VALUE-BASED LEADERSHIP DEVELOPMENT : A CASE STUDY FROM PT XYZ *

The main challenge of family business is about sustainability. Sustaining the success of business across the next generations is a critical issue. By using a case study from an Indonesia family business, this study aims (1) to measure the level of leadership capability of the existing management team, (2) to identify the relevant values to develop so that redefined visions and missions, (3) to define developmental program of the value based leadership for the existing management team. This study used mixed research method using an appreciative inquiry for the qualitative and descriptive statistics for the quantitative approach. The conclusions of this study are: (1) the company need to increase the leadership capacity for the existing management team, (2) there are seven relevant values for enabling the new vision and mission: ownership, responsibility, integrity, creativity, learning, quality and consistence, (3) The management team are expected to play leadership role as a protector, promoter and role model for actuating those seven values, especially on values such as consistence, creativity, learning and quality.


Introduction
Family business plays a major role in the economy of many countries both in developing and developed countries.Susanto & Susanto (2014) explained that family business contributes about 70% to 90% of global GDP.It is about 80% -90% of the companies in northern America are family businesses.Family businesses in the United States provide 62% employment for the national workforce.Some famous companies such as Hilton, Ford Motor, Marriott and Wal-Mart are also family businesses.It about 75% of private sector in the Middle East is controlled by the 5000 richest families.They employ about 70% labour force and controls more than 90% of trading activities De Massis (2012) explained the indicators of a family business.(1) the company is managed by the certain families, (2) the majority of business is owned by certain families (3) the company become an identity of certain families, (4) the company is controlled and directed by the certain families (5) the company is led by several generations of the certain families or (6) the pattern of succession is dedicated for certain families.Gimeno, Baulenas, & Coma-Cros (2010) explained family businesses have at least five major challenges: (1) overlapping roles.It frequently takes place in ownership, families, and management.Interpersonal conflicts emerge that tend to ignore the interests of business.It tends to accommodate the interests of the family, (2) succession planning.There are some difficulties in running business across generations.Frequently the next generation is not interested in continuing the leadership of the business.Or the next generation does not have enough capabilities and personal quality required, (3) family constitution.There is a complex relationship among the owners and the managements to maintain family harmony or to keep business performance, (4) family governance and (5) communication.It is not easy to create an open, direct and clear communication in daily business activities.
The biggest challenge is about sustainability.It is about 70% of family businesses that go bankrupt or sold before it is taken over by the second generation.Only 10% survive until the third generation, and not more than 3-5% are able to sustain until the fourth generation (Stalk & Folley, 2012).Tjiptono (2013) states that a lot of family businesses have been no longer in operation when the owners pass away.This is caused by the excessive dependence of the company on the founder and weak mechanisms of leadership and systemic succession process.Even though the succession is crucial for family business, there are still many businesses, particularly in Indonesia, which looked at the issue of succession as a taboo discussed formally, openly and systematically ( Tjiptono2013).Companies are really in trouble when the next generation to continue the leadership role of the business.
Dealing with those challenges, Fishman (2009) recommends nine important things that should be executed by a family business: (1) establishing organizational vision and mission (2) hiring and firing familymember employees, (3) compensating the employees, (4) selecting the successor, (5) grooming the family-member successor, (6) aligning the culture of the family business into the organizational vision & mission, (7) addressing multiple role challenges, (8) recruiting, motivating and retaining non-familymember employees into the managerial team of family business, and (9) transitioning the ownership to family members.

Theoretical Review
This study is based on two main theories: leadership theory and the theory of values.Based on those theories, this study aims to investigate leadership values in Indonesian family business during the leadership transition from the founder to the second generation.

Leadership Theory
Robbins & Judge (2013) define leadership is an ability to influence a group of people to achieve a vision or a set of specific objectives.In the same way, Yukl (2010) argues leadership is related to efforts to intentionally influence people in the form of guidelines, structures facilitating the diverse activities and relationships within a group or organization.Osborne (2014) define leadership is an ability to create an environment where everyone understands what to contribute, and they feel fully committed to doing an incredible job.More comprehensively Yammarino (2013) explained that leadership is a process of multilevel (individual, pairs, groups, organization) between leaders and followers that occurs in certain situations where a leader (superior, supervisor) and followers (subordinates, team members work) to share a specific purpose (vision, mission) and together make it happen (goals, objectives, tasks) happily without compulsion.Some definitions from the scholars (Robbins & Judge, 2013;Yukl, 2010;Osborne, 2014;Yammarino, 2013) can be summarized as follows: (1) ability to influence, (2) concern to the others, and (3) orientation towards the future.Leadership capability is designed into eight levels.The highest level (level 8) is individual who has a strong ability to influence, highly concern to the others and long term or future oriented thinking.The lowest level (level 1) is individual who is lack of ability to influence, tend to self-concern and short-term oriented thinking.Figure 1 shows the framework of leadership capability.

Theory of Values
Lavigna, ( 2013) state the values are a set of important ideas or principles used as criteria to make decisions or priorities in personal or business life.Kuron et al. (2015) explains the values are parameter or indicator of anything which are considered important or desirable by the individual for life or work.Furthermore Krause, (2015) has grouped the values into two categories: (1) organizational values -which serves as a guide for all people in the organization in making daily decisions, and (2) individual values -a set of standards by which the individual evaluates others, makes decision, explains something or takes action and also assessing which are valuable, important, or preferably on preferences, behaviour, or specific action.

Values-Based Leadership
Crumpton (2011) explains that leadership theory has evolved into five generation.The first generation focuses on "who is the leader?" as marked by the theories about the characteristics of the great leader and charismatic leadership.The second generation focuses on "what is done by the leader?" as marked by the behavioural theory of leadership.
The third generation focuses on "under what conditions the leadership can be effective?"This idea is marked by contingency theory or situational leadership.Then in the fourth generation, leadership theory focused on "how the leaders think, judge and act?"This is rooted from the transactional-transformational leadership, servant leadership, and authentic leadership.Nowadays, the theory of leadership has entered the fifth generation that is the spiritual leadership.
The value-based leadership is one of leadership concept from the fourth generation.It is also called as the authentic leadership.The authentic leader is a leader who is aware of his/her own-self well.This leader has high selfconfidence to express the values and behave based on the values so that he gain complete trust from the followers (Robbins & Judge, 2013).

Research Method
This study is a case study.This empirical inquiry aims to investigate a contemporary phenomenon within its real life context, especially when the boundaries between phenomenon and context are not clearly evident (Yin, 2011).A case study is also a study in (a) single case in real life context are selected, and (b) scores obtained from the case is mostly analysed in a qualitative manner (Dul & Hak, 2008).
PT XYZ is the selected single case for this study.PT XYZ is a leading manufacturer of sliding walls and blinds in Indonesia.The company product is broadly used in many offices, hotels, shopping mall and luxury houses in many major cities.PT XYZ was established in1980 and founded by Mr. Bruno.He is an architect who graduated from the Universitas Parahyangan, Bandung.Mr. Bruno and his friends had started the business in the first factory at Klender, Jakarta Timur.The company has experienced several times ups and downs in running the business.In 2015 Mr Bruno has decided to retire and spend a lot of time in religious social activities.He gave business control to his two daughters -Fin and Jean who graduated from the leading university in Australia.Some family and friends of Mr. Bruno were still involved in the management team.Mr. Bruno expected the company continued growing and reaching brighter future under the leadership of the second generation.
This study aims to answer three main questions: (1) "how is the leadership capability of the existing management team?"Is the leadership capability of the existing management team considered low or high level?By understanding the current level of leadership capability, it will help the company design the leadership development programs relevant to future challenges.( 2 This study used mixed research method which combined quantitative and qualitative approach in the research process.Quantitative approach used survey and descriptive statistical analysis for answering the first question -"how is the leadership capability of the existing management team?" and the third question -"what are the recommendation for the developmental program of value based leadership ".The qualitative approach used appreciative inquiry for answering the second question -"what are the relevant values to be developed?"

Data Collection
The quantitative approach was carried out by survey or asking all of the existing management team to fill the self-registered questionnaires.The management team consists of two directors, nine managers and 52 supervisors.There were two questionnaires used in this study: (1) leadership capacity and ( 2

Profile of Existing Management Team
The existing management team are dominated by men (70%), less than 40 year old (63%), senior high school as their educational background (67%), and years of service more than three years (73%).The existing management team consists of 3% the second generation as top management, 14% of managers as middle management and 83% supervisors as frontline management.

Leadership Capacity of the Existing Management Team
Based on the three dimensions of leadership capacity, the existing management team has: ability to influence others is weak (75%), more concern to others (51%), and have short-term thinking orientation (62%).Figure 3 shows that the existing management team has big room for developing their ability in influencing others, especially influencing their team members and the ability to think strategically through strategic planning both in the scope of teams or organizations.

Figure 3: Profile of Leadership Capability
The leadership capability of the existing management team in every managerial position is shown in Table 1.Overall leadership capacity of management team is on level 3 (3.14).Top and middle management are at level 5 (5.33) and frontline management is on level 3 (3.04).This result explains that leadership capability of the existing management team needs to be developed further, especially in terms of conceptual, strategic and futureoriented thinking.The frontline management is important to improve their ability to influence others or team members.

The Relevant Values for the Future
The relevant values to be cultivated was obtained in appreciative inquiry session.This session was conducted in full day workshop in Bogor and followed by the founder (first generation), the top management (second generation) and middle management.The workshop participants were 26 people and divided into several groups.The activities and results of each phase of Appreciative Inquiry is described in the Appendix -1.
The Defining Phasethe founder gave speech about his hope and expectation for the company in the future.Founder did not want the company was trapped into declining growth or even die after the founder no longer actively involved in the management team.There are four expectation of the founder: (1) the company must have the bigger newly visionmission and the management team must work together to achieve the vision and mission, (2) all employees are inspired and motivated to progress in line with the achievement of the vision and mission of the company, (3) the company should have operational support system that can meet the needs of customers and all stakeholders, and (4) the company must produce leaders with great character who brings change both in the company and the broader society.
The Dreaming Phaseat this phase the participants were divided into four groups consisting of 6-7 people.Each group was asked to visualize the expected future of company.They discussed it into groups and the conclusion of discussion were visualized in the form of posters.After finishing their poster making, each group presented their poster in front of the class to the whole workshop participants.
Then the workshop was continued to the design phase.The participants were divided into two groups.By understanding the idea of all posters presented, each group was asked to formulate a vision and mission statement for company.Proposed vision and mission statement of each group presented and discussed by all participants.The result of design phase was the new vision and mission statement.Based on the plenary discussion, all participants agreed upon as follows: The new vision statement: "Becoming a trusted and biggest company in providing interior solutions for offices, hotels and luxury homes in Asia Pacific", The new mission statement: "We are here for (1) providing an excellent solution for the problem of customers and related stakeholders, (2) committing to develop the qualified professional, (3) exceeding the needs of the market and ( 4) producing best benefits for the owner, and (5) caring about the interests of society and the environment".
The Destiny Phasethe participants were grouped differently into two groups.Each group were asked to identify what are the values relevant to the new vision and mission.By cultivating those value make the company possible to achieve the vision and mission effectively.Then proposed the values of each group were presented and discussed by whole participants.The entire participants agreed on the seven values.Those were value of ownership, responsibility, integrity, learning, creativity, consistence and value of quality.The Discovery Phaseall participants were grouped into seven groups.Each group were asked to formulate the definition and three key behaviours associated with the values.Each group presented their findings in front of the class.The result of this phase were the definition and key behaviours of the seven relevant values.Appendix-1 shows all activities and results from each phase of 5D Cycle.Through this appreciative inquiry workshop, the company have agreed on seven relevant values with definition and key behaviour with the following explanation: (1) Ownership is defined as "make efforts to produce something better and always show a caring attitude towards the various situations".Key behaviours are personal involvement, working excitement and emotional engagement.
(2) Responsibility is defined as "being accountable in every duty and process of work".Key behaviours are meaningfulness, responsiveness and accountability.
(3) Integrity is defined as "behave consistently, honestly, and shows words with deeds both in scope of company and personal".Key behaviours are self-alignment, courage and honesty.
(4) Learning is defined as "demonstrating a flexible and open attitude.Being able to draw wisdom of every positive or negative situation and produce something better with regard to concerning the progress of the company or the development of quality self".Key behaviours: knowledge sharing, knowledge application, and knowledge seeking.
(5) Creativity is defined as "keep to explore and exploit many ideas or ways, as well as the process to produce a better result.Key behaviours are entrepreneurship, value added and optimism.
(6) Consistence is defined as "indicating stability and permanence in acting to achieve the organizational outcomes and goals".Key behaviours are holding the principles, long term orientation and persistence (7) Quality is defined as "ensuring processes and results exceeding the excellent standard in every performed work and task".Key behaviours are continuous improvement, process excellence and customer orientation.

Implementation of the Corporate Values
Work Behaviour Description questionnaire was designed based on the definition and key behaviours of the identified corporate values.This questionnaire consists of 63 statements and uses five scale with the responses: 1 for "always", 2 for "often", 3 for "rarely", 4 for "sometimes", or 5 for "never ".Questionnaire was distributed to all levels of management team (63 people).The result of this survey is demonstrated presented in the Appendix-2.For strengthening the implementation of the seven value in the whole organization, the existing management team are recommended to play three roles as value based leaders: (1) as the role model of the seven valuethe existing management team must lead their team by showing the examples that reflecting the values.Before giving instruction to the followers for implementing the seven values, they must apply it first.(2) As the promoter of the seven values the existing management team must promote continuously the seven values in various occasionsformal or informal meeting.They must advocate the followers to believe and apply the seven values as the opportunity for being more successful in personal and professional life and (3) as protector of the seven valuesthe existing management team must provide support, opportunities and reward for the followers to take initiative in implementing the seven values.They also provide negative consequences on behaviour of the followers which are contrary to the seven values.For aiming the better score of the seven value implementation, the existing management team may focus on the value of learning consistence, quality, and creativity.Especially in key values such as: knowledge application (value of learning), value added (value of creativity), continuous improvement (value of quality) and holding the principles (value of consistence).

Conclusion
For developing value based leadership, the existing management team need to develop leadership capacity in their ability to influence others and the ability to think strategically.The company have found and committed to implement the seven values for the brighter future.The corporate values are: Ownership, Responsibility, Integrity, Learning, Creativity, Consistent and Quality.For strengthening the implementation of the seven values, the existing management team are recommended to become as the role model, the promoter and the protector of the seven values.The existing management team may focus on several key values such as: Knowledge Application (Learning), Making Added Value (Creativity), Continuous Improvement (Quality) and Holding the Principles (Consistence).

Research limitations
This study limits the discussion only on values-based leadership in PT XYZ context.It does not discuss the other related systems such as strategic planning, human resource management, performance appraisal and career development system.This study does not explore the application of the seven values as part of the corporate culture.According to Schein ( 2010) the values is one of three element of corporate culture.There are two other elements such as basic assumptions and artefacts.
For the future study, the researcher recommend to multiple case study with several comparative company in the same industry.So the conclusion can be generalized to industry Quantitative research about causal relationships between leadership capability, value implementation and corporate performance is interesting to examine.
Leadership & Organizational Studies, 20(2), 149-155. Yin, R. K. (2011). Qualitative-Research-From-Start-To-Finish. The Guilford Press. Yukl, G. (2010) )"what are the relevant values to be inculcated for the whole organization?"In line with the leadership transition to the second generation, it is important to redefine what are the vision and mission for the future.The first generation has established a strong foundation of business.The company has become a prominent manufacturer for sliding wall and blinds in Indonesia.Is there any bigger ambition for the company in the future?What are the new vision and mission to be redefined?And what are the relevant corporate values which enable the new mission and vision?(3) "What are the recommendation for the developmental program of value based leadership?"After understanding the profile of leadership capacity of the existing management team and the relevant values to be cultivated, then the next question is what actions are supposed to be taken by the management team?What are the current values to be strengthened in daily business activity?
) work behaviour description Leadership capacity is designed to measure level of leadership capability and reflected into three dimensionsability to influence, concern to others and future orientation.It consists of 15 statements and eight levels of leadership capability as shown in Figure 1.Work performance description is designed to measure how often the corporate values are demonstrated in the daily working activity.This questionnaire is based on the result of appreciative inquiry.The one of appreciative inquiry outcome is the defined seven relevant values for the whole organization.Each value is reflected into three sub-dimensions and each sub-dimension is reflected into three measurements item.The overall questionnaire of The Description of Work Behaviour consists of 63 statements.Both Leadership Capacity and Description Behaviour used five-scale response.

Figure
Figure 1: Leadership Capability Qualitative approach utilized appreciative inquiry method.According to Stavros, Godwin, Cooperrider, & Wiley (2012) appreciative inquiry is a positive approach to encourage changes in the organization by using images of the best possible future which is articulated and visualized by people or stakeholders.This approach has positive impacts on human system in the organization.Appreciative inquiry in this study involved the founder, the second generation, and the entire of existing management team.They were invited to join in the one day workshop session for running the 5-D Cycle of appreciative inquiry (Cooperrider, Whitnye, & Stavros, 2008; Schlombs, Howard, Delong, & Lieberman, 2015; Yuliani, Adnan, Pierce Colfer, & Indriatmoko, 2014).The 5-D cycle is: (1) Defining Phasedeclaring the main goal of appreciative inquiry workshop.(2) Dreaming Phasevisualizing the future of company.All participants were divided into four groups.They were asked to draw collaboratively about the ideal conditions of the company in the future.The ideas from each group were visualized in the poster and then presented in front of entire participants.(3) Designing Phasedeveloping vision and mission statement.Based on the whole presented posters, all participants were divided into two large groups to formulate a The entire values had been well implemented in daily working activity by management team.This conclusion is based on score of seven values are more than 4. The score of the seven values are: Ownership (4.22), . Leadership in Organizations (Seventh Edition).Prentice Hall.Yuliani, E. L., Adnan, H., Pierce Colfer, C. J., & Indriatmoko, Y. (2014).