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A study of contemporary leadership models in CPA firm audit teams

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A study of contemporary leadership models in CPA firm audit teams
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Dillaway, Manson Peter, 1937-
Copyright Date:
1980
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English

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Auditing ( jstor )
Audits ( jstor )
Job performance evaluation ( jstor )
Job satisfaction ( jstor )
Modeling ( jstor )
Moderator variables ( jstor )
Normativity ( jstor )
Questionnaires ( jstor )
Randomness ( jstor )
Research design ( jstor )

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University of Florida
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University of Florida
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0023438550 ( ALEPH )

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A STUDY OF CONTEMPORARY
LEADERSHIP MODELS IN CPA
FIRM AUDIT TEAMS




By




MANSON PETER DILLAWAY


A DISSERTATION PRESENTED TO THE GRADUATE
COUNCIL OF THE UNIVERSITY OF FLORIDA IN
PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE DEGREE OF DOCTOR OF PHILOSOPHY

UNIVERSITY OF FLORIDA


1980














TABLE OF CONTENTS


ABSTRACT. .

CHAPTER I






CHAPTER II

CHAPTER III

CHAPTER IV

CHAPTER V

CHAPTER VI

CHAPTER VII

CHAPTER VIII








CHAPTER IX


THE AUDIT TEAM AND ITS ENVIRONMENT.

The Audit . . . .
The Audit Team. . . .
The Phases of an Audit . ..
Audit Teams Leadership Research

LEADERSHIP STUDY MODELS . .

MEASUREMENTS. . . .

ADMINISTRATION OF FIELD STUDY .

RESPONSES RELATED TO LEADER BEHAVIOR.

MODERATOR VARIABLE EFFECTS. . .

LPC STUDY RESULTS . . .

SOME ADDITIONAL OBSERVATIONS AND RESULTS

Ideal Leader Behavior Correlational
Study . . . .
Vroom and Yetton Normative Model of
Leadership Styles . .
Item Analysis of the LBDQ Results
Factor Analysis of the LBDQ Results

CONCLUDING COMMENTS . . .


Summary ..
Conclusion. .


PAGE
iv

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102


BIBLIOGRAPHY.

APPENDIX A. .


. 102
. 104


S. 106


109


.












APPENDIX B.

APPENDIX C.

APPENDIX D.

APPENDIX E.

APPENDIX F.

APPENDIX G.

APPENDIX H.

APPENDIX I.

APPENDIX J.


PAGE

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Abstract of Dissertation Presented to the Graduate Council
oftheUniversity of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy

A STUDY OF CONTEMPORARY LEADERSHIP MODELS
IN CPA FIRM AUDIT TEAMS



By



MANSON PETER DILLAWAY

DECEMBER 1980


Chairman: Gary L. Holstrum

Major Department: Accounting


The applicability of certain behavioral and situational

leadership studies models was tested using audit teams from

a national CPA firm engaged in field work.

Leader behavior predictor variables were measured using

an adaptation of the Fox Modified Leader Behavior Description

Questionnaire. They included Consideration, Initiating

Structure, Consultative-Participative Decision-Making, Work

Facilitation, Decisiveness, Goal Emphasis, Leader Support,

and Management of Rewards and Punishment. Situational char-

acteristics measured among team subordinate members included

Pressure, Task Certainty, Need for Information, Organiza-

tional Independence, and Intrinsic Job Satisfaction. Global

assessments were obtained for team performance from







supervisors and for job satisfaction from members. Addition-

ally, a measure of subordinate dissatisfaction was obtained

by using the shortfall between the expected leader behavior

and actual leader behavior item scores on each individual

team member's Fox Modified Leader Behavior Description Ques-

tionnaire. Each team leader completed the 32-item Fox Least

Preferred Coworker (LPC) instrument.

Consideration, Leader Support, Work Facilitation, and

Decisiveness showed a significant negative correlation with

Dissatisfaction. WorkFacilitation correlated positively with

Performance. Significant negative correlations were found

between LPC and Performance when leader member relations were

moderately poor (Octant VII). A factor analysis of the Fox

Modified Leader Behavior Description Questionnaire results

yielded a three-factor solution. None of the derived factors

approximated any of the predictor variables previously

measured.

Based upon the results of this study, none of the models

tested appeared to be notably applicable for predicting out-

comes in terms of audit team satisfaction and performance.

It was also concluded that situational factors may exert a

stronger influence on audit teams than on more homogeneous

groups engaged in less complex tasks.













CHAPTER I

THE AUDIT TEAM AND ITS ENVIRONMENT


The Audit

Such diverse services are performed by certified public

accountants in both the private and public economic sectors

of the United States that it is necessary to place a bound-

ary around those areas of public accounting which are to be

considered in this study. The primary service performed by

CPAs is discussed in the following:

The objective of the ordinary examination of financial
statements by the independent auditor is the expression
of an opinion on the fairness with which they present
financial position, results of operations, and changes
in financial position in conformity with generally ac-
cepted accounting principles. [AICPA SAS No. 1, 1973,
p. 1].

This examination of financial statements will subsequently

be referred to as an audit.

The primary role of auditing has been described as "to

improve the usefulness of decision-making information" [PM

& M, 1976, p. 2], and the fundamental type of decision-mak-

ing which auditing facilitates is the allocation of scarce

resources in a society. This role is not restricted by type

of economic system or organizational structure, since infor-

mation that is improved in terms of accuracy, timeliness,

understandability, or specificity should enable better

choices to be made both in terms of attracting capital from








investors and distributing internally generated funds among

alternative uses.


The Audit Team

For the purpose of this study, it was determined that

there exists a standard organizational structure used by the

tested CPA firm on all annual audits despite the fact that

each annual audit is a unique case. Notwithstanding this

uniqueness, there are common elements of organization which

may be observed in the firm tested and in comparable CPA

firms.

One member of a firm will normally retain overall re-

sponsibility for an audit. This is generally that individual

who assumes the primary role in maintaining communications

with the client and negotiates the particular services which

the firm will provide as well as the billings for those serv-

ices. This individual is normally a partner in the CPA firm.

The key role element is the entrusted authority and responsi-

bility for providing services to particular clients. The

partner will not normally take an active part in the routine

audit work (nor should he if he is to be an objective

reviewer of the audit evidence). Consequently, a manager is

appointed to organize specific client services and an "ac-

countant-in-charge" (AIC) is appointed for the field work

phase of the audit. The AIC generally prepares and admin-

isters an audit program which, when effectively carried out,

will provide sufficient evidence for the CPA firm's








publication of an opinion regarding the client's financial

statements.

The AIC should be an audit staff member with sufficient

experience and ability to effectively plan the nature and the

extent of the audit tests and supervise the work of the sub-

ordinate audit staff members while they are occupied with

this audit engagement--both in the field and in the CPA

firm's office.

It is the AIC position which is of primary interest in

this study. An AIC will customarily be delegated extensive

discretionary authority in an engagement as long as it seems

apparent that satisfactory results are being achieved. The

competent AIC will, quite literally, handle an entire audit

engagement.

The number of assistants assigned to an audit engage-

ment is not necessarily stable and may fluctuate during the

course of the engagement depending upon the audit procedure

being conducted. For instance, a large group may be tempor-

arily required to observe and review a client's count of

year-end inventories. There is, however, a tendency to as-

sign audit assistants to engagements for the duration where

feasible. This tendency endures in practice because of the

learning period required for an assistant to master a client's

employees and the other members of the audit team.

Many audit assistants are quite limited in their work

experience and may have little more than their university








education and the CPA firm's indoctrination course to serve

as a basis from which to perform audit tests.

Since formal educational programs are, of necessity,

general in the type of knowledge that they convey, the audit

assistant finds that during the early stages of his career

there is a continual need for counsel as new situations are

encountered. As staff assistants become experienced, they

may be expected to perform work requiring the exercise of

professional judgment. During periods when a CPA practice

experiences rapid expansion, staff assistants will advance

rapidly in terms of the degree of responsibility demanded

by work assignments and may find themselves working at the

limit of their acquired skills.

On the typical audit engagement, staff assistants must

work with the AIC and their colleagues in order to make a

useful contribution to the audit. The degree of this inter-

dependency should be evident in the character of the rela-

tionship between a staff assistant and the various other

members of an audit team. Whereas most work assignments on

an audit do not require assistants to work in unison with

each other, the overall coordination of an audit team is

vital to effective performance if individual assistants are

not to interfere with the work of others and avoid needless

duplication.

During the course of an audit there may be instances

where the members of the team are unable to perform certain

procedures or provide required services because they lack




... .... ... .








sufficient technical knowledge. To fit this need, most CPA

firms employ "specialists" for aid when these situations

arise. These employees specialize in computer technology,

personnel evaluation and placement, tax planning, SEC report-

ing, or some other area of concern to the audit team. Gen-

erally specialists serve on an engagement to the extent that

their expertise is needed. In his relationship with the AIC,

the specialist resembles an internal consultant, not a sub-

ordinate. Since this study will concentrate on the inter-

play between group leader and subordinates, the specialist

will not be included as a team member.


The Phases Of An Audit

There are three readily identifiable phases in an an-

nual audit. Each has implications with regard to supervis-

ion to staff assistants. First, there is a planning phase

in which a CPA firm manager and the accountant-in-charge de-

cide the manpower needs of the audit and establish deadlines

for the completion of certain portions of the audit work.

The second phase is where the AIC and his assistants

perform field tests to gather evidence which will enable them

to form an opinion as to the appropriateness of the client's

financial report. In this phase the audit "team" is func-

tioning and, it may be assumed, perceptions of leader behav-

ior become measurable. This is the phase which provides the

basis for the measurements in this study.









The third and final phase of an audit engagement norm-

ally takes place in the CPA firm's office after the field

work has been completed. The working papers are assembled,

checked, and reviewed. Normally, a smaller staff is required

in this phase than during the preceding field work phase.

If no gaps remain in the network of evidence that has been

gathered in accordance with the audit program, the CPA firm

will issue an auditor's report and the audit team will be

disbanded.


Audit Team Leadership Research

The relative importance of leadership in the audit team

context has not been documented. In this study an attempt

is made to eliminate this void. Accordingly, this study con-

centrates on groups engaged in annual audits during the field

work phase. It seeks to determine the applicability of cer-

tain theories which purport to explain the effects of leader

behavior on group performance and on group member satisfac-

tion.

It is expected that practitioners may benefit from this

research in several ways. It could enable them to discover

possible sources of employee dissatisfaction which results

in unnecessary staff turnover. It could point to leader be-

havior which tends to be associated with high quality work.

Certainly, improvements in audit team performance in an ab-

solute sense eventually reflect favorably upon the CPA








profession as a whole by reducing the possibility of inap-

propriate auditor's reports.

Perhaps the most positive aspect of this research is in

its potential for improving team efficiency. Efficiency of

operation is as important in a service-oriented CPA firm as

it is in a manufacturing firm. It is more difficult to

measure efficiency when output is not in the form of units

of standard quality and specification. A layman may assume

that if one AIC required five hundren man-hours for an annual

audit and another completed the annual audit in a subsequent

year in eight hundred man-hours, the AIC using the fewer

hours was the more efficient. An experienced reviewer of

annual audits would be quick to point out that the man-hours

expended in an audit was seldom a measure of efficiency even

when a standard audit program is used by and the experience

level and competence of the audit teams are comparable.

Each annual audit is unique. Efficiency in field work

is a long-range necessity for CPA firms. There are con-

straints in terms of the fees a client will pay. There is

also a time constraint in field work created by the neces-

sity to simultaneously divide the firm's professional staff

among numerous clients. Further need for efficiency is gen-

erated by the deadlines which exist for the publication of

financial statements and other documents which may rely on

the same financial data (SEC reports and tax returns).

The limited time span of an audit team's existence ob-

viates the need for a longitudinal measurement of the possible









effects of alternate leader behavior on group performance

and subordinate satisfaction. Although leadership research-

ers have pointed to the necessity for longitudinal studies

[Fox, 1976a; Fox, 1976b, Franklin, 1975;Likert, 1967] due to an

apparent time-lagbetween changes in supervisory behavior and

lasting changes in subordinate performance, the temporary

nature of an audit team rules out this consideration.

Clearly, in this respect, an audit team should have more sim-

ilarity with the laboratory study groups and temporary mili-

tary groups which have provided much of the support for lead-

ership models. It is the temporary change in group behavior

which is the appropriate criterion in studying audit teams.

An audit team is a group in which the leader (AIC) norm-

ally wields extensive authority relative to his assistants

and the extent to which the task of the group is structured

is quite low. Very little leadership research has been pub-

lished on groups of this type. Two studies were reported by

Fielder 1967, p. 129 and "the data obtained in these studies

are quite weak." This study, then, concentrates in an area

that has been neglected.

The foregoing provides the background information nec-

essary to consider the effects of leader behavior on per-

formance and satisfaction measures as applied to groups en-

gaged in annual audit work in the field (audit teams).

Subsequent chapters will briefly review the research to date

in leadership and show how it was applied to audit teams in

this instance.













CHAPTER II

LEADERSHIP STUDY MODELS


The primary objective of this study is to determine the

applicability of certain contemporary research models and

techniques used for understanding leadership in formal organ-

izations for groups engaged in the field work phase of annual

audits. It is expected that the results should indicate

whether certain preoccupations in leader behavior and atti-

tude have noticeable effects on assessments of group effec-

tiveness and various individual measures of job satisfaction.

The major approaches to the study of leadership have been

classified by Filley et. al. [1976] into three categories--

trait, behavioral, and situational.

The trait approach is based upon the assumption that an

individual's behavior can be attributed to certain distinc-

tive psychological or physical characteristics. Certain

identifiable traits differentiate successful from unsuccess-

ful leaders to proponents of this approach. Traits cannot

be directly observed, but conceptualizations can be measured

which may approximate traits. For example, "I.Q." tests

are available which some presume to measure an approximation

of an individual's intelligence.

Filley et al. [1976, p. 219] state that "the weight of

evidence pertinent to the trait approach does not lend









strong support to it." They conclude that the proposition

that there are a finite number of identifiable characteristics

or traits which differentiate successful from unsuccessful

leaders is insufficiently supported by the research conducted

to date.

The behavioral approach to the study of leadership as

defined by Filley et al. [1976] is based upon the assumption

that leaders may be characterized by readily observable be-

havior patterns. These patterns, in turn, may be categorized

into four types: supportive, participative, instrumental,

and "great man."

Examples of supportive leaders would be individuals who

rate high in Consideration (Ohio State Leadership Studies

Model) or Leader Support (Fox Normative Model). These leaders

treat their subordinates in ways which increase their posi-

tive feelings toward their jobs. That is, they praise work-

ers for good performance, avoid authoritarian behavior, and

adopt a posture of thoughtfulness and sincerity in their

interactions with subordinates.

In their summary of the empirical evidence as to the

effectiveness of leaders characterized by considerate-sup-

portive behavior, Filley et al. [1976, p. 222] conclude that

"supportive leadership is often effective, resulting in im-

proved subordinate attitudes, satisfaction, and performance."

However, the studies reviewed could not be construed as to

substantiate the proposition that effective leaders are char-

acterized by supportive behavior because of the effects of










individual, task, and environmental variables. The authors

also point out that "much remains to be learned" with regard

to the question of causality--studies have shown that sup-

portive leader behavior positively affects subordinate sat-

isfaction and performance and other evidence suggests that

supportive behavior may be the result of subordinate satis-

faction and performance.

Participative leaders are those who use participative

decision making and supervision techniques. Such leaders

would rate high in Consultative-Participative Decision Mak-

ing (Fox Normative Model). In their review of the studies

dealing with participative leadership, Filley et al. [1976,

p. 229] state that although findings suggest that participa-

tive leadership is often effective, the proposition that ef-

fective leaders are characterized by participative decision

making and supervision "cannot be said to be confirmed, be-

cause there is ample evidence that the effects of participa-

tive leadership are not omnipotent." They cite the necessity

for the leader to be otherwise skilled in the performance of

his task, for subordinates to be in favor of participation,

and for the task to be a complex one requiring a high quality

decision or subordinate acceptance of the decision--or a

combination of both. As was the case with supportive lead-

ership, situational variables must be considered in the

evaluation of participative leadership findings.








Instrumental leadership is based upon the management

activities of planning, organizing, controlling, and coordin-

ating the work of subordinates. These activities are presumed

to be "instrumental" in achieving group accomplishment of or-

ganizational activities. Leaders rating high in Initiating

Structure (Ohio State Leadership Studies Model) or Work Facil-

itation (Fox Normative Model) represent instrumental leaders.

Empirical evidence with regard to the effectiveness of

instrumental leadership in promoting group performance and

satisfaction criteria does not fully support the proposition

that instrumental leaders are effective leaders. Kerr et al.

[1974] reviewed the results of studies where Initiating Struc-

ture was measured and concluded that it was only effective

in situations where there was outside pressure, where the

task was satisfying in itself, where subordinates perceive

high labor mobility for their skills, and in other specific

situations.

"Great man" leaders are characterized by both supportive

and instrumental leadership behavior. Presumably the leader

faces conflicting demands from the two levels that he works

directly with--subordinates preferring supportive behavior

and superiors preferring instrumental behavior. Filley et al.

[1976, p. 233] question whether it is possible for a leader

to exhibit both behavioral styles. They feel that the prop-

osition that "great man" leaders are effective is only par-

tially supported by the empirical literature and that situa-

tional factors come into play on the two components of "great









man" leadership (supportiveness and instrumentality) in the

same fashion as they might for supportive of instrumental

leadership.

Situational leadership approaches have been used to

eliminate the major weakness of the behavioral approaches

just mentioned--oversimplification due to the failure to

consider the moderating effects of situational factors. Con-

tingency theories have been proposed by Fiedler [1967), House

[1971], and Vroom and Yetton [1973], among others. These as

well as certain specific behavioral models will now be

summarized.

The Ohio State Leadership Studies were undertaken by an

interdisciplinary group working within the Bureau of Business

Research of the Ohio State University. An eight step research

plan was adopted and reported in the monograph, Methods in

the Study of Administrative Leadership [Stogdill and Shartle,

1955]. Two of the eight steps--the steps of greatest inter-

est to this study--called for descriptions of actual leader

behavior by both group leader and group members and measures

of individual leader and group effectiveness. Two basic hy-

potheses were proposed with regard to leader behavior: (1)

the patterns of behavior in a given leadership position will

be determined in part by the performance demands made upon

that position and (2) the leader's behavior is related to (a)

status in the organizational hierarchy, (b) structure of

interactions among organization members, (c)








responsibility-authority structure of the organization, and

(d) performances of members of the organization.

Hemphill and Coons [1957, p. 7] report that the problem

of obtaining leader behavior descriptions was met by develop-

ing a methodology designed to answer a primary question,

"How does this leader operate?" The instrument that evolved

consisted of a set of questions which would enable researchers

to isolate and classify the relevant forms of behavior ex-

hibited by an individual when directing the activities of a

group toward a shared goal. Nine dimensions of behavior were

tentatively selected: integration, communication, production

emphasis, representation, fraternization, organization, eval-

uation initiation, and domination. Using these dimensions,

a large number of items were constructed and refined [Hemphill

and Coons, 1957, p. 9]. Among the several criteria used for

item selection were insistence that only specific behavior

as opposed to general traits or characteristics be described,

that an item be limited to one unit of behavior, that an item

not be emotionally or evaluatively toned, and that the times

be applicable to many different organizational structures,

groups, and situations. An initial factor analysis of the

intercorrelations of the dimensions of the Leader Behavior

Description Questionnaire (LBDQ) conducted by Hemphill and

Coons [1957, p. 24] yielded factors labelled Maintenance

of Membership Character, Objective Attainment Behavior, and

Group Interaction Facilitation Behavior. The first is based









on leader behavior that is socially agreeable to group mem-

bers while the other two are based on leader behavior which

structures group activities and communications.

Another factorial study utilizing the LBDQ was carried

out with air crew commanders by Halpin and Winer [1957].

They accounted for 100% of the common variance with four fac-

tors which were designated Consideration (49.6%), Initiat-

ing Structure (33.6%), Production Emphasis (9.8%), and Sens-

itivity (7.0%). The subsequent working model of leader be-

havior which evolved from these Ohio State studies concen-

trated on the first two factors. Consideration (C) is des-

cribed as leader behavior reflecting friendship, mutual

trust, respect, and warmth. Behavior on the part of a leader

which organizes and defines relationships, defines roles, and

clarifies how to do jobs is classified as Initiating Struc-

ture (I.S.).

The bulk of the early studies utilizing the LBDQ were

based on hypotheses such as supervisors rate favorably the

performance of leaders who show high I.S. behavior; subord-

inates prefer as leaders those who show high C behavior; and

leaders getting highest effectiveness ratings score above

the mean in both leader behavior dimensions while leaders

getting lowest ratings score beneath the mean in both dimen-

stions [Halpin, 1957]. The results of these studies did not

lend themselves readily to generalization due to the organi-

zationally specific nature of most leadership positions.

Jacobs [1970, p. 33] concluded: "These studies demonstrate









that situational variables influence the balance of leader

behavior that will be desired (or best)."

Stogdill [1974, p. 427], one of the developers of the

LBDQ, has cautioned researchers about placing too much empha-

sis on C and I.S. and other frequently used measures:

A small number of variables (authoritarianism,
democratic leadership, consideration, initiating
structure, and LPC, for example) has been overworked
at the expense of the other variables that are
equally important and about which little is known.

However, Stogdill [1974, p. 428] does reaffirm the key be-

lief that there is a functional dependency between leader be-

havior and group performance and emphasizes the situational

nature of such behavior:

The leader is required to (1) maintain role
structure and goal direction, (2) provide for role
freedom and group drive, and (3) maintain group
cohesiveness and norm conformity. The behaviors
that produce these outcomes differ from group to
group depending upon variations in member charac-
teristics, task characteristics, and group charac-
teristics.

In an effort to encounter criticism that the Ohio State

Leadership Studies ignore situational variables, Kerr et al.

[1974], by reviewing published findings utilizing the Leader

Behavior Description Questionnaire, were able to develop ten

situational propositions and two general postulates of lead-

ership effectiveness. The variables which were hypothesized

to have a moderating influence between C and I.S. and satis-

faction and performance criteria were subordinate need for

information, job level, subordinate expectations of leader

behavior, perceived organizational independence, leader's









similarity of attitudes and behavior to managerial style of

higher management, leader upward influence, and the task

characteristics of pressure and intrinsic satisfaction. The

adaptation of these situational variables into the Ohio State

Leadership Studies tends to reconcile that massive body of

work with the other contemporary leadership studies.

House and Dessler [1974] have revised and extended

House's [1971] Path-Goal Theory of Leader Effectiveness which

attempts to explain the effects of intermediating (situational)

variables in the relationship between leader behavior and

performance and satisfaction measures. The leader is viewed

as one whose function is motivational--to increase personal

payoffs to subordinates for work goal attainment and to fa-

cilitatethe ease with which subordinates may travel the path

to goal attainment. They contend that the specific leader

behavior necessary to perform this motivational function is

determined by (contingent upon) the situation in which the

leader operates.

House and Dessler [1974, p. 31-2] mention two classes of

situational variables: (1) the characteristics of subordin-

ates and (2) the environmental pressures and demands the sub-

ordinates must cope with to -accomplish work goals and satisfy

their own needs. One subordinate characteristic is the de-

gree to which leader behavior is perceived to be either a

source of immediate satisfaction or instrumental to future

satisfaction. The other characteristic is the subordinates'

perception of their own ability with respect to task demands.








Environmental moderators proposed by House and Dessler were

the subordinates' task, the formal authority system of the

organization, and the primary work group. They suggest that

the effect of the leader on the subordinate's motivation will

be a function of how deficient the environment is with respect

to motivational stimuli, constraints, or rewards.

The leadership studies undertaken at the Survey Research

Center of the University of Michigan share certain similari-

ties with the Ohio State Leadership Studies. The Survey Re-

search Center methodology also relies upon the position that

leadership amounts to a large aggregation of separate behav-

iors [Bowers and Seashore, 1966, p. 240]. The basic differ-

ences between the two research methods are in how aspects of

leader behavior should be grouped and classified. There are

four dimensions emphasized in the survey Research Center

Studies: (1) support, (2) interaction facilitation, (3) goal

emphasis, and (4) work facilitation. These are based on an

integration of research results and writings by Katz and

Kahn, Cartwright and Zander, Mann, and Likert [Bowers and

Seashore, 1966, 247]. The Survey Research Center methodology

measures aspects of behavior which represent supervisory and

peer leadership. The Ohio State Leadership Studies concen-

trate on the leadership provided by one leader in a group.

A standardized questionnaire has been developed based

on the four factors proposed by Bowers and Seashore [Taylor

and Bowers, 1972]. It is a machine-scored instrument which

measures support, goal emphasis, work facilitation, and









interaction facilitation for both supervisory and peer lead-

ers. Also measured are various assessments of individual

satisfaction (with peers, with supervisor, with job, with the

organization in relation to others, with pay, with current

progress, and with future prospects). The entire question-

naire contains twenty-four short questions, thirteen of which

measure the four leadership factors.

Taylor and Bowers [1972, p. 55] initially administered

the Survey of Organizations to the employees of an oil refin-

ery (N = 325), and, after excluding three questions from the

set, obtained Spearman-Brown reliability coefficients of from

.85 to .91 for the four leadership factors. An analysis was

made to determine if there existed a single general factor

for supervisory leadership of sufficient magnitude to inval-

idate the four factor construct. It was concluded that the

general factor content was not large enough to regard any of

the four proposed factors as interchangeable measures of a

single leadership factor and that each of the four contained

sufficient unique variance to be considered a measure of some

distinguishable aspect of leadership.

Studies initially undertaken by the Group Effectiveness

Research Laboratory at the University of Illinois are based

on Fiedler's Contingency Model which suggests that changes

in group effectiveness from one situation to another, where

leadership style is held constant, depend upon the favorabil-

ity of the situation [Fiedler, 1967, Fiedler and Chemers,

1974]. The binary factors which determine situation









favorability are (1) leader-member relations (good, poor),

(2) task structure (high, weak), and (3) position power

(strong, weak). The eight combinations of these factors

form eight cells in Fiedler's classification of group situ-

ations. Four criteria are used to determine the degree of

task structure: decision verifiability, goal clarity, goal

path multiplicity, and solution specificity. Leader-member

relations are based upon the degree of acceptance the leader

obtains from his group. Position power is related to the ex-

tent to which the leader can reward and punish his subordin-

ates.

The measure used to classify leadership style in Fied-

ler's Contingency Model studies is the Least-preferred Co-

worker (LPC) score. This is obtained from a sixteen scale

semantic differential instrument [Fiedler, 1967.,p. 269].

The bipolar scales have eight positions that may be selected

by the respondent from least favorable to most favorable.

The usual scoring is one point for the least favorable posi-

tion up to eight points for the most favorable position.

The total score for a given leader is the summation of the

scores for every item. A high score on the LPC instrument,

in relation to a given norm, reveals a leader who holds his

least-preferred coworker in higher regard than low scorers.

Fiedler [1967, p. 46] hypothesizes that:

High-LPC leaders are concerned with having good
interpersonal relations and with gaining prominence
and self-esteem through these interpersonal relations.








Low-LPC leaders are concerned with achieving success
on assigned tasks, even at the risk of having poor
interpersonal relations with fellow workers.

When the situation is favorable for the leader in terms

of control and influence, Fiedler and Chemers [1974, p. 77-8]

argue that a leader will pursue his secondary goals:

the high LPC leader will concern himself
with such status-enhancing activities as ordering
people around, assigning tasks, and assuming re-
sponsibility. The low LPC leader, given this high
degree of control, will be relaxed, friendly, and
considerate, in the knowledge that the task pre-
sents no problem.

In situations where the leader control is low (unfavor-

able situations), Fiedler and Chemers [1974, p. 78] hypothe-

size that each leader will revert to his primary goal: the

high LPC leader will seek to enhance relationships with group

members; the low LPC leader will concentrate on getting the

task accomplished at the expense of good interpersonal rela-

tions, if necessary.

A normative decision-making model based upon organiza-

tional psychology has been proposed by Vroom and Yetton [1973],

who had found significant variation in the amount of partici-

pation that was perceived as necessary by managers in given

problem situations. Their model is based on the assumption

that the most appropriate unit for the analysis of a situa-

tion requiring the exercise of leadership is the particular

problem to be solved and the context in which the problem

occurs. The discrete social processes by which organizational

problems are translated into decisions form the basis for

prescribed leadership styles which vary in the amount of









subordinate participation. Vroom and Yetton describe five

decision methods for group problems varying from a completely

autocratic decision style to a group generated decision

style. To make the model operative, a list of questions are

provided for the leader to consider in diagnosing a partic-

ular problem before choosing a decision style. Heller [1973]

independently developed a similar model and reached similar

conclusions.

Bass and Valenzie [1974] have proposed a Systems Model

of Leadership in which the system outputs (effectiveness and

employee satisfaction)are to be explainedby systems inputs

(organizational, work group, task, and subordinate personal-

ity variables), system relations (power distribution in-

formation distribution, and work group structure and objec-

tives), and managerial styles (directive, manipulative, con-

sultative, participative, and delegative). They have hypoth-

esized that the directive style should be most effective

when the leader has high power and information distributions;

the delegative style, when low. Participation is hypothesized

to be most effective when the leader and group members have

equal information. Consultation was proposed for situations

where the leader has high power but low information and man-

ipulation for low power-high information situations.

One of the recurring difficulties in leadership studies

is the isolation of significant moderator variables and the

statements of their effect. In addition to the variables









isolated in the contingency models of Kerr et al. [1974],

Fiedler [1967], Vroom and Yetton [1973], House and Dessler

[1974], and Bass and Valenzie [1974], as already discussed,

there have been numerous studies purporting to show the me-

diating effects of additional variables on measures of satis-

faction and performance.

Bowers and Seashore [1966, p. 257] found that the best

"predictor" of three out of four peer leadership variables

was the same variable as measured for the group leader, in-

dicating a relationship between the two. Certain writers

cited by Greene [1976, p. 65] have argued that subordinate

behavior may cause variance in leader behavior in opposition

to the usual pattern of causuality assumed in leadership

studies. Fox [1976a, p. 6] has cited performance and satis-

faction of his subordinates are moderated by the behavior of

higher level management,

The moderating effects of group member personality dif-

ferences have been discussed by Korman [1974, p. 192] and

Fox [1976a, p. 6]. Korman believes that personality differ-

ences may prove to have significant moderator effect if the

personality constructs used are situationally defined and the

measures construct validated. Korman believes that care in

these areas will eliminate criticism based on evidence per-

sonality test unreliability over time and over different

situations.

Kerr et al. [1974, p. 66] discuss a number of findings

with regard to the moderating effect of pressure from








external forces (interunit stress and physical danger) and

from internal forces (urgency of time demands). Significant

correlations between proficiency ratings and structure have

been found in studies where time pressure was involved.

In this review of the research literature, Filley et al.

[1976, p. 233] conclude that the effects of supportive lead-

ership are most positive with regard to performance when (1)

the subordinate has been previously denied some source of

satisfaction or (2) the subordinate operates under conditions

of frustration or stress. The effects of supportive leader-

ship on subordinate satisfaction were found to be positive

except in situations where work is intrinsically satisfying

[Filley et al. 1976, p. 220].

With regard to instrumental leadership, Filley et al.

[1976, p. 230] reportthat initiating structure has its most

positive effects when

(1) There is a high degree of pressure for output due to
demands imposed by sources other than the leaders
(2) The task is satisfying to subordinates
(3) The subordinates are dependent on the leaders for
information and direction
(4) The subordinates perceive that they have labor
mobility
(5) The subordinates are psychologically predisposed
toward being told what to do and how to do it
(6) Subordinates' tasks are nonroutine
(7) Subordinates have high occupational-level jobs
(8) Subordinates are under stress due to threat from
sources other than the leaders
(9) The number of people working together for the same
leader is high (12 or more)
(10) The leader is considerate

Other important moderators mentioned by Fox in his lit-

erature review [1976a, p. 7] include subordinate-leader









knowledge and expertise differences, supervisor's upward

influence, inter-group competition, and complementarity of

leader-subordinate behavior styles.

It should be apparent from the foregoing, that research

results in the leadership area are not only specific to sit-

uational characteristics, but also subject to the potential

mediating effects of many other variables. The difficulty

in drawing well grounded generalizations from these endeavors

has by no means diminished the volume of research being done;

nor, for that matter, have basic theoretical criticisms such

as the relative importance of leadership to other organiza-

tional variables [Hunt and Larson, 1976, p. 235] or the mer-

its ofacognitive versus operation approaches in leadership

studies [Fox, 1976b]. Many still consider an acognitive

study of leader-subordinate dyads as an effective research

opportunity.

This brief discussion of contemporary research methods

in the field of leadership studies is not intended to be

complete. It is introductory to the chapters which follow.

The purpose of this dissertation is to borrow and adapt to

an auditing environment that which has been successfully ap-

plied elsewhere. The general approach has been to use the

methods of many contemporary schools rather than select one

methodology. In this way, questions regarding the criteria

used for selection of particular leadership measurement

methods may be minimized and the study may be limited to the

usefulness of the methods toward predicting satisfaction and
performance in auditing situations














Chapter III

MEASUREMENTS


The foundation upon which this study is built is Ident-

ifying and Developing Leadership Aspects of Effective Manage-

ment in Team-Oriented Task Groups [Fox 1976a]. In this work,

Fox presents a normative model for leadership based upon cur-

rent research findings -- a model specifically developed to

assist managers of team-oriented (interacting) task groups

in adjusting their behavior toward greater managerial effec-

tiveness.

The adaptation of the Fox model to the field of auditing

follows due to the fact that an audit team engaged in the

field work phase of an annual audit represents an interacting

task group. Fiedler [1967] states that in such groups, there

exists a high degree of interdependence among group members.

The leader coordinates the various task functions of the

group's activities so that the work flows smoothly and harm-

oniously. The various segments of an audit program must be

closely coordinated if the work of the audit team is to be

successful. Certain audit procedures may be completed by an

individual, yet many require a coordinated effort by two or

more.

Effective performances from audit teams are imperative

if professional standards are to be maintained and if the
-26-


M









required efficiency for the auditing firm's profitability is

to be met. Certain situational aspects of annual audits are

relatively comparable. The behavior of the audit in gather-

ing evidence is partially restricted in the interest of re-

maining an independent observer. Certain audit procedures

are demanded by generally accepted auditing standards. Min-

imum standards of record-keeping and reporting are forced

upon the client by the necessity to provide documentary sup-

port for items reported on tax returns and financial reports.

The manufacturers of business machines, business forms, and

computer software have tended to standardize the ways that

most large organizations produce, record, and store documents

and reports. Organizational structures often reflect simi-

larities within specific industries. The auditors, them-

selves, tend to be similar in education, interest, aptitudes,

and even standards of dress. This may be the result of a

certain amount of standardization in selection policies used

by major CPA firms. These conditions would seem to indicate

that the study of audit teams in the field represents a po-

tentially rewarding area for research in leadership. This

is especially appropriate at a time when auditing effective-

ness is continually questioned both in court cases and by

government and when signs of staff member dissatisfaction

are prevalent.

Fox [1976a, p. 2] regards the dominant emphasis in def-

initions of leadership as influence via personal interaction

and considers only face-to face aspects of planning and









controlling as falling within leadership. This leads to a

definition of leadership style as the behavioral prediposi-

tion or orientation on the part of a leader as he deals with

the performance of management or leadership functions that

result more from the leader's personality or values than

from the demands of the situation at hand [Fox, 1976a, p.9].

Leadership style factors suggested by Fox [1976a, p. 10]

based on his review of published factor analysis of leader

behavior descriptions [Halpin and Winer, 1957; Bowers and

Seashore, 1966; Wofford, 1970; Miller, 1973; House and Des-

sler, 1974] are (A) task relevant structuring emphasis, (B)

support emphasis, and (C) consultation, participation

emphasis.

The normative model hypothesizes the actual behavior,

as opposed to style or predisposition, that appears to be

optimal under various circumstances. The model categorizes

four major behavioral areas and related them to the three

leadership styles previously mentioned. A listing of each

behavioral area with some specific examples of positive

leader behavior follows [Fox 1976a, pp. 16-27]:

Leader Support. Leader is friendly and easy to approach,
is willing to listen and attentive to problems and other
matters people wish to discuss. He freely gives de-
served credit to others, does things to make it pleas-
ant to be a group member and to strengthen the self-
esteem of his subordinates.

Consultative-Participative, Decision-Making. Leader
encourages subordinates to exchange information and
ideas. When possible, he invites group member sugges-
tions and gives serious consideration to them before
finalizing decisions which affect either the individual
or the group. If in a position which requires his









his retention of veto power, he uses it as sparingly as
possible. He appropriately delegates decision-making
to individuals, the group, or subgroups with a level
of collaboration desired by them. When possible, he
gives advance notice of changes and is candid and open
to questions. Whenever possible, he strives for deci-
sions relative to the pursuit of given organizational
objectives which accommodate the needs and values of his
subordinates.

Work Facilitation, Leader trains subordinate, consults
with him on job related problems and ways to improve
performance, helps him to plan and schedule work ahead
of time anticipating detailed needs and problems, pro-
vides appropriate equipment, materials, and sees that
decisions are made and implemented in time.

Goal Emphasis. Leader uses appropriate process to de-
velop realistic goals and plans, and gain commitment to
them, he stresses high standards of performance for him-
self and his subordinates, and establishes appropriate
contingencies between rewards and individual and group
performance.

Table 1 lists the major constraints to leader behavior in

each of the behavior areas. Two of these constraints (lack

of decisiveness and management of contingencies) were singled

out by Fox to be of particular importance and are found as

separate predictor variables in this study (Decisiveness and

Management of Rewards and Punishment).

In conjunction with research carried out among ROTC

cadets while testing his normative model, Fox [1976c] devel-

oped a leader behavior questionnaire which measured both the

four behavioral areas in his normative model as well as the

two behavioral areas in the Ohio State Leadership Studies

model (C and I.S.). Each variable score for a leader's be-

havior is computed by combining the individual scores of a

subset of questionnaire items. A group score is obtained by

averaging the ratings for any one variable for all group

-29-









Table 1

NORMATIVE MODEL*


BEHAVIOR AREAS


Leader Support





Consultative-Participative
Decision-Making


Work Facilitation


Goal Emphasis


CONSTRAINTS


Time
Required Social Distance
Therapist Role Pitfall
Goal Conflict


Real Time Pressure
Absence of Subordinate Desire
Selective Interest
Leader Can't Deliver
Differential Expertise
Incapacity
Personality
Need to Impose Decisions


Lack of Influence
Lack of Expertise
Lack of Decisiveness


Low Consultative-Participative
Skill
Low Technical-Conceptual Abil-
ities
Lack of Commitment
Management of Contingencies


*[Fox, 1976a, p. 35]









members.. The first 54 items on Fox's 60 item questionnaire

were selected from Form XII of the Ohio State Leader Behavior

Description Questionnaire, slightly modified to fit the spe-

cific research situation --ROTC cadets on summer camp ex-

ercises.

As used in this study, the Leader Behavior Description

Questionnaire for an Independent Auditor in Charge in Field

Work (Appendix B) was developed from Fox's leader behavior

questionnaire, although some items were not used and eleven

new items were introduced. These new items are designed to

cover those facets of Fox's four leader behavior area defin-

itions which were not included among specific questions on

his original instrument. This work was carried out at the

suggestion of Dr. Fox and under his guidance. The resulting

52 item questionnaire yields predictor variable scores based

on the question subsets as shown in Table 2. A measure of

the situational variable Leader-Member Relations is also

available from a question subset (Nos. 5, 6, 27, 44, 48 and

52). It will be noted that the entire set of questions con-

tains many that are used for more than one variable's meas-

urement. This stems from the fact that C and I.S. purport

to cover all of the behavioral classes that are significant

in leadership as do L.S., C-P D-M, W.F., and G.E. There

are simply two different models incorporated into the ques-

tionnaire design and they both cover the same kinds of behav-

ior.









Table 2

LEADER BEHAVIOR VARIABLES


Variable

Consideration

Initiating Structure

Leader Support

Consultative-Partici-
pative Decision-
Making

Work Facilitation


Symbol


C

I.S.

L.S.


C-P, D-M


W.F.


Item Subset (see note below)

1, 6, 9, 10, 2, 25, 27, 44

18, 21, 22, 30, 32, 41, 43, 45

1, 4, 6, 19, 27, 33, 44, 48



5, 9, 10, 25, 26, 28, 32, 40

2, 8, 10, 17, 22, 24, 30,


38, 45, 46, 50


Decisiveness

Goal Emphasis


Management of Rewards
and Punishment


G.E.


M.R.P.


3, 11, 20, 24, 34, 36, 39

7, 14, 16, 18, 23, 35, 42, 47,


13, 15, 29, 31, 37


NOTE: The score for each variable is a simple average of the
individual item scores from the subset. If the score
is from the Leader Behavior Description Questionnaire
for an Independent Auditor in Charge of Field Work
(Appendix B) it represents a measure of actual behav-
ior for the particular variable. If the score is
from the Ideal Leader Behavior questionnaire it repre-
sents a measure of optimal leader behavior as expected
by the subordinate (Appendix D) or the leader (Append-
ix E). Group (team) scores are produced by averaging
the subordinate scores for each variable in a group.


_________________________________-----------ON&-








Certain minor details that are expected to rule out

potential sources of error are worth mentioning. The order

of items on the instrument was determined by a random dis-

tribution so as to avoid any biases that might result from

having each variable's subset intact. Three experienced

CPAs reviewed the appropriateness of the questions in the

Leader Behavior Description Questionnaire (Appendix B) as

well as subsequent research instruments in the study. Partic-

ular emphasis was placed on using language which would be

neither unfamiliar nor ambiguous inthe auditing environment.

The possibility of reading a sexist bias into the Ohio State

LBDQ question forms (every item begins with "He") was elim-

inated by replacing "He" with "This Auditor" and rewording

the questions where possible to eliminate masculine posses-

sive pronouns. In certain cases the range of possible an-

swers (Always, Often, Occassionally, Seldom, Never) was ex-

panded to include a "No Basis" selection. It was believed

that this would strengthen a respondent's confidence in the

instrument for those cases where his knowledge of how the

auditor in charge acted was vague or nonexistent.

Certain basic assumptions underly the research enumer-

ated in this chapter and stipulate the measurements selected.

In part, this study is a test of the applicability of the

Fox Normative Model and the Ohio State Leadership Studies

Model in the public accounting context. Some of the working

hypotheses which apply to these models and this study follow:








Hypothesis 1
There will be significant variance among individual
teams on measured dimensions of tear leader behavior
(predictor variables) in terms of perceptions of ac-
tual behavior.

Hypothesis 2
There will be significant variance among individual
team members on measured dimensions of ideal leader
behavior.

These two hypotheses reflect an assumption common to

most leader behavior research -- that there are individual

differences with regard to perceived leader behavior and

preferences of normative leader behavior. Aggregations of

particular individual member's scores on leader behavior di-

mensions into group average scores for a leader should also

result in a range of scores for the leaders whose groups are

averaged, since leaders may be expected to behave differently

in response to similar situations.

Hypothesis 3
There will be significant correlation between average
team measurements on dimensions of leader behavior
(predictor variables) in terms of perceptions of ac-
tual leader behavior and average team measurements
of satisfaction and performance (criterion measures).

This hypothesis assumes that the models have predictive ability

for the effects of alternate forms of leader behavior on job

performance and satisfaction.

In view of the current consensus regarding the relation-

ship between leadership effectiveness and situational vari-

ables, a decision was made to measure situational character-

istics. The most comprehensive summary of the moderating

effect of situational variables between criterion and leader









behavior measures was found in the Kerr et al. [1974] situa-

tional propositions. Proposition 1 of this study follows:

(1) The greater the amount of pressure, the greater
will be subordinate tolerance of leader Initiat-
ing Structure, and the greater will be the (pos-
itive) relationships between Structure and sat-
isfaction and performance criteria. Pressure
may stem from the nature of the task (degree of
time urgency, uncertainty, permissible error
rate) or from some threatening source external
to the task.

Based upon this proposition, the following items were in-

cluded in the Audit Staff Member Opinion Survey (Appendix

C): measures of degree of time pressure (questions 9 and 10),

permissible error rate (questions 11 and 12), and threats

from exterior sources (questions 13 and 14). Uncertainty

was dealt with separately. (See the discussion following

Proposition 6).

Propositions 2, 3 and 4 consider the effects of intrin-

sic satisfaction on subordinates [Kerr et al. 1974]:

(2) The greater the intrinsic satisfaction provided by
the task, the less positive will be relationships
between Consideration and satisfaction and perform-
ance criteria. Intrinsic satisfaction may be de-
rived from high job autonomy, broad job scope, or
the opportunity to do interesting and meaningful
work.

(3) The greater the intrinsic satisfaction provided by
the task, the less negative will be relationships
between Structure and subordinate satisfaction.

(4) The greater the intrinsic satisfaction provided by
the task, the less positive will be relationships
between Structure and performance.

In accordance with the sources listed in Proposition 2, three

facets of intrinsic satisfaction have been incorporated in

the Audit Staff MemberOpinion Survey: job autonomy









(questions 15 and 16), breadth of job scope (questions 17 and

18), and meaningful work (question 19).

Proposition 5 considers the effects of job-related in-

formation on subordinate criteria [Kerr et al. 1974]:

(6) The greater the amount of task certainty, the
greater will be the (positive) relationships
between leader Consideration and subordinate
satisfaction.

Proposition 9 is particularly appropriate to the CPA firm

environment [Kerr et al. 1974]:

(9) The greater the perceived organizational independ-
ence of subordinates, the greater will be the
(positive) relationships between leader behavior
variables and satisfaction and performance criter-
ia. Particularly when perceived independence is
low. Consideration-satisfaction and Structure-
satisfaction relationships will be relatively in-
significant.

Traditionally, the organizational independence of CPA firm

staff members has been high. As with other professionals,

a certain degree of job autonomy must be accorded CPA firm

staff members to provide the necessary atmosphere of profes-

sionalism. However, the primary generator of independence

has probably been the rapid growth of the profession in re-

cent decades which has tended to create a shortage in public

accounting, as well as in other areas, of qualified profes-

sionals. This has resulted in a prevailing 'situation where

any competent staff member could expect to find employment

with other CPA firms or among a wide choice of accounting

positions outside of CPA firm practice. Questions 7 and 8

of the Audit Staff Member Opinion Survey (Appendix C) are









included to measure how the staff member perceives his in-

dependence with regard to alternate employment in these two

areas.

No items are included in the Audit Staff Member Opinion

Survey to specifically test Propositions 7, 8, or 10 [Kerr

et al. 1974]:

(7) The less the agreement between subordinate expec-
tations of leader Consideration and Structure and
their observations of these behaviors, the lower
will be the levels of satisfaction and performance
of subordinates. Such expectations typically re-
sult from a host of cultural, experiential, and in-
formational sources.

(8) The less higher management is perceived to exhibit
Consideration, the lower will be the (positive)
relationships between lower-level supervisors'
consideration and subordinate satisfaction.

(10) The greater the perceived upward influence of the
supervisor, the greater will be the (positive)
relationships between consideration and subordinate
satisfaction. This will be especially true for
subordinates who are highly dependent on their loss
for such things as recognition, freedom, and phys-
ical and financial resources.

Proposition 7, a postulation of the relationship between

the degree to which subordinate expectations of leaderbehav-

ior are met and performance and satisfaction measures, may be

tested using the difference between Leader Behavior Descrip-

tion Questionnaire and Ideal Leader Behavior (Appendix D)

results as a measure of the degree to which expectations are

met.

Propositions 8 and 10 [Kerr et al. 1974] deal with (1)

the contrasting degrees of Consideration between higher and

lower-level management as perceived by subordinates and (2)









the perceived upward influence of the supervisor. It was de-

cided that these moderator variables are not appropriate in

the CPA firm environment. All staff members are a part of

"management," Even relatively inexperienced staff members

find themselves in supervisory roles on some engagements.

There is an opportunity for exchange between junior staff

members and the managers and partners of a CPA firm that pre-

cludes the usual sorts of barriers which isolate workers

from management. The flexible, informal type of organization

in CPA firms also tends to reduce the importance of a super-

visor's upward influence, It is also worth noting that a

superior-subordinate relationship in a CPA firm is a tempor-

ary condition. As soon as an audit is completed, the staff

members take positions on new audit teams. The hierarchy in

aCPA firm tends to be flatter than in most organizations,

with usually about four levels of professional staff and

numerous members at each level. Consequently, the bulk of

the power in personnel and operational matters is disbursed

among a group of partners and managers making upward influence

a highly complex item for measurements.

The Kerr et al. [1974] study provides the basis for

the first nineteen items in the Audit Staff Member Opinion

Survey (Appendix C) --which are designed to measure moder-

ator variables. The remaining six items (Nos. 20 to 25) in-

clude four measures of satisfaction (with colleagues, with

compensation, with the leader, and with the present job

situation), a measure of leader-member relations, and a









measure of the current leader's decision-making style. The

necessity for the latter two will be discussed later.

The working hypothesis which is to be tested with the

Kerr et al. [1974] moderator variables follows:

Hypothesis 4 (Moderated Ohio State Leadership Studies
Model) The correlation between average team predictor
variable measurements and criterion measures will be
enhanced by classifying teams into groups based upon
average team scores in certain follower characteristics
as proposed by Kerr et al. [1974].

In other words, the relationship between predictor variable

and satisfaction or performance will be stronger when the

influences of certain follower characteristics are screened

out.

The four subordinate satisfaction items included in the

Audit Staff Member Opinion Survey (see questions 20, 21, 23

25, Appendix C) are derived from the Survey of Organizations.

Taylor and Bowers [1972, p. 76] assumed that satisfaction

was multidimensional and they used seven questions to cover

satisfaction with peers, supervisor, job, organization,

compensation, progress, and opportunity. For the purpose of

this study, job and organizational satisfaction were combined

into one question. It was concluded that satisfaction with

a job in a CPA firm would be tantamount to satisfaction with

the organization since every staff member moves throughout

the organization, working with a variety of colleagues and

supervisors. Subordinate audit staff members also perform

varied tasks, depending upon a client's needs. To a certain








extent, then, the concept of a job with fixed, familiar tasks

is foreign to audit staff members.

Questions regarding satisfaction with progress and op-

portunity were considered unnecessary in this study which is

geared to large CPA firm staff members. Those who do not make

satisfactory progress are soon separated from the firm--

often, placed with a client. Promotions, for those staff

members who remain, are practically automatic. Consequently,

lack of progress should not be a problem in large CPA firms.

Satisfaction related to opportunity for advancement in the

organization should not be a problem, either. Generally,

subordinate staff members hired are believed to have "part-

nership potential." The partner's position in a large CPA

firm is both responsible and financially rewarding--a suf-

ficiently advanced opportunity to satisfy most.

The Ideal Leader Behavior questionnaire (Appendix D) is

identical in most respects with the Leader Behavior Descrip-

tion Questionnaire (Appendix B). The major difference is that

instead of asking for the actual behavior of a specific lead-

er, the Ideal Leader Behavior questionnaire asks "what the

IDEAL auditor should do" in similar situations. The order

of questions is identical and the same subsets are used to

arrive at the eight leader behavior predictor variables. Dis-

crepancies between the ideal version and the actual version

may be used as a measure of subordinate satisfaction. This

is in accordance with the Kerr et al. [1974] Proposition 7

and Porter and Lawler [1968, p. 31].








The three questionnaires discussed up to this point rep-

resent the entire set administered to audit team subordinates.

What is obtained, then, is the subordinate staff member's

perception of his team leader's actual behavior with regard

to 52 items or situations. Subsets of these provide measures

of the leader's behavior in terms of Consideration, Leader

Support, and certain other predictor variables (see Table 3)

as observed on a specific audit engagement. Measures in terms

of the subordinate staff member's ideal for behavior from a

leader in the same situations are also gathered. And, fin-

ally, measures of a number of potentially significant moder-

ator variables are obtained (see Table 4) as well as several

individual satisfaction measures.

The criterion measure for this study is a global assess-

ment instrument (see Appendix G). It asks the manager or

partner to evaluate the auditor in charge (supervisor) of the

field work phase in a particular audit in terms of other per-

sons in similar positions within the same firm. In part 1 of

this questionnaire the auditor in charge is evaluated for

deadline promptness, efficiency of staff utilization (two

aspects), training ability, and crises avoidance. Parts 2

and 3 require the manager or partner to evaluate subordinate

staff satisfaction (three aspects) and client satisfaction

(four aspects). The purpose of these three preliminary parts

of the "Manager's Rating of Field Work Performance" is to

force the manager to think of the audit from the client's and

subordinates' standpoint as well as from his own. When this









TABLE 3

TABLE OF MEASUREMENTS


Variables


Measuring Instrument


PREDICTORS: (13)


Consideration
Initiating Structure
Leader Support
Consultative-Participative
Decision Making
Work Facilitation
Decisiveness
Goal Emphasis
Management of Rewards
and Punishment

LPC (Self Description)
LPC
Social LPC
Task LPC
LPC Difference Score


MODERATORS:


ACTUAL BEHAVIOR: Leader
Behavior Description
Questionnaire


NORMATIVE BEHAVIOR:
Leader Behavior


Ideal


Fox LPC Scales


(7)


Pressure
Task Certainty
Information Needs
Organizational Independence
Intrinsic Work Satisfaction
Leader-Member Relations
Leader's Decision-Making
Style


Audit Staff Member Opinion
Survey


CRITERION MEASURES:


Team Performance
Team Leader Performance

Satisfaction with Colleagues
Satisfaction with Compensation
Satisfaction with Current
Leadership
Overall Job Satisfaction

Satisfaction with Leader


Supervisor's Rating of Field
Work Performance


Audit Staff Member Opinion
Survey



Difference (ILB LBDQ)


-42-


(7)








TABLE 4

LPC MEASUREMENTS


Variable


LPC


LPC Self
Description

Task LPC


Social LPC


LPC Difference
Score


Version of
LPC Instrument

Least Preferred
Coworker


Least Preferred
Coworker

Least Preferred
Coworker

Least Preferred
Coworker


Total Score
Item Subset (See Appendix F)

1,3,4,7,8,9,11,12,14,20,21,
26,28,29

1,3,4,9,10,14,17,18,19,20,
22,25,28,31

4,5,13,14,17,18,25,31


1,3,7,11,15,20,21,28


(Task LPC Social LPC)








is done, the possibility of a standardized overall evaluation

of leader effectiveness and team effectiveness may be improved

over a point blank, one-item rating. Question 4a (How would

you evaluate the overall effectiveness of this team based

upon your review of the field work?) is the criterion measure

for team performance. Question 4b (How effective was the

auditor in charge of field work as a leader on this particu-

lar audit?) is a performance evaluation for the leader, alone,

separated from the success or failure of the team. These will

be analyzed against the results of the other questionnaires

as two distinct performance criterion measures.

Each audit team leader (supervisor) completed the Ideal

Leader Behavior questionnaire (Appendix E) as did his sub-

ordinates on the audit. Any differences between a supervis-

or's behavior expectations and the average responses of his

subordinates could then be analyzed to determine whether ex-

pectations are role dependent. The cover sheet on the Ideal

Leader Behavior questionnaire administered to team leaders

contains an additional question which illicits leader-member

relations as judged by the team leader on a five point scale

ranging from very good to very poor. This question is similar

to question 22 of the Audit Staff Member Opinion Survey which

asks for the subordinate's judgment of leader-member relations.

Each team leader must complete the Fox LPC Self Descrip-

tion instrument (Appendix F) in duplicate -- one version for

a least preferred coworker and the second version describing

himself. The instrument is expanded over the standard









sixteen scale version used by Fiedler to include scales that

fully cover the five recurring dimensions found by Tupes and

Christal 11961]: urgency, agreeableness, dependability, emo-

tional stability, and culture. A complete review of the de-

velopment of this instrument is included in Fox [1976d].

For this study, two LPC instruments are employed. The

supervisor's rating of his least preferred coworker will be

obtained by combining the scores for fourteen scales from the

32 item instrument-- least preferred coworker version. This

measure will be referred to as LPC [Fox, 1976a, p.4]. The

supervisor's rating of himself is termed LPC self-description

and is obtained by combining scores for a different subset

of fourteen items on the appropriate version of the instru-

ment. It should be noted that the respondent checks either

of two boxes at the top of the instrument to identify the in-

strument as a description of "My Least Preferred Co-worker"

or "Me." Additional LPC measures are possible from these

instruments (Task LPC, Social LPC, and a Difference Score)

by combining different subsets of scales (see Table 4).

The various LPC measures obtained may then be used as

predictor variables to test the following working hypothesis:

Hypothesis 5 (Fiedler Contingency Model)
There will be a correlation between leader LPC score
and measures of leader and group effectiveness as
proposed by Fiedler [1967].

One item has been included in the study in an effort to

single out each team leader's decision method (item 24, Ap-

.pendix C). This is based upon the Normative Model of









Leadership proposed by Vroom and Yetton [1973]. Five deci-

sion methods open to a leader are proposed in the case of

individual problems -- decision problems encountered by one

subordinate member of a group. The methods and their assigned

symbolic notations are IVroom and Yetton, 1973, p. 13]:

A 1 where the leader makes the decision for
himself, using only information available
to him at that time.

A 11 : where the leader makes the decision by
himself after obtaining information from
the subordinate.

C 1 : where the leader makes the decision after
sharing the problem with his subordinate
and hearing his suggestions and ideas.

G 1 :where the leader and subordinate arrive
at a mutually agreeable decision after
analyzing the problem together.

D 1 : where the subordinate makes the decision--
the leader having delegated that respons-
ibility to him and provided him with any
information that he held.

Vroom and Yetton categorize eighteen problem types based

upon the presence or absence of eight problem attributes.

Their Normative Model of Leadership included one or more of

the above decision methods as the preferred solution for each

of the problem types. An analysis of the eighteen problem

types revealed that only four were applicable to the situa-

tions encountered by subordinate audit staff members. In

each of these problem types, style G-l was appropriate. In

some cases D-l and C-1 were also appropriate depending upon

the sufficiency of subordinate information and the importance

of the subordinate's acceptance of the decision.








In the particular question selected for use, it is

stated that the subordinate has sufficient knowledge and in-

formation to make a quality decision. Consequently, for the

case included on the questionnaire the preferred solution may

be any one of the latter three. However, the objective of

this study is not to test the Vroom and Yetton model, but to

determine if there is a significant relationship between any

one decision-making style and the criterion measures.

The research design for this study is present in Appendix













CHAPTER IV

ADMINISTRATION OF FIELD STUDY


The field study was performed with employees of one of

the "big-eight" accounting firms. Audit teams were selected

which met the following criteria:

(a) Four or more regular members (excluding specialists)
(b) One individual in charge of field work during that
entire phase of the audit.
(c) Ninety days or less from the time the team completed
the field work.
(d) Each team member must have been on the audit for at
least ten days to be considered a regular member.

Five offices in this accounting firm (all located in the

southeastern U.S.) participated in the study. Thirty-four

teams were found in these offices which met the above criter-

ia. An effort was made to include all possible teams, since

in this way a representative cross-section of large audit

teams would be tested. The firm could not have the option

of submitting only its best audit teams (in terms of overall

performance and member satisfaction) for testing.

The firm did not consider assembling all of the employ-

ees for testing at one time as a feasible way to conduct the

study. Their contention was that this would be too expensive.

They also preferred to designate one of their own represent-

atives in each office to administer the questionnaires. In

each case, it was a partner or personnel specialist who had

been involved in the scheduling of audit field work.

-48-









Meetings were held with each of the five individuals who

were to administer the questionnaires. The purpose of these

meetings was to provide these individuals with all of the

background information that they would need in order to ad-

minister the instruments. The models utilized in the study

were explained and then each questionnaire was reveiwed to

show its contribution to the study. During these meetings,

the teams to be tested were selected.

In order to provide anonymity to the testing process

special cover sheets were designed for the sets of question-

naires provided for staff members (team leaders' supervisors).

A code number for each team was assigned by the administra-

tor and entered on the cover sheets (see Appendices A, B, and

C). The audit engagement and team leader were entered fol-

lowing the code number. Each individual was instructed to

enter the team code number on all questionnaires in his set.

Staff members were further required to coin a six digit per-

sonal code number and enter it on each questionnaire. The

result was that each questionnaire could be sorted by team

and team member, yet no name remained on any of the documents.

The name was entered on the cover sheet, which was to be re-

moved and destroyed by the individual completing the question-

naires.

Although it would perhaps have been preferable to admin-

istor all of the questionnaires at the same time of year,

this was not possible. Most of the annual work is scheduled

at various times of the year --not necessarily following









the fiscal year-end. A further complication is that many

corporate clients use fiscal years which end throughout the

calendar year.

Twenty-two correctly completed sets of questionnaires

were eventually obtained. Of the twelve teams that were not

usable, there were several reasons. In one case, the audit

manager did not feel that he should evaluate the team's per-

formance for an outsider, even with the anonymity provided.

The most frequent problem was the loss of one team member due

to resignation, transfer, sickness, or insufficient time in

the field.

Frequent inquiries were made to the test administrators,

urging them to follow up on those team members that had not

been tested. A few of the discrepancies were eventually

filled; however, once an audit team had been disbanded in ex-

cess of ninety days, the team was excluded from the sample.

The result of this strict enforcement of the criteria

for audit team selection was to limit the statistical base

for the study. This is the case, particularly, where the

analysis of results for the moderator variable effects is

undertaken.

One of the reasons why there were so few teams large

enough to be suitable for the study is that auditing tech-

niques in recent years have tended to become more scientific

and less laborious. Greater emphasis is placed on an evalu-

ation of internal control, statistical sample selections, and

upon analytical techniques which provide assurance without









extensive verification. Also, since virtually all clients

of a large CPA firm use a computerized information system,

a major concern for the auditor now is to evaluate the system

to determine the probability for material breakdowns in con-

trol. Audits of this genre do not require large teams to

test and evaluate account balances in search of human error.

The fact that all of the offices were located in the

southeastern U.S. is perhaps a positive factor in the study.

To whatever extent there remain regional differences in atti-

tudes toward authority, work habits, or job expectations,

these would appear to have been screened out by using offices

only in one region.

The use of firm representatives to administer the ques-

tionnaires has both positive and negative aspects; the chief

advantage being that the individuals tested realized that the

study was sanctioned by the firm and might be expected to

adopt an attitude of sincerity in completing the question-

naires. The negative aspects of having the firm's represent-

atives administer the questionnaires are that they lack the

commitment toward the project and the intimate knowledge of

the study that the originator would bring.













Chapter V

RESPONSES RELATED TO LEADER BEHAVIOR


That leaders were perceived to behave differently by

their teams may be demonstrated by noting the statistics on

Table 5.. Perceived leader behavior on the eight dimensions

measured showed a certain amount of variability as assumed in

working hypothesis number one, Chapter III. The greatest

variability was measured in the two Ohio State Leadership

Studies variables [Stogdill and Shartle, 1955], Considera-

tion and Initiating Structure, with standard deviations of

.35 and .29, respectively. It should be pointed out that

scores in any dimension could range from a minimum of one to

a maximum of five. The six Fox Normative Model variables

[Fox, 1976a] showed somewhat less variability, standard de-

viations ranging from .27 down to .15. Means for all eight

predictor variables fell within a range between 3.57 and 4.12.

No particular conclusions should be drawn from these mean

values, due to the lack of comparative studies using the same

instrument with other groups.

There was some variability in expectation of ideal be-

havior from leaders as seen by individual team members, which

was assumed in working hypothesis number 2 (see Table 5).

As a matter of fact, the variability in the ideal behavior

dimensions was generally greater than in the perceived

-52-









Table 5

LEADER BEHAVIOR VARIABILITY

A. Perceived Leader Behavior (n = 22 items)

Variable Mean S.D. Min.

Consideration 3.94 .35 3.38

Initiating Structure 3.72 .29 2.92

Leader Support 4.12 .26 3.75


Consultative-Participative
Decision-Making

Work Facilitation

Decisiveness

Goal Emphasis

Management of Rewards and
Punishment


B. Ideal Leader Behavior (n

Variable


Consideration

Initiating Structure

Leader Support

Consultative-Participative
Decision-Making

Work Facilitation

Decisiveness

Goal Emphasis

Management of Rewards and
Punishment


3.72

4.00

3.57

3.62


3.83


= 69 respon

Mean S.D.

4.32 .34

4.05 .41

4.46 .32


3.96

4.43

3.39

3.85


.33

.33

.27

.35


.27

.27

.15

.22


3.21

3.43

3.19

3.22


Max.

4.50

4.30

4.67


4.22

4.48

3.76

4.15


.19 3.44 4.20


dents)

Min.

3.38

3.12

3.50


3.12

3.27

2.71

3.00


Max.

5.00

4.88

5.00


4.62

5.00

4.29

4.78


S.E.

.07

.06

.06


.06

.06

.03

.05


.04


S.E.

.04

.05

.04


.04

.04

.03

.04


4.01 .25 3.40 5.00 .03









behavior dimensions for the same variable. This was a sur-

prising outcome--an indication that the perceived behavior

of the 22 leaders was somewhat less variable than the con-

sensus of how the leaders should act. Evidently, the team

leaders tended to behave similarly-- possibly this is a re-

sult of the firm's stated personnel policies and informal

customs.

The mean scores in seven out of the eight ideal behavior

variables were higher than the comparably perceived leader

behavior scores in the same variable. This was the expected

result. The one variable where leaders perceived behavior

scored higher than the ideal was on the dimension of Decisive-

ness. Apparently, CPA firm audit staff members prefer less

decisiveness. They expect to be involved in the decisions

which affect them.

A comparison of leaders' and subordinates' expectations

with regard to leader behavior may be seen in Table 6. The

greatest discrepancy between the mean predictor variable

scores for the two groups was .29 (Consultative-Participative

Decision-Making). All but two other variables showed mean

differences of less than .20. Perhaps the most notable find-

ing is that if the mean scores are rounded to the nearest

whole number, all are equal. In six of the eight variables,

the subordinates' ideal scores are higher. However, this

difference is always less than one standard deviation. Ap-

parently, there is little role dependency with regard to








Table 6

IDEAL LEADER BEHAVIOR

Comparison of Leaders' and Subordinates' Expectations


Variable


Consideration

Initiating Structure

Leader Support

Consultative-Participa-
tive Decision-Making

Work Facilitation

Decisiveness

Goal Emphasis

Management of Rewards
and Punishment


Leader
Expectations

Mean S.D.

4.07 .21

4.14 .31

4.41 .22


3.67

4.29

3.14

3.98


.33

.27

.26

.39


Subordinate
Expectations

Mean S.D.

4.32 .32

4.05 .41

4.46 .32


3.96

4.43

3.39

3.85


.33

.33

.27

.35


4.01 .25


4.00 .23









expectations of leader behavior among the 69 subordinates

and 22 leaders tested.

In accordance withworking hypothesis number three, Chap-

ter III, Pearsonian correlation coefficients were computed

between predictor variables and assessments of satisfaction

and performance. (See Tables 7, 8, and 9.) Of the six Fox

Normative Model variables, Consultative-Participative Deci-

sion-Making, Goal Emphasis, and Management of Rewards and

Punishment did not show any significant correlation with the

criterion scores. Leader Support correlated .41 with Leader-

Member Relations and -.47 with the difference between the

group averages for the 52 leader behavior items. This dif-

ference is labelled Discrepancy Measure, and is expected to

be a measure, as opposed to an assessment, of group dissatis-

faction.

This result raises a question of to what (negative) de-

gree the Discrepancy Measure indicates overall job satisfac-

tion. Porter and Lawler [1968, p. 31] define satisfaction

as "the extent to which rewards actually received meet or

exceed the perceived equitable level of rewards." The Dis-

crepancy Measure used in this study is an average of all of

the differences (ideal minus actual score) for each of the

52 items selected for this study from the LBDQ (see

both Appendices B and D). A review of the items on these

questionnaires demonstrates an element of positive or nega-

tive reward in most: for example; item (1), "treated all

subordinates on the audit as professional colleagues; item









Table 7

FOX NORMATIVE MODEL

Correlation between Predictors and Criterion Scores



Predictor Variable


C-P,
L.S. D-M


W.F. D G.E. M.R.P.


0 -.06

p -.13

Q .41*

T -.04


.13

.05

.18

.18


Y .00 -.01


Z .17


-.19

.06


.12


-.18


.08 -.10

.21 -.16


.20 .19

.42** .29


.46** .36*


Q31 -.47** -.28


-.08


.05

.21


-61** -.56** -.27


* denotes probability of randomness less than .10

** denotes probability of randomness less than .05


Symbol Variable


L.S.
C-P,D-M
W.F.
D
G.E.
M.R.P
0
P
Q
T
Y
Z
Q31


Leader Support
Consultative-Participative Decision-Making
Work Facilitation
Decisiveness
Goal Emphasis
Management of Rewards and Punishment
Satisfaction with Colleagues
Satisfaction with Compensation
Leader-Member Relations
Overall Job Satisfaction
Team Performance
Leader Effectiveness
Discrepancy Measure (Ideal Behavior Minus Actual
Behavior)


Criterion
Measure


.14

-.12


-.15

-.16

-.01

.04


I









Table 8

OHIO STATE LEADERSHIP STUDIES MODEL

Correlation between Predictors and Criterion Scores




Predictor Variable



C I.S.

0 -.07 -.05

P -.12 -.10

Q .33 .07


Criterion Measure


T -.08


Y -.07 -.05

Z .07 .17

Q31 -.49** -.26

** denotes probability of randomness less than .05


Variable

Consideration
Initiating Structure
Satisfaction with Colleagues
Satisfaction with Compensation
Leader-Member Relations
Overall Job Satisfaction
Leader Effectiveness
Discrepancy Measure (Ideal Behavior Minus Actual
Behavior)


.08


Symbol


C
I.S.
O
P
Q
T
Z
Q31









Table 9

LPC MODEL

Correlation between LPC Measures and Criterion Scores


U V


W WV X


Criterion

Measure


O .11

P -.15

Q -.03

T -.06


.07


.00


.02 -.09 -.08


.14 -.04 -.15 -.02


.17 -.03


Y -.42** .19


Z -.24

Q31 -.06


.00

-.33


-.17


-.46** -.53**

-.29 -.22


-.28

.18


36*


.39 -.34


* denotes probability of randomness less than .10

** denotes probability of randomness less than .05


Symbol Variable


LPC
Task LCP
Social LPC
LPC Difference Score (Social LPC-Task LPC)
LPC Self Description
Satisfaction with Colleagues
Satisfaction with Compensation
Leader-Member Relations
Overall Job Satisfaction
Team Performance
Leader Effectiveness
Discrepancy Measure (Ideal Behavior Minus Actual
Behavior)


.25

.07


U
V
W
WV
X
0
P
Q
T
Y
Z
Q31









(4), "gave deserved credit to subordinates when dealing with

senior colleagues," item (6), "did little things to make it

pleasant to be on the audit," and item (9), "was willing to

make adjustments in the audit program to suit individual

subordinates."

Those items that do not represent a reward in the per-

sonal sense (for example; item (2), "anticipated problems

and planned for them" and item (7), "pushed to get the field

work done with a minimum of wasted time and effort") may

still be regarded as related to overall job satisfaction.

One must assume that a staff member serving on an audit team

in the field would be less satisfied with his job, regardless

of the level of social deference directed toward him, if the

main goal--to gather evidence--was thwarted by poor organ-

ization and planning.

Work Facilitation correlated .42 with Team Performance

and .46 with the Leader Effectiveness assessment. Decisive-

ness correlated .36 with Leader Effectiveness. Work Facilita-

tion and Decisiveness correlated most strongly with the Dis-

crepancy Measure, -.61 and -.56, respectively.

The only significant correlation between criterion meas-

ures and the two Ohio State Leadership Studies predictor vari-

ables was between Consideration and the Discrepancy Measure,

-.49. Initiating Structure did not show any predictive abil-

ity in this sample.

The Ohio State studies are not in disagreement with these

findings. Initiating Structure and Satisfaction seem to be









positively related in situations where group members perceive

a need for structuring activities on the part of the leader

and negatively related where the need does not exist. It

would seem apparent that an audit team could fit in either

category. The situation is unique in that most of the audit

tests and procedures may never have been performed before in

the context of the current client organization and accounting

system. The audit team, itself, would be a recently assembled

group where the members may have had no previous working re-

lationships.

Although the LPC Model does not presume any predictive

ability for the LPC measures, Pearsonian correlations were

computed between the five LPC measures and the satisfaction

and performance assessments and also with the Discrepancy

Measure. Figure 5 shows the results. LPC, Social LPC, and

the LPC Difference Score correlated strongly with Team Per-

formance. It should be noted that these were negative cor-

relations, indicating that high performance was found in

teams led by low LPC leaders--persons holding their least-

preferred coworker in low regard. LPC Self Description

showed some correlation with the assessment of Leader Effec-

tiveness and the LPC Difference Score correlated with the

Discrepancy Measure .39.

In this study, variability was measured both in per-

ceived leader behavior and in expected ideal behavior. There

was little variation between leaders' and subordinates' no-

tions of what ideal behavior ought to be. Three variables









from the Fox Normative Model correlated with the Discrepancy

Measure--Leader Support, Work Facilitation, and Decisive-

ness. Work Facilitation correlated with both performance

assessments--Team Performance and Leader Effectiveness.

Small correlations also showed up between Leader Support and

Leader-Member Relations and between Decisiveness and Leader

Effectiveness. Both of these corrleations appear logical.

While a discussion of the shortcomings of the study will

be reserved for later, it would seem appropriate at this time

to deal with the performance measures (Team Performance and

Team Leader Effectiveness). Of the 22 teams, 15 were rated

as being "slightly above average for our firm" and four were

given the top rating, "significantly above average for our

firm. Only one team was rated as having performed "average

for our firm." Two were rated "slightly below average for

our firm."

It is possible that the performance measure is biased.

The individual making the rating does have final responsibil-

ity for the audit and by implication is deeply concerned with

its adequacy. Each partner or manager may believe that the

audits performed by his subordinates are better than the

firm's average because he sees to it that those areas which

he considers most important are performed to his satisfaction.

Partners and managers may also have a tendency to believe

that their office is above average for the firm--a preference

based on familiarity rather than experience.








Consideration was the variable from the Ohio State

Leadership Studies Model which had a significant correlation

in this study. That the Discrepancy Measure, a measure of

dissatisfaction, was the criterion measure that correlated

(negatively) was not unexpected.

Three of the LPC variables correlated with Team Perfor-

ance. As a matter of fact, no other variable was more

strongly correlated with Team Performance than LPC, Social

LPC, or the LPC Difference Score. These are interesting ob-

servations, but not tests of the Contingency Model because

the groups are left unclassified as to Leader-Member Relations

in this part of the study. Chapter VII will evaluate the

study results in accordance with the Contingency Model.)

These results discussed to this point demonstrate the

applicability of working hypotheses 1, 2, and 3. Neither the

Fox Normative Model nor the Ohio State Leadership Studies

Model variables appeared to indicate relationships with the

assessments of satisfaction. The situation improves when

the criterion measure of satisfaction is the Discrepancy

Measure. The Ohio State Leadership Studies variables did not

correlate with performance in this study, whereas, certain of

the other predictor variables measured showed some relation-

ship.













CHAPTER VI

MODERATOR VARIABLE EFFECTS


As discussed in Chapter III, eight of the ten situational

propositions suggested by Kerr et al. [1974] were selected for

testing in this study. The expectation was that a sharper re-

lationship between Consideration and Initiating Structure and

assessments of satisfaction and performance could be found by

using the proposed moderator variables as screening devices.

The usefulness of these results is limited by the performance

measurement bias, discussed in Chapter V, as well as by the

limited sample size.

A quadrant analysis was used to determine whether the

classification by predictor variable (HI or LO ranking in

Consideration or Initiating Structure) was independent of a

similar classification by moderator variable (Pressure, Task

Certainty, Need for Information, Organizational Independence,

and Intrinsic Job Satisfaction). Table 10 shows the results

of the quadrant analyses for the two Ohio State predictor

variables as paired against the five moderator variables

selected as feasible for this study. Although the Kerr et al.

11974] propositions were stated only in terms of the relation-

ship of the Ohio State predictor variables to satisfaction

and performance, it seemed plausible to search out any effects

that the moderator variables might have on the Fox Normative
64









Table 10

MODERATOR VARIABLE INFLUENCES
Chi-square
Phi Coefficient
Probability of Randomness

Moderator Variable


Consideration


Predictor

Variable


.733
-.183
.39


Initiating
Structure .000 1.473 .733 .733 .733
.000 .259 .183 .183 -.183
1.000 .22 .39 .39 .39

Leader .182 .000 .182 1.636 .182
Support -.091 .000 -.091 .237 .091
.67 1.000 .67 .20 .67

Consultative- 4.545 .786 .182 1.636 .182
Participative -.455 .189 .091 .273 .091
D.M. .03Y* .38 .67 .20 .67

Work 1.636 .786 .182 1.636 .182
Facilitation -.273 -.189 .091 -.273 -.091
.20 .38 .67 .20 .67

Decisiveness .182 .786 4.545 .182 .189
.091 -.189 .455 -.091 .091
.67 .38 .03* .67 .67

Goal .182 .000 1.636 .182 1.636
Emphasis -.091 .000 .273 .091 -.273
.67 1.00 .20 .67 .20


Management
Rewards and
Punishment


Symbol
J
K
L
M
N


1.636
.273
.20


.000
.000
.00


Variable
Need for Information
Task Certainty
Organizational Independence
Pressure
Intrinsic Satisfaction


.182
-.091
.67


.000
.000
1.000


1.636
-.273
.20


.182
-.091
.67


Items from App. C, CI III
1,2,3,4,5
6
7,8
9,10,11,1,13,14
15,16,17,18,19


** Denotes probability of randomness less than .05


321
121
57


.733
-.183
.39


.733
-.183
.39








Model predictor variables as well. For each combination of

predictor variable (8) and moderator variable (5), the 22

teams were assigned to one of four quadrants: quadrant 1,

HI classification in both predictor and moderator; quadrant

2, LO classification in both predictor and moderator; quad-

rant 3, LO predictor classification and HI moderator classif-

ication; and quadrant 4, HI predictor classification and LO

moderator classification.

Table 10 shows the results of the test for covariation

between the predictor and moderator variables based upon the

number of cases falling in each category represented by the

four quadrants. The chi-square statistic was computed and

the strength of association was then found by measuring the

phi coefficient. None of the Ohio State predictor variables

showed a strong covariation for these tests--the relation-

ship between Initiating Structure and Task Certainty appeared

to be the greatest (phi coefficient of .259 and a probability

of randomness of .22). There were two strong relationships

between the Fox predictor variables and the moderator vari-

ables; and, in retrospect, both appear to be quite logical.

Consultative-Participative Decision-Making and Need for In-

formation had a phi coefficient of -.455. The indication

here being that where the subordinate's need for information

is high, he does not experience a high degree of participa-

tion in the decision making process. Decisiveness and Organ-

izational Independence has a phi coefficient of .455. Those

subordinates who felt independent of their firm, or highly









mobile in the job market, perceived their leaders as highly

decisive; whereas those subordinates who did not consider

themselves as mobile at the present time perceived their

leaders as indecisive. It is likely that the mobile employ-

ees are the more experienced staff members--ones that would

force their leaders into decisiveness by making decisions on

their own as their level of expertise warranted. Consequent-

ly, these employees would tend to present relevant problems

to the leader for solution in situations where the leader

must act. Inexperienced subordinates might ask for decisions

in situations where none is required or where information is

too scant for a thoughtful decision. In these cases they

could be left with a perception of their leader as indecisive.

Table 11 also shows the results of chi-square tests.

However, in this instance, the predictor variable scores used

are the ideal behavior measures. The moderator variables ap-

pear to exert a greater influence on expected (ideal) behav-

ior than on actual behavior as perceived by subordinates.

A strong relationship was noted between Initiating Struc-

ture and Intrinsic Satisfaction. The phi coefficient was

negative, -.455, which may be an indication that where there

is a high degree of satisfaction inherent in the job, subord-

inates do not want a leader to engage in structuring activi-

ties to a high degree.

The Fox Normative Model predictor variables (ideal be-

havior) yielded four strong relationships with the moderator

variables. Leader Support and Task Certainty, Consultative-





68


Table 11

MODERATOR VARIABLE INFLUENCES

Chi-square
Phi Coefficient
Probability of Randomness

Moderator Variable


Predictor

Variable


J
Consideration .000
S000
.000
1.00

Initiating ,182
Structure -.091
.67

Leader ,188
Support -.092
.66

Consultative- 2.933
Participative .365
D.M. .08

Work .182
Facilitation .091
,67


Decisiveness


(Ideal
Leader
Behavior)Goal
Emphasis


Management of
Rewards and
Punishment


.000
.000
1.00

.000
.000
1.00

.182
-.091
.67


Variable


Items from Ap. C, Ch. III


Need for Information 1,2
Task Certainty 6
Organizational Independence 7,8
Pressure 9,1
Intrinsic Satisfaction 15,


,3,4,5


0,11,12,13,14
16,17,18,19


** Denotes probability of randomness less than .05


K
.321
.121
.57

.786
.189
.38

6.044
,524
.01

2.121
.311
.14

.000
.000
1.00


.321
-.121
.57

2.121
-.311
.15

.000
.000
1.00


L
.733
.183
.39

.182
-.091
.67

1.692
.277
.19

.733
-.183
.39

.182
.091
.67


6.600
.548
.01

.000
.000
1.00

.182
-.091
.67


M
.000
.000
1.00

1.636
.273
.20

.188
.092
.66

.733
.183
.39

1.636
-.273
.20


2.933
-.365
.08

.733
-.183
.39

.182
-.091
.67


N
.733
-.183
.39

4.545
-.455
.03**

.188
.092
.66

.733
-.183
.39

1.636
-.273
.20


.733
.183
.39

.733
-.183
.39

1.636
.273
.20


Symbol
J
K
L
M
N









Participative Decision-Making and Need for Information, and

Decisiveness and Pressure all appear to be strongly related

where the ideal leader behavior and actual situational char-

acteristics are concerned. The phi coefficients for these

three relationships were .524, .365, and -.365, respectively.

The strongest relationship of all was between Decisiveness

and Organizational Independence, phi coefficient.548. The

relationship between Decisiveness and Organizational Inde-

pendence appears logical for the same reason when the pre-

dictor variable is ideal as for the previously discussed per-

ceived case. The relationship between Leader Support and

Task Certainty also follows a logical pattern--where there

is a high degree of task certainty, leader support is desir-

able, The negative relationship between Decisiveness and

Pressure could indicate that in high pressure situations,

subordinates do not want a decisive leader. Perhaps they

would prefer to operate in an atmosphere free of the con-

straint imposed by a highly decisive leader. The relation-

ship between Consultative-Participative Decision-Making and

Need for Information is not parallel in the ideal behavior

situation to the findings for the perceived behavior situa-

tion. In the latter, it was surmised that leaders did not

consult with subordinates in those cases where the subordin-

ates reflected a high need for information. However there

appears to be a positive relationship between the two vari-

ables when ideal behavior is substituted for perceived Con-

sultative-Participative Decision-Making. This may indicate









that even though relatively uninformed, subordinates still

prefer to be consulted,

The chi-square test does not take into consideration the

criterion measure effects. Consequently, a further step was

added to incorporate these into the quadrant analysis so that

the Kerr et al. [1974] situational proDositions could be ex-

amined in this environment. Table 12 contains the results.

The test was basically a simple observation of the difference

between quadrants. Each group was ranked HI or LO among the

twenty-two groups for each predictor variable (Consideration

and Initiating Structure as perceived by subordinates) and

moderator variable in this phase of the study. The appropri-

ate pairings were made to test each of the eight Kerr et al.

[1974] propositions that were feasible for this study. When

each group had been classified into a quadrant for a specific

pairing, the average Overall Satisfaction or Team Performance

was computed for the set teams in the quadrant. These aver-

age criterion measure scores were then compared to determine

if they followed the direction of the proposed results.

Table 12 shows that of the sixteen tests made of the

propositions studied, seven followed the expected direction

of change in criterion measure. Table 13 shows the quadrants

and criterion scores for propositions 1, 2, 3, 4, 5, 6 and 9.

Table 14 shows the results of the tests for proposition 7.

Among the propositions where two or more tests were con-

ducted (1, 2, 7, and 9), the agreement of observations with

expected results was always mixed. Of the propositions











Table 12
















Congruity of Prop-sed Effect and seed :srved~ fct ri-=tmality


0-.i State
Pre Cr


Pressure
pressure s.S.
Intrinsic Sat. C
Tr-.t-.sic at. C
Intrinsic Sat. .S.

Infcrr.s.t c. Need .S.
Task Certainty C
Discrecancy C
Dis crepan.cy C
(-A oerc r varea:e r.n:t

Org. i nc .. ...e c
Org. In dc enence r

Or(.oderzcr variale n.t
(coderatcr variab-e nct


SFtisfs" ic

Sa i fact icr



Satsfacticn
Sat







S 'a--c-- ct



oEserved)


SPropositions are reproduced in Chapter II1
*" See FYcure 2 for listing of i !e:ns used in -r--:ue-en

TESTING P'DCEDURE: Each of the 22 groups was placed into a H: cr LO
classfication for each of the moceratcr variat-es r-nasurei us.-.-
the mean sccre for the variable for each croup as a score fr rac :.
in an array. The 11 highest scoring grous in tne array were c
nated H:. The other groups were desigated L. A s lar rocedur
was used tc cas:Irfy the 2 f zre s 7 I l ; 'fr
thE Chic State rrecdctcr var:abCes. A arat ana,
crCpsltiton testec aE follow:

rredictor Tr 1 e


Quacrarnt I ,u a.. i .ra
(insert aver-i
criteric. sEcr e c.
of group fal!
inc Ir. __ _.-_


acderatcr


Kerr, e- al,
Prcmssltic


Nr- ra-
\a ZaI


D- T'-e" -t o .



!:C





:,0


Cr terinC.











Table 13


SQUADRANT ANALYSES OF

(See Figure

Procositicr.
I.S.
HT LO
HI cases: 7

perf.
3.86 3.50
M 7--- y ---- o


LO 3.80 14.50


Frcpos-itir. 2
C
HI LO
HI cases: 5 6


c


LO .35 3. 3
LO


Proposition 5
I.S.
HI LO
I cases: 65








sat.









LO
L 3.85 3.673


LO 3.41 3.52





HI LC
HI cases: 6 5

sat.


r~ptR ET AL. CONTIN3ENC THEOrY ?R&?CSI. 'S

for coding cf mierator varabt~l s:
on rcsl o- '-eL'
ProposiOn tn

H: LO HI LC
HI cases: 7 HI cases: 5

sat. perf.
-. 3.0L 3-7 .


Proposition 3
I.S.
HI LO
HI cases: 5 6

SZ C




LO 3.6- 3.25


Proposition 6
C
HI LO
HI cases: 7 7

sat.
3.a9 3.76






T 7
Lo 3-7. 3-






H cases: 71
L LC



3.

LO


Proposi-t-n
C.S.



HI esers: 5 6
-T-





LO _i


Propcstior. 9
C
HI LO


perf.
T 3.83 '-









HI cases: 7





I^ -- ------- E ----------
sat .-



L.3 C


m











Table 14


Ccc-arsnr. of Fr-ccsed Effect tc


Average -E ult F.esull
A- Z
_____ rd


Perfc ance


L.C
3.*







3.73


Hi-ger
Lover


t* The difference te.ween cservec (cerce'ved) Conrsderat..n ar. Ideal
(expected) Cons ierat ion was computed fcr eac tea.. The teams -ere
then ranked intc LC and HI classiflcat ons tasec u-cn tne amcur.t cf
discrepancy as represented by the com-pued difference. Eieven t-rms
were included in each clas3ificatlon. The average Overall Satisa-
tion and Team Performance were cooputed for each classlflcation. The
same procedures were also followed usinc g Ir.tlati Structure as
predictor variable. Propcsitfon 7 states that the higher the dis:r;-
ancy between expeczations of tenavlcr rad ofser-vaticns cf beha-
for both Consideratlcn and Initiatring :ruCt're activities, the lower
will be the levels of satisfaction arnd performance of suocrdinates.


Predic=cr
Var-able


I.S.


M


Higher
I C W E r









where one test was made (3, 4, 5, and 6), two showed observ-

ations in accordance with the proposed result. Four of the

seven propositions relating to performance and three out of

nine propositions relating to satisfaction were in agreement

with the proposed results. Due to the absence of any pattern

in the results of the tests of the contingency theory propo-

sitions, it is not appropriate to make further conjecture as

to the applicability of these propositions in the auditing

environment.














CHAPTER VII

LPC STUDY RESULTS


The 32 item Fox LPC instrument (Appendix F, Chapter III)

was completed by each team leader in two versions--for

least preferred coworker and for self, Five predictor vari-

ables were obtained from these instruments; LPC, Task LPC,

Social LPC, and LPC Self Description. Table 4, Chapter III,

lists the item subsets which comprise these variables.

Assignment of teams into octants of Fiedler's classifi-

cation system acquired three measurements; position power,

task structure, and leader-member relations [Fiedler, 1967,

pp. 22-32]. Position power was measured using a set of 13

questions as utilized by J. G. Hunt [Fiedler, 1967, p. 281].

These questions were discussed with the partner or specialist

in charge of assigning staff to audit teams in three of the

offices visited. In every case, at least ten of the questions

were answered in the affirmative-- indicate an attribute

of high position power.

Group task structure was evaluated by having the same

three experts who answered the position power questions eval-

uate an audit team member's job in the manner suggested by

Fiedler and Chemers [1974, p. 68]. Four dimensions of task

characteristic (goal clarity, goal-path multiplicity, deci-

sion verifiability and decision specificity) were scored by









experts on a scale from 1 (low structure) to 8 (high struc-

ture). In each the mean score of the four dimensions was

below 5.0, indicating low task structure. The task structure

for a leader's job would be lower than the team member's job.

Consequently, it can be safely assumed that the task struc-

ture of any team member, to include the leader, or the task

structure of the team as a whole, is low for CPA firm audit

teams.

High position power combined with low task structure

indicates octants III and VII of Fiedler's classification

system. Fiedler [1967, p. 121] stated that there are rela-

tively few groups of this type in real life. Two studies

were undertaken by Fiedler and his associates using groups

created in a laboratory setting. The median correlations

reported for these groups were: -.33 where leader-member

relations was good octantt III) and .05 where leader-member

relations was moderately poor octantt VII), [Fiedler, 1967,

pp. 137-8].

Fiedler and Chemers [1974, p. 64-5] indicate two ways

to measure leader-member relations. One method was to ask

group members to indicate on a sociometric scale their ac-

ceptance of their leader as opposed to other supervisors.

The second method was to ask the leader to answer ten bipolar

(eight-point) questions, the sum of which yields a group at-

mosphere score. Fiedler and Chemers [1974, p. 65] admit

that the first method is awkward due to the fact that most

employees do not care to show low regard for their









supervisors. The second method may be criticized on the

grounds that it represents an evaluation by the leader, where

it would be potentially embarrassing for him to admit the

truth in certain cases, For instance, some of the scales are

Efficient-Inefficient, Cold-Warm, and Friendly-Unfriendly.

For this study, four measures of leader-member relations

have been taken. Six items from the Leader Behavior Descrip-

tion Questionnaire (items 5, 6, 27, 44, 48, and 52) when com-

bined and averaged provide a measure of leader-member rela-

tions [Fox, 1976c, Table 19C]. Each team member was asked to

give a global assessment of leader-member relations. Subord-

inates answered the question, "All in all, how would you

judge your relationship with the auditor in charge of field

work for the engagement listed on the cover sheet to this

set of questionnaires?" A group average of these responses

provides a second measure of leader-member relations. Lead-

ers were also asked to answer a similar question in an appro-

priately modified version, providing a third measure of

leader-member relations. A fourth measure was obtained by

taking a simple average of the second and third measures.

It was assumed that equal weight should be given to the

supervisor's and subordinates' respective assessments, since

the phenomena being measured represents an average of a

series of dyadic relationships. Therefore, in each dyad the

leader and the subordinate should be given equal weight.

Table 15 contains the results where the teams are split

into respective octants using the LBDQ subset as a measure


M





















Table 15


Te

Le

Di

Co

Co

Ov


FIEDLER CO.'NTINGES;CY MDDEL

Rank-Order Ccrrelation Coefficients between LPC and Criterion Scores

Octant III (Leader-Mlember Relations: Good) n=ll

LPC Task Social LPC LPC
Coworker LFC LPC Difference Self

am Perfcr.ance -.35 .09 -.56* -.70" .0

ader Effectiveness -.40 -.29 -.52' -.23 .2

screpancy Measure -.38 .09 .oE -.1 -.7

.lleaeue Sat. .00 .09 -.17 -.23 .7:

rmpensatlcr Sat. -.32 .18 -.21 -.-5 -.3

era J St. .08 .25 .0 -.3 -.


0





L**

5


Octant VII (Leader-Member 'olatlons: .oderately Foor) n=32

LPC Task Social LPC LiC
Coworker LPC LPC Difference Self

Team Perforance -.57* -.02 -.50 -.29 .19

Leader Effectiveness -.39 -.21 -.33 -.0b .27

Discrepancy Measure .50 -.47 .55* .7i** -.0o

Colleague Sat. .12 .03 .4 .34 .15

Compensation Sat. .06 -.16 .19 .19 .2''

Overall Jct Ea:. -.15 -.27 -.C .12 -.2



denctc: prcbatl!ity of rra.-.ness oest that .]C

'' cenctes probat1llty of ranc-.cnes less trar .c

Leader-.'em-:er .elatcnrr scores are a cc-rposte of items 5,E,2,,,
and 52 frc~ the Leader Behavicr Descrlctlon Questionnaire (Apt. z,
Chapter III'. Oct.nt III Teamc: Nos. 3 ,,7,, 9,15 12,1 17,1 ,c
Octant : 2,2,4,,,13, -,:5,20,~, ... ..









of leader-member relations. The rho-value (Spearman rank-

order correlation) between LPC and Team Performance for Oc-

tant III closely agrees with Fiedler's predication of -.33,

however, Octant VII results are quite different. LPC and

Team Perfomrance show a rho-value of -.57, as opposed to

Fiedler's result of .05. Strong correlations appear between

Team Performance and Social LPC -.56 and LPC Difference -.70.

The LPC Self Description Correlates with two measures of

satisfaction; .71 with Satisfaction with Colleagues and -.72

with the Discrepancy Measure, a measure of dissatisfaction.

These last four correlations, all Octant III values, should

be compared with their Octant VII counterparts. In this way,

it can be determined to what extent the LPC variables dis-

criminate between the two octants. It is apparent that the

LPC Difference Score shows the greatest disparity in Team Per-

formance rank order correlations. The other LPC measures

seem to be in the same vicinity, regardless of octant. The

same holds true for all LPC measures in their correlations

with Leader Effectiveness.

The Discrepancy Measure appears to be the criterion

measure which contains the most diversity in correlations

when shifting from Octant III to Octant VII. The spread be-

tween the rank-order correlations is .88 LPC Coworker, .56

Task LPC, .47 Social LPC, .92 LPC Difference Score, and .64

LPC Self Description. The only other correlation spreads

that enter into this range of magnitude are: .41, Team Per-

formance and LPC Self Description; .56, Colleague Satisfaction









and LPC Self Description; .64, Satisfaction with Compensa-

tion andLPC Difference Score; .96, Satisfaction with Com-

pensation and LPC Self Description; .52, Overall Job Satis-

faction and Task LPC; and .42, Overall Job Satisfaction and

LPC Difference Score.

Table 16 contains the rank-order correlation values

where the measure of leader-member relations is a single-

item assessment given by team subordinates. In this partic-

ular analysis, there were nine median valued teams which were

eliminated in the process of dividing the teams into octants.

Perhaps as a consequence of this, the resulting rank-order

correlations are stronger than in the other analyses in which

far fewer teams were eliminated. Once, again, the results

do not coincide with Fiedler's predictions; LPC and Team

Performance correlated -.52 and -.80 for Octants III and VII,

respectively (-.33 and .05, predicated).

A large number of significant rho-values were computed

in the analysis where leader-member relations was measured

by using the team subordinate assessment. Eleven correla-

tions of .71 or greater may be noted in Table 16. It may be

of particular interest that the three strongest correlations

with Team Performance (LPC Coworker -.80, Social LPC -.90,

and LPC Difference Score -.78) are all negative values.

This is an indication that leaders with low LPC scores, pre-

sumably task-oriented, are more successful than high LPC

leaders [Fiedler and Chemers, 1974, p. 78]. Similar results

may also be noted on the other performance measure, Leader









81








Table 16


FIEDLER CONTINGENCY MODEL

Rank-Order Correlation Coefficients between LFC and Criterion 5:ores

Octant III (Leader-Member Relations: Good) n=6

LPC Task Social LPC LF
Coworker LPC LPC Difference Self

Team Performance -.52 -.39 -.52 -.46 -.03

Leader Effectiveness -.56 -.56 -.56 -.37 .15

Discrepancy Measure -.49 .03 -.49 -.77' -.37

Colleague Sat. .10 .29 .10 -.10 .49

Compensation Sat. -.81" -.67 -.81** -.61 --32

Overall Job Sat. -.41 -.58 -.41 .03 -.70


Octant VII (Leader-Member Relations: Moderately Poor) n=-

LPC Task Social LPC LF:
Coworker LPC LPC Difference Self

Team Performance -.80'' .30 -.90* -.78** .50

Leader Effectiveness -.85" .23 -.81" -.58 -50

Discrepancy Measure .65 -.52 .58 .77** -.L5

Colleague Sat. .36 .24 .02 -.07 -.32

Compensation Sat. -.16 .22 .00 -.54 .71'

Overall Job Sat. -.61 .16 -.47 -.63 .77*


denotes probability of randomness less than .10

** denotes probability of randomness less than .05

Leader-Member Relations scores are a group average of a single iter,
global assessment from the Audit Staff Member Opinion Survey (App. C,
Chapter III, item 22). Octant III Teams: Nos. 6,12,16,17,19,22. c-
tant VII Teams: Nos. 7,8,11,13,14,18,21. Deleted Teams: 1,2,3,4,:,
9,10,15,20.








Effectiveness, which also shows strong negative correlations

with LPC Coworker, Social LPC, and LPC Difference Score.

There were numerous large differences between the Octant

III and Octant VII rho-values. Once again, the Discrepancy

Measure appears to show the greatest amount of diversity when

shifting between octants. There were differences of 1.14,

LCP coworker;.55, Task LPC; 1.17, Social LPC; and 1.54, LPC

Difference Score. Team Performance, Leader Effectiveness,

and Overall Job Satisfaction showed differences when shift-

ing between octants of .69, .79, and .74 for correlations

with Task LPC. Team Performance, Colleague Satisfaction, and

Overall Job Satisfaction when correlated with LPC Self Des-

cription differed .53, .51, and 1.47 between octants. There

was a spread of .66 when comparing the rho-values for Overall

Job Satisfaction and the LPC Difference Score.

The above results were not unexpected. Since a large

number of median values were eliminated, differences should

have been more marked for a shift in a major element of sit-

uational favorableness.

Table 17 contains the rank-order correlations between

the LPC predictor variables and the criterion measures where

the measure of leader-member relations is the leader's global

assessment. The Team Performance correlation for Octant VII

comes closest to the Fiedler [1967, pp. 137-8] predication,

-.09 in lieu of .05. Team Performance and LPC Coworker cor-

relate -.64 in Octant III, compared to the predicted value

of -.33






83











Table 17


FIEDLER CONTINGENCY MODEL

Rank-Order Correlation Coefficients betweer-lpCand Criterion Scores

Octant III (Leader-Member Relations: Good) n=ll

LPC Task Social LPC LPC
Coworker LPC LPC Difference Self

am Performance -.64" -.34 -.53' -.29

ader Effectiveness -.29 -.75** -.40 .29

screpancy Measure -.21 .02 .27 -.18 -.

league Sat. .01 .31 -.19 -.34 .

mpensation Sat. -.28 .13 -.12 -35 .

erall Job Sat. -.64** -.07 -.40 -.40 -.


36





3-



-2


Octant VII (Leader-Ne-ber Relations: Moderately Poor) .1=

LPC Task Social LPC LPC
Coworker LPC LPC Difference Self

Team Performance -.09 .53* -.19 -.47 .29

Leader Effectiveness -.14 .45 -.09 -.36 .57'

-Discrepancy Measure .16 -.70** .33 .64*1 -.0

Colleague Sat. .51 -.08 .51 .35 .25

Compensation Sat. .38 -.01 .54' .17 .12

Overall Job Sat. .65** .32 .48 .13 .-1


denotes probability of randomness less than .10

** denotes probability of randomness less than .05

Leader-Member Relations scores are a single-item global assessment
given by the group leader (instruction page, Ape. E, Chapter III).
Octant III Teams: Nos. 1,2,5,12,15,16,17,18,20,21,22. Octant VII Ie-Z:
Nos. 3,4,6,7,8,9,10,11,13,14 ,15.


Te

Le

Di

Co

Co

Ov









Significant correlations appear between LPC Coworker

and Overall Job Satisfaction; -.64, Octant III and .65, Oc-

tant VII. From this, it seems task-oriented leaders (low

LPC) have teams with higher satisfaction when leader-member

relations are perceived as good by the leader and high LPC

(relations-oriented) leaders have teams with higher satisfac-

tion when the leader perceives leader-member relations as

moderately poor. Fiedler and Chemers [1974, p. 78] hypoth-

esize that a low LPC leader in a favorable situation will be

relaxed, friendly, and considerate; whereas, the high LPC

leader in an unfavorable situation will seek a close relation-

ship with his group members. The negative correlation for

Octant III, a favorable situation, could result from the sat-

isfying effect of human-relations activities coming from the

low LPC (task-oriented) leader. The positive correlation in

Octant VII is the result of high LPC (relations-oriented)

leaders resorting to their primary style in this unfavorable

situation.

Table 17 reveals many examples of extreme shift in cor-

relation between octants for similar sets of variables. How-

ever, as in Tables 15 andl6, in most cases both correlations

are not statistically significant, limiting the amount which

one may conclude from the differences.

The division of teams into Octants III and VII for all

of the analyses up to this juncture has been based upon per-

ceptions or assessments by team subordinates (Tables 15 and

16) or team leaders (Table 17). The final analyses used an









average of team leader assessments and subordinate average

assessments. Table 18 reveals that some of the results are

similar. The negative to positive satisfaction shift for

LPC Coworker as conditions become less favorable continues.

Strong correlations continue between the Discrepancy Measure

and the LPC Difference Score in Octant VII. Octant III cor-

relations between LPC Self Description and Team Performance,

Leader Effectiveness, and Overall Job Satisfaction surfaced

where none had been statistically significant before.

When comparingTables 15, 16, 17, and 18 one might be

concerned that there are not more similarities. However, if

one carefully compares the assignment of teams to octants,

as noted at the bottom of each table it is apparent that

only Teams 16 and 17 are consistently classified in Octant

III and only Teams 11, 13, and 14 are consistently classified

in Octant VII. The difference measures of leader-member re-

lations give quite different rankings. None of the measures

matches the methods suggested by Fiedler and Chemers dis-

cussed earlier. Perhaps this accounts for the disparity of

the results in the study with their median rho-values. How-

ever, it should be noted that Fiedler's median results fell

within rather large ranges [Fiedler, 1967, pp. 137-8] and

encompassed only two studies.






86













Table 18


FIEDLER C.::TNGE:':CY MODEL
Rank-Order Correlation Coefficients between LPC and Criterion Scores

Octant III (Leader-Memoer Relations: Good) n=9

LPC Task Social LPC LPC
Coworker LPC LPC Difference Self
Team Performance -.64' -.46 -.55 -.27 -.75"

Leader Effectiveness -.17 -.87** -.35 .52 -.58'

Discrepancy Measure -.18 .17 .12 -.46 -33

Colleague Sat. -.06 .19 -.06 -.13 .23

Compensation Sat. -.28 .12 .17 -.19 -.20

Overall Job Sat. -.56 -.07 -.32 -.46 -.831*


Octant VII (Leader-.ember Relations: ".odertely Poor) n=

LPC Task Social LPC LPC
Coworker LPC LPC Difference Self
Team Performance -.23 .60* -.50 -.60' .14

Leader Effectiveness -.24 .52 -.37 -.45 .49

*Discrepancy Measure .22 -.75'* .40 .80** -.50

Colleague Sat. .58* -.09 .44 .36 .11

Compensation Sat. .34 -.02 .56 .21 -.03

Overall Job Sat. .65** .37 -55 .03 .47


denotes probability of rando-ness less than .13

** denies prcbfSbliZ t of randc ness less than .05

Leader-Member Relations scores are a simple average of the leader's
global assessmert (insnru-tion page, App. E, Chapter III) and the
average global assessment by tea m members (item 22, ApP. C, Chapte-
III). Octant III Teams: Nos. 1,2,5,12,15,16,170,0,22. Octant VII
Teams: Nos. 3,4,7,8,9,,1 ,11,13,4. Deleted Tean-s: 6,1 ,19,21.









CHAPTER VIII

SOME ADDITIONAL OBSERVATIONS AND RESULTS



Ideal Leader Behavior Correlational Study


Computations were made to determine whether any possible

relationships existed between ideal (expected) leader behav-

ior and the assessments of satisfaction and performance and

the Discrepancy Measure--a measure of job dissatisfaction.

Neither the Fox Normative Model nor the Ohio State Leader-

ship Studies Model suggest any correlation between ideal

leader behavior and criterion measures; however, the search

seemed appropriate in this study due to the availability of

the necessary data.

Table 19 reveals four possible significant relationships

between Fox Normative Model predictor variables and criter-

ion scores. Expectations of Leader Support correlate posi-

tively with the Discrepancy measure. This may be an indica-

tion that the greater the short-fall in leader behavior, the

greater the subordinate's need for supportive activities in

the future. The negative correlation between expected Man-

agement of Rewards and Punishment and Leader-Member Relations

may indicate that these activities, in the CPA firm environ-

ment, may detract from good supervisor-subordinate relations.

Difficult to explain is the set of correlations with expected

Consultative-Participative Decision-Making. The latter cor-

related positively with the Discrepancy Measure, a measure






88


Table 19

FOX NORMATIVE MODEL

Relationship between Predictors and Criterion Scores

Predictor Variable (Ideal Behavior)
C-P
L.S. D-M W.F. D G.E. M.R.P.


O -.05

P .21


Criterion

Measure


.12 -.11

.22 .22


Q -.16 .05 -.08


T -.08


45** .00


Y -.28 -.07 -.20

Z -.24 -.09 -.07


Q31 .39*


.41* .31


.25 -.02 -.16

.16 -.17 -.03,

.13 -.10 -.38*


-.29


.05


.09 -.11 -.05


.10

.18


.03 -.06


.14


.25


* denotes probability of randomness less than .10

** denotes probability of randomness less than .05


Variable


Leader Support
Consultative-Participative Decision-Making
Work Facilitation
Decisiveness
Goal Emphasis
Management of Rewards and Punishment
Satisfaction with Colleagues
Satisfaction with ComDensation
Leader-Member Relations (subordinate assessment)
Overall Job Satisfaction
Team Performance
Leader Effectiveness
Discrepancy Measure (Ideal Behavior Minus Actual
Behavior)


Symbol

L.S.
C-P,D-M
W.F.
D
G.E.
M.R.P
0
P
Q
T
Y
Z
31








of job dissatisfaction, and positively with Overall Job Sat-

isfaction. Possibly this indicates that dissatisfaction as

measured in this study belongs on a continuum which is dis-

tinct from the overall satisfaction continuum.

The test for correlations of ideal behavior predictor

variables with the set of criterion measures using the Ohio

State Leadership Studies Model (Table 20) showed a strong

correlation between expected structuring behavior and dis-

satisfaction, as represented by the Discrepancy Measure.

This could be interpreted as an indication that groups having

higher expectations of emphasis on structuring activities on

the part of their leaders were more dissatisfied. The nega-

tive correlation between expected Initiating Structure and

Team Performance may indicate that groups that prefer higher

standards for structuring activities on the part of their

leaders tended to perform less effectively than others.


Vroom and Yetton Normative Model of Leadership Styles

Based upon item no. 24 in the Audit Staff Member Opin-

ion Survey, which was completed by each team subordinate

(App. C, Chapter III), it was possible to classify the deci-

sion method used by each team leader. The average response

for the team subordinates was computed. A score of 4.5 or

above was classified as style Al; 3.5 to 4.4, All; 2.5 to

3.4, Cl; 1.5 to 2.4; Gi; ans 1.4 or less, D1 (refer to p.

46, Chapter III, for descriptions of decision methods in

the Vroom and Yetton model).

Of the 22 team leaders, 8 used decision method C1 and








Table 20

OHIO STATE LEADERSHIP STUDIES MODEL

Relationship between Predictors and Criterion Scores



Predictor Variable
(Ideal Behavior)

C I.S.


0 -.01


.28


Q -.05


Criterion Measure


Y

Z

Q31


* denotes probability of randomness

** deontes probability of randomness


less than


less than .05


Variable


Consideration
Initiating Structure
Satisfaction with Colleagues
Satisfaction with Compensation
Leader-Member Relations
Overall Job Satisfaction
Team Performance
Leader Effectiveness
Discrepancy Measure (Ideal Behavior Minus Actual
Behavior)


.16

.07

-.14


.15

-.23

-.15

.35


-.12

-.38*

-.16

.54**


Symbol


C
I.S.
0
P
Q
T
Y
Z
Q31







13 used decision method Dl. Groups using decision method Cl

showed a higher average for both Team Performance (4.125 to

3.750) and Overall Job Satisfaction (3.750 to 3.622). The

feasible solution for the typical auditing problem presented

in item no. 24 suggested by Vroom and Yetton [1973, p. 194]

would be decision method Cl.

The mean value reported by teams on the decision method

question was 2.33. The range of possible scores was from

1.00 (completely delegative style) to 5.00 (completely author-

itarian style). The median style for this range would be

3.00, which compares to the actual median of 2.33, indicating

a perceived bias in the direction of delegative styles. Cor-

relation coefficients (Pearsonian) were computed between

mean team response to the decision method item and the satis-

faction and performance criterion measures used in other parts

of this study. The only correlation of any size was with the

Discrepancy Measure, .37 (probability of randomness .09).

While the correlation is small, it does indicate a possible

line between delegation of decision making and dissatisfaction.

This result goes against the thrust of one of the major as-

sumptions inherent to the traditional human relations school

of thought in industrial relations. However, numerous stud-

ies have indicated that participatory leadership methods may

not be effective in terms of performance and satisfaction of

team members IJacobs, 1970, pp. 76-84].








Item Analyses of the LBDQ Results


Pearsonian correlation coefficients were computed

between each item of the Leader Behavior Description Ques-

tionnaire for an Independent Auditor in Charge of Field Work

(Appendix B) and five of the criterion measures (Satisfaction

with Colleagues, Satisfaction with Compensation, Leader-

Member Relations, Overall Job Satisfaction, and the Dis-

crepancy Measure). Correlations were computed on an indi-

vidual (n = 69) and group (n = 22) basis. Additionally, cor-

relation coefficients were computed for each of the 52 LBDQ

items and Team Performance and Leader Effectiveness on a group

basis.

Only six items when taken on an individual basis gave

correlation coefficients of greater than .50; and, all cor-

related with the Discrepancy Measure. Table 21 lists the

items and correlation coefficients. After reviewing the con-

tent of these items, it is apparent that they should corre-

late negatively with dissatisfaction. Leaders who perform all

of these functions well may be eliminating serious potential

sources of dissatisfaction. It is interesting to note that

no variable other than Work Facilitation includes more than

one of these items. Most of the predictor variables used in

this study are made up of at least eight items (Table 2,

Chapter III). Work Facilitation includes eleven items.

Consequently, it is safe to conclude that the subset of items

selected in the item analysis of individual responses does

not approximate any of the predictor variables used. This









Table 21

ITEM ANALYSIS OF LBDO RESULTS: INDIVIDUAL RESPONSES (n=69)


Correlation
with
Discrepancy
Measure

-.64


-.51

-.65

-.54

-.53



-.54



Item

25


35

36

45

46

50


Item (See Appendix B, Chapter III)

25. Gave advance notice of changes in the audit
where possible

35. Inspired enthusiasm among subordinates.

36. Took full charge when emergencies arose.

45. Scheduled the work to be done.

46. Skillfully coordinated the necessary inter-
action of subordinates with the client's
employees and with each other.

50. Gave the appropriate amount of direction to
subordinates.


Member of Variable Item Subset


Consideration, Consultative-Participative
Decision-Making

Goal Emphasis

Decisiveness

Initiating Structure, Work Facilitation

Work Facilitation

Work Facilitation









should not be taken to imply that the items correlating

highest on an individual basis should approximate one or more

of the predictor variables; because the analysis by item ig-

nores the multicollinearity inherent in a subset.

Group averages of the 52 item scores from the LBDQ were

also analyzed for correlation with the criterion measures

used in the study. Six correlation coefficients with values

over .50 were found and are listed on Table 22. Four of the

items which correlated strongly in the analysis of individual

responses (items 25, 35, 36, and 50). The criterion measure

which correlated in all cases was the Discrepancy Measure.

It is logical that where an item showed a high correlation

on an individual basis, it may also show a high correlation

when the individual responses in each group are averaged.

Table 22 shows the correlation coefficients for the

group average responses to the LBDQ items. Two items were

correlated with Team Performance. It seems appropriate that

Item 2 (Anticipated problems and planned for them) would be

related to Team Performance, but the positive correlation of

Item 24 (Failed to take necessary action) with Team Perform-

ance is puzzling. This item was supposed to be reverse-

scored. Failure to reverse the scoring.would account for a

correlation coefficient sign reversal; however, a review of

the computer instructions and independent tests of computa-

tions showed that all items that were to be reverse-scored

had, in fact, been so treated. It must be reported, then,









Table 22

ITEM ANALYSIS OF LBDQ RESULTS: GROUP RESPONSES (n=22)


Corre-
lation Criterion*

.52 Y


.54

-.66


-.51


-.74


-.60


Item

2

24

25


35

36

50


Y

Q31


Q31


Q31


Q31


Item (See Appendix B, Chapter III)


2. Anticipated problems and planned for
them.

24. Failed to take necessary action.

25. Gave advance notice of changes in
the audit where possible.

35. Inspired enthusiasm among subord-
inates.

36. Took full charge when emerengencies
arose.

50. Gave the appropriate amount of di-
rection to subordinates.


* Y = Team Performance; Q31 = Discrepancy Measure


Member of Variable Item Subset

Work Facilitation

Work Facilitation, Decisiveness

Consideration, Consultative-Participative Decision-
Making

Goal Emphasis

Decisiveness

Work Facilitation




Full Text

PAGE 1

l A STUDY OF CONTEMPORARY LEADERSHIP MODELS IN CPA FIRM AUDIT TEAMS By MANSON PETER DILLAWAY A DISSERTATION PRESENTED TO THE GRADUATE COU N CIL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQU IREME N TS FOR THE D EGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 1980

PAGE 2

ABSTRACT CHAPTER I CHAPTER II CHAPTER III CHAPTER IV CHAPTER V CHAPTER VI CHAPTER VII TABLE OF CONTENTS THE AUDIT TEAM AND ITS ENVIRONMENT. The Audit .......... The Audit Team ........ The Phases of an Audit .... Audit Teams Leadership Research LEADERSHIP STUDY MODELS MEASUREMENTS ... ADMINISTRATION OF FIELD STUDY RESPONSES RELATED TO LEADER BEHAVIOR. MODERATOR VARIABLE EFFECTS. LPC STUDY RESULTS ..... PAGE iv 1 1 2 5 6 10 27 48 5 2 64 75 CHAPTER VIII SOME ADDITIONAL OBSERVATIONS AND RESULTS 87 CHAPTER IX BIBLIOGRAPHY. APPENDIX A .. Ideal Leader Behavior Correlational Study . . . . . . . 87 Vroom and Yetton Normative Model of Leadership Styles . . . . 89 Item Analysis of the LBDQ Results 92 Factor Analysis of the LBDQ Results 96 CONCLUDING CO MMENTS Summary . Conclusion. ii 102 102 104 106 109

PAGE 3

PAGE APPENDIX B. 112 APPENDIX C. 116 APPENDIX D. 119 APPENDIX E. 123 APPENDIX F. 127 APPE N DIX G. 129 APPENDIX H. 130 APPENDIX I. 131 APPENDIX J. 132 iii

PAGE 4

Abstract of Dissertation Presented to the Graduate Council oftheUniversity of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy A STUDY OF CONTEMPORARY LEADERSHIP MODELS IN CPA FIRM AUDIT TEAMS By MANSON PETER DILLAWAY DECE M BER 1980 Chairman: Gary L. Holstrum Ma jor Department : Accounting The applicability of certain behavioral and situational leadership studies models was tested using audit teams from a national CPA firm engaged in field work. Leader behavior predictor variables were measured usin g an adaptation of the Fox Modified Leader Behavior Description Questionnaire. The y included Consideration, Initiatin g Structure, Consult a tive-Particip ative DecisionMak ing Wo r k Facilitation, Decisiveness, Goal Emphasis, Leader Support, and Mana g ement of Rewards and Punishment. Situation a l char acteristics measured among team subordinate members included Pressure, Task Certainty, N eed f or Information Organizational Independence, and Intrins i c Job Sa tisfaction. assessments were obtained for team performance from iv G lobal

PAGE 5

supervisors and for job satisfaction from members. Addition ally, a measure of subordinate dissatisfaction was obtained by using the shortfall between the expected leader behavior and actual leader behavior item scores on each individual team member's Fox Modified Leader Behavior Description Ques tionnaire. Each team leader completed the 32-item Fox Least Preferred Coworker (LPC) instrument. Consideration, Leader Support, Work Facilitation, and Decisiveness showed a significant negative correlation with Dissatisfaction. WorkFacilitation correlated positively with Performance. Significant ne gativ e correlations were found between LPC and Performance when leader member relations were moderately poor (Octant VII). A factor analysis of the Fox Modifi ed Leader Behavior Description Questionnaire results y ielded a three-factor solution. No ne of the derived factors approximated any of the predictor variables previously measured. Based upon the results of this study, none of the models tested appeared to be notabl y app licable for predicting out comes in terms of audit team satisfaction and performance. It was also concluded that situational factors may exert a stronger influence on audit tea ms than on more homo g eneous groups enga g ed in less complex tasks. V

PAGE 6

CHAPTER I THE AUDIT TEAM AND ITS ENVIRONMENT The Audit Such diverse services are performed by certified public acco u ntants in both the private and public economic sectors of the United States that it is necessary to place a bound ary around those areas of public accounting which are to be considered in this study. The primary service performed by CPAs is discussed in the following: The objective of the ordinary e x a m ination of financial statements b y the independent au d itor is the e x pression of an opinion on the f airness with which the y present financial position, results of operations, and changes in financial position in confonnit y with g enerally ac cepted accounting principles. [AICPA SAS No. 1, 1973, p. 1] This examination of financial statements will subsequently be referred to as an audit. The primary role of auditing has been described as "to improve the use f ulness of decision-makin g information" [P M & M 1976 p. 2], and the f unda m ent a l t y pe of decision-mak ing which auditin g facilitates is the a llocation of scarce resources in a societ y This role is not restricted by type of economic s y stem or or g anizational structure, since infor mation that is impro v ed in terms of accurac y timeliness, understandabilit y or specificit y should en a ble better choices to be made both in terms of attractin g capital f ro~ 1

PAGE 7

2 investors and distributing internally g enerated funds among alternative uses. The Audit Team For the purpose of this study, it was determined that there exists a standard organizational structure used by the tested CPA firm on all annual audits despite the fact that each annual audit is a unique case. Notwithstanding this uniqueness, there are connnon elements of or g anization which may be observed in the firm tested and in comparable CPA firms. One member of a firm will normally retain overall re sponsibilit y for an audit. This is ge nerally that individual who assumes th e primary role in ma int aini n g communications with the client and ne g otiates the particular services which the firm will provide as well as the billings for those serv ices. This individual is normally a partner in the CPA firm. The key role element is the entrusted authority and responsi bilit y for providing services to particular clients. The partner will not normally take an active part in the routine audit work (nor should he if he is to be an objective reviewer of the audit evidence). Con s equently, a mana g er is appointed to o'r g anize specific client services and an "ac countant-in-ch a r g e" (AIC) is appointed for the field work phase of the audit. The AIC ge nerall y prepares and admin isters an audit pro e r am which, when e ff ecti v ely carried out, w ill provide sufficient evidence for the CPA firm's

PAGE 8

3 publication of an opinion regarding the client's financial statements. The AIC should be an audit staff member with sufficient experience and ability to effectively plan the nature and the extent of the audit tests and supervise the work of the sub ordinate audit staff members while they are occupied with this audit engagement--both in the field and in the CPA firm's office. It is the AIC position which is of primary interest in this study. An AIC will customarily be delegated extensive discretionary authority in an engagement as long as it seems apparent that satisfactory results are being achieved. The competent AIC will, quite literally, handle an entire audit engagement. The number of assistants assigned to an audit engage ment is not necessarily stable and may fluctuate during the course of the engagement depending upon the audit procedure being conducted. For instance, a large group may be tempor arily required to observe and review a client's count of y ear-end in v entories. There is, however, a tendency to as sign audit assistants to enga g ements for the duration where feasible. This tendency endures in practice because of the learning period required for an assistant to master a client's employees and the other members of the audit team. Many audit assistants are quite limited in their work experience and may have little more than their university

PAGE 9

4 education and the CPA firm's indoctrination course to serve as a basis from which to perform audit tests. Since formal educational programs are, of necessity, general in the type of knowledge that they convey, the audit assistant finds that during the early stages of his career there is a continual need for counsel as new situations are e ncoun t ered. As staff assistants become experienced, they may be e x pected to perform work requirin g the exercise of professional judgment. During periodswh~n a CPA practice experiences rapid expansion, staff assistants will advance rapidly in terms of the degree of responsibility demanded by work assignments and may find themselves working at the limit of their acquired skills. On the t yp ical audit engagement, st aff assistants must work wi th the AIC and their collea g ues in order to make a useful contribution to the audit. The de gr ee of this inter depen d enc y should be evident in the character of the rela tionship between a staff assistant and the various other members of an audit team. Whereas most work assi g nments on an audit do not require ass ist a nts to work in unison with each other, the overall co o rdination o f a n audit team is vttal to e ff ective perfor ma nce if individual assistants are not to interfere with the work of others and avoid needless duplication During the course of an audit there may be instances where the members of the team are un a ble to perform certain proce d ures or provide required ser v ices because they lack

PAGE 10

5 sufficient technical knowledge. To fit this need, most CPA firms employ "specialists" for aid when these situations arise. These employees specialize in computer technology, personnel evaluation and placement, tax planning, SEC report ing, or some other area of concern to the audit team. Gen erally specialists serve on an engagement to the extent that their expertise is needed. In his relationship with the AIC, the specialist resembles an internal consultant, not a sub ordinate. Since this study will concentrate on the inter play between group leader and subordinates, the specialist will not be included as a team member. The Phases Of An Audit There are three readil y identifiable phases in an an nual audit. Each has implications with regard to supervis ion to staff assistants. First, there is a planning phase in which a CPA firm manager and the accountant-in-charge de cide the manpower needs of the audit and establish deadlines for the completion of certain portions of the audit work. The second phase is where the AIC and his assistants per f orm field tests to g ather evidence which will enable them to form an opinion as to the appropriateness of the client's financial report. In this phase the audit "team" is func tioning and, it may be assumed, perceptions of leader behav ior become measurable. This is the phase which provides the basis for the measurements in this study.

PAGE 11

6 The third and final phase of an audit en gaf.? ement norm ally takes place in the CPA firm's office after the field work has been completed. The working papers are assembled, checked, and reviewed. Normally, a smaller staff is required in this phase than during the preceding field work phase. If no gaps remain in the network of evidence that has been gat hered in accordance with the audit program, the CPA f irm will issue an auditor's report and the audit team will be disbanded. Audit Team Leadership Research The relative importance of leadership in the audit team context has not been documented. In this study an attempt is made to eliminate this void. Accordingly, this study con centrates on groups enga 3: ed in annual audits durine; the field work phase. It seeks to determine the applicability of cer tain theories which purport to explain the effects of leader behavior on group performance and on g roup member satisfac tion. It is expected that practitioners may benefit from this research in several ways. It could enable them to discover possible sources of employee dissatisfaction which results in unnecessary staff turnover. It could point to leader be havior which tends to be associated with hi g h quality work. Certainly, improvements in audit team performance in an ab solute sense eventually reflect favorably upon the CPA

PAGE 12

7 profession as a w hole b y reducin g the p o s s ibilit y of i n ap propriate auditor's reports Perhaps the most positive aspect of this research is in its potential for improving team efficiency Efficiency of operation is as important in a service-oriented CPA firm as it is in a manufacturin g firm. It is m ore dif f icult to measure efficiency when output is not in t h e form of units of standard quality and specification. A la yman may assume that if one AIC required five hundren manho urs for an annual audit and another completed the annual audi t in a subsequent y ear in ei g ht hundred man-hours, the AIC us i n g the fewer hours was the more efficient. An experienced reviewer of a nnual a udits would be quick to point out t ha t the m an-hours e x pended in an audit w as seldom a m e a sure of e fficienc y even when a standard audit pro g ram is used by and the experience level and competence of the audit te a ms are c omparable. Each annual audit is unique. Efficienc y in field work is a long-ran g e necessity for CPA firms. There are constraints in terms of the fees a client will pa y There is also a time c onstraint in field w ork cre a ted b y the neces sit y to simult a neousl y divide the f irm's pr ofes sional staff among numerous clients. Further need f or e ffi ciency is g en erated b y the deadlines which exist for the publication of fin a ncial statements and other docu me nts w hich m ay rel y on the same fin a ncial data (SEC reports and ta x returns). The li m ited time sp a n of a n a udit te a m' s e x istence ob vi a tes the need for a lon g itudinal m e a sure m ent of the possible

PAGE 13

8 effects of alternate leader behavior on gr oup perfor manc e and subordinate satisfaction. Although leadership research ers have pointed to the necessity for longitudinal studies [Fox, 1976a; Fox, 1976b, V'xanklin ; 1975 ;Lik ert, 1967] due toan apparent timel ~ ag between chan g es in supervisor y behavior and lasting chan g es in subordinate perfo rmanc e the temporary nature of an audit team rules out this consideration. Clearly, in this respect, an audit team should have more sim ilarity with the laboratory stud y g roups a nd temporar y mili tary g roups which ha v e provided mu ch o f the support for leadership models. It is the temporar y change in gro up behavior which is the appropriate criterion in studying audit teams. An audit te am is a group in which the leader (AIC) norm ally wields e xt ensive autho rit y rel a tive to his assistants and the extent to w hich the t as k of the gr oup is s tructured is quite low. Very little leadership research has been pub lished on groups of this type. Two studies were reported by Fielder 1967, p. 129 and "the data obtained in these studies are quite weak." This study, then, concentrates in an area that has been ne glected. The foregoing provides the background information nec essary to consider the effects of leader behavior on per formance and satisfaction measures as applied to g roups en g a g ed in annual audit work in the field (audit teams). Subsequent chapters will briefly review the research t o date in leadership and show how it was applied to aud it teams in this instance.

PAGE 14

CHAPTER II LEADERSHIP STUDY MODELS The primary objective of this study is to determine the applicability of certain contemporary research models and techniques used for understanding leadership in formal organ izations for groups engaged in the field work phase of annual audits. It is expected that the results should indicate whether certain preoccupations in leader behavior and atti tude have noticeable effects on assessments of group effec tiveness and various individual measures of job satisfaction. The major approaches to the study of leadership have been classified by Filley et. al. [1976] into three categoriestrait, behavioral, and situational. The trait approach is based upon the assumption that an individual's behavior can be attributed to certain distinctive ps y chological or physical characteristics. Certain identifiable traits differentiate successful from unsuccess ful leaders to proponents of this approach. Traits cannot be directly observed, but conceptualizations can be measured which may approximate traits. For example, "I.Q." tests are available which some presume to measure an approximation of an individual's intelli g ence. Filley et al. [1976, p. 219] state that "the weight of evidence pertinent to the trait approach does not lend -9/

PAGE 15

10 strong support to it." They conclude that the proposition that there are a finite number of identifiable characteristics or traits which differentiate successful from uusuccessful leaders is insufficiently supported by the research conducted to date. The behavioral approach to the study of leadership as defined by Filley et al. (1976) is based upon the assumption that leaders may be characterized by readily observable be havior patterns. These patterns, in turn, may be categorized into four types: supportive, participative, instrumental, and "great man." Examples of supportive leaders would be individuals who rate high in Consideration (Ohio State Leadership Studies Model) or Leader Support (Fox Normative M odel). These leaders treat their subordinates in ways which increase their posi tive feelings toward their jobs. That is, they praise work ers for good performance, avoid authoritarian behavior, and adopt a posture of thoughtfulness and sincerity in their interractions with subordinates. In their summary of the empirical evidence as to the effectiveness of leaders characterized by considerate-sup portive behavior, Filley et al. [ 1976, p. 222] conclude that "supportive leadership is often effective, resulting in im proved subordinate attitudes, satisfaction, and performance." However, the studies reviewed could not be construed as to substantiate the proposition that effective leaders are char acterized by supportive b?h~vior because of the effects of

PAGE 16

11 individual, task, and environmental vari3bl es. The authors also point out that "much remains to be learned" with regard to the question of causality--studies h av e shown that sup portive leader behavior positively affects subordinate sat isfaction and performance and other evidence su gg ests that supportive behavior may be the result of subordinate satis faction and perform a nce. Participative le ad ers are those who use participative decision making and supervision techniques. Such leaders wo uld rate hi gh in Consultative-Particip a tive Decision Mak ing (Fox Normative M odel). In their rev i ew of the studies dealing with participative leadership, Filley et al. [1976, p. 229] state that althou g h fi n din g s su gg est that participa tive leadership is often effective, the proposi tion that ef fective leaders are characterized b y participative decision making and supervision "cannot be said to be confirmed, be cause there is ample evidence that the e ffe cts of participa tive leadership are not omnipotent." They cite the necessit y for the leader to be otherwi se skilled in the performance of his task for subordinates to be in favor of par ticipation, and for the task to be a complex one requiring a high qualit y decision or subordinate ac ceptance of the decision--or a combination of both. As was the case with supportive lead ership, situational variables mus t be considered in the evalu a tion of participative leadership fi ndin gs.

PAGE 17

12 Instrumental leadership is based upon the management activities of planning, organizing, controlling, and coordin ating the work of subordinates. These activities are presumed to be "instrumental" in achieving group accomplishment of or ganizational activities. Leaders rating high in Initiating Structure (Ohio State Leadership Studies M odel) or Work Facil itation (Fox Normative Model) represent instrumental leaders. Empirical evidence with regard to the effectiveness of instrumental leadership in promoting group performance and satisfaction criteria does not fully support the proposition that instru me ntal leaders are effective leaders. Kerr et al. [1974] reviewed the results of studies where Initiating Struc ture was measured and concluded that it was only effective in situations wh ere there was outside pressure, where the task was satisfying in itself, wh ere subordinates perceive high labor mobility for their skills, and in other specific situations. "Great man" leaders are characterized by both supportive and instrumental leadership behavior. Presumably the leader faces conflicting demands f rom the two levels that he works directly with--subordinates preferring suppor tive behavior and superiors preferrin g instrumental behavior. Filley et al. [1976, p. 233] question whether it is possible for a leader to exhibit both behavioral styles. The y feel that the prop osition that "great man" le ade rs are effective is only par tially supported by the empirical literature and that situa tional factors come into play on the two components of g reat

PAGE 18

13 man" leadership (supportiveness and instrumentality) in the same fashion as they might for supportive of instrumental leadership. Situational leadership approaches have been used to eliminate the major weakness of the behavioral approaches just mentioned--oversimplification due to the failure to consider the moderating effects of situational factors. Con tingency theories have been proposed by Fiedler [1967}, House [1971], and Vroom and Yetton [1973), among others. These as well as certain specific behavioral models will now be summarized. The Ohio State Leadership Studies were undertaken by an interdisciplinar y g roup workin g within the Bureau of Business Research of the Ohio State University. An ei g ht step research plan was adopted and reported in the monograph, Methods in the Study of Administrative Leadership [Stogdill and Shartle, 1955]. Two of the ei g ht steps--the steps of greate-st inter est to this stud y --called for descriptions of actual leader behavior by both g roup leader and group members and measures of individual leader and g roup effectiveness. Two basic hy potheses were proposed with re g ard to leader behavior: (1) the patterns of behavior in a given leadership position will be determined in part by the performance demands made upon that position and (2) the leader's behavior is related to (a) status in the or g anizational hi e rarchy, (b) structure of interactions a m ong or ga nization members, (c)

PAGE 19

14 respo nsibilit y au thority structure of the organization, and (d) perf orma nces of mem bers of the organization. Hemphill and Coons [ 195 7, p. 7] report that the problem of obtaining leader behavior descriptions was met by develop ing a methodology designed to answer a primary question, "How does this leader operate?" The instrument that evolved consisted of a set of questions which would enable researchers to isolate and classify the relevant forms of behavior ex hibited by an individual when directing the activities of a g roup to wa rd a shared g oal. Ni ne dimensions of behavior were tentatively selected: inte g ration, communication, production emphasis, representation, fraternization, organization, eval uation initiation, and do m ination. Usin g these dimensions, a large number of it ems wer e constructed a nd refined [Hemphill and Coons, 1957, p. 9]. Amo n g the several criteria used for item selection were insistences that only specific behavior as opposed to general traits or characteristics be described, that an item be limited to one unit of behavior, that an item not be emotionally or evaluatively toned, and that the times be applicable to many dif feren t organizational structures, g roups, a nd si tu atio ns. A n initial factor a n a l y sis of the intercorrelations of the dimensions of the Leader Behavior Description Questionnaire (LBDQ) conducted by Hemphill and Coons [1957, p. 24] yielded factors labelled Maintenance of Me~ bership Character, Ob jective Attainment Behavior, and Group Interaction Facilitation Behavior. The first is based

PAGE 20

15 on leader behavior that is socially agr eeable to g roup mem bers while the other two are based on leader behavior which structures group activities and cormnunications. Another factorial study utilizing the LBDQ was carried out with air crew co mma nders by Halpin and Winer [ 195 7] They accounted for 100 % of the common variance with four fac tors whi ch were designated Consideration (49.6 % ), Initiat in g Structure (33 6 % ), Production Emphasis (9.8 % ), and Sens itivity (7.0 % ). The subsequent working model of leader be havior which evolved from these Ohio State studies concen trated on the first two factors. Consideration (C) is des cribed as leader behavior reflectin g friendship, mutual trust respect, and warmth. Behavior on the part of a leader which or ga nizes and defines relationships, de fi nes roles, and clarifies how to do jobs is classified as Initiating Struc ture (I.S.). The bulk of the early studies utilizing the LBDQ were based on hypotheses such as supervisors rate favorably the perfor m ance of leaders who show high I.S behavior; subord inates prefer as leaders those who show high C behavior; and leaders g ettin g hi g hest e ff ectiveness ratings score above the mean in both leader behavior dimensions while leaders g ettin g lo wes t ratin g s score beneath the mean in both dimen stions [Halpin, 1957]. The results of these studies did not lend t h emselves readily to g eneralization due to the or g ani zationally specific nature of most le aders hip positions. Jacobs (1970, p. 33] concluded: "These studies demonstrate

PAGE 21

16 that situational variables influence the balance of l e a der behavior that will be desired (or best)." Stogdill [1974, p. 427], one of the developers of the LBDQ, has cautioned researchers about placing too much empha sis on C and I.S. and other frequently used measures: A small number of variables (authoritarianism, democratic leadership, consideration, initiating structure, and LPC, for example) has been overworked at the expense of the other variables that are equally important and about which little is known. However, Stogdill [1974, p. 428] does reaffirm the key be lief that there is a functional dependenc y between leader be havior and g roup performance and emphasizes the situational nature of such behavior: The leader is required to (1) maintain role structure and goa l direction, (2) provide for role freedom and g roup drive, and (3) maintain g roup cohesiveness and norm conformity. The behaviors that produce these outcomes differ from g roup to group dependin g upon variations in member charac teristics, task characteristics, and group charac teristics. In an effort to encounter criticism that the Ohio State Leadership Studies ignore situational variables, Kerr et al. [1974], by reviewin g published findings utilizing the Leader Behavior Description Questionnaire, wer e able to develop ten situational propositions and two g eneral postulates of lead ership effectiveness. The variables which were hypothesized to have a moderating influence between C a nd I.S and satis faction and performance criteria were subordinate need for information, job level, subordinate e xpec tations of leader behavior, perceived or g anizational independence, leader's

PAGE 22

17 similarity of attitudes and behavior to managerial style of higher management, leader upward influence, and the task characteristics of pressure and intrinsic satisfaction. The adaptation of these situational variables into the Ohio State Leadership Studies tends to reconcile that massive body of work with the other contemporary leadership studies. House and Dessler [1974) have revised and extended House's [1971] Path-Goal Theory of Leader Effectiveness which attempts to explain the effects of intermediating (situationaf} variables in the relationship between leader behavior and performance and satisfaction measures. The leader is viewed as one whose function is motivational--to increase personal payoffs to subordinates for work g oal attainment and to fa cilitatethe ease with which subordinates may travel the path to goal attainment. They contend that the specific leader behavior necessary to perform this motivational function is determined by (contingent upon) the situation in which the leader operates. House and Dessler [1974, p. 31-2] mention two classes of situational variables: (1) the characteristics of subordinates and (2) the environmental pressures and demands the sub ordinates must cope with to ~ccomplish work goals and satisfy their own needs. One subordinate characteristic is the de gree to which leader behavior is perceived to be either a source of immediate satisfaction or instrumental to future satisfaction. The other characteristic is the subordinates' perception of their own ability with respect to task demands.

PAGE 23

18 Environmental m oderators proposed by House and Dessler were the subordinates' task, the formal authority s y stem of the organization, and the primary work group. They suggest that the effect of the leader on the subordinate's motivation will be a function of how deficient the environment is with respect to motivational stimuli, constraints, or rewards. The leadership studies undertaken at the Survey Research Center of the University of Michigan share certain si~ilari ties with the Ohio State Leadership Studies. The Survey Re search Center methodology also relies upon the position that leadership amounts to a large a gg re g ation of separate behav iors [Bowers and Seashore, 1966, p. 240). The basic differ ences between the two research methods are in how aspects of leader behavior should be g rouped and classified There are four dimensions emphasized in the survey Research Center Studies: (1) support, (2) interaction facilitation, (3) goal emphasis, and (4) work facilitation. These are based on an integration of research results and writings by Katz and Kahn, Cartwright and Zander, Mann, and Likert [Bowers and Seashore, 1966, 247). The Survey Research Center methodology measures aspects of beha v ior which represent supervisory and peer leadership. The Ohio State Leadership Studies concen trate on the leadership provided by one leader in a group. A standardized questionnaire has been developed based on the four factors proposed by Bowers and Seashore [Taylor and Bowers, 1972). It is a machine-scored instrument which measures support, goal e m phasis, work facilitation, and

PAGE 24

19 interaction facilitation for both s upervisory and peer lead ers. Also measured are various assessments of individual satisfaction (with peers, with supervisor, with job, with the organization in relation to others, with pay, with current progress, and with future prospects). The entire question naire contains twenty-four short questions, thirteen of which measure the four leadership factors. Taylor and Bowers [1972, p. 55) initially administered the Survey of Organizations to the employees of an oil refin ery (N = 325), and, after excludin g three questions from the set, obtained Spearman-Brown reliability coefficients of from .85 to .91 for the four leadership factors. An analysis was made to deter m ine if there e x isted a sin g le g eneral factor for supervisor y leadership of sufficient magnitude to inval idate the four factor construct. It was concluded that the g eneral factor content was not lar g e enou g h to re g ard any of the four proposed factors as interchan g eable measures of a single leadership factor and that each of the four contained sufficient unique variance to be considered a measure of some distin g uishable aspect of leadership. Studies initiall y un d ert ak en by the Grouo Effectiveness Research Laboratory at the University of Illinois are based on Fiedler's Contingency M odel which su gg ests that chan g es in g roup effectiveness from one situation to another, where leadership st y le is held constant, depend upon the favorabil it y of the situation [Fiedler, 1967, Fiedler and Chemers, 1974]. The binary factors w hich determine situation

PAGE 25

20 favorability are (1) leader-me~ber relations (good, poor), (2) task structure (high, weak), and (3) position power (strong, weak). The eight combinations of these factors form eight cells in Fiedler's classification of group situ ations. Four criteria are used to determine the degree of task structure: decision verifiability, goal clarity, goal path multiplicity, and solution specificity. Leadermem ber relations are based upon the degree of acceptance the leader obtains from his group. Position power is related to the ex tent to which the leader can reward and punish his subordin ates. The measure used to classify leadership style in Fied ler's Contin g ency Mod el studies is the Least-preferred Co worker (LPC) score. This is obtained from a sixteen scale semantic differential instrument [Fiedler, 1967. p. 269]. The bipolar scales have eight positions that may be selected by the respondent from least favorable to most favorable. The usual scorin g is one point for the least favorable posi tion up to ei g ht points for the most favorable position. The total score for a g iven leader is the surrnnation of the scores for ever y ite m A hi g h score on the LPC instrument, in relation to a g iven norm, reveals a leader who holds his least-preferred coworker in hi g her re g ard than low scorers. Fiedler [1967, p. 46) hypothesizes that: Hi g h-LPC leaders are concerned with having g ood interpersonal relations and with gaining prominence and self-esteem throu g h these interpersonal relations.

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21 Lo w -L PC leaders are concerned with a chie v in g success on assi g ned tasks, even at the risk of having poor in t erpersonal relations with fellow workers. When the situation is favorable for the leader in terms of control and influence, Fiedler and Chemers [1974, p. 77-8] argue that a leader will pursue his secondary goals: the hi g h LPC leader will concern himself with such status-enhancing activities as ordering people around, assi g ning tasks, and assuming re sponsibility The low LPC leader, given this high de g ree of control, will be rela x ed, friendly, and considerate, in the knowledge that the task pre sents no problem. In situations where the leader control is low (unfavor able situations), Fiedler a nd Che rn ers [1974, p. 78] h y pothe~ size that each leader will revert to his primary g oal : the hi g h LPC leader will see k to enhance relationships with g roup members ; the low LPC l ead er will concentrate on g ettin g the task accomplished at the expense of g ood interpersonal rela tions, if necessary. A normative decision-makin g model based upon organiza tional ps y cholo gy has been proposed b y Vroom and Yetton [1973] who had found si g nific a nt v ariation in the a mount of partici pation that was p erceived as necessar y b y ma na g ers in given problem situ a tions Their model is based on the assumption that the most app r opriate unit f or the anal y sis of a situa tion requirin g the exercise of leadership is the particular problem to be solved and the context in w hich the problem occurs. The discrete social processes b y which or g anizational problems are translated into decisions fo rm t h e basis for prescribed le a dership st y les w hich va r y in the amount of

PAGE 27

22 subordinate participation. Vroom and Yetton describe five decision methods for group problems varying from a completely autocratic decision style to a group generat ed decision style. To make the model operative, a list of questions are provided for the leader to consider in diagnosing a partic ular problem before choosing a decision style. Heller [1973] independently developed a similar model and reached similar conclusions. Bass and Valenzie (1974] have proposed a Systems Model of Leadership in which the system outputs (effectiveness and employee satisfaction) are to be explained by systems inputs (organizati o nal, work group, task, and subordinate personal it y variables) : s y stem relations (power distribution in formation distribution, and work g roup structure and objec tives), and managerial styles (directive, manipulative, con sultative, participative, and dele g ative). They have hypoth esized that the directive style should be most effective when the leader has high power and information distributions; the dele g ative style, when low. Participation is hypothesized to be most effective when the leader and g roup members have equal information. Consultation was proposed for situations where the leader has high power but low information and man ipulation for low power-high information situations. One of the recurring difficulties in leadership studies is the isolation of si g nificant moderator variables and the statements of their effect. In addition to the variables

PAGE 28

23 isolated in the contin g enc y mo dels of K err et al. [1974], Fiedler [1967], Vroom and Yetton [1973], House a nd Dessler [1974], and Bass and Valenzie [1974), as already discussed, there have been numerous studies purporting to show the me diating e ff ects of additional variables on measures of satis faction a nd performance. Bowers and Seashore [1966, p. 257] found that the best "predictor" of three out of four peer leadership variables was the same variable as measured for the g roup leader, in dicatin g a relationship between the two. Certain writers cited by Greene [1976, p. 65] have argued that subordinate behavi or may cause variance in leader behavior in opposition to the usual patt ern of c a usualit y assumed in leadership studies. Fox [1976a, p. 6] has cited performance and satis faction o f his subordinates a re m oderated b y the behavior of hi g her level management. The moderating effects of group member personality dif ferences hav e been discussed b y Korman [1974, p. 192] and Fo x [1976a, p. 6). Korman believes that personality differ ences may pr o v e to have si g ni fi c a nt m o dera tor e ff ect if the personalit y c o n str ucts used are situationally defined a nd the me asures construct validated. Korman believes that care in these areas will eliminate criticism based on evidence per sonalit y test unreliabilit y over time a nd over different situations. Kerr et al [1974, p. 66] discuss a number of findings with re gar d to the moderating e ffe ct o f pressure from l

PAGE 29

24 external forces (interunit stress and physical dan g er) and from internal forces (urgency of time demands). Significant correlations between proficiency ratings and structure have been found in studies where time pressure was involved. In this review of the research literature, Filley et al. [1976, p. 233J conclude that the effects of supportive lead ership are most positive with regard to performance when (1) the subordinate has been previously denied some source of satisfaction or (2) the subordinate operates under conditions of frustration or stress. The effects of supportive leader ship on subordinate satisfaction were found to be positive except in situations where work is intrinsically satisfying [Filley et al. 1976, p. 220]. With re ga rd to instrumental leadership, Filley et al. [1976, p. 230] repor t that initiating structure has its most positive effects when (1) There is a high degree of pressure for output due to demands imposed by sources other than the leaders (2) The task is satisfying to subordinates (3) The subordinates are dependent on the leaders for information and direction (4) The subordinates perceive that they have labor mobility (5) The subordinates are psychologicall y predisposed toward being told what to do and how to do it (6) Subordinates' tasks are nonroutine (7) Subordinates have high occupational-level jobs (8) Subordinates are under stress due to threat from sources other than the leaders (9) The number of people workin g to g ether for the same leader is high (12 or more) (10) The leader is considerate Other important moderators mentioned by Fox in his lit erature review [1976a, p. 7] include subordinate-leader

PAGE 30

25 knowledge and expertise differences, supervisor's upward influence, inter-group competition, and complementarity of leader-subordinate behavior styles. It should be apparent from the foregoing, that research results in the leadership area are not only specific to sit uational characteristics, but also subject to the potential mediating effects of many other variables. The difficulty in drawing well grounded generalizations from these endeavors has by no means diminished the volume of research bein g done ; nor, for that matter, have basic theoretical criticisms such as the relative importance of leadership to other or g aniza tional variables [Hunt and Larson, 1976, p. 235] or the mer its o.r acogni ti ve versus operation a?proaches in leadership studies [Fox, 1976b]. Many still consider an aco g nitive study of leader-subordinate dyads as an effective research opportunity. This brief discussion of contemporary research methods in the field of leadership studies is not intended to be complete. It is introductory to the chapters which follow. The purpose of this dissertation is to borrow and adapt to an auditing environment that which has been successfully ap plied elsewhere The general approach has been to use the methods of many contemporary schools rather than select one methodology. In this way, questions re g arding the criteria used for selection of particular leadership measurement methods may be minimized and the study ma y be limited to the usefulness of the methods toward predictin g satisfaction and performance in auditing situations

PAGE 31

Chapter III M EASUREM EN TS The f o u ndation upon w hich this s tud y is built is I dent ifying and Developing Leadership Aspects of Effective Ma na g ment in Team-Oriented Task Grouos [Fox 1976a]. In this work, Fox presents a normative model for lea d ership based upon cur rent research findin g s -a model s p eci f icall y developed to assist m an ag ers of te a m-oriented (inte r actin g ) task g roups in adjustin g their beh a vior toward g re a ter ma na g erial e f fec ti v eness. The ad ap t a tion o f the F ox mo del to the f ield o f aud itin g follows due to the fact that an a udit team en g a g ed in the field work phase of an annual audit represents an interactin g task group. Fiedler [1967) states that in such g roups, there exists a hi g h de g ree of interdependence amon g g roup me m bers. The leader coordinates the various t a sk f unctions of the g roup's acti v ities so that the w ork flo w s sm oothl y and harm oniousl y The various se g ments o f an a udit pro g ra m must be closely coordinated if the work of the audit team is to be successful Certain audit procedures ma y be completed by a n individual, y et many require a coordinated effort b y two or more. Effecti v e per f ormances f rom audit t e a ms are i m perative if professional stand a rds are to be m ai ntained and if the -26

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27 required ef f ic ie nc y for the auditing firm' s profitability is to be met. Certain situational aspects of annual audits are relatively comparable. The behavior of the audit in gather ing evidence is partially restricted in the interest of re maining an independent observer. Certain audit procedures are demanded by g enerall y accepted auditing standards. Mi imum standards of record-keepin g and reporting are forced upon the client by the necessity to provide docu m ent ary sup port for items reported on tax returns a nd financial r eports. The manufacturers of business ma chines business forms, and computer software have tended to standardize the ways that most large or ga nizations produce, record, and store documents and reports. Organizational s tru c tur es oft en reflect simi larities within specific indus trie s The auditors, them selves, tend to be similar in educa t ion, interest, aptitudes and even standards of dress. This may be the result of a certain amount of standardization in selection policies used by major CPA f irms. These conditions wo uld seem to indicate that the study of audit te am s in the field represents a po tentiall y rewarding ar ea f or research in leadership. This is especiall y appropriate at a t ime whe n a uditin g ef f ec tive ness is continually questioned both in court cases and b y g overnment and when si g ns of sta ff memb er dissatisfaction are pre va lent Fo x [1976a, p. 2] regards the d ominan t emphasis in d e f initions of le a dership as in f luence via personal inter act ion and considers only fa ce-to face aspects o f planning a nd

PAGE 33

28 c o ntrollin g a s fallin g w ithin le a dership. This leads to a definition of leadership style as the behavioral prediposi tion or orientation on the part of a leader as he deals with the performance of mana g ement or leadership functions that result more from the leader's personality or values than fro m the d em ands of the situ a tion at hand [Fox, 1976a, p.9]. Leadership st y le factors su gg ested b y Fox [1976a p. 10) based on his review of published factor analysis of l e ader beh a vior descriptions (Halpin and Winer 1957; Bo w ers and Seas ho re, 1966; Wo f ford, 1970; M iller, 1973; H o use and Des sler 1974] are (A) t a sk relevant s t ructuring e mphasis, (B) support e m phasis, and (C) consultation, participation e mp h a s is. The nor ma tive m odel h y pot h esizes the a ctu a l beha v ior as o p posed to st y le or predisposition, that a ppears to be opti m al under various circumstances. The model cate g orizes four major behavioral areas a nd related them to the three lea d ership st y les previousl y mentioned. A listing of each beha v ioral area with s o me speci f ic e xam ples of positive le a d e r b eh av ior follo w s [Fo x 1 9 76a pp. 16-27) : Lea der S up vort. L e a der is f riendl y a nd eas y to a pproach is w il l in g to listen and attenti v e to problems a nd other m atters people wish to discuss. He freely g ives de served credit to others does thin g s to make it pleas a nt to be a g roup member and to stren g then the self esteem of his subordinates. Con s ult ati v e-Participati v e, DecisionM akin g Leader encour a g es subordinates to e x chan g e infor ma tion a nd ideas. When possible he invites g roup me m ber su gg es tions a nd g ives serious c o nsideration to them before f in a lizin g decisi o ns which affect either the individual or the g roup. If in a po sition which requires his

PAGE 34

his retention of veto power, he uses it as sparin g ly as possible. He appropriatel y dele gat es decision-makin g to individuals, the gr oup, or sub gr oups with a level of collaboration desired by them. 1.Jhen possible, he gives advance notice of changes and is candtd and open to questions. Whenever possible, he strives for deci sions relative to the pursuit of given organizational objectives which accorrrrnodate the needs and values of his subordinates. Work Facilitation. Leader trains subordinate, consults with him on job related p roblems and ways to improve performance, helps him to plan and schedule work ahead of time anticipating detailed needs and problems, pro vides appropriate equip m ent, materials, and sees that decisions are made and implemented in time. Goal Emphasis. Leader uses appropriate process to de velop realistic g oals and plans, and g ain co rrrrn itment to them he stresses hi g h standards of performance for him self and his subordinates, and establishes appropriate contin g encies bet w een rewards and individual and g roup performance Table 1 lists the major constr ai nts to leader behavior in e a ch o f the behavior areas. Two o f these constraints (lack of decisiveness and management of contingencies) were sin g led out b y Fox to be of particular importance and are found as separate predictor v ar iables in this study (Decisiveness and Ma n agem ent o f R e war ds a nd Punishment). In conjunction with research carried out among ROTC cadets whil e testin g his nornative mod el Fox [1976c] devel oped a leader behav i o r questionnaire whi ch measured both the four behavioral areas in his nor mativ e mod el as well as the two behavioral are as in the Ohio State Leadership Studies model (C and I S ). E a ch variable score fo r a leader's be havior is computed b y combining the individual scores of a s ubset o f questionnaire items A g roup score is obtained by averaging the rat in gs for an y one variable for all g rou p 29

PAGE 35

30 Table 1 NORMATIVE MODEL* BEHAVIOR AREAS Leader Support Consultative-Participative DecisionMak ing Work Facilitati on Goal Emphasis *[Fox, 1976a p 35] CONSTRAINTS Time Required Social Distance Therapist Role Pitfall Goal Conflict Real Time Pressure Absence of Subordinate Desire Selective Interest Leader Can't Deliver Dif f erential Expertise Incapacity Personality Need to Impose Decisions Lac k of Influence Lac k of Ex pertise Lack of Decisiveness Low Consultative-Participative Skill Low Technical-Conceptual Abil ities Lack of Commitment Mana g ement of Contin g encies

PAGE 36

31 members . The first 5 4 items on Fox's 60 item questionnaire were selected from Form XII of the Ohio State Leader Behavior Description Questionnaire, slightly modified to fit the spe cific research situation-ROTC cadets on summer camp ex ercises. As used in this study, the Leader Behavior Description Questionnaire for an Independent Auditor in Char g e in Field Work (Appendix B) was developed from Fox's leader behavior questionnaire ) although some items were not used and eleven new items were introduced. These ne w items are desi g ned to cover those facets of Fox's fo ur leader behavior area defin itions which were not included among specific questions on his ori g inal instru me nt. This work wa s carried out at the su gg estion o f Dr. Fox and under his g uidance. The resultin g 52 item questionnaire y ields predictor variable scores based on the question subsets as shown in Table 2. A ~ easure of the situational vari a ble LeaderM ember Relations is also available from a question subset (Nos. 5 6, 27 44, 48 and 52) It will be noted that the entire set of questions con tains ma n y that are used for more th a n one varia ble's meas urement. This stems from the fa ct that C a nd I. S. purport to cover all of the behavioral classes that are si g nificant in leadership as do L .S., C-P DM, W.F., a nd G.E. There a re si mp l y t wo different models incorporated into the ques tionn a ire d esi g n a nd the y both cover the sam e kinds o f beha v ior.

PAGE 37

32 Table 2 LEADER BEHAVIOR VARIABLES Variable Consideration Initiatin g Structure Leader Support Consultative-Partici pative DecisionSymbol C I.S. L.S. M akin g C-P, DM W ork Facilitation W .F Decisi v eness D Goal Emphasis G.E. Ma n g e m ent of Rewards and Punish me nt M.R.P. Item Subset (see note below) 1, 6, 9, 10, 2, 25, 27, 44 18, 21, 22, 30, 32, 41, 43, 45 1, 4, 6, 19, 27, 33, 44, 48 5 9 10, 25, 26, 28 32, 40 2, 8, 10, 17, 22, 24, 30 38, 45, 46, 50 3, 11, 20, 24, 34, 36, 39 7, 1 4, 16 18, 23, 35, 42, 47, 49 13, 15, 29, 31, 37 NOTE : The score for e ac h variable is a simule average of the individual item scores from the subs et If the score is from the Le a der Behavior Description Q uestionnaire for an Independent Auditor in Ch ar~ e of Field W ork (Appendix B) it represents a m easure of actual beha v ior for the particular variable. I f the score is from the Ideal Leader Behavior qu estionnaire it repre sents a m e a sure of optim a l leader behavior as ex p ected b y the subordinate (Appendi x D) or the leader (Append ix E). G rou p ( team) score s ar e produced b y av era g in ~ the subordinate scores for e a ch va ri a ble in a g roup.

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33 Certain minor details that are expected to rule out potential soures of error are worth mentioning. The order of items on the instrument was determined by a random dis tribution so as to avoid any biases that ~i~ht result from having each variable's subset intact. Three experienced CPAs reviewed the appropriateness of the questions in the Leader Behavior Description Questionnaire (Appendix B) as well as subsequent research instruments in the study. Partic ular emphasis was placed on using lan g ua g e which would be neither unfamiliar nor ambiguous in the auditing environment. The possibility of readin g a sexist bias into the Ohio State LBDQ question forms (every item begins with "He") was elim inated by replacing "He" with "This Auditor" and rewording the questions where possible to eli ~ inate ~asculine posses sive pronouns. In certain cases the ran g e of ?ossible an swers (Always, Often, Occassionally, Seldom, Never) was ex panded to include a "No Basis" selection. It was believed that this would strengthen a respondent's confidence in the instrument for those cases where his knowled~e of how the auditor in charge acted was va g ue or nonexistent. Certain basic assumptions underl y the research enumer ated in this chapter and stipulate the measurements selected. In part, this study is a test of the applicability of the Fox Normative Model and the Ohio State Leadership Studies Model in the public accountin g context. Some of the workin g hypotheses which apply to these models a nd this studv follo w :

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34 Hypothesis 1 There will be significant vari a nce a m on g individual teams on measured dimensions of tea~ le a der behavior (predictor variables) in terms of perceptions of ac tual behavior. Hypothesis 2 There will be significant variance amon g individual team members on measured dimensions of ideal leader behavior. These two h y potheses reflect an assum p tion co rnn on to most leader behavior research -that t here are individual differences with re g ard to perceived leader behavior and preferences of normative lea d er beh a vior A g g re ? ations of part i cular individual member's scores on le a der behavior di mensions into g roup avera g e scores for a leader should a lso result in a ran g e of scores for the le a ders w hose g roups are avera g ed, since le ad ers m a y be e xp e c te d t o b e hav e di f f e re ntl y in response to similar situations. Hhpothesis 3 Tere will be significant correlation between a vera g e team measurements on dimensions of leader behavior (predictor variables) in terms of perceptions of ac tual leader behavior and avera f e team measurements of satisf a ction a nd performance (criterion m easures). This hypothesis a ssumes that the models have predictive abilit y for the e f fects o f altern a te f or m s of le a der behavior on job performance a nd sa ti s fa ction In view of the current consensus re g ardin g the re la tion ship between le a dership effectiveness a nd situ a tion a l v a ri ables, a decision was made to measure situ a tional char a cter istics. The most co mp rehensi v e su rmna r y o f the mo d er a tin g effect of situ a tion a l v ariables bet w een c r iterion a nd leader

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35 behavior measures was f ound in the K err et al. [1974] situa tional propositions. Proposition 1 of this study follows: (1) The greater the amount of pressure, the greate r will be subordinate tolerance of leader Initiat ing Structure, and the greater will be the (pos itive) relationships between Structure and sat isfaction and performance criteria. Pressure m ay stem from the nature of the task (degree of time ur g ency, uncertaint y, permissible error rate) or from some threatening source external to the task. Based upon this proposition, the following items were in cluded in the Audit Staff Member Opinion Survey (Appendix C) : measures of de g ree of time pressure (questions 9 and 10), permissible error rate (questions 11 and 12), and threats from exterior sources (questions 13 and 14). Uncertainty was dealt w ith separately. Proposition 6). (See the discussion following Propositions 2, 3 and 4 consider the effects of intrin sic satisfaction on subordinates [Kerr et al. 1974]: (2) The greater the intrinsic satisfaction provided by the task, the less positive will be relationships between Consideration and satisfaction and nerfor m ance criteria. Intrinsic satisfaction may be de rived from hi g h job autonomy, broad job scope, or the opportunity to do interesting and meaningful work. (3) The g reater the intrinsic satisfaction provided by the task, the less ne g ative will be relations h ips between Structure and subordinate satisfa ction. (4) The g reater the intrinsic satisfaction provided by the task, the less positive will be relationships bet w een Structure and perfor ma nce. In accordance w ith the sources li s ted in Prop osition 2, three facets of intrinsic satisfaction have bee n incorporated in the Audit Staff M ember Opinion Survey: j ob autonom y

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36 (questions 15 and 16), breadth of job scope (quP.stions 17 and 18), and meaningful work (question 19). Proposition 5 considers the effects of job-related in formation on subordinate criteria [Kerr et al. 1974]: (6) The g reater the amount of task certainty, the g reater will be the (positive) relationships between leader Consideration and subordinate satisfaction. Proposition 9 is particularly appropriate to the CPA firm environment [Kerr et al. 1974]: (9) The g reater the nerceived or g anizational independ ence of subordinates, the greater will be the (positive) relationships between leader behavior variables and satisfaction and perfor m ance criter ia Particularly when perceived independence is low. Consideration-satisfaction and Structure satisfaction relationships will be relatively in si g nificant. Traditionally, the or g anizational independence of CPA firm staff members has been high. As with other pro f essionals, a certain degree of job autonomy must be accorded CPA firm staff members to provide the necessary atmosphere of professionalism. However, the primary g enerator of independence has probabl y been the rapid g rowth of the profession in re cent decade s w h ich has tended to create a shorta g e in public accountin g, as well as in other a reas o f aualified nrofes sionals. This has resulted in a prevailin g situation where any co m petent staff member could expect to find employm e nt with other CPA f irms or amon g a w ide choice of accounting positions outside of C P A firm pr a ctice. Questions 7 and 8 of the Audit Staff Member Oninion Survey ( A ppend i x C) are

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37 included to measure how the staff m e mb er perceives his in dependence with re g ard to alternate employment in these two areas. No items are included in the Audit Staff Member Opinion Survey to specifically test Propositions 7, 8, or 10 [Kerr et al. 1974]: (7) The less the agreement between subordinate expec tations of leader Consideration and Structure and their observations of these behaviors, the lower will be the levels of satisfaction and performance of subordinates. Such expectations typically re sult from a host of cultural, e xp eriential, and in formational sources. (8) The less hi g her mana g ement is perceived to exhibit Consideration, the lower will be the (positive) relationships between lower-level supervisors' consideration and subordinate satisfaction. (10) The g reater the perceived upward influence of the supervisor, the g reater will be the (positive) relationships between consideration and subordinate satisfaction. This will be especially true for subordinates who are hi g hly dependent on their loss for such things as reco g nition, freedom, and phys ical and financial resources Proposition 7, a postulation of the relationship between the de g ree to which subordinate e xp ectations of le ad er behav ior are met and performance a nd satisfaction measures, ~a y be tested using the difference bet w een Le ad er Behavior Descrip tion Questionnaire and Ideal Leader Behavior (Appendix D) results as a measure o f the de g ree to whi ch expectations are met. Propositions 8 and 10 [Kerr et al. 1974] deal with (1 ) the contrastin g de g rees of Consideration between hi g her a nd lower-level m a n ag e me nt as perceived b y subordinates and (2)

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38 the perceived upward influence of the supervisor It was decided that these moderator variables are not appropriate in the CPA firm environment. All staff members are a part of ''management." Even relatively inexperienced staff members find themselves in supervisory roles on some engagements. There is an opportunity for exchan g e between junior staff members and the managers and partners of a CPA firm that pre cludes the usual sorts of barriers which isolate workers from mana g ement. The flexible, informal type of organization in CPA firms also tends to reduce the imuortance of a super visor's upward influence. It is also worth notin g that a superior-subordinate relationship in a CPA firm is a tempor ar y condition As soon as an audit is comnleted, the staff members take positions on new a udit teams. The hierarchy in a CPA firm tends to be flatter than in most or g anizations, with usually about four levels of Drofessional staff and numerous members at each level. Consequently, the bulk of the power in personnel and operational matters is disbursed among a g roup of partners and m ana g ers makin g upward influence a hi g hl y complex item for measurements. The Kerr et al. [ 1974] stud y provides the basis for the first nineteen items in the Audit Staff M ember Opinion Survey (Appendix C) -which are designed to measure moder ator variables. The remainin g six items (Nos. 20 to 25) in clude four measures of satisfaction (with colleagues, with compensation, with the leader, and with the present job situation), a measure of leader-member relations, and a

PAGE 44

39 measure of the current leader's decision-making style. The necessity for the latter two will be discussed later. The working hypothesis which is to be tested with the Kerr et al. [1974] moderator variables follows: Hypothesis 4 (Moderated Ohio State Leadership Studies Model) The correlation between average team predictor variable measurements and criterion measures will be enhanced by classifying teams into g roups based upon average team scores in certain follower characteristics as proposed by Kerr et al. [1974]. In other words, the relationship between predictor v ariable and satisfaction or performance will be stronger when the influences of certain follower characteristics are screened out. The four subordinate satisfaction items included in the Audit Staff Member Opinion Survey (see questions 20, 21, 23 25, Appendix C) are derived from the Survey of Or~anizations. Taylor and Bowers [1972, p. 76] assumed that satisfaction was multidimensional and they used seven questions to cover satisfaction with peers, supervisor, job, organization, compensation, progress, and opportunit y For the purpose of this study, job and organizational satisfaction were combined into one question. It was concluded that satisfaction with a job in a CPA firm would be tantamount to satisfaction with the or ga nization since every staff member moves throu g hout the organization, working with a variety of collea g ues and supervisors. Subordinate audit staff members also perform varied tasks, depending uoo n a client's needs. To a certain

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40 extent, then, the concept of a job with fixed, familiar tasks is foreign to audit staff members. Questions regarding satisfaction with progress and op portlll1ity were considered unnecessary in this study which is geared to large CPA firm staff members. Those who do not make satisfactory progress are soon separated from the firmoften, placed with a client. Promotions, for those staff members who remain, are practically automatic. Consequently, lack of progress should not be a problem in large CPA firms. Satisfaction related to opportunity for advancement in the organization should not be a problem, either. Generally, subordinate staff members hired are believed to have "part nership potential." The partner's position in a large CPA firm is both responsible and financiall y rewarding--a suf ficiently advanced opportunity to satisfy most. The Ideal Leader Behavior questionnaire (Appendix D) is identical in most respects with the Leader Behavior Descrip tion Questionnaire (Appendix B). The major difference is that instead of asking for the actual behavior of a specific lead er, the Ideal Leader Behavior questionnaire asks "what the IDEAL auditor should do" in similar situations. The order of questions is identical and the same subsets are used to arrive at the eight leader behavior predictor variables. Discrepancies between the ideal version and the actual version may be used as a measure of subordinate satisfaction. This is in accordance with the Kerr et al. [1974) Proposition 7 and Porter and Lawler [1968, p. 31).

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41 The three questionnaires discu s sed up to this point rep resent the entire set administered to audit team subordinates What is obtained, then, is the subordinate staff member's perception of his team leader's actual behavior with regard to 52 items or situations. Subsets of these provide measures of the leader's behavior in terms of C o nsideration, Leader Support, and certain other predictor variables (see Table 3) as observed on a specific audit en g a g ement. Measures in terms of the subordinate staff member's ideal for behavior from a leader in the s a m e situations are al s o g a th ered. A nd, fin ally, measures o f a number of p o t e ntiall y si gn ificant moder ator variables are obtained (see T a ble 4) as well as several individual sati s faction measure s The criteri o n m ea sure f o r t h is st ud y is a g lobal assess ment instr um ent (see A ppendi x G) It asks the m ana g er or partner to evaluate the auditor in ch a r g e (supervisor) of the field work phase in a particular audit in terms of other per s o ns in similar positions within the same firm. In part 1 of this questionnaire the auditor in char g e is evaluated for deadline pr o m pt ness efficienc y of s ta f f utili z ation (two as pects ) t r a inin g a b ilit y a nd cr i ses a v o ida nce. Parts 2 and 3 require the mana g er or partner to e v aluate s ubordinate s taff satisfaction (three a s p e cts) and client satisfaction ( f our a s pects) The purpose of these three preliminary part s o f the "M ana g er s R atin g of Field W o r k Per f orm a nce" is to fo rc e the m ana g er to think of the au d it f r o m the client's and subordinates' st andpoint as well as f rom h is m -m. When this

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42 TABLE 3 TABLE OF MEASUREMENTS Variables PREDICTORS: ( 13) Consideration Initiating Structure Leader Support Consultative-Participative Decision Making Work Facilitation Decisiveness Goal Emphasis Management of Rewards and Punishment LPC (Self Description) LPC Social LPC Task LPC LPC Difference Score MODERATORS: ( 7 ) Pressure Task Certainty Information Needs Organizational Independence Intrinsic Work Satisfaction Leader-Member Relations Leader's Decision-Making Style CRITERION MEASURES: (7) Team Performance Team Leader Performance Satisfaction with Colleagues Satisfaction with Compensation Satisfaction with Current Leadership Overall Job Satisfaction Satisfaction with Leader -42Measuring Instrument ACTUAL BEHAVIOR: Leader Behavior Description Questionnaire NORMATIVE BEHAVIOR: Ideal Leader Behavior Fox LPC Scales Audit Staff Member Opinion Survey Supervisor's Rating of Field Work Performance Audit Staff Member Opinion Survey Difference (ILE LBDQ)

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Variable LPC LPC Self Description Task LPC Social LPC LPC Difference Score 43 TAB LE 4 LPC ME A SUREMENTS Version of Total Score LPC Instrument Item Subset (See Appendix F) Least Preferred l,3,4,7,8,9,11 12,14,20,21, C o worker 26,28,29 Me l,3,4,9,10,14,17,18,19,20, 22,25,28,31 Least Preferred 4,5,13,14,17,18,25,31 Coworker Least Preferred 1,3, 7,11 15 20,21 28 Co w orker Least Preferred (Task LPC Social LPC) Cowor k er

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44 is done, the possibility of a standardized overall evaluation of leader effectiveness and team effectiveness may be improved over a point blank, one-item rating. Question 4a (How would you evaluate the overall effectiveness of this team based upon your review of the field work?) is the criterion measure for team performance Question 4b (How effective was the auditor in charge of field work as a leader on this particu lar audit?) is a performance evaluation for the leader, alone, separated from the success or failure of the team. These will be analyzed against the results of the other questionnaires as two distinct perf orma nce criterion measures. Each audit team leader (supervisor) completed the Ideal Leader Behavior questionnaire (Appendix E) as did his sub ordinates on the audit. Any differences between a supervis or's behavior expectations and the average responses of his subordinates could then be analyzed to determine whether ex pectations are role dependent. The cover sheet on the Ideal Leader Behavior questionnaire administered to team leaders contains an additional question which illicits leader-member relations as judged by the team leader on a five point scale rangin g from ver y good to very poor. This question is similar to question 22 of the Audit Staff Mem ber Opinion Survey which asks for the subordinate 's judgment of leader-member relations. Each team leader must complete the Fox LPC Self Descrip tion instrument ( A ppendix F) in duplicate -one version for a least preferred co wo rker and the second version describing himself. The instru me nt is expanded over the standard

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45 sixteen scale version used by Fiedler to include scales that fully cover the five recurring dimensions foillld by Tupes and Christal Il961]: urgency, agreeableness, dependability, emo tional stabilit y, and culture. A complete review of the de velopment of this instrument is included in Fox [1976d]. For this study, two LPC instruments are employed. The supervisor's rating of his least preferred coworker will be obtained by combining the scores for fourteen scales from the 32 item instrument-least preferred coworker version. This measure will be referred to as LPC [Fox, 1976a, p.4]. The supervisor's rating of himself is tenned LPC self -description and is obtained by combining scores for a different subset of fourteen items on the appropriate version of the instru ment. It should be noted that the respondent checks either of two boxes at the top of the instrument to identify the in strument as a description of "My Least Preferred Co-worker" or "Me Additional LPC measures are possible from these instruments (Task LPC, Social LPC, and a Difference Score) by combining different subsets of scales (see Table 4). The various LPC measures obtained may then be used as predictor variables to test the following working h y pothesis: B~pothesis 5 (Fiedler Contingency Model) T ere will be a correlation between leader LPC score an d measures of leader and group effectiveness as proposed by Fiedler [1967]. One item has been included in the study in an effort to sin g le out each team leader's decision method (item 24, Ap pendix C). This is based upon the Normative Model of

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46 Leadership proposed by Vroom and Yetton [1973). Five decision methods open to a leader are proposed in the case of individual problems -decision problems encountered by one subordinate member of a group. The methods and their assigned symbolic notations are IVroom and Yetton, 1973, p. 13): A 1 A 11 C 1 G 1 where the leader makes the decision for himself, using only information available to him at that time. where the leader makes the decision by himself after obtaining information from the subordinate. where the leader makes the decision after sharing the problem with his subordinate and hearing his suggestions and ideas. where the leader and subordinate arrive at a mutually agreeable decision after anal yz in g the problem to g ether. D 1 wh e re the subordinate ma k es the decisionthe leader having dele g ated that respons ibility to him and provided him with an y information that he held. Vroom and Yetton categorize eighteen problem types based upon the presence or absence of ei g ht problem attributes. Their Normative Model of Leadership included one or more of the above decision methods as the preferred solution for each o f t he pr o ble m ty pes. A n anal ys is of the ei g h t een problem ty pes re v e a led that o nl y four were applicable to the situa tions encountered b y subordinate audit staff members In each of these problem t y pes, style G-1 was appropriate. In so m e ca s es D-1 and C-1 were also appropriate dependin g upon the sufficienc y of subordinate information and the importance of the s ubordin a te's acceptance of the decision.

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47 In the particular question selected for use, it is stated that the subordinate has sufficient knowledge and in formation to make a quality decision. Consequently, for the case included on the questionnaire the preferred solution may be any one of the latter three. However, the objective of this study is not to test the Vroom and Yetton model, but to determine if there is a significant relationship between any one decision-making style and the criterion measures. The research design for this study is present in Appendix A,

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----Q-lAPTER IV ADMINISTRATION OF FIELD STUDY The field study was performed with employees of one of the "big-eight" accollllting firms. Audit teams were selected which met the following criteria: (a) Four or more regular members (excluding specialists) (b) One individual in charge of field work during that entire phase of the audit. (c) Ninety days or less from the time the team completed the field work. (d) Each team member must have been on the audit for at least ten days to be considered a regular member Five offices in this accounting firm (all located in the southeastern U .S.) participated in the study. Thirt y -four teams were found in these offices which met the above criter ia. An effort was made to include all possible teams, since in this way a representative cross-section of large audit teams would be tested. The firm could not have the option of submitting only its best audit teams (in terms of overall performance and member satisfaction) for testing The firm did not consider assembling all of the emplo y ees for testing at one time as a feasible wa y to conduct the study. Their contention was that this would be too expensive. They also preferred to designate one of their own represent atives in each office to administer the questionnaires. In each case, it was a partner or personnel specialist who had been involved in the scheduling of audit field work -4 8

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49 Meetings were held with each of the five individuals who were to administer the questionnaires. The purpose of these meetings was to provide these individuals with all of the backgro1md information that they would need in order to ad minister the instruments. The models utilized in the study were explained and then each questionnaire was reveiwed to show its contribution to the study. During these meetings, the teams to be tested were selected. In order to provide anonymity to the testing process special cover sheets were designed for the sets of question naires provided for staff members (team leaders' supervisors). A code number for each team was assigned by the administra tor and entered on the cover sheets (see Appendices A, B, and C). The audit engagement and team leader were entered fol lowing the code number. Each individual was instructed to enter the team code number on all questionnaires in his set. Staff members were further required to coin a six digit per sonal code number and enter it on each questionnaire. The result was that each questionnaire could be sorted by team and team member, yet no name remained on any of the documents. The name was entered on the cover sheet, which was to be re moved and destroyed by the individual completing the question naires. Although it would perhaps have been preferable to admin ister all of the questionnaires at the same time of year, this was not possible. Most of the annual work is scheduled at various times of the year --not necessarily following

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50 the fiscal year-end. A further complication is that many corporate clients use fiscal years which end throughout the calendar year. Twenty-two correctly completed sets of questionnaires were eventually obtained. Of the twelve teams that were not usable, there were several reasons. In one case, the audit manager did not feel that he should evaluate the team's per formance for an outsider, even with the anonymity provided. The most frequent problem was the loss of one team member due to resignation, transfer, sickness, or insufficient time in the field. Frequent inquiries were made to the test administrators, urging them to follow up on those team members that had not been tested. A few of the discrepancies were eventually filled; however, once an audit team had been disbanded in ex cess of ninety days, the team was excluded from the sample The result of this strict enforcement of the criteria for audit team selection was to limit the statistical base for the study. This is the case, particularly, where the anal ys is of results for the moderator variable effects is undertaken. One of the reasons why there were so few teams large enough to be suitable for the stud y is that auditing tech niques in recent years have tended to become more scientific and less lab o ri o us. Greater emphasis is placed on an evalu ation of internal control, statistical sample selections, and upon analytical techniques which provide assurance without

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51 e x t e nsive verification. Also, since virtually all cl ie nts of a large CPA firm use a computerized information system, a major concern for the auditor now is to evaluate the system to determine the probability for material breakdowns in con trol. Audits of this genre do not require large teams to test and evaluate account balances in s earch of human error. The fact that all of the offices were located in the southeastern U.S. is perhaps a positive factor in the stud y To whatever extent there remain re g ional differences in atti tudes toward authority, work habits, or job expectations, these would appear to have been scr e ened out b y using offices only in one region. The use of firm representatives t o a dm inister the ques t ionnaires has both positive and ne g ative a s p ects ; the chie f advanta ge bein g that the individuals tested realized that the stud y was sanctioned by the firm and might be e x pected to adopt an attitude of sincerity in completing the question naires. The ne g ative aspects of havin g the firm's represent atives administer the questionnaires are t h at they lack the c omm i tm ent to w ard the project and th e in tim ate knowled g e o f the s t ud y t h at the originator w o uld b r i n g

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Chapter V RESPONSES RELATED TO LEADER BEHAVIOR That leaders were perceived to behave differently by their teams may be demonstrated by notin g the statistics on Table 5~ Perceived leader behavior on the eight dimensions measured showed a certain amol.Il1t of variability as assumed in working hypothesis number one, Chapter III. The greatest variability was measured in the two Ohio State Leadership Studies variables [Stogdill and Shartle, 1955], Considera tion and Initiating Structure, with standard deviations of .35 and .29, respectively. It should be pointed out that scores in any dimension could range from a minimum of one to a maximum of five. The six Fox Normative Model variables [Fox, 1976a] showed somewhat less variability, standard deviations ranging from .27 down to .15. Means for all eight predictor variables fell within a range between 3.57 and 4.12. No particular conclusions should be drawn from these mean values, due to the lack of comparative studies using the same instrument with other groups. There was some variability in expectation of ideal be havior from leaders as seen by individual team members, which was assumed in working hypothesis number 2 (see Table 5). As a matter of fact, the variability in the ideal behavior dimensions was generally greater than in the perceived -52

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53 Table 5 LEADER BEHAVIOR VARIABILITY A. Perceived Leader Behavior (n = 22 items) Variable Consideration Initiating Structure Leader Support Consultative-Participative Decision-Making Work Facilitation Decisiveness Goal Emphasis M ana g ement of Rewards and Punishment Mean S D. Min. Max. S.E. 3.94 .35 3.38 4.50 .07 3.72 .29 2.92 4.30 .06 4.12 26 3. 75 4.67 .06 3.72 .27 3.21 4.22 06 4.00 .27 3.43 4.48 06 3.57 15 3.19 3. 76 .03 3.62 .22 3.22 4.15 .05 3.83 .19 3.44 4.20 .04 B. Ideal Leader Behavior (n = 69 re sponde nts) Variable Consideration Initiatin g Structure Leader Support Consultative-Participative Decision-Making Work Facilitation Decisiveness Goal Emphasis Ma na g e me nt of Rewards and Punishment Mean S.D Mi n. M ax. S.E. 4. 32 34 3 38 5. 00 04 4.05 .41 3.12 4.88 .05 4. 46 32 3. 50 5 00 04 3.96 .3 3 3.12 4.62 .04 4.43 .33 3.27 5 .00 .04 3.39 .27 2.71 4.29 .03 3.85 .35 3.00 4.78 .04 4.01 .25 3.40 5 .00 .03

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54 behavior di m ensi o ns for the same variable. This was a sur prising outc om e -an indication that the perceived behavior of the 22 leaders was somewhat less variable than the con sensus of how the leaders should act. Evidently, the team leaders tended to behave similarly-possibly this is a re sult of the firm's stated personnel policies and informal customs. The mean scores in seven out of the eight ideal behavior variables were higher than the comparably perceived leader behavior scores in the same variable This was the expected result. The one variable where leaders perceived behavior scored higher than the ideal was on the dimension of Decisive ness Apparentl y CPA firm audit staff members prefer less decisiveness They expect to be involved in the decisions which affect them. A comparison of leaders' and subordinates' expectations with regard to leader behavior may be seen in Table 6. The greatest discrepancy between the mean predictor variable scores for the two groups was .29 (Consultative-Participative Decision-Making). All but two other variables showed mean differences of less than .20. Perhaps the most notable find ing is that if the mean scores are rounded to the nearest whole number, all are equal. In six of the eight variables, the subordinates' ideal scores are higher. However, this difference is alwa y s less than one standard deviation. Ap parently, there is little role dependenc y with re g ard to

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55 Table 6 IDEAL LEADER BEHAVIOR Comparison of Leaders' and Subordinates' Expectations Variable Consideration Initiating Structure Leader Support Consultative-Participative DecisionM aking Work Facilitation Decisiveness G o al E m phasis M anagement of Re w ards and Punishment ,, Leader Expectations Mean S D. 4.07 .21 4.14 .31 4.41 .22 3. 6 7 33 4.29 27 3.14 .26 3 98 39 4.00 23 Subordinate Expectations M ean S.D. 4.32 32 4.05 41 4.46 32 3.96 33 4.43 33 3. 39 2 7 3. 8 5 3 5 4.01 25

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56 expectations of leader behavior among the 69 subordinates and 22 leaders tested. In accordance with working hypothesis number three, Chap ter III, Pearsonian correlation coefficients were computed between predictor variables and assessments of satisfaction and performance. (See Tables 7, 8, and 9 ) Of the six Fox Normative Model variables, Consultative-Participative Deci sion-Making, Goal Emphasis, and Management of Rewards and Punishment did not show any significant correlation with the criterion scores. Leader Support correlated .41 with Leader Member Relations and -.47 with the difference between the group averages for the 52 leader behavior items. This dif ference is labelled Discrepancy Measure, and is expected to be a measure, as opposed to an assessment, of group dissatis faction. This result raises a question of to what (negative) de gree the Discrepancy Measure indicates overall job satisfac tion. Porter and Lawler [1968, p. 31) define satisfaction as "the extent to which rewards actually received meet or exceed the perceived equitable level of rewards The Dis crepancy Measure used in this study is an average of all of the differences (ideal minus actual score) for each of the 52 items selected for this study from the LBDQ (see both Appendices Band D). A review of the items on these questionnaires demonstrates an element of positive or nega tive reward in most: for example; item (1), "treated all subordinates on the audit as professional colleagues; item

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57 Table 7 FOX NORMATIVE MODEL Correlation between Predictors and Criterion Scores Criterion Measure denotes k--k denotes Symbol L.S. C-P,D-M W.F. D G.E. M.R.P 0 p Q T y z Q31 Predictor Variable C-P, L.S. D-M W.F. D G.E. M.R.P. 0 -.06 .13 -.19 -.18 .01 p -.13 .05 .06 .08 .10 Q 41* .18 .12 .21 16 T -.04 .18 .20 .19 08 y .00 -.01 42k;" .29 .05 z .17 03 45,H, 36,\.21 Q31 47-,"k -.28 -61 -fd, S6A--k -.27 probability of ran dornnes s less than .10 probability of ran dornnes s less than .0 5 Variable Leader Support Consultative-Participative Decision-Making Work Facilitation Decisiveness Goal Emphasis Ma na g ement of Rewards and Punishment Satisfaction with Collea g ues Satisfaction with Compensation Leader-Member Relations Overall Job Satisfaction Team Performance Leader Effectiveness .1 4 -.12 31 .15 -.16 .0 1 04 Discrepancy Measure (Ideal Behavior Minus Actual Behavior)

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58 T a ble 8 OHIO STATE LEADERSHIP STUDIES MODEL Correlation between Predictors and Criterion Scores Symbol C I.S. 0 p Q T z Q31 Predictor Variable C I.S. 0 -.07 -.05 p -.12 10 Q 33 .07 Criterion M easure T -.08 .0 8 y 07 -.05 z 07 .17 Q31 .49 * -c .26 1 -* denotes probability of randomness less than 05 Variable Consideration Initiating Structure Satisfaction with Collea g ues Satisfaction with Co m pensation LeaderM ember Relati o ns Overall Job Satisfac t ion Leader Effectiveness Discrepancy M easure (Ideal Behavior M inus A ct ual Behavior)

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59 Table 9 LPC MODEL Correlation between L PC Measures and C riterion S cor es u V w WV X 0 11 .07 .0 7 0 0 .25 p -.1 5 .02 -.09 .08 .07 Q -.03 14 04 .15 .02 Criterion T .06 .17 03 -.17 28 Measure y -.42** .19 -.46** -.53** .18 z .24 .00 -.29 -.22 36* Q31 .06 -.33 .13 39 -.34 denotes probability of randomness less than .10 d denotes probability of randomness less than .05 Symbol u V w WV X 0 p Q T y z Q31 Vari ab le LPC Task LCP Social LPC LPC Difference Score (Social LPC Task LPC) LPC Self Description Satisfaction with Colleagues Sat i sfaction with Compensation Leader-Member Relations Overall Job Satisfaction Team Performance Leader Effectiveness Discrepancy Measure (Ideal Behavior Minus Actual Behavior)

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60 (4) g av e d eserv ed credit to sub o rdinates when dealing with senior collea g ues item (6), "did little things to make it pleasant to be on the audit," and item (9), "was willing to make adjustments in the audit program to suit individual subordinates." Those items that do not represent a reward in the per sonal sense (for e x ample; item (2), "anticipated problems and planned for them" and item (7), "pushed to get the field work done with a minimum of wasted time and effort") may still be re g arded as related to overall job satisfaction. One m ust a s slilTie that a staff m ember serving on an audit team in the field w o uld be less satisfied with his job, regardless of the level o f so cial de fe rence directed to w ard him if the m ain go al--to ga ther evidence-wa s th w arted b y poo r orga i z ation and pl a nnin g Work Facilitation correlated .42 with Team Performance and .46 with the Leader Effectiveness asses s ment. Decisive nes s c o rr e lated .36 with L e ad e r Effectiveness Work Facilita tion and Decisiveness correlated most strongl y with the Dis cr e panc y M ea s ure 61 and -.56 respectivel y. Th e o nl y sign i f icant correla t ion b e t w een cri t erion me as ures and the t w o Ohio Sta t e Leadership Studies predictor vari ables was bet we en C o nsideration and the Discrepancy M ea s ure, -.49 Initia t in g S t ructure did not show an y predictive abil it y in this samp le. Th e Ohio St a te studies are not in disa g reement with these findin g s. Initiatin g Structure and Sati s faction seem to be

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61 positively related in situations where group members perceive a need for structuring activities on the part of the leader and negatively related where the need does not exist. It would seem apparent that an audit team could fit in either category. The situation is unique in that most of the audit tests and procedures may never have been performed before in the context of the current client organization and accounting system. The audit team, itself, would be a recently assembled group where the members may have had no previous working re lationships. Although the LPC Model does not presume any predictive ability for the LPC measures, Pearsonian correlations were computed between the five LPC measures and the satisfaction and performance assessments and also with the Discrepancy Measure. Figure 5 shows the results LPC, Social LPC, and the LPC Difference Score correlated strongly with Team Performance. It should be noted that these were negative correlations, indicating that high performance was found in teams led by low LPC leaders--persons holdin g their least preferred co wo rker in low re ga rd. LPC Self Description showe d some correlation with the assessment of Leader Effec tiveness and the LPC Difference Score correlated with the Discrepancy Measure .39. In this stud y, variability was measured both in per ceived leader behavior and in e x pected ideal behavior. There was little variation between leaders' and subordinates' no tions of what ideal behavior ought to be. Three variables

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62 from the Fox Normative Model correlated with the Discrepancy Me asure--Leader Support, Work Facilitation, and Decisive ness. Work Facilitation correlated with both performance assessrnents--Team Performance and Leader Effectiveness. Small correlations also showed up between Leader Support and Leader-Member Relations and between Decisiveness and Leader Effectiveness. Both of these corrleations appear logical. While a discussion of the shortcomings of the study will be reserved for later, it would seem appropriate at this time to deal with the performance measures (Team Performance and Team Leader Effectiveness). Of the 22 teams, 15 were rated as being "slightly above average for our firm" and four were giv en the top rating, "significantly above average for our firm. Only one team was rated as havin g performed "average for our firm." Two were rated "slightly below average for our firm." It is possible that the performance measure is biased. The individual making the rating does have final responsibil ity for the audit and b y implication is deeply concerned with its adequacy. Each partner or manager may believe that the audits performed by his subordinates are better than the firm's average because he sees to it that those area s which he considers most important are performed to his satisfaction. Partners and mana g ers may also have a tendenc y to believe that their office is above average fo r the firm --a preference based on familiarity rather than experience.

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63 Consider a tion was the v ari a ble f rom the Ohio State Leadership Studies Model which had a significant correlation in this study. That the Discrepancy Measure, a measure of dissatisfaction, was the criterion measure that correlated (negatively) was not unexpected. Three of the LPC variables co r related with Te am Per f or ance. As a matter of fact, no other variable was more strongly correlated with Team Performance than LPC, Social LPC, or the LPC Difference Score. These are interesting ob servations, but not tests of the Contin g enc y M odel because the groups a re l eft unclassi f ied a s to L e a derM ember Relation s in this part o f the study. Ch a pter VII will evaluate the stud y results in accordance w ith the Contin g enc y M odel.) These results discussed to this p o int d e m onstr a te the applicabilit y o f w orking h y potheses 1, 2, and 3. N either the Fox Normative M odel nor the Ohio State Leadership Studies M odel variables appeared to indicate relationships with the a ssessments of satisfaction. The situation improves when the criterion measure of satis f action is the Discrepanc y M easure. The Ohio State Leadership Studies v ari a bles did not correl a te wi t h p er f orm an ce in t his s tud y, whe re a s c ertain of the other predictor variables me as ured sho w ed some rel a tion ship.

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CHAPTER VI MODERATOR VARIABLE EFFECTS As discussed in Chapter III, ei g ht of the ten situational propositions sug g ested by Kerr et aL [1974) were selected for testing in this study. The expectation was that a s harper re lationship between Consideration and Initiating Structure and assessments of satis f action and performance could be found by using the proposed moderator variables as screening devices. The usefulness of these results is limited by the performance measurement bias discussed in Chapter V as well as by the limited sample size. A quadrant anal y sis was used to determine whether the classification by predictor variable (HI or LO ranking in Consideration or Initiating Structure) was independent of a similar classification b y moderator variable (Pressure, Task Certaint y Need for Information, Or g anizational Independence, and Intrinsic Job Satisfaction). Table 1 0 shows the results o f the quadrant anal y ses for the two Ohio State pr e dictor variables as paired against the five moderator variables selected as feasible for this study. Although the Kerr et al Jl974J propositions were stated only in terms of the relation ship of the Ohio State predictor variables to satisfaction and performance, it s e emed plausible to search out any effects that the moderator variables might have on the Fox Normative 64

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----------6 5 Table 10 M OD E FATOR VARIABLE I N FLU EN CES C h isquar e Phi C oefficien t Proba b ili t y o f RandoP.1I1es s M od e ra t or Variabl e J K L M N Consideration 733 321 .000 7 33 7 3 3 1 8 3 12 1 .000 .183 .183 . .. :3 9 5 7 1.000 39 .39 I n itiatin g Structure .000 1. 473 733 733 .733 00 0 .2 5 9 .183 1 83 1 8 3 1.000 22 39 .39 .39 Leader 1 82 000 .182 1. 636 182 Support .091 00 0 -. 091 237 .09 1 Predictor V ariab l e Consult a tive .67 4 545 1. 0 00 7 8 6 67 .2 0 .6 7 .1 8 2 1. 636 .182 S ym bol J K L M N Pa rt i c ip ative .4 55 .1 8 9 D. M . 0} 'd 3 8 Wo r k 1.636 .786 Facilitation .2 7 3 -. 1 89 .20 38 D e c isivenes s 1 82 .786 091 ~ .189 .67 38 Goal 182 000 EmDhasis .091 000 67 1.00 Ma n ag e m ent o f 1. 6 36 .000 Re w ards a nd 2 7 3 000 Punish m ent .20 1.00 V ariable N eed for Infor m ation Task Certaint y Or g ani z ational Independence P res s ure Intrin s ic Sa tis f action 091 273 .091 .67 20 67 182 1. 636 .182 091 .27 3 -.0 91 67 2 0 67 4 .5 4 5 1 82 .1 89 .4 5 5 091 091 0's,' dr 67 .6 7 1. 636 .182 l. 636 2 73 .091 -. 273 2 0 .67 20 1 82 1. 6 36 1 8 2 .0 9 1 .2 7 3 091 n 7 .20 .67 I t e m s f rom A pp C, Ch. III 1 2,3,4,5 6 7, 8 9 10,11,1 2 ,13,14 15,16 17, 1 8, 19 ;'r* Denotes p roba b ilit y o f r a ndo mn e ss less tha n 05

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66 Model predictor variables as well. For each combination of predictor variable (8) and moderator variable (5), the 22 teams were assigned to one of four quadrants: quadrant 1, HI classification in both predictor and moderator; quadrant 2, LO classification in both predictor and moderator; quad rant 3, LO predictor classification and HI moderator classif ication; and quadrant 4, HI predictor classification and LO moderator classification. Table 10 shows the results of the test for covariation between the predictor and moderator variables based upon the number of cases falling in each cate go r y represented by the four quadrants. The chi-square statistic was computed and the strength of association was then found b y measuring the phi coefficient. No ne of the Ohio State predictor variables showed a strong covariation for these tests--the relation ship between Initiating Structure and Task Certainty appeared to be the greatest (phi coefficient of .259 and a probability of randomness of .22). There were two strong relationships between the Fox predictor variables and the moderator vari ables; and, in retrospect, both appear to be quite logical. Consulta tive -Participative Decision-Making and Need for In formation had a phi coeffic~ent of -.455. The indication here bein g that where the subordinate 's need for information is hi gh, he does not experience a hi gh degree of participa tion in the decision making process. Decisiveness and Or g an izational Independence has a phi coefficient of .455. Those subordinates who felt independent of their firm, or highly

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67 mobile in the job mark et, perceived their leaders as hi g hly decisive ; whereas those subordinates who did not consider themselves as mobile at the present time perceived their leaders as indecisive. It is likely that the mobile employ ees are the more experienced staff mernbers--ones that would force their leaders into decisiveness by making decisions on their own as their level of expertise warranted. Consequent ly, these employees would tend to present relevant problems to the leader for solution in situations where the leader must act. Inexperienced subordinates might ask for decisions in situations where none is required or where information is too scant for a thou g htful decision. In these cases they could be left w ith a perception of their leader as indecisive. Table 11 also shows the results of chi-square tests. However, in this instance, the predictor variable scores used are the ideal behavior measures. The moderator variables ap pear to exert a g reater influence on expected (ideal) behav ior than on actual behavior as perceived by subordinates. A stron g relationship was noted between Initiating Struc ture and Intrinsic Satisfaction. The phi coef f icient was ne g ative 455 which may be an indication that where there is a hi g h de g ree of satisfaction inherent in the job, subord inates do not want a leader to en g a g e in structurin~ activi ties to a hi gh degree. The Fox No rmative Model predictor variables (ideal be havior) yielded four stron g relationships with the moderator variables. Leader Support and Task Certainty, Consultative

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68 Table 11 MODERATOR VARIABLE INFLUENCES Chi-square Phi Coefficient Probability of Randonmess Moderator Variable J K L M N Consideration .000 .321 .733 .000 .733 .000 .121 .183 .000 .183 1.00 .57 .39 1.00 .39 Initiating ,182 .786 .182 1. 636 4.545 Structure 091 .189 -.091 .273 -.455 .67 .38 .67 .20 .0}'-* Leader .188 6.044 1. 692 .188 .188 Support -.092 .524 .277 .092 .092 .66 .01 .19 .66 .66 Consultative2.933 2 .121 .733 .733 .73 3 Participative .365 .311 183 .183 -.1 83 D.M. .08 .14 39 .39 .39 Work .182 .000 .182 1. 636 1. 636 Facilitation .091 .000 .091 -.273 -.273 Predictor ,67 1.00 .67 .20 .20 Variable Decisiveness .000 .321 6.600 2.933 .733 .000 -.121 .548 -.365 .183 (Ideal 1.00 57 01 .08 .39 Leader Behavior)Goal .000 2.121 .000 .733 .733 Emphasis 000 311 .000 -.183 -.1 83 1.00 .15 1.00 .39 .39 Ma n ageme nt of .182 .000 .182 182 1. 636 Rewards and 091 .000 -.091 -.091 .273 Punishment .67 1.00 .67 .67 .20 S ym bol J Variable N eed for Information Items from App. C, Ch. III 1,2,3,4,5 K L M N Task Certaint v Organizational Independence Pressure Intrinsic Satisfaction 6 7 ,8 9,10,11,12,13,14 15,16,17 18,19 ,H, Denotes prob ab ilit y o f r a ndonmess less than 05

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69 Participative Decision-Making and Need for Information, and Decisiveness and Pressure all appear to be strongly related where the ideal leader behavior and actual situational char acteristics are concerned. The phi coefficients for these three relationships were .524, .365, and -.365, respectively. The strongest relationship of all was between Decisiveness and Organizational Independence, phi coefficient.548. The relationship between Decisiveness and Organizational Inde pendence appears logical for the same reason when the pre dictor variable is ideal as for the previously discussed per ceived case. The relationship between Leader Support and Task Certainty also follows a logical pattern--where there is a hi gh de g ree of task certaint y, leader support is desir able, The ne g ative relationship between Decisiveness and Pressure could indicate that in hi gh pressure situations, subordinates do not want a decisive leader Perhaps they would prefer to operate in an atmosphere free of the con straint imposed b y a hi g hly decisive leader. The relation ship between Consultative-Participative Decision-Making and Ne ed for Info rm ation is not parallel in the ideal behavior situation to the fi ndin g s for the perceived behavior situation. In the latter, it was surmised that leaders did not consult with subordinates in those cases where the subordin ates reflected a hi g h need for information. However there appears to be a positive relationship between the two v ari ables when ide a l behavior is substituted for perceived Con sultative-Participative DecisionMak in g. This may indicate

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70 that even thou g h relatively uninformed, subordinates still prefer to be consulted, The chi-square test does not take into consideration the criterion measure effects. Consequentl y, a further step was added to incorporate these into the quadrant analysis so that the Kerr et al. [1974] situational pronositions could be ex amined in this environment. Table 12 contains the results. The test was basically a simple observation of the difference between quadrants. Each g roup was ranked HI or LO among the twenty-two groups for each predictor variable (Consideration and Initiatin g Structure as perceived by subordinates) and moderator variable in this phase of the study. The appropri ate pairings were made to test each of the eight Kerr et al. [1974] propositions that were feasible fo r this study. Whe n each gr oup had been classified into a quadrant for a specific pairing, the average Overall Satisfaction or Team Performance was computed for the set teams in the quadrant. These aver ag e criterion measure scores were then compared to determine if they followed the direction of the proposed results. Table 12 shows that of the sixteen tests made of the propositi ons studied, seven f ollo wed the e xp ected direction of change in criterion measure. Table 13 shows the quadrants and criterion scores for propositions 1, 2, 3, 4, 5, 6 and 9. Table 14 shows the results of the tests f or proposition 7. Among the propositions where two or more tests were con ducted (1, 2, 7, and 9), the agreement of observations with e xpe cted results was always mixed. Of the propositions

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71 Table 12 Y..e:--:-, et 2! 1 :. ... .... :: ~_: c . o:-.::: ~:.c.~e ? :=:: =c: c ::1 l 2 2 3 l, 5 6 7 7 7 7 9 9 9 1 0 ?re~sure ~:es st:re ln -.: :-:. ns ic Sa :. Ir.::-i:-:~:!c l:: :r:.:1s:ic ln:.:--ir.!:.:: Sc :. In f c:-:-:-.,;.: :'. c:-: );eed Task Ce ::--:a:.n t y Di~ ~ :-' P~2:1c y D~ sc~e;:.2.:-1cy o:~c!"'e;:, 2 :;:: ::: .s. C C .,. C" I. S. :!. S C C C S.=:-:.s : c.: :~::-: :-'e:"" : :-:-~C.=--: C S2 u:i s:': c : ic :-: Fe :-: c:--.-=. . ce S2:::s : 2.c::'.c :-: ( :-: :) :, C ':":: : : -:--0 \ 0 2. :2 : =._ :-. : : C = '= : -2 0 :--e;. ~ r.~ -:?-;' e>~C::-r.:eC =-.: -..,.:: .... ::0 :-~. I:iCe ~ ~:-:d-=:ic:::C Sa:.: ~: c::c :.c~ O r-~. 2.:J C~;: e :iCen:e 1 S ?t-:": -c : .2 : i c~ O r :J: dc;:,e::je r.~ e : S ~ E.:. : ~~ 2:::.~ c :-. ( ~odera t o ::-v2r i2~le ~ o t ocse :-ve~ ) P r opcs1t 1 o ns are r ep rodu ced :ir. Cha~ :e:IIT fa:11s:i~g a~ ~~ e : ~s used 1~ ~ eafu ~ e~e~ t :: ~.: :: c -~ ::s ~; C T~STI~C P~ OS ED Ll ~ ~: ~ach of the 22 [ r oups placed :. r.~o a~ ::: er LO cla ssi :1ca:1on for each o ~ t he ~ ot e :c c :va:i a~ es neasu :e~, us :'.::r the cea~ sc c :e fc:the vari able f o :each ~ r o up 2s a s cs re f o :r a~~i~; in an a :r2y. The 11 hi~hes~ sc o :-~r.; r r o u~s in the 2:-ray r e c~~::G nate6 H :. The othe r ~ro u ps w e r e desi r ~ 2~e t ~ C h s1~~la :; :o : e ~ur e ~ as use~ tc c!a~s :.. y the 2~ ~r cu~! ~! 2n~ ~ : : l2!:i ~ ic3:i~n! ~ e r O~ i c ~ ~ e ~ i c: c ~ ~ a~1ab}e~ ~=--c ?~s :.:io~ :es t ec 2~ foll0ws: LC r . ,. ,.... ..... ..,.. '-< --~ C ,. e:c.

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?:occ s:'..:::.o:: l I .S. :U LO EI case s : 7 lj e ::'. 3 B6 3 50 J 0 LO 3 80 lJ 5 0 F rc;, o s::.: i :,r. 2 C HI LO HI ccses: 5 'C"a:. c:. "J ~.:: J ; J 'i ,3.83 L O .) ..... :..i 6 I I t-------~~ -I P r oposition 5 I. S HI L O H I c ases: 6 5 sat J LO 3.85 3 7 3 I b :, 31l l 3 5? :T ~c5 :.':io:. C j-j = L C EI cases: 6 5 sat. J 7~ 3.f:7 L ., 01 5 3, Li= 3.0 L O 72 Table 13 liI cases: 7 s a: 1 '. 3 ,.,, . ._. "::; LO 3 95 I.S HI HI ca se s: 5 SC..:. : C = 1; LO I 3 6: P r o p ositi on 6 C HI HI HI c ase s: 7 sat. 3. 1J9 J. S ca se s: 7 ; I LO "J ., 3.95 LO LO 3 .7 6 L O 1. :0 , :__l, lJ 0 6 7 l; :~~po~ ~: ~~:: "'I Hl LO .., EI cases: 5 1 : oe :-~ lJ ':iC 7 ?:"" opo s~ :1c-n !. 1 .S. Pro pc siti c , 5 C HI P. I cases : 6 pe rf. 3 8::, C, 6 IJ LC 51 L LO I --q-_ c,_=-_o_l _3 .-60 I ?ro :!Js:. :.: :::: :-: 9 I. S HI case::: 7

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? r edictc \ a ::;::, le C C I. S. "':......... .; !,, LO P.I 73 T a ble 14 :.. ..., e :-~~= Scor= E:_f;: : e r L e :-P.1 ~:-Je r !...c ,:e :,:i ::-.e ~c,:e -:-1 1 The ~~~ference ~ e:we en ctse:-vcd (~erceived) Co~s~d e ra:! c~ '.de~ : ( expect e j ) Cc~s!de r a:ion was co~pu ted ~ e r ea:~ tea~. mhe te2~s ~ere t hen ranked !~:c LC 2nd HI cl2ss!ficat!cns based ~p on tne a ~o ~n: c ~ dis crepancy as r e presented b y the cc~;uted difference :1even te :~s w e r e i ncJuded in ea : h c las s ificatio~. The averafe Overa~: Sa:~s~a~ tio n a nd Teac Per~sr~ance ~ ere co~pured f o r e ac h class~ ~ ica:io~. The s ame p r oc ed ures we r e al s o foll o wed usin~ ln1t1at1n~ Structure as a p r edicto r var!a~le. F r opcsi:!o n 7 s:a:es t~a: the hif h e r the d'.~:re;an c y betv,:E:"e:-. ~): pe.:: :2:.i c ;;s o~ t -?no.\i c:-2:--::: c. ':.. sc: :-c. ::...c :-:: c~ -:: c .-.:. : :-f o r both Conside:a :! on 2nd Init12tin~ ::r~=~~re ac t iv!:1es, :he ::~er w ill be the lev el s o f satisfa c tion an~ ;er~ : r~an c e o ~ suo o rd!na:es.

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74 w here one test w as m a de (3 4, 5, a nd 6), two sho w ed observ a tions in accordance with the proposed result. Four of the seven propositions relating to performance and three out of nine propositions relating to satisfaction were in agreement with the proposed results. Due to the absence of any pattern in the results of the tests of the contin g ency theory propo sitions it is not appropriate to make further conjecture as to the a pplicability of these propositions in the auditing en v iron m ent.

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CHAPTER VII LPC STUDY RESULTS The 32 item Fox LPC instrument (Appendix F, Chapter III) was completed by each team leader in two versions--for least preferred coworker and for self, Five predictor vari ables were obtained from these instruments; LPC, Task LPC, Social LPC, and LPC Self Description. Table 4, Chapter III, lists the item subsets which comprise these variables. Assignment of teams into octants of Fiedler's classifi cation s y stem acquired three measurements; position power, task structure, and leader-member relations [Fiedler, 1967, pp. 22-32]. Position power was measured using a set of 13 questions as utilized by J. G. Hunt [Fiedler, 1967, p. 281) These questions were discussed with the partner or specialist in charge of assi g ning staff to audit teams in three of the offices visited. In every case, at least ten of the questions were answered in the affirmative-indicate an attribute of high position power. Group task structure was evaluated by havin g the same three experts who answered the position power questions eval uate an audit team member's job in the manner su gg ested b y Fiedler and Chemers [197 4 p 68]. Four dimensions of task characteristic ( g oal clarity, g oal-path multiplicity, deci sion v erifiability and decision specificity) were scored by 75

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76 e x perts on a scale f rom 1 (low structure) to 8 (hi g h struc ture). In each the mean score of the four dimensions was below 5.0, indicating low task structure. The task structure for a le2der's job would be lower than the team member's job Consequently, it can be safely assumed that the task struc ture of any team member, to include the leader, or the task structure of the team as a whole, is low for CPA firm a udit teams High position power combined with low task structure i ndicates octants III and VII of Fiedler's classification s y stem. Fiedler [1967, p. 121] stated that there are rela tively few g roups of this type in real life. Two studies w e r e underta k en b y F iedler a nd his as sociates usin g g roups created in a l a bor a tor y settin g. The m edian correlations reported for these g roups were: -.33 where leader-member relations was g ood (octant III) and .05 where leader-member relations was moderately poor (octant VII), [Fiedler, 1967, p p. 13 7-8] Fiedler and Che m ers [1974, p. 64-5] indicate two wa y s to m e a sure le a derm e m ber relations. One m ethod was to ask g r o up m embers t o i ndicate on a sociometric scale their a ceptance of their leader as opposed to other supervisors The second method was to ask the leader to answer ten bipolar (ei g ht-point) questions, the sum of w hich y ields a g roup at score. Fiedler and Chemers [1974 p. 65) admit that the first m e t hod is awkward due to the fact that most e m plo y ees do not care to show low re g ard for their

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77 supervisors. The second method may be criticized on the grounds that it represents an evaluation by the leader, where it would be potentially embarrassing for him to admit the truth in certain cases. For instance, some of the scales are Efficient-Inefficient, Cold-Warm, and Friendly-Unfriendly. For this study, four measures of leader-member relations have been taken. Six items from the Leader Behavior Descrip tion Questionnaire (items 5, 6, 27, 44, 48, and 52) when com bined and averaged provide a measure of leader-member rela tions [Fox, 1976c, Tab le 19CJ Each team member was asked to give a global assessment of leader-member relations Subord inates answered the question, "All in all, how would you judge your ~elationship with the auditor in charge of field work for the engagement listed on the cover sheet to this set of questionnaires?" A group average of these responses provides a second measure of leader-member relations. Lead ers were also asked to answer a similar question in an appro priately modified version, providing a third measure of leader-member relations. A fourth measure was obtained by takin g a simple average of the second and third measures. It was assumed that equal weight should be g iven to the supervisor's and subordinates' respective assessments, since the phenomena being measured represents an average of a series of d ya dic relationships. Therefore, in each dyad the leader and the subordinate should be g iven equal weight. Table 15 contains the results where the teams are split into respective octants using the LBDQ subset as a measure

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78 Tab le 15 R2nkO rcer Ccrrel2:1on Coe~f1cients bet..,,eer. LPC and Cr1te,}on Scores O:tant III ( Leader-Me~ber Eel2tions: Good) n=ll LPC Task Social LPC LP C o worke:LFC LPC Difference Se:~ Tea~ Perf c r::-.z:1ce --35 .09 -.s6 70 11 .0 0 Leader E~!'e::~v en ess -.40 29 -.5 2 1 -.23 2:: Di sc re ;;2.:1: y : e 2 su re -.3 8 .0 9 .OE l ., 2 C ollearue C'.. .00 .09 -.17 2:: 71 .. ...JC:. C om?ens 2: .l c:. Set -.3 2 .1 B -.21 -.4 5 .35 Cive 2~ 1 Jc :_ . .0 8 2S 01: 3 C 1 :: r-C. ... L P C T as k Social :...re 1 r c Coworker L PC L ?C D! !"'~ cr er: ,:. e s e :;_f T eam Pe rf o r::. 2n:e --57 1 -.0 2 .so .29 .19 Leader Effect1 v eness -.39 -. 21 --33 -.O!J 27 D.1scr epan c y M easu re .so -.47 55 1 .7 /Jff -. OE C olleague S c :. .1 2 .03 1 4 .11; J C om_oensa :1 o :-: Sa:. .OG -.1 6 lS: ] 9 E2 Ov e r 2L Jc~ -.1 5 27 }C .1 ? ::: ... ..... c ~ L c ade r-~ e ::-:e :R e lat1o:-: ~ sco,es ar~ 2 cc::~ os i tc o ~ .1t e ::-: s 5 S 27,tL,~~. and 52 fr c :: ~e Lc2de :5ehav1c :De~c:!::. 1on Qu es :! o nn21r ~ (A:: ~ C h 2 ;;tc :::: :: : Oc t2:1: IIJ T c:2::-:s : l ios 3 ~ .7, :,S JS ,1 2 J.( }7, c ~ S O ct:::.:. t. : = : -: e.:... -: :: : r: : ~ l 2 4 t 1 2. 3 ~.:. : 2 e, ~] 2

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79 of leader-member relations. The rho-value (Spearman rank order correlation) between LPC and Team Performance for Oc tant III closely agrees with Fiedler's predication of -.33, however, Octant VII results are quite different. LPC and Team Perfomrance show a rho-value of -.57, as opposed to Fiedler's result of .05. Strong correlations appear between Team Performance and Social LPC -.56 and LPC Difference -.70. The LPC Self Description Correlates with two measures of satisfaction; 71 with Satisfaction with Collea g ues and-. 72 with the Discrepanc y Measure, a measure of dissatisfaction. These last four correlations, all Octant III values, should be compared with their Octant VII counterparts. In this way, it can be determined to what extent the LPC variables discriminate between the two octants. It is ap parent that the LPC Difference Score shows the g reatest disparity in Team Performance rank order correlations. The other LPC measures seem to be in the same vicinity, regardless of octant. The same holds true for all LPC measures in their correlations with Leader Effectiveness. The Discrep a nc y M easure appears to be the criterion measure whi ch contains the most diversit y in correlations when shifting from Octant III to Octant VII. The spread be tween the rank-order correlations is .88 LPC Coworker, .56 Task LPC, .4 7 Social LPC, .92 LPC Diffe r ence Score, and .64 LPC Self Description. The only other correlation spreads that enter into this range of magnitude are: .41, Team Per formance and LPC Self Description; .56, Collea g ue Satisfaction

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80 and LPC Self Description; .64, Satisfaction with Compensa tion and LPC Difference Score; .96, Satisfaction with Com pensation and LPC Self Description; .52, Overall Job Satis faction and Task LPC; and .42, Overall Job Satisfaction and LPC Difference Score. Table 16 contains the rank-order correlation values where the measure of leader-member relations is a singleitem assessment given by team subordinates. In this particular analysis, there were nine median valued teams which were eliminated in the process of dividing the teams into octants. Perhaps as a consequence of this, the resultin g rank-order correlations are stronger than in the other analyses in which far fewer teams were eliminated. Once, again the results do not coincide with Fiedler's predictions; LPC and Team Performance correlated -.52 and -.80 for Octants III and VII, respectively (-.33 and .05, predicated). A large number of significant rho-values were computed in the analysis where leader-member relations was measured by using the team subordinate assessment. Eleven correla tions of .71 or g reater may be noted in Table 16. It may be of particular interest that the three strongest correlations with Team Performance (LPC Coworker -.80, Social LPC -.90, and LPC Difference Score-. 78) are all negative values. This is an indication that leaders with low LPC scores, pre sumably task-oriented, are more successful than high LPC leaders [Fiedler and Chemers, 1974, p. 78]. Similar results may also be noted on the other performance measure, Leader

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81 Table 16 PIED:ER CO N TI NGENC Y MODEL Rank -Order Correlation Coefficients betw e e n LFC and Cr!:erion ~:or2s Octant III (L eade r-M embe r Relations: G oo d) n=6 LPC Ta s k Social LPC L;: Cow o rker LPC LPC Differe,nce s~~r _ Teare Perfor m ance -.52 --39 52 l./6 -.03 Leader Effectiv en ess .56 -.56 -.56 -37 .15 Discrepancy Measure 49 .03 -.49 -. 771 37 Colleague Sat .10 .29 .10 -.10 .!l 9 Co mp ensation Sat. 81 *' -.67 -.81 61 32 Overall Job Sat. -. tn .58 -.41 .03 70 Octant VII (Le a der Member Relations: ~od e ratel y Poor ) ~ = LPC Task Soc i a l LPC L F: C oworker LPC LPC Difference S e~ '." Team Perforr:iance -.80*' .3 0 -. 9 -. 78*' 5 0 Leader Effectiveness -.s s u .2 3 -.81 .. 58 .50 Discrepancy Measure .65 -.52 .58 7 7u !.:5 Colleague Sat . 36 .24 .02 07 J2 Co m pensation Sat -.16 .22 .00 -.54 :P O v erall J o b Sat . 61 1 6 47 -.63 77 denot es probability of randomness less than .10 denotes probability of randomn ess less than .05 Leader-Member Relations scores are a g r o up average of a single ito~, global assessmen: fro~ the Audit Staff Membe r Opinion Survey (Ap~. C, Chapter III, item 22). Octant III Teams: Nos. 6,12,16,17,19 22. :Oc tant VII Teams: Nos 7 ,8,11,13 lll,18,21. D e leted Teams: 1 ,2,3 4,:, 9,1 0 ,15,20.

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82 Effectiveness, which also shows strong ne g ative correlations with LPC Coworker, Social LPC, and LPC Difference Score. There were numerous large differences between the Octant III and Octant VII rho-values. Once again, the Discrepancy Measure appears to show the greatest amount of diversity when shifting between octants. There were differences of 1.14, LCP cowo"rker; 55, Task LPC; 1. 17, Social LPC; and 1. 54, LPC Difference Score. Team Performance, Leader Effecti ve ness, and Overall Job Satisfaction show-ed differences when shift ing between octants of .69, .79, and .74 for correlations with Task LPC. Team Performance, Collea gue Satisfaction, and Overall Job Satisfaction when correlated with LPC Self Des cription differed .53, .51, and 1.47 between octants. There was a spread of .66 when comparing the rho-values for Overall Job Satisfaction and the LPC Difference Score. The above results were not unexpected. Since a large number of median values were eliminated, differences should have been more marked for a shift in a major element of sit uational favorableness. Table 1 7 contains the rank-order correlations between the LPC predictor variables and the criterion measures where the measure of leader-member relations is the leader's global assessment. The Team Performance correlation for Octant VII comes closest to the Fiedler [1967, pp. 137-8] predication -.09 in lieu of .05. Team Performance and LPC Coworker cor relate -.64 in Octant III, compared to the predicted value of .33 ----

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83 Ta bl e 17 FIE D L ER CO N T INGEN C Y M OD ::: L Ra nk-Ord e r Co ::-r elati o n C oeff ic :1ents betweer.:I..P C a!'1 d Cr i t eri o n Scor ~s Oc ta nt III (L e ader-~e mb er Rela tions : Good) n=ll LPC Task Social LPC LPC Cow o rker LPC L P C Diff e rence S e l !' Team P erfor man ce -.64 .. .34 53 -.29 Le a der Effect:1 veness 2 9 7 5 l lQ .29 D :1scr e pan c y Measure -. 2 1 .0 2 27 1 8 Co lleag u e Sat .0 1 .31 1 9 -.34 C ompe n sat i o n S a t .2 8 13 -.12 --35 O v e r a ll Jo b S at -. 6 4 .. -.07 4 0 -.40 Octa~t VII (L eader -M e~be ::Relat i ons: Moderately Poer) LPC Task Soc i al LPC i..PC C o wo::-1-:er LPC LPC Difference Se 1 '." T eam P e r f o r mance 0 9 53 -.1 9 47 L eade r E f fe cti v eness 14 4 5 -.0 9 -.3 6 Discrepancy M e a s ur e .16 -. 10 1 33 6411 Collea g u e Sa t .51 -.0 8 51 .3 5 Co mp e nsat ion Sa.t. 38 0 1 5 IJ I 17 Ov e r a ll Job Sat. . 65 32 4 B 1 3 denotes protabil:1 ty of rand omness less than .10 denotes probability of ra ndomness )e~s t han .0 5 Leade r~e~ber Relations sc~res are a single 1t em global asses s~er. : :; 6 .: 9 :. 8 ; 4 n :. 2 .d :. 7 f -. 5 0 ::: 5 :. 2 ..:_] giv en by t h e g r ou p leader (instruction page Ape E Ch ac ter I:! ) Oc tant II Teams: ~ os l, 2 5 12 ,1 5 ,1 6 17 ,1 8 20 21 22. Oc t a~t. VII :~~-s: l l o s. 3 4 6 7 8 9 ) 0 11 1 3 1 lj l S

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84 Significant correlations appear between LPC Co w orker and Overall Job Satisfaction; -.64, Octant III and .65, Oc tant VII. From this, it seems task-oriented leaders (low LPC) have teams with higher satisfaction when leader-member relations are perceived as good by the leader and high LPC (relations-oriented) leaders have teams with higher satisfac tion when the leader perceives leader-member relations as moderately poor. Fiedler and Chemers [1974, p. 78] h y poth esize that a low LPC leader in a favorable situation will be relaxed, friendly, and considerate; whereas, the high LPC leader in an unfavorable situation will seek a close relation ship with his g roup members. The negative correlation for Octant III, a favo r a ble situation, could result from the sat isfying effect of human-relations activities comin g from the low LPC (task-oriented) leader. The positive correlation in Octant VII is the result of high LPC (relations-oriented) leaders resortin g to their primary style in this unfavorable situation Table 17 reveals many e xa mples of extreme shift in cor relation between octants for similar sets of variables. How ever, as in Tables 15 and 16, in most cases both correl ati ons are not statistically si g nificant, limitin g the. amount which one may conclude from the differences. The division of te a ms into Oct a nts III and VII for all of the analyses up to this juncture has been brt s ed upon p er ceptions or assesswents by team subordinates (Tables 15 and 16) or team leaders (T a ble 17). The final a nalyses used an

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85 a v era g e o f t e a m le a der a sse s s m ents a nd subo rd inate ave r a g e assessments. T able 1 8 reveals that so me of the results are similar. The ne g ative to positive satisfaction shift for LPC Coworker as conditions become less favorable continues. Strong correlations continue between the Discrepancy Measure and the LPC Difference Score in Octant VII. Octant III cor relations between LPC Self Description and Team Performance, Leader Effectiveness, and Overall Job Satis f action surfaced where none had been statistically si g ni f ic a nt before. When co m parin s Tables 15, 16 17, and 1 8 o ne m i g ht be concerned that there are not m o re similarit i es. However, if one carefully comp a res the assi g n m ent o f te am s to octants, as noted a t the bott o m of each t a ble, it i s a p pa rent that onl y T eam s 16 a nd 17 are consistentl y cl as s if ied in Octant III and onl y Teams 11, 13, and 14 a re c o nsi s tentl y classified in Octant VII. The difference measures o f leader-member re lations give quite different rankin g s. N one of the measures matches the methods su gg ested b y Fiedler and Chemers discussed earlier. Perhaps this accounts for the disparity of the results in the stud y with their m edian rhov alues Howe v er it sh oul d be n o ted th a t Fiedler' s m e di an r e s ults f ell w ithin r at her lar g e ran g es [Fiedler 19? 7 p p 137-8] and encompas s ed onl y two studies.

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86 Table 18 ?.ar.k O r de !" Co rr e l at i o :-: C o eff1c1 e !1tS :i e t..; e e!1 L?C a!1d C!"it e rion S co!"es Octant III (L ead er-M e m o er Relaticns: Good) n=9 LPC Task Social LPC LPC C o worker LPC LPC Differe n ce Self Team Perf o :m 2nce 64 1 .46 --55 -. 27 -.15 Leader Effectiveness 17 -. 87 .. --35 .52 -. 5 8 1 Discr epa ncy Me asure -.1 8 17 12 6 -33 Coll e ague S at -.06 .1 9 .06 .13 .23 C o r.i pen sa:i o n S at .2 8 12 17 -.19 -.20 Ove :-a ll J o :i S2. : ~ -.5 6 -.0 7 .32 46 -. 31 *' LPC Ta s k S o cia l L P C L?C C o w ori: e:LP C LPC Differ e nce Self Team Perf o :m ance -. 23 60 1 -.50 60 1 Le ade:-Effectiv e ness -.24 52 -3 7 -.45 Dis c repancy 1leasu r e .22 --75 11 .lW .Bo Coll e ag u e S a t. .58 -.09 .44 .36 Com p e n sati o n Sat .34 -.02 .56 .21 Overall Job Sat .6 5 -37 -5 5 .0 3 den o :es p r o ~a :i i li t y o f r ando~ ~ e s s ies s t~a !1 .1 0 L eade:---M em b~r ?. el a tion s s co r e s a:-e a s! m ole avera~ e of the l eader ~ global asses sm e:-:: (instr~:tion page Ap~~ E, Ch a p i e!" III) and the avera g e global a s ess me :-:: b y te~~ me m te:-(!ter.i 22, A~~C C~apte IIIl. Octar.t I I Te a '"'s : :Jo s 1,2,5,12,l ,1 6,17 20 2 2 O :::ta!1 : II Te2.;.1s : ~ cs 3 ll ,8, 9 ,1:, l l 13 l ll Dele ed Te a :::s: ~.ls-,l'?, 2 1 . :.. 4 49 -. 50 11 -. 03 .47

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------------------------------87 CHA P TER VIII SO M E ADDITIONAL OBSERVATIO N S AND RE S ULTS Ideal Leader Behavior Correlational Study Computations were made to determine whether any possible relationships existed between ideal (expected) leader behav ior and the assessments of satisfaction and performance and the Discrepanc y Measure--a measure of job dissatisfaction. Neither the Fox Normative M odel nor the Ohio State Leader ship Studies Model su g gest any correlation between ideal leader behavior and criterion measures; however, the search seemed appropriate in this study due to the availability of the n e ces s ar y data. Table 19 reveals four possible si g nificant relationships between Fox Normative Model predictor variables and criter ion scores. Expectations of Leader Support correlate posi tively with the Discrepancy measure. This may be an indica tion that the g reater the short-fall in leader behavior, the g reater the subordinate's need for supportive activities in the future. The ne ga tive correlation bet w een e x pected M an ag ement of Re w ards and Punishment and LeaderM ember Relations ma y indicate that these activities in the CPA firm environ ment ma y detr a ct f rom g ood supervisor-subordinate relations. Difficult to e x plain is the set of correlations with expected Consultative-Participative DecisionM akin g The latter cor related positivel y with the Discrepanc y M e a sure, a m easure

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I --------88 Table 19 FOX NOR.~TIVE MODEL Relationship between Predictors and Criterion Scores Predictor Variable (Ideal Behavior) C-P L.S. D-M W.F. D G.E. M.R.P. 0 -.05 .12 -.11 .25 -.02 -.16 p .21 .22 .22 .16 -.17 -.03 Q -.16 .OS -.08 .13 -.10 -.38* Criterion T -.08 .45*;\.00 -.29 .05 .24 Measure y -.28 -.07 -.20 .09 -.11 -.05 z -.24 -.09 -.07 .10 .03 -.06 Q31 .39 41;\.31 .18 .14 .25 .. k denotes probability of randomness less than .10 Symbol L.S. C-P,D-M W.F. D G.E. M.R.P 0 p Q T y z 31 denotes probability of randomness less than .05 Variable Leader Support Consultative-Participative Decision-Making Work Facilitation Decisiveness Goal Emphasis Management of Rewards and Punishment Satisfaction with Colleagues Satisfaction with Cornnensation Leader-Member Relations (subordinate assessment) Overall Job Satisfaction Team Performance Leader Effectiveness Discrepancy Measure (Ideal Behavior Minus Actual Behavior)

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89 of job dissatisfaction, and positivel y w ith O v erall Job S a isfaction. Possibly this indicates that dissatisfaction as measured in this study belongs on a continuum which is dis tinct from the overall satisfaction continuum. The test for correlations of ideal behavior predictor variables with the set of criterion measures usin g the Ohio State Leadership Studies Model (Table 20) showed a s t rong correlation between expected structurin g behavior a nd dis satisfaction, as represented by the Discrepancy M easure. This could be interpreted as an indication that g roups havin g higher e x pectations of emphasis on structurin g activities on the part of their leaders were more dissatisfied. The ne g tive correlation between expected Initiatin g Structure a nd Team Per f ormance ma y indicate that g roups th a t prefer hi g her standards for structurin g activities on the part of their leaders tended to perform less effectivel y than others. Vroom and Yetton N ormative Model of Leadership Styles Based upon item no. 24 in the Audit Staf f M ember Opin ion Surve y which was completed b y each team subordinate ( A pp. C, Ch a pter III) it was possible to c las sif y the deci sion method used b y each team le a der. The av er a g e res p onse for the team subordinates was computed. A score of 4:5 or above was classified as st y le Al ; 3.5 to 4.4, All; 2.5 to 3.4, Cl ; 1.5 to 2.4 ; Gl ; ans 1.4 or less Dl (refer top. 46, C h a p ter III f or descriptions o f decision methods in the Vroom and Y etton model). Of the 2 2 team leaders, 8 used decision m ethod Cl and

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90 T a ble 2 0 OHIO STATE L E ADERSHIP S TUDIES M ODEL Relationship between Predictors and Criterion Scores Predictor Variable (Ideal B ehavior) C I.S. 0 -.01 16 p .28 .07 Q -.05 14 Criterion M easure T 15 -.12 y -.23 .,. 38-' z -.15 -.16 Q31 .35 5 4 ; 'ck denotes probabilit y of randomness less than .10 deontes probability of randomness less than .05 Symbol C I.S 0 p Q T y z Q31 Variable Consideration Initiatin g Structure Satis f action with Collea g ues Satisfaction with Compensation LeaderM ember Relations O v erall Job S a tisfaction Te am P er fo r ma nce Lea d er E f fectiveness Discrepancy Measure (Ideal Behavior M inus Act ual B ehavior)

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91 13 used decision method Dl. Groups using decision method Cl showed a higher average for both Team Performance (4.125 to 3. 750) and Overall Job Satisfaction (3. 750 to 3.622). The feasible solution for the typical auditing problem presented in item no. 24 suggested by Vroom and Yetton [1973, p. 194) would be decision method Cl. The mean value reported by teams on the decision method question was 2.33. The range of possible scores was from 1.00 (completely delegative style) to 5.00 (completely author itarian style). The median st y le for this range would be 3 00, which compares to the actual median of 2.33, indicating a perceived bias in the direction of delegative styles. Cor relation coefficients (Pearsonian) were computed between m e a n team response to the decision m ethod item and the satis faction and performance criterion measures used in other parts of this study. The only correlation of any size was with the Discrepancy Measure, .37 (probability of randomness .09). While the correlation is small, it does indicate a possible line between dele g ation of decision making and dissatisfaction. This result goes a g ainst the thrust of one of the maj0r as sumptions inherent to the traditional human relations school of thought in industrial relations. However, numerous stud ies have indicated that participatory leadership methods may not be effective in terms of performance and satisfaction of team members [J a cobs, 1970, pp. 76-84]

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92 Item Analyses of the LBD Q Results Pearsonian correlation coefficients were co m puted between each item of the Leader Behavior Description Ques tionnaire for an Independent Auditor in Charge of Field Work (Appendix B) and five of the criterion m e a sures (Satisfaction with Colleagues, Satisfaction with C om pens a tion LeaderMember Relations Overall Job Satisfaction, a nd the Dis crepanc y Measure) Correlations were computed on an indi vidual (n = 69) and g roup (n = 22) basis Additionall y cor relation coefficients were computed for each of the 52 LBDQ items and Team Per f ormance a nd Leader Effectiveness on a group basis. Onl y si x it ems w hen t ak en on a n ind iv i d ual b a sis ga ve correlation coe ff ici e nts of g reater than .50 ; and, all cor related with the Discrepancy M easure. Table 21 lists the items and correlation coefficients. After reviewin g the con tent of these items, it is apparent that they should corre late ne g ativel y with dissatisfaction. Le a ders who per f orm all of these functions well may be eliminatin g serious potential sources of cl issatis fa ction. It is interestin g to note that no variable other th a n Work Facilitation includes more tha n one of these ite m s. M ost of the predictor v ariables used in this stud y a re ma de u p of at least ei g ht items (Table 2, Chapter III). Wo rk Facilitation inclu d es ele v en items Consequentl y it is safe to conclude th a t the subset of items selected in the ite m anal y sis of indi v idual responses does not approximate an y of the predictor variables used. This

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93 Table 21 ITEM ANALYSIS OF LBDQ RESULTS: INDIVIDUAL RESPONSES (n=69) Correlation with Discrepancy Measure Item (See Appendix B, Chanter III) -.64 -.51 -.65 -.54 -.53 -.54 Item 25 35 36 45 46 50 25. 35. 36. 45. 46. Gave advance notice of chan g es in the audit where possible Inspired enthusiasm among subordinates. Took full charge when emergencies arose. Scheduled the work to be done. Skillfully coordinated the necessary inter action of subordinates with the client's employees and with each other. 50. Gave the appropriate amount of direction to subordinates. Member of Variable Item Subset Consideration, Consultative-Participative Decision-Making Goal Emphasis Decisiveness Initiating Structure, Work Facilitation Work Facilitation Work Facilitation

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94 should not be taken to imply that the items correlating highest on an individual basis should approximate one or more of the predictor variables; because the analysis by item ig nores the multicollinearity inherent in a subset. Group averages of the 52 item scores from the LBDQ were also analyzed for correlation with the criterion measures used in the study. Six correlation coefficients with values over .SO were found and are listed on Table 22. Four of the items which correlated strongly in the analysis of individual responses (items 2 5, 35, 36, and 50). The criterion measure which correlated in all cases was the Discrep a ncy M easure. It is logical that w here an item showed a high correlation on an individual basis, it may also show a high correlation when the individual responses in each g roup are averaged. T a ble 22 shows the correlation coefficients for the group average responses to the LBDQ items. Two items were correlated with Team Performance. It seems appropriate that Item 2 (Anticipated problems and planned for them) would be related to Team Performance, but the positive correlation of Item 24 (Failed to take necessar y action) with Team Perform ance is puzzlin g. This item was supposed to be reverse scored. Failure to reverse the scorin g would account for a correlation coefficient sign reversal; ho w ever, a review of the computer instructions and independent tests of computa tions showed that all items that were to be reverse-scored had, in fact, been so treated. It must be reported, then,

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95 Table 22 ITEM ANALYSIS OF LBDQ RESULTS: GROUP RESPONSES (n=22) Correlation Criterion* Item (See Appendix B, Chapter III) .52 54 -.66 51 -.74 -.60 Item 2 24 25 35 36 50 y y Q31 Q31 Q31 Q31 2. Anticipated problems and planned for them. 24. Failed to take necessary action 25 Gave advance notice of changes in the audit wh ere possible. 35. Inspired enthusiasm among subord inates. 36. Took full c harg e w hen emeren g encies arose. 50. Gave the appropriate amount of di rection to subordinates. Y = Tea m Performance; Q31 = Discrepanc y M easure M ember of Variable Item Subset Work Facilitation Work Facilitation, Decisiveness Consideration, Consultative-Participative Decision Making Goal Emphasis Decisi ve ness Work Facilitation

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96 that the leaders of the teams did fail to take necessary ac tion in som e circumstances and this failure correlates with team performance in this study. Factor Analysis of the LBDQ Results A factor analysis was undertaken to determine which sub sets of items based upon perceived leader behavior from the 52 item LBDQ covaried. These subsets would be, presumably, the constructs from which future research wi th audit teams and the modified LBDQ (See Appendix B,) might be based. It would also serve as a useful test of the applicability of the predictor variables used for this study to com pare the derived factors, item by item, with the predictor variable subsets. After extractin g the principal axes in the initial fac tor method, there were 15 factors with latent roots (ei g en values) greater than 1.0. The software package used for this study, SAS 79, has a rotation capability of nine factors. A nine factor solution was computed, automatically, by vari max rotation. Subsequently the latent roots from the intital method were inspected to determine at whi ch point mostly error is being extr a cted by successive factors [Guertin and Baile y, 1970, p. 116]. This point is found where the decre ments in latent roots stop decreasing. This phenomenon oc curred between the third and fourth factors -indicatin g a three-factor rotated solution. Table 23 contains the factor loadin g s from the three

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97 Table 23 LBDQ FACTOR ANALYSIS Factor Loadings: LBDQ Item Factor 1 Factor 2 Factor 3 2 .65088 4 .6536 2 6 .64897 7 .63670 12 .63 824 13 .60542 14 .59572 15 -.68646 16 .57781 17 .63331 22 .50256 23 .68928 25 .52687 .53203 26 .65380 27 .78014 30 .60763 32 .56079 35 .70328 37 .63841 38 .50155 39 .53079 44 .70148 46 .60433 48 .63221 so .55334

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98 factor Varimax solution which exceed .50 Item 25 was commo n to Factors 1 and 2 This particular item has both a relations oriented and a task-oriented connotation, which may be the reason that it appears in two factors. The factors are made up of items which have a common reference, as can be noted by reviewing the item content of the sets of items (Table 24). The twelve items in Factor 1 have to do with correct senior-subordinate relationships. They represent a composite of leader behavior that is genial, yet respectful. Subord inates were to be well informed as to the reasons behind orders, changes in the audit, what was expected of them, and any new ideas before being put into action. Factor 2 is comprised of seven items which all indicate a proper task orientation on the part of the leader. The leader plans for problems, minimizes time and effort in the field, handles complexities efficiently, strives to meet deadlines, and settles conflicts. Factor 3 appears to be opposite to Factor 1. These seven items all represent incorrect senior-subordinate rela tion ah ips. They represent a leader who shows little concern for the feelings o f his subordinates and misuses authority. While the purpose of this study was not to derive a new model for leader behavior or to propose variables which aid in the prediction of team results and individual satisfaction it serves a useful purpose to compare the factors developed in the study with the predictor variables used The ei g ht predictor variables which represent subsets of LBDQ items

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L BD Q 99 Tab le 24 ITEMS CONTAI N ED I N THREE-FACTOR SOLUTION Factor l I tcn Text G a ve des e rv e d credit to subo:-dinates when d eal ing with sen i o: collea g u e s. 6 Did l i ttle thinbs t o ~ake it ple2sant to be a ssig ned to the 2 u c~t. 1 2 Ex p l ained t he re asons beh i nd orders re quests and instru=tl0r.s on occasions wh en i t w as pr2ct~c2l to d o sc. 2 5 G a v e adv2 nc e no t ice of c hanges in the audit where possible. 2 Encourabed initiative in s ~bord~na tes. 27 Loo ke d out for the personal welfare of subord in 2te a u dit st a ff members. 30 Let subo rdinates know wha t was e xpecte d of th em 32 Discussed new id eas wit h subordinates o n the audit before putt i ~ ; them into acti o n. 3 5 -Inspired en thu siasm amon; sJbo :dinates. Wa s fri e ndly and appro2c~a ble ~6 S kil lfully c oordinated the ne cessa r y interaction of ~~ bo rd:n Jte s wi th the clie nt's e~p lo yces and wi th eac h other. 50 Gav e the a pprop riate a~ount of di r ection to subordinates Factor 2 2 Anticip ate d problems and p l anned for them. 7 Pushe d to get the field "'orl-: d or.e with a m inimum of tin e 2nd ef~-:>l't 17 Handled com p lexities in the audit efficiently. 22 Made his references cl ear to subordir.ates. ?3 Drove h ar d when a deadline a pp roached. 2 5 Gave advance notice of c hange s in th e audi t w ne re possitle. 38 Effective l y s ettled c on flict s w hen they occu red a~ o nb subo r~ in~:~~ on th e audit Factor 3 1 3 Punished th e entire aud1t tea~ f e r the poor perform~nce of or 2 few sut.ordinatc::.. l !J A ::.sir,ncd w orv. to sub o :-din ::. : es t ha t w as beyond ti icir ca::.;:it.11:-.. : :. 1 5 Needles::.ly ca ll ed at tent :c:, to the fact th c,t pe r f o r::. 2 :1 ce ev~ :i.; 2tio~s would b e s ub ~ 1ttc ~ e n ea :h ~u bord1nate u~8n t~e cc~ ~]~~ !=~ of l!ic aud! t. J G ld op ted an a u d it pro[r 2~ t~~t wRs un realistic 1n vi e~ of t he a~: Jn: o f tirTJ e schedu l ed for fi e):: ~c:L. 37 u~ ed thr e ats of o v ert1~e ~o:-~ as a pun i t i ve instr u~e nt to t h':: k1nd of pcrfor~ance d ~~i :0j. 3 9 /,l)o .-:cd ::.u bo:-" :::natcs C"l t ... e 1::.:::it t o ta v.e unnece::sar:: ao v :c:-.:~c'=.:.. ~ 8 Mi::.J~ed authcrity.

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I 100 are listed on Table 25 along with the three factors in such a way that one can compare the respective subsets. It is apparent that none of the factors closely matches any of the predictor variables. Factor 1 has four common items with Leader Support, for instance. However, Factor 1 has eight other items; Leader Support, four. Factor 2 appears to re semble a composite of Work Facilitation and Goal Emphasis in that six of its seven items are included in the twenty items from the subsets of those two variables. The factor analysis results neither stren g then nor weaken the presumed applicability of the Ohio State and Fox Normative Models to the study of leader behavior. Since there were few stron g correlations between the predictor variables and criterion measures when these models were tested, there is no reason to suspect that a factor analysis of the LBDQ results would match predictor variables from these models.

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101 Tab l e 25 L:l'.JQ Facto r CP I te:n 1 2 < C I.S ;., .S D : 1 ;.. .? D G. E: : : :'. p. -~ 1 X X 2 X X 3 X ll X X 5 y 0 X X X 7 X X 8 X 9 X X 1 0 X y y 1 X 1 2 X X 13 X I l ll X X 1 5 X llJ X X 1 7 X X l 8 X X 10 X 2 0 X .J. ) 22 X X X 23 X X 2ll X Y. 2 5 X X X y 2 X X 2 7 X X X 2a .... X 29 3 0 X '{ .. )" 3:;. r 3 2 X X X 3 3 X 34 X ,::; ~ -' X y j:C Y. r ): ,c )'. Y. 3 9 X Y. !l o 1 X 42 X 4 3 X ll X X X IJI ; y ,;; l ) : 47 X 4 c X Y. 49 :,: 5'.:' z :,:

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CHAPTER IX CONCLUDING CO}1MENTS Summary The primary objective of this study was to determine the applicability of certain contemporary research models and techniques used for predicting the effects of leader behavior on group perfor m ance and individual satisfaction in the con text of g roups en g a g ed in the conduct of annual audits for CPA firms. Two basic approaches were utilized; behavioral and situational. The Fox Normative Model and the Ohio State Leadership Studies M odel were used to anal y ze certain leader ship patterns that are included in the behavioral approach. For the situational study of leadership in the auditing en vironment, the contingency models of Fiedler, and Yet ton and Kerr et al [1974) were applied. The research instruments used in this study were, for the most part c o nstructed by borrowin g ideas and items from e x istin g instr ume nts In a ddition, the Fox LPC Scales w ere used intact. One of the nation's "big eight" CPA firms a g reed to participate in the study on a regional basis. Thirty-four audit teams were selected from the firm's participating of fices. These included all that fit the criteria for selec tion From the teams selected, 22 complete and usable sets of questionnaires w ere eventually obtained. The data from 102

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I 103 these teams w a s a nal yz ed in accordance with the research de sign presented in Appendix A. Five working hypotheses were listed in Chapter III. There was variability in both perceived leader behavior and ideal leader behavior as assumed in working hypothesis 1 and 2. Working h yp othesis 3, which comprised the behavioral ap proach tests, called for correlation coefficients between predictor variables from the Fox Normative Model and the Ohio State Leadership Studies Model and the criterion measures used in the study. Four of the eight predictor variables correlated strongly with the measure of dissatisfaction; of which, three were from the Fox Normative Model. Only one predictor variable work facilitation, showed any significant correlation with the performance measures. The analysis of results of the test of the Kerr et al. [1974] contingency model propositions for the Ohio State Leadership Studies Model was clouded by an insufficient sample size. Conclusions with regard to the applicability of these propositions to an audit team environment must be reserved until more studies are performed. The results of the LPC stud y differ with re g ard to which measure of leader-member relations is used. Four different measures were tried. Octant III results (leader-member re lations: good) tended to agree with Fiedler's predicted cor relation. It was in the Octant VII case that the magnitude and direction of the correlation was radically divergent;

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104 h ow ever the number of published studies with g roups falling into these classifications (Octants III and VII) is meager. Leadership style classifications as suggested by the Vroom and Yetton Normative Model were made for each group. The leaders in practice seemed to delegate more decision making to their subordinates than the model would suggest to be optimal. Groups using the appropriate leadership style had higher performance and satisfaction averages than the other set of groups. A small number of LBDQ item responses, when evaluated on an individual basis correlated strongly with the measure of dissatisfaction. Similar results occurred when group average item scores were used in lieu of individual responses to LBDQ ite ms, except that two of the correlations were with team performance. N either of these subsets remotely resembled any of the predictor variables from the two behavioral ap proach models. A factor analysis of the LBDQ results suggested three groupings of items which appear on the basis of this study to be related No ne of the factors derived accuratel y matches a n y o f the predictor v a riables Conclusions None of the models studied appears to be particularly useful for predicting outcomes in terms of audit team satis faction and performance. Several facets of the problem merit further study. Situational variables ma y exert a stronger

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105 influence on a udit t e am results than with those groups fre quently tested in other studies. The position which was studied, audit team leader, may tend to be an organization ally specific position--varying from office to office in the same firm. Audit team subordinates are, as a rule, not as ho m ogenious as group members studied in other tests of these models. Some are significantly more experienced than others, and would need less structuring activity from their leaders Audit team leaders are not equal in the ability to provide assist a nce to their teams because of differences in the a mount o f influence the y have with a particular client a nd with their own supervisors. Lastly, professional stand ards dictate the le v el of acceptable significance from an audit team. A n y shortcomings must be systematicall y corrected before the auditors' report can be issued. Consequently, team performance cannot vary over a wide range in the end. Testing for the effects of moderator variables was weak ened by the n um ber of teams which could be used in the quad rant anal y ses. In general, the analyses could not be made if teams close to the mean in either of the variables were eliminated. T his is not to s a y th a t undertakin g this stud y was too idealistic in the final anal y sis--large audit teams are still in use and their leader behavior is of great im portance to the respective parties involved. N evertheless g aining appropriate access to these teams is difficult for researchers and expensive to the CPA firm involved.

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BIBLIOGRAPHY American Institute of Certified Public Accountants (1973], Committee on Auditing Procedure. Statement Auditing Stand ards No 1 [AICPA 1973]. Bass, B M. and E. R. Valenzie (1974], "Contingent Aspects of Effective Management Styles: in Contingenc y Approaches to Leadership J. G. Hunt and L. L. Larson, eds. [Southern Illinois University Press, 1974), pp. 130-55. Bowers, D G. and S. E. Seashore [1966], "Predicting Organi zational Ef f ectiveness with a Four-Factor Theor y of Leader ship A dministrative Science Quarterly [Sept. 1966] pp. 238-63. Fiedler, F. E [1967], A Theory of Leadership Effectiveness [ M cGra w -Hill Book Company, 1967]. Fiedler, F E. a nd M M Che m ers (197 4 ] Le a dershi~ and E f ective M ana g ement [Scot Foresman and Company, 1 74). Fille y A. C., R. J. House, and S K err [1976], Mana g erial Process and Organizational Behavior [Scott Foresman and Company, 1976] Fox,W. M [1976a], Identify and Devel As ects of Effective Mana Groups, Tee nica Report ice of N aval Research, JSAS Catalo~ of Selected Documents in Psychology, Vol. 6 [August 197]. Fo x W. M. [1976b] "On Operant Approaches to Leadership" in Leadershi : The Cuttin Ede J. G. Hunt and L. L. Larson, eds So ut ern Illinois Universit y Press 1976] pp 23 4 -5. Fox W. M. [1976c], Anal sis of Militar ---~~~~~--~~-~---~--~-~ istic Field Setting, Tee nica Report Septem er for the Office of Naval Research, JSAS Catalog of Selected Documents in Psychology, Vol. 6 [August 1976]. Fo x, W. M [1976d] Least Preferred C o worker Scales : Researc h and De v elop m ent Technical Report 70-5, September 1974, for the Office of N aval Rese a rch JSAS, Catalog of Selected Documents in Psychology, Vol. 6 [May 1976]. 106

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r I 107 Franklin, J. L. [1975], "Down the Organization: Influence Across Levels oh Hierarchy," Administrative Science Quart erly [March 1975], 153-64. Greene, C. J. [ 1976], "Disenchantment with Leadership Re search: Some Causes, Recorrnnendations, and Alternative Directions," in Leadership: The Cutting Edge, J. G. Hunt and L. L. Larson, eds. [Southern Illinois University Press, 1976) pp. 57-67. Guertin, W. H. and John P. Bailey [1970), Introduction to Modern Factor Analysis [Guertin and Bailey, 1970). Halpin, A. W. [1957], "Leader Behavior and Effecti v eness of Aircraft Commanders," in Leader Behavior: Its Description and Measurement, R. M. Stogdill and A. E. Coons, eds. [Bureau of Business Research, Ohio State University, 1967]. Halpin, A. W. and B. J. Winer [1957], "A Factorial Study of the Leader Behavior Descriptions" in Leader Behavior: Its Descri tion and Measurement, R. M. Stogdill and A. E. Coons, eds. Burear o Business Research, Ohio State University, 1957]. Heller, F. A. [1973], "Leadership, Decision Making, and Con tingency Theory" Industrial Relations [May 1973], pp. 183-99. Hemphill, J. K. and A. E. Coons [1957], "Development of the Leader Behavior Description Questionnaire" in Leader Be havior: Its Descri tion and Measurement, R. M. Stogdill an A. E. Coons, es. Bureau o Business Research, Ohio State University, 1957]. House, R. J. [1971], "A Path-Goal Theory of Leader Effective ness" Administrative Science Quarterly [Jan. 1971] pp. 19-30. House, R. J and G. Dessler [1974] "The Path Goal Theory of L e a dership: Some Post Hoc and A P riori Tests" in Contin g enc A roaches to Leadership, J. G. Hunt and L. L. Larson eds Sout I inois University Press, 1974], pp. 29-55. Hunt, J. G. and L. L. Larson [1976], "General Discussion" in Leadership: The Cutting Edge, J. G. Hunt and L. L. Larson, eds. [Southern Illinois University Press, 1976] pp. 234-5 Jacobs T. 0. [1970) Leadership and Exchan e in Formal Organizations [Human Resources rganization,

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r 108 K orman, A K [1974), Cont ingen c y Approaches to Leaciership: An Overview," in Contin ge ncy Ap 1 roaches to Leadership, J G. Hunt and L. L. Larson, eds. Southern Illinois Univers ity Press, 1974], pp. 189-95. Kerr, S., C. A. Schriesheim, C. J. Murphy, and R. M. Stogdill [1974), "Toward a Contingency Theory of Leadership Based upon Consideration and Initiating Structure Literature," Organizational Behavior and Human Performance [August 1974], pp. 62-82. Miller, U. A. [1973), "A Hierachial Structure of Leadership Behavior," Technical Report 66, [Management Research Center, University of Rochester], 1973. Peat, Marwi ck Mitchell and Co. [1976), Research Opportunities in Auditing [PM & M, 1976). Porter, L. W. and E. E. Lawler [1968), Ma na g erial Attitudes and Performance [Richard D. Irwin Inc., 1968]. Sto gdi ll R. M. [1974), Handbook of Leadership [The Ma cMillan Co mpany, 1974). Stogdill, R. M. and C. L. Shartle [1955], Methods in the Study of Leadershi~ [Bureau of Business Research, Ohio State Un iversity, 19 5). Taylor, J. C. and D. G. Bowers [1972), Survey of Or~anizations [Institute for Social Research, University of Mic igan, 1972). Tupes, E. C. and R. E. Christal [1961], Recurrent P ersonality Factors Based on Trait Ratings, Technical Report ASD-TR61-97, May 1961. Personnel Laborator y Aeronautical Sys te m s Division, Air Force S y stems Commond, Lackland Air Force Base, San Antonio, Texas Vroom, V. H. and P. W. Yetton [1973), Leadership and Decision Maki ng [Universit y of Pittsburg P ress 1973].

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APPENDIX A Research Design Test No. 1. Covaration: Predictor Effects A. Measurements and Measuring Instruments 1. Predict or Variables from App-endix Ohio State Leader Behavior Consideration B Dimensions Fox Normative Model Leader Behavior Dimensions 2 Criterion Measures Team Performance Initiating Structure B Leader Support B Consultative-Participative Decision-Making B Work Facilitation B Decisiveness B Goal Emphasis B M a na g ement of Rewards and Punishments B from Appendix Team Leader Effectiveness Satisfaction with Colleagues Satisfaction with Compensation Satisfaction with Current Leadership Overall Job Satisfaction Satisfaction with Leader G G C C C C Band D B. Research Hypotheses (let r stant for Pearson's product-moment correlation) H r = o H r f 0 o a H F = t 2 H : Ff t 2 o a 109

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110 Test No 2 Covariation: Predictor and Mode rator Effects A. Measurements and Measuring Instruments 1. 2. 3. Predictor Variables (as for Test No. 1) Criterion Measures (as for Test No. 1) Moderator Variables Kerr, et al (1974) Fox (1976b) Vroom and Yetton (1973) B. Research Hypotheses from Pressure Task Certainty Need for Information Organizational In de pen den ce Intrinsic Job Sat is faction Leader-Member Relations Leader's Decision Method Quadrant Analysis: Mean Team Scores in Appendix C C C C C C C Each Predictor (8) and Moderator (5) for Cutting Scores Resulting in 40 2x2 Tables. (use a chi-square test of independence) H : the two classifications are independent 0 H a the two classifications are dependent (use a phi coefficient to determine the strength of association where dependency is implied)

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111 Test N o. 3 Rank-Order Covariati on A M easurements and Measuring Instruments 1. Predictor Variables LPC Task LPC Social LPC LPC Difference Score LPC Self Description 2. Criterion Measures (as for Test No. 1) B. Research Hypotheses (let r stand for Spearman's rank-order correla t ion) s H 0 H 0 r = 0 s F = t 2 H r -:/= 0 a s H F -:/= t 2 a

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APPENDIX B Leader Behavior Description Quest1onna1re Independent Auditor ln Olarge of P1eld Work Sta(f l'leciber Code BW1ber (See D1rect1ons) Audit Team Code Number (See Dlrectlons) (1n weeks) you were Assigned to thls Audlt Purpose of the Questionnaire On the following pages ls a 11st of items that may be used to describe the behavior of the auditor who -s 1n charge of the f1eld work on a recently completed field assignment. Each item describes a specific kind of behavior, but doe& not aek you to judge whether the behavior 1 desirable or undesirable. Each item should be considered as a separate description, Th1s 1s not a test of ab111ty or consistency ln mak1DB answers. Its only purpose is to msJce 1t possible ror you to deacribe, as accurately as you can, the behavior of the audltor you served under. Conf1dent1al1ty 'The responses that you provide for this research project are conf1dent1al. Only the researcher and one member of the Graduate faculty of the Un1verslty o~ P'lorida wlll have access to the completed questionnaires. lour name v111 not be attached to~ of the materials which you complete. The audit team coding will be destroyed as soon as all test materials have been collected, Consequently retracing of any quest1onna1re to a flrm, office, or 1n d iv1 c ual will be 1mposs1 ble. Directions a. b, c. d, READ each 1 tem, THINK about the frequency w1th which your audit team leader eng~ed 1n the behavior descr1 bed by the item. DECIDE whether he (A) alw~s, (B) often, (C) occaslonally, (D) aeldo11, or (E) never acted as descr1 d by the item, An (X) answer 1s provided for certain questions you may have no basis for answering, CIBCLE one of the s1x letters (ABC DEX) follow1ng the item to sho the answer you heve selected, A Always B Often C Occasionally D .. Sel d o11. E =Never X No Bas1s Based upon ~elected 1tems from Leader Ben.-iQr Descr1pt1on Quest1onnalre Porm XII, or1 g lnated by staff members of the Ohle State Leadershlp Stu d ies a..n~ rev1sed by the .Bureau of Buslness Research. Th1s verslon developed by M. P. D111a~ay un d er t h e g u1danoe of W. M. Pox, U n 1vers1ty of nor1da 11 2 h ._ 1

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,---------113 BOW THE AUDITOR IN CHARGE OP FIELD WORK ACITD A Alwaya B Often Cs Occasionally DSeldo111 E .. Never :X No Bas1a THIS AUDITOR 1. Treated all subordinates on the audit as professional oolle~ues .AECDE 2. J..nticipated problems and planned for them. A B C D l J. Was hesitant about g1ving ass1gTllllents, 1nstruct1ons, or orders to subordinates A B C D E 4. Gave deserved cred1t to subordinates when deal1ng w1th senior colleaguee A B C D E X 5. Trusted subordinates on the aud1t to exercise profes.sioos.l Judgment A B C D E 6. Did little thlngs to make 1t pleasant to be ass1gned to the audit A B C D E 7. Pus h ~d to get the flel d work done with a mlnlmUIII or vasted ti111e and effort A B C D E 8. Could reduce a madhouse to system and order. A B C D E X 9. Was willing to make adJustment 1n the audit program to suit individual subordinates, A B C D E 10. Put suggestions made by subordinate audit staff members into operation ABCDEX 11, Backed down when he should have been f1rm 1n dealing with subordinates on the aud1t A B C D E 12. Explained the reasons behind orders, requests, and instruction on occasions when 1t was practical to do so A B C D E lJ, Punished the entire audit team for the poor perfo r mance of one or 11 few subordinates A B C D E 1 4 15. 1 6 17. 18. Assi g ned w o rk to subordinates that wa s be y o n d their capabllity Ne e dlessly called attention to the fact that performance evaluatlons would be sutxnl tted on each subordinate upon the co112pletlon of the aud1t. . . . . . Adopted B..Il audit pro gr am that was unr e alistic in vlew of the amount of time scheduled for field work . Handled coc: p lexi t1es 1n the audl t eff1 c 1entlJ. . E.:n ph aaized to !!Ubord1na tes t h e i mpo rtance of generally accepted s.udltl~ standards. . . . A A A A A 19, ~as relu c tant to allow su b or d inates any freedo= of actlon A B C D E B C D E B C D E B C D B C D E B C D E

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r 114 BOW THE AUDITOB IlJ CHARGE OP FIELD WOBK ACTED J. Al ways B Often C Occ.a.s1ona111 D Seldort E Never X Ro Baslt nns .AUDITOR. 20. Let some subordinatea have authority which he should have reta1ned A B C D E 21. Assigned part1cula.r task11 to subordinstes l!lB eppo11ed to seneral areas of re!!ponsi b111 t1 . . . . . A B C D E 22. 1'\&de his preferences clear to subordl Ill\ tes A B C D E 2J. Drove Mrd when a deadl1ne approached. A B C D l 24. Palled to take neceBBary act1on. . . . A .B C D E 25. Gave advance not1oe of chan,ses in the aud1t where poss 1 ble A B C D E I 26. Encouraged 1nltle.t1ve 1n subord1na tee. . . . . . A B C D E 27. Looked out for the personal welfare of subord lnate aud1t staff members. . . . . . . . >. B C D E X 28. Un1la teral ly dec1ded how thln,ee should be done when 1t 11ould have been easy to consult wl th subordinate11. . A B C D E 29. Proml eed rewards to subord 1na tell that were not de11vered . A B C D E :x JO. Let subord lna tee know "What was expected of them, . . A B C D E Jl. AeB1gned the least pleasant audl t t.e.BkB to those subordinates who failed to perform up to expectations. A B C D E X J2. Discussed nev ideas w1th subordinates on the aud1t before ptlttlng them into act1on . . . . . J. B C D l I JJ. Obtained the assistance of the aud1tor charged w1 th final authority for the engagement whenever necessary ln eliminating obstacle!! racing Bubordlnates . . . . A B C D E X )4. Was easily dissuaded by the client w h en aud1t objectives -were at stake . . . . . A B C D E I 35. lnsplred enthuslBBlll among Bu bo rd1nateB A B C D E J6. Took full charge when eicer ~ enc1ee &TO&~. . . A B C D E X J7. U11ed threa tB of overtime work BB a pun1t1ve instrument to obtain the k1nd or pcrforl!lance desired . . A B C D E JB. E::ffectively settled conflicts 11hen they occured acong subordinates on the audit . . . . A B C D E I J9. Allowed Bubord1natee on the aud1t to take unnecessary advant.a g ee. . . . . . A B C D E

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115 BO._, THE AUDITOR IN CHABGE OP FIELD 'wORX ACTED A Always B Often C Occasionally D E Never :X .,. No Baeh 'l:HIS AUDITOR. 40. Delegated area& of respons1b111ty 1n the audit to peolf1o &ubord1nates and allowed them to m.ake all the1r own deo1a1on.a A B C D E 41. Kade sure that subord1nstea on the audit knew who was 1n charge of the f1eld work 42. Reedled subordinates for greater effort 4J. Encouraged un1form1ty 1n the execution of aud1t procedures 44. Was fr1endly and approachable Scheduled the work to be done 46. Sklllfully c oord1nated the necessary 1nteract1on of subordinates w1th the cl1ent's em p loyees and with each other 48. Bequ1red h1gh productivity from all subordinates regardless of experience M1auaed authority 49. Made pep talks to st1mulate subordinates, A B C D E A B C D E A B C D E A B C D E A A A A B B B B C C C C D D D D E E E A B C D E 50. 51. Gave the appropriate amount of direction to !!Ubordinates. A B C D E Cr1t1c1~ed the work of 1nd1v1du.al subord1nates 1n front of others A B c D E 52. Could wa1t just so long, then blew up A B C D E

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APPENDIX C .lodlt :lt.afr Op1n.lon SurTe7 St.arr lleaber Code Jlhlllber .lud.1 t 'htu: Codr liua ber _______ D!r-ectloru: Par each of the foll o w1n,g. pl.ace checbark crrer o n e best. aTa1lhl choice. 'Ihe nia po t.hat you prcn'lde tor th1 project are c on! l d e r.t la l Only U,e reaea r cher 11cnd one of the l'acu.l tJ of thr lln1Tera1 ty of 1lor1da wlll haTe acoe to t.ne c ompl eted queat1onn.a.1r--ea. ?our na.ae wtll not be to an7 or the aaterlal1 which you The audlt taaa coding be detroyed soon al.l aater1ala hay~ been oolleot..ed. Conaeqoentl1. r,,i::n.clng of knJ ~ue1tto n r-.al" to offlce, or lnd l Tldual be l. Bo aa.n., part or the CPA i:a..a ,-ou i:-ed of the aoat recent publ lcatlon of renu U? 0 paru 1 pa.rt J pe.ru 2. 7or what length of you been el!l plo yed on a rull-tla e 1n publlc acco un t ll'l8 p ~ctlcel un.cier 6 o-.er 6 under 12 oYer 1 2 under 18 oe r 18 under 24 110a. J. \ihlch of the follo,dn,g beat decrlbe tn" :,our ed u c.atlon a..nd erperlenee hac prepared 10\J t.o 1our t.a .. ke durln.! the past ge n erallJ' s ll g ntlJ lneufflclen-:. no o o re tnL~ a d eq u at.r 11 o r, tri s n a d e qu a t e fa.J"' m or e t na.n a d e qu ate 4. 1n order t..o a wcll-rou.nded aole practltloner~ would you requlre 1n audlt1 n,g tec r,.n1 quee. t..ai&tlon. r:1a naRe1t1 l" nt a d Y leor 1 or som~ other ar e a of pro(esslonal deYel opa,e nt7 four of th.rec of t.J,eae fwo of these one of t. ne ee none of 5. Yowpresent at.arr dea1gntlon 11 equllent to whlch of thee7 )uni or aenlor 6. Bo polentlally oorrrct are there to p erfora of the th.at you been recen tl J' a 1.f ned 7 only one correct about two (e'1t aoce pt.cd al ternatle D\.laarou1 an unl 1ml te~ or 7. Wh l ch of the follol ~ be at rf"lpreenta your un der e t an dl~ of b y otn~r CPA flrms for Jo b a ppl 1c.an t .,1th your pr~,,nt leel or e du c a tlo n an ~ ex pcr1e"nc e _7 __ 're,:y hlg tl n o ne:rlate n t 8 Whlch of the foll o ln..i! beat repre,ent. your underat..and1ng or the deltland b J' pr1 l n du atr an d FOe rruaent for Jo b ppl 1 c an t a vlt h your p reaent leTel o f edu c a t lon and experlenoe 7 9. Under ho u c~ o re,~ u re do ,100 fln ~ 7our,~1r ln ~ettl ~ ~ y our orr on t l m .. 7 & J. l!09t u.n be ar b1 tlf'l~J. O, Jt be arab l e lrno ne 11 6

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117 10. aalack do .rou bellYc 1 1nolu
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118 n. Co,..1der1nt; the ...,ount or effort and d111g,,nc that you pot 1nto 7ovr ork, how do you real about yottr Onanclal co.,peneatlon7 Tery .9oaewnat d1aeat1rled fa tr 1, tlafled YeTJ aatl.9fled 22. A..ll ln all. ho ould .7ou Jud~ir your T"f'ltlonah1 p th thfl audlt.or ln c.narg-e of !leld work for the ~~ement lllt1 on t.ne coer 1theet t:o tnla or a.t:lafact.or.r a.de qua t.e 2). A.ll 1n all. ho aatlafled were 7ou tb 't.ht leader9hlp ab111t7 of the audlt.<>r 1.1, c.hr~ or the f1eld work on t.he aud1t on the coTer heet to tnl act or questlonna1rea7 Ter1 dlot19f1ed aomevnat d 1 a9a t1 ad neutral fa1rl7 2~. 1..3.au.e that. ,-ou &T"'I" once ~1n orlclne ln thf"' fleld on thaOClt. llsted on the coer wlth the a.aae auditor ln chr~e. You are en,sa~ed ln les~ of trans:11ctlons 1n an area or aaterlal lport.ance. You are eonfldf'tnt that your ~ucatlon a.nd e7perlence are uff1c1ent to enable you to h11.ndlr It. becomes apparent to :,ou th"-t the n\.U!Jb!r of errorJ oncoered are ~1en1r1c.antl1 h1~her than exprected. baaed on result or s1a1lar recorded 1n the prlor :,ear and ~u1dellnes lncluded ln t~e and1t progT&.m. Add1tlonal audlt testa: be nece.s.9a.rJ. Accord1ngl1. :,oil call t 1'1 1s fact to the attent1on or the aud1tor ln cnar e; e. &aeed upon your e:r ~rl en ce v1th th1s ~r!on durlno th15 recent lJ co1:cp)et.e6 au d1t h o w ou1d t h e drc1~lon be reached &3 to the rutturr a..n d e:rtent of the a dd 1t1 on a 1 au ~1 t step? (check one) _____ The aud1t.or ln chars~ w o uld t.aKe o-.r.r and t.hr b1 wlt.J;out any further help :,au. ______ (b) The audltor ln cn.arp_tw o uld makr. the drclslon by hlmeelf after us1ns y~u ~o ob~a\n any addlt1onal fact.1 that he m.a.1 conalder neces8&TJ for h1s dec1.s1on. Nt vlthout gettlna your or -----~c) The auditor 1n chr~r nuld d1ecusa the problee thoro~hl1 wtth you. ~rtt1ng all :,our 1deaa and l.8aeatlo~: ttlen. 111ake the dec1alon b1 h1maelf. ______ (d) n..~ audttor 1n chrr wnuld analyze th~ problem wlth ~ou and. to~etner, you would arr1T~ st a utually ~re~blr aol11t1on. _____ (e) ~e aut11tor ln chr,.-r w,,uld c,..,)e~te thr L.o you. ~1T1~ 7ou an.7 pert1n~nt 1 nfori."ltlon thlllt he 2.!,. ln a.n oerall .aenae. h o w are you wlth your pr oa~nt job Jl1tuat)on7 Ter1 d)a111.t1sf1ed s o caewna t dll~tlsf!ed neutral fa1rly l l!lfle~ TCTJ B&t1sfle ~

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r---------------------------------APPENDIX D ldeal Leader Behavior (Pons .S) (What Iou Expect of an Independent Aud1tor 1n Charge of Pield Work) Staff ~ember Code Number (See D1rections) Aud1t Team Code Number (See D1rections) Purpose of the Questionnaire On the following pages 1s a list of items that may be used to describe the behavior of an auditor 1n cha.rge of field work, as you think he should act. Each item describes a spec1f1o kind of behavior. and you must Judge whether the behav1or 1s desirable or undesirable. Each 1tem should be considered as a separate description. This 1s not a test of ability or consistency 1n ~&king answers. It simply asks you to describe what an ideal auditor ou~ht to do 1n supervising the field work of an audit. Confident1al1ty The responses that you provide for this research project are confidential. Only the researcher and one member of the Graduate Paculty of the Un1vers1ty of f'lorida will have access to the completed quest1onna1res, Your name will not be attached to any of the materials which you complete. The audit tea m coding be destroyed as soon as all test mRterlala have been collected. Consequently, retracing of any questionnaire to a f1rm, office, or ind1v1 du al w111 be impo:ssi ble. Directions a. READ each item. b. THINK about how frequently the auditor should engage in the behavior described by the item. c. DECIDE whether he should always, often, occasionally, seldom, or never act as described by the item. d. CIRCLE one of the five letters foll0wing the item to show the answer you have selected. A "' Al)layll B Often Ca O casslonall y D = Seldo11: E a Never Based upon aelected items from Leader 5eh avior Descrlption Questlonnalre Form XII, or1 g lnated by staff members of the Ohlo State Leadersh1p Studle~ and revised by the .&ureau of Bus1neas Research. Th1s vers1on developed by M. P. Dillaway under the guldance of W. M. Pox, Un1vers1ty of Ylorida. 119

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1. 120 A ., Al ways B = Of t en C = O ccas i ona lly D Sel d om \ihat the IDEAL Audito r S H OULD do: Treat all subordinates o n coll e a fnl eS the a udi~ as his p rofes s l o nal .E Ne ve r A B C D E 2. Ant lclpa t e pro b lems a n d plan fo r them A B C D E J. Gl v e assigroients 1 nstruct 1 ons, o r o rd e rs t o subordinates o n the audl t as necessa r y A B C D E 4. G lve deserve d credit to his subordlnat~s o n the audit wnen dealln~ with senl o r c olle a aues. A B c D E 5 Trust subo r dina t es o n the audlt to exercl s e p rofe ss lonal ju dgire nt A B C D E 6. Do llttle thlnss to m ake it p l easa nt to be ass l.,-n e d to the audit. A B C D E 7. Push to ~et the fleld work don e w1th a mlnl m um o f w es t e d tl rn e and effort. A B C D E 8 .oe able tc re d uc e a madho u se to syster:: a n d order A 5 c D E 9 .6e wlllln ~ to m ake adj u stme nt s ln the au d lt p r og ra m t o s u lt i nd lvldu a l s u bord l n ate s A B c D E 1 0. Put s u i:!Z'es tlons ma d e by su bo r d ln a tr a ud lt st aff mernbe rs 1nto o p era t1on. A B C D E 11 Ba ck down whe n he ou g ht to stand flr m in dealin g with subordlnates o n the a u d l t . . A B C D E 1 2 On occaslons w hen it l s pract i ca l to do so explaln the r e a s ons for hls orders reque s ts, or lns t ru c tlons A B c D E 13 Punl sh th e e ntlre a udlt tea m f or t r. e po or pe rf o r ma n ce o f one or a few subordinates. A B c D E 14. Assl1rn wor k to su bo riiln a t e s on the a ud l t that ls be_vond t he ir c ap ab111 t y A B C D E 1 5 ~eed l ess l _v c a ll attent i on t o th e f ~ c t that h e w l l l be sut=1ttl n ~ nerforman c e e v alua t ions on subordinates fo llo w ln E the c omp l e tl on of th e a u c lt 1 6 Adop t an audlt th a t l s unr ea ll s tlc ln vl e w o f t he a :no unt or ti me s c hed ul ed f or fl e ld work . 17 P.and le co ::p 1 e xi tl es in th e a u d 1 t efflcl e ntl v. l E .=::has 1 z e t o s u bo r d i nates o n th e a i.;d 1 t t he i mpo rt ance o f aenerally acce ;Jted aud lt1 nfl s t andards 1 9 ::,e r eluctan t t o a ll o w s u bord 1 n'ites o n t he a udl t a n y f ree d o:n o f a ction . . . . . . 20 Le t s ubord i n '\t e s on t he au d lt h a ve aut ho rl ty A E C D t A B C D E A E C D E . A E C D E . A E C D E w h l c h h e s~ou l d keeF A E C D E

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121 A = Always B = Often C = Occasionally D = Seldom E = Never 21. 22. 2J. 24. 25. 26. 2728. 29 JO. Jl. J2. JJ. I/hat the IIE,,.L auditor ~HUULD do: Asslirn partlcul'lr t.~1<.-: to ~uborc1lr. ,t~s on th,. Rurllt a:: or--cse .. t.o 11enera1 arP.<\S of rt"s:-on!'.1b111t:, ,. !'lake hls preferences c lesr t.o suoord lna tes on the audit . . . . . . . . A Drive hard when a deadllne api:roaches . A Pall to take necessary action . . . A I/here possible, glve advance noti c e of chaf18eS in the audit . . . . . . . A Encou.ra~e 1~1 t1at.1ve ln subordlnatps o n the audlt . . A Look out for the -cers ona l wt"lfare of su bordina te audlt s taffmec:ibers. . . . . . . A Unll'iterally declde how thl::gs should be d o ne w h en he c o uld ee.s l l :v consult wlth su bard 1 nil t e s on the aud1t . . J... Proml se rewards to su~:r-dlnates on the audlt that he c an't dellver . . . . . . . A Let suoordlnat""s on t!ll" audlt know what ls expected o f them . . . . . . A Assl;-n the least pleasant audit tRsks to the subordlnRtes who fa1l to perform Uj) to hls expectatlons. . . . . A Dlscuss new ldeas wlth subordinates on thP. audlt before puttlng them lnto actlon. A 0btaln the assistance of the audltor char J3ed wlth fin a l aut hority for the eng a5eme nt whenever necessary in ell m1natln" obstacles fac1ng subordinatl'!s on the audl t A "D C D E B C D E B C D E B C D E B C D E B C D E B C D E E C D [ B C D E B C D E :s C D E E C D E E C D E J4. Be easily dissuaded by the cllent when audlt obJectlves are at stake A B C D E 35. In so1 Te e~thusl~s~ a=ong su bo rdinates on t h e au::!lt J... e c D E J6 Take full char~e wner. em er1
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41. 42. 4.J. 4-4. 1 22 .A. .. Alvaya B Often Ce Occasionally D "' Seldom What the ID~ Auditor S H OULD do: ~ake sure that subordinates on the audit know that he ls 1n chArge or the fleld work. ~eedle subordinates for ~rester effort F:1icoura5e un1formity 1n the executlon of audit procedures. Be friendly and approachable 4,5. Schedule the work to be done 46. S k illfully coordinate the neces s ary 1nteract1on of subo r d1natee on the aud1t w1th the cl1ent's e~pl o yees and w1th each other. 47. Requ1re hlgh product1v1ty from all subor d ina t es on the aud1t regardless of ex p erlence. ~ l s u s e bls aut h o r lt y Make pep talks to stlmulate eubordl n a t es on the audlt. .50. G1ve the appropriate a~ount of dlrectlon to subordinates on the audlt. 51. Cr1tlc1ze the work of subordinates on th~ audit in front of others ,52. Be able to wait just so lo ng then blow up. A A A E Never B B B B C C C C D D D D E E E A E C D E A B C D E J.. B C D E A B C D E A B C D :E A B C D E A B C D E A B C D E

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APPENDIX E Ideal Leader Behsv1or (Por:m L) (What You Expect or an Independent Auditor 1n Char~e or Field Work) Aud1t Team Code Number (See D1rect1ons) Purpose or the Quest1onna1re On the following pages 1s a 11st of ltems that ~ay be used to describe the behavior of an aud1tor 1n charge or field work. as you think he should act. Each 1tem descr1bes a speo1f1c k1nd of behav1or. and you must judge whether the behavior 1s desirable or undes1rable. Each 1tem should be considered as a separate descr1pt1on. This 1s not a test of ability or cons1stency in ma.king answers. It s1mply asks you to describe what an 1defll. auditor~ to do in superT1sing the field work of an audit. Confident1al1ty The responses that you provide for this research project are confidential. Only the reBearcher and one me~ber of thr. Graduate Paculty of the Un1vers1ty of nor1da will have access to the completed quest1onna1res. Your n.a.me w111 not be atuched to any of the materials wh1ch you complete. 'The audit te8.lll coding w111 be destroyed as soon as all test materials have been collected. Conseouently. retrac1ng of any quest1onn.a1re to a f1rm. off1ce or ind1v1dual will be 1mposs1ble. Aud1t Team Leader Opi nion Survey All 1n all, how would you judge vour relatlonship th the staff members who were ass1gned to you for the fle!"awork phase of the engagement listed on the cover sheet? (Check One) very good satisfactory adequate unsatisfactory very poo D1rect1ons b. c. d. READ each item. THINK about how frequently the auditor should engage 1n the behavior described by the item. DECIDE w h ether he should always. often. occasionally. seldom. or never act as described by the item. CIRCLE one of the flve letters foll o wiT15 the 1tem to show the an s wer you have selected. Bc,,Often C Occaslonally D Seldoa E Never Eased upon sel e cted 1tems from Leader .Beha vior Deecr1pt1on Questionnalre Porn XII. or1 g1nat ed by staff member 3 of the Oh1o State Leadership Studles and revlsed by the Bur eau or Busi ness Eesear ch. This version deTeloped by M.P. D111away under the guidance of W. M. Pox, Un1Ters1ty of norlda. 123

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124 A = Always B = Often C = Occasionally D = Seldom E Never Vhat the IDEAL Auditor SHOULD do: 1. Treat all subordinates on the aud1~ as his professional collea~es 2. Ant1c1pate problems and plan for them. A B C D E .A.BCDE 3. G1ve asslgn!llents. 1nstructlons. or orders to subordinates or. the aud1 t as necessary A .B C D E 4. Give deserved credlt to his subordlnat~s on the audit wnen deal lni;i: wl th senior col leairues A .B C D E 5. Trust subordinates on the audit to exercise professional j ujgme nt. A B C D E 6. Do 11 ttle thin g s to make it pleasant to be assl.,.!'led to the audit. A B C D E 7. Push to ~et the field work done with a minimum of wasted t1rne and effort. A B C D E B. E,e able to reduce a madhouse to systel'J and order. A B c D E 9. E,e willing to m ake adjustments in the audlt pro~ram to suit lndlvldual subordl !'l ates. A B C D E 10. Put su.,. ~e stlons made by subordlnatr audlt ir.to operation , A B C D E 11. Back down when he ou~ht to stand firm 1n dealing with subordinates on the audlt A B C D E 12, On occaslons when it is practical to do so. explain the reasons for his orders, requests. or instructlons. A B C D E 1), Pun1sh the entire audit teal'J for tr.e poor perform~nce of one or a few subordinates. , A B C D E 14. Ass1.r;n work to suborll.ln!!.tes on the audit that is be.vend tr.eir capabillty, , , A B C D E 15. 1 6 17. lE. i. ee dles s ly call attention to the f ~ ct that he w111 be s~~~1ttln.,. ne rfor mance eva)uat1ons on subordinates f ol lowln ~ the co mp letlon of the au~lt A Acopt an eudlt that ls unrealistic 1n view of the amount of tlme sch e duled for fleld work. A Ha~dle in the audit eff1c1ently. A E==haslze to subordinates on the a~dlt the i mpo rt a nce of aenerally acce~ted audlt1!1f' standards. A 19, Be r eluc tant to allow subordln~tes on the audit any freedo~ of action A 20. Le: so~e subordln~~es on the audlt have authorlty B B B B B C C C C C D D D D D E E E E w~!ch he should kee~ A E C D E

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125 A z: Always B .. Often C = Occaslonally D = Seldom E = Never \lhat the JDE,J. aud1tor ~HeULD do: 21. Ass111:n part1cul11r t : ,=: k" to !'>uborc11r.:1t~s on thP. RUrllt as o;---oseA to JTenerll] arP.I\S of TP.S~ons1b111ty . ,. C D f'. 22. P'.ake h1s preferences cle!ir to subordinates on the aud1t . . . . . . . . . . A B C D E 23. Dr1ve hard when a deadline approaches . . . . A B C D E 24. Pall to take necessary action A B C D E 25. lt'here possible, g1ve advance notice of changes in the audit A B C D E 26. Encourage 1n1tiat1ve in subord 1na t~ s on the aud1t . . A B C D E 27. Look out for the personal wP.lfare of subordinate aud1t staff111e!:lbers. . . . . . . A B C D E 28. Unilaterally dec1de how th l!lgs should be done when he could easl l.v consult wlth su bord 1 n11 te s on the audit . . A B C D E 29. Prom1se rewards to subo,d1na tes on the aud1t that he can t deliver . . . . . . . . . A B C D E JO. Let subord 1na tP.s on thP. audit know what ls e:rpec ted of them . . . . . . . . . A B C D E Jl Ass1gn the least pleasant audlt tasks to the subord1nAtes who ran to perform up to his expectations. . . . . A B C D E J2. Discuss new 1deas with subordinates on thP. audit before putting them into act1on . . . . . A B C D E 33. Obtain the assistance of the auditor charged w1 th f1nal authority for the engagement whenever necessary in I eliminatirur obstacles facing subord 1na te s on the audit. A E C D E I . I 34. Be easily dissuaded by the client when audlt objectives I I are at stake . . . . . . . A B C D E I 35. Inspire enthUSl9.S l!l au::ong subordinates on the audl t. I A B C D E I I 36. Take full char~e when emer'Cencles arlse . . . A B C D E I I 37. Use threats of overt1[1le work as a pun1t1ve lnstruire!""lt I to obtaln the kind or .=erfor'.'lance hr. wan ts. . . . . A B C D E 38. Settle confllcts when they occur amoru:; subordinates on the audit . . . . . . . A E C D E 39. Allow subordinates on the eudlt to tai
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126 ... .A Alwa,. B Of'ten C Occas1onall,. D Seldom E Never Vhat the IDEAL Aud1 tor SHOULD do: 41. !ke sure that su bard 1na te s on the aud1t know that he 1.11 1n charge of the field worlc. . . A B C D E 42. Needle subordinates for greater effort . . J. B C D 4J. Encoura~e un1form1t,. 1n the execution of audlt JII:ocedures . . . . . . . . . . A B C D E 44. lle f'r1endly and app r oachable . . . A B C D E 45. Schedule the work to be done A E C D E 46 Slc1llfully coordinate the necessary 1nteract1on of sllbord.1nates on the audit w1 th the client's e m ployee!!! and wlth each other. . . . . . . A B C D E 47. Require hlgh productlv1ty from all subord1nates on the aud1 t regardlesa of experience. . . B C D E 48. Misuse h1s author1 ty . . . . . . A E C D E 49. JWce pep talks to s t 1mulate subordlnates on the aud1t . . . . . . . . . . A B C D E 50. G1Te the appropriate amount or d1rect1on to subord1nates on the aud1t. . . . . A B C D E 51. Cr1t1c1ze the wor:k of aubord1nates on the aud1t 1n front of others . . . . . . A B C D E 52. Be able to wa1t Just 80 long. then blow up . A B C D E

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? APPENDIX F INSTRUCTIONS : "Jbnt of ltle one"'"" wilh .. horn you~ .... i.~ kat wdl tu or she....-, M ~you__...,.. .or in lhe past. Ya, ,nay er....,. n<>t likit 1hio r.nt _. Oeaitw rhis by pl.ocw ..,_ dwd.m-1< or, scak_ You n-..y ct-,1; M wdl M witn i boa~ ti you lttl II-al rh .. ,...., on ttw ~i., p,opnly dnoibn 11w penon. c, you h.o..c no ba-':s tor n.:,cribing thr po-non on 'dul scalt. dHdt midpo,nL The fa,tt>n you Vo l,om the ol ad, salt 1.-ard t~ itr"1 ;,,tto,~ 1>1.cio~ you r ~d..nan. mort ,,..., lttl ,t,. ~~"" h.os tht Q'-"'lity docraba:I B[ SUR[ TO CHECK VERY SCALE. P~ 6"cr i br yourself on the other cx,py ol this Ion:\ . . ,.,_ .. 2. S.'"'I 3. Sl>ittlul. mran 4. Hr1plu' =~'~ 5 51,_ noo-e-~rprttC 6 T~t.e. naious 7 Alo.-:if, d i s~nt. s,e,41,<-onlned 8 Julo.; : 9 lru s tlu l 10 Honct K r u pu lou1 11. Br,r,ng 12 Stui>born ~11-;11ed 1:1 1,-.. ; 11=llv 0tdrrly ml'ticulou1 14 Ell i c i =t 15 Gloomy drorr-ued 16 frank.. o~n :--: --: ---:--: : --: --:-: --: U npl ~ --: ------: : --: -: --: ---: GoodNlturtd ._ i nd y : --: -: -: --: ----: --: --: Fnnu nt Oos I rvC' l --. -. ---. --. -. --Enr,~ic. i,.,nv-ho --: --: --: --. : -: --: ----Fhl,1a.ed. unwo,rfl'Cf --: --: --: --: : --: --: -: --: APO
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. 128 : --: --: --: : : --: --: --: --: Ea-uly uose1 ~:,.,..out. incautioul :: --: --: ----:----< : : --: --: --: Cauhou,. C-irlul .I ~=-. --:---:-: s,...0 .. 111 :--: --: --: --: :--: --: --: ~ : 1un,d. He.um .. ,. !.{'-:_.ae .t ';,_i,.:;.3..-J_~.,i,:~-; ~~... NOTE : Pou" II" bd. ..., ORCl. your m~I ~d u nu which --,, ...__ clue 10 serious doubt a, ;...,u,c;,.,.1 ~,.,,;.. TLPC Sula -. a,rnpil4IIS bt "Will..,. H. fc-11(,. u,.;_.;ty of f:ida U-y o1 lhe-. ..-ir a-.d thi -'YMI ol Ernel C. Tw,a and RaY"'Oftd E.. Dvi.ul i,,, Tcct.,.._.r R.,._.1 ASO R~-97 t" (. .... \

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I AP P ENDIX G Mana~era Ratinp; of P1eld Work Performance Aud1t Code Nuci ber D1rect1ona: Please complete the following questions with the.best choice among the alternatives. Restrict your evaluations to obaervat1ons and experienc~s from your f1ra alone. Do not compare your employees or the1r work with example~ encountered elsewhere. 1'h1s :i nformation -.111 oe eld 1n confidence. !he fleld atud7 administrator and one member of the Dn1vers1ty of Florida Graduate 1'aculty have sole access to the completed questionnaire. None of th1 ~nforaat1on will be aha.red with any of Jour colleagues, clients, or employees. An7 publ1cat1on or results exclude names or persons and organ1zat1ona. Please note that your perceptions and 1mpress1ons are requested, which need not "be based on tactual data or oerta1nt7.; Indicate 7our choice tor each question by circling the letter represent1ng the answer that 1 nearly oorreot. A S1gn1t1cantly above average tor our firm B Slightly above average tor our f1ra C Average tor our firm D Slightly below average for our E Significantly below average for our firm X No Baals for an answer (not available for Part 4) 1. Supervisor's Evaluat1on (your 1mpress1on) Bow would 7ou rate the success of the auditor in charge of field vork in finish1ng this audit -----:.r w1th1n the deadl1ne? . . . . . . . A B C D E X b. How would you rate the success of the auditor in charge of field work in staying w1thin the planned man-hours budget? . . . . . . . A B C D E X c. Bow would you rate the success of the aud1tor 1n charge of f1eld work in obtain1ng a suitable level of performance in view of the ab1lit7 of the ass1 gned staff members? . . . . . A B C D E X d. How would you rate the aud1tor 1n charge or field work as a teacher or trainer of start members while in the f1eld? . . . . . . A B C D E X How would 7ou rate the success of the auditor in charge or field work in avo1d1ng unnecessary cr1aes? . . . . . . A B C D E X 2. Starr member Satisfaction and Performance (aa you perceive 1 t) What degree or suoceas did the auditor in charge of f1eld work have 1n mainta1n1ng staff members job sat1sfaction? . . . . . . . . A B C D E X b. What degree of enthus1asm dld the member of th1s audit team show while serr1n~ on the audit? A B C D E X c. How successful was th1s audit team in avoiding int er nal str1fe dur1 n,the l!lUd1t7. . . . . . A B C D E X J. Client Sat1sfaction (as you perceive 1 t) a. What kind of impress1on d1d the aud1tor 1n charge or field work leave with th1a cl1~nt? . . . A B C D E X b. What kind of 1mpression did the audit team as a group leave w1 th th1a cl1ent? . . . . . A B C D E X c. How would you describe your r1rms relat1ons th th111 cl1ent prior to the moat recent &ud1t7 . A B C D E X d. How would you describe your firm's relat1ons w1th th1s client at present? . . . . . . . A B C D E X 4. Overall Evaluat1on -(your impreaa1on) Bow would 7ou evaluate the overall efrect1veneaa of th1a te&JI baaed upon your rev1ew of the f1eld work? . . . . . . . . . . . . A B C D E b. How effective was the auditor 1n charge or f1eld work as a leader on th1a particular audit? . A B C D \

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STAFF .MEMBER CODE NUMBER Select any six digit number as your own code number. The only -r estric~ion is that the six digits may not all 'b e ident1 c al or consecutive. Number selected: Place this number on the first pageor eachor tlie" three questionnaires that you are to complete: Leader Behavior Description Questionnaire, Audit Staff Member Opinion Survey, and Ideal Leader Behavior. 2. AUDIT TEAM CODE NUMBER __ This number identifies the audit team and the aud itor in charge of field work on one of your recently com pleted field engagements. Insert this number on the first page of each form in this set. Audit Team Code Number Auditor in Charge Engagement 3. FINAL INSTRUCTIONS Tear off this~ when you have completed the three questionnaire_s ___ You may wish to refer to it to refresh your memor y as to the identity o f the auditor in charge or audit team being described. After your questionnaires have been sumbitted, tou must destroy this~ to insure the confidentiality o this research pro}ect. THAN K YOU VER Y MUCH FOR YOUR ASSISTANCE 130 \

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IThis number identifies the audit team wnic li you supervised on-a recently completed field engagement. Enter this number on each of the attached questionnaires in lieu of your name or where an audit team ~ode number .. s .require4. .. Team Code Number Auditor in Charge 2. FINAL INSTRUCTIONS Separate this~ from the attached materials. You must retain it and aestroy it after completing the ques tionnaires. The researcher has a similar list of code numbers and it, too, will be destroyed following the col lection of the materials, making it impossible to trace the completed questionnaires to any individual or group. THANK YOU VERY MUCH FOR YOUR ASSISTANCE 131 \

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Man~ger's Rating of Field Work Performance Engagement --------------------------Manager ----------------------------Supervisor (Auditor in Charge of Field Work) --------St a ff Members Audit Team Code Number --------------------Enter the audit team code number on the attached rating form. When the rating is completed, remove and destroy this ident ification slip. 132

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PERSONAL DATA EDUCATION WORK EXPERIENCE MILITARY SERVICE BIOGRAPHICAL SKETCH Born: April 21, 1937 Married: 1 child University of California Berkeley B.S.B.A., 1964 UCLA, M.B.A., 1965 University of Florida, Ph.D., 1980 Laventhol & Co., Los Angelos, Ca., 1965-69. Assistant Professor, Fort Lewis College, Durango, Colorado, 1969-71 Assistant Professor, Virginia Tech., 1976-present United Stated Army, Lt., Jan. 1959-May 1962 13 3

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I certify that I have read this study and that in my opinion it conforms co acceptable standards of scholarly presentation and is fully adequate in scope and quality, as a dissertation for the degree of Doctor of Philosophy. Gary Holstrum Associate Professor of Accounting I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the de g ree of Doctor of Philosophy ,,,, / ~ ---,,-/ -----= / ,,,,, __.,,,, ,,,,c L ~x L ----bc --:::_ _:. / / Dou g -A. T Snowball Associat e Professor of Accounting I certify that I have read this stud y and that in my opinion it conforms to acceptable standards of scholarl y presentation and is fully adequate in scope and qualit y, as a dissertation for the de g ree of Doctor of Philosophy. -----,. /'. // ; ;,~ -// / / William M. Fox Professor of Ma na g ement

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I I certif y that I have read this stud y and that in m y opinion it conforms to acceptable standards of scholarly presentation an d is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. Frederic Professor of Economics This dissertation was submitted to the Graduate Faculty of the School of Accounting in the Colle g e of Business Ad ministration and to the Graduate Council, and was accepted as partial fulfillment of the requirements for the degree of Doctor of Philosophy. December 1980 Dean for Graduat e Studies and Research

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\ \ UNIVERSITY OF FLORIDA 1111111111111111111111111111111111111111111111111111111111111111 3 1262 08553 5101

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\ \ UNIVERSITY OF FLORIDA 1111111111111111111111111111111111111111111111111111111111111111 3 1262 08553 5101