Leadership and Effectiveness during the Financial Crisis - A Content Analysis of Letters to Shareholders

Josef Scheuerlein

Doctoral thesis

Abstract:

The communication of Chief Executive Officers (CEOs) and, more broadly, leaders, is an essential part of the leadership process. An increasing number of researchers started to investigate leadership effectiveness within the context of language use. In order to gain a better understanding of what constitutes to an effective leader, I conducted three separated studies with three different aims. Study 1 examines whether the language use of 104 CEOs from major U.S. companies changes in times of the Financial Crisis (years 2006–11) – and what these linguistic changes can tell us about their leadership effectiveness. Study 2 and 3 represent an important at-tempt to explore some of the rhetorical aspects of effective leadership. Study 2 in-vestigates linguistic differences between effective and non-effective CEOs in eco-nomical prosperous times (years 2006–07) – using language and company per-formance as predictor variables. Study 3 analyses possible language differences between effective and non-effective CEOs in times of a severe economical crisis, namely during the height of the Financial Crisis (years 2008–09) – further using language and company performance as predicting variables. CEOs word usage is assessed within 594 Letters to Shareholders, using the computerized text analysis software Linguistic Inquiry and Word Count 2015 (LIWC2015). Effectiveness is measured via the linguistic markers of a) first person singular pronouns, b) first person plural pronouns, c) emotionality -, d) present achievement -, e) visionary -, f) risk -, g) power -, and h) present positive work - words. The results revealed signifi-cant changes of first person plural pronouns, emotionality, present achievement, pre-sent risk, and present positive work – words in times of the Financial Crisis. Fur-thermore, non-effective CEOs use significant more emotionality words than effec-tive CEOs in economical prosperous times. Lastly, the limitations and issues with generalizations are recognized and discussed for applications and future direc-tions.This dissertation points to the power of language as a naturalistic and unobtrusive tool to examine distinct aspects of the leadership and effectiveness phenomenon. Furthermore, the findings show that the application of Content Analysis has many advantages over non-language based methods and the present studies highlight the crucial role which communication plays in effective leadership. Further, the analysis of language can be utilized to predict future leaders, produce feedback and facilitate interventions and directions that can be highly beneficial for individuals, teams and companies.

Abstract:

The communication of Chief Executive Officers (CEOs) and, more broadly, leaders, is an essential part of the leadership process. An increasing number of researchers started to investigate leadership effectiveness within the context of language use. In order to gain a better understanding of what constitutes to an effective leader, I conducted three separated studies with three different aims. Study 1 examines whether the language use of 104 CEOs from major U.S. companies changes in times of the Financial Crisis (years 2006–11) – and what these linguistic changes can tell us about their leadership effectiveness. Study 2 and 3 represent an important at-tempt to explore some of the rhetorical aspects of effective leadership. Study 2 in-vestigates linguistic differences between effective and non-effective CEOs in eco-nomical prosperous times (years 2006–07) – using language and company per-formance as predictor variables. Study 3 analyses possible language differences between effective and non-effective CEOs in times of a severe economical crisis, namely during the height of the Financial Crisis (years 2008–09) – further using language and company performance as predicting variables. CEOs word usage is assessed within 594 Letters to Shareholders, using the computerized text analysis software Linguistic Inquiry and Word Count 2015 (LIWC2015). Effectiveness is measured via the linguistic markers of a) first person singular pronouns, b) first person plural pronouns, c) emotionality -, d) present achievement -, e) visionary -, f) risk -, g) power -, and h) present positive work - words. The results revealed signifi-cant changes of first person plural pronouns, emotionality, present achievement, pre-sent risk, and present positive work – words in times of the Financial Crisis. Fur-thermore, non-effective CEOs use significant more emotionality words than effec-tive CEOs in economical prosperous times. Lastly, the limitations and issues with generalizations are recognized and discussed for applications and future direc-tions.This dissertation points to the power of language as a naturalistic and unobtrusive tool to examine distinct aspects of the leadership and effectiveness phenomenon. Furthermore, the findings show that the application of Content Analysis has many advantages over non-language based methods and the present studies highlight the crucial role which communication plays in effective leadership. Further, the analysis of language can be utilized to predict future leaders, produce feedback and facilitate interventions and directions that can be highly beneficial for individuals, teams and companies.

Keywords

effective leadership, quantitative content analysis, financial crisis

Keywords

effective leadership, quantitative content analysis, financial crisis

Language used: English

Date on which the thesis was submitted / produced: 15. 7. 2019

Thesis defence

• Supervisor: doc. Ing. Helena Chládková, Ph.D.
• Reader: Ivana Tichá, prof. Ing., Ph.D., Martina Rašticová, doc. PhDr., Radovan Savov, externi

Mendel University in Brno

Faculty of Business and Economics

Doctoral programme / field:
Economics and Management / Business Management and Economics