Impacts of Resource Alertness and Change Leadership Style on Financial Performance: An Empirical Study

Impacts of Resource Alertness and Change Leadership Style on Financial Performance: An Empirical Study

Ao Zhang, Yong Chen, Xiaobo Xu, Yang Gao, Lan Zhang
Copyright: © 2021 |Pages: 16
DOI: 10.4018/JGIM.2021030103
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The dynamic competition theory emphasizes that executives must have the ability to discover and identify new resources to deal with the external environment change and implement the leadership style change for improving the financial performance. The authors studied the impacts of resource alertness and change leadership style on enterprise financial performance with the perceived competitive tension as the moderator. Data analysis from 208 valid questionnaires indicated that resource alertness and change leadership style have a direct positive impact on financial performance by changing the leadership style. The positive effect of change leadership style on enterprise performance will be strengthened with high perceived competitive tension. Important theoretical and practical implications are discussed. Limitations and future research are presented as well.
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1. Introduction

The different leadership style will affect whether the employees can use resources strategically in the market economy (Covin and Slevin,1991). A good match between proper leadership style and enterprise resources will lead to the improvement of enterprise financial performance. Although more studies have been conducted about information resource alertness in the field of entrepreneurship research, its research content mainly focuses on the antecedents of information resource alertness, there source identification and utilization, and the relationship between information resource alertness and the enterprise’s rapid growth. However, there is a lack of research on the effect of information resource alertness on change leadership style and enterprise growth. We analyzed its influence on the relationship between information resource alertness and organizational change from the adjusting competitive tension perspective. Additionally, we examined how organizational strategic change and traditional enterprise change can be evoked by recognizing and utilizing enterprise resource to improve competitive advantage and organizational performance.

Researchers argued that an organization should pay attention to the competitive dynamics of the market where all enterprises compete in the same market (Chen et al., 1996 and 2007;Chen and Miller,2012). An organization is aware of the possible actions and responses of its competitors and the competitive confrontation between competitors. To move towards organizational goals in a changing external environment, the organization is inevitable to achieve the effective leadership style to strengthen the change effect and promote the financial performance improvement by adopting the management mode. One driving factor causing an organization to compete or fight back is awareness-motivation-capability (AMC).Considered as a trigger action against competitors, the competitive tension is defined as a tension between competitors (Chen et al.,2007). If the competitive tension reaches a certain level, it may be detonated, resulting in confrontational competitive actions and responses among enterprises. Furthermore, the competitive state will change from the original equilibrium confrontation to the dynamic competition. The stronger the competitive tension is, the stronger an organization's intention to adopt competitive antagonism is, and the faster its competitive action is (Chen, 1996). Therefore, under the influence of complex factors, the leadership style will be adjusted to achieve contingency for external competition. Thus, the competitive tension has a significant impact on the change of leadership style. Although scholars have shed lights on the role of competitive tension in the relationship between information resource alertness, change leadership style, and enterprise growth, they mainly focused on the qualitative level only due to lack of the relevant empirical study.

The article is organized as follow: Section 2presents a conceptual model and hypotheses of the relationship between information resource alertness, transformational leadership style, and financial performance. We further explore the boundary conditions that information resource alertness affects the change leadership style. We also discuss the relevant theory of dynamic competition to strengthen the cognition of dynamic competition theory. Section 3 discusses the data and data collection. The next section tests the adjustment of perceived competitive tension between information resource alertness, change leadership style, and financial performance. We further reveal the regulatory role of perceived competitive tension in the process of enterprise growth. Finally, we present contributions, limitations, and future research.

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