Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 ABSRJ 5 (1): 67 ISSN 1855-931X EMPOWERMENT IN THE GREEK PUBLIC SECTOR: EVIDENCE FROM TOP MANAGEMENT EXECUTIVES Athanasios N. Tsirikas, M. Sc., M. Sc., PhD University of Macedonia, Department of Accounting and Finance Greece athanasios.tsirikas@ch.transport.bombardier.com Kleanthis K. Katsaros*1, MIS, MIntS, PhD University of Macedonia, Department of Accounting and Finance Greece kleanthis.katsaros@gmail.com Abstract “Empowerment takes more than a minute…” - K. Blanchard The present paper examines empowerment as a resource based view strategy for the development of Greek public sector. Empowered organizations are expected to become the norm in the postmodern age, to gain commercial advantages and to be in a position to create and maintain a sustainable competitive advantage. However, it is widely believed that traditional command and control structures disempower organizational members, especially in the public sector. Within this context, our research uses the well-known Whetten and Cameron (1995) questionnaire for empowerment on a survey conducted among top management executives serving in four major Greek public sector organizations. Principal component factor analysis within a sample of 165 top-management public sector executives reveals the five empowerment dimensions, namely meaning, self-efficacy, self- determination, trust and personal control. After the discussion of the findings, a number of tactics and policies about the enhancement of executives’ empowerment conclude the paper. Keywords: empowerment, Greece, public sector, top management executives JEL Classification: H83, M12, M54 1 University of Macedonia, Department of Accounting and Finance, Egnatia St. 156, 54006 Thessaloniki, Greece. Tel: (+30)2310891699 & (+41) 796979670 Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 1 INTRODUCTION Workforce empowerment tends to be one of the most important managerial issues in the present decade as it is considered central to an effective strategy development (Whetten & Cameron, 2005). Senge et al., (1999, p.11) by introducing the term “…age of empowerment…” claim that empowering has become a key rhetoric during the last decades of the twentieth century. However, little consensus has been agreed upon its definition (Thomas & Velthouse, 1990). In this respect, empowerment constitutes an end and an internally defined mean of achieving goals and influencing other valued outcomes in many ways (Blanchard et al., 1996). Thus, scientists with different research background use empowerment in a variety of contexts and intentions. Employee empowerment, as a management approach, has been introduced since the 1990’s, in both private and public sector organizations, with the aim to improve performance, responsiveness, and innovation. As far as empowerment in the public sector is concerned, it is argued that the weaknesses of governments’ machinery are not due to lazy or incompetent public employees, but due to the rigid and predetermined governmental rules and regulations that discourage employees’ innovation and creativity (Carroll, 1995; Gore, 1993; Kettl, 1994; Thompson, 2000). Peters (1996, p.51) concludes that in countries where new public management reforms have been undertaken (i.e. United Kingdom, Canada, Australia and France), “…more empowered workers should be willing to work harder, share more ideas with management, and treat their clients more humanely since they are themselves being treated better…”. Within this context, our study is based on Spreitzer’s definition, where empowerment is approached from a psychological perspective as “…an active (ra her than a passive) orientation in which an individual wishes and feels able to shape his or her work role and con ext…”(1995, p.1444). In the first part of the paper we trace empowerment insights out of a literature review. Moreover we examine empowerment as a resource based view strategy for the development of Greek public sector by studying a sample of 165 top- management executives from four major public state organizations. In the second part of the paper we propose a number of tactics and policies about the enhancement of executives’ empowerment, taking into consideration the special characteristics of Greek economic environment. t t 2 TRACING EMPOWERMENT INSIGHTS Empowerment refers to the process of increasing the ability of individuals or groups to make choices and transform those choices into preferred actions and outcomes (Langton & Robbins, 2006). Rappoport (1984) points out that it is easy to define empowerment by its absence rather than defining it in action. The concept, although widely used, can be characterized as highly elusive and vague, as there is little, if no, consensus in its exact definition (Thomas & Velthouse, 1990). This may be due to the fact that the term is used across a great range of disciplines (i.e. psychology, philosophy, sociology, education, economics, community development etc.), each one of them bringing different interpretation. In the management field, emerged two distinct theoretical perspectives, a managerial and a psychological one (Fernandez & Moldogaziev, 2010, p.24). Though completely different approaches, both perspectives suggest that for employees to be empowered and have an ownership mentality, there must be a clear definition of the values and mission of the ABSRJ 5 (1): 68 Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 organization; the organization must help employees gain the relevant skills; employees need to be supported in their decision making and not criticized when they try to do something extraordinary; and employees need to be recognized for their efforts (Langton & Robbins, 2006). The managerial perspective is based to the fact that the key element in the concept of empowerment is power, i.e. the Oxford English Dictionary defines the verb empower as to invest legally or formally with power: to authorize, license. Consequently, the managerial perspective views employee empowerment as a construct that explains how people with power (i.e. managers) in an organization share power, authority, information, and rewards with those who do not have power (personnel) (Conger & Kanungo, 1988; Bowen & Lawler, 1992, 1995; Kanter, 1979) to improve organizational outcomes. In more details, managers are learning how to give up control, and employees are learning how to take responsibility for their work and make appropriate decisions (Langton and Robbins, 2006). This point of view, led many scholars to note that managers should distinguish between being in authority and being an authority (Stewart, 1994). On the other hand, the psychological perspective, introduced in the late 1980’s, considers employee empowerment as a motivational construct increasing task motivation (Thomas & Velthouse, 1990) and fostering feelings of self-efficacy (Conger & Kanungo, 1988). In a more detailed definition, empowerment is asserted to be a process of enhancing feelings of self- efficacy among organisational members through the identification of conditions that foster powerlessness, and through their removal by both formal organizational practices and informal techniques of providing efficacy information (Conger & Kanungo, 1988, p. 474). As stated in Fernandez & Moldogaziev’s study (2011), this motivational process consists of five stages: a) conditions leading to a psychological state of powerlessness, b) the implementation of empowerment strategies and techniques, c) the removal of conditions leading to powerlessness and the transmission of information that enhances self-efficacy, d) a feeling of empowerment as a result of receiving and processing this information, and e) the behavioral effects of empowerment (i.e. greater effort and persistence). In the same line of argument, Thomas & Velthouse (1990) concluded that empowerment is a heightened level of intrinsic task motivation or internalized commitmen to a task. The authors also introduced a model according to which, an employee makes personal assessments of four aspects of a task: impact, competence, meaningfulness, and choice (Fernandez and Moldogaziev, 2010, p.25). Spreitzer (1995, p.1444) examines empowerment as an active (rather than a passive) orien ation in which an individual wishes and feels able to shape his or her work role and context. The author, likewise Conger & Kanungo (1988) and Thomas & Velthouse (1990), also considers empowerment as a motivational construct and acknowledges four procedures: meaning, competence, self-determination, and impact. Another definition framed by Carlzon (1987) suggests that empowerment is freeing someone from rigorous control by instructions, policies and orders, and giving tha person freedom to take responsibility for his\her ideas decisions, and actions. According to Johnson (1993, p.32) empowerment is the realization and actualization of potential and opportunity just waiting to be unleashed, while other scholars see empowerment as the way of persuading employees to be fully responsible for their own job satisfaction (Senge et al., 1999). Finally, another worth mentioning attempt in defining the field of employee empowerment is that of Bowen & Lawler (1992, 1995) who defined empowerment as an approach to service delivery, unveiling four determinants: information, rewards, knowledge, and power. Although Bowen and Lawler have pointed out the role of power in the process of empowerment, they emphasized that programs focused only on power tend to be insufficient for realizing the t t t , ABSRJ 5 (1): 69 Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 benefits of empowerment. Finally, the psychological perspective considers employee empowerment as a humanistic device to improve the quality of working life for ordinary employees (Denham Lincoln et al., 2002, p.271). Within this context, Quinn & Spreitzer (1997), in their research on the characteristics of empowered people (through both in-depth interviews and survey analysis), found four characteristics that most empowered people have in common, a) a sense of self- determination (this means that they are free to choose how to do their work; they are not micromanaged), b) a sense of meaning (they feel that their work is important to them; they care about what they are doing), c) a sense of competence (this means that they are confident about their ability to do their work well; they know they can perform), and d) a sense of impact (this means that people believe they can have influence on their work unit; others listen to their ideas). If organizations adopt the management process of employees’ empowerment they can achieve many effective outcomes. Numerous studies have shown that empowerment may improve organizational effectiveness and productivity (Kirkman & Rosen, 1999; Lawler et al., 1992, 1995; Nielsen & Pedersen, 2003; Spreitzer, 1995); promote the innovation of the personnel (Spreitzer, 1995); reinforce employees’ job satisfaction (Kirkman & Rosen, 1999; Lawler et al., 1992, 1995) along with organizational commitment (Guthrie, 2001; Kirkman & Rosen, 1999; Lawler et al., 1992, 1995) and job involvement (Coye & Belohlav, 1995). According to Bowen & Lawler (1992), a benefit of empowerment is that employees will feel better about their jobs and themselves; and this will result to reduced turnover, less absenteeism, and fewer union organizing drives. Within this context, Zemke & Schaaf, (1989), noted that empowerment is a common theme running through many of the most effective service businesses, such as American Airlines, Marriott, American Express, and Federal Express. However, the implementation of empowerment policies may also entail some disadvantages, since empowerment might impose extra financial and production costs on organizations (Bowen & Lawler, 1995). Further, the paper suggests that a number of problems can arise when organizations decide they want to empower employees: a) some managers do not want empowered employees, because this can take away some of their own base of power, b) some employees have little or no interest in being empowered, and c) empowerment does not work the same way in every workplace. 3 AIM AND METHODOLOGY The aim of the present study was firstly, to investigate public sector top-management executives’ empowerment and, secondly, to propose a number of practices and policies regarding the effective management of empowerment in the public sector field. The research was conducted in four major Greek public sector organizations, in close cooperation with their administrations and the University of Macedonia, the second semester of 2011. The four organizations operate in the fields of electricity (38% of the sample), telecommunications (29% of the sample), public fixed-route transportations (24% of the sample) and water supply (9% of the sample) respectively. Overall, these organizations employ more than 48.000 people in Greece and are considered as the “Achilles' heel” of the local economic environment. We chose to examine their top-management executives because on the one hand, they are acknowledged as firms’ major decision makers (Calori et ABSRJ 5 (1): 70 Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 al., 1994) and on the other hand, their personal characteristics affect strategic decision processes (Peterson et al., 2003) and strategic actions that have implications for firm performance (Nadkarni & Narayanan, 2007). In more detail, their human resources departments proposed 353 top-management executives to participate in the research as key informants (i.e. in charge of or involved with their organizations’ strategic management implementation). Overall, a total of 165 top- management executives replied to the structured questionnaire (74% male and 26% female; response rate 46.74%). The first month we organized a relevant workshop to explain the rationale and significance of the research, along with its goals, supporting objectives and expected results. The next month, we conducted a pilot test to examine the research functionality. Consequently, we send a presentation of our research to all top-management executives along with guidelines for the questionnaire. All through the research period, we provided full support (i.e. personal meetings, phone or e-mail) to the participants. Table 1 summarizes the demographic characteristics of the participants in our research. Table 1: Demographic characteristics of the sample Age Working Experience (years) N 165 165 Mean 49,02 23,11 Median 50,00 23,00 Std. Deviation 4,725 4,328 Variance 22,329 18,732 Minimum 38 13 Maximum 58 33 Frequency Percent Men 110 66,7 Women 55 33,3 Gender Total 165 100,0 Frequency Percent BSc 53 32,1 MSc 87 52,7 PhD 25 15,2 Education Total 165 100,0 Regarding the measurement of empowerment, we used the well known questionnaire for empowerment developed by Whetten and Cameron (1995). The questionnaire consists of four empowerment dimensions suggested by Spreitzer’s (1995) empirical study and another one suggested by Mishra (1992). Thus, it captures five dimensions of empowerment, namely self-efficacy, self-de ermination, personal con rol meaning and trust. In more detail: a) Sel efficacy (competence), which suggests that employees possess a sense of confidence as well as a personal mastery regarding their capabilities; b) Self-determination (choice), which suggests that employees feel free to initiate tasks, make independent decisions and try out their ideas; c) Personal Control (impact), which suggests that employees believe that they t t , f- ABSRJ 5 (1): 71 Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 have the ability to cause a change or produce an outcome in the desired direction, despite the obstacles their external environment, imposes on them, d) Meaning (value), which suggests that employees value the purpose, the goals, and the mission of their work. Hence, they are committed, involved, excited and persistent in chasing preferred goals, e) Trust (security), which suggests that employees possess a sense of security within their job environment. 4 RESULTS Principal component factor analysis revealed five dimensions that characterize Greek top- management executives’ empowerment. The five dimensions have eigenvalues greater than 1 and explain 66.57% of total variance. In more detail: 1) Trust (F1, variance 16.04%): employees want a cooperative, honest and common understanding environment, where they feel confident towards a fair and equal treatment. 2) Personal control (F2, variance 13.59%): employees believe they can make a difference, have an impact, and achieve a desired result. 3) Self-determination (F3, variance 13.35%): employees experience freedom, discretion, and choice. 4) Self-efficacy (F4, variance 12.02%): employees feel capable, confident, and competent about their job. 5) Meaning (F5, variance 11.57%): employees sense the value, the purpose and the mission of the activities in which they are engaged. High reliability also characterizes the five factors. The Crobach coefficient alpha is 0,91 for the trust factor, 0,82 for the personal factor, 0,81 for the self-determination factor, 0,71 for the self-efficacy factor, and 0,75 for the meaning factor respectively. Mean values for each factor indicate that top-management executives gave greater score to trust (mean & SD=6.29 ± .65), self- efficacy (mean & SD=5.86 ± .79) and personal control (mean & SD=5.23 ± .73) than to self-determination (mean & SD =3,17 ± .78) and meaning (mean & SD=1.89 ± .69). Table 1 summarizes the results. ABSRJ 5 (1): 72 Advances in Business-Related Scientific Research Journal (ABSRJ) Volume 5 (2014), Number 1 Table 2: Empowerment Factor analysis results Factors Questions Trust Personal control Self-determination Self-efficacy Meaning 5 .95 15 .87 10 .86 20 .84 4 .92 9 .82 14 .74 19 .73 2 .92 17 .79 12 .78 7 .75 3 .91 8 .87 18 .67 13 .53 1 .83 16 .75 6 .73 11 .69 Eigenvalue 3.21 2.72 2.67 2.40 2.31 Variance (%) 16.04 13.59 13.35 12.02 11.57 Cronbach a .91 .82 .81 .71 .75 Mean & SD 6.29 ± .65 5.23 ± .73 3.17 ± .78 5.86 ± .79 1.89 ± .69 Finally, the correlations among the five factors that capture the dimensions of empowerment in the Greek public sector are in general low degree (0.017