Impact of Employee Decision Making Styles on Organizational Performance: In the Moderating Role of Emotional Intelligence

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From the SelectedWorks of Rn Rshid Rehmn 01 Impct of Employee Decision Mking Styles on Orgniztionl Performnce: In the Moderting Role of Emotionl Intelligence Rn Rshid Rehmn Avilble t: https://works.bepress.com/rshidrehmn/6/

World Applied Sciences Journl 17 (10): 1308-1315, 01 ISSN 1818-495 IDOSI Publictions, 01 Impct of Employee Decision Mking Styles on Orgniztionl Performnce: In the Moderting Role of Emotionl Intelligence 1 Rn Rshid Rehmn, Arfn Khlid nd Mjid Khn 1 Quid-i-Azm School of Mngement Sciences (QASMS), Quid-i-Azm University, Islmbd, Pkistn Deprtment of Mngement Sciences, COMSATS Institute of Informtion Technology, Islmbd, Pkistn Abstrct: The primry im of the present study is to determine the impct of employee decision mking styles on orgniztionl performnce. Study lso investigtes the moderting role of emotionl intelligence on the reltionship mong decision mking styles nd orgniztionl performnce. Dt is collected on rndom smpling bsis from 187 bnking sector employees. Findings of the study determine tht employee s different decision mking styles influence orgniztionl performnce differently. Mjor findings include tht rtionl nd dependent decision mking styles hve high positive impct on orgniztionl performnce while voidnt decision mking styles hs negtive impct on orgniztionl performnce. Study further determines tht emotionl intelligence modertes the reltionship mong decision mking styles nd orgniztionl performnce. Key words: Decision mking % Decision mking styles % Orgniztionl performnce % Emotionl intelligence INTRODUCTION Orgniztion s performnce is mesured considerbly bsed on their finncil chievements nd growth. None of ny orgniztion wnts to hve losses nd low future growth. Thus mngers in the orgniztions hve urge to crft performnce in the line of business opertions. This performnce chievement pproch mkes the benchmrk for the top mngement to recognize their mnger s efforts nd intellectul bilities in mking productive business. In order to get sustinble orgniztionl performnce, mngers hve to mke decisions in frming their orgniztion s pth towrds the chievement of orgniztionl gols. Mngers needed substntil informtion to mke sound business decisions thus; mngers must hve substntil informtion before mking decisions. As the decisions bsed on smll informtion re not effective nd this poor business decision mking re reflected in the orgniztionl performnce. However, mnger s decisions ffect the orgniztion dily [1, ]. Astley nd Ven (1983) [3] rgue tht decision mkers hve significnt influence on firm s performnce. Holt nd Jones (00) [4] found tht emotionl intelligence hs n impct on orgniztionl performnce. Consequently, the focus of this pper is to evlute the employee different decision mking styles nd the impct of these decision styles on orgniztionl performnce. Study lso investigtes the moderting role of emotionl intelligence on the reltionship mong decision mking styles nd orgniztionl performnce. Literture Review: There is n emerging body of knowledge devoted to define the individul decision mking styles. The innovtion of individul decision mking styles nd group decision rules hve significnt inferences for orgniztions [5]. Reserchers hve explored wide rnge of individul decision mking styles [5]. Such s, Scott nd Bruce (1995) [6] define decision mking styles s the lerned hbitul response pttern exhibited by n individul when confronted with decision sitution. Bsed on this definition, Scott nd Bruce (1995) [6] ctegorize individul decision mking style in to five mjor ctegories which dels in turns with rtionl, intuitive, dependent, voidnt nd spontneous decision mking styles. Authors defined decision mking styles s. Corresponding Author: Rn Rshid Rehmn, Quid-i-Azm School of Mngement Sciences (QASMS), Quid-i-Azm University, Islmbd, Pkistn. Tel: +93334899913, E-mil: rshidrehmn9@gmil.com. 1308

World Appl. Sci. J., 17 (10): 1308-1315, 01 Rtionl decision mking style is chrcterized by [16] founds tht top mngement tems mke decisions thorough serch for logicl evlution of lterntives (B) which influence the orgniztionl performnce. Allen, Intuitive decision mking styles is chrcterized by Amson, Dvid & Schweiger (1994) [17] founds tht relince upon hunches nd feelings (c) dependent strtegic decision mking influence orgniztionl decision mking styles is chrcterized by serch for performnce. Irene, Abdul nd Rsheed (1997) [18] further dvice nd direction from others (d) voidnt decision found tht rtionl decision mking hve positive mking style is chrcterize by ttempts to void decision ssocition with orgniztionl performnce. Rehmn mking nd (e) spontneous decisions mking styles is (011) [19] propose theoreticl model nd rgue tht chrcterized by tking sudden nd impulsive decisions. decision mking styles hve n impct on orgniztionl However, n individul decision mking prctices cn performnce. lso be determined in terms of decision rules tht generte lterntives for individul decisions [7]. Reserchers Hypothesis 1: There Is n Impct of Decision Mking found tht individul try to pply specific rules while Styles on Orgniztionl Performnce: Abrhm (000) mking decisions under ny circumstnces [8]. [0] founds tht n emotionlly intelligent individuls Betty (1986) [8] define these decisions rules s n hve high orgniztion commitment, high success rte lterntive tht provide mximum pyoff bsed on ll [1] nd use positive emotions to enhnce their decision future conditions. Author further explined tht n mking cpbility. George (s cited in Grdner nd individul exmine ech lterntive nd select the option Stough, 001) [] rgues tht emotionl intelligence providing highest pyoff. By considering these decision enhnces individul bility to get solutions for the rules, Bum nd Wlley (003) [9] found tht fst strtegic problems nd to tckle issues nd opportunities fcing by decision mking hve n impct on orgniztionl them nd by their orgniztions s well. Individul within performnce in terms of corporte reputtion, finncil this context, re ble to enhnce decision mking performnce, employee commitment nd growth of cpbility through their knowledge nd mngement of orgniztion. Mrch nd Sutton (1997) [10] enlighten emotions nd the leders who re ble to correctly firms performnce s the evlution in terms of profits, recognize emotions re more ble to decide whether the productivity, debt rtios, mrket shre, sles nd stock emotion is ttched to opportunities or problems nd prices. therefore use those emotions in the procedure of decision Bolt nd Yýlmz (009) [11] defined orgniztionl mking. The definition of emotions nd its mesurement performnce on the bsis of seven performnce chnges with the pssge of time. Slovey nd Meyer ctegories. These performnce ctegories include (1990) [3] define emotions s n orgnized response profitbility, orgniztionl effectiveness, continuous which crosses the mny psychologicl subsystems such improvement, productivity, qulity, qulity of work life s psychologicl, experimentl, cognitive nd motivtionl nd socil responsibility. Antony nd Bhttchryy subsystems. At erlier stges, intelligence resercher (010) [1] explined orgniztionl performnce in mesures emotions with respect to vrious subsystems brod sense nd define it s the excellent mesure of such s occsionlly emotions nd socil emotions ssocition of ll performnce vribles which influence (Grdner, 1983) [4] nd consider emotionl intelligence s the orgniztion s functioning. There is wide rnge of prt of socil intelligence (Slovey & Meyer, 1990) [3]. literture vilble on the discussion tht whether to Slovy nd Meyer (1990) [3] re the first who uses term mesure firm performnce subjectively or objectively. emotionl intelligence nd define it s the bility to The core reson behind this phenomenon is tht objective monitor one s own nd other s feelings nd emotions to mesures re used to be more rel but re often restricted discriminte mong them nd to use this informtion to in scope to finncil dt. Subjective mesures on the guide one s thinking nd ctions. Author further other hnd lck concreteness, but equip the resercher elborte the concept of emotionl intelligence by with richer description of the efficiency of n explining it through three dimensions of dptive orgniztion s compred to competitors [13, 14]. bilities; pprisl nd expressing the emotions, utilizing We used subjective mesure in this study for nd regulting the emotions in solving problems. Lter on, orgniztionl performnce becuse objective mesures Golemn (1995) [5] expnded the construct of emotionl re more fine-grined thn quntittive mesures [15]. intelligence by dding specific socil nd communiction Mny reserchers explored the link between decision skills which influence by understnding nd expression of mking nd orgniztionl performnce. Amson (1996) emotions. Slovey nd Myer (1997) [6] give the revised 1309

World Appl. Sci. J., 17 (10): 1308-1315, 01 Fig. 1: Theoreticl Frmework model of emotionl intelligence by focusing more on (00) [31] founds tht emotionl intelligence influence the cognitive components of emotionl intelligence. the employee preferred style of conflict resolution which The revised model composed of four ctegories of contributes towrds the understnding of orgniztionl emotionl intelligence: perception pprisl nd performnce nd its determinnts. expression of emotions; employing nd nlyzing emotionl informtion; emotionl fcilittion of thoughts Hypothesis : Emotionl Intelligence Modertes the nd regultion of emotions for further emotionl growth. Reltionship Between Decision Mking Styles nd Lter on mny resercher defines nd mesures emotionl Orgniztionl Performnce: Bsed on the bove intelligence ccording to the scope of their studies such literture, following frmework s depicted in Figure 1 is s GENOS EI Inventory which is specificlly designed for designed for the present study in which decision mking workplce emotionl intelligence, Br-On emotionl styles serve s independent vrible, orgniztionl quotient inventory which deeply mesures the emotionl performnce s dependent vrible while emotionl intelligence construct (Br-On, 1996) [7] nd Bernet intelligence serve s moderting vrible mong decision (1996) [8] developed the Perception of Affect scle bsed mking styles nd orgniztionl performnce. on the bsis tht being ble to focus rpidly, properly nd effortlessly to feelings is the keystone of emotionl Methodology intelligence.. Reserchers founds tht emotionl Smple: Popultion for the study consists of 151 intelligence lso hve impct on orgniztionl brnches of ll public nd privte limited bnks locted in performnce. Holt nd Jones (00) [4] concluded tht Gujrnwl city of Pkistn. Rndom smpling is used to emotionl intelligence hs n impct on orgniztionl collect dt from bnking sector employees. Dt is performnce. Druskut, Sl, & Mount (006) [9] studied collected by using questionnire method. Respondents the vrious wys through which emotionl intelligence consist of 16% top level mngers, 59% middle level ffects orgniztionl performnce. Authors concluded mngers nd 5% of low level mngers. In ddition to tht emotionl intelligence hve n impct on this, prticipnts include 83% of mles nd 17% femles. performnce, helps in developing interntionl business cpbilities nd ffects mny business outcomes. Melit, Mesure nd Procedure: Decision mking styles of the Cesr, Gerld, Anthony nd Ronld (003) [30] founds employees were ccessed using decision mking styles tht emotionl intelligence trining is n evolutionry questionnire developed by Bss nd Avolio (000) [3]. mens of orgniztionl performnce. Jordn & Troth The originl decision mking style questionnire 1310

World Appl. Sci. J., 17 (10): 1308-1315, 01 composed of 5- items mesuring rtionl, dependent, vribles to determine the liner reltionship mong them. intuitive, voidnt nd spontneous decision mking As we cn see from Tble 1, tht rtionl decision mking styles. Orgniztionl performnce ws ccessed using style, r (185) =. 86, p < 0.01 nd dependent decision 7-items scle which mesure orgniztionl performnce mking style, r (185) =.719, p < 0.05 re high positively in terms of finncil performnce nd growth of correlted with orgniztionl performnce. Similrly, orgniztion. GENOS emotionl intelligence inventory is intuitive nd spontneous decision mking styles re used to mesure emotionl intelligence which is wek positively correlted with orgniztionl specificlly designed for ccessing workplce performnce nd voidnt decision mking styles is wek emotionl intelligence. Emotionl intelligence scle negtively correlted with orgniztionl performnce, r consist of 15-items which mesures the three dimension (185) = -.193, p < 0.05. Emotionl intelligence is highly of emotionl intelligence; emotionl wreness of self, correlted with rtionl nd dependent decision mking emotionl wreness of others nd emotionl resoning. styles, modertely correlted with orgniztionl All the responses re obtined on five point likert scle performnce, r (185) =.566, p < 0.05nd wekly correlted rnges from strongly disgree to strongly gree. A totl with intuitive nd voidnt decision mking styles. of 300 mil or self dministered questionnires re From Tble, regression nlysis is computed to distributed from which only 187 were received bck with study the impct of rtionl decision mking style on the response rte of 6% from the given smple. orgniztionl performnce. Results found tht rtionl decision mking style hs impct on orgniztionl Sttisticl Anlysis: To exmine goodness of mesure, performnce. 67% vrince in orgniztionl performnce responses to items were subjected to fctor nlysis is explined by rtionl decision mking style s $ =.67, using principl component method. Fctor loding is t (185) = 10.63, p< 0.05. In Tble 3, regression nlysis is nlyzed using vrimx rotted component mtrix. clculted between intuitive decision style nd For finl nlysis purpose, the fctor to retin in the finl orgniztionl performnce. Anlysis found tht intuitive scle meet the two criteri; first, the Eigen vlue for ech decision mking style hve no significnt impct on extrcted vrible should be greter thn one nd orgniztionl performnce s $ =.141, t (185) =.139, p > secondly, items must be 0.50 on one fctor nd less thn 0.05. 0.35 in other fctors (Hir et l., 1998). The extrcted Regression nlysis is clculted by considering fctors thn subjected to finl nlysis which includes voidnt decision mking style s independent vrible 1-items scle for decision mking styles with nd orgniztionl performnce s dependent vrible in Cronbch s lph of 0.739, 7-items scle for orgniztionl Tble 4. Results conclude tht voidnt decision mking performnce with lph relibility of 0.813 nd 13-items style hs significnt negtive impct on orgniztionl scle of emotionl intelligence with lph relibility of performnce. About 16% vrince in orgniztionl 0.67. All the scles fulfill the minimum requirement of 0.50 performnce is determined by voidnt decision mking of scle relibility suggested in the literture. [33, 34, 35]. style s )R =.161, p < 0.05. Tble 5 nd 6 presents the results of regression RESULTS nlysis mong dependent decision mking style, spontneous decision mking style nd orgniztionl The reserchers used SPSS 15 for dt entry, performnce. There is n impct of dependent decision descriptive nd sttisticl nlysis nd Structurl mking style on orgniztionl performnce $ =.631, Eqution Modeling (SEM) is used to test the theoreticl t (185) = 11.440, p < 0.05. Similrly, from Tble 6, model in this study. Correltions re clculted for study regression nlysis is computed between spontneous Tble 1: Inter Scle correltion of ll study vribles. Scles 1 3 4 5 6 7 1. Rtionl DMS.90*.518**.074**.361.86**.813. Intuitive DMS.69**.049**.330**.141**.1 3. Dependnt DMS.093.11**.719.773 4. Avoidnt DMS.091 -.193.097** 5. Spontneous DMS.1**.1 6. Orgniztionl Performnce.566 7. Emotionl Intelligence Decision mking styles, *p< 0.05, ** p<0.01 1311

Tble : Regression Anlysis of Rtionl Decision Mking Style nd Orgniztionl Performnce World Appl. Sci. J., 17 (10): 1308-1315, 01 Tble 7: Moderting Effect of Emotionl Intelligence on the Reltionship between Decision Mking Styles nd Orgniztionl Performnce Model b SE $ t p Model b SE $ )R F t p Constnt 1.97 1.18 1.69 Step 1 Constnt 19.43 1.918 9.573.000 OP.40.01.86 10.63.001 OP.588.071.594.57 1.78 13.861.001 R =.696 Step Constnt 19.173.981 7.777.000 F = 91.70 OP.334.149.66.591 109.60 3.896.00 b )R =.673 EI.379.157 3.676.000 Note. The p-vlue given in the tble is the ctul p-vlue, Orgniztionl performnce, *p< 0.05 Tble 3: Regression Anlysis of Intuitive Decision Mking Style nd Orgniztionl Performnce Model b SE $ t p Constnt 5.99 1.178 5.68 OP.13 0.31.141.139.147 R =.14 F = 14.54 )R =.094 Note. The p-vlue given in the tble is the ctul p-vlue, Orgniztionl performnce, *p< 0.05 Tble 4: Regression Anlysis of Avoidnt Decision Mking Style nd Orgniztionl Performnce Model B SE $ t p Constnt 7.773 1.7 6.68 OP -0.10 0.9 0.193 4.96.006 R =.163 F = 6.83 )R =.161 Note. The p-vlue given in the tble is the ctul p-vlue, Orgniztionl performnce, *p< 0.05 Tble 5: Regression Anlysis of Dependnt Decision Mking Style nd Orgniztionl Performnce Model b SE $ t p Constnt.133.679.189 OP.168.031.719 11.440.000 R =.649 F = 8.08 )R =.631 Note. The p-vlue given in the tble is the ctul p-vlue, Orgniztionl performnce, *p< 0.05 Tble 6: Regression Anlysis of Spontneous Decision Mking Style nd Orgniztionl Performnce Model b SE $ t p Constnt 4.553.178 4.33 OP.097.019.1 3.77.037 R =.01 F = 1.74 )R =.191 Note. The p-vlue given in the tble is the ctul p-vlue, Orgniztionl performnce, *p< 0.05 Note. In Step 1, the Predictor vrible is decision mking styles (TLS) while in step, Predictors re decision mking style & emotionl intelligence (EI) nd dependnt vrible is orgniztionl performnce in both b cses., Orgniztionl performnce, Emotionl intelligence, *p<0.05. decision mking style nd orgniztionl performnce. Results of the regression nlysis determine tht spontneous decision mking style lso hs n impct on orgniztionl performnce. A totl of 19% vrince in orgniztionl performnce is explined by spontneous decision mking style, )R =.191, p < 0.05. Study prtilly supports the hypothesis 1. To nlyze H, step-wise regression nlysis is computed by tking decision mking styles s independent vrible, orgniztionl performnce s dependent vrible while emotionl intelligence serve s moderting vrible. The vlue of the mgnitude of the independent vrible hs been incresed due to the presence of moderting vrible [36]. As depicted in Tble 7, from step 1 to step, the vlue of )R =.57, p < 0.05 increse up to )R =.591, p < 0.05 in the presence of moderting vrible indicting tht (R chnge = 0.064) 6% vrince in orgniztionl performnce is defined by emotionl intelligence. The entire results of the nlysis conclude tht emotionl intelligence modertes the reltionship mong decision mking styles nd orgniztionl performnce. Study fully supports the H hypothesis. The structure eqution modeling (SEM) is used to test the theoreticl model. The results of SEM nlysis shows tht the cusl model hs Goodness of Fit Index (GFI) =.91, Adjusted Goodness of Fit Index (AGFI) =.89, Normed Fit Index (NFI) =.90, Comprtive Fit Index (CFI) =.94, Incrementl Fit Index (IFI) =.93, Reltive Fit Index (RFI) =.83, Non-Normed Fit Index (NNFI) =.93, Root Men Squre Residul (RMR) =.09, Root Men Squre (RMESA) =.039 nd chi-squre vlue = 41.39 with significnce p-vlue =.037 concluding tht theoreticl model is good fit s depicted in Figure. The CFI, GFI, AGFI, NFI, NNFI nd IFI vlues of.90 nd Chi-squre significnce greter thn t = 0.05 showing properties of good fit model. 131

World Appl. Sci. J., 17 (10): 1308-1315, 01 Fig. : Csul model summry DISCUSSION AND CONCLUSION The im of this study is to explore the link between decision mking nd orgniztionl performnce. The models further look t the moderting role of emotionl intelligence in predicting this reltionship mong decision mking styles nd emotionl intelligence. Study find out tht employee diverse decision behviors hve different impcts on orgniztionl performnce. Results of the current study re in line with the finding mde by Amson (1996) nd Rehmn (000) tht mngement decisions influence orgniztionl performnce. Present reserch findings conclude tht employee rtionl, dependent nd spontneous decision mking style hve positive impct on orgniztionl performnce where s voidnt decision mking style hve wek negtive impct on orgniztionl performnce. No ssocition is found between intuitive decision mking style nd orgniztionl performnce. The present study is in sequence with the previous literture findings tht rtionl decision mking hve n impct on orgniztionl performnce (Irene, Abdul nd Rsheed, 1997). Mny reserchers rgue tht emotionl intelligence hve n impct of orgniztionl performnce (Druskut, Sl, & Mount, 006; Jordn & Troth 00; Ronld, 003). The current reserch pper further find out tht emotionl intelligence modertes the reltionship mong decision mking styles nd orgniztionl performnce which indictes tht employee hving strong emotionl intelligence mkes strong decisions tht result in high orgniztionl performnce. Findings of the study will be used by the dynmic orgniztions of the present er hving huge workforce to mnge their decision behviors nd for getting desirble orgniztionl performnce. Orgniztions should lso consider the trinings regrding emotionl intelligence to get more equipped nd furnished workforce which contributes towrds greter orgniztionl performnce. REFERENCES 1. Zleznik, A., 1989. Wht mkes leder? Success, June: pp: 4-45.. Certo, S.C., 003. Modern Mngement. Prentice Hll, NJ. 3. Astley, G. nd A. Vn de Ven, 1983. Center perspective nd debtes in orgniztionl theory. Administrtive Science Qurterly, 8: 45-73. 4. Jones, S. nd Holt, 00. Emotionl Intelligence nd Orgniztionl Performnce: Implictions for Performnce Consultnts nd Eductors. Performnce Improvement, 44(10): 15-3. 5. Coscrelli, W.C., J. Burk nd A. Cotter, 1995. HRD nd decision mking styles. Humn Resource Development Qurterly, 6: 383-395. 6. Scott nd Bruce, 1995. Decision mking styles: The development nd ssessment of new mesure. Eductionl nd Psychologicl mesurement, 55: 818-831. 1313

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