RESEARCH HORIZONS

Magazine 2016

International Peer-Reviewed Journal

RESEARCH HORIZONS, VOL. 6 JULY 2016

A STUDY OF EMOTIONAL INTELLIGENCE AND MANAGERIAL

EFFECTIVENESS IN THREE DIFFERENT TYPES OF ORGANIZATIONS

*Keshmira R. Patel

*Satishchandra Kumar.

ABSTRACT

The present study empirically explored the role of emotional intelligence and its components on

managerial effectiveness. It was done on a convenience sample of 200 managers working in different

types of organizations in India. Data were analyzed using descriptive, correlation and regression

analyses. The results of the study indicated that emotional intelligence was significantly and positively

correlated to managerial effectiveness in the composite sample and in the banking and finance sector

but not in the manufacturing and information technology sectors. Further emotional intelligence

significantly predicted managerial effectiveness in the composite sample and the banking and finance

sector but not in the other two sectors. Finally, out of the five components of emotional intelligence,

only interpersonal intelligence and intrapersonal intelligence were related to and predicted managerial

effectiveness in the composite sample and the banking and finance sector.

Key Words : Emotional intelligence and managerial effectiveness

Introduction

In the past two decades, the organizational scenario has changed tremendously due to globalization

and digital technology. It seems that these changes will gradually integrate the isolated nations into the

global economy which will result in major changes in the course of the 21 century, some of which are

already manifested in the emergence of new economy, new employees, new values and new businesses

(

Marin, 2015). The new economy characterized by high growth, low inflation, and high employment

will require employees with multiple skills; who will have to undergo continuous training and work in

teams; and also cope with alienation and stress (Robbins, 2000). Similarly, the managers will also

require various skills in order to be effective. Simply having a high level of cognitive intelligence along

with technical skills and competence may be necessary but not sufficient criteria for an individual’s

success in an organization. Having competence in relationship management and communication skills

will assume utmost importance for success as well. These along with some other competencies are at

the core of the emotional intelligence construct. Thus as Goleman (1998) posits, it is perhaps the

emotional intelligence of managers which is one of the most important factor that determines the

effectiveness of the managers. Emotional Intelligence refers to the ability to monitor one’s own and

other’s feelings and emotions, to discriminate among them, and to use this information to guide one’s

thinking and actions (Salovey and Mayer, 1990). It includes the components of intrapersonal intelligence,

interpersonal intelligence, adaptability, stress management, and general mood. In an environment

characterized by continuous change and turbulence, organizations require managers who are aware

of and who can manage their own emotions as well as the emotions of others; are empathic, flexible,

optimistic and have a high level of stress tolerance. These competencies are a requirement for managers

irrespective of the type of organization (Manufacturing, Banking and Finance, and Information

technology) to which they belong; since all types of organizations face almost the same challenges

such as long working hours, high attrition rate, target based job, job insecurity, and burnout.

Literature Review

Emotional and social intelligence have been found to have a positive impact on employee performance

(

Goleman and Boyatzis, 2008; Emmerling and Boyatzis, 2012). When managers and employees are

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emotionally intelligent, they will be highly motivated and passionate about their work (Emmerling and

Boyatzis, 2012).

Further, emotional intelligence is a crucial factor for developing employee potential, leadership skills,

and teamwork (Chopra and Kanji, 2010).

Studies on emotional intelligence have shown that emotional intelligence predicts success in important

domains like personal and work relationship ( Salovey and Grewal, 2005). It is considered to be

important in organizational factors such as: organizational change (Singh, 2003); leadership (Ashkanasy,

002; Gardner and Stough, 2002; Weymes, 2002); management performance (Slaski and Cartwright,

002); perceiving occupational stress (Nicklaou andTsaousis, 2002; Oginska-Bulik, 2005); and life

satisfaction (Palmer, Donaldson and Stough, 2002). Emotional intelligence is found to be related to

organizational citizenship behaviors ( Kappagado, 2011; Iranzadeh and Amlashi, 2012); and employee

work engagement behavior ( Ravichandran, Arasu, and Kumar, 2011).

Emotional intelligence has also been found to be related to managerial effectiveness (Bar-On and

Orme, 2003; Coetzee and Schaap, 2005) which refers to “the ability of a manager to carry out the

activities required of his position while achieving the results both current and in terms of developing

further potential” ( Gupta, 1996).

In a study by Sinha and Jain (2004), the dimensions of emotional intelligence were found to be related

to personal effectiveness, organizational commitment, reputation effectiveness, general health, trust,

employee turnover, organizational effectiveness and organizational productivity. Similarly, a study by

Yuvaraj and Srivastava (2007) found a positive relationship between emotional intelligence and

managerial innovation as well as between emotional intelligence and managerial effectiveness. In

another study Shipper, Kincaid, Rotondo and Hoffman (2013) found a positive relationship

between managerial effectiveness and emotional intelligence in three different cultures namely, the

United States, United Kingdom, and Malaysia. Jain, Srivastava and Sullivan (2013) found a positive

relationship between both, emotional intelligence and managerial effectiveness as well as between

tolerance of ambiguity and managerial effectiveness. Peter (2013) found that self awareness of the

managers had the greatest impact on the performance of leaders in local government administration

in Nigeria. Besides, the study also found that managing emotions was important for leadership.

Thus emotional intelligence seems to be related to managerial effectiveness. However due to the

paucity of research work in this area (especially studies comparing different types of organizations) in

India, a need to undertake a research survey was felt. Therefore the present study was undertaken to

understand the role of emotional intelligence on managerial effectiveness in the Indian setting. Thus

the objectives of the study were: 1) To empirically explore whether emotional intelligence and the

components of emotional intelligence were correlated to the effectiveness of managers in three different

sectors in India. 2) To investigate whether emotional intelligence and its components predict managerial

effectiveness in these organizations.

Hypotheses:

Based on the above objectives we hypothesized that:

There is a positive and significant relationship between emotional intelligence and managerial

effectiveness in the composite sample as well as the three types of organizations namely, the

manufacturing sector; the finance sector; and the information technology sector in the Indian

setting.

There is a positive and significant relationship between the components of emotional intelligence

(intrapersonal intelligence, interpersonal intelligence, adaptability, stress management, and general

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mood) and managerial effectiveness in the composite sample as well as the three types of

organizations namely, the manufacturing sector; the finance sector; and the information technology

sector in the Indian setting

Emotional intelligence significantly predicts managerial effectiveness in the total sample and the

three types of organizations in the Indian setting.

The components of emotional intelligence (intrapersonal intelligence, interpersonal intelligence,

adaptability, stress management, and general mood) are significant predictors of managerial

effectiveness in the composite sample as well as the three types of organizations namely, the

manufacturing sector; the finance sector; and the information technology sector in the Indian setting.

Method

Sample

A sample of 200 managers working in various organizations in the city of Mumbai. In the sample 139

(

69.5%) were males and 61 (30.5%) were females; 127 (63.5%) were married and 73 (36.5%) were

unmarried; 114 (57%)were graduates, 63 (31.5%) were post graduates, and 23 (11.5%) had other

professional qualifications; 111 (55.5%) were working at the junior management level, 51 (25.5%) were

working at the middle management level, and 38 (19%) were working at the top management level;

and 68 (34%) belonged to the manufacturing sector, 66 (33%) belonged to the banking and finance

sector, and 66 (33%) belonged to the information technology sector. The age of the manager ranged

from 21 years to 59 years, the mean age being 32.79 years and the total experience ranged from 1

year to 37 years, the mean experience being 10.52 years.

Research design

A correlation design was used in the study.

Instruments

Emotional intelligence was measured using the Bar-On EQi developed by Bar-On (2001). The Bar-On

EQi measures emotionally and socially intelligent behavior as reported by respondents (Bar-On, 2001).

It has 133 items; four validity indices; and a sophisticated correction factor rendering scores for-

Intrapersonal intelligence which includes Self-Regard, Emotional Self-Awareness, Assertiveness,

Independence, and Self Actualization; Interpersonal intelligence which includes Empathy, Social

Responsibility, and Interpersonal Relationship; Stress Management which includes Stress Tolerance

and Impulse Control; Adaptability which includes Reality Testing, Flexibility, and Problem Solving; and

General Mood which includes Optimism and Happiness. Out of 133 items, 15 items measure positive

and negative impression and hence these items are not included in the scoring of any of the subscales.

Respondents have to give their ratings on a five point rating scale. Some of the items are reverse

scored. The minimum and maximum scores that can be obtained are 118 and 590 respectively. The

internal consistency coefficients for the EQ-i subscales range from 0.69 to 0.86, with an overall average

internal consistency coefficient of 0.76. The average retest reliability coefficient after one month is 0.85

and after four months is 0.75. The scale has face, content, factor, construct, convergent, divergent,

criterion group, discriminant, and predictive validity.

Gupta’s (1996) Managerial effectiveness questionnaire was used to measure the effectiveness of

managers. The Managerial effectiveness questionnaire consists of 45 items and measures 16 factors

of managerial effectiveness namely, Confidence in subordinates; Communication and task assignment;

Networking; Colleague management; Discipline; Informal Communication; Management of market

environment; Conflict resolution; Integrity and communication; Management and competence;

Motivating; Delegation; Image building; Welfare management; Consultative; and Inspection and

Innovation. Respondents have to give their ratings on a five point rating scale. Some of the items are

reverse scored. The minimum and maximum scores that can be obtained are 45 and 225 respectively.

Both, the test retest reliability, and the split half reliability of the scale is 0.73. Rawat and Kumar (2010)

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in their study found the reliability coefficient (coefficient alpha) of the scale to be 0.84. The scale has

face, content, and, construct validity.

Results

Table 1: Descriptive Statistics for the composite sample and the three sectors

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Data were analyzed using descriptive, correlation and regression analyses. Table1 indicates that both,

the mean emotional intelligence scores as well as the mean managerial effectiveness scores are high

for the composite sample as well as the three types of organizations.

Table 2: Inter-correlations between emotional intelligence, its components and

managerial effectiveness in the composite sample

200, * p<0.05, ** p<0.01, *** p< 0.001

Table 2 shows that emotional intelligence was positively and significantly correlated to managerial

effectiveness (r= 0.23; p< .01) in the composite sample. The interpersonal emotional intelligence

component and the adaptability component were also significantly correlated to managerial

effectiveness.

Table 3: Inter-correlations between emotional intelligence, its components and

managerial effectiveness in the manufacturing sector

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N = 200, * p<0.05, ** p<0.01, *** p< 0.001

Table 3 shows that the correlations between emotional intelligence and managerial effectiveness as

well as between the components of emotional intelligence and managerial effectiveness in the

manufacturing sector were not significant.

Table 4: Inter-correlations between emotional intelligence, its components and

managerial effectiveness in the banking and finance sector

N = 200, * p<0.05, ** p<0.01, *** p< 0.001

Table 4 shows that there were significant positive correlations between emotional intelligence and

managerial effectiveness (r=0.42; p< .01) in the banking and finance sector. The interpersonal

emotional intelligence component (r= 0.42; p< 0.01) and the adaptability component (r=0.33;

p<.01) were also significantly correlated to managerial effectiveness.

Table 5: Inter-correlations between emotional intelligence, its components and

managerial effectiveness in the information technology sector

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N = 200, * p<0.05, ** p<0.01, *** p< 0.001

Table 5 shows that in the information technology sector emotional intelligence and its components

were not significantly correlated to managerial effectiveness.

Table 6: Regression analysis with total managerial effectiveness as criterion variable

in different sectors and in composite sample, with emotional intelligence and

dimensions of emotional intelligence as predictor variables

N=200, * p < 0.05, ** p < 0.01, *** p < 0.001

Table 6 shows that emotional intelligence predicted 5% of managerial effectiveness in the composite

sample (Beta=0.23; p<.01) and 17% of managerial effectiveness in the banking and finance sector

(

Beta=0.41; p<.01). The interpersonal emotional intelligence component (Beta= 0.32; p<.001) and

the intrapersonal emotional intelligence component (B=0.17; p<0.05) together accounted for 12% of

the variance in managerial effectiveness in the composite sample. In the banking and finance sector

emotional intelligence significantly predicted 17% of managerial effectiveness (Beta= 0.41; p< .01).

In the manufacturing sector (Beta= 0.12; ns) and the information technology sector (Beta= 0.06; ns)

emotional intelligence did not significantly predict managerial effectiveness. In the banking and finance

sector the interpersonal emotional intelligence component (Beta=0.37; p<.01) and the intrapersonal

emotional intelligence component (Beta=0.33; p<0.05) significantly predicted managerial effectiveness

and accounted for 27% of the variance in managerial effectiveness.

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Discussion

RESEARCH HORIZONS, VOL. 6 JULY 2016

The present study found evidence for the importance of emotional intelligence in increasing the

effectiveness of managers. The obtained results provide support for hypotheses 1and 3 in the composite

sample and in the banking and finance sector but not in the manufacturing and information technology

sectors indicating that emotional intelligence is positively related to and predicts managerial effectiveness

in the composite sample and in the banking and finance sector. Findings also provide support for

hypothesis2 for the interpersonal and adaptability components of emotional intelligence in the composite

sample and the banking and finance sector indicating that the interpersonal and adaptability components

of emotional intelligence are related to managerial effectiveness in the composite sample and the

banking and finance sector. Further, obtained results provide support for hypothesis 4 for the

interpersonal and intrapersonal components in the composite sample and in the banking and finance

sector indicating that these two components are important predictors of managerial effectiveness.

Thus it can be seen that emotional intelligence and its components play a more important role in the

banking and finance sector as compared to the other two sectors. One reason for this could be that in

the banking and finance sector, managers have to constantly interact with their clients. Customer

satisfaction is of utmost importance in service oriented organizations such as banks and financial

institutions. This is where emotional intelligence skills play a more important role than cognitive or

technical skills. Interpersonal skills and intrapersonal skills both are extremely important when it comes

to customer satisfaction. This is precisely what the results of the study indicate.

The obtained results are consistent with earlier studies which have also found a positive relationship

between emotional intelligence and managerial effectiveness (Yuvaraj and Srivastava, 2007; Sharma,

012; Srivastava and Sullivan, 2013). In this context, Macaleer and Shannon (2002) contend that

having a high amount of emotional intelligence is what distinguishes individual “star performers” from

others. Further, Cooper (1997), posits that emotions if managed properly can affect the employees

trust, commitment, productivity gains, and accomplishments. Emotional intelligence benefits both, the

managers as well as the employees. Emotionally intelligent managers will have a passionate workforce

and hence are likely to get results that are beyond expectations. Diggins (2004) asserts that the best

managers need to possess emotional intelligence to make decisions that are based on a combination

of self-management and relationship skills and an awareness of how their behavior affects others in the

organization. In the contemporary organizations where most managers have a high amount of cognitive

ability, it is the emotional intelligence of the managers that determine whether they will be effective as

managers.

The study has implications for future research and practice. Given the importance of emotional

intelligence, these findings suggest that organizations could consider emotional intelligence as an

important criterion for selecting their managers. Organizations may also invest in training managers

who are already working with the organization in emotional intelligence skills since emotional intelligence

competencies can be acquired through training.

A relatively small sample and use of survey method were the limitations of the study. Future research

could include a larger sample and a 360 degree approach to obtain ratings on both the measures.

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Associate Professor, Dept of Psychology, Mithibai college of Arts, Science and Commerce, JVPD ,

Juhu, Mumbai, 400056. Email : [email protected]

*Associate Professor,University Dept of Applied Psychology, University of Mumbai, Mumbai –

00098

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