ServiceFriday: Lead The Way – How Leadership Styles Impact Organizational Change Capacity

“Leadership is the capacity to translate vision into reality.” That quote belongs to Warren Bennis, a renowned scholar and author who immersed himself in the field of leadership studies for nearly the entirety of his life. Bennis wrote several books about leadership and later became a consultant to companies looking for guidance in terms of leadership. In the context of the service industry, leaders most often mean managers and, for the purpose of this blog, the focus is on upper management and not the middle manager. These are the kinds of leaders who have a great influence on the company culture but how does the leadership style of management impact the company culture, such as the organizational change capacity (OCC)?

There is an exhaustive amount of extant research centered on leadership in the workplace but, in an article recently published in the SAGE Open journal, researchers have started to investigate how OCC is affected by three styles of leadership: transformational leadership, transactional leadership and laissez-faire leadership. Transformational leaders communicate noticeable standards, encourage and promote subordinates to align with organizational goals for better performance, and help in enhancing employee satisfaction and innovative work behavior. Transactional leaders, however, accomplish goals by rewarding subordinates who meet expectations while penalizing those who don’t. Laissez-faire leadership refers to indifferent or a lack of leadership.

A combination of 11 non-profit organizations in Pakistan were sent the researchers’ questionnaire and over 200 participants completed it. Along with the aforementioned leadership styles, they also primed participants on employee trust. This was because employees’ trust in their leadership has been shown, through prior research, to lead toward desirable outcomes and a greater exchange of ideas and knowledge.

The results from the study indicated that OCC is significantly and positively correlated with transformational leadership, transactional leadership and employee trust. Laissez-faire leadership was significantly and negatively correlated with OCC. The findings also show that employees’ trust is the mediating factor between transformational leadership and OCC as well as laissez-faire leadership and OCC. No significant relationship existed between transactional leadership and employees’ trust.       

“Transformational leadership facilitates OCC and increases the likelihood for successful management and implementation of change,” the researchers noted. Transformational and transactional, to a degree, leadership are the ideal styles for supporting OCC. Laissez-faire leadership features minimized contact between leaders and subordinates so it is of little surprise that individuals with laissez-faire leadership behavior will negatively affect OCC.

For more information on how leadership styles impact OCC, read the full article at SAGE Open at this link. (A fee may apply.)