Leadership styles and successful change implementation : the moderating role of the big five & employee gender

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Tim Molenaars

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Leadership Styles and Successful Change Implementation

The Moderating Role of the Big Five & Employee Gender

UvA Master's Thesis Business Studies on Leadership and Management 2013-2014

Supervisor: Dr. Nesrien Abu Ghazaleh

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Abstract

Nowadays, 70% of the planned attempts for organizational change still fails in the end. This figure has not changed over de past decade and thus requires thorough research to prevent companies from making the same mistakes repeatedly. This study focuses on the contextual factor of employees during the change implementation and combines that with

transformational, ethical and servant leadership. Both the Big Five of employees’ personality and employee gender are hypothesized to moderate the effect between leadership and

eventual change success. When tested (N = 123) with quantitative questionnaires, the results indicated both strong positive relations for all of the three leadership styles on the change success. Furthermore, employee gender was identified as a moderator of this relationship, so that it is stronger for male employees and slightly weakened for female employees. Although the findings in this study did not support the Big Five as moderators, it does suggest

promising leads for future studies.

Introduction

Change management is already a fully recognized discipline for several decades. As depicted by the CEO of KPN Telecom Ad Scheepbouwer, change management is rising in its

importance: “We have seen more change in the last ten years than in the previous 90” (IBM, 2008). Hence, many scientific studies are conducted on this subject and even more (less- scientific) management books are written about managing change (almost 90,000 at

Amazon.com). In 1995, the well-known change management scholar John Kotter presented a study that showed a success rate of only 30% of all organizational change programs. In other words, approximately 70% of all attempts to implement organizational change results in a failure. However, more disturbingly, recent research by Keller & Aiken (2008) of McKinsey

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5 & Company re-examined these statistics and, more than a decade later, the failure rate of organizational change is still 70%. Later on, more scientific studies such as the ones from Burke (2010, in: Van der Voet, 2013) and Burnes (2011) supported the high failure rate of organizational change. Thus, although many experts presented their findings on how to implement change successfully, it seems that no improvement is made.

Currently, two options seem plausible: (1) change management theories do not match practice and are therefore ineffective, or (2) change management theories are not yet

sufficiently aligned within the context of a company. In order to build on the theoretical foundations, the latter option must be explored first. Therefore, this study examines the effectiveness of change implementation by focusing on the organizational context of employees and different leadership styles.

One of the fundamental assumptions of change management is that employee support is essential for a successful change implementation (Bartunek, Rousseau, Rudolph &

DePalma, 2006; Herold, Fedor, & Caldwell, 2007). It plays a key role in “ensuring acceptance of change and in creating the conditions to make effective contributions to the organization” (O’Brien, 2002, p. 442). Moreover, the support of front-line employees is argued to be dependent both on the content of the change as well as on how the process of change implementation is organized (Armenakis & Bedeian, 1999; Self, Armenakis &

Schraeder, 2007). Hence, employee support can be managed and thus change implementation can be managed as well.

In order to manage change, one first has to start the change. Burke (2010) argues that the organizational change is often initiated by the top management team, the CEO or senior managers. Therefore, many studies focused on the leadership roles of senior executives in guiding their change program towards the employees. (e.g. Fernandez & Rainey, 2006; Hennessey, 1998). However, the implementation of the change process generally leans upon

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6 the front-line managers (FLMs) (Burke, 2010). Van der Voet (2013) continued on this subject and examined to what extent the degree of transformational leadership of the FLMs may contribute to a successful change implementation.

In the field of the front-line employees, several aspects seem to be neglected in the area of change implementation. Some studies, however, did investigate on possible outcomes of change on the employees afterwards, such as job loss, threats to the psychological well-being and reduced status of the employee (Ashford, 1988; Schweiger & DeNisi, 1991). In addition, Lau & Woodman (1995) examined change schemata’s and assessed individual’s general attitude towards change beforehand. Nevertheless, during the actual change implementation, employees are often regarded to from the perspective of the (in)direct managers.

Therefore, one may conclude that several levels of the organization are examined in both the process and the content of change, but still more research is needed to understand how employees’ individual differences might affect the effectiveness of an implementation process (Mack, 2012). Hence, this study aims to examine the experiences and perceptions of the employees in the process of the change implementation. A focus on the perceived

leadership is maintained and combined with both the personality characteristics of the employees as well as employees’ gender. Therefore, the research question in this study is formulated as: “To what extent do employee gender and personality characteristics affect employees’ perceptions of change implementation and thus the eventual success of the change process?”

Herewith, this research’ intentions are: to elaborate on the perceptions, experiences and opinions of the (front-line) employees during a change implementation; to examine how these affect a possible relationship between different leadership styles and the success of a change implementation; and, finally, to elaborate on the possibility in considering

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7 quantitative methods for investigating in change management. Practical implications may result in the provision of a tool to improve the effectiveness of leadership during any change implementation. For instance, when the personality traits of the employees are known, managers may adjust their leadership style towards certain individuals based on their personality scores, in order to lead them more effectively towards the desired change.

Although many theories and studies on change management focus on specific examples or case studies (Stewart & Kringas, 2003; Thomas, 1996) or conduct qualitative methods on case-based designed research (Kuipers et al., 2013), this study will examine the change implementation through quantitative methods using a general survey. In the next section, the key variables of this study are determined and discussed according to the extant literature. A brief overview of these variables, along with several dimensions of each, is provided underneath in the form of a theoretical model in figure 1.

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Literature review

First, the dependent variable of change is discussed, followed by the dimension of leadership styles and, finally, we elaborate on the personality traits according to the Big Five and discuss the potential moderating role of employee gender. Subsequently, based on earlier findings, plausible hypotheses are stated on the moderation effects as proposed in figure 1.

Planned Change

Throughout the years, change management has developed many different strategies, plans and perspectives (e.g. Burke, 2010). In the ‘big picture’ of change, there is an external

environment (political, economical, social, technological, ecological and legal factors) and an internal environment (companies’ structure, culture and policies) in which the former

influences the latter (Armenakis & Bedeian, 1999; Pettigrew, 1985 in: Pettigrew, Woodman & Cameron, 2001). Starting organizational change can be seen as an internal reaction on external factors. The subsequent change implementation process depends on this rather important factor of the initiator’s organizational role.

The process of organizational change is referred to as “the implementation of modifications in an organization’s structure, or work and administrative processes” (Metselaar, 1997, p. 42). In this process, a clear distinction between planned change and emergent change is made in the literature (By, 2005). This distinction is based on who is starting the change. Planned change is characterized by top-down goal setting: a somewhat forceful modification from the top management towards the employees. Emergent change, on the other hand, is considered a bottom-up change process. It is initiated by the (front-line) employees and not as rigid as planned change. This study focuses on the implementation of planned organizational change as initiated by the CEO or senior managers.

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Leadership styles

In planned change, both the content and process of change are formulated in advance by the top management of the company. To ensure employee support for the initiated change, the leadership style of the (front-line) managers plays a crucial role in letting the change succeed. Hence, leadership practiced during change implementation is also one of the key factors in change management (e.g. Rafferty & Griffin, 2006; Wanous, Reichers & Austin, 2000).

Transformational Leadership

Transformational leadership (TL) entails leadership dimensions such as idealized influence, inspirational motivation, individual consideration and intellectual stimulation (Den Hartog & Koopman, 2001). Idealized Influence (II; or Charisma) is the first dimension of TL and is considered a key quality of a transformational leader (Bass, 1990). It includes behaviors such as having a vision and encouraging a strong sense of a collective mission (Bass, Avolio, Jung & Berson, 2002). Such a vision can be seen as expressing an idealized picture of the future based around group and organizational values (Rafferty and Griffin, 2004). Furthermore, it helps a leader to gain respect and trust of his or her followers, enhances organizational pride among colleagues and increases the overall optimism (Bass, 1985). Finally, leaders having charisma excite, encourage and inspire their subordinates to do their job most effectively (Den Hartog & Koopman, 2001).

The second dimension of TL is the Inspirational Motivation (IM). Bass (1990) states that an inspirational leader also articulates how the desirable future state (the vision) can be reached and sets the appropriate example to be followed (role modeling). In an earlier study of Bass, an ethical factor was also embedded in the dimension of IM by arguing that a leader should arouse his/her follower’s motivation to transcend the self-interest in order to serve the organizational goals (Bass, 1985).

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10 Thus, a transformational leader may attract subordinates to its charismatic vision and the IM may increase the effectiveness and focus of those employees, but to achieve the full potential of the subordinates a leader needs the third dimension: Individual Consideration (IC)

(Yammarino & Bass, 1990). Avolio & Bass (1995) state that this dimension of TL can be examined on three levels, each indicating a slightly different perspective. The first level concerns individual needs, interests and capabilities and how to link those to the

organization’s mission. This implies individualized attention and specialized orientation for new employees. On the team level, Avolio & Bass (1995) operationalize IC as recognizing the individual differences and a strong continuing focus on increasing the potential of the team. Finally, the organizational level describes that respect and trust among all employees are crucial as employees are referred to as the essential factors for organizational change (Avolio & Bass, 1995). Yammarino, Spangler & Bass (1993) add that a transformational leader also senses when a subordinate needs to receive adequate feedback or is interested in a more challenging task.

Finally, the fourth dimension of TL is called Intellectual Stimulation (IS). As TL recalls, it is all about the transformation: from the ‘old’ state towards a new and desirable future state presented as the mission. Therefore, the fourth dimension of TL addresses this transformation by “challenging assumptions, taking risks (…) [and] stimulating and encouraging creativity in their followers” (Judge & Piccolo, 2004, p. 755). Furthermore, a transformational leader with the trait of IS encourages to rethink old habits and is known as a provider of challenging new ideas (Bass & Avolio, 1994). Lastly, Yammarino & Bass (1990) argue that this dimension also entails arousing the subordinates’ awareness of their own personal framework through which they conceptualize, analyze and understand problems and generate solutions. In this way, TL encourages employees to ‘think outside the box’ and come up with creative and more effective solutions for organizational problems.

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11 Hence, Eisenbach et al. (1999) argue that a transformational leader possesses both qualities that enable one to successfully head for change as well as a social influence that enables a leader to create a favourable climate for change. Podsakoff, MacKenzie, Moorman & Fetter (1990) explain that by promoting the organizations’ mission and persuade subordinates to transcend personal interests, TL can result in followers equating their own success with that of the organization. Therefore, employees become more willing to make a positive

contribution to the organization, which, in other words, implies an increasing organizational commitment (OC) (House, Woyke & Fodor, 1988). Tichy & Devana (1990) also state that a transformational leader who defines the urgency for change, creates and shares his/her vision and enhances commitment to it, can ultimately change an entire organization. Van der Voet (2013) supports these results by indicating the positive role that transformational leadership can play in change management. Based on these statements, transformational leadership may be one of the more favorable leadership styles for the implementation of organizational change [H1A].

Ethical Leadership

Likewise, the ethical leadership (EL) style is also found to relate positively to organizational change aspects. EL is defined as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making” (Brown et al., 2005, p. 120). This definition implies that EL plays an important role in enhancing positive employee attitudes and behaviors by acting in an ethical manner (Walumbwa, Mayer, Wang, Workman & Christensen, 2011). However, EL also enables followers to overcome unethical practices and provides ethical guidance for followers (Brown et al., 2005). Brown and Mitchell (2010) emphasize the importance of EL in such cases, because

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12 employees tend to conform to the ethical values of their leaders when faced with ethical questions or problems. They also found that ethical leaders have a positive influence on employees’ work behavior. Lastly, Brown et al. (2005) state that EL can anticipate follower’s reaction that includes satisfaction with the leader, perceived leader effectiveness, willingness to apply an extra effort on the job and eagerness to report problems to the management.

In order to explain how EL affects followers, the Social Learning Theory (SLT) and Social Exchange Theory (SET) are often used (Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009). SLT considers that individuals copy the values and behaviors of the ethical leader if he/she is perceived as credible and attractive (Bandura, 1977; 1986). Thus, ethical leaders serve as role models and set the behaviors that are expected from the followers. Based on the SLT, ethical leaders can have two types of influence on their followers (Mayer et al., 2009). Firstly, the actions of the leaders are noticeable to subordinates so that they can duplicate the expected behaviors. Secondly, the ethical leader rewards ethical and punishes unethical behaviors to keep their followers on the right track (Mayer et al., 2009).

SET is based on reciprocity (Gouldner, 1960), which means that if one person does something beneficial for another, the other feels obliged to reciprocate this good behavior (Cropanzano & Mitchell, 2005). Thus, if ethical leaders reinforce high levels of trust and treat their employees in a decent and equal manner, the employees will reciprocate by contributing to the organization.

In the light of these aspects and theories on EL, several studies examined a positive effect of EL on the trust of employees (e.g. Brown, Treviño & Harrison, 2005). In addition, this employees’ trust in leaders is found to facilitate the implementation of organizational change (Tyler & Degoey, 1996 in: Zhu, May & Avolio, 2004). Moreover, role modeling and reciprocity may also increase employees’ intended effort to change (Mayer et al., 2009). Hence, this study also hypothesizes a positive effect of EL on the success of change [H1B].

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Servant Leadership

The third and final leadership style discussed in this study is servant leadership. Servant leadership differentiates itself from ethical and transformational leadership by implying a paradoxical leadership style. The concept of a servant leader originates from Greenleaf (1977) who states that a true servant leader has the natural tendency for wanting to serve first. That person is essentially different from a person who wants to lead first (Greenleaf, 1977). Graham (1991) argues that a servant leader “humbly serves the subordinates, rather than expecting to be served by them” (p. 111). Moreover, Graham (1991) distinguishes three key components of servant leadership. (1) The recognition of the insurmountable failure of employees; even the most committed, motivated and well-intentioned people can make crucial missteps. (2) The awareness of the tendency of people in high organizational positions to become relatively more narcissistic, possibly leading to an excess of hubris (De Vries, 1990). And (3) the understanding of the tendency of lower level employees to lose their critical thinking and be stuck in docility (Graham, 1982; 1991).

Base on these three components, Spears (1998) proposed 10 servant attributes commonly found in servant leaders. These attributes have been used in a wide variety of studies across a broad period of time (Parris & Peachey, 2013). The list of attributes entails: careful listening; showing empathy; healing as in completing yourself and others; awareness of both the organization and oneself; persuasion instead of coercion; conceptualization; foresight through learning; stewardship by commitment and service; commitment to the growth of people and, building a strong community.

The big difference with transformational leadership is that a true servant leader is a servant first, rather than a leader first. The servant leader influences the subordinates in such a way that they become freer, wiser and more autonomous (Graham, 1991). Moreover, servant leaders are found to increase organizational collaboration (Irving & Longbotham,

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14 2007; Sturm, 2009), enhance commitment (Cerit, 2010; Hale & Fields, 2007), stimulate employee creativity (Neubert et al., 2008) and are rewarded with both higher leader trust and organizational trust (Washington, Sutton & Field, 2006). In addition, it is argued that the chance of those being served turning into servants themselves increases as they are influenced by the stewardship and commitment of their servant leader (Graham, 1991; Neubert et al., 2008). Furthermore, a servant leader pays attention to people’s development and helps them to thrive on a variety of levels, while a transformational leader helps his/her followers in order to stimulate the organizational outcome (McMinn, 2001).

Although these differences do exist, Stone, Russell & Patterson (2004) state that both transformational and servant leadership suggest aspects of the dynamic and active leadership styles. Another similarity is that both transformational and servant leaders share their vision, have integrity, create commitment and therefore gain trust from their followers (Farling, Stone, & Winston, 1999). Hence, Russell & Stone (2002) state that servant leadership has the potential to change organizations and societies as it supports developments on both the personal and organizational level as well as it stimulates the positive metamorphoses in both interpersonal work relations and the organizational well-being (Russel & Stone, 2002). Therefore, this study hypothesizes that servant leadership positively influences the success of an organizational change implementation [H1C]. Summarized, this study hypothesizes that:

Hypothesis 1A [H1A]: Transformational leadership will be positively associated with

the successfulness of the change implementation.

Hypothesis 1B [H1B]: Ethical leadership style will be positively associated with the

successfulness of the change implementation.

Hypothesis 1C [H1C]: Servant leadership style will be positively associated with the

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Employee support

As already explicated, employee support is a highly important factor for succeeding the change implementation process (e.g. Bartunek et al., 2006). Ensuring employee support for change depends on the two factors of content and process of change. Because the content can be seen as firm specific, this study focuses on the process of change (implementation).

Building on the importance of the front-line employees, change management assesses this implementation process. However, managing change with a focus on the employees may require some adjustments to the organizational structure of a company. O’Brien (2002) argues that focusing on employee support for change implies a more supportive leadership style and a more facilitating role for firms in enabling the employees to change. In addition, a firm has to make sure that it integrates the participation in change in the daily work processes of these employees (O’Brien, 2002). But first, a company has to understand its employees in order to act upon their preferences, experiences and personalities.

Moderating role of the Big Five

In order to examine employees’ behavior, thoughts and attitudes towards change, this study also aims to examine the perceptions of the employees regarding to any recent top-down change implementations in their organization. Different perceptions of the same events can be shaped by the differences in the personality characteristics of each individual (Barrick & Mount, 1991). Howell & Shamir (2005) argue that employees’ characteristics are strong determinants of subordinates’ reactions to their supervisors. For example, Ehrhart & Klein (2001) found that employees’ personality do affect their preferences for different types of leadership styles. Two theories support these findings: the substitute for leadership theory of Kerr & Jermier (1978) and the path-goal theory (House, 1971). Both suggest that differences in employee personalities may influence their opinions or attitude on their supervisors.

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16 Hence, this study aims to elaborate on the personality characteristics of the employees in terms of the Big Five personality traits (Goldberg, 1990): extraversion, agreeableness, conscientiousness, neuroticism and openness to experience. This five-factor model can be generalized across many cultures (McCrae & Costa, 1997; Salgado, 1997) and remains reasonably stable over time (Costa & McCrae, 1988, 1992). Moreover, the Big Five personality model is used several times to explore relationships between personality and aspects of job performance (e.g. Barrick & Mount, 1991; Salgado, 1997). The next paragraph will elaborate on these five factors of Goldberg (1990).

First of all, extraversion is characterized by the degree of dominance, energy, assertiveness and to what extent one is talkative, enthusiastic and active (Costa & McCrae, 1992). The high end of extraversion shows people who like other people and large groups; they are cheerful and pursue excitement and stimulation (Barrick & Mount, 1991). Vice versa, introverted people prefer to have time alone and are perceived as more quiet and independent. LePine & Van Dyne (2001) showed that extraversion positively affects proactive voice behavior and cooperative behavior, while these behaviors are positively associated with actively creating and supporting change (Bateman and Crant, 1993). Moreover, a recent study of Benoliel & Somech (2014) has found that - among others - extraversion moderates the positive

relationship between participative leadership and in-role performance. With these findings in mind, one can plausibly argue that extraversion will moderate the relationship between the leadership styles and successful change implementation, such that this relationship will be stronger under employees high on extraversion, rather than low [H2A].

Secondly, agreeableness describes personality traits as being good-natured, trusting, cooperative, tolerant and altruistic (Barrick & Mount, 1991; Costa & McCrae, 1992). Someone scoring high on agreeableness is seen as trustworthy and often has positive and

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17 cooperative working relationships. However, this person may also efface own preferences resulting in diminishing own advantages such as salary level (McClelland & Boyatzis, 1982). During organizational change, it is likely for such a person to follow the planned change tamely. Also, agreeableness positively moderates the effect of participative leadership on performance (Benoliel & Somech, 2014). Finally, agreeableness is found to positively affect coping effectiveness and perceived control of stressors (Kaiseler, Polman & Nicholls, 2012). Hence, it seems plausible to state that subordinates who score high on agreeableness

moderate the relationship between leadership and successful change implementation more strongly, than subordinates scoring low on agreeableness [H2B].

Furthermore, conscientiousness represents to what extent one is careful, responsible, thorough and organized (Barrick & Mount, 1991). It addresses the ability to work hard, have self-discipline, ambition and responsibility (Costa & McCrae, 1992; Mount & Barrick, 1995). Hence, conscientiousness is found to be the most predicting and consistent trait antecedent of overall job performance (Barrick, Mount & Judge, 2001). Next to that, LePine & Van Dyne (2001) found that conscientiousness also positively relates to both voice and cooperative behavior, while both voice and cooperative behavior are found to positively relate to actively creating change (Bateman & Crant, 1993). In a study of Steers & Spencer (1977), the

personality measure ‘need for achievement’ – part of conscientiousness trait – was found to positively moderate the relationship between autonomy and job performance. Relating to this study, leadership style shapes the extent of autonomy, for instance by the degree of

empowerment (part of TL; Graham, 1998). Similarly, Benoliel & Somech (2014) show that conscientiousness positively moderates the positive relationship between participative leadership and in-role job performance. Therefore, we hypothesize that employees with a high level of conscientiousness may positively moderate the relationship between leadership and successful change implementation [H2C].

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18 Fourthly, neuroticism (versus emotional stability) implies people who are easily upset,

insecure and often give negative attitudes towards others. Moreover, they experience emotions such as anxiety, depression, impulsiveness, embarrassment and worriedness (Barrick & Mount, 1991; Costa & McCrae, 1992). On the other hand, emotional stability is reached when one is perceived as calm, relaxed, self-confident and flexible. Neuroticism as an affective trait may result in emotional responses towards certain leadership styles (McCrae & Costa, 1987). For example, De Hoogh & Den Hartog (2009) found neuroticism as a

negative moderator between the charisma dimension of a leader (part of TL) and burnout. As (organizational) change is associated with a certain amount of uncertainty and stress (Schweiger & DeNisi, 1991; Nutt, 1998), this study proposes that the degree of neuroticism among employees may negatively moderate the relationship between leadership and

successful change implementation, such that this relationship will be stronger in combination with employees low on neuroticism [H2D].

Finally, the high end of openness to experience is characterized by people who are imaginative, independent-minded, reflective, intellectually curious, untraditional and eager to explore new ideas (John & Srivastava, 1999; Zhao & Seibert, 2006). Contrarily, someone scoring low on openness to experience is found to be narrow in interests and shows conventional behavior. This factor of the Big Five is also argued to have positive relationships with creativity-related intelligence (McCrae, 1987), a strong emphasis on innovation (Schumpeter, 1942/2008 in: Zhao & Seibert, 2006) and the desire to be creative (Engle, Mah & Sadri, 1997). Conclusively, the dimension of openness to experience is positively associated with effecting mechanisms for coping with stressful events like

organizational change (McCrae & Costa, 1986), coping effectiveness and perceived stressor control (Kaiseler et al., 2012). Therefore, this study hypothesizes that subordinates high on

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19 openness to experience will moderate the relationship between leadership and successful change implementation positively [H2E].

In general, the importance of considering individuals’ subjective experience of change is emphasized by Rafferty & Griffin (2006). Moreover, Vakola, Tsaousis & Nicolaou (2004) confirmed that, among others, personality traits influence the attitude towards change. This attitude is essential for the eventual success of change. Building on the associations provided on each trait of the Big Five, this study introduces the following five hypotheses.

Hypothesis 2 [H2]: The relationship between the leadership styles and successful

change implementation will be positively moderated by the dimensions of

extraversion [H2A], agreeableness [H2B], conscientiousness [H2C] and openness to experience [H2E], but negatively moderated by neuroticism [H2D].

Moderating role of employee gender

Recently, there has been a slight increase in studies examining leadership styles within different contexts (Rowold, 2011). However, scholars are still far from understanding the potential influences of those contextual factors and how they may affect the relationship between leadership styles and organizational outcomes (Yukl, 2002). The main reason for this lack of exploring studies is that there is an enormous amount of contextual factors that may play a role in leader effectiveness. Among others, typical context aspects are the leader’s attributes (e.g. vision, charisma or communication skills; Frese et al., 2003), organizational characteristics (e.g. firm size or profit vs. non-profit; Rowold & Rohmann, 2009), the employees (e.g. culture or personality; Walumbwa et al., 2007; Vakola et al., 2004) and gender (of both manager and subordinates; Rohmann & Rowold, 2009). The latter contextual

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20 factor may become a more urgent factor as the proportion of female employees is increasing in today’s organizations. The recent study of Rowold (2011) already supported the

importance of possible moderating roles of employee gender differences on the relationship between different leadership styles and organizational outcomes. Furthermore, employee gender is found to interact with the effect of different leadership styles and job satisfaction (Chen, Chen & Chen, 2010). Moreover, the same study of Chen et al. (2010) showed

promising results as in distinct differences for male and female employees on the relationship between transformational leadership and organizational commitment, job satisfaction and trust. These results clearly indicate stronger relations with the change supporting factors of commitment, satisfaction and trust for male employees, rather than for female employees. In addition, transformational leadership, in essence, has similarities with ethical and servant leadership in being characterized as an active and dynamic leadership style. Hence, this study deems it plausible to hypothesize that employee gender will moderate the relationship

between all three different leadership styles and the perceived change success [H3].

Hypothesis 3 [H3]: The relationship between the leadership styles and successful

change implementation will be moderated by employees’ gender such that male employees experience a greater change success in the presence of one of the three leadership styles than female employees do.

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Methods

Sample

All key variables were measured through a digital survey on the employee level. Each survey was completed by Dutch employees. Two Master students of the Business School of the University of Amsterdam recruited all the participants through convenience sampling,

snowball sampling and self-election in a period of three weeks. Surveys were sent by email to potential respondents and/or organizations after which participants had to complete the survey within two weeks. These procedures resulted in a useable database (N = 123) with an average age of 39.4 (SD = 14.63). Furthermore, 54.5% of the participants was female and the most common sectors they worked in were retail (23.6%) and healthcare (22.0%). The most frequent education levels in the used sample were a degree in university’s bachelor (28.5%), followed by a high school degree (25.2%). When implementing the change, the average employee worked for the organization for 11.16 years (SD=10.63). Furthermore, the employees in our sample most frequently experienced planned changes such as forced redundancies (26.8%) or (partial) reorganization (15.4%). The average planned change happened approximately 10.1 months ago and had an average duration time of 12.2 weeks.

Measurements

The most frequently used measure of Transformational leadership (TL) is the Multifactor Leadership Questionnaire (MLQ; Antonakis, Avolio & Sivasubramaniam, 2003). The MLQ addresses the four dimensions of TL since years, but recently it has been criticized

(Antonakis et al., 2003). The first two dimensions of Idealized Influence and Inspirational Motivation are often combined into a single factor as charisma (Conger & Kanungo, 1998). The other two dimensions of TL - Individualized Consideration and Intellectual Stimulation - can be viewed as behavior to increase employees’ self-confidence through empowerment

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22 (Graham, 1998). Based on these statements, Yukl (1999) argues that TL should also include aspects of participative leadership, in order to empower subordinates. However, these aspects are not included in the regular MLQ. Therefore, this study measures TL through 11 items of CLIO scale as developed by De Hoogh, Den Hartog & Koopman (2004). The more recent CLIO questionnaire bases the TL scale on both charisma and empowerment, while including the aspects of participative leadership. All items were statements on which respondents can answer through 5-point Likert scale (1 = I strongly disagree, 5 = I strongly agree). One item of this scale was: “My supervisor is always looking for new opportunities for the

organization”. Like all leadership styles, TL was measured regarding the change

implementation as perceived from the employee level which resulted in a relatively high reliability of the TL scale (α = 0.924).

Ethical leadership was measured using 10 items questionnaire adopted from Brown et al. (2005). Items were also measured through the system of 5-point Likert scale. One item was: “When making decisions, my supervisor asks ‘what is the right thing to do’?”. These 10 items were found to be internally consistent (α = 0.889).

The last leadership style of this study was measured through the fourteen items of the Servant Leadership Scale (SLC) of Ehrhart (2004). Again, all of the items were based on the 1-5 Likert scale. A representative example of an item is “My manager sets the personal development of employees as a priority”. Overall, the servant leadership turned out to be highly reliable (α = 0.921).

The Big Five personality traits of Goldberg (1990) are measured through the mini-IPIP questionnaire as developed by Donellan, Oswald, Baird & Lucas (2006). This scale contains 20 items, measuring four items per personality trait (extraversion, agreeableness, conscientiousness, neuroticism and openness to experience). Example items per trait were, respectively: I talk a lot; I am interested in problems of others; I put things back where they

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23 belong; I get easily upset; I have a vivid imagination. Item anchors were 1 = strongly disagree to 5 = strongly agree (1-5 Likert scale). The internal consistence for all traits were sufficient, representing alphas of 0.777 (extraversion); 0.777 (agreeableness); 0.822 (conscientious-ness); 0.757 (neuroticism) and 0.823 (openness to experience).

For the independent variable - the success of the implemented change - the change success questionnaire of Nutt (1998) is used. This questionnaire measures the change success along three dimensions, using two items each: adoption, value and efficiency. Together, it forms a six-item scale based on the 5-point Likert system. Nutt (1998) states that objective data on change success is hard to gather and even harder to compare to each other, hence the quantitative and objective questionnaire. An example of a reversed item is: “There were too many people involved in the change”. This scale was also reliable as shown in α = 0.788.

Finally, the scale measuring ‘attitudes toward organizational change’ (ATOC) is also used to measure the independent variable of the success of the implemented change. This scale contains four items and is adopted from the study of Lau & Woodman (1995). It is found to relate positively to employees’ commitment to change, including readiness to change and openness to change (Armenakis, Harris & Field, 1999; Wanberg & Banas, 2000). A recent study of Choi (2011) identified employees’ ATOC rather as a state than as a

personality trait, because one’s ATOC “may change over time as individuals’ experience change” (Choi, 2011, p. 479). These results do suggest external influences such as the experienced leadership style. The ATOC scale is also measured according to the 1-5 Likert scale and an example item is: “I am willing to support any further changes”. The ATOC scale had a relatively high internal consistence: α = 0.921. The means, standard deviations, inter-correlations and Cronbach’s alphas of all key variables are presented in table 1 on page 24.

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Table 1: Descriptives and correlations between the key variables (Cronbach’s Alphas on diagonal).

Variables M SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. Gender 1.54 0.50 - 2. Age 39.42 14.63 .176 - 3. Tenure 11.16 10.63 .154 .700** - 4. Firm size 159 125 -.074 .273** .57* - 5. Extraversion 3.09 0.84 -.179* -.150 -.260* .036 (.78) 6. Agreeableness 3.96 0.66 .052 -.069 -.114 -.020 .424** (.78) 7. Conscientiousness 3.76 0.76 .106 .150 .080 .047 -.045 .160 (.82) 8. Neuroticism 2.06 0.74 .028 -.152 -.105 -.076** -.070 -.252** -.134 (.76) 9. Openness to Exp. 3.21 0.90 -.213* -.255* -.138 .070 .216* .175 -.024 .109 (.82) 10. Ethical Lead. 3.25 0.80 .022 -.036 .141 .072 -.021 .073 .047 -.047 -.012 (.89) 11. Transform. Lead. 3.31 0.87 -.077 -.190* -.014 .000 -.063 .096 .024 -.049 .019 .855** (.92) 12. Servant. Lead. 3.00 0.80 .033 -.099 .085 .032 -.102 .007 -.027 .031 .043 .860** .841** (.92) 13. Change Success 3.08 0.88 -.020 -.223* -.133 -.209* .081 .133 .158 -.085 .127 .469** .485** .433** (.79) 14. ATOC 3.21 1.16 -.067 -.171 -.025 -.049 .072 .150 .175 -.057 .164 .549** .557** .477** .775** (.91) 15. Change Comb. 3.13 0.93 -.044 -.211* -.087 -.142 .081 .149 .176 -.076 .153 .538** .551** .482** .949** .934** (.90)

* : Pearson correlation is significant at the 0.05 level (2-tailed). ** : Pearson correlation is significant at the 0.01 level (2-tailed).

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25

Analyses

The analyses that were planned to conduct for this study contained several regression models. After computing the five different personality characteristics, three leadership styles and two change success variables, the Cronbach’s alphas of all scales were examined (see table 1, page 24) and no items were deleted. As shown in table 1, both the Change Success and the ATOC variables are highly correlated on a significant level (c = .775, p < .001). A single dependent variable on change success (‘Change Combined’) was therefore constructed by merging the items of those two variables. This procedure is conducted in order to include the different aspects that may define organizational change success, such as adoption, value, efficiency and employees’ attitude. Thus, the ‘change combined’ variable is from now on used as the dependent variable in all further regression analyses.

For testing hypotheses 1A, 1B and 1C, linear regressions were conducted to estimate the nature of the direct associations between the leadership styles and the change success. When these regressions support the hypotheses, the moderation effects of the second and third hypotheses are tested as well. For the evaluation of [H2A], [H2B], [H2C], [H2D],

[H2E] and [H3], a special type of analyses is used: the PROCESS regression analyses as

presented by Hayes (2008). Within the PROCESS software of Hayes (2008), this study used the

so-called ‘model 1’ to examine potential interactions and possible moderation roles between the key variables. The software package enabled quick examination of the potential

moderation effects, while still making use of mean-centered and interaction variables. Furthermore, the PROCESS program allows the implementation of the Johnson-Neyman

technique which defines the significance region(s) (p < .05) for the tested moderator, if applicable. All regression analyses, including the PROCESS models, were conducted in the

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26

Results

Sample

Of all 257 surveys that were started, only 47.9% actually completed the full survey, resulting in the usable database of 123 respondents. Those surveys that did not make it to the usable database were mostly deleted due to not finishing the first question (13.5%) and not having the experience of witnessing a planned change (13.0%). Unfortunately, 29 respondents needed to be eliminated for not fully completing the study, although they did experience a planned change in their organization. Plausible reasons for these potential respondents not to round off the entire survey may be the lack of time, lack of commitment, unwillingness to share certain specific or sensitive information or the somewhat difficult statements in the survey. All of these factors were stated by some of the respondents who did complete the survey, but experienced some difficulties while doing so.

Models 1A - 1C

Regression models 1A, 1B and 1C (corresponding with the numbered hypotheses) examined the direct effect of the three different leadership styles on the change successfulness (table 2).

Model 1A (Transformational leadership  Change Combined) indicated a positive effect, while statistically significant (β = .536, p < 0.01, F(122) = 52.716, R² = 0.303). This

large positive effect remained beyond sector, tenure, gender and age. Secondly, model 1B (Ethical leadership  Change Combined) also presented a significant and positive effect (β = .548, p < 0.01, F(122) = 49.253, R² = 0.283), even when controlled for variables such as sector,

tenure, gender and age. Finally, model 1C (Servant leadership  Change Combined) has similar results as models 1A and 1B (β = .478, p < 0.01, F(122) = 36.564, R² = 0.232). Thus,

model 1C presented a large and positive effect, beyond the control variables sector, tenure, gender & age. All results of the models 1A, 1B and 1C can be found in table 2 on page 30.

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Models 2A - 3

Regression models 2A, 2B, 2C, 2D, 2E and 3 also correspond with their eponymous hypotheses. Each model consists of three interaction tests, performed according to the

PROCESS regressions of Hayes (2008), to test for possible moderation as formulated

accordingly in their corresponding hypotheses. All independent variables were centered around zero by subtracting the mean of each value. If this section mentions “the three leadership styles”, it refers to the transformational, ethical and servant leadership styles as perceived by the employees.

Model 2A tested the incremental contribution of the interaction between extraversion and the three leadership styles on change success after controlling for the main effects of extraversion and the three leadership styles. Unfortunately, transformational leadership showed no evidence of a moderation effect of employees’ extraversion (β = .016, ns., F = 18.425, R² = 0.316, ∆R2

= 0.000), nor did ethical (β = .020, ns., F = 16.858, R² = 0.298, ∆R2 = 0.000) or servant leadership (β = -.008, ns., F = 13.174, R² = 0.249, ∆R2 = 0.000). The results of the interaction terms of model 2A are presented in table 4 on page 52 in the appendix.

Model 2B tested the additional contribution of the interaction between agreeableness and the three leadership styles on change success after controlling for the main effects of agreeableness and the three leadership styles. However, employees’ agreeableness did not significantly moderate the effect of transformational (β = .041, ns., F = 18.200, R² = 0.315, ∆R2

= 0.002), ethical (β = .003, ns., F = 17.118, R² = 0.301, ∆R2 = 0.000) or servant leadership (β = .049, ns., F = 13.627, R² = 0.256, ∆R2 = 0.002) on the perceived change success. The results of the interaction terms of model 2B are showed in table 5 on page 53 in the appendix.

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28 Similarly, the interaction terms based on the employees’ conscientiousness also did not suggest any moderation effects on each of the three leadership styles. This was tested in model 2C, which indicated non-significant results when testing for the incremental

contribution of the interaction between conscientiousness and the three leadership styles on change success after controlling for the main effects. The results for transformational

leadership (β = -.005, ns., F = 19.530, R² = 0.330, ∆R2 = 0.000), ethical leadership (β = .002,

ns., F = 17.991, R² = 0.312, ∆R2 = 0.000) and servant leadership (β = .041, ns., F = 14.623, R² = 0.269, ∆R2

= 0.002) all showed non-significant results. The results of the interaction terms of model 2C are indicated in table 6 on page 53 in the appendix.

Model 2D tested the additional contribution of the interaction between employees’ neuroticism and the three leadership styles on change success after controlling for the main effects of neuroticism and the three leadership styles. Sadly, neuroticism was not found to influence the relationship between transformational leadership and planned change success as a moderator (β = -.083, ns., F = 18.013, R² = 0.312, ∆R2 = 0.006), neither did it moderate those relationship with respect to ethical (β = -.072, ns., F = 16.741, R² = 0.297, ∆R2 = 0.005) and servant leadership (β = -.048, ns., F = 12.699, R² = 0.243, ∆R2 = 0.002). The results of the interaction terms of model 2D can be observed in table 7 on page 54 in the appendix.

The final model on employees’ personality characteristics tested the incremental contribution of the interaction between openness to experience and the three leadership styles on change success after controlling for the main effects of openness to experience and the three leadership styles. This model (2E) did also not support the hypotheses and showed non-significant results for transformational (β = .0127, ns., F = 20.380, R² = 0.339, ∆R2 = 0.016) and ethical leadership (β = .069, ns., F = 18.620, R² = 0.319, ∆R2 = 0.005) as well as it did for servant leadership (β = .062, ns., F = 13.460, R² = 0.253, ∆R2 = 0.004). The results of the interaction terms of model 2E are disclosed in table 8 on page 54 in the appendix.

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29 Model 3 examined the potential moderating role of employees’ gender on the already

established relationships between transformational, ethical and servant leadership. For transformational leadership, gender did positively moderate that relationship with change success (β = -.155, p < 0.05, F = 4.239, R² = 0.327, ∆R2 = 0.024). Among men, the experience of transformational leadership during the implementation of planned change increases their perception of the successfulness of the change (Effect = .785, SD = .125, p < .001). Whereas among women, transformational leadership has a slightly less positive effect on how they experience the success of planned change (Effect = .448, SD = .106, p < .001).

Similarly, gender does also serve as a moderating variable on the relationship between ethical leadership and perceived change success (β = -.167, p < 0.05, F = 4.890, R² = 0.320, ∆R2

= 0.031). For men, the experience of ethical leadership largely increased the change successfulness (Effect = .831, SD = .127, p < .001), while this effect is relatively low for women (Effect = .442, SD = .122, p < .001).

Finally, gender also has a moderating role on the effect of servant leadership on change successfulness (β = -.164, p < 0.05, F = 4.309, R² = 0.262, ∆R2 = 0.030). Likewise, these results imply that the presence of servant leadership during organizational change has a relatively larger positive effect on the change success for males (Effect = .782, SD = .140, p < .001) than for female employees (Effect = .398, SD = .121, p < .01). In conclusion, the

moderation effect of gender on the relationship between transformational, ethical, servant leadership and the change success can be set at the incremental contribution of, respectively: 2.4%, 3.1% and 3.0%. The results of the interaction terms of model 3 are showed in table 3 on page 30. A graphical display of these moderation effects can be found in figures 2, 3 and 4, which can be found on respectively: pages 49, 50 and 51.

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30

Table 2: Regression results for model 1A, 1B and 1C.

Model 1A Model 1B Model 1C

Dependent Variable Change Combined Change Combined Change Combined

Coefficient SE Beta Coefficient SE Beta Coefficient SE Beta

Constant 1.431* .468 1.496* .450 1.882** .462 Transformational .573** .085 .536** Ethical .637** .092 .548** Servant .556** .096 .478** R2 .303** .289** .232** Note: N = 123, *p < .01, **p < .001.

Table 3: Interaction regression results for model 3, differentiated on the three leadership styles.

Transformational Ethical Servant

Dependent Variable Change Combined Change Combined Change Combined

Coefficient SE Beta Coefficient SE Beta Coefficient SE Beta

Constant 3.122** .070 3.137** .070 3.138* .073

Gender * Transf. -.336* .163 -.155*

Gender * Ethical -.390* .176 -.167*

Gender * Servant -.384* .185 -.164*

R2 (∆R2) 0.327* (0.024)* 0.320* (0.031)* 0.262* (0.030)*

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31

Discussion

Conclusion

Nowadays, around 70% of the planned organizational changes still fail in the end, due to implementation issues (Burnes, 2011; Keller & Aiken, 2008). The main goal of this study was to explore several of the many contextual factors that may affect the success of the implementation of planned change in organizations. Therefore, this study focused on three distinct and active leadership styles and how they relate to organizational change success. Furthermore, in general, it is said that employee support is essential for a successful change implementation (e.g. Bartunek et al., 2006), because it is crucial for the acceptance of the planned change (O’Brien, 2002). Hence, we included several contextual factors based on the employees who experienced the planned change, such as their gender and personality

characteristics. Together, these aspects were summarized in the research question of this study, namely: “To what extent do employee gender and personality characteristics affect employees’ perceptions of change implementation and thus the eventual success of the change process?”

This research question was divided into three separate hypotheses, which were subsequently broken down into dimensional sub hypotheses. Results showed strong and positive relations between all three experienced leadership styles during the implementation (transformational, ethical and servant leadership) and the eventual perceived change success. Hereby, the results evidently supported all three sub hypotheses 1A, 1B and 1C.

Unfortunately, no hypothesized moderation effects of the employees’ Big Five personality characteristics were confirmed by the PROCESS analyses of this study. Finally, employee

gender does moderate the effect of all three leadership styles on the change success in such a way that the effect is strong and positive for male employees, but weakened for female employees. Thus, the results showed significant evidence for the acceptance of hypothesis 3.

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Limitations & improvements

This section will discuss some of the practical limitations of the findings of this study. Although the research team did everything in their power to produce a high quality and quantitative study on change management, some nuances need to be made. Furthermore, both improvements for further research as well as potential topics for future research are notified.

Unfortunately, certain strategies and measurements do come along with specific limitations to the study. The used sample (N = 123) was found sufficient for testing and analyzing the proposed hypotheses. However, this sample included a great number of different planned changes in a variety of sectors. In order to generalize our findings entirely across all Dutch organizations, a bigger sample is desired. Furthermore, a larger sample would provide more power in the results, which may lead to stronger conclusions. Practical options to establish such a great sample can be found in close cooperation with a big company that went through a specific planned change or selecting a representative sample size across the country and stimulating respondents via payments.

In addition, it can be plausibly said that the sample could not represent all Dutch organizations as the recruitment of respondents is done through convenience sampling and self-election. Although we did not measure this characteristic, it is conceivable that a great proportion of the sample originated from only two provinces of the Netherlands. This is due to the fact the main part of the research team’s network is situated in two provinces.

Another discussion point is the fact that this study limits itself in being cross-sectional instead of longitudinal, focusing on only one time measurement. Hence, the measurements of leadership during the implementation and the eventual change success may be altering due to subjective bias or bad memory of respondents. Besides that, it is possible for employees to miss certain leadership attributes during the implementation process, which, in turn, are of course not reflected in the leadership scores in the database. In order to overcome both of

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33 these issues, we advice to - ideally - measure at least three times around the change process: before, during and after the change. This rejects the bad memory of respondents and may provide a clearer overview of cause and effect of leadership styles and eventual change success. Furthermore, we recommend measuring all key variables in dyads containing the employee and his or her direct manager. Combining the measurements of these two parties overcomes the subjective bias of, for instance, not liking your manager. In addition, it may give a more credible and sincere measurement of variables such as leadership and change success. For even higher reliability of the measurements, a third source can be added in which co-workers also judge each other on certain organizational behaviors as well. Unfortunately, this study did not have the time, money or organizations needed to do so.

Furthermore, all respondents still worked at the changed company for at least a while (this is needed for answering the statements on the eventual change success). This means that employees who left the company during or after change cannot be taken into account, while these people may be the ones who experienced the change or the leadership at its worst. This disadvantage may also be one of the elements, besides personal bias, that may affect the overall leadership and change success scores. In this case, it may increase those scores, because the employees who ‘survived’ the planned change are the ones who are actually responding to the survey while the ones who did not work at the company after the change could not respond to the survey. For solving this problem in future studies, one should focus on specific planned change that does not involve people being marked as redundant and therefore leave the company. The other option is to maintain contact with those ex-employees and take their experiences and opinions into account while conducting the research. While the former can be more practical and simple to attend, the latter may be more elegant and

interesting to perform. However, the latter option is also more complex and requires at least a longitudinal study on the process of change implementation.

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Interpretation of results

This study has provided some clear results on two of the three hypotheses. We established clear evidence for the positive associations of transformational, ethical and servant leadership during the implementation process and the subsequent change successfulness. Based on these results, employee gender was found to interact with these effects positively in model 3. In the presence of any one of the leadership styles, male employees were found to have a stronger and positive perception of the change success, than female employees did. Female employees did still slightly positively moderate the effects of leadership on change success. However, especially when employees experienced a high degree of one of the three leadership styles, the effect of employee gender was weakened for female employees. The moderation effects of employee gender are displayed in graphics and differentiated on transformational

leadership (page 49), ethical leadership (page 50) and servant leadership (page 51).

Although none of the sub hypotheses regarding the moderating roles of the Big Five personality characteristics were supported in this study, one could argue that still some progress is made. All of the five models do suggest the positive or negative β’s as

hypothesized, albeit relatively small. Especially when examining the β, explained variance and significance level (p < .06) of the characteristic of openness to experience, it seems that this model (2E) does possess the potential to prove a moderation effect on the relationship between transformational leadership and the change success. Unfortunately, this was not the case in this study. For the other two types of leadership the β’s of the interaction terms with openness to experience were still positive, but did drop almost around 50% compared to transformational leadership.

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35 Another interesting topic for further research may be the fact that this study found some peculiar correlations between some of the variables (see table 1 on page 24). For instance, employee gender correlates negatively with both extraversion and openness to experience, meaning a more negative association for female employees. This would correspond with the weakened relationship between leadership and change success for female employees and the potential of openness to experience as a positive moderator. Furthermore, both age and firm size have slightly negative correlations with the change success variable. Future studies may fruitfully explore this indication that older employees and bigger firms may experience more difficulties at the implementation of planned changes.

Concluding, this study confirms that transformational, ethical and servant leadership do affect the perceived success of the change implementation process [H1] and that this relationship is moderated by employee gender, so that the relationship is stronger for male employees and relatively weakened for female employees [H3]. Furthermore, the Big Five personality characteristics [H2] were not found to moderate the effect of model 1. Though, the fifth personality characteristic of openness to experience did show some promising results for future studies. A possible explanation for the non-significant results among the Big Five personality characteristics may be found in the relatively small scale that was used to measure them. The mini-IPIP (Donellan et al., 2006) contains only 20 items to measure the Big Five, while the more extensive personality measures may include over 200 items. Furthermore, the mini-IPIP is not focused specifically on organizational relevant behavior, which in turn may lead to a mismatch between the hypothesized link and the actual measured characteristics.

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36

Contributions

The most important contributions lie in establishing the clear, strong and positive links between the three forms of active leadership and the eventual change success, as well as the moderation effect that employee gender has on this relationship. Furthermore, this study did explorative research on the quantitative measure of change success and change

implementation by using the change success-scale of Nutt (1998). Eventually, it turned out to correlate highly with the already established ATOC scale and thus may provide a valuable tool for future quantitative measures of the implementation process of change. Finally, we elaborated on the potential of contextual factors during change implementation, with a focus on the experiences of the employees. Although not all Big Five characteristics showed clear evidence for interaction effects, this study did provide some hopeful findings that may result in practical tools if they are tested once more in a bigger or multi-sourced sample.

Thus, although not all of the hypotheses were supported, we conclude that there is sufficient ground to further investigate the potential effects of contextual factors, such as the employees, around the implementation process of planned organizational change. Future studies may also fruitfully explore the likely impact of openness to experience with a bigger and maybe even double- or triple-sourced database.

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Leadership styles and successful change implementation : the moderating role of the big five & employee gender