Business and regulators partnerships: Government transformational leadership for constructive conflict management

Abstract

Regulations are often thought to be impediments to collaboration between governments and businesses; however, governments and businesses are increasingly forming partnerships to help them negotiate regulation issues and more broadly work together. This study argues that governments, by exercising transformational leadership, lay the foundation for the cooperative approach, in contrast to the competitive and avoiding approaches, to conflict management that in turn results in effective partnerships. Findings from 146 pairs of government regulators and business support the hypothesis, though the evidence for the ineffectiveness of avoiding conflict was not statistically significant. Specifically, structural equation analysis results support the model that transformational leadership fosters cooperative approach to conflict and reduces competitive conflict management that in turn result in respectful, effective partnerships that develop industries.