Leadership Styles in Relation to Employees’ Trust and Organizational Change Capacity

Muhammad Yasir,Rabia Imran,Noor Azmi Mohamad,Muhammad Muddassar Khan,Muhammad Kashif Irshad

doi:10.1177/2158244016675396

Abstract

This article intends to examine the role of leadership styles (transformational, transactional, and laissez-faire) and employees’ trust toward organizational change capacity (OCC). Data were collected from a convenient sample of managers, coordinators, officers, community facilitators, social organizers, and activists through questionnaires. A total of 250 respondents were sent questionnaire, usable questionnaires were 204. Results revealed positive and significant relationship between transformational leadership and employees’ trust. Moreover, an insignificant relationship was found between transactional leadership and employees’ trust, whereas laissez-faire and employees’ trust were found to be negatively associated. Findings of the study also depicted a positive and significant relationship of transformational leadership and transactional leadership with OCC. However, laissez-faire was negatively associated with OCC. Results also revealed that employees’ trust mediates the relationship between leadership styles (transformational and laissez-faire) and OCC. However, employees’ trust did not mediate the relationship between transactional leadership and OCC. Finally, implications and suggestions for future research are provided.

Highlights

The importance of leadership has grown significantly in organizations as compared with the past
The current study focuses on finding the effect of leadership styles on organizational change capacity (OCC) through the mediating role of employees’ trust
Past literature provides evidence that leadership plays an important role toward OCC, as transformational leadership is found to have a positive impact on the change process (Brown, 1994; Long & Mao, 2008)

Summary

Introduction

The importance of leadership has grown significantly in organizations as compared with the past. Leadership is identified as one of the most important factors for this successful transformation (Kotter, 1995) It is considered as a key contributor towards building organizational capacity for change (Judge, 2011), as organizations aim to enhance their capacity to change requires effective and trustworthy leadership (Judge, 2011; Judge & Elenkov, 2005; Soparnot, 2006). These leaders organize and align followers toward a common goal by giving them direction and defining the most appropriate behaviors and attitudes needed for change (Geller, 2003; Northouse, 2007). They develop trusting followers that leads to enhanced capacity for organizations to change (Judge, Bowler, & Douglas, 2006)

Methods

Results

Discussion

Conclusion