The Importance of Emotional Intelligence for Authentic Leadership Style

Maric, Ivana; Kovac, Jelena; Habek, Luka Conference Paper The Importance of Emotional Intelligence for Authentic Leadership Style Provided in Cooperation with: IRENET - Society for Advancing Innovation and Research in Economy, Zagreb Suggested Citation: Maric, Ivana; Kovac, Jelena; Habek, Luka (2018) : The Importance of Emotional Intelligence for Authentic Leadership Style, In: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Split, Croatia, 6-8 September 2018, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb, pp. 413-420 This Version is available at: https://hdl.handle.net/10419/183853 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc/4.0/ 413 ENTRENOVA 6-8, September2018 Split, Croatia The Importance of Emotional Intelligence for Authentic Leadership Style Ivana Maric University of Zagreb, Faculty of Economics and Business, Croatia Jelena Kovac University of Zagreb, Faculty of Economics and Business, Croatia Luka Habek Inpulse Investment Fund, Belgium Abstract The acceleration of the business environment often does not leave individuals sufficient amount of time and space to establish meaningful connections - especially among the manager's population. Although the emphasis is placed on the fact that people are the most valuable resource for organizations, the increasingly present superficial connections among colleagues do not support it. Therefore, in the context of the mentioned changes, it should be emphasized that it is not enough to pay attention only to the development of cognitive knowledge that an individual possesses and for which there are numerous programs for improvement; but rather to focus more on the emotions of individuals. In addition, in today's organizations emotionally intelligent leaders are needed more than ever. Their modus operandi should be the implementation of emotional intelligence model into organizations in an authentic way, creating organizations of the future. The aforementioned authenticity in incorporating an emotional intelligence model can help organizations achieve their full potential. Otherwise, elements of the emotional intelligence model represent nothing more than a manipulation tool for individuals to achieve their own goals, and the progress of the organization is fading away. For the purpose of this paper, managers and employees of various organizations in Croatia were surveyed in order to determine the level of emotional intelligence and its relationship to the style of leadership. Keywords: leadership, leading, authentic leadership, emotional intelligence JEL classification: M10 Introduction The topic of intelligence research and its role in solving problems has always been an interesting topic for psychology researchers; Wechsler (1944) determines it as the overall capacity of an “individual to act purposefully, think rationally and effectively” with his surroundings. Furthermore, Gottfredson (1998) says intelligence is the ability to solve cognitively complex problems; while Gardner (1983) sees it as human intellectual competence, which must include a set of problem-solving skills. Therefore, given the many different definitions of intelligence Sternberg (2000), says 414 ENTRENOVA 6-8, September2018 Split, Croatia it's very likely that there are as many definitions of intelligence as there are experts who define it. Although there is no consensus about the definition of intelligence, there is still a fact that the interest in studying is growing with increasing turbulence and great dynamics in modern business. Thus, in today's world, there is an unavoidable testing of cognitive intelligence in organizations in all segments of the career development of individuals - from initial employment up to potential advancement to the highest levels in the organization. Hence, if we are talking about evaluating different knowledge and skills of individuals, cognitive tests can be of great help. However, today's organizations, where the quality of interpersonal relationships is more emphasised then ever and colleagues are often perceived as members of the extended family; an assessment of knowledge and skills is not enough. Because of all the above, there has emerged the need to assess other characteristics of the individual such as personality traits, ability to recognize and manage emotions, ability to manage changes and ability to resolve conflict situations. Emotional intelligence is an extremely interesting area, which is particularly popular around the world after Goleman (1995) explains it in a new and different way that is, pointing out “that emotional intelligence is twice as important as technical skills, IQ” or other characteristics of the person. He is also the first person to associate emotional intelligence with the function of leadership and a job that some person conducts (Goleman, 2000). Although the area of emotional intelligence has been rather explored and there is a significant number of scientific papers on this topic, it is not the same for the Croatia management science, where this topic is relatively new and there is not much research specifically related to emotional intelligence and areas of management and leadership. Definition and models of emotional intelligence Considering the fact that it is a relatively new area and that extensive research is being conducted, it should be noted that the definition of emotional intelligence is liable to change. In rising number of models of emotional intelligence, it is possible to distinguish three leading models: (1) integrative ability model; (2) mixed model; (3) trait model. According to each model, scientists have developed different methods of measurements for emotional intelligence. Although models have some similarities, authors tend to highlight their specialty. Therefore, the need of developing and shaping new methods of measurements for evaluation of emotional intelligence has found the foundations in that highlighted differences. Integrative ability model. An ability-based model recognizes emotions as useful sources of information that help an individual to understand and settle in the social environment (Salovey et al., 1997). The model also implies that individuals differ in their ability to process and interpret information about the emotions from the environment and the ability to connect such information with the full knowledge. Salovey et al. (1990: p. 189) presented a definition of their emotional intelligence model, as the ability to recognize, monitor and distinguish an individual's own emotions and someone else's emotions. That information should be useful in shaping an individual's thinking and action. In accordance with the new findings of the study, they later supplement the definition and define emotional intelligence as the ability to think about emotions and because of them; in order to improve the thinking process (Salovey et al., 2004: p. 203). Within the Salovey and Mayer models, there are four types of abilities: 415 ENTRENOVA 6-8, September2018 Split, Croatia  Identification of emotions - refers to the ability to detect facial emotions (observation of facial micro expression), emotions in voice, emotions in images and in written documents also including the ability to recognize their own emotions. This ability is also the premise of all the other emotional intelligence capabilities because it enables the individual to continue processing the collected emotional information;  Use of emotions - signifies the ability to modify emotions with the purpose of facilitating cognitive activities such as thinking and solving problems;  Understanding emotions - encompasses the ability to understand emotions and the complex relationships between them. An excellent example of understanding the emotion is the ability to distinguish almost imperceptible differences between them and to recognize the development of emotions over time;  Management of emotions - describes the ability to regulate one's own and other emotions. Mixed model. The mixed model of emotional intelligence was developed by Daniel Goleman and presented in his book of the same name. Emotional intelligence in the simplest terms is defined as the ability to recognize one's own emotions and manage those emotions, the ability to self-indulgence, and to recognize other emotions and relationship management by Goleman (1995: p.3). Throughout the years, the model has been changing its scope following the newest research, but in all the various modifications of competence, emotional intelligence areas are divided into personal and social competences. In its original form in 1995, the model suggested five areas of emotional intelligence: (1) recognizing one's own emotions, (2) managing own emotions, (3) motivating ourselves, (4) recognizing other emotions, and (5) managing relationships. Later, Goleman describes the model more in detail and adds to each area emotional intelligence specific skills. At this stage of development, the model has 25 skills (Goleman, 1998). Furthermore, thanks to the new findings of research (Boyatzis et al., 2000), Goleman synthesizes the model and then proposes 20 skills located in four areas: (1) self-awareness, (2) managing their own emotions, (3) social awareness, and (4) relationships (links) (Cherniss et al., 2001). After significant changes the model's last modification has, the same number area remained the same but the number of skills reduced to only 12, as shown in Table 1. Table 1 Competences in Daniel Goleman’s Model of Emotional Intelligence PERSONAL COMPETENCES SOCIAL COMPETENCES Selfawar enes s Emotional awareness Empathy Organizational awareness Soci al awar enes s Selfmanagement Emotional self-cotrol Adaptability Achievement orientation Positive outlook Influence Relationship management Coach and mentor Conflict management Teamwork Inspirational leadership Source: Goleman et al. (2017) 416 ENTRENOVA 6-8, September2018 Split, Croatia Trait model. In the trait model Petrides proposed the conceptual distinction between a model based on the abilities and models of emotional intelligence based on the characteristics (Petrides et al., 2000). The trait model of emotional intelligence is the constellation of emotional perceptions of one's personality at lower levels of personality (Petrides et al., 2007). Thus, within the emotional intelligence model, the term refers to an individual's understanding of his own emotional abilities. This definition of emotional intelligence includes the dispositions of behaviour and perception of one's own abilities (Petrides et al., 2007). It is measured by selfassessment test as opposed to a skill-based model that refers to real abilities. There are different approaches to emotional intelligence measurement according to the trait model, and a rather large number of instruments is used. The most prominent are the EQ test, the Swinburne Emotional Intelligence Test (SUEIT) and the Schutte emotional intelligence test. No, none of the aforementioned tests, while examining intelligence, abilities or skills, is already a limited measure of emotional intelligence (Petrides et al., 2007). The most widely used and highly researched self-assessment of emotional intelligence is EQ 2.0., Known as Bar-On EQ. There are over 200 studios that used EQ or EQ 2.0 (Bar-On et al., 2000). The Importance of emotional intelligence for the Organizational Excellence and Authentic Leaders Kernis (2003) described authentic leadership as being aware of and trusting one's own feelings. Avolio et al. (2004) defined authentic leaders as genuine, reliable, trustworthy, real, and veritable. Authentic leaders have a deep understanding of “moral and ethical ramifications of their actions” (Avolio et al., 2004). Figure 1 presents the dimensions of an authentic leader. Figure 1 Dimensions of an Authentic Leader Source: George et al. (2007) 417 ENTRENOVA 6-8, September2018 Split, Croatia The combination of those dimensions together depicts a leader who will be needed for organizations of the future. By comparing the emotional intelligence model and authentic leadership, it is possible to notice significant overlapping. It might even be said that the authentic leadership of a sort of prerequisite for a proper and sustainable way of applying the model of emotional intelligence. The above is supported by the fact that unlike IQ, which is largely determined genetically and does not change significantly since childhood, emotional intelligence skills can be learned at any age. However, it should be emphasized that this is not easy to achieve because it requires time and dedication to learn the skills that the emotional intelligence model proposes. Persistence in mastering these skills results in a better understanding of one's own emotional state, which is the first step to managing it. After successfully completing that step, one is ready to recognize, understand, and manage emotions and people in his/her surroundings. That is exactly the way the leaders can be extraordinarily helpful in performing everyday tasks. However, never the less, it should also be pointed out that the application of emotional intelligence competences is not sufficient at the level of one leader within the organization, but as stated by Goleman et al. (2008: p. 83), this should be incorporated into leadership within the whole organization. Then emotional intelligence can be the basis for building organizations with long-term orientation; because even though they look to the future, they have a firm basis in the values at the present. Methodology and Results As previously mentioned in the introduction to the need of this paper, a primary research was conducted. The research was carried out in order to familiarize managers in Croatia with this increasingly important area and to link them with leadership style. As a research tool was used, a questionnaire from "London Leadership Academy" formed according to Daniel Goleman's emotional intelligence model (1995). The questionnaire was translated into Croatian language and adapted for research purposes. The questionnaire was formatted on the Netigate website and distributed electronically. Three types of questions were used in the questionnaire: (1) open type questions, (2) closed type questions, and (3) questions formulated as preconfigured responses in the Likert scale with intensity levels as follows; 1 - not at all, 2 - mostly no, 3 - sometimes, 4 - mostly yes, 5 - completely yes. Empirical research was conducted in the period from July to September 2017, on a sample of 137 participants; of which 48% were managers and 52% were other employees. The average age of all respondents is 33 years, with the largest number of surveyed employees in the age interval of 20 - 29 years, while the largest number of surveyed managers is in age intervals 40 - 49 and 50 - 59 years. The above indicates the natural course of career development of an employee. An exception to this is a small number of managers (7.58%) in the age interval of 20 - 29 years. It is important to emphasize that these are the owners of micro-enterprises that have up to ten employees, and due to the shallow organizational structure of those companies, their owners are also the managers; although very often these are young people who are just at the beginning of their careers. 418 ENTRENOVA 6-8, September2018 Split, Croatia Figure 2 Comparison of the Level of Emotional Intelligence of the Respondent According to the Function Performed in the Organization Where They Work Source: Authors' Ilustration By analysing the results of the research, it is possible to conclude that there is a relatively significant space for progress and development of skills aimed at managing their own emotions, both for employees and managers. In authentic and superficial accession recognizing others' emotions and management services in relations with others, may be one reason the results obtained by research. Turbulence present in the everyday business environment prevents meaningful connection and commitment among employees in the organization. Precisely such an environment, where associates tend to recognize the emotions of others so they can use that knowledge as a competitive advantage in order to manipulate their co-workers, becomes toxic. Thus, emotional intelligence skills that are developed without authenticity represent nothing but a tool to manipulate others in order to achieve one's own goals, and the whole model loses its true meaning. Conclusion The development of technology in the last two decades and the constant development of knowledge have significantly accelerated the way of life, both private and in the organization. This acceleration of the business environment often does not leave individuals plenty of time and space to establish meaningful connections, especially for managers. Although the emphasis is placed on the fact that people are the most valuable resource in organizations, the increasingly present superficial connection does not support it. Therefore, in the context of these changes, it should be emphasized that it is not enough to pay attention only to the cognitive knowledge and predisposition that an individual may have, but rather to focus on the emotions of individuals. 419 ENTRENOVA 6-8, September2018 Split, Croatia Although different authors interpret this increasingly popular model, everyone agrees that emotional intelligence exists and that, unlike cognitive intelligence, it can be further developed. The current model of emotional intelligence according to Goleman envisages four areas with relevant skills but given that, the area that has been explored in recent years is likely to change in the future. In today's organizations, emotionally intelligent leaders are needed, which will instil the emotional intelligence model into the organization in an authentic way, thus creating a future organization. The aforementioned authenticity in incorporating an emotional intelligence model can help organizations achieve their full potential. Otherwise, the emotional intelligence modelling skills are nothing more than a manipulation tool for others to achieve the goals of the individual, and the progress of the organization is gradually disappearing. Cultivating emotional intelligence skills and becoming a more authentic leader go hand-in-hand. Increasingly, authentic leaders are embracing the benefits of high emotional intelligence and striving to implement new habits and skills that can help better their performance as an authentic leader. 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Salovey, P., Mayer, J. D., Caruso, D. (2004), “Emotional Intelligence: Theory, Findings, and Implications“, Psychological Inquiry, Vol. 15, No. 3, pp. 197–215. 18. Salovey, P., Sluyter, D. (1997), Emotional development and emotional intelligence: Implications for educators, Basic Books, New York. 19. Sternberg, R. J. (2000), Handbook of Intelligence, Cambridge University Press, New York. 20. Wechsler, D. (1944), The measurement of adult intelligence, Williams and Wilkins, Baltimore. About the authors Ivana Maric works as the Assistant professor at the Faculty of Economics and Business, University of Zagreb. She graduated at the Faculty of Organization and Informatics, University of Zagreb. She got her PhD at the Faculty of Economics and Business with the topic "Specifics of the function of management of non-profit organization". Her research interests are management, management of non-profit organizations and social entrepreneurship. Author can be contacted at [email protected]. Jelena Kovac works as the External associate at the Faculty of Economics and Business, University of Zagreb; where she graduated with the topic "Relationship between emotional intelligence and leadership style". Her research interests are social innovations, management of non-profit organizations and social entrepreneurship. The author can be contacted at [email protected]. Luka Habek works as the Investment Analyst Intern at the Inpulse Investment Fund. He graduated at the Vlerick Business School – Brussels. His research interests are financial management, corporate finance, capital budgeting and valuation, financial statement analysis, strategic management accounting and control. Author can be contacted at [email protected].