mode ls o r organi za1i on. brea k in g w il hgem oso
adi
onal e 1i
ptr phi as " th e ex tent to w hi ch less ul powerf
members o f in stitution s
ma na nt hil es to fac i I ilatc th e g se l f-act uali zin and orga ni zati o ns w ithi n a co untry ex pec t and acce pt th at
be hav iors that arc co nsistent wi 1h stewa rdshi p th eo ry. powe r is d istri but cd unequall y " ( Ho fstede, 199 1: 28 ) . In certain
W alton ( 1980 , 1985) ad voca ted hi gh-co mmitm ent cultures,ly lar relati ve ge differences in po wer among members
rna nage mcnl ph i loso phv that wa s char·actcr d ize by hi g h are accep ted and to leraled. In a culture w ith hi g h power
parti cipati on. open co mmtiuni on,caempowe rm e nt o f wor·kers. di stance, th ere is an acce ptance th at less powe rful m embers
and th e es tab l ishment of trust. Law ler ( 1986 , 1992) elaborated w ill be depe ndent on more mem po w erful
bers and privil eges
on t his vi ew by co ntra sl in g the manage ment
he phil osophi es and statu s symbo ls arc both ex pec ted and popu lar. In lo w
described as co ntro l-o ri ent ed ve rsus in vo me
-or
. lveienl nt eu powe r· d istance cu lt ures , in equ al iti es are minimi ze d, th e
Acco rdin g to L aw ler. the co n1r·o ed approac
cl-mi n1 h is based 0 11 in depende nce o f th e less pow er ful is va lu ed and enco uraged,
a rnanagc
ing
ilt
phi
1·1
i contro
the
losop
ment
g hy th think in am ll pa and statu s ands m c las
bo ls sy are frowned upon ( H odgell s &
or the wo rk mu strtbe: sepa rated fro m the doin g pn o f the wo rk-conlr ma
eme Lel uth
-ocnlph
scl
rihmcnt as , 1993) In hi gh powe r- d istancc cultures, orga ni za ti ons
p<llh
and
Invo l l ve nt nt ed ::tp i'Oac es i; l' ·o ar·c ccntr;tlr
d. a ze nd th ey include erences
large diff in auth orit y,
<;c r- na ge ::t nd do not crc:at t c a scp<ll·a ion a1 nong 1
nd dosal<
g ntr
co o·y. .11 perqui
l lin a
g. nd sit es T he opposuld e
it wo be tru e in a lo wniti o
thin k ing. ::t ir th e wol'kump. Ttiohenkey ass power di ~ t an ce ·ga za Low powe r d istance cultures are
in i nvo mlveent-ol'i ented appi'Oach cs is thatcn
en
sw henchaemp loyees ar ·e more co nd uci ve to th e deve lop ment of stewa rd shi p relati ons
iv ll oe and responsib i l it y they wi ll deve l f- lop se beca use their mem bers p lace greater va lu e on th e esseynti al
con tro l of th eir he hJv ior.phimelosop hy equalit o f all peop le.
T he manage nt of an organi za tio n ca n crea te a
H y pothesis 8 : Exec uli ves repo rti ng low po w er di stance
context in w hi ch a stewa rdship approach is maintain ed. Th e
at th eir co mpani es wi ll be positi ve ly assoc iated w it h
crea ti on o f theme-oinvo
r ienl
l veed nt management "'illd lea to
direc tor obser va t ion o f steward ship-o ri ent ed CEO
th e emerge nce o f o rga tinonal
i ;:a behav iors co nsistent w ith
behav io r.
stc11 ard sh ip th eo ry.
M E AES SUR AND METHODS
Hypothes is 6: Exec ut i ves reponing hi g h in vo melve nt
situat ions at · the ir co m pa ni es w ill lybe positi ve Sampl
e
ass oc iated w ith d irec to r obse rva ti on o f stewa rd ship- W e crea ted and mai led a sur vey to 500 randsted ylected
oml se
ori ent ed CEO behav io r. pub li cly li co rp orati ons, ta rgetin g both th e C EO and th e

Published by FHSU Scholars Repository, 2007 42

3
Journal
Dav is. Frankof
fort Business
alh.er.
and
Vo llr & Hill
Leadership: Research, Practice, and Teaching (2005-2012),
Journ al or Business andce.
rch.
s:Lead
and
Prac Vol.Re3ea[2007],li No. 1, Art. 6
ership
Teaching
2007. Vo l J. No . I , 40-50

board s of directors of th ese co mpani es in 1997 . Th e res ult o f co mponent item s indi cated a three -co mponent so lut io n. Th e
th e initi al mailing and fo ll ow- ups is th at 16 1 d irec tors and 135 first co mponent ( identifi cati o n) had si x it em s and ex plai ned
CEOs responded . Stati sti ca l tes ts comparin g th e mea n response 23.4% o f th e va ri ance, th e second ( in vo l vem ent) had three
for th e va ri abl es betwee n w aves o f data co ll ec tion were it ems and ex p lain ed an additi onal 16 .9% of th e vari ance, and
insignifica nt , sugges tin g th at later res pondent s we1·e simil ar to th e third (c ul tu re) had fi ve items and ex pl ained an add iti onal
earli er respondent s. W e y ielded I 02 matched pairs o f CEO and 15.4% o f th e va1·iance. The sca les fo r th e depend ent and
direc tor respon ses. Miss ing data redu ced th e number o f in dependent va ri ab les appear in appendi x A .
companies in o ur analys is to 100 . T hi s stud y mee ts th e
minimum acceptable response rate o f 20% for dsm vey -base C o ntr
oal Va ri bles
resea rch ( H itt . Hosk inso n, Jo hn son. & M oese l, 1996) .
We inc lud ed se ve n co ntro l va ri ab les co mm o nly fo un d in
Unmatched res ponses were used in our fac tor an::l liys s. but
co rp orate govern ance resea rch: Pro fit abilit y, cap ital
we re di scard ed before we tes ted hypoth eses.
ex pend itures, stoc k o w nership , dualit y, fir m size, lo ng-t erm
compensati on. and board tenure. Th ey are co ntro l va ri ab les in
Dependent Variabl e
th e usual, stati sti ca l se nse o f th e ter m . In multi ple regress io n
We mea sured th e dependent va ri able with d irec tor surve ys. analys is, th ey may co mpete wi th our hypoth esized co rrelates to
W e deve loped an eight-item scale as ses sin g th e lea dershi p account fo1· vari ance in th e dependent va ri ab le. A lth o ug h we d o
approach th eir C EO ex hibited . A prin c ipal-co mponents fac tor not frame form al hy potheses in vo l v in g th ese vari ab les, we note
analysis determin ed w heth er a redu ce d se t o f the co m ponent th at each may serve as a mechani sm to co ntro l CEOs.
sca le items co uld be ex tracted. T he th re ho ld estab li shed in
Pro fit ab ilit y: Dav is et al. ( 1997) pred icted th at fir ms wi th
advance for th e se lec ti o n of fac tor it ems were a fac tor load ing
good ali gnm ent betwee n th e CEO phi losop hy and the fi rm 's
of .50 or greater and at least a .20 diffe rence betwee n th e item 's
gove rn ance stru cture wo uld tend to have supe ri or pro fit abi lit y .
loadi ng with its fac tor and eac h o f 1he other fac tors. T he
W e measured pro fi tabil it y as th e diffe rence betwee n fi nn and
analys is o f th e eight co mponenl items in dted ica a tw o -
th e mean in dustry relllrns on equit y, ba se d o n fo ur-d ig it SICs.
component so luti o n th at ex piJin ed 56 .-l 0 o o r th
e T1·ari
he an ce.
D ata we 1·e co ll ec ted fro m Rese:J rch al Insig ht.
first component poss ess ed fi ve items refl ec tin g a stewa rdshi p-
C apit Ex penditures: D av is. et al. ( 1997) argued that
ori entati on. T hese items w ere totaled for th e subseq uent
C EOs w ith a stewa rd ship perspecti ve wi l l possess a lo ng-term
analys is. T he seco nd co mponent co nsisted of th ree items
perspec ti ve fm th e firm and w ill pur ue strateg ies th at suppo rt
unrelated to stewa1·dship and wa s not use d.
long-term perf o, rm
ge anma ce lik kin cap it al in ves tmen ts.
Ind epend ent Vari ables Ca pi tal ex pendes itur we r·e com put ed as a fi rm 's capi tal
experes ndi tu d i v ided by its total asse ts and subt rac t in g th e
T he sured
independ
re m11 ithentC va1·iab les we ea EO equi va lent ind ustr ) mea n, aga in base d on fo u1 cted
·g-di
it SI
from
Cs. Data
surveys. W e empl oyed pre-p ub li shed sc ales to measure e fire co th l ve 11e le Resea rch Insight. p: ner s
of th e in depend ent va ri ab les ( hi gh order needs. ex trin sic t ock Ow hi W here CEO's ho ld gre at er proporti ons
mot iva ti on, va lue co mmitm ent , personal power. ndr p0 :J 11e Of kStOC
i. th ere II ll be grea ter degreeS Of al ig nm ent ll' itiJ th e
d istance) and crea ted new sca les to r th e three remai ning int erests o f th e firm and it s shareho lders (Ei se nhardt . 1988:
ind ependent va ri ab les ( identifi cat ion. i111 o lvemcnt , and culture) Jensen & M eck1.l in g, 976) W e co mp ut ed stoc k ow nerships as
usin g factor analys is. the perce nt age o f th e firm 's co mm o n shares held by th e
First, w e se lected th e fi ve pre-pub li shed scales. For th e first C EO/ nt.
e' ; Pr de D ata we re ectcoedll fro m proxy statements.
two, w e used Frankfort er, Dav is, & V o llr 's
a th 10- (:~00
item 1) Du ali ty: W hen th e CEO also serve s as c hair m thane of
hi gh order needs sca le and th eir 9- it em ex trin sic moti va ti on boa rd (co m rn o nl v refe rred to as the ndu al rn govc :J ce stru cture),
scale. Th e third w as a I 0-i tem sca le deve loped by Sc hec hter he/ she it ma) th e lim boa rd's co ntro l o f mana ge me nt
( 198 5) meas ured va lue co mm itm ent. Th e fourth and firth were ( D onaldso n & Da1·is. 1989 n.
ll iam
1985).
, 199 1: Dual
\.Viit y so
sc ales develo ped by Frost and Stahelski ( 1988) to mea sure is a dic hoto mo us va ri ab le in 11hich 0 represe s 111 out side board
power and po wer di stance . T hese sca les arc b:J scd upon leadership ( kn ow n as the in dependent governan ce stru cture)
French and Raven's ( 19 59) bases o f soc ial powe r and corts rec ande Is rcrr sehere nt i n ~ t a n ce s 11 th e CEO a lso ser ves as th e
se veral sca le form at co n fo unds fo und in prev ious resea rch. chai rm an o f t he boa rd . Data we 1·e co l lec ted f ro m proxy
Referent and ex pert power subsca les we re co mbin ed to fo rm an statement size:s. I'll
11 - item scale represe nting pe1 onal
·s powe r. Coe rc ive. F irm <.: siLc of th e firn1 ma y 1ntlucn cc the fo rm o f
legitim ate, and rewa rd powe r subscak s we re co mbin ed to form po we1· a l-oCt::O
r u ses. exa n1p le. a L'EO in a a) vny large fi rm
a 12-item sca le representi ng po,ver diSie sta11 Ce. 111 ce th es 11 not h:11e as mu ch t veopportunit
) thtoe d i1 ha ·ec co ntac t
scales had p1·ev io usly -estab l ished rel iabil it) (a lpha) 1neas u1·e<>. ncces sa1·) tL) t' Stabli ed
sh. wW
topersonal
e
r fi po wn co lll ll rm
fa ctor analy is wa s not necessa ry to for mul ate th ese ll1 c size by takin ogf the
the ltotn log numbe r of em p loyees
meas ures . ( F1·ank to n er. et <d., 200 I ). 1cd Datafrom
ere
11 co l l ec Rese arc h
Second , we appli ed facto r analys is to til t: CEO surve) S fo r I nsight.
onensa
co
: vc
th e three remainin g ind epend ent va r iab les. empl oy in g th e same ng-
Lu te rm mp ti E:-.ec uti co m pe nsa ti o n th at is
dec ision rul es w ith th e ind epe ndent va ri able s as we did 111 lo ng- term in natudre mi ght be u se to uea te ali g nm ent w hen a
determinin g th e dependent va ri able. T he analys is o f th e 1 -1 CEO is ass um ed to be opportuni sti c, rather th an possess 3

https://scholars.fhsu.edu/jbl/vol3/iss1/6 43 4
 D:"kFr:
lon
>S. er.111
. and Vo ll ra th IIIII
Davis et al.: An Empirical Test of Stewardship Theory
.l oun wl or Ousin
css a nd Lc~ ders hip · Research. Practi ce. and Teaching
2007. Vo l. 3. No . I. 40-50

stcwa t·dshi p ori entati on (Jen se n & M eck l ing, 1976) . We Method
ca lcul ated long-term co mpensa ti on as th e percentage o f shon
Th e data for all but one of th e dependent, independent, and
term to total exec uti ve compensati on. T hese data were
control vari ab les were co ntinuous. The other one was
co llec
ted from proxy statement s.
di chotomous. T herefore, w e co ndu cted hypoth es is testin g using
Board tenure: With steward ship's emphas is on deve lopin g
multipl e regress ion analys is.
and maint ainin g long-term relati onships, w e anti cipate th at
C EO's wi th stew ard ship phil oso phies will tend to have serv ed Res ult s
on th e board for a relatilyvelong peri od o f tim e. Board tenure
wa s meas ured as :h e year th e CEO first began ser vice on th e Figure I di spl ays a v isual represe ntati on of the control and
boa rd . Da ta were co llted
ec from proxy statements. ex perim ental vari ab les.

FIGURE I : Visual Representation of the Co ntrol and Ex perimental Va ri ables

C unlro al lc.
s:x\cs'ariahtc
l'ro llt:~hli>l y
Sloc k ownersl
C ap ll pe nd>tur
11p
D u:~ l >l )'
Fmn \ I ll'
I ll ll g_- l l: llll
'\ illCU
10
C 1llp 11 11
I)O aHJ IC i llll\..'

Ex pnimtnlal \ 'a ria ica

On
cshl
On C
tnnINeeds
gh Order
ll> ;dc>c Mo
e
Ex i> Viii>
nl>l i>
Va lu COilllll>llll III
Pcr...,o lna J>o w~r
ln vn lvcm c111
C ullurc

Tab lelowI be shows th e descri pti ve stati stics, alpha s, (N unn

ll y,allio
y, 1967) . Addit na we obse r ved no multi-
va ri ati on in nat ion fac tors (V I Fs), and th e co rrelati on co llinea rit y probl ems th at wo ul d affec
t th e result s, with only
ma tri x. W e meas ured reliability by co mput in g alpha one va ri able ( hi gh ord er needs) ex hi b it ed a V IF th at exceeded
scores . A ll alp has exceeded th e minimum stand ard o f 2.0, far from th e criti ca l I im it of I 0 (Ne tt er, Wa sserm an, &
.50 foent r al
ex perim va ri ab les and we re dee med acce pt able Kut ner, 1989) .

Tab le 1: D esc er·i ptiv S tati st ics, A lph as, Variation Infl a tion Fa c to r·s (VI F s ),
an d t h e Co n eiolat
n Matr· ix

rvh.:all .S I) AlpJII :~ Sie

enlliVII'
\\:il'd
tnn i-s1c- l'c.rsoll >gh Ex ld Va lu ~ 11al
' h'I o rd c1 111 U I II{1
V;0 1l CCIII Oil Cll llll1l - powe r
II CCd \ 11111 lllp
Cnl
h ccd' 21 20
Sicw:l r lb ~ I 7<) l
l> t: nnki 11 43 ~ I ~ :\8 X3 ~ ()J 10*
F\1 11 11 '\ IC 111
0 lO(1\ ill ll 2') 92 ) 62 X(, I (,<)O 07 20 41 *'
ld enlill cai> il 62 -11 9 71 I 35 -O:i 04 - 06
Va lu._; C {) llllllltlll ~ tll 4 5 ()(, 3 <JX 86 I 75 2x•,.. 31** - 10 .Jo••
Pc r~ un t ll po wer 39 S5 5 I0 81 I 48 19 ' 47'.. 23 05 t6
lii \0 \ VC il\ C ill 10 2 1 I 97 71 I 16 26** 04 . 01 ()<_) 18 . 09tu
Cul re 2 37 50 I 61 50*** 20
.09 . 25* 44*'* . 18
\\l\VI: r Cli \U IIl CC 25 cI 5 88 81 I 20 - 14 -.08 II 03 - 20 ' 12
l'>ulilahllil ) o c9 n49 1.3 1 09 26 '* 08 12 . 02al es
.08 - 14 60
>p C'< ll cx pe nd>lllr 36 1.1 6 - 13 . OJ - 09 s Oc R 08 04 12 6 . 13 I
Sloc k O\\ nn l11p 12 10 - II - 13 14 0 1 ay -.00 60
D11 l11 .49 1.3 3 -O S .02 - 2 1* II 19 -.05
F i1111 Sttc 2 66 76 I 46 -04 08 - I~ 24' 06 .06
Ln m
n g-lcrco mpe
ton
ns at 23 20 1. 50 06 09 - 13 34* ** 27 ** 03
llnard tmurc c4 76 9 t8 I 43 -.0 1 07 36 *** - 25** -.08 OS

Published by FHSU Scholars Repository, 2007 44

5
Journal of Business
Davi s. Frankforter. Voll
ra & Leadership:
. th and Hill Research, Practice, and Teaching (2005-2012),
Journ al o r Bu Vol.
siness and Leadership 3 [2007],
: Research. ce.No.
Practi and 1,Tea
Art.
chin6
g
2007. Vol. J. No . I. 40-50

Co ntinued tabl e I
In vo lve
- Culture Power Pro fi ta- Capital
k S toc Duality S ize Long -term
lll Cill di St (l llC c.! bi lit y Expendi - owners hip Co mpen-
lures sati on
Involvement
Culture . I5
Power di stan ce -. 10 -.24*
l'rotit abilit y 09 2 1* - 05
Ca pit al expenditures .05 . I0 -01 .07
Stock ownership .05 . 16 ()) . 19 - 16
Dualit y I7 . II -.23 * - 08 07 . 12
Finn size ()() 08 10 II 26* -.02 .22.
Long·tern
nsation
l cu mpL: -.06 12 06 I0 I ~ - OJ 2 1*
Board tenure - I t} -. 20 . 0~ - 16 -.06 -.23 * -.28 ** -. 14 -.04
• r < .05
.. p < .0 1
••• r < .oo 1
Tab le 2 shows th e mu ltip le regres sion res ults. Mode l I th e depend ent vari ab le, th e F stati sti c w ill not be stati st ica ll y
eva luates onl y the regress ion result s mea suring th e effect o f th e sionifi ca nt Th e res ults for model I show no exp lanatory power
contro l variables on th e depend ent va ri ab le (s tewa rd ship) . Thi s fo~ any of th e control variab les over th e depende nt va ri ab le.
allows us to di stin gui sh between th e effec t of th e con tro l and Sim il arl y, th e overal l mode l ' s ex p lanatory power over t he
th e experimental vari ab les o n th e depend ent variabl e. In thi s dependent va ri abl e shows an in signifi can t F of 1.5 8 and an
2
model, if th e co ntrol va ri ab les have no exp lanatory power over adju sted R of - .04 .

Table 2: Mu ltiple Reg ress ion Results

t\ lode l I i\ lodcl 2 i\ l o dl'l J

Variabks Beta Beta Beta
Constant 22 .3 I 9. 13* ** 7.20 2.54* 8 73 2.50*
H ig.h er
ord need s .06 1. 19 09 I 68 *
Ex trin sic mo ti vati on .04 1.28 OJ .34
ldelllilicati on - 06 -138 -.07 - 1.57
Va lu e co mmitllh.: ll t .02 .38 .02 -.37
Pe rso na l po wer 01 . 15 .0 1 20
l ll vo lv..;ment 20 1 19* 19 2 I 3*
Cultu re .J I .J 68*** ..J 7 523***
1\lwcr di .S l1 11 l Ce 0I 01 - 02 - 73
Pwli tahi
y lit ()I () 6 7 - 01 - 1.08
C apita l e~ pcnclitun.::-. -0 1 -1 OR -O J - I 69
Stnc
owne
y h: rsh ip 01 () 66 - 01 76
Dua lit -.32 - 68 - 62 - I )7
Firm size - 09 - 28 - 12 -.45
Long-{ crm co
c ns
mp ati0 11 77 65 7
1.1 I 16
Boa rd tenure - 01 - 48 -.0 I -. 18
Adju sted R2 - 04 10 .36
.54 6 29 *** 4.53 ***
df 15
• p < 05
** p < .0 I
... Jl < .0111

M odel 2 eva luates o nl y th e regres sio n res ult s meas urin g th e
ef fec t of th e ex perim ent al va ri ab les on th e depe nd ent va ri ab le.
exc ludin g the effe cts of th e contro l va ri ab les. I f th e
ex perim ental va ri ables have ex p lanatory power· o ver th e
dependent va ri ab le. th e F stati sti c wi ll be stati sti call y
signifi ca nt. We find th at mode l 2 show s good exp tory
lan:1
power of th e ex perim ent al va r·iabl es ov er th e dependent
vari ab le, w ith in vo l vement and cultur-e achiev in g stat isti ca l
signifi ca nce. The ove rall mode l 's ex plan atory power over th e
dependent va ri ab le y ielded a stati sti ca ll y signifi ca nt F of 6.29
and an adju sted R 2 of .30 .
Mode l 3 di sp lays t·csult
or s f' th e full model. in clud in g both
groups of contro l and ex perim ent al va ri ab les . I f the co ntro l
vMiab les do not interac t wi th th e ex perim enta l vJri ab les. th en
th e res ults fo un d in m ode l 3 w ill be sim i lar to th ose found in
mode l 2 and mode l I . In thi s m ode l, in vo lve m ent and cu ltu re
contin ued to be stati sti ca ll y signifi ca nt , whi le hi gher mde r
needs wa sll ystJt isti ca signifi ca nt onl y in th is mod el. Th e
ove rall model 's ex plan atory powe r over th e depende nt var iabl sJr e
was imii to tha t o f model 2 , wi th a stati sti cal ly signifi ca nt F
of 4 .53 and an adj usted R 2 of .36 .
W e co nducted hy poth es is tes tin g usin g o ne-ta il ed tests
beca use d irec ti on was predi cted. H ypo th eses 6 and 7 ac hi eved
cleat· suppon in models 2 and 3, whil e hy po th es is I wa s
support ed onl y in model 3. Th us. one of th e fiv e psycho log ica l
and two of th e tlll'ee situ at ional w ere stati sti ca ll y significant. Of

https://scholars.fhsu.edu/jbl/vol3/iss1/6 45 6
 I )," , " l 1:111k1l o • 1 ~ 1 . VP III. :ilh
alld II III Davis et al.: An Empirical Test of Stewardship
ltHulla ll" " " ~Theory
ss 11d L~ackrs hip : R cs ~arc h . racti ce. "" d Teaching
200 7. Vol. 3 . No I . 40- SO

variab l lli es (' I ~O s ursuil o r higher (isli ypoI )orckr wa s Dav is,an,.1 .,ll oo Sc m1 1:. , & Do naldso n, L. 1997. Tow ard a
11<.:e '> lli es posili ve ly ass oc is
csis
cd
iCnl
ein
ri:11
cand
iab(w SiiU:lli
lc
li ycpo ilh OnaJ Sleward ship theo r y of manage menl. Aca d em y of
i ) pOih ~ l eOwa r rd s h ip . lli V:J s, VO Ve lll Ma na getmRev eu iew, 22: 20-47 lo.. I
es 6) ullur lli 7) we re posil i ve ly
a ~s oc i a l e d w ill!(.1997)
model
ory
sl
expsewael
l rd ship Ove
ycielded
a g r::~ ll , lli Davi l. DeA nge .. 1988 . M nnageri al co mpelili on, info rm ali on cos ts,
liip ood allitl power, ex plai ri nin ancc
canl g leve lsand
in models o l' co rp orate govern ance : T he u e o r acco untin g
hi g hl y sig nifi va 2 ::~ nd 3 . :h
He perfonn<tii Cemeas ures in proxy co nl ests. J ournal of
Acco unting and Eco no mics, 10 :, 3-36.
llbcu ss iou am i F uture v se is an
Donaldso11 L ., & Da v is, J. 1989 . CEO governance and
l)a el al. ( 1997 cuscd
s-o) nsli
rand
argued
rc I hal slewa rdship ::~ ge n cy­ shareholder return s: Agc ucy th eo r y o r stewardship
(l la1i ip cs ull as a ma ier c ho ol' ice bel wec n theory. l)apcr esenl cdpr al llic ann uii l meetin g of lh e
ag<:nl: s and nc ipals.pri O ur slud y find s 11i c C oc
ed
EO dlh-repon
c10r .:: a A ca, dem
c ge y o r Ma11a rn n1 W ashin gton, D .C. mtl. c
a nl cc~.: d c n! s
ror ~ 1 -:: ward s liip ss ia1 wi dirc
p c rcc pli o n ~ of' C I:O I) pe, cw u n s i ~ l c nl i11i c.:: II 4 o r I li e Dav is cl l)u hon L .. & Dav is. J. 199 1. Sl eward ship lheor y or ;~ ge n cy
;II ( 199nna 7)
rin·o
cll(li
cpr
ipalcc- mode 1n ge l. 1-'1 1n our rcse.!1 u
ig
wee
card
lh
lil
konal
co alll
cl,sli
:nc
ip<
nwoip-ori
:1
ds
caadd
lu ode
sl lli
r thi
enl co
sed<1-y: aliCgn1
I ~ O gove rna nce 8nd shareho lder rclurns.
ha we C811 il l'li c ew 11 111 A uslrali an Journal of Manage m ent , 16 : 49-64 .
.:: prin :1 1d C I ~ O s 11 c!\ i ~ l.
l ·cc k s, IC , & No llri:. , N . 1')92. Beyo nd th e hy pe. Boslon:
l lndin g~ llll 1r -, nillc i1 1l i1i
ll ;u·1ill·d<11 l l u hoo
-, <:: ss Sc l.
ilr<:: '> 1-'ir ~ l . i11 l csnl !in
eccd
lcw;
al
sc,g!h
ocd
c i'!li
ose e 1:1111
: 1cl<1rs .:: <, Jr bliip we
nllnn lli 11 dll 11d be pl· e ~c lll w hen ;1
lew;
ll!hal
e
ll dlrl·C
mW!li
lI'dleIO
Wc'>1:0 I
l : i ~c i J h ; lrdl , K . 19 8X I-Ih
.nryo n
and
A ge cy-
in s tiluli :J eo
ei ve '> '> hil i< mo ( 1')~ 5 )
<trg 11 OI
ed
01:1ekn
11!cal
11 lll own u urc w hirsall ch cd,
yiacl
e ca
igcrs
bc
slso
lll(lll
yi olsl'ra1
agc n1k
w:t sho ill
cxp l ; u ~;JI I O II S or
Th se rcl ail
a, cnsal
I sales
. cnt
ion
, 31\'lanagt:
.co
1: mp
Ac:td<:n1y of rn .lournal 488 -5 11
nuni c;ill am cy CO illr uld un vc 1:a
ppli ( 1 9~X) . () ui1111 :111d Junes ( 1995) . ami i IJ ;; 111 '. & .I ' ~'>e n , M . I 'JS J. p:traliSc on o f' ownershi p and
( 1996 u1
p/o
ail
nc
) rspro
nh
ary
a!
cv idcncc
vd
:. ide
irec
O urar:.-
l urs
10 Ipercc
li e i vc u1dsl cll':l rd s C\l lllr or
CO il lru l. .l our nal Law & Eco nomic s, 2 6 : 30 1-325 . s
findin gs ow Ili lii !r i11 !li eclwiDlioen
snali I lipsyc
av e Cho I:Olog ical
C I:O 11li 1c1ors co nsisl rc p o n ~ am illlali 1:1·ank . 1{ . 1 9~X . l'a ss iou within reason: T he strat eg ic r ole of
<.: lll i11J s' al. ( 1997) dd
y ssn10dcl. emotions. New York : Norlo 11.r. o n
Seco nd , 1hi ~ llld :1 lo prccc arch
vvai
ly
1n)
d
iuus
oy
III
)orc
ld:
.vi1sc:1
by
idcd
1g
C
rese
orpo
rch
C by andral
eIS boc l<trgo111pl
vc m :
'> UI vcy- sc 11:1 p1 il! dirc c l o r~ C I : O ~ al lli l: rankl .:: S., Da v is, J ., & Vo ll .-a tli , 1cc')
) . _()0
ement
s 1. W hy impl
s: CQ J1:1 tn !li e du ._:e;tl gove rnan ce lru lm Mu ch :td o aboo.ul so melhin
<t :thilil <1 1d is lli crerm c li111il cd i11 Ce il ~ nlral Busin ess Review XX : Ll -9 .
lil'cdi ctisve l il y.<thi Thi is I ru e u i" prev ious 1rcnc hliplliorcsc:
agucd
as
i' a b ge cy
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1111 be 111 11 o ur sl ud
y oy ' sscr vc s rprim 1r dal<~
: ' "'..: as
ll ni vc rsi1 y oi" Mi c hi gan
, ln
es lilul for Soc ial Resea
rch.
dll iucsry
govc
e:-.a
l:lcusin
, rmplc
C\l g pri or
rurlllill')'
lli c d:ll
hc nc lll or :l
sec da da prov idin :1 ~ liiiiU:Ird lli lll lill o r Frusl . 1) ., & Sl:th c lsk i, t\ . 19XX
:tli
surclnenl
e. cTh
sysl
nl c
lll c:J
l'11111r
c:l
Ic l·cli
l'llilll
gm
c corc. rp OI' :I <.: Cc '> ui' l:rcnclil :tm Ra ve n '~ ha <;cs
or soc i:d powe r in
11ork g r o up ~ .l ourual of A pplied
y, IPsyc
Socho
ial log 8:
ES REFEltE NC 17~ - 1 X t) .

t\ ld c1.lcr (' I '> T2 E' istt'l ll'l'

g, n: , , l:itnlncs
: 111tl nm t lr : c; lil'>l ,lll .I ' II ,II ICCV
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'>t:ll inl gs
1cc N..:11 ll ullluod
ell, II . 11 11' 111
CSS ;l cklll:tl l ,
Al ll .I , .\: O ldh. :t ,lll (; 1')7(> . Mo ii V<t li 1<lll g11 lhlh
wgli mue
!.!.) l'> ( ' 1'>7
llllg.
1 /l O
1 rg:
1\ ;III
llll O:l l< 111 :111 cw , II :II :1 1d ~..: 11 -d c, oi' ork 1 ·e~ 1 o i' a 1hcoBeha ry . Organizat
v io , nal ior
!uall tn l'uhlil' t\d miuistration l<ni :.11 : 15 "1-357l ul
. a and llum P lll l'l-rformanrc i 6 : 25 0-2 79 , .

IIIOII II 1\1 . l l)(,l)

e cilIIS
co
lldcnllli
, mlMo l', so tll\111 :~nd 111 ili <> ll ll o~ kin s o 11 , R., Jol111son, R. , & M oc sc l. D . 1996 . T he
CIII.
: n i.
<ll ·g :~n i ; a l io n.JI vu ill l vc i ii Ad rn inistrativ l llilrk I( H corp cor
ooral
l l rrn
<.: llr Qamll i11n ova 1i on. Academy
uartcd ..J 1 <1 6 - )~5 of Maua~.:ent e nt .lour nal , 39 : I OX<I - 1III 0.

)'A,c R . & Mac l\1ill<i co

1!)90
llnl .I. C ri sis
, cnl e AafOCUS nd oi' ll od gcR.,
l ls. & Lul ha11S,
nio1
-:rna ·:d
opcns
ccg
1
ns.
C
F.
alsin1p
nage
ies
ro tfol ls'
iona
C199 ir, . loc:
U .S. M ullin
lli(l ll il ~e ri ; d illlliiiiii C: II iO II S: c ~ lud y or co lh Of n1 a1 1ra1 tl 1n n1 ss
:t ll enlio
<:JrS
nl o f l Op ll UI g<.: i11 SUrvivin
ns.gi li ti l :IIll
in g l Scienl't:
ly, 35 :lrr tdllll ca 1i ompeusa io and Benefit s Rev iew,
dministrative Quartn cl
(, \ LI -6. 57 25 : 4 2- ·1 ~ .

Published by FHSU Scholars Repository, 2007 7

 Journal
Dav of Business
is. Frankforter. &Hill
Vo llrath . and Leadership: Research, Practice, and Teaching
Journal of Bu(2005-2012),
sin ess and Leade Vol.Re3 [2007],
: search,
rship No.
Pracri cc. and1, Art.g6
Teachin
2007 . Vol. 3. No . t. 40-5 0

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a , le ll nd D. 1975. Po"er: T he inn e r ex peri ence . Nell'

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1: ree
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Yan , A , Ze"
McG regor, D . 1960 . The hum a n s ide of the e nt erprise. hu ( I , & 11 <1 11 . D . 200 2. Int erna
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ti ignal nm
Yo rk: McG raw- ll ill . lo r ca ree r bui ldin g : A mod nships
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at o f agen c: rel io and
psycho log ica I co ntractAc s. ad c my o f M a nagc mcn I
McGregor, D. 196 7. The profess io na l manager.
· Ne" Yorh. Rev'"iL , 27. '73-39 1

James Dllv is is an assoc iate pro fessor o l' rn anagc t ment <l No tre Dame ehe
cy
poll'her
teac
Univers
hes itbus
), ·e in s' li and
int ern ati onal bu s in ess . l ie is th e Jam es r . O'S· haughnChaeSS) ir of Fami l) Ent erpri es a nd scl'lee' as th direc to r of the Gigo t
Cent er for Entre :tuJie
preneuri
li e r tl s. (!CC il ed hi s lagc
il'h r.D.
merin ll ll ll fro rn th e Ll nil
1. Icrs ity' or 011'<1 lis rese:-Jrc h int erests
in clu de ste>va
ship
r eo
cl r·y th and tru st.

https://scholars.fhsu.edu/jbl/vol3/iss1/6 47 8
 IJ.11 " · FrnnkliI>nh.
cr.; Vo llrat
Davis et al.: An Empirical Test of Stewardship
mel till ce.Theory
Journa l o rnus incss an d Leaders hip : Research . Prac ti and Teaching
200 7. Vo l. J. No . I . 40-50

Steve n Fra nkfort er i an ilociil

ss te pro fessor at Wi nthrop Un ive rsit y. w here he teaches busin ess po li cy . H e rece ived his Ph
.D . in
manage
from
ecnt nt th Uni versity of Was hin gton. lli s research int eres ts in clu de diversit y , stakeho lder th eory, corporate
gove rnil ncc, and stewardship th eory.

David Vo llrath is a professor o f mannge

me
at Indi anant U ni versity South Bend , w here he teaches orga ni za ti o nal behav ior and
bu sin ess ethi cs . li e received his Ph .D. in soc ial psycho logy from th e U ni versit y o f Illin o is (C hampaign-Urbana). His research
int eres ts foc us on group compos iti on, performa nce, and deci sion- mak ing.

Va ness;
• Hill is an nss istant professor o f management at Uni versit y of L oui siana, Lafaye tt e, w here she teac hes orga ni zati onal
behav ior and human resource management. he recei ved her Ph .D. in business from Carn egie M ell on U niversit y. Her research
int eres ts in c lu de stakeho lder th eory and bu inc ss ethi cs.

Published by FHSU Scholars Repository, 2007 48

9
 Journal
Davis. of Business
rrankfoner. & Hill
Vo ll rat h. and Leadership: Research, Practice, and Teaching (2005-2012),
Journal o f 13u
ss Vol.Resea
s in.: and Leade rship 3 [2007], No.
rch. Practicand 1, Art.
ge. Teac h111 6
2007 . Vol J . No I. 40-50

Appendix A

Sc ales
Depe
e (An
Varia
ndent
s\\ ercd bl b) directo"
)

Please indi cate yo ur reac ti on to each o f ow

th
se gfostateme
ll in nt
Strongly Strong.!)
sag Di ree Agree
Steward ship SD
I. M y s trategic initialt
mpa vcs
e n)serve th co 's inte res ts SD D u A SA
2. My hudgete initi
co
atimpan
ves ser
J ve th 's interests I) A SA
J. f\1 y initiatives rcgn rdin g Ill ) pr o ,H.: and authori t) s en c the Cll lllp ll ll) 's int c 1 c-,~.:-. SD I) u A S ;\
4. My initiati
' t ing
cves
themy
rega rd pe !..: '\c rv co mp i ll l) \ tll! C t c ~ t ~ \I) I) lJ \ S 1\
5. I prov ide aclcqu(lt c. tim ~ l y co mp;HltC
) Hl:ttli
{ Hm ll to ho;~rd
tOr dtt \:C '\ S l) I) ll A S!\

llllkpcnJ cntr Van :d1lcs (A'""c cd b) l" l (h)

Please es tim ate how important each item is to yo u

NOT VERY
Im portant Im portant
High Order Needs
I. Exceeding hoardons expectati
of you
2. The challenge of the work itsc l f
3. Seei ng the results o f yo ur wo rk
4. Your findin g a so luti on to a problem
5. Y our agreement with compan y va lues
6. Your agreement with board interests
7. Increas
g in company va lu e
8. Your bein g a co mp any t ea m -p l ay ~ r
9. Performan ce is on par w ith mana g~ r s in similar
ons si tu :1ti
10. Your loya lt y to the co mpany

Extrinsic Motivation
I. Recogniti on fo r yo ur success
2. Your status within the co mpan y
3. Your j ob securit y
4. Wages whi ch co mpare favo rabl y wi th others doin g sim i1M or same j ob
5. R~ s pec t and re cogniti on fromesout id the co mpa ur
ny
k lo r yo "or
nt of yo ur salar)
7. Opportunit y lo r yo ur advanng
omprai
cementse
Rece i vi fr th e b o:~rcl lo r ah.i we
<' ll cl one
9. Yo ur pcrso
I nCJ eco nomic gr~ in

s ~trongl~ Strong!)
D1 ag.rc:L· t\ greL'
ldcntilication
I. The longer I sta y with thi s orga ni zati on. th e harlk r it is to b n c SD I) u !\ SA
2. It wou ld be dirti cult
lo r me to adapt to a nc·wor on ga ni za ti SD I) u !\ SA
3. I wo uld give up a lot by lea ving thi s orgaon z1ti ati SD D u !\ SA
4. I would be wil lin g to stay wit h thi s orgaonnni until
ti I retire so I) u ;\ SA
5. If I dec ided to leave thi s organi zati on. it would be dirti n cultt
o C\p l ai to Ill ) so 0 ll A SA
fri ends and famil y
6. Man y chan ges wo uld have to occur in 111 ) present c ircumstan ces to ca use so I) ll !\ s,,
me to leave thi s orga
non
i u ni

Value Co mmitment
I. My va lues and th e organi zati on's va lu es arc very s imil ar SD I) u A SA
2. I am willin g to put in a great deal or c11 rt
obeyo nd th at norm all ) ex pected SD I) u !\ SA
in order to help thi s organi on
zati be succe>s ful
3. Thi s orga ni zati on inspires my hcstj ob pcr lo nn ance SD I) ll A SA
4. I usuall y agree with thi s orga ni zati on's p o l i c i ~s on important
el
crs perso nn mn tt so 0 u A SA

,,,,
5. I c ar~ about the fat e of thi s orgaon zni ati SD I) ll A SA
6. I tell my fri end s that thi s orga ni zati on i> a good pl ace to '""' SD I) u SA
7. Thi s is one o f th e bes t o f all orga nizatio ns lo r" hich to 11 0rl- so I) Ll ';/\
8. I am glad I chose th is organi za onti to "or!- fo r ove r otkr ss I wa co nsideri ng so D Ll S.·\
at the tim e I j o ined
9. I am proud to tell o
ers
on
>th
orga
I amnir.
th
part
at o f thi Hi SD I) ll A :0, •\
10. I el l> not intend to k <tvc th is o rga n tni ;_..1 io in th e fo re ~e \!abk: future SD I) ll !\ St\

Please estimate ho w ofl L:n) ou used each heh

n :: ior to c\c.TC ISC: control ()\ er ) our subordinat es.

https://scholars.fhsu.edu/jbl/vol3/iss1/6 49 10
 Davi
er.
. and
s. Vollra
Frank fo rt th Hill Davis et al.: An Empirical Test of Stewardship Theory
Journal of Business and Leadership : Research, Practice. and Teaching
2007. VoL 3. No . I. 40-SO

Se ldom Otien
P ~rsona l Po wer
Pro mote
em th or reco1nmend
lore th 1n pro motion
2. Re comm
sem
e nd
fOr th
l\wa rd or co mmendati on
Give
emth hi gh I"K::i iOnn ancc ril tin gs
4. Prai em
se th
Give th em extra time off
('- Adv ise and ass ist them
7. Give them good ass signm e nt 4
8. Rel y on his/her good relations with th em to get the job done 4
9. Rel y on his/her people gettin g the job done because they do beca use they don' t
want to let him/ her down
I0. Set the exa mple and rel y upon hi s/her peo ple to lo ll ow hi s/her example
II . Rely on them thinking that it's to their advant age as much as it is to his/her to r
th
em to cooperate with him/her

Power Distan ce
I. Demote them or reco mmend th em lo r demoti on
2. Reco mm endsciplin th em loaryr di acti on or repr im ands
J. G i ve m th
eman lo w pe rfor ce ratin gs
4. Chewem tl1 out
5. Give th em ex a tr wo rk as puni shmc111
(, Let em
tl1ow kn th at I have th e ri ght to ex pec t to have my orders fo llowe d
7. Expect th at my orders and requ ests will be carri ed out becausee I am th
boss and th ey will not ques tiom ter
on
o or
an
a s rd fr upai
ec them to fo llo w my orders beca use th ey rea liobab ze I thlyat pr ha ve
inform at ion they don't have ander
re
th efO a good reaso n for iss uin g (lil Y order
9. Ge t them to accoeish
mpl th wo rk by demonstrating th at I know how to
perlilrm th e task
I0 Impressem th with my overall
w mpcten
y cc And ab ilit
on th e sp0t
ectco rr lOllS
12. Gi ve em
th had assignm
se nt

Pleas«.: indi
e cat yo ur re~1 c t io n to each i.) r the 1t1 ll owin
g s t ~lt ~; IJ l e nt s .
Stron gly Strongly .
Di sagree Agree
111\'0 I' VC IIIl rtl
Within a year. the hoard will
co me be more in volve
d in how the co mp any SD D u A SA
spends money (R)
2. Within a ycQr. the iJOQrd
d wil more
llbeco me in vo ve wi th my deci sions. (R) SD D u A SA
J. Wit hin a yea r. the boa rd will act to promote
skier ri strateg ic dec isions. (R) SD D u A SA
SA
C ulture SA
I The board sees myvesble
initi
attra
QSaticre
c di Qnd ti ve SD D u A SA
2. The boa rd generall
y acce pts or complies with my initiati ves SD D u A SA
J. Th e hoard reli
cs on tru st more than on mechani sms to co ntrol me SD I) u A
The hoa rd wk es ea long-t rm more th an a short -term view of its relati
onship SD D u A
wi lh rn c
Within a year. th e boa rd willnot
cr
d Qchange
em y my pc >w an utl lOr it SD D u A SA

It is reve rse-scaled

Published by FHSU Scholars Repository, 2007 11

50