Transformative leadership and change in public enterprises

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In this section, we propose a theoretical framework that accounts for relationship between leadership and affective commitment to change in a public sector context.

Because the successful implementation of organizational change requires changes in
the behaviors and attitudes of employees, we focus our attention on the employee
level. We build on change management and leadership theory in order to explain the
relationship between leadership and affective commitment to change among
employees. Existing theory about change management is mostly appropriate for
executive level leaders (e.g. Kotter, 2003; Miller, 2001). However, the role of lower
level managers is recognized to be especially important during the implementation of
change (Burke, 2010).

We therefore focus on how the leadership behavior of direct supervisors contributes to the successful implementation of organizational change (cf. Van Dam, Oreg & Schyns, 2007; DeVos, Buelens & Bouckenooghe, 2007). The framework accounts for how their transformational leadership behavior influences commitment to change, and stimulates the occurrence of planned and emergent processes of change in the organization.

Finally, the framework accounts for the specific external environment and organizational structure that typically characterizes public organizations. We thus argue that these contextual factors may impact the transformational leadership behavior of direct supervisors, and as such the processes through which the implementation of change comes about. In order to account for the outcome  of change implementation, researchers often focus on the attitudes of employees regarding change (Herold, Fedor, Caldwell & Liu, 2008; Self, Armenakis & Schraeder, 2007; Walker, Armenakis & Berneth, 2007). In this study, we include affective commitment to change as an outcome variable
(Herscovitch & Meyer, 2002; Armenakis et al., 1999). Herscovitch & Meyer (2002)
and Meyer et al. (2007) conclude that commitment to change is an important
antecedent of the behavioral intentions of employees to support organizational
change. We focus on affective commitment to change, as it is suggested to be the strongest predictor of employee change behavior (Herold, Fedor, Caldwell & Liu,
2008; Rafferty & Restubog, 2009; Herold, Fedor, Caldwell, 2007). Herscovitch &
Meyer (2002: 475) define affective commitment to change as “a desire to provide
support for the change based on a belief in its inherent benefits”.

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A central position in the literature on change management is that the way an
organizational change initiative is received by employees is dependent on the process
of implementation (Burke, 2010; Armenakis & Bedeian, 1999). As such, the way in
which organizational change is implemented – the process of change – is an important
antecedent of the commitment to change of employees. The literature on change
management distinguishes between planned and emergent change processes (cf.
Kickert, 2010; By, 2005; Burnes, 2004). Planned processes of change are top-down and programmatic. The objectives of change are formulated in advance. Planned processes of change rely heavily on the role of management (Bamford & Forrester, 2003). Top-down communication is the main mechanism of creating support for change among employees. Through a process of ‘telling and selling’, managers disseminate information to inform employees about the change and why they should be committed to implementing it (Russ, 2008).

Change can also be implemented through a more devolved and bottom-up process. In this study, we refer to such change processes as emergent change (cf. Kuipers et al., in press). Emergent changes rely more on the participation of employees. Employees are seen as active participants in the change process (Russ, 2008). The management of the organization may initiate emergent changes, but they do not formulate detailed objectives of change. The mechanisms of creating commitment to change are both communication and participation: instead of only being informed about the change, employees are invited to participate in the implementation of change. A high quality of change information and a high degree of participation are both assumed to be positively related to the acceptance and support of change by employees (Rafferty & Restubog, 2009; Bartunek, Rousseau, Rudolph, & DePalma, 2006; DeVos, Buelens & Bouckenooghe, 2008). A planned process of change is expected to result in a high quality of communication. Emergent processes of change are expected to stimulate both the quality of communication and the degree of participation. High quality communication and a high degree of participation are both expected to positively influence employee affective commitment to change. The role of leadership is generally seen as essential during the implementation of organizational change (Burke, 2010; Herold et al., 2008; Kotter, 1996). Attention is often focused on senior management or the guiding coalition of change (Kotter, 1996; Fernandez & Rainey, 2006) Moreover, the importance top management support for a change initiative is often highlighted (e.g. Holt, Armenakis, Feild & Harris, 2007).

While the role of senior management is often emphasized during the initiation of change, direct supervisors play an important role during the implementation of change
(e.g. Allen, Jimmieson, Bordia & Irmer, 2007; Van Dam, Oreg & Schyns, 2007; DeVos, Buelens & Bouckenooghe, 2007). We focus our attention on the leadership behavior of direct supervisors, rather than for example the relationship between employees and their supervisor or the supervisor’s personal characteristics.

The main leadership theory that emphasizes organizational change is the theory of transformational leadership (Bass, 1985; Eisenbach, Watson & Pillai, 1999). The core of the transformational leadership theory is that “by articulating a vision, fostering the acceptance of group goals, and providing individualized support, effective leaders change the basic values, beliefs, and attitudes of followers so that they are willing to perform beyond the minimum levels specified by the organization” (Podsakoff et al., 1996, p. 260).

Authors regularly emphasize the importance of transformational leadership during change, but there is little empirical evidence concerning the relationship between transformational leadership and employee responses to change (Burke, 2010). Some studies have reported a direct relationship between transformational leadership and commitment to change (e.g. Oreg & Berson, 2011; Herold et al., 2008). However, Carter et al. (2012) and Bass et al. (2003) suggest that more attention is needed for the mediating mechanisms that account for the influence between transformational leaders and employee outcomes. Rather than a direct relationship between leadership and commitment to change, other studies to implementing organizational change (Higgs & Rowland, 2005, 2010; Kavanagh & Ashkanasy, 2006). The transformational leadership behavior of direct supervisors may thus affect the characteristics of the change process through which organizational change is implemented, which will in turn have an effect on employee commitment to change.

Transformational leadership can be expected to stimulate both planned and emergent changes. Transformational leaders contribute to planned change, because they recognize the need for change, create and communicate appealing visions for change and inspire and motivate employees to implement organizational change (Bass, 1999; Pawar & Eastman, 1997; Carter, Armenakis, Feild & Mossholder, 2012).

While transformational leaders may stimulate changes in a directive way, they also seek employee participation by stimulating cooperation and delegating authority to employees (Bass, 1985). Moreover, transformational leaders stimulate their employees to find innovative and creative solutions in their work by thinking outside of the box and by addressing old problems in new ways (Bass et al, 2003; Yukl, 2000). So next to prescribing the vision of change in a top-down manner, transformational leaders may also stimulate bottom-up changes in the organization.

Transformational leaders can thus be expected to contribute to change commitment by
stimulating both planned and emergent changes within the organization. In our framework, we account for the specific external environment and organizational structure of public organizations. The organizational environment and the organizational structure are central concepts in the classic studies on organizational change (Burns & Stalker, 1961; Aiken & Hage, 1968; Lawrence & Lorsch, 1967 Mintzberg, 1979). Moreover, several recent studies have suggested that the implementation of organizational change may be affected by the specific environment and structural characteristics of public organizations. For example, Fernandez & Rainey (2006) and Burnes (2009) have focused on how the pluralistic, political environment of public environments comes into play during processes of organizational change. Coram & Burnes (2001) and Isett et al. (2012) argue that the bureaucratic organizational structures that typically characterize public organizations may have a bearing on the implementation of organizational change. There is much evidence that transformational leadership is contingent on contextual factors (Conger, 1999; Pawar & Eastman, 1997; Shamir & Howell, 1999). We therefore theorize that certain specific characteristics of public sector organizations (cf. Rainey, 2003; Boyne, 2002; By & Macleod, 2009) may influence the transformational leadership behavior of direct supervisors during processes of change (e.g. Wright & Pandey, 2009).

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Public organizations can be said to operate in a relatively complex environment, which is characterized by a multitude of stakeholders, ambiguous and often conflicting objectives, a high level of scrutiny and external political influences on decision-making processes (Rainey, 2003; Boyne, 2002, By & Macleod, 2009; Piening, 2013). The degree of environmental complexity refers to the number of factors on which the organization is dependent, and the degree to which these factors are dissimilar (Duncan, 1972).

Shamir & Howell (1999) argue that a high degree of complexity stimulates transformational leadership behavior, because it is difficult to routinize organizational operations in these conditions. Employees therefore rely on their supervisor to provide meaning and vision in order to execute their tasks. Similarly, Karp & Helgø (2008) have highlighted the need for leadership during processes of organizational change in the public sector, because of its complex and chaotic character. We therefore expect that a high degree of environmental complexity is positively related to the transformational leadership behavior of direct supervisors.

Public organizations are often described as being relatively bureaucratic (Rainey, 2003; Boyne, 2002). While several recent studies have highlighted centralization as a key characteristic of public organizations (e.g. Andrews, Boyne, Law & Walker, 2009; Wright & Pandey, 2009; Moynihan & Pandey, 2005), a high degree of formalization can be seen as the defining characteristic of bureaucracies (Mintzberg, 1979).

Formalization can be defined as the degree to which organizational activities are manifested in written documents regarding procedures, job descriptions, regulations and policy manuals (Hall, 1996). A high degree of formalization can be expected to reduce the transformational leadership behavior of direct supervisors. When the operations of public organizations are to a large extent based on rules and procedures, there is little need for transformational leadership behavior aimed at the beliefs, values and attitudes of employees (Conger, 1999; Pawar & Eastman, 1997). Moreover, Mintzberg (1979) states that lower level managers will be more occupied with rule-compliance and control in highly formalized organizations. A high degree of formalization is therefore expected to be negatively related to transformational leadership behavior of direct supervisors.

By reducing their transformational leadership, direct supervisors in a highly formalized
organization are thus less likely to contribute to planned and emergent processes of

Summarizing, we argue that the role of leadership is central in the implementation of change in public organizations. Transformational leadership is expected to have a direct effect on affective commitment to change. Furthermore, prior studies suggest that transformational leadership behavior may also stimulate planned and emergent processes of change. Planned change processes aim to create commitment to change through top-down communication, whereas emergent processes of change highlight both communication and participation. As such, transformational leadership behavior may also indirectly contribute to the creation of commitment to change by stimulating planned and emergent processes of change. In order to account for the public sector context of public organizations, we incorporate the degree of environmental complexity and formalization in our model.

Environmental complexity is expected to increase transformational leadership behavior, while formalization will diminish transformational leadership. The specific public sector context thus influences the implementation and outcomes of organizational change by simultaneously stimulating and constraining transformational leadership behavior of direct supervisors. A visualization of our theoretical model is given in figure 1.