Testing a Moderated Mediation Model of Transformational Leadership,Values,and Organization Change

Abstract

A field study of organizational leaders and their immediate followers was conducted to investigate (a) the mediating roles of follower openness to change values and follower self-transcendence values in linking transformational leadership to follower change resistance and follower extra effort, respectively and (b) the moderating role of organization change magnitude in influencing the mediation effects. Transformational leadership theory postulates that a range of follower attitudinal and performance outcomes are at least partially explained by a leader’s ability to influence followers’ values to support organizational change. Using Preacher, Rucker, and Hayes’s moderated mediation framework, this study extends transformational leadership research by testing a model that explicates the roles of leader behavior, follower values, and a key contextual variable in producing effects on follower attitudinal and performance outcomes. Data from 181 organizational leaders and 723 of their respective followers demonstrated strong support for the moderated mediation model. The conditional indirect effects of transformational leadership on follower change resistance and follower extra effort via follower openness to change and self-transcendence values, respectively, were stronger in work contexts characterized by high organization change magnitude. Implications for theory, future research, and practice are discussed.

Keywords

transformational leadership leader values corporate social responsibility

Change-oriented leadership models and practices, including transformational leadership (Bass, 1985; Bass & Avolio, 2000) and charismatic leadership (Conger & Kanungo, 1994) have dominated the study of organizational leadership for more than 30 years. Numerous qualitative and meta-analytic reviews (Conger, 1999; Judge & Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996) have demonstrated the powerful effects of change-oriented leadership at the individual, group, and organization levels of analysis. While the numerous positive outcomes of transformational leadership are indeed impressive, including positive effects on follower motivation and job satisfaction (Judge & Piccolo, 2004), affective organizational commitment and turnover intention (Fu, Tsui, Liu, & Li, 2010), and openness to change (Groves, 2005), very little empirical research explains the active mediating or explanatory processes through which such leaders produce these powerful effects. Furthermore, transformational leadership research is often criticized for failing to account for the moderating effects of key contextual variables, such as organizational structure, culture, and environmental uncertainty (Finkelstein, Cannella, & Hambrick, 2008; Kark & Van Dijk, 2007; Pawar & Eastman, 1997; Shamir & Howell, 1999).

Transformational leadership theory postulates that follower values perform a critical mediating mechanism through which such leaders achieve a wide range of positive effects in organizations (Yukl, 1999). Of the many claims of transformational leadership theory, values play a central role in the mediating processes through which leaders “ . . . influence followers to make self-sacrifices, commit to difficult objectives, and achieve much more than was initially expected” (p. 286). Indeed, much of the earliest theoretical research on transformational leadership claims that followers of such leaders achieve exceptional levels of performance because they are inspired to transcend their self-interests and lower level motivational needs in favor of the organization’s values, particularly concerning the alignment of personal and organizational values during periods of change (Bass, 1985; Burns, 1978). Indeed, influencing followers to transcend their self-interests for the benefit of group or organizational goals and other pro-organizational behaviors has been succinctly described as “ . . . the essence of charismatic and transformational leadership” (Van Knippenberg et al., 2004, p. 830). Although postulated as a values-based leadership process whereby leaders utilize values to motivate their followers to achieve exceptional performance and collectively accomplish organizational change (Bass, 1985; Shamir, House, & Arthur, 1993), transformational leadership research currently lacks empirical studies that explicate the potentially important mediating role of follower values. Overall, many of the key claims of transformational leadership theory concerning the mediating role of follower values, particularly during periods of significant organizational change, currently lack empirical research evidence.

The purpose of the present study is to address these research gaps by examining follower openness to change (FOC) values and follower self-transcendence (FST) values as mediating the relationships between transformational leadership and two key follower outcomes during periods of major organizational change: follower behavioral resistance to change and follower willingness to exert extra effort toward change initiatives. This study also investigates the moderating role of organization change magnitude on the mediating effects of FOC and FST on both follower change resistance and follower extra effort. A review of the relevant theoretical and empirical literatures establishes the case for why FOC and FST play important mediating roles between transformational leadership and follower outcomes during periods of significant organization change. Using Preacher, Rucker, and Hayes’s (2007) moderated mediation framework, as well as split sample methodology to control for common method variance, this study tests these moderated mediation relationships with a diverse sample of 181 organizational leaders and 723 of their followers. After describing the study’s methodology, data analysis strategy, and hypothesis testing results, key findings and implications for theory and practice are discussed.

Theoretical Background and Hypotheses

Conceptual Model

Figure 1 illustrates the proposed moderated mediation model tested in the present study. Transformational leadership is defined as leaders who influence their followers by developing and communicating a collective vision and inspiring them to look beyond self-interests for the good of the organization (Bass, 1985; Bass & Avolio, 2000). The most recent model of transformational leadership includes five leadership dimensions: idealized attributes, idealized behaviors, inspirational motivation, intellectual stimulation, and individualized consideration. Leaders who demonstrate idealized attributes and idealized behaviors (formerly the “charisma” dimension) earn credit and respect from their followers by carefully considering their followers’ needs above their own needs, talking about their most important values and beliefs, and emphasizing the importance of the moral and ethical consequences of key decisions. Inspirational motivation is characterized by leaders who provide meaning and challenge to their followers’ work and encourage followers to envision attractive future states for their work units and the organization. Intellectual stimulation is defined as behaviors that encourage followers to be innovative and creative by questioning assumptions, reframing problems, and approaching old problems in new ways. Finally, individualized consideration involves behaviors that emphasize paying close attention to followers’ individual needs for achievement and growth, including teaching, coaching, and creating new learning opportunities.

Figure 1.

Proposed conceptual model of the study variables.

The model postulates that transformational leadership will predict follower change resistance and follower extra effort via FOC and FST, respectively. FOC values are predicted to partially explain the relationship between transformational leader and follower change resistance, while FST is postulated to mediate the transformational leadership–follower extra effort relationship. Furthermore, organizational contexts characterized by highly significant change are modeled to strengthen the mediated effects of FOC and FST on the relationships between transformational leadership and the follower outcomes. Thus, the indirect effects of transformational leadership via FOC and FST on follower change resistance and follower extra effort, respectively, are expected to be different for followers across high and low levels of organization change magnitude. A review of the theory and research supporting the conceptual model’s proposed relationships is presented below.

Leader and Follower Values

Values have long served an important role in the study of leadership behavior as they strongly influence the affective, attitudinal, and behavioral responses of individuals (Meglino & Ravlin, 1998; Rokeach, 1973). Defined as transsituational sets of priorities that serve as guiding principles in people’s lives (Schwartz, 1992), values serve critical roles for organizational leaders, including the establishment of criteria and rules for decision making, facilitating a preferred leadership style, and influencing the beliefs, attitudes, and behaviors of followers (Groves & LaRocca, 2011; Waldman & Galvin, 2008). Transformational leadership theory has long postulated that changing followers’ values is a primary influence process through which such leaders achieve their effects in organizations. Bass and Steidlmeier (1999) claimed that “ . . . transformational leaders openly bring about changes in followers’ values by the merit and relevancy of the leader’s ideas and mission to their followers’ ultimate benefit and satisfaction . . . ” (p. 189). The focus of the present study is to examine the critical role of follower values as important mediating processes through which transformational leaders achieve successful outcomes during periods of significant organizational change. Because values serve an instrumental role in the manner in which followers perceive and support (or resist) large-scale organizational changes, as evidenced by research on employee values and resistance to change (e.g., Blankenship & Wegener, 2008; Ledford, Mohrman, Mohrman, & Lawler, 1989), follower values represent logical explanatory variables through which transformational leaders are effective during periods of significant change. The following sections review the research on follower values and transformational leadership while establishing the case for FOC and FST as values that explain transformational leaders’ success in driving effective organizational change.

Much of the empirical research on values and transformational leadership has relied on Schwartz’s (1992, 1996) values theory, which classifies personal values into four broad value dimensions. The first two value dimensions consist of a focus on personal goals and achievement (self-enhancement) versus the welfare of others and collective interests (self-transcendence). The second pair of value dimensions consists of a preference for maintaining the status quo and traditions (conservation) versus a preference for novelty, renewal, and experimentation (openness to change). The extent to which leaders espouse openness to change and self-transcendence values, and influence their followers to also adopt these values vis-à-vis transformational leadership behaviors, has potentially important implications for followers’ attitudes and performance during periods of organizational change. Research suggests that values affect the manner in which individuals interpret events and their corresponding attitudes and behaviors (Meglino & Ravlin, 1998; Oreg & Berson, 2011). Employees who value conservation and traditional values are likely to interpret organizational changes as a threat to the status quo and resist such changes if they are perceived as inconsistent with their fundamental values or world views. People with high openness to change values may interpret the same organizational changes as opportunities for growth, renewal, and stimulation. For example, employees with high openness to change values may be more likely to perceive the restructuring of their division or work unit as an opportunity to adopt a new role or set of job challenges that will enhance their overall engagement and career advancement. By comparison, employees with high conservation and traditional values may be less likely to accept even the possibility that a restructuring process will benefit the organization or themselves, as the high risks associated with a large-scale change precludes a willingness to consider the potential benefits.

Along a similar vein, employees who adopt individual-oriented values centered on power and ambition may be more likely to interpret organizational changes as direct threats to the current authority structure, and possibly less inclined to personally sacrifice the status, power, and resources necessary to implement major changes. Research on resistance to change has long supported the notion that employees resist large-scale organization change due, in part, to the fear and anxiety associated with real or imagined consequences involving loss of power and/or valued possessions (Piderit, 2000). Resistance to change is often a result of the personal investment of time, energy, and intellectual contributions that people make in organizations and their natural concerns about losing such investments as part of a change initiative (Tushman, Newman, & Romanelli, 1986). Accordingly, employee behaviors become value-laden over an extended period of time, which frequently results in resistance to any proposed organizational change. In contrast, individuals with self-transcendent values based on collective-oriented values such as altruism and universalism may perceive organizational changes as opportunities for shared sacrifice and therefore demonstrate a willingness to support the change despite potential personal losses. For example, employees with high self-transcendent values are more likely to support a downsizing initiative that requires reduced hours and associated wages for all positions in order to prevent the elimination of any single position and demonstrate a sense of solidarity with their colleagues. Recent empirical research supports this contention, as Effelsberg, Solga, and Gurt (2014) found strong evidence for the positive relationship between transformational leadership and followers’ willingness to engage in selfless pro-organizational behavior. Importantly, this relationship was fully mediated by followers’ organizational identification, a critical attitudinal variable during periods of organizational change.

Transformational leaders are often characterized as skilled values transmitters who create values-laden visions that attract followers (Conger, 1999). Given that followers trust and personally identify with transformational leaders (Bass & Avolio, 2000), they are likely more willing to internalize their leaders’ values concerning openness to organizational changes and willingness to engage in extra effort to support change initiatives. For example, Sosik (2005) found that managers’ self-transcendent values were strongly associated with follower organizational citizenship behaviors and follower extra effort. Transformational leaders motivate followers by promoting visions that embody core values, including those concerning change and collective sacrifice, which become strongly linked to followers’ effort, goals, and self-concepts (Lord & Brown, 2001; Lord, Brown, & Freiberg, 1999). As such, the openness to change and self-transcendent values held by transformational leaders are likely to be closely aligned with their followers’ values (Hayibor et al., 2011). In a study of CEO values and leadership behavior, Fu et al. (2010) found that self-transcendent values accentuated the effect of transformational behavior on followers’ affective organizational commitment and turnover intentions. In sharp contrast, self-enhancement values attenuated the impact of transformational leadership on followers’ commitment and turnover intentions. Followers’ resulting internalization of values helps explain the relationship between transformational leadership and value-oriented outcomes, including follower organizational citizenship behaviors (Groves & LaRocca, 2011; Hui, Law, Hackett, Duanxu, & Zhen, 2005), follower and group ethical decision making (Zhu, Avolio, Riggio, & Sosik, 2011), ethical organizational climate (Engelbrecht, van Aswegen, & Theron, 2004), and follower intentions to resist organizational change (Oreg & Berson, 2011). Based on the theoretical and empirical research reviewed above, the following hypotheses are presented:

Hypothesis 1: FOC values will partially mediate the relationship between transformational leadership and follower change resistance.

Hypothesis 2: FST values will partially mediate the relationship between transformational leadership and follower extra effort.

The aforementioned Hypotheses 1 and 2 are presented as partially mediated relationships between transformational leadership and follower change resistance and follower extra effort, respectively, based on prior research findings that demonstrate the potential for other explanatory or mediating factors. For example, Effelsberg et al. (2014) found support for organizational identification as a mediating variable explaining the effects of transformational leadership onto selfless, pro-organizational behavior. In a study of the impact of transformational leadership on work group effectiveness, Hoffman, Bynum, Piccolo, and Sutton (2011) found strong support for follower perceptions of person–organization value congruence as a mediating variable. Most recently, Hannah, Schaubroeck, and Peng (2016) found strong support for (a) value internalization as partially mediating the influence of transformational leadership on followers’ performance and (b) followers’ levels of role self-efficacy as mediating the relationship between transformational leadership and follower performance. Overall, Hypotheses 1 and 2 predict partially mediated relationships between transformational leadership and two key follower behavioral intentions given the potential for other explanatory processes that explicate.

Organization Change Magnitude

A primary goal of the present study is to address the general lack of attention to the contextual influences on transformational leadership and follower attitude and behavioral outcomes. While scholars have suggested several important contextual variables that may moderate the effects of transformational leadership (Finkelstein et al., 2008; Shamir & Howell, 1999), no published empirical study to date has investigated the moderating impact of organization change magnitude on follower values and follower performance outcomes. Existing theoretical research and limited empirical studies in other contexts offer evidence supporting the moderating role of organization change magnitude on the relationships among transformational leadership, follower values, and follower attitudes and performance outcomes.

Research integrating self-regulatory focus theory and self-concept-based leadership theories offer additional support for the present study’s moderated mediation model. Adopting Higgins (1997, 1998) regulatory focus theory, Kark and Van Dijk (2007) assert that transformational leaders are more likely to elicit a promotion self-regulatory focus in their followers, which is characterized by emphasizing goals that represent the “ideal self” such as hopes, wishes, and aspirations. This self-regulation mechanism is contrasted with a prevention focus, which focuses individuals on prevention goals, such as the avoidance of punishments and the execution of expected duties, obligations, and responsibilities. As transformational leadership behaviors focus followers’ attention on the ideal self while also serving as important role modeling of promotion focused behaviors, followers are likely to emulate this approach in their work and attitudes toward organizational change. In contrast, leaders who focus followers’ attention on their work in terms of obligations, regulations, and possible losses, which are driven by conservation or traditional values, will likely elicit a prevention regulatory focus among their followers and the resulting resistance to change. Kark and Van Dijk (2007) propose that transformational leaders role model a promotion focus for followers, which will result in followers’ greater willingness to support organizational changes.

Oreg and Berson (2011) argue that during periods of significant organization change, followers are more likely to model their leader’s values, behavior, and overall outlook. They assert that the influence processes utilized by leaders to drive follower behavior and performance outcomes “ . . . may be particularly salient in the context of organizational change in which the increased ambiguity associated with the change highlights the discretion and influence that leaders of organizations possess” (p. 632). When organizations or work units experience radical organizational change, followers are more reliant on their leaders for guidance, role modeling of appropriate values, and other leader actions (policies, programs, offsite meetings, etc.) that reduce uncertainty. Thus, followers’ values and resulting attitudes and behaviors concerning organizational change are likely driven by their leaders’ transformational leadership behaviors and moderated by the magnitude of changes taking place in the organization or work unit. Based on the theory and limited empirical research reviewed above, the following hypotheses are presented:

Hypothesis 3: Organization change magnitude will moderate the strength of the mediated relationship between transformational leadership and follower change resistance via FOC values. The mediated relationship will be stronger under high organization change magnitude than under low organization change magnitude.

Hypothesis 4: Organization change magnitude will moderate the strength of the mediated relationship between transformational leadership and follower extra effort via FST values. The mediated relationship will be stronger under high organization change magnitude than under low organization change magnitude.

Method

Participants, Sample Organizations, and Procedures

Participants

A total of 904 respondents, including both team leaders (“leaders” hereafter; n = 181) and their direct reports and work unit colleagues (“followers” hereafter; n = 723) from 181 organizations participated in this study. Ninety-five (53%) of the leaders were male, while the mean age was 39.16 years (SD = 9.69). The ethnic background of the leaders was as follows: Asian American (n = 18, 9.9%), African American (n = 22, 12.2%), Hispanic/Latin American (n = 32, 17.7%), Caucasian (n = 92, 50.8%), American Indian/Alaskan (n = 1, 0.6%), Hawaiian/Pacific Islander (n = 1, 0.6%), and other (n = 13, 7.2%). The most common industries from which the leaders were drawn included government/public sector (n = 39), nonprofit (n = 18), energy/utilities (n = 16), and education/academia (n = 15). The aforementioned industry categories were inductively created based on the qualitative responses provided by the leader sample. Ninety-nine (54.7%) of the sample organizations were nonprofit, while their private/public status was as follows: publicly traded (n = 24, 13.3%), private (n = 94, 51.9%), and government (n = 55, 30.4%). The leaders reported their position title as department supervisors or frontline managers (n = 29, 16%), regional, district, and/or middle managers (n = 65, 35.9%), and executive-level managers (n = 38, 21%). The leaders had a mean of 4.02 followers (SD = 1.33), and a range of two to seven followers. Overall, the followers had worked with their respective team leaders for a mean of 3.37 years (SD = 2.78).

Sample Organizations

Both leaders’ and their respective teammates’ participation in the study was completely voluntary. The leader participants were drawn from five community-based leadership programs that each represented a large city in southern California. Each program is composed of a cohort of leaders who represent a range of organizations in their local community, including for-profit businesses, governmental agencies, and nonprofit organizations. Each program consisted of a cohort of leaders who participated in monthly 1-day sessions that took place over the course of 1 year. The five programs from which the leaders were drawn took place over the course of a 2-year period (2009-2011). Sponsored and delivered by the local chamber of commerce, the program’s sessions were generally delivered on the third Friday of each month. A typical cohort for such community leadership programs would include leaders who represent a cross-section of organizations throughout the community, including city government agencies, higher education institutions, health care organizations, large for-profit businesses, nonprofit and community-based organizations, and small businesses. Although most leaders’ participation in the program was sponsored by their respective employers, leader participants also included small business owners and executive directors of nonprofit and community-based organizations. The purpose of each program was to provide the leader cohort with targeted educational sessions on the community’s critical institutions, including arts and culture, education and workforce development, health care, law and government, ports and airports, media, and entertainment. In addition to listening to speakers who represented each of these community institutions, the cohort was exposed to the critical challenges facing each institution and how the leader participants can help address such challenges. The programs did not provide any training or seminars in transformational leadership, transactional leadership, or leadership outcomes addressed in this study.

Procedures

For each community leadership program, the leader participants were sent an e-mail with instructions for participation, an informed consent form, and a link to the leader questionnaire. The e-mail invitation was sent to each leader the week after the opening seminar of the program. Each leader was asked to submit via e-mail the names and e-mail addresses of their direct reports and teammates to the author. Each of the leader’s direct reports and teammates were sent a separate, confidential e-mail with instructions for their participation, an informed consent form, and a link to the teammate questionnaire. The leader and follower questionnaires were completed during the first 4 weeks of each community leadership program. There were a total of 203 leader participants enrolled in the five programs. While all leaders were asked to participate in the present study as part of their respective program, the final sample consisted of 181 leaders for an 89.2% response rate. The discrepancy between the total number of program participants and those who participated in the present study is due to several factors, including (a) leader participants declining to participate in the study, (b) leader participants who were not employed in leadership functions in their respective organizations, and/or (c) leader participants who had incomplete data (either self-report data or follower-report data) and were subsequently dropped from further analysis. The specific participation rates across the five leadership programs included 41 (22.6%), 38 (21.0%), 34 (18.8%), 32 (17.7%), and 36 (19.9%) leaders, respectively. The overall response rate for the teammates nominated by their leaders to participate across all sample organizations was 74%.

Measures

Transformational Leadership

The Multifactor Leadership Questionnaire (Bass & Avolio, 2000) was used to measure transformational leadership. Each leader’s direct reports were asked to report how frequently a list of 20 behaviors characterized their leader’s behavior (0 = not at all, 4 = frequently, if not always). The Cronbach alpha reliability estimates and sample items for the subscales include idealized influence (α = .83; “Goes beyond self-interest for the good of the group”), idealized behavior (α = .86; “Considers the moral and ethical consequences of decisions”), inspirational motivation (α = .91; “Articulates a compelling vision of the future”), intellectual stimulation (α = .85; “I seek differing perspectives when solving problems”), and individualized consideration (α = .80; “I spend time teaching and coaching”). The Cronbach alpha for transformational leadership overall was .92.

Leader and Follower Values

Leader and follower values were measured using the openness to change (five items) and self-transcendence (five items) scales from Brown and Treviño’s (2009) modified version of Schwartz’s (1996) established values measure. This measure was adopted for the present study because of its long-established history and development (Schwartz, 1992, 1996), frequent use in high-quality research on leadership and organizational behavior (e.g., Sosik, 2005), and specific modifications for relevance to work organizations (Brown & Treviño, 2009). The openness to change values self-assessed by both leaders and followers included experimentation (trying new things), variety (welcoming novelty and change), creativity (innovating, thinking outside the box), curiosity (pursuing interests, inquisitiveness), and daringness (seeking adventure, taking risks). The self-transcendence values self-assessed by both leaders and followers included altruism (caring, assisting others), justice (treating others fairly), helpfulness (working for the welfare of others), teamwork (working together, cooperation), and equality (ensuring equal opportunity for all). Consistent with the Brown and Treviño procedure, leaders were asked to self-assess their openness to change and self-transcendence values with the following instructions: “What is the message you convey to direct reports about how important each of these values should be as a guiding principle for their work.” For leaders, the Cronbach alphas for openness to change and self-transcendence were .79 and .73, respectively. Followers were asked to self-assess their openness to change and self-transcendence values with the following instructions: “To what degree do you use each of these values as an important guiding principle for your work?” Leaders and followers were asked to rate each value statement according to a 7-point scale (−1 = opposed to my values, 0 = not important, 1 = somewhat important . . . 5 = of supreme importance). For followers, the Cronbach alphas for openness to change and self-transcendence were .90 and .79, respectively.

Organization Change Magnitude

The magnitude of change occurring at the sample organizations (leader–follower groups) was assessed by Groves’s (2005) five-item scale. Leaders and followers were asked to characterize the changes that occurred (or are still occurring) at their respective organization during the past year on a scale ranging from 5 (extremely significant) to 1 (little or no changes). Interrater reliability analyses (r_wg; James, Demaree, & Wolf, 1984) indicated sufficient leader–follower agreement with an alpha of .79. and an ICC₂ coefficient of .74. Using the 5-point scale described above, leaders and followers were asked to rate the magnitude of organizational change across the following dimensions: structural (e.g., reorganization, downsizing or workforce reduction, changes in major reporting relationships), cultural (e.g., changes in business philosophy or purpose, core values, expected behavior), technological (e.g., new equipment, computer or software systems), procedural (e.g., new work processes, policies, practices), and personnel (e.g., new position[s], job function[s], job transfers, major turnover). Leaders’ and followers’ ratings across these change dimensions were summed and averaged to create a composite measure of organization change magnitude, which produced a Cronbach alpha of .84.

Follower Change Resistance

Followers’ behavioral intentions to resist organizational change were assessed using a modified version of Oreg’s (2006) Change Attitudes Scale. Sample items of this scale include “I protested against the change,” “I complained about the change to my colleagues,” and “I spoke highly of the change to others” (reverse-coded). The items were adapted to address the major organizational changes that occurred during the past year. Follower rated the extent to which they agreed with each of the items on a 6-point scale (1 = strongly disagree to 6 = strongly agree). Prior research supports the reliability and validity of the measure to assess resistance attitudes concerning organizational change (Oreg, 2003; Oreg & Berson, 2011; Sverdlik & Oreg, 2009). The Cronbach alpha for follower change resistance was .94.

Follower Extra Effort

Followers’ extra effort was assessed using de Luque, Washburn, Waldman, and House (2008) modified, four-item version of Bass’s (1985) original extra effort scale, which was part of the original Multifactor Leadership Questionnaire. On a Likert-type scale ranging from 0 (not at all) to 4 (frequently, if not always), followers were asked to rate the extent to which they exert extra effort in support of the work unit’s goals. A sample item includes “I am willing to make serious personal sacrifices to contribute to the success of my work unit.” The Cronbach alpha reliability was .83.

Control Variables

Leader gender, leader tenure at current position, and the tenure of the working relationship between leaders and their respective followers were used as control variables for hypothesis testing. Empirical research indicates that gender may be associated with leader values (e.g., Pennino, 2002; Premeaux, 2004; Sosik, 2005) and transformational leadership (e.g., Bass, Avolio, & Atwater, 1996; Carless, 1998); therefore, leader gender (1 = male, 2 = female) was included as a control variable. Because a manager’s prior work experience is often strongly associated with leadership performance outcomes (including follower attitudes and follower effort/performance), number of years at current position (leader tenure) was also used as a control variable. Finally, the tenure of the working relationship between leaders and their respective followers was used to control for the effects of the attraction–selection–attrition process (Bretz, Ash, & Dreher, 1989; Schneider, 1987). The attraction–selection–attrition process suggests that due to internal forces and routinized activities, organizations function in ways that attract, select, and retain an increasingly homogenous workforce that shares common characteristics, interests, backgrounds, and orientations. Given the range of industries from which the leaders and followers were drawn, industry was coded into the primary industries represented by leaders’ respective organizations. Tukey’s honestly significant difference test was calculated to determine any significant differences in the study’s variables across the industries. No significant between-industry differences were found. Independent honestly significant difference tests across public/private status (publicly traded, private, and government) also identified no significant differences across the study’s variables. Finally, simple t tests comparing differences in the study’s variables for nonprofit and for-profit organizations revealed no significant differences across the study variables.

Analyses

Level of Analysis

The leader was chosen as the unit of analysis for the present study such that follower ratings of transformational leadership, follower change resistance, and follower extra effort were averaged and aggregated. To justify the aggregation of follower ratings to create group-level measures, within-group reliability statistics (r_wg; James et al., 1984) were calculated. The interrater reliability coefficients for transformational leadership, follower change resistance, and follower extra effort were .88, .78, and .85, respectively. The ICC₂ coefficients were .85, .74, and .81. These results provide support for the aggregation of follower ratings to create group-level measures.

Control for Same Source Bias

Recent meta-analyses of transformational leadership studies (e.g., Judge & Piccolo, 2004) indicate that follower ratings of leadership style and leadership outcomes are often strongly related to one another. As noted in prior research (e.g., de Luque et al., 2008; Dvir, Eden, Avolio, & Shamir, 2002), mono-source bias is especially problematic when assessing the relationship between follower ratings of transformational leadership and leadership outcomes. To mitigate these problems in the present study, Rousseau’s (1985) split sample method was used to control for mono-source bias for the relationships between transformational leadership and leadership performance outcomes (follower change resistance and follower extra effort). To split the follower sample in this study, half of the follower surveys (n = 362) for a given leader were used to measure transformational leadership, where the other half (n = 361) were used to measure follower change resistance and follower extra effort. All follower surveys for each leader were randomly assigned a number (e.g., 1-5 for a leader with five followers). For leaders with an even number of followers, odd-number follower surveys were used to measure transformational (Follower Survey A), and even-numbered surveys were used to measure follower change resistance and follower extra effort (Follower Survey B). For leaders with an odd number of followers, the “extra” follower survey was assigned to the leadership style sample or the leadership outcomes sample on an alternating basis. The full sample of followers (n = 723) was utilized to calculate follower values and leader–follower organization change magnitude.

Results

Preliminary Analyses

Prior to testing the values-centered leadership model and the associated hypotheses, confirmatory factor analyses were conducted to provide support for the construct validity of the leader and follower variables. Utilizing Amos software (Arbuckle & Wothke, 1999) and following procedures recommended in prior research (Jöreskog & Sörbom, 1993), we used the following indictors of model fit: chi-square, goodness-of-fit index (GFI), adjusted GFI (AGFI), root mean square error of approximation (RMSEA), incremental fit index (IFI), comparative fit index (CFI), and Akaike information criterion (AIC). The measurement models were tested to assess whether each of the measurement items would load significantly onto their respective scales. Consistent with prior SEM research (Bagozzi & Heatherton, 1994) concluding that measurement models with three indicators per latent construct are ideal while such models can carry up to five indicators without estimation problems, we completed a parceling procedure for those constructs with more than five items. Parceling offers the benefits of reducing random errors, simplifying the measurement models, and maintaining the structural integrity of models that include multiple-indicator constructs. For those variables with more than five items (transformational leadership and follower change resistance), the items for each variable were randomly parceled into three composite indicators and entered into the measurement model. For transformational leadership, the three subscales were entered into the model as indicators of these latent constructs.

The first measurement model included the study variables that were assessed in the self-report leader survey, specifically leader openness to change values, leader self-transcendence values, and organization change magnitude. This model demonstrated strong fit to the data, as evidenced by the following results: χ² = 27.09 (degrees of freedom [df] = 14, p = .381), GFI = .97, AGFI = .95, RMSEA = .03, IFI = .97, CFI = .98, and AIC = 45.45. These results offer strong support for the construct validity of the leader values variables. A second measurement model was tested that included the follower-report variables, including transformational leadership, FOC, FST, organization change magnitude, follower change resistance, and follower extra effort. Results from this measurement model also demonstrated strong fit, χ² = 210.75 (df = 94, p < .001), GFI = .95, AGFI = .92, RMSEA = .05, IFI = .96, CFI = .96, and AIC = 96.66. Taken together, these results provide sufficient support for the construct validity of the leader and follower variables and for proceeding with hypothesis testing.

Hypothesis Testing

Table 1 presents the means, standard deviations, and correlations of the study variables. Hierarchical multiple regression analyses were conducted to test Hypotheses 1 and 2, while hierarchical moderated regressions were conducted to test Hypotheses 3 and 4. For all analyses, leader gender, leader job tenure, and leader tenure with followers were entered as control variables. For the moderated regression models, the independent variables and interaction terms were converted to z scores to avoid multicollinearity concerns (Aiken & West, 1991).

Table 1.

Means, Standard Deviations, and Correlation Coefficients of Study Variables.

	M (SD)	1	2	3	4	5	6	7	8	9	10	11
1. Leader gender^a	1.53 (0.50)	—
2. Leader job tenure	4.22 (3.80)	−.01	—
3. Leader–follower tenure	3.37 (2.78)	−.14	.47**	—
4. Leader openness to change	5.50 (0.83)	−.01	−.01	−.03	.79
5. Leader self-transcendence	5.88 (0.67)	.22**	.07	−.08	.21**	.73
6. Follower openness to change	5.47 (0.60)	−.06	.05	−.06	.01	.05	.90
7. Follower self-transcendence	6.16 (0.44)	−.11	.10	.11	−.01	.06	.56**	.79
8. Organization change magnitude	3.10 (0.83)	−.01	−.01	.06	.02	.03	−.11	−.01	.84
9. Transformational leadership	4.20 (0.45)	−.05	.16*	.20**	.06	.12	.30**	.42**	.04	.92
10. Follower change resistance	3.78 (0.72)	−.04	.03	−.05	.04	−.07	−.22**	−.20**	.07	−.26**	.94
11. Follower extra effort	3.68 (0.73)	.09	−.04	.12	.03	.01	.17*	.22**	−.07	.45**	−.12	.83

Note. Italicized coefficients are Cronbach’s alphas.

1 = male and 2 = female.

p < .05. **p < .01.

Hypotheses 1 and 2

Hypothesis 1 predicted that FOC would partially mediate the relationship between transformational leadership and both follower change resistance, while Hypothesis 2 predicted that FST would partially mediate the transformational leadership–follower extra effort relationship. The study’s hypotheses were tested using Preacher et al.’s (2007) moderated mediation framework. The first step in this analysis was completing Baron and Kenny’s (1986) procedure for testing mediation: (a) the independent variables must be significantly related to the mediator, (b) the independent and dependent variables must be significantly related, (c) the mediator and dependent variable must be significantly related, and (d) the relationship between the independent and dependent variables must be weaker or nonsignificant once the mediator is added to the model. The regression results for testing mediation for Hypotheses 1 and 2 are presented in Tables 2 and 3.

Table 2.

Results of Hierarchical Regression Analyses for Testing the Mediating Effect of Follower Openness to Change Values (Hypothesis 1).

	Follower openness to change	Follower change resistance
	Follower openness to change	Step 1	Step 2
Leader gender	−.05	−.03	−.02
Leader job tenure	.04	.03	.03
Leader–follower tenure	−.04	−.06	−.05
Transformational leadership	.27**	−.24**	−.14
Follower openness to change			−.20**
ΔR²	.15	.18	.03
Total R²	.15	.18	.21
F	8.93**	15.21**	16.93**

Note. n = 110. Standardized regression coefficients are shown.

p < .05. **p < .01.

Table 3.

Results of Hierarchical Regression Analyses for Testing the Mediating Effect of Follower Self-Transcendence Values (Hypothesis 2).

	Follower self-transcendence	Follower extra effort
	Follower self-transcendence	Step 1	Step 2
Leader gender	–.10	.07	.07
Leader job tenure	.08	−.03	−.02
Leader–follower tenure	.11	.10	.08
Transformational leadership	.40**	.44**	.22*
Follower self-transcendence			.20**
ΔR²	.18	.20	.03
Total R²	.18	.20	.23
F	12.70**	15.21**	16.93**

Note. n = 110. Standardized regression coefficients are shown.

p < .05. **p < .01.

Results presented in Table 2 demonstrate that after controlling for leader gender, leader tenure, and leader–follower tenure, transformational leadership was associated with FOC (β = .27, p < .01). Thus, the first condition for mediation was satisfied. Results presented for Step 1 predicting follower change resistance (β = −.24, p < .01) show that transformational leadership was strongly related to the follower outcome variable, which supports the second condition for mediation. Results for Step 2 demonstrate that FOC (β = −.20, p < .01) was associated with follower change resistance, supporting the third condition for mediation. Finally, Step 2 shows that the effect of transformational leader was weakened for follower change resistance (β = −.14, ns) once FOC was entered into the model. Similar results were observed for the mediating effect of FST on the transformational leadership–follower extra effort relationship (Table 3). Transformational leadership was associated with FST (β = .40, p < .01), which was strongly related to follower extra effort (β = .44, p < .01). Step 2 shows that the effect of transformational leader was weakened for follower extra effort (β = .22, p < .05) once FST was entered into the model. To further test the significance of the mediation effects, Sobel’s (1982) test for indirect effects was conducted (MacKinnon, Lockwood, Hoffman, West, & Sheets, 2002). Results demonstrated that the indirect effect on both follower change resistance (z = 3.04, p < .01) and follower extra effort (z = 2.86, p < .01) were significant. Overall, Hypotheses 1 and 2 were supported.

Hypotheses 3 and 4

Hypotheses 3 predicted that the mediating effect of FOC on the transformational leadership–follower change resistance relationship would be moderated by organizational change magnitude. Similarly, Hypothesis 4 predicted that the mediating effect of FST on the transformational leadership–follower extra effort relationship would also be moderated by organizational change magnitude. Moderated mediation analyses were conducted according to the following procedures recommended by Preacher et al. (2007): (a) significant effects of transformational leadership on follower change resistance and follower extra effort; (b) significant interaction between transformational leadership and organization change magnitude on FOC and FST, and significant interactions between each set of follower values and organization change magnitude on both follower outcome variables; (c) significant effects of FOC and FST on follower change resistance and follower extra effort, respectively; and (d) different conditional indirect effects of transformational leadership on the outcome variables via each set of follower values across high and low levels of organization change magnitude. The final tests for moderated mediation establish whether the strength of the mediation effects via follower values differs across high and low organization change magnitude.

The first condition for moderated mediation is supported by results from testing Hypothesis 1, which demonstrated that transformational leadership was associated with both follower change resistance and follower extra effort. Table 4 presents results from a series of moderated regression models to offer support for the second condition for moderated mediation. The transformational leadership–organization change magnitude interaction was associated with FOC (β = .19, p < .01) and FST (β = .23, p < .01). The FOC–organization change magnitude interaction and FST–organization change magnitude interaction were related to follower change resistance (β = −.21, p < .01) and follower extra effort (β = .19, p < .01), respectively. These results offer support for the second condition for moderated mediation. Results for testing Hypothesis 1 offer support for the third condition for moderated mediation, as FOC was related to follower change resistance, while FST was associated with follower extra effort. To test the final condition for moderated mediation, which requires the magnitude of the conditional indirect effect of transformational leadership via follower values to differ across high and low levels of organization change magnitude, Preacher et al.’s (2007) statistical procedures were applied. A z statistic and standard error were calculated for the conditional indirect effects of transformational leadership via FOC and FST, while high and low organization change magnitude was calculated as 1 standard deviation above and below the mean (Preacher et al., 2007). Table 5 presents the results of these analyses, specifically the estimates, standard errors, z statistics, and significance values of the indirect effects for transformational leadership via follower values across high and low levels of organization change magnitude. The results demonstrate that the conditional indirect effects of transformational leadership were stronger and significant in the high organization change magnitude condition for follower change resistance (b = −.105, p < .01) and follower extra effort (b = .094, p < .01). These effects were weaker and not significant in the low organization change magnitude condition for both follower change resistance (b = .010, ns) and follower extra effort (b = .015, ns). Overall, these results offer support for Hypotheses 3 and 4.

Table 4.

Results of Hierarchical Regression Analyses Testing Moderation of the Mediated Effects of Follower Openness to Change and Self-Transcendence Values (Hypotheses 3 and 4).

	Follower openness to change	Follower self-transcendence	Follower change resistance	Follower extra effort
Leader gender	−.05	−.09	−.03	.05
Leader job tenure	.04	.08	.04	−.03
Leader–follower tenure	−.04	.10	−.05	.09
Transformational leadership	.28**	.35**	−.20*	.15*
Organization change magnitude	−.10	−.02	.08	−.05
Transformational leadership × Organization change magnitude	.19**	.23**
Follower openness to change			−.18*
Follower openness to change × Organization change magnitude			−.21**
Follower self-transcendence				.14*
Follower self-transcendence × Organization change magnitude				.19**
ΔR²	.22	.24	.19	.15
Adjusted R²	.20	.22	.17	.14
F	12.70**	15.03**	10.79**	8.35**

Note. n = 110. Standardized regression coefficients are shown.

p < .05. **p < .01.

Table 5.

Moderated Mediated Results for Transformational Leadership Across Levels of Organization Change Magnitude.

Moderator	Level	Follower change resistance^a				Follower extra effort^b
Moderator	Level	Conditional indirect effect	SE	z	p	Conditional indirect effect	SE	z	p
Organization change magnitude	Low	.010	.025	−0.42	.71	.015	.022	1.16	.25
Organization change magnitude	High	−.105	.028	−3.45	.01	.094	.030	2.89	.01

Note. SE = standard error. ^aMediating variable is follower openness to change values. ^bMediating variable is follower self-transcendence values.

Discussion

The purpose of this study was to address several important gaps in transformational leadership research by examining FOC values and FST values as mediating the relationships between transformational leadership and followers’ behavioral resistance to change and willingness to exert extra effort during significant organizational change, respectively. Using Preacher et al.’s (2007) moderated mediation framework, the results demonstrated conditional indirect effects of transformational leadership on both follower change resistance and follower extra effort in work contexts characterized by high organization change magnitude. Transformational leaders’ role modeling of openness to change and self-transcendent values through key behaviors, such as creating value-laden visions that illustrate change as opportunities for growth and demonstrating a willingness to incur personal losses and sacrifice to support the change, was associated with followers who adopted these values and demonstrated support for organizational changes. Consistent with prior theory explicating the role of transformational leadership, follower values, and follower behavioral outcomes (Brown & Treviño, 2009; Meglino & Ravlin, 1998; Oreg & Berson, 2011), the results suggest that followers’ adoption of openness to change and self-transcendent values were associated with the manner in which significant organizational changes were perceived and ultimately supported. The study results indicate that followers of transformational leaders may be more likely to interpret major organizational changes as opportunities for growth and renewal rather than as direct threats to personal status, power, and resources. Overall, these findings suggest that transformational leadership behaviors are likely associated with the follower attitudes and behaviors most critical for achieving successful organizational change, such as demonstrating a willingness to support the changes despite potential personal losses and engage in extrarole or voluntary actions to help execute a change initiative.

Implications for Transformational Leadership Theory

The findings from this study present several implications for transformational leadership theory and research. This study offers empirical support for the relationships between transformational leadership and key follower values that are associated with organizational change. To date, no published empirical study has linked transformational leadership, FOC and FST values, and a key contextual variable to test critical follower attitudinal and behavioral outcomes during major organizational change. Despite the dominant role of leaders transmitting values to followers as a central mechanism of follower influence in models of transformational leadership (e.g., Bass & Steidlmeier, 1999; Burns, 1978), very few empirical studies link transformational leadership and follower values (Brown & Treviño, 2009; Fu et al., 2010; Oreg & Berson, 2011) and there are no published studies that model organizational change magnitude as a key contextual variable. Future empirical examination of follower values and other mediating constructs, such as trust and leader–follower values congruence, is clearly needed to better explain the active mechanisms through which transformational leadership achieve positive results during periods of organizational change.

Addressing the limited empirical support for the active mediating influence processes of transformational leadership, the study findings suggest that a potentially powerful explanation for the robust effects on follower performance outcomes during organizational change stems from FOC and FST values. Transformational leaders, driven by their fundamental beliefs in openness to change, collectivistic, and self-transcendent values such as altruism, self-sacrifice, and social justice, influence their followers to believe that their work roles and sustained effort are critical for achieving ambitious change initiatives. Aided by transformational leaders’ collective vision that inspires followers to look beyond self-interests for the good of their organization, followers’ beliefs in altruism, shared sacrifice, and internalization of such values generates willingness to exert extra effort for the leader and organization (Lord & Brown, 2001; Lord et al., 1999). Future research is needed to corroborate and extend these findings that FOC and FST values partially explain the robust effects of transformational leadership on follower change resistance and follower extra effort during periods of significant organizational change.

Implications for Practice

The findings from this study suggest several key implications for the selection, promotion, and development of organizational leaders. The results suggest that leaders who role model openness to change and self-transcendent values through transformational leadership behaviors are more likely to affect critical follower attitudinal and behavioral outcomes during major organizational changes. A recent McKinsey & Company (2008) survey concluded two thirds of change initiatives fail due, in part, to the quality of leadership and nature of congruence between leader and employee values during organization changes. As such, organizations seeking to enhance the efficacy of major organization change initiatives should consider the following implications for leader selection, promotion, and development practices. Organizations may benefit by augmenting their leader selection and promotion processes with assessments that target value orientations. Specifically, experience-based, semistructured interviews can be designed to elicit a candidate’s prior work experiences with respect to influencing followers throughout change initiatives. Organizations may revise existing leadership assessment and development practices according to the transformational leadership dimensions. Research on multisource or “360-degree” leadership assessments strongly suggests that managers can develop the skills and behaviors associated with transformational leadership (e.g., Avolio & Gibbons, 1988; Barling, Weber, & Kelloway, 1996), which portends their capacity to influence followers’ value orientations and resultant performance during organizational changes.

Limitations and Future Research

While the hypothesized model was supported, several study limitations and promising future research directions should be noted. First, the cross-sectional nature of the data precludes any causal conclusions associated with the relationships postulated in the moderated mediation model. A longitudinal design whereby leader behavior and follower values are assessed at one point in time with a subsequent measurement of leadership behavior and changes in follower values and behaviors may offer stronger evidence of the mediating role of follower values. Along a similar vein, the study design precluded analysis of the differential impact of organizational culture and leadership on organizational change as each leader and his or her respective team members represented a different organization. Given consistent research illustrating the strong impact of organizational culture on the organizational change process (Clement, 1994; Latta, 2009), future field studies should adopt research designs that would include multiple leaders working in the same organizations and allow for analysis of leadership styles and their impact on followers’ values in the same organizational context. Finally, future transformational leadership research would benefit from extending the present study’s findings on FOC and FST values by examining the congruence between leaders’ and followers’ values as a potential mediator of transformational leadership and follower performance outcomes. Recent research supports the potentially critical mediating role of leader–follower value congruence for explaining the powerful performance effects of transformational leadership (Hannah et al., 2016; Hoffman et al., 2011).

Conclusion

Organizations competing in today’s historically difficult economic conditions face a myriad of challenging decisions that affect both short-term solvency and long-term value creation. Since the onset of the current recession, which officially began in December 2007 (National Bureau of Economic Research, 2008), businesses of various sizes across multiple industries arguably confront the greatest threat to their existence since the Great Depression. In the context of the current incredibly challenging economy, private and public sector organizations must continue implementing the necessary changes necessary for adapting to their rapidly changing environments. Findings from this study suggest that organizations seeking to enhance the efficacy of their change initiatives should develop transformational leadership capacity to garner its effects on followers’ willingness to support organizational change.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Author Biography

Kevin S. Groves is an associate professor of Organization Theory and Management at Pepperdine University’s Graziadio School of Business and Management. His research and consulting activities include transformational leadership, succession management, and leadership development practices.

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