Leadership models in European retail industry

Leadership models and management have always been up-to-date in retail enterprises in Europe and have a high level of significance. This paper shows the seven most popular leadership models with their characteristics and details. Moreover further leadership models and theories are presented. The research questions are: Which of these seven main approaches are the most appropriate theories for the retail industry? Or is it not possible to find a final answer which applies generally? Furthermore it is shown which kind of models are up-to-date and what types of classical leadership models still have been used successfully, partially with adaptations. Hereby, during the discussion of results, some possible ways are shown, where the world of leadership models in the European retail trade could move.


Introduction (First-level heading, Times New Roman 12pt, Bold)
The European Retail Branch is one of the largest economic sectors of the EU-28.This results from earned turnovers of over 2.4 trillion euro p.a. and a number of employees of approximately 17 million.Furthermore, thinking of food and textiles, retail is certainly necessary for the distribution of 507 million people.Hereby the range runs from the vitally important until luxury and the adornment of life.The domestic market, created by the EU-28 countries, is measured in terms of BIP (GDP) the largest single market in the world.Five of the ten largest EU-28 retailers are German enterprises.In the TOP 10 worldwide Germany is represented with three companies.In this situation the authors took the advantage to use a direct access to the first and second level of the large retail trade companies.For the first time this probably enables a survey among top deciders of the leadership models in their particular enterprises.For comparison, besides the academic discussion, large and very large retail companies, all of them international and always operating in several European countries (a significant quantity of these is operating globally) were utilized.Hereby the company structure, stock company or other types had no significance.Whereas it is to state the fact that the majority of the large European retail trader of all branches either directly or indirectly are dominated by family entrepreneurs majoritarian since their founding, often over decades.In contrast to other industries a rather unusual situation.This particular owner situation has also influence on the human leadership, company's culture and values of an enterprise.
In this work a comparison of the leadership models in the European retail trade is made and described, how these 17 million employees are led by the respective managers.Hereby different kinds of models are described, compared and analyzed in an expert questionnaire with regard to their positive suitability and distribution.Thereby it can be mentioned in this introduction yet that without anticipating the research result, a "one size fits all" leadership model is difficult to identify.In this work the leadership models of all relevant branches of retail trade like food, textile, DIY, drugstore, furniture and interior design, shoes and leisure are compared and described.So conclusions can be drawn regarding the theoretical state of research and the implementation in companies.However one circumstance is obvious at all current studies, developments of models and all discussions: the human leadership plays an outstanding role for a long-term business success.But how to develop and create practical new leadership models?This discussion has been continued for decades and with no end in sight.A proverb in trade says <Handel ist Wandel> (trade is change).A similar thing happens with leadership models, whereas not few constants are available and maintained, especially considering the background of a fast and comprehensive modified working and customer environment.The contribution of this work should give a current state of the situation and also a first outlook for the future.
We also contribute to the growing literature on CEO style.Several studies find evidence of managerial fixed effects on a variety of corporate outcomes (Weisbach, 1995;Chevalier & Ellison, 1999;Bertrand & Schoar, 2003;Bennedsen et al., 2006;Frank & Goyal, 2007).We address a more focused questions, asking which CEO style is most commonly used in European retail industry and which is the most suitable one.

Literature review
Leadership is generally described as an interpersonal process in which a leader influences followers.In most definitions, the basic elements of leadership usually include a leader, a follower, and their relational interactions (Dansereau et al., 2013).Recent research has expanded the original theories (Bird, 1940;Mann, 1959;Stogdill, 1950) by placing greater emphasis on how and why followers are willing to be influenced by their leaders (e.g., Podsakoff, et al., 1990;Rousseau et al., 1998;Van Knippenberg et al., 2004).One factor that seems to influence the leader-follower relationship and is relatively universal to leadership theories is trust (Dirks & Ferrin, 2002).Another important factor usually connected with leadership is ethics (Bauman, 2013).Including discussions of ethics and morality when developing a leadership theory, however, is usually unquestioned.What leadership research must do is seek to understand the values behind moral integrity and leadership without moving to a value-free social science (Ciulla, 2004).Linking leadership with morality is a consistent theme in modern leadership theories.An excellent overview of leadership ethics and leadership theories is provided by Brown and Trevino (2006).Theory and research concerning leadership, especially in the organizational context, suggest that leadership is an important factor that may affect work team processes and results (Chen & Kanfer, 2006;Kozlowski & Ilgen, 2006;Mathieu et al., 2008;Morgeson et al,, 2010;Randall et al., 2011).Therefore, the leadership training becomes a necessity (Santos et al., 2015).
The literature on the topic leadership models is very extensive in general, in many aspects controversial and it tries to connect the mega trends in the future with a success-promising leadership ideology.Therefore leadership faces the always same old and above all new challenges, because the mega trends influence the world of leadership models (Ernste et al., 2014).The social megatrends of the today's world are demographic change, globalization, individualization and structural change and technology.In addition to these mega-trends, the developments concerning leading people in general have to be expounded.So, the intelligence and power of intuition is emphasized actually more and more strongly, this also in connection with the term of company culture.Therefore the managers, and hereby the real leaders are meant, determine the silent rules in a company.If these managers want to lead rather formally or integratively, etc. this reflects intuitively again.These rules, independently of the official leadership models, help employees to feel quickly familiar with different kinds of company's cultures (Gigerenzer, 2008).
In the paper for the retail trade relevant actual leadership models are compared and analysed (table 1).

Data
The method of questioning was selected for the collection of statistical data as well as data referring the different kinds of leadership models in order to be able to find out the preferences and opinions of the questioned persons.In the survey 25 experts were asked.According to a research for this work, it is the first time that such a large number of top managers of European retail trade were ready for a survey about leadership models.These 25 experts managed in their professional current situation or their carrier numerous middle-and large retail companies or concerns or even belong as a participant to their company.The led companies come from all retail branches like food, furniture, shoes, textile, interior design, ware houses, drug stores, construction markets, office trader, garden center and beverage markets.
All business types in retail trade like full-line supplier, discounter and specialist supplier were included.All experts work or worked for international European companies.The companies always operate in several countries of the EU, some in more than 20 countries.Also all company types are represented, from the limited company, the stock company, to the joint partnerships as well as mixed forms as the limited by shares.
The managed companies have a turnover in total of >100 billion euros p.a. and occupy more than 400.000 employees.In European retail trade majoritarian from three countries the large systems were developed, from France and UK, but mostly from the German speaking area (DACH-region), especially discounter of all assortments.Mainly entrepreneurs and top managers of the DACH-region get a chance to speak in the expert's questionnaire.This is due to the market importance of trade companies from the DACH-region for Europe and the direct personal access to this group of people, what was the basic condition to be able to make this survey.From the top 100 retailers in Germany in 2013, 25 companies are included in this survey.Referring to the top ten, seven are included.Furthermore we would like to point out that three from the worldwide ten largest food retailers were included in our survey for the European section.These companies also operate internationally in Europe, without exception.
Regarding this survey it is particularly necessary to point out that six from the 25 surveyed persons are real company founders, majority shareholders or persons who enjoy a similar status like an entrepreneur, due to their development work in their respective companies and their status within their families, enterprises and foundations.All other surveyed experts are to be found in the executive board or managing board, thus in the first management and leadership level respectively the first level of the entire HR segment.Some of them are or were members of further advisory boards of retail companies.
The large majority of the middle management or even the lower management or employees and workers in retail trade were not explicitly asked in this survey.Certainly, a large number of questionaries' could have been evaluated statistically.But, by asking the top management and the owner level, the strategic background of leadership models and theories could rather be examined and this always top-down, regarded from the peak.Also interesting hereby is how far an implementation is technically realized and really successfully implemented in reality.

Methods
The programs Statistical Package of the Social Sciences 22 (SPSS 22) and Microsoft Excel 2007 were used for the input, processing of the data, as well as statistical evaluation of the collected data.Various statistical procedures were used for the examination of the derived hypotheses.On the one hand the chi-squared test for independency was used for the mathematical response of the individual questioning, in other cases the linear single regression with a categorical predictor variable.The choice of the particular procedure is adapted respectively to the optimally possible scale level, which was possible according to the available data.In the case of too small survey samples regarding some questions, it was decided not to calculate these with SPSS.However the results were analyzed descriptively and displayed graphically.
For all calculations exclusively two-side test methods were made, as the available hypotheses were formulated undirected.The small survey sample size complicated the achievement of the significance level; at the same time the survey sample size isrelatively considerednot all that small, as there is only a very limited number of top managers available in the area of European retail trade.

Prominence of the Leadership Models
Referring to question number seven, the first substantive question, a matching with the analysis of the literature review regarding the topic of the prominence of the seven leadership models should be done by means of the expert's questionnaire  It is worth mentioning that a number of experts added the following: The <Anthroposophic Approach>, as practiced by the drug store operator dm or the national LEH operator Tegut with its headquarter in Fulda/Germany, gains more and more followers, in particular in the increasing market segment BIO-LEH.Experts stated several times that the particular leadership style which corresponded to the development status of the organization, particularly of the employees, would be realized.Additionally they acknowledged positive leadership (power orientated leadership) as well as the styles authoritarian and patriarchy.

Practibility of the Leadership Models
The experts rate the practicability of <Harzburger Model> as highest, closely followed by <Situational Leadership Model> and <GRID Model>, directly behind are <New Leadership Model> and finally <St.Gallen Model> and <No Leadership Model>.At <Others> anthroposophical, authoritarian and patriarchy style were mentioned as before.This is further illustrated in the following table 3. The special emphasis of the practicability of the <Harzburger Model> certainly also lies in its long-term and wide spread implementation.It shows the contrast between the Top Management/owner level and the level of division managers.The division manager considers <New Leadership Model> as superior practicable and <No Leadership Model> as rather impractical.Here it seems to be more obvious which models are seen more or less practicable.Especially in the largest companies with more than 5000 employees, the <Situational Leadership Model> and the <New Leadership Model> stands for practicability and the <No Leadership Model> is not preferred at this point.
Also the age obviously plays a larger role referring to the evaluation of practicability.So the younger experts below the age of 49 consider the <Situational Leadership Model> and the <New Leadership Model> more suitable.However the manager older than 49 has a greater faith in the implementation quality of <GRID Model> than of <Harzburger Model>.This also depends on the respective life and work experience.Source: own processing  In the literature review there has already been mentioned the fact of the frequently occurring mixed forms.This is due to the fact that most of the examined enterprises act in different geographies associated with large cultural differences, as for example Scandinavia and Eastern Europe.This will be considered by the companies, despite or because of an international strategy, by means of adaptions on the respective leading culture of the countries.

The Most Frequently Used Leadership Models in the European Retail Trade
Table 5 deals with the questions about the reasons for the high, low, or non-implementation of the various leadership models.The top managers rank <Situational Management Model> on first position and <St.Gallen Model> has not been mentioned.Managers, with the age older than 49, show an almost equal response behaviour.<Situational Model> at front place, however equally followed by <Harzburger Model> and <No Leadership Model>, again no mention of <St.Gallen Model>.In middle size companies up to 5000 employees we find a relatively uniform distribution, only without <New Leadership Model> and <St.Gallen Model>.In those companies with more than 5000 employees all models, except <St.Gallen Model>, are used.<Situational Model> and <Harzburger Model> are ranked on top.Referring to question concerning the frequency of the use of the seven leadership models a contradiction becomes obvious.Within the scientific discussion and referring to the prominence in the questionnaire the <St.Gallen Model> takes an established place.In the operational praxis none of the top managers sees relevant reasons for an effective use of this model.This could be related to the fact that the <St.Gallen Leadership Model> is seen as too complex in retail trade and a continuous implementation is described as elaborating.In the Top management of European Retail trade <St.Gallen Model> is well-known, but a significant implementation in enterprises is neither existing nor probable in future.

Further results
Referring to the personal preferences of the success promising future leadership, following models were added: <Situational Leadership Model>, if it is seen sufficiently broad, including the different cultures in the individual countries and the mixed form <Situational Model -New Leadership Model>.The General Manager clearly prefers the mixed form.Long-term top Managers rely on <Situational Model> and (surprising) <GRID Model>.The experienced manager with 10-20 years of experience builds on a mixed form, <New Leadership Model>, others and <GRID Model> as well as <Harzburger Model>.
Referring to the question regarding the best chances for success in the future it is clearly stated by the very international traders with more than eight countries that the <New Leadership Model> is favored, followed by the <Situational Leadership Model> at the same level with the mixed forms.Obviously in case of great international scope the well-known and traditional leadership models <Harzburger Model> and <GRID Model> are left behind.

Discussion
In the article the seven most well-known and, without the <St.Gallen Model>, the most common leadership models in the European retail trade were described and compared in their individual parts.In this context the three already long existing and researched approaches, <Harzburger Model>, <GRID Model> and <St.Gallen Model>, were viewed regarding their characteristics and their practical implementation.The clear result hereby is that <Harzburger Model> is still used in different adaptions and after modernizations, just as the <GRID Model>, rarer, but still with a high importance in retail.However the third and well-known model of F. Malik respectively the University of St. Gallen, has a surprising high prominence and in relation to this a very low range of implementation, at least in European retail trade.The delimitation to the two classical models, <Harzburger Model> and <GRID Model>, which were and are mainly used in European trade, clearly indicates that once again the St. Gallen team is aware of the fact that for various reasons their model is hard to deal with in retail trade.
The New Leadership model is human-related and aims at the delegation of responsibility, a confidential working atmosphere and a reduction of hierarchical structures.This all complies with the modern spirit of the age of the following digital generations and especially offers an option for a decentralized and fast decision finding for the retail trade, with its many geographically spread units.These are essential as the basic conditions for a fast and profitable grow.In addition to this come the mutation and the polarization between the more and more digitalized retail trade, very large branch systems and a respective regionalization of trade formats, starting with the food trade, even in large discount concerns.Therefore a prediction can already be made, that this kind of leadership models will find their way and take over a very important part.
Also surprising was that the <No Management model>, a contradiction in itself, is used more often in practice than supposed.The reasons for that continue to lie in darkness.What affects company managements and owners to waive any, although first of all only theoretical announcement of a leadership model?Are these future intentions or the simple understanding that it also obviously works without any?Or is it the aversion of companies and managers to take over models from the theory into practice, which is always accompanied with risks, work and the use of resources?Leadership definitely also takes place in companies without any defined leadership model.Furthermore these companies existed and exist with a long lasting presence, often with significant material success.Maybe this model is the best of all?Interesting and broad questions appear for a further examination of the theme complex "Leadership models in European retail trade".

Limitations
The performed limitation to larger companies and the respective stationary sector is simply due to the size, complexity and the variety of the branch.A presentation of all distribution types, from the one-person business for all retail formats, size classes, partial branches and distribution channels would not have been possible in a reasonable scope of this paper.
Additionally it has to be mentioned that the output, questionnaires and results mainly come from LEH Europe and are not equally spread over all sub-sectors.On the one hand, this is due to the significant dominance of the LEH-segment in relation to other Non-Food branches in European retail trade and, on the other hand, regarding the expert's questionnaire, the direct access especially to the management of these companies.Derived from this, the paper does not describe all 28 EU-countries from an equal perspective, but on many parts, by means of the perspective and through the eyes of the German speaking countries Germany and Austria.This circumstance just plays a roll concerning the company cultural differences because the respective parts of Europe sometimes differ strongly at this point, even though the leadership models have the same name.
Finally remains the relatively small number of participants concerning the expert's questionnaire, which is due to the fact that from 130 potential persons, 25 experts participated.
In absolute terms a quite moderate number of persons but on the basis of the function level, the number of managers at this level and mainly the number of viewed companies is a high rate, as quasi all experts have worked in different companies in their career.Additionally it has to be mentioned that the experts have occupied supervisory board mandates in other European retail companies.Thus 50% of the large stationary retail companies of Europe (Top 100) are covered.So, such a large group of experts has not been asked about leadership models in European retail trade in this way so far.This is certainly also a decisive contribution of this paper to the discussion concerning this topic.

Conclusion
In the recent history many enterprises rely on the proven models as the Harzburger model or GRID.The actual development, pushed by the social megatrends and the dramatically changing conditions with regard to the increasing digitalization and globalization, clearly goes in the direction of New Leadership and situational leadership and in mixed forms or modernizations of proven models.The (European) retail tradeworld became too complex and fast moving, in order to do everything right with one leadership model "one size fits all" and to be able to cover everything.
In the paper also the following insight could be gained.Extreme gaps partly exist between the academic discussion about leadership models and their implementation in companies and the company's reality.The large-scale expert's survey plus interviews of top-managers respectively companies of reputable European companies confirmed this gap in large part.In this work many companies of the top 100 in European retail trade, including the market leaders, had the chance to speak.Gap means how far the often theoretical discussion in its supposed precision is away from the real life.Thereby the expert's survey could answer some research questions, f.e. about prominence and implementation of leadership models.Other assumptions, as f.e. the application of St. Gallen model, were clearly disproved.New additions include findings beyond the actual scientific discussion, f.e. the gap of the countless companies and organizations that seem to manage without any official leadership model.Surely one quintessence is that in the daily business countless mixed forms and adaptions exist, which are due to the different company-and country cultures.
With regard to the human leadership it is not about the technical patents and physical legitimacy.Leadership always is something deeply social, an interaction between people and therefore very difficult to transform into theoretical concepts.Each leader and led person, each group in companies and many frame conditions are different and are managed differently.This is scientifically insufficient, but the reality.

Table 1 : Comparison of the leadership models Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Harzburger Model GRID St. Gallen Situational Management New Leadership No Management Approach to problems
. A very interesting point is the different perspective referring to the various age groups, which are shown in the table 2. So, <Situational Leadership Model> and <New Leadership Model> are more well-known than the other models among younger managers between the age of 23 and 49.Only concerning <No Leadership Model> all age groups correspond rather identically.The real difference is that the older managers in the age over 49 state that they are particularly familiar with the <Harzburger Model> as well as <GRID Model>.This corresponds to the chronological development of the different models from the Fifties of the last century to the present time.Table1then consistently shows that independent on the number of employees, the <Situational Leadership Model> shows the highest recognition in organizations with more than 20.000 employees.Followed by different forms <Harzburger Model> over <GRID Model> and <New Leadership Model> up to <St.Gallen Model> and <No Leadership Model>.

Table 2 : Prominence of leadership models (ordered)
Source: own processing

Table 4
shows significant differences, if you disconnect the hierarchy levels.Owner and General Manager see <Situational Model> and <Harzburger Model> at the same level and also (still) point out <St.Gallen Model>.The Division managers however have a clear preference for the <Situational Model>, followed by <Harzburger Model> and <No Leadership Model>.Table3also shows that younger Managers up to the age of 49 years recognize the use of the <Harzburger Model>, followed by <New Leadership Model> and <Situational Leadership Model>, far behind <GRID Model>, <St.Gallen Model> and <No Leadership Model>.The manager above the age of 49 has another perception.Here the <Situational Model> is ahead of <Harzburg Model> and <GRID Model>.This assessment corresponds with the comparison of the expert's opinion of the large employers with more than 20.000 employees.

Table 4 : Use of leadership models in the European Retail trade (ordered) Age Size of Company Hierarchy 23-49 over 49 over 5000 company head, member of board, general manager division manager
Chaotic Model>, <GRID Model -Authoritarian Model>, <Harzburger Model-Patriarchy Model>, <GRID Model -Patriarchy Model> and <Situational Model -Patriarchy Model>.To summarize, a colorful mixture of all possible combinations.

Table 5 : The most frequently used leadership models in the European Retail trade
Source: own processing