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Master Thesis
MSc in Business Administration - Leadership and Management track
The impact of autocratic leadership style and participative leadership
behaviour on support for change, and the moderating effect of
organizational identification and job-related uncertainty
Dóra Török (11088761)
Thesis supervisor:
dhr. dr. Merlijn Venus
First draft: 10-06-2016 Final version: 24-06-2016
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Statement of originality
This document is written by Student Dóra Török who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
3 ACKNOWLEDGMENT
I would first like to express my gratitude to my thesis supervisor, dhr. dr. Merlijn Venus of the University of Amsterdam. He always provided help and valuable feedback whenever I had a question about my research or writing and he steered me into the right direction when he thought I needed it.
I also like to thank to my parents and to my family for providing me support and encouragement throughout my years of study, through the process of researching and writing this thesis. This accomplishment would not have been possible without them. Thank you.
4 Table of content
1. Introduction 7
2. Theoretical Background 10
2.1. Organizational change 10
2.1.1. Overcoming resistance and building support for organizational change 11
2.1.2. Building support for organizational change 14
2.2. Leadership and organizational change 15
2.2.1. Autocratic leadership style 17
2.2.2. Participative leadership behaviour 18
2.3. Organizational identification 22
2.3.1. The moderating role of organizational identification 24
2.4. Job-related uncertainty 26
2.4.1. The moderating role of job-related uncertainty 28
2.5. Research model 29
3. Research Method 30
3.1. Procedure 30
3.2. Sample 31
3.3. Measures 31
4. Data analysis and results 33
4.1. Data analysis 33 4.2. Results 34 4.2.1. Descriptive statistics 34 4.2.2. Main effects 35 4.2.3. Conditional effects 35 5. Discussion 40 5.1. Theoretical implications 41 5.2. Limitations 44
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5.3. Directions for future research 45
5.4. Practical implications 47
6. Conclusion 48
References 49
Appendix 57
Index of tables and figures
Figure 1 Research model 29
Table 4.1. Means, standard deviations, correlations, and reliability scores 36 Table 4.2. Hierarchical regression model for Support for Change, Hypothesis 1 37 Table 4.3. Hierarchical regression model for Support for Change, Hypothesis 2 37 Table 4.4. Moderating effect of Organizational Identification, Hypothesis 3 39 Table 4.5. Moderating effect of Organizational Identification, Hypothesis 4 39 Table 4.6. Moderating effect of Job-related Uncertainty, Hypothesis 5 40 Table 4.7. Moderating effect of Job-related Uncertainty, Hypothesis 6 40
Index of appendices
Appendix A Measures 57
Appendix B Employee questionnaire 60
6 Abstract
Nowadays, in the turbulent and fast-changing world, organizations face the pressure and the challenge to adapt to the changing demands and environment. There is growing research aiming to examine the role of leadership during the change process, especially because it is assumed that different kinds of leadership behaviours or styles have different effects and consequences for the success of a change initiative. In the current paper two, less frequently discussed leadership styles will be examined in order to contribute to the extant literature on change management; autocratic leadership style and participative leadership behaviour. When an organizational change takes place, the major challenge for leaders is to address change recipients' reactions in order to prevent or overcome resistance, and to achieve support for the change initiative. The goal of the current thesis is two-folded: to examine the main effects between the aforementioned leadership style and behaviour on support for change among employees, and to explore the moderating role of organizational identification and job-related uncertainty in the case of the main effects, because they are critical variables during change. A data set containing 106 leader-employee dyads, which was collected in 4 languages, was used to explore the relationships and conditional effects. The hierarchical regression analyses in each case showed no significant relationships and effects. The findings contribute to the extant literature by the examination of the aforementioned relationships, providing alternative explanations for underlying reasons and mechanisms, and serving as a basis for future research.
Keywords: organizational change, autocratic leadership style, participative leadership
7 1. Introduction
In our accelerated world, internal organizational and environmental challenges, the pressure of competition, the urge to best serve costumer needs, and the goal to survive on the market have one major thing in common: change. Companies need to change in order to comply with challenges, to gain competitive advantage, to best serve the ever changing customer needs in a world where customers constantly look for something better and more innovative. Most of the companies are aware of the need for change, then why do so many fail on the way toward it? The case of Nokia can provide a possible answer for that question. Birkinshaw (2013), a professor at the London Business School, asked his MBA students how come that Nokia lost its leading role on the market in less than five years? The students provided somewhat predictable answers, such as Nokia failed to develop new technologies and it lost touch with its customers. According to Birkinshaw (2013), the answer to the question has a lot to do with leadership. Leaders are responsible for a wide range of events and processes in the times of change, such as eliminating processes that are not valuable anymore, ensuring that front-line managers have a voice and it is heard, and also, they should not be intolerant of failure.
Leading change can be seen as one of the most important aspects of leadership. Leaders are essential in the process to make an organization able to comply with and adapt to a changing environment. Leaders also have a major role in ensuring a change initiative to be successful. Resistance to change may serve as a great obstacle on the way, which leaders can overcome if they put effort into understanding the underlying reasons and mechanisms for resistance. If leaders are able to overcome resistance, or way better, if they can achieve support for the change from the beginning, that makes the change initiative more likely to succeed (Yukl, 2010). One can assume that leadership plays a vital role in the equation of support for change. But there is a little understanding provided by the extant literature, what
8 kind of impact leaders have on change and what kind of leadership behaviours may be seen as effective in terms of gaining support for and enacting an organizational change. Also, there is not much empirical evidence about the topic (Ford & Ford, 2012). Moreover, not many studies have addressed leaders' behaviours and personal attributes specifically in the context of organizational change (Oreg & Berson, 2011a). The current paper addresses this lack of empirical evidence by examining the impact of autocratic leadership style and participative leadership behaviour on support for organizational change. The main goal of the examination is to provide a better understanding through which mechanisms the aforementioned leadership behaviours may or may not lead to support for change among employees.
Since leaders also function as change agents, they can achieve support for change by influencing various factors in the work environment (Ford & Ford, 2012). The example of Nokia also represents the importance that the understanding of what kind of leadership behaviours work the best during a change and how they work, cannot be neglected. Researchers in the past twenty years examined the relationship between transformational and charismatic leadership and organizational change. Autocratic leadership style and participative leadership behaviour are studied in the current paper because of the lack of research done so far about these two in terms of support for organizational change.
Throughout the years of research, it became more clear that the success or failure of organizational change initiatives are also dependent on the behaviour of change agents (Battilana, Gilmartin, Sengul, Pache & Alexander, 2010). Lines (2004) concludes in his research that it seems to be a relationship between participation and the successful implementation of strategic change and post change organizational commitment. But there is not much research on leadership behaviours other than transformational and charismatic, and their impact on organizational change, specifically their impact on support for change among employees (e.g. Bommer, Rich & Rubin, 2005; Eisenbach, Watson & Pillai, 1999). It is
9 expected that the link between autocratic leadership behaviour and support for organizational change will be negative, while in the case of participative leadership behaviour this link is expected to be positive. Furthermore, in the current paper organizational identification and job-related uncertainty will be taken into account as moderators. Both moderators have the potential to change the nature of the relationship between a leadership style or behaviour and support for organizational change, thus, it makes them interesting to be part of the model, and to investigate the role they will play, moreover they are critical variables during change. Organizational identification is expected to strengthen the hypothesized positive relationship between participative leadership behaviour and support for change, while weaken the proposed negative relationship between autocratic leadership style and support for change. Job-related uncertainty is hypothesized to strengthen the expected positive relationship between participative leadership behaviour and support for change as well as the expected negative relationship between autocratic leadership style and support for change. Previous studies concentrated more often on readiness for change (e.g. Rafferty, Jimmieson & Armenakis, 2012) instead of support for change, furthermore they focused on different moderators during the research. Because of the aforementioned reasons, the current paper will provide theoretical contributions to the existing literature.
The current paper first provides theoretical background of organizational change and support for change among employees, autocratic leadership style, participative leadership behaviour and of the two moderators, organizational identification and job-related uncertainty. After each section, the related hypotheses will be introduced. The subsequent section will describe the methodology to test the hypotheses, then the results of the data analysis will be reported. In the discussion, theoretical and practical implications will be discussed, the limitations will be addressed, and the conclusion will be drawn.
10 2. Theoretical background
The aim of this review is to provide a theoretical basis to aid the better understanding of the model. Those theories and constructs will be addressed that are relevant to the model being discussed in the current paper.
2.1. Organizational change
Nowadays, in the increasingly complex business environment, organizations face the need to implement major changes in order to be able to respond to challenges and to survive (Higgs & Rowland, 2005). According to Yukl (2010), what is going to be changed is not a negligible fact. The success of an organizational change initiative is partially dependent on the type of the change. Whether attitudes or roles are being changed, the author differentiates between two major approaches. First, within the attitude-centred approach, the emphasis is on changing attitudes and values. In order to succeed, organizations may use a range of techniques, such as team-building activities, training programs, persuasive appeals or culture change programs. The underlying assumption in this approach is, that once attitudes and values are changed, a person's behaviour would also change in a beneficial way, so that those people might become change agents themselves and spread the vision among other people. Second, within the role-centred approach, the emphasis is on changing the work roles. To do so, the workflow can be reorganized, jobs can be redesigned, changes can be introduced into the criteria of evaluating the work, and the reward system also can be changed. The logic behind this approach is, that due to the change in work roles, people must act in a different way which will lead to a change in attitudes in order to comply with the new behaviour. There are other major types of change as well. The technologies being used can be also changed, for example the decision and information support systems. Organizations may also decide to change their competitive strategy if necessary. There can be major changes within the organization as well, emphasizing either human (improving human resources) or
11 economic factors (improving financial performance). The first phase of any kind of change initiative should be to identify the nature of the problem and to identify those objectives that leaders aim to achieve with the change (Yukl, 2010).
Huy and Mintzberg (2003) categorize change in a different way. According to their approach, the three different types of change also have different origins; dramatic change is delivered from the top to the bottom by senior management, systematic change arises laterally, while organic change is an emergent, bottom-up process. Even though, dramatic change is the one that is initiated explicitly by senior management, all of the three types need some sort of leadership presence in order to be successful. The authors' categorization and the fact that leadership plays a role in achieving success in the case of each category support the notion that leading change is indeed an important aspect of leadership (Yukl, 2010).
An organizational change's likelihood for success will be higher, if the leader of the change attempts to understand the underlying reasons for resistanceand tries to gain support for the change among employees. Employees may react to change in different ways, they might support or resist it, and their reaction is dependent on many factors (Yukl, 2010).
2.1.1 Resistance to change
Employees resisting major changes is a common phenomena for leaders and organizations (Yukl, 2010). Dent and Goldberg (1999) argue that resistance became a standard chapter in most of the management textbooks, and it is taken so self-evidently that it is barely defined. Resistance can play a critically important factor in terms of the success or failure of a change initiative; managers often view it as an obstacle on the way toward successful change implementation but it can also serve as a useful source of information, which makes it possible to develop a change process that might be more successful (Sohal, 1998).
12 According to Ansoff (1988), resistance may lead to increased costs, delays and instabilities in the change process. Resistance can also be seen as the will to maintain the current status quo and being persistent to avoid any kind of change (Fuentes, 2003). The
proposed change can be resisted as well in the case when organizational members believe that the organizational identity is exposed to a threat because of the change initiative. The organizational identity defines a range of acceptable and unacceptable behaviours. Problems arise when the change initiative leads to behaviours and management practices that are in misalignment with the organizational identity (Jacobs, Christe-Zeyse, Keegan & Pólos, 2008). The social identity approach also supports the notion that when organizational identity is threatened, members of the organization will resist the change in order to protect the basis of an element of their self-definition, namely the organizational identity. (Venus, Stam, Van Knippenberg, 2016).
Fuentes (2003) follows Rumelt's (1995) five-group classification of the sources of resistance and completes it with other authors' contributions. In the formulation stage there are three categories, the first is distorted perception, interpretation barriers and vague strategic priorities (e.g. denial, communication barriers), the second category deals with the low level of motivation for change (e.g. direct costs of change, past failures), while the third with the lack of creative responses (e.g. resignation, inadequate strategic vision). There are two further categories in the implementation stage, the first deals with political and cultural deadlocks (e.g. department policies, deep routed values) and the second includes other possible sources of resistance (e.g. leadership inaction, cynicism).
Economic threats also serve as one of the possible sources of resistance. The lack of trust in those people who propose the change is also a main source of resistance, especially since distrust may magnify other sources of resistance. These perspectives raise the level of anxiety and fear of uncertainty (Yukl, 2010). Employees resist the uncertainties and potential
13 disadvantageous outcomes that a change can cause, rather than the change itself (Dent & Goldberg, 1999; Sohal, 2006). Resistance can also stem from the good intentions of employees, such as trying to comply with ethical principles or the desire to guard the organization's best interests (Piderit, 2000).
Uncertainty caused by the organizational change may serve as a cause for resistance in many ways. Employees have two fundamental needs to reduce uncertainty, thus help to overcome resistance as well. Predictive needs, that is, being able to predict what is going to happen next, and explanatory needs, when employees understand the reasoning why something is happening the way it is (Bordia, Hobman, Jones, Gallois & Callan, 2004a).
What could leaders possibly do to break resistance and achieve support for a change initiative among employees? First, it must be recognized that leaders and employees see the same change initiative differently. Both party acknowledges that vision and leadership play a vital role in the succession of a change, but not enough leaders put effort in discovering the way of making employees support the change and not resist it. There is a gap between what top management has in mind when introducing a change and what employees perceive of that initiative. An organizational change for many employees is not welcomed, it appears to be threatening, while the management sees it as an opportunity to make the business more productive or more aligned with the strategy. In order to close the gap, leaders should put themselves into their employees' shoes and understand the employees' perspectives of the change (Strebel, 1996). There are many tactics and techniques that enable leaders to reduce the level of resistance. Among these tactics, collected by Judson (1991), are threats and compulsion, compromises and bargaining, inducements and rewards, criticism, psychological support, participation, persuasion, ceremonies, and guarantees against personal losses.
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2.1.2. Building support for organizational change
So far resistance has been discussed as a phenomena that is detrimental and hinders the change initiative. However, resistance can also serve as a resource. Through its existence, it maintains the discourse about the change thus, gives change agents the opportunity to further explain and reason for the change, and it provides organizational members with the opportunity to develop understandings, thus help them in the sense-making process. Resistance can also indicate a higher level of engagement by expressing concerns regarding the change; this might signal a higher level of psychological ownership and commitment. Because resistance can be viewed as a form of conflict as such, it can also lead to decisions of higher quality (Ford, Ford & D'Amelio, 2008).
Overcoming resistance is usually not enough when an organizational change takes place. The two terms, overcoming resistance and achieving support for the change are often being discussed together in the literature (Fernandez & Rainey, 2006). In order to ensure the success of a change initiative, employee reactions must be addressed. Many antecedents contribute to various employee reactions that lead to different consequences of a change, both personal and work-related, such as well-being, health, withdrawal, and job satisfaction, organizational commitment and the level of performance. By using different types of practices and activities (participation, communication, principal support, procedural justice, management competence etc.), leaders can ensure that the reactions of employees will be favourable, and they can also use those activities to address the rather negative reactions in order to ensure positive change-related outcomes (Oreg, Vakola & Armenakis, 2011b). Participation, for instance, is not only able to break the resistance but also plays a great role in gaining support for change. When employees are encouraged to participate and they are involved in every stage of the organizational change from the very beginning, they will develop a psychological ownership, will be more willing to provide feedback, help
fine-15 tuning the processes, and they will also be more likely to transfer and share critical information during the change. This way, employees would become more proactive participants of the organizational change thus, more supportive of it (Fernandez & Rainey, 2006).
During an organizational change leaders are able to influence many of the above mentioned factors in the work environment that may have a direct or indirect effect on the outcome of a change initiative. Leaders have a fundamental role in the change management process (Ford & Ford, 2012). Even though, there is growing evidence of the importance of leadership behaviour in managing change (Battilana, 2010), there is much to learn about different leadership behaviours and styles and their relationship with gaining support for organizational change.
The aim of the upcoming section is to provide an example of a leadership style that may not serve best in a situation where an organizational change takes place, and to demonstrate that participative leadership style would be a better choice to achieve support for change.
2.2 Leadership and organizational change
Scholars attempted to create a universal definition for leadership throughout the decades since the beginning of the 20th century. During that period of time, definitions of leadership were changing constantly, emphasizing different aspects of leadership in the different decades (Northouse, 2013). During the GLOBE study, researchers came up with a definition for organizational leadership, stating that organizational leadership is "the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of organizations of which they are members." (House, Hanges, Javidan, Dorfman & Gupta, 2004, p.56).
As argued before, leaders play a crucial role during an organizational change because they can influence various aspects in the work environment that can either threaten or
16 contribute to the success of a change initiative (Yukl, 2010; Ford & Ford, 2012). The presence of an effective manager during change is necessary but not sufficient. While an organizational change must be planned, directed and controlled, thus well-managed, leaders are the ones being capable of introducing a change in a way that it will yield success in the end. They can win employees' hearts and minds through articulating a vision, empowering and involving people into processes, and last but not least, motivating them. By using their personal power, leaders can make it clear where the organization currently stands, what and why some things should be changed, and show the way toward a better future (Gill, 2003). Thus, to examine leaders' behaviours in the context of organizational change has relevance, since leaders' behaviours and attitudes can shape individual and organizational level outcomes, such as resistance or support for change, firm performance, and culture (Oreg et al., 2011b).
However, the main focus in terms of examining leadership's role during an organizational change has been on transformational leadership so far. The definition of transformational leadership also stems from the concept of change and it has been discussed to a great extent in connection with change. Because it leads to many positive outcomes, such as extra effort, organizational citizenship behaviour, increased employee satisfaction, and organizational commitment, it is viewed as a "positive change-oriented behaviour by change implementers" (Bommer et al., 2005, p. 734). Transformational leaders are successful in gaining support for change and leading a successful change initiative by displaying appropriate behaviours. When they realize that there is a need for change, they create an appealing vision for a better future rather than creating dissatisfaction with the status quo, furthermore, they provide personal support, they stimulate followers, empower them, and by setting high performance expectation they increase the self-efficacy of their employees (Eisenbach et al.,1999).
17 Less attention has been paid on other leadership styles and behaviour, especially in the context of organizational change. This is the exact reason why autocratic leadership style and participative leadership behaviour serve as the topic of the current paper in connection with support for change.
2.2.1. Autocratic leadership style
Lewin and Lippitt in 1938 conducted a preliminary study with elementary school children in order to develop techniques to examine autocratic and democratic group atmospheres. Two teachers were appointed in each group to lead and to make the children complete a task of preparing theatrical masks. One group was lead by a leader with autocratic style, the other with democratic. In the authoritarian group, all policies were determined by the leader, the steps and processes to achieve the goal were dictated by him, the future direction remained uncertain, he determined when and whom to work with, furthermore, he criticized the children's' activities, did not participate in the group work, and he remained always impersonal. Lewin and Lippitt found that in the autocratic group, a higher level of tension existed, there was less communication, less stable group structure, more unfinished work, children even developed two scapegoats, and the feeling for group property and group goals was much worse developed.
Autocratic leadership is considered to be "a leader type not taking care of the socioemotional dimensions of groups, such as maintaining group cohesion and promoting the group as a viable social entity" (Cremer, 2007, p. 1388). Autocratic leaders show little willingness to care about the needs of members and show little respect toward them (Cremer, 2007). They also influence feelings in a negative way, and score low on consideration as shown by the Ohio State University studies (Judge, Piccolo & Ilies, 2004). In accordance with Lewin's and Leppitt's findings, the followers of autocratic leaders exhibit negative feelings, because their leader does not motivate them to exhibit a sense of loyalty toward the group.
18 Autocratic leaders are seen as being pushy and dominating, group members are not encouraged or allowed to display their voice in decision making processes, leaders show little, if any respect toward followers' values, opinions, and ideas. In terms of the leader-member exchange theory, autocratic leaders do not put much effort into establishing a positive relationship between them and their followers. Furthermore, they do not provide opportunities to discuss alternatives during a decision making process, they push their own solutions, and this kind of behaviour often leads to negative consequences (Cremer, 2007). While democratic leaders care about involving their followers into a discussion, autocratic leaders do not. Also, employees working in an organization where the atmosphere is rather autocratic, express more frustration and anger (Rast III, Hogg & Giessner, 2013).
In the previous section, different techniques and methods were introduced to overcome resistance and gain support for organizational change among employees. After discussing the nature of autocratic leadership style, one can assume that autocratic leaders may not be the ones who would care much about gaining support for an organizational change initiative. According to the above mentioned characteristics, they would more likely to push the change initiative without providing employees the opportunity to discuss the change and its possible outcomes. Moreover, they would not allow employees to actively participate and develop a sense of psychological ownership, thus making employees less supportive of the change. Given the existing theoretical background and argumentation, the following hypothesis will be tested:
H1: Autocratic leadership style has a negative effect on support for change among employees. 2.2.2. Participative leadership behaviour
The participative leadership behaviour originates from the 1950s, when researchers at the University of Michigan conducted a study on leadership behaviour. The main goal of the study was to examine the relationship between leader behaviour, group processes and group
19 performance. During the study, the researchers involved leaders from various fields and collected information about their managerial behaviour by using questionnaires and interviews. A distinction was made between relatively effective and ineffective leadership behaviours based on objective measures of group productivity. This way, the researchers identified three types of leadership behaviours: task-oriented behaviour, relations-oriented behaviour, and participative leadership. Managers with participative leadership behaviour used more group supervision instead of supervising employees individually, they encouraged subordinates to participate in the decision-making processes and to cooperate, and they aimed to improve communication. In group meetings the manager's role should be guiding the discussion and ensuring that it remains supportive, constructive, and it is oriented toward problem-solving. Even though subordinates are involved in decision making and discussions take place, the manager is still responsible for all the decisions and their outcomes (Yukl, 2010). The participative leadership behaviour has been also studied in the context of the path-goal theory in the 1970s. Path-path-goal theory focuses on the way leaders motivate subordinates to achieve a designated goal. Four leadership behaviours have been included so far: directive, supportive, participative and achievement-oriented. Participative leaders pay attention to subordinates' ideas and can also involve their suggestions during the decision making process (Northouse, 2013).
Yukl (1999) argues though, that researchers who were eager to prove that participative leadership behaviour is more effective than autocratic leadership, asked the wrong questions, did not take situational contingencies into account, and they only measured the average participation used by a leader. Also, the conditions for participation must be right. There should be enough time to participate, the issues for which employees can provide input should be relevant for them, the organization's culture should support participation, and employees should have the ability to participate (Cascio, & Wynn, 2004). Leaders are responsible for and
20 able to create such situations and conditions where subordinates will feel motivated and able to participate, and welcome this leadership behaviour. Those conditions also include information sharing, individual level and group level self-efficacy, trust among group members, skills in problem-solving, and clarity about objectives. When these conditions are present, there is a more favourable climate to enact participative leadership behaviour (Yukl, 1999).
Shifting from a classical type of hierarchical leadership to a more participative form of leadership is challenging, but worth the attempt. In order to achieve different tangible and intangible outcomes, such as a successful organizational change, leaders should aim to a better and deeper understanding of processes and factors among employees. Involving them across the levels of hierarchy, making their ideas and suggestion count, can be an effective tool for achieving a better understanding (Rok, 2009). The opportunity to participate in decision-making reduces ambiguity and uncertainty because employees perceive an increased level of knowledge about decisions (Bordia, et al., 2004a). Participative leaders are also able to influence the justice perceptions of employees in a favourable way. Participative leaders can have a positive impact on procedural, interpersonal, and informational justice by asking for employee input and providing timely, accurate, and helpful information. Justice perceptions play an important role in the evaluation of employees whether they have been treated fairly during procedures and whether those procedures were fair. The different dimensions of justice are related to important outcomes such as organizational commitment, job satisfaction, turnover intentions, and management trust. High levels of organizational commitment and trust in management can both increase the likelihood of the acceptance of a change initiative (Kernan & Hanges, 2002).
Furthermore, beneficial consequences can be achieved by two theoretical models of participative leadership behaviour that are widely used in terms of subordinates' work
21 performance, but are also useful in terms of supporting a change initiative. According to the motivational model, subordinates' performance will improve through higher levels of psychological ownership and greater intrinsic rewards from work due to the higher involvement in decision making. The exchange-based model functions through enhanced levels of trust in the leader, because the participative behaviour indicates that leaders have confidence in and respect for the subordinates. Because of that, subordinates are more likely to reciprocate their leaders and thus, their performance will increase (Huang, Iun, Liu & Gong, 2010).
When examining the nature of the relationship between participative leadership behaviour and support for change among employees, one would recognize that this kind of leadership behaviour has the potential to achieve a supportive behaviour regarding organizational change. Also, Wanberg and Banas (2000) found partial support for a positive relationship between higher levels of participation and openness to change occurring within a reorganizing workplace. As discussed earlier, facilitating participation in decision making can create a sense of psychological ownership, reduce resistance and enhance the level of trust toward the leader. When these conditions are present, as argued in the first section, a leader is more likely to gain support for a change initiative. Those leaders who exhibit participative leadership behaviour, because of its nature, can create those conditions. Based on the theories presented and the argumentations based on them, the following hypothesis will be tested:
H2: Participative leadership behaviour is positively related to support for change among employees.
In the upcoming two sections the moderators of the current paper will be introduced. Because of their nature, these two moderators have the potential to influence the relationships between the autocratic leadership style and participative leadership behaviour and support for organizational change among employees. Both of the chosen moderators, organizational
22 identification and job-related uncertainty, are also being discussed in the literature in connection with organizational change. Because, as will be presented later on, the two moderators have different individual- and organizational-level outcomes, it is reasonable to presume that the impacts of autocratic leadership style and participative leadership behaviour will differ between employees who highly identify with their organizations and experience high levels of job-related uncertainty.
Organizational identification is discussed in terms of how employees who are highly identified with their organization can further a change initiative and how those employees behave during a change (Kreiner & Ashforth, 2004; Van Knippenberg & Sleebos, 2006). Job-related uncertainty is usually discussed as one of the three factors of uncertainty caused by a change initiative. Experiencing job-related uncertainty during change elicits the same reactions among employees, such as the fear of losing the job, decreased level of perceived control, lower levels of job morale and job satisfaction (Bordia et al., 2004a; Bordia et al., 2004b). Organizational identification can be seen as a desirable attachment to the organization (Kreiner & Ashforth, 2004), while job-related uncertainty may create a more destructive atmosphere.
2.3. Organizational identification
The psychological linkage between the individual and the organization is related to a wide range of job-related outcomes, including job satisfaction, job motivation, turnover intentions, and extra-role performance. In recent years, there has been a shift from organizational commitment to social identification processes, an alternative approach to describe the relationship between individuals and organizations (Van Knippenberg & Sleebos, 2006). According to Tajfel, social identity means that an individual experiences belongingness to a certain group and this group membership delivers emotions and values to the individual (Hogg & Terry, 2000). This group membership is self-definitional; belonging
23 to a certain group contributes to self-definition. Thus, individuals' self-definition is based on collective attributes of groups to which they belong ("we"), as well as on idiosyncratic individual attributes and interpersonal relationships ("I"). Individuals' motivation to further the organization's interest is also explainable through social identity theory (Van Knippenberg & Hogg, 2003; Van Knippenberg & Sleebos, 2006).
Based on social identity theory, organizational identification reflects the extent to which individuals define themselves in terms of the membership in an organization. Organizational identification "reflects the psychological merging of self and organization" (Van Knippenberg & Sleebos, 2006, p. 572.) Patchen provided the most comprehensive definition about organizational identification so far: it is a "variety of separate, though related phenomena , (1) feelings of solidarity with the organization, (2) attitudinal and behavioural support for the organization; and (3) perception of shared characteristics with other organizational members" (Riketta, 2005, p. 360). One would assume, that there is a great similarity between the concept of organizational identification and organizational commitment. The main difference is, that organizational commitment is seen as attitudinal, and the individual and the organization are distinct entities psychologically, while according to organizational identification, individuals experience oneness with the organization (Van Knippenberg & Sleebos, 2006).
In previous research, a positive association has been found between organizational identification and organizational citizenship behaviour and performance, while organizational identification found to be negatively associated with turnover intentions and actual turnover. Because of the great number of positive consequences of organizational identification, many scholars see it as a desirable attachment to the organization. It also helps individuals to develop a sense of meaning, belonging, and it also increases the perceived level of control at work (Kreiner & Ashforth, 2004).
24 Organizational identification does not always have a positive effect, it also has its "dark side"; when it has a negative effect both on the individual and on the organization. When individuals identify themselves too much with the organization, when they are overidentified with it, they may focus too much on their work to the extent when they lose a sense of their individual identity. Overidentification may also lead to a denial behaviour, when individuals are not able to see the faults of the organization anymore or they are not willing to see them (Kreiner & Ashforth, 2004). Moreover, organizational identification also has a paradoxical effect in the context of a change. It can serve as a means to unite employees toward the succession of the change, however employees might be so highly identified with the organization that they might not see rational behind a change initiative, or it can fully blind them and making them unable to discover new possibilities that might be advantageous for the organization (Fiol, 2002). Despite of the dark side of organizational identification, it has a wide range of positive effects that can foster positive outcomes for organizations.
2.3.1. The moderating role of organizational identification
In previous sections, it has been discussed that different leadership behaviours might be related to support for organizational change among employees in a different way. Precisely, it was hypothesized that autocratic leadership style will be negatively related to support for organizational change among employees, while the relationship will be positive in the case of participative leadership behaviour. Organizational identification will be taken into account as a moderator in the aforementioned relationships. Individuals who experience a high level of organizational identification are experiencing a sense of oneness with the organization, are willing to highly contribute to the collective, perceive organizational interest as self-interest, and are intrinsically motivated. When individuals experience a high level of organizational identification, the values, norms and interests of that organization will be deeper embedded in the self-concept and they will perceive a sense of oneness with the organization. Furthermore,
25 the interests of the organization will be perceived as self-interests, thus, individuals will be eager to contribute to the collective, they will be intrinsically motivated to do so, thus they will help further the organization's goals and interests as those were their own (Van Knippenberg & Sleebos, 2006).
It is proposed that organizational identification will strengthen the positive relationship between participative leadership behaviour and support for organizational change among employees. Leaders with participative leadership behaviour provide the opportunity to participate, empower their employees, and they provide explanations and reasoning for the change (Rok, 2009; Yukl, 2010). Those employees who exhibit high organizational identification are more concerned about the organization, especially in times of change, and those employees will be the ones who will look out for opportunities to participate, get voice, and get more information on procedures (Van Knippenberg, Martin & Tyler, 2006). Thus, this leadership behaviour is hypothesized to have a more favourable relation to support for change when the level of organizational identification is high.
H3: The positive relationship between participative leadership behaviour and support for organizational change among employees will be moderated by organizational identification, so that this relationship is stronger for higher values of organizational identification.
In the case of autocratic leadership style, organizational identification is proposed to serve as a "buffer" that neutralizes the negative effects and outcomes of having an autocratic leader. Even though it has been argued before that especially those who highly identify with their organization would seek the opportunities to participate, it is hypothesized that this assumption would not be applicable in the case when there is an autocratic leader. An autocratic leader would not provide opportunities to participate, not even for those who are highly identified with the organization. In this case the affective component of organizational identification would take over the stage. This means that those employees who exhibit a high
26 level of organizational identification also love their organization, thus it is presumed that when such employees have a leader who exhibits autocratic leadership style, they will still rather further the organization's interest and goals during a change, and they would care about its best interest regardless of the autocratic atmosphere they are exposed to by their leader. This could be especially true compared to a group of employees who are not highly identified with the organization but experience the same autocratic leadership style by the same leader. In their case, organizational identification could not serve as a buffer. Thus, the following hypothesis is proposed:
H4: The negative relationship between autocratic leadership style and support for organizational change among employees will be moderated by organizational identification, so that this relationship is weaker for higher values of organizational identification.
2.4. Job-related uncertainty
General uncertainty can be defined as "an individual's perceived inability to predict something accurately" (Milliken, 1987, p. 136). The underlying reasons for feeling this way might be the lack of information or feeling incapable to decide which data is relevant (Milliken, 1987). Traditionally, uncertainty is viewed as a non-desirable state that fosters people to find ways to cope with it. Because of that, many theorists see uncertainty as a motivational force. According to the uncertainty reduction theory, in order to reduce uncertainty, individuals or groups will feel the urge to engage in information seeking behaviours (Allen, Jimmieson, Bordia & Irmer, 2007).
There are different kinds of uncertainties in an organization's life, but since the current paper focuses on organizational change, uncertainty will be categorized in terms of that. Bordia et al. (2004a) proposes a three-factor conceptualization of uncertainty during organizational change: strategic, structural, and job-related uncertainty. Strategic uncertainty refers to the organizational-level issues, such as the reason for change, future directions,
27 planning, and so forth. Structural uncertainty arises during organizational restructuring, changes in the inner structure and way of working of the organization, such as reporting structures or merging of work units.
Job-related uncertainty may be caused by many factors and events, such as organizational restructuring, changes in staffing requirements, downsizing, or the increasing usage of the external labour market (Ito & Brotheridge, 2001). Job-related uncertainty includes such dimensions as fear of losing the job, uncertainties regarding promotions, job security, being replaced by new technologies, changes to the job design, to responsibilities or to job role. Uncertainty, in general, is positively related to stress, turnover intentions and negatively associated with job satisfaction and trust (Bordia et al., 2004a). A further consequence can be the lower level of job morale and job satisfaction (Bordia, Hunt, Paulsen, Tourish & DiFonso, 2004b). Uncertainty leads to perceived decrease or lack of control, which then has negative consequences for psychological well-being (Bordia et al., 2004a). Moreover, job-related uncertainty, as shown by Karasek in 1990, may lead to even more serious conditions, it can also affect the cardiovascular health (Pollard 2001). Employees, when facing uncertainty regarding events and outcomes of organizational change, experience a feeling of lack of control. They will feel unable to deal with the change, because they do not have knowledge about the consequences of the change on their jobs, status, and other responsibilities. In order to gain control during an organizational change, knowledge is essential (Bordia et al., 2004b).
To cope with job-related uncertainty, there are two possible ways. First, trying to prevent or decrease the perceived level of uncertainty. Second, buffering the negative effects of uncertainty, thus helping employees to function. Organizational communication and participation have a major role in coping with job-related uncertainty. Both of them can function as information flows, helping employees understand processes and reasons, which
28 leads to a sense of control and a reduced level of uncertainty (Vander Elst, Baillien, De Cuyper & De Witte, 2010). Those employees who experienced an opportunity to participate and were involved in processes, reported higher levels of perceived clarity and knowledge about decision-making processes and criteria. Involvement reduces the levels of ambiguity and uncertainty, consequently it yields positive attitudes (Bordia et al., 2004a).
2.4.1. The moderating role of job-related uncertainty
As presented earlier, uncertainty during an organizational change may lead employees to feel ill-equipped to cope with organizational change, and this also applies to job-related uncertainty. It may lead to resistance to the change, thus hindering the organizational change initiative (Bordia et al., 2004b). When uncertainty is high, employees tend to seek for information to reduce the level of uncertainty and to gain sense of control (Bordia et al, 2004a). As mentioned before, communication and participation are effective means to reduce uncertainty. However, an autocratic leader would push his or her decision without asking for input from employees. Furthermore, under the supervision of an autocratic leader, employees usually report low levels of perceived control over processes and decisions, while feeling a sense of control is an important factor in reducing uncertainty (Vugt, Jepson, Hart & Cremer, 2003). Thus, because of the aforementioned reasons, an autocratic leader would not likely to engage in management practices that would provide favourable conditions for employee support for change, especially not when uncertainty is high. It is expected that using job-related uncertainty as a moderator, the negative relationship between autocratic leadership style and support for organizational change among employees will be strengthened.
H5: The negative relationship between autocratic leadership style and support for organizational change among employees will be moderated by job-related uncertainty, so that this relationship is stronger for higher values of job-related uncertainty.
29 As argued before, when employees face high levels of uncertainty, they will engage in strategies in order to reduce uncertainty and gain a sense of control (Vugt et al., 2003). In circumstances, where the level of uncertainty is high, people are actively looking for opportunities to gain more information to be able to make sense of what is happening with them and with the organization. Participative leaders provide their employees with the chance to get involved in processes, they attempt to make it clear why certain things are happening the way they are, furthermore, their aim is not only to let employees express their opinions and suggestions, but to reduce uncertainty and ambiguity (Rok, 2009, Bordia, et al., 2004a). Employees would view a leader who exhibits participative leadership behaviour as more favourable when the level of job-related uncertainty is high. Thus, a participative attitude toward employees would lead to a higher likelihood of support for organizational change among employees especially, when there is a lot of uncertainty at work. Based on the previous arguments, the following hypothesis will be tested
H6: The positive relationship between participative leadership behaviour and support for organizational change among employees will be moderated by job-related uncertainty, so that this relationship is stronger for higher values of job-related uncertainty.
2.5. Research model
After introducing the hypotheses, the following research model can be drawn:
30 3. Research method
3.1. Procedure
The current thesis is part of a thesis project at the Human Resource Management and Organizational Behaviour Department of the University of Amsterdam. The topic of the thesis project was change management and four master students participated under the supervision of one professor. The population of interest were those organizations, where an organizational change was taking place at that moment, or would take place in the near future. At those organizations that met the criteria, leaders and their employees have been approached in order to collect data about leader-employee dyads. The organizations that have been approached operate in different industries and were facing or would face in the near future various kinds of organizational changes. The most common types of organizational changes were acquisition, merger, reorganization, and relocation of the companies.
The data collection started in April 2016 and was closed at the end of May 2016. Convenience and snowball sampling were used to approach either the leaders or the employees to fill in the questionnaires. Leaders were asked to reach out to other managers who might be interested in filling in the questionnaires. Matching codes were used to link the leader and employee questionnaires. The questionnaires were returned anonymously and the obtained data was treated confidentially.
The questionnaires were distributed online in four languages: English, German, Dutch, and Hungarian. Most of the scales that were used to measure the different variables were adopted from English studies. For the other three languages, the back-translation technique was used. Both questionnaires contained an introduction, an explanation of the purpose of the study and of the matching codes. Anonymity and confidentiality were emphasized. Respondents also had the opportunity to contact one of the participating master students in the project in order to request a summary of the findings.
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3.2. Sample
115 leader questionnaires and 112 employee questionnaires were returned. This yielded 106 matched questionnaires. It is very difficult to tell the exact response rate since not only convenience but also snowball sampling was used. It can be concluded though, that the response rate might have been very low. In most of the cases, employees were reluctant to approach their leaders to fill in the questionnaires and most of the approached leaders did not have the time or the capacity to participate, mainly due to the change their organizations were going through.
There were no missing data in the obtained 106 dyads. The final sample contained 52 men and 54 women (49.1% and 50.9%, respectively). In the end, 1 English, 41 German, 30 Dutch, and 34 Hungarian dyads were collected. The age ranges from 21 to 64, with an average of 38.07 years (with a SD of 12.07 years). The average and the standard deviation of the age were calculated by excluding one answer (of being 5 years old), thus here N = 105. The tenure of the employees ranges from less than 1 year to 46 years, with an average of 9.1 years (with a SD of 9.6 years). The hours spent with work weekly ranges from 9 hours to 65 hours, with an average of 37.6 hours per week (SD = 11.1 hours). Employees have more than 3 days a week direct contact on average with their supervisors (SD = 1.6 days). Employees get guidance from their current supervisors for 4.5 years on average (SD = 4.9 years).
3.3. Measures
The questionnaires were used for four different theses, thus they also contain variables that were not used in the model being discussed in the current paper. Only the measures of those variables are going to be presented that are relevant to the model of this paper. All variables were measured with scales obtained from extant literature. The items were rated on a five-point Likert scale, ranging from (1) Strongly disagree to (5) Strongly agree. The overall scale scores were created by averaging item means.
32 The (leader rated) support for change was measured by a 14-item scale, conducted of three subscales, developed by Herscovitch and Meyer (2002), Venus (2013), and Fedor, Caldwell and Herold (2006). The Cronbach's alpha for the 14-item scale is 0.948. Originally, all the items of this scale were stated from the employee's point of view, however, in the leader's questionnaire they were stated from the leader's point of view; the leader had to rate the perceived supportiveness of the employee. Example items are: "The employee encourages the participation of others in the change" and "The employee supports the future plans of the organization". There are no counter-indicative items in this scale.
Autocratic leadership style was measured by a 3-item scale drawn from the original
6-item scale developed by De Hoogh, Den Hartog and Koopman (2004) (α = 0.873). English translation for the original Dutch items was found in De Hoogh and Den Hartog (2009). Examples include: "This leader is bossy and orders subordinates around" and " This leader often pushes his/her opinions". All items are indicative.
Participative leadership behaviour was measured on a 3-item scale drawn from the
original 6-item scale, conducted by Arnold, Arad, Rhoades and Drasgow (2000) (α = 0.838). Example items are: "My direct supervisor encourages work group members to express ideas/suggestion" and "My direct supervisor gives all work group members a chance to voice their opinions". There are no counter-indicative items.
Organizational identification was measured by a 6-item scale, developed by Mael and
Ashforth (1992) (α = 0.743). All items are indicative and the scale includes: "When I talk about my organization, I usually say ‘‘we’’ rather than ‘‘they’’" and "This organization’s successes are my successes".
Job-related uncertainty was measured by a 4-item scale of uncertainty, developed by
33 uncertainty at work right now" and "Many things seem unsettled at work recently". There are no counter-indicative items.
The control variables that are used in this study are tenure and the frequency of weekly contacts with the supervisor (contact). These variables were measured by single items: "How many years do you work in your current company?" and "How many days per week do you have direct contact with your supervisor (e.g. meeting, call, e-mail)?".
4. Data analysis and results
4.1. Data analysis
The obtained data was analyzed with IBM's Statistical Package for Social Sciences version 22. There were no counter-indicative items among the items of the variables used for the current thesis. Among the 106 dyads, there was no missing data.
In the next step, the reliabilities of the scales were reviewed. All Cronbach's alpha coefficients exceed 0.7, indicating that the scales are reliable. The values are the followings: 0.873 for autocratic leadership style, 0.838 for participative leadership behaviour, 0.743 for organizational identification, 0.899 for job-related uncertainty, and 0.948 for support for change. No items were deleted in order to achieve an increase in the value of the Cronbach's alphas since that would have not affected the reliabilities substantially. The values of the corrected item total correlations exceed 0.3 in every item's case, indicating a good correlation with the total score of the scale. The skewness and kurtosis coefficients indicate that the data obtained for each variable is approximately normally distributed.
To test the strength of the relationships between the scales, bivariate correlation was used. In order to test the hypotheses, hierarchical regression was used. In the case of Hypothesis 1 and 2, which aim to test the main effects, the control variables were included in step 1 and the independent variables (autocratic leadership style and participative leadership behaviour, respectively) were included in step 2. In order to test Hypothesis 3, 4, 5, and 6, the
34 control variables, the corresponding independent variables and moderator variables were included in step 1 and the interaction terms were included in step 2. In the case of each analysis the control variables were tenure and the frequency of weekly contact with the direct supervisor.
4.2. Results
4.2.1. Descriptive statistics
Table 4.1 contains the means, standard deviations, correlations, and the Cronbach's alphas. It can be concluded that there is a low level of autocratic leadership style (M = 1.92) and a high level of participative leadership behaviour (M = 4.09) in the sample. The average level of organizational identification (M = 3.66) exceeds the average level of job-related uncertainty (M = 2.83). However, the level of organizational identification is not particularly high, neither is the level of support for change among employees (M = 3.76).
The correlations indicate absence of relation between autocratic leadership style and support for change (r = -.123, p = .21) and between participative leadership behaviour and support for change (r = -.023, p = .817), however none of these two correlations are significant. There are significant correlations between the two independent variables, autocratic leadership style and participative leadership behaviour (r = -.679, p = 0), between participative leadership behaviour and organizational identification (r = .217, p = .025), between organizational identification and job-related uncertainty (r = -.267, p = .006), and between job-related uncertainty and support for change (r = .191, p = 0.05). There were no significant correlations between the dependent variable (support for change) and the control variables. However, the direction of the non-significant correlation between support for change and tenure is negative, and it is positive between support for change and the frequency of weekly contact with the direct supervisor.
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4.2.2. Main effects
In order to test Hypothesis 1 and 2, the ones that test the two main effects, hierarchical multiple regression was performed. For testing Hypothesis 1, the two control variables (tenure and contact) were included in step 1 and autocratic leadership style as the independent variable in step 2 (Table 4.2). After controlling for tenure and contact, the model was statistically not significant F(2,103) = .799, p = .452 and explained 1.5% of variance in support for change. After including autocratic leadership style, the model explained 2.9% of variance in support for change, however this model was statistically not significant either, F(1,102) = 1.00 p = .395. The introduction of autocratic leadership style to the model explained additional 1.4% variance in support for change (R² change = 0.014, F(1,102) = 1.40 p = .239). However, this R² change was not significant. In the final model none of the three variables, (tenure (b = -.007, p = .361), contact (b = .033, p = .479), autocratic leadership style (b = -.096, p = .239)) were statistically significant. According to the results, Hypothesis 1 is not supported.
In order to test Hypothesis 2, in step 1 the two control variables (tenure and contact) were involved and in step 2 the participative leadership behaviour as the independent variable (Table 4.3). After performing step 1, the model explained 1.5% of variance in support for change , however this model was statistically not significant F(2,103) = .799, p = .452. In step 2, after introducing participative leadership behaviour, the model explained 1.6% variance of support for change, but this model was statistically not significant either, F(1,102) = .568, p = .637. The change in the R² was not significant F(1,102) = .12, p = .729. None of the three variables (tenure (b = -.007, p = .368), contact (b = .04, p = .395), participative leadership behaviour (b = -.034, p = -.729)) were statistically significant predictors for support for
36 ** Correlation is significant at the .01 level (2-tailed)
* Correlation is significant at the .05 level (2-tailed)
Variable M SD 1. 2. 3. 4. 5. 6. 7. 1. Tenure 9.10 9.56 - 2. Frequency of weekly contact (Contact) 3.74 1.57 -.058 - 3. Autocratic leadership style 1.92 0.90 .01 -.084 (.873) 4. Participative leadership behaviour 4.09 0.76 .026 .165 -.679** (.838) 5. Organizational identification 3.66 0.62 -.028 .044 -.071 .217* (.743) 6. Job-related uncertainty 2.83 1.09 .013 -.075 .079 -.052 -.267** (.899)
7. Support for change 3.76 0.74 -.095 .085 -.123 -.023 .086 -.191* (.948)
37 Table 4.2 Hierarchical regression model for Support for Change, Hypothesis 1
R R² R² change B SE β t Step 1 0.124 0.015 Tenure -.007 .008 .09 -.922 Contact .037 .046 .079 .811 Step 2 0.169 0.029 0.014 Tenure -.007 .008 -.9 -.917 Contact .033 .046 .07 .71
Autocratic leadership style -.096 0.081 -.116 -1.185
Table 4.3 Hierarchical regression model for Support for Change, Hypothesis 2
R R² R² change B SE β t Step 1 0.124 0.015 Tenure -.007 .008 .09 -.922 Contact .037 .046 .079 .419 Step 2 0.128 0.016 0.001 Tenure -.007 .008 -.089 -.905 Contact .04 .047 .085 .854
Participative leadership behaviour -.034 0.098 -.035 -.347
4.2.3. Conditional effects
To test Hypothesis 3, the control variables, participative leadership behaviour and organizational identification were included in step 1 of the hierarchical regression analysis, while in step 2 the interaction term of participative leadership behaviour and organizational identification was added (Table 4.5.). In step 1, neither participative leadership behaviour (b = .073, t = .133, p = .895), nor organizational identification (b = .264, t = .393, p = .695) predicted support for change in a statistically significant way. In step 2, the interaction effect appeared to be not significant (b = -.036, t = -.234, p = .816), implying the absence of a moderating effect. Due to the inclusion of the interaction effect, the final model explained 2.5% of the variance in support for change, this explanatory power, however, emerged to be not significant (F(1,100) = .513, p =.766). In the light of the results of the analysis, Hypothesis 4 is not supported.
