Master thesis, MscBA, specialisation Change Management University of Groningen, Faculty of Economics and Business
April 12, 2010 WOUTER KLOMP Student number: 1621416 Friesestraatweg 330 9718 NT, Groningen Tel: +316 14 56 32 76 E-mail: klompwouter@hotmail.com Supervisor University: Dr. B.J.M. Emans
Faculty of Economics and Business
Supervisor field of study:
G.H. van Goor Emim.
ABSTRACT
INTRODUCTION
Beer and Nohria (2000) state that one-third to two-thirds of major organizational change initiatives are deemed failures. Burnes (2004), Higgs and Rowland (2005) argue that up to seventy percent of the change initiatives fail. Although we can argue about the reliability of these figures, few organizational change initiatives tend to be complete failures, but few tend to be entirely successful either. The first requisite in order to achieve the desired change outcome is creating employees’ readiness for change. Lewin (1951) called this process ‘unfreezing’, Kotter (1995) called it ‘creating a sense of urgency’, Cummings and Worley (2005) called it ‘motivating change’, and Kanter (1992) used the term ‘need for change’. In other words, the extent to which the organization achieves the benefits expected at the end of the change process is affected by the influence strategies used by change agents in order to develop readiness for change.
Kotter (1995) argues that creating readiness for change needs leaders who embrace the need for change, are an example, communicate a compelling vision, and inspire others to act on the vision, instead of managers who, embrace the status quo. The distinction between leaders and managers however, is a bit contrived, as managers have to lead and leaders have to manage (Caldwell, 2003; Mintzberg, 2004; Stoker 2005). But the leadership behaviours mentioned by Kotter (1995) fit very well with two central components of charismatic
leadership, namely, inspiration and influence by ideals (De Hoogh, Den Hartogh & Koopman, 2004). Despite the important role leaders have during organizational change (Conger, 2000; Caldwell, 2003), empirical evidence is missing about the relationship between a charismatic leadership style exposed by managers, who are often change agents, and its effects on employees attitude towards change (Caldwell, 2003).
Beside the effect of charismatic leadership on readiness for change the effect of participation in decision making about change issues is researched in this study. Many researchers are convinced about the importance of participation in organizational change processes (Kotter, 1995; Lines, 2004; Bouma, 2009). The notification of this importance goes at least back to 1948 with the article of Coch and French (1948) called surprisingly
overcoming resistance to change. It is suggested that participation contributes to readiness for change (Armenakis, Harris, and Mossholder, 1993; Cummings & Worley, 2005). In
2004). Brown (1991) found evidence for a positive relation between participation and an increased accuracy in perceptions about the reasons for and goals of change initiatives. Also, it has been argued that participation leads to qualitatively better decisions. One reason for this being that a broader array of relevant skills, competencies and information are brought to bear on each stage in the decision making process (Lines, 2004). This advantage is extensively researched in the field of team diversity (Milliken, 1996). Though a lot is written about the importance of leadership (Kotter, 1995; Higgs and Rowland, 2005; Yukl, 2008) and participation (Armenakis et al. 1993; Lines, 2004; Cummings and Worley, 2005) during organizational change, empirical evidence of the effect, direct or indirect that both strategies play is slight (Yukl, 1999; Caldwell, 2003; Bouma, 2009).
This study will empirically investigate the effectiveness of charismatic leadership and participation as strategies in creating readiness for change. Two major planned organizational changes were the setting for this research. Both organizational changes took place at a Police force in the North East of The Netherlands. The first organizational change was the
THEORY Charismatic leadership
In essence, leadership is primarily focused on moving and changing others. Leadership in context of organizational change is therefore defined as influencing attitudes and behaviours of employees in order to achieve change related goals, by a person who hold a formal position towards the employee. Employee attitude and behaviour towards change are influenced by the use of certain leadership styles. This study assesses the influence of charismatic leadership on the development of readiness for change. The concept of charismatic leadership is also associated with transformational or visionary leadership.
Although charismatic leadership seems to be a good fit for examining change
implementers, which is in this study similar to managers, there is some question about how it should be conceptualized and operationalized (Bommer, 2005). Most research on charismatic leadership is conducted with use of the Multifactor Leadership Questionnaire (MLQ),
developed by Bass (1985). Transformational, transactional and laissez-faire leadership are the three concepts which together form the MLQ. The transformational leader typically inspires followers to do more than originally expected. The concept of transformational leadership includes the following behavioural dimensions: individualized consideration; intellectual stimulation; idealized influence; and inspirational motivation. Transactional leadership involves an exchange process to motivate follower compliance with leader requests and organization rules. Transactional leadership includes contingent reward behaviour, passive management by exception, and active management by exception. Both transformational and transactional leaders are active leaders. Finally, the laissez-faire leader avoids decision making and supervisory responsibility. In a sense this extremely passive type of leadership indicates the absence of leadership (Den Hartog et al., 1997).
Other popular leadership instruments are the Transformational Leader Behaviour Inventory (Podsakoff et al., 1996) and the Conger-Kanungo Scale (Conger et al., 1997). Despite its popularity the MLQ and similar instruments received critic in both
conceptualization and operation. For example, the matter of power sharing, which is important for an understanding of underlying processes influencing charismatic leadership, seems under-represented in these instruments (Yukl, 1999; De Hoogh et al., 2004).
overvaluation of positive effects attributed to charismatic leadership, while some of these effects are in fact attributed to unmeasured positive aspects of transactional leadership (De Hoogh et al., 2004).
To overcome these problems De Hoogh et al. (2004) developed the Charismatic Leadership In Organizations (CLIO) instrument. Therefore, this study used the CLIO instrument developed by De Hoogh et al. (2004).The charismatic leadership scale measured by the CLIO is primarily oriented on the following three behavioural dimensions: idealized influence; inspirational motivation; and empowerment. Idealized influence is to behave in a way that arouses admiration, and motivating by inspiration provides vision and meaning. Empowerment includes intellectual stimulation, individualized consideration, and employee involvement. Intellectual stimulation refers to challenge employees to approach problems from a new perspective. Individualized consideration is giving support, encouragement and coaching. Finally, employee involvement contains behavioural aspects of consultation, delegation and the exchange of relevant information with employees.
According to Holt, Self, Thal, and Lo (2003) and Bommer (2005) charismatic leadership behaviour strongly represents positive change-oriented behaviour by change implementers. In many organizational changes managers’ function as change implementers. This line of
reasoning is supported by Holt et al. (2003) who indicate the important role of line managers’ behaviour in contrast with senior management, and employee’s perceived benefits of the change. Similar, Larkin and Larkin (1994) have posited that while senior leaders may command change, employees will look to their line managers for clues about the change.
More direct evidence of charismatic leadership behaviour related to employee’s attitudes was found by De Hoogh et al. (2005), where charismatic leadership was related to positive work attitude. Bommer (2005) found that charismatic leadership had a strong negative relationship with an individual’s perceived organizational cynicism. These results indicate that charismatic leadership behaviour potentially is an important predictor of employees’ attitude towards change. Previous mentioned research give reason to expect a positive direct relationship between charismatic leadership and readiness for change. However, Antonakis, Avolio et al. (2003) conclude that work on charismatic leadership has reached what has been described as Stage 2 of the evolution of new theories: the evaluation and augmentation stage. In this stage, theories are critically reviewed and the focus is on identifying mediating
Participation
Participation has a long history in academic research (Coch and French, 1948). A wide variety of labels have been used to describe the phenomena of employees influencing organizations, for example: participation (Coch and French, 1948); involvement (Pettigrew, Woodman, and Cameron, 2001), active participation (Armenakis & Bedian, 1999) or participation in decision making (Latham and Locke, 1994; Sagie and Koslowsky, 1994). Probably due to the
influential work of Lewin (1947), whose group decision experiments stressed the role of group consensus in getting members to commit themselves to subsequent actions, research on the effects of participation has long primarily focused on goal commitment (Latham and Locke, 1994). The work of Lewin had a similar influence on how participation was defined. Bouma (2009) stated that participation was first defined as group involvement or group decision making, while contemporary scholars seem to focus on individual involvement of employees in organizational decision making (Sagie and Koslowsky, 1994; Strauss, 1998; Lines, 2004). Following contemporary research, participation is in this study defined as an active involvement of individual employees in decisions regarding organizational change.
Previous research on participation identified a variety of potential benefits, such as an increased understanding of the circumstances that make change necessary, a sense of ownership (Bouma, 2009) and control over the change process, and increased readiness for change (Armenakis et al., 1993). A study of Lewis (2006) indicates that the higher the perceived level of participation, the higher employee’s perceptions of success were. Sagie et al. (1990, 1991) executed two laboratory simulations which demonstrated that acceptance of a change in simulated organizations was more affected by participation in tactical than in strategic decisions. To test their findings in the field Sagie and Koslowsky (1994) applied one study to five similar organizational changes in five different organizations. In four
organizations participation in tactical decisions rather than strategic was positively related to productivity.
Readiness for change
Actually, readiness is nothing more than a positive antonym for resistance. Though the perceptions and thoughts that people get from the two words are opposites. The meaning of resistance has changed from its original concept developed by Lewin. Lewin (1951)
conceptualized resistance as a systems phenomenon while for example the concepts of Oreg (2006) and Szabla (2007) are based on the psychology of the individual. Due to this misuse of the term resistance, see Dent and Goldberg (1999) for an extensive review, it is now common that we think that organizational members resist change. Similar, Piderit (2000) and Lawrence (1954) warn managers, often change leaders, to avoid creating resistance in subordinates by assuming that they will always be opposed to change. This cognitive mindset often results in change leaders, often managers, who will force instead of sell the change. By extension Nord and Jermier (1994) argue that the term is often used as part of an agenda that may overshadow employees’ legitimate reasons for objecting change. Dent and Goldberg (1999) argue that organizational members resist negative consequences and not necessarily change in itself. They resist because of uncertainty, the quality of the change or a loss of status or control. Thus, the label of resistance can be used to dismiss potentially valid employee concerns about proposed changes (Piderit, 2000). Therefore readiness is a much better name for the same construct.
A review of empirical research reveals that readiness for change has been conceptualized in three ways: as a cognitive state; as an emotion; and as a behavioural intention (Piderit, 2000). This study follows the conceptualization of Oreg (2006) who developed a
multidimensional readiness for change construct: where the affective component regards how one feels about the change (e.g., angry, anxious, enthusiastic); the cognitive component involves what one thinks about the change (e.g., is it necessary? Will it be beneficial?); and the behavioural component involves actions or intention to act in response to the change (e.g., complaining about the change, trying to convince others that the change is good). Thus, readiness for change is defined as a multidimensional attitude consisting of an affective, cognitive, and intentional dimension that predicts the actual behaviour, resistance or adoption, of individuals towards organizational change.
Further, Bouma (2009) found evidence for mainly an indirect effect of participation on employee’s perceptions of success about change. Therefore, it is more likely that both
strategies affect readiness for change through several variables related to the situation that the leader and the employee find themselves in (Pillai, 1999; Bommer, 2005; Van Dam, 2007; Bouma, 2009). These – so-called – contextual variables act as mediators and are supposed to explain how and why both strategies create readiness for change. Primarily based upon previous empirical research (Bouma, 2009; Bommer, 2005; Oreg, 2006) four potentially important mediators were identified. These mediators are trust, ownership, cynicism and workload. Trust, ownership and workload refer to how change is currently perceived. While cynicism refers to how the history of organizational change affects the way change is perceived. Therefore it is crucial to take into account that both current and past events condition current and future attitudes toward change.
Trust
Trust is considered to be a multidimensional concept and extremely important in predicting interpersonal relations (Bouma, 2009; Yang, 2010). Though different
conceptualizations exist this study heavily depends upon the two-dimensional trust concept of Bouma (2009). The first dimension is called trusting others and is concerned about the belief and confidence in others. Trusting others is defined as an employee’s belief that others make the right change related decisions. The second dimension refers to a perception of the amount of confidence that is received from others around the individual when he/she works with the change. Being trusted is defined as a perception of the amount of respect and confidence that is received from others.
Trust in others and especially in those leading the change seems to be a prerequisite for employees to cooperate with the change. Armenakis et al. (1993) for example, state that the effectiveness of influence strategies is dependent upon the change agent gleaned
charismatic leadership style, primarily due to the positive effect of individualized support (Podsakoff, 1996). However, the emphasis in previous mentioned academic research has focused on the trusting others dimension.
Research supporting the being trusted dimension is scarce. According to Strauss (1998) participation will ensure that employees become more appreciated and respected as people. Further, it is suggested that followers of charismatic leaders feel trust, and respect towards the leader, and they are motivated to do more than they originally expected to do (Yukl, 1999). Though Strauss and Yukl suggest that being trusted is related to participation and charismatic leadership, only Bouma (2009) found empirical evidence of a positive relationship between participation and being trusted. The foregoing findings indicate that there is a reasonable amount of empirical evidence that trusting others and being trusted are positively influenced by participation and charismatic leadership, and related to readiness for change.
Ownership
Scholars have defined ownership in many different ways. Dirks, Cummings, and Pierce (1996) for example, define ownership as an affective psychological state where someone feels the object is his/hers. Bakan et al. (2004) use ownership to define the shared owning of an organization by its employees. Similar to Dirks et al. (1996) and Bouma (2009) described ownership as a feeling of possession. At the same time ownership is closely related to commitment, satisfaction (Dirks et al, 1996; Bouma, 2009) and responsibility (Bouma and Emans, 2005). Following research of Bouma (2009) ownership is defined as employee attitudes of possession, dedication, and commitment towards organizational change.
There is a substantial body of scientific evidence indicating a positive relation between participation and ownership. Lines (2004) found evidence for a strong relation between participation and organizational commitment. Bouma (2009) found evidence for a significant relation between participation and ownership. Some indication is present to suggest a positive relation between charismatic leadership and ownership as well. For example, Fedor and Caldwell (2008) found evidence for a positive relation between charismatic leadership and commitment to a specific change project.
Organizational Cynicism
Organizational cynicism is detrimental when change agents try to create readiness for change. Cynicism is considered as a pessimistic viewpoint about change efforts being successful because those responsible for making change are blamed for being unmotivated, incompetent, or both (Wanous, Reichers, and Austin, 2000). Cynical feelings about change efforts can also arise when previous change efforts have failed or when organizational leaders continually introduce new change programs (Reichers, Wanous, & Austin, 1997). These feelings may result in a loss of faith in change agents and future change initiatives. Cynicism is defined as a pessimistic attitude about change efforts being successful along with a loss of faith in those who are responsible for the changes. Overcoming cynicism is particularly important because when the current change fails, feelings of cynicism will increase. Consequently, future changes are even less likely to succeed. To overcome the detrimental effects of cynicism Brown and Cregan (2008) and Reichers (1997) suggest involving people who are affected by the change and sharing information with them. This implies a relationship between
participation and cynicism. Bommer (2005) found evidence that transformational leadership behaviours are effective tools for combating employee’s cynicism. Following the outcome of the Bommer study it is expected that charismatic leadership is an effective strategy to
negatively influence organizational cynicism.
Further, it is argued that the success of past organizational changes influences employees’ attitudes toward change (Reichers et al. 1997). According to Armenakis (2007) cynicism negatively influences an individuals’ change believe. Though academics did not pay much attention to the role of change history, it is reasonable to expect a negative relationship between cynicism and readiness for change.
Workload
A disadvantage of participative change strategies is the extra time and energy it demands of the people involved in addition to their regular activities (Bouma, 2009). The more time and energy the change demands the more their regular activities are under pressure.
Bouma (2009) found a negative correlation between workload and participation. The reason for this unexpected finding was that management had released participating employees from excessive workload. Thus, it is still expected that participation and charismatic leadership are positively related to workload. While in turn workload is negatively related to readiness for change.
Research Questions
This study aims to investigate the role of charismatic leadership and participation as strategies creating readiness for change. The idea is that both strategies contribute independently to readiness for change. More specifically, the following hypotheses were formulated:
Hypothesis 1
Participation is related to readiness for change through positive mediation of ownership (a), trusting others (b), and being trusted (c), and negative mediation of cynicism (d) and
workload (e).
Hypothesis 2
METHOD Organizational context
A Police force in the North Eastern of The Netherlands was the setting for this research. The objects of study were two major planned organizational changes. The first was the introduction of a new National information system (IS). The reason for the development of a new IS was the limited ability to exchange information between the 25 regional Police forces in the Netherlands. An existing Police IS called X-pol formed the basis of the new IS and was used for years by several Police forces. The IS was developed by a national supportive Police division called VTS-PN. The implementation of the IS stood under huge time pressure of the Ministry of Interior because an earlier attempt to develop a completely new IS was utterly failed. The IS was introduced eight months earlier but as far as the employees were
concerned, the change was still very much underway, and so their experiences of it were still fresh in their minds.
The second organizational change is a merger of supporting divisions such as finance, HRM, the emergency centre, and a regional detective force with two other Police forces. The reasoning behind the merger is twofold. First, the Police forces anticipated on a national debate to decrease to number of regional Police forces. Second, it is a measure to save costs. The actual merger was very much at the end of the preparation phase. Several management positions were already filled in and it was waiting for a social agreement until clarity could be given to employees whether or not they held their current position. Further, extensive work was done to develop uniform protocols and work methods.
Data collection
Both studies used a questionnaire to gather data. The questionnaires were pre-tested by five organizational members. Based on the gathered information changes were made to improve the clarity of items. The data was collected with use of a web-based
self-administrated questionnaire. The pre-selected people were able to login with a unique code. This prevented individuals to participate more than once. Each respondent was required to answer all the items of the questionnaire. The application automatically checked for missing values and excluded those from the dataset, although that limited the total number of
most close to them; secondly it was done because a substantial part of the invited employees were affected by both changes. The questionnaires were distributed together with an
accompanying letter. In this letter the reason of study was explained as well as their
guaranteed confidentiality. The organizational members had a period of four weeks to fill in the questionnaire. After four weeks 469 people had returned the questionnaire completely which is 45% of the original target group.
Measures
Both studies used the same set of constructs. For a complete overview of the used constructs and associated items we refer to appendix 1. All measures, with exception of participation, were collected with a 7-point Likert-type scale with the following responses (translated from Dutch): completely disagree (1) largely disagree (2); somewhat disagree (3); not disagree/not agree (4); somewhat agree (5); largely agree (6); completely agree (7). To assess the internal consistency of the scales being measured, the Cronbach’s alphas were measured. For an overview of the scores see table 1.
Readiness for change. The dependent variable readiness for change scale was developed
by Oreg (2006) and for this research translated in Dutch. Because the scale measured readiness in terms of resistance to organizational change the items were primarily negative formulated. To prevent the idea of respondents that change is negative several positive items were added. The added positive items were based on scales developed by Oreg (2006) and Szlaba (2007). The scale consists of eighteen items, equally divided over the three
dimensions. An example is “I feel relieved because of the change.”
Charismatic leadership. De Hoogh et al.’s (2004) charismatic leadership in organizations
(CLIO) questionnaire was used to measure charismatic leadership. Respondents were asked to assess their line manager’s behaviour. Charismatic leadership was measured using eleven items. An example is “My manager is able to make others enthusiastic for his/her plans”.
Participation. The participation scale that was used captures the extent to which
employees participated in the change process. The scale is based on Bouma (2009). Participation was measured with use of a 5-point scale with the following responses
Cynicism. Cynicism reflects on how employees perceived previous change initiatives.
Cynicism was measured using six items by Atwater et al. (2000). An example item is “I’ve pretty much given up trying to make suggestions for improvements in this company.” For this research the items were translated in Dutch.
Workload. The scale to measure workload was developed by Bouma (2009) and consists
of three items. An example is “My workload has increased through the change.”
Ownership. Ownership was measured using the scale developed by Bouma (2009). This
scale consists of three items. An example is “I feel personal responsible for the success of the change.”
Trusting others. The scale trusting others was developed by Bouma (2009) and adjusted
to the specific setting of this study. The scale trusting others consists of three items, an example is “I trust the people who implement the change for doing this well.”
Being trusted. The scale being trusted was developed by Bouma (2009) and adjusted to
the specific setting of this study. The scale being trusted consists of three items; an example is “My colleagues respect me when I work with the change.”
Control. To analyze the hypothesized relationships, we controlled for the following three
self-reported variables: gender; age; and tenure.
TABLE 1
Number of items and Cronbach’s alpha scores of the scales
Number of items α Study 1 α Study 2
Readiness for change 3 0.90 0.91
Data analysis
Both studies were analyzed separately using SPSS version 17.0. Some items needed to be recoded to reflect the scale in a proper way. After performing correlation analyses, regression analyses were performed to identify the mediating relationships between the variables. The presented regression analyses were all controlled for age, tenure, and gender.
RESULTS
Table 2 and 3 contain the means, standard deviations and correlations of respectively study 1 and 2. Table 2 shows strong significant intercorrelations .73 – .78, p < 0.01 between the three dimensions of the outcome variable readiness for change, which was not surprising to the researcher. Although research has demonstrated that cognition, emotion, and intention are indeed distinct dimensions (Oreg, 2006; Szabla, 2007) theory and research also argue for strong interrelationships among these three dimensions. Many appraisal theorists claim that thinking and feeling are inextricably interrelated (Szabla, 2007). Table 2 shows for most variables an average score close to the scale middle. Table 2 shows a very low mean of 1.76 and standard deviation of .57 on the predictor variable participation, which is somewhere in between ‘have been passed’ and ‘have been informed’. Further, a mean of 5.29 for workload is high compared to study 2 and former research of Bouma (2005) and Bouma (2009). The negative correlation between participation and workload was not expected but in line with former research of Bouma (2009). When interviewing participants they all indicated that they were unloaded from regular work. Thus, the same explaining reason is applicable here for the negative correlation between participation and workload compared to the Bouma (2009) study.
TABLE 2
Means, standard deviations, and correlations of study 1
Mean Std. Dev. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 Age 44.78 10.69 - 2 Tenure 20.91 12.53 .79** - 3 Function 1.90 0.31 -.14** -.24** - 4 Gender 1.28 0.45 -.31** -.34** .09 - 5 Affective readiness 4.27 1.13 -.12* -.13** -.15** .11* - 6 Cognitive readiness 4.13 1.28 -.01 -.07 -.19** .07 .78** - 7 Intentional readiness 4.12 1.10 -.03 -.07 -.26** .03 .76** .73** -
8 Readiness for change 4.17 1.07 -.06 -.10* -.22** .08 .92** .92** .90** -
9 Participation 1.76 0.57 .05 -.02 -.14** -.07 .28** .25** .34** .32** - 10 Charismatic leadership 4.43 1.15 .01 .01 -.28** .04 .22** .19** .18** .21** .18** - 11 Trusting others 4.56 1.11 .01 -.06 -.18** .07 .42** .45** .44** .48** .30** .36** - 12 Being trusted 4.19 1.15 -.19** -.23** -.11* .05 .28** .24** .34** .31** .26** .32** .44** - 13 Ownership 3.68 1.20 -.09 -.10* -.26** .07 .53** .51** .60** .59** .35** .32** .52** .60** - 14 Cynicism 3.96 1.03 .08 .10* .29** -.03 -.41** -.37** -.40** -.43** -.24** -.46** -.45** -.33** -.31** - 15 Workload 5.29 1.38 .08 .20** .08 -.13** -.40** -.38** -.37** -.42** -.22** -.18** -.29** -.19** -.32** .38** -
In study 2 the three readiness dimensions were strongly intercorrelated .72 - .81 , p < 0.01 The Participation scored a much more acceptable mean of 2.36 in study 2, which is
somewhere in between ‘have been informed’ and ‘have been consulted’. Also, the correlation values of participation on readiness for change are stronger than in study 1. Table 3 shows for most variables an average score close to the scale middle. Compared to study 1, workload scored a much lower mean of 3.71 with a standard deviation of 1.43, and scored only positive correlations with the control variable function (.35**), participation (.24**), and being trusted (.25**). Thus, while study 1 shows a negative correlation between participation and
workload, study 2 showed a positive significant correlation between workload and
participation. The most probable reason when interviewing involved organization members
for this discrepancy between both studies is that participants in study 2, excluding the
permanent project members, were not unloaded from their regular tasks. This finding clearly shows the effect of project management and specifically allocating human resources to a project. Finally, differences in mean scores between the three readiness for change
dimensions are visible. Intentional readiness scored a rather high mean of 4.81 compared to cognitive readiness 4.31 and affective readiness 4.15.
TABLE 3
Means, standard deviations, and correlations of study 2
Mean Std. Dev. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 Age 47.52 8.68 - 2 Tenure 21.33 11.54 .64** - 3 Function 1.80 0.40 -.20* -.21* - 4 Gender 1.28 0.45 -.28** -.52** .20* - 5 Affective readiness 4.15 1.17 -.18 -.13 -.33** .02 - 6 Cognitive readiness 4.31 1.13 -.25** -.21* -.28** .03 .81** - 7 Intentional readiness 4.81 1.07 -.22* -.21* -.35** .13 .78** .72** -
8 Readiness for change 4.42 1.03 -.22* -.20* -.34** .07 .94** .92** .90** -
9 Participation 2.36 0.80 .00 -.12 -.31** .04 .41** .37** .48** .46** - 10 Charismatic leadership 4.91 1.12 .00 -.11 -.28** .22* .26** .30** .32** .31** .40** - 11 Trusting others 4.62 1.13 -.11 -.13 -.24** .03 .72** .66** .64** .74** .40** .47** - 12 Being trusted 4.62 0.89 -.23** -.16 -.34** .09 .43** .36** .50** .47** .48** .43** .46** - 13 Ownership 3.86 1.25 -.03 -.11 -.42** .01 .67** .60** .75** .73** .58** .40** .66** .53** - 14 Cynicism 3.53 1.08 .06 .07 .42** -.08 -.63** -.55** -.65** -.66** -.43** -.51** -.72** -.51** -.59** - 15 Workload 3.71 1.43 .06 -.04 -.35** -.02 .05 .05 .12 .08 .24** .13 .01 .25** .15 .00 -
Mediation
To find support for hypotheses 1 and 2 regression analyses were performed. According to Baron and Kenny (1986) a variable mediates a relationship if the following three conditions are fulfilled. First, a significant relation exists between the predictor variable (participation and charismatic leadership) and the mediators. Second, a significant relation exists between the mediators (ownership, trusting others, being trusted, cynicism and workload) and the outcome variable (readiness for change). Third, the regression slope (β) from the predictor variable shrinks upon the addition of the mediators to the regression model. Preacher and Hayes (2004) specified the third condition more precisely. If the regression slope of the predictor variable shrinks from significant to insignificant, then full mediation can be accepted. If the strength of this relationship is reduced but remains statistically significant then partial mediation is evident, if a Sobel test proves that the effect of the independent on the dependent variable via the mediator is still significantly different from zero.
Study 1
Table 4 shows the regression analyses for hypotheses 1 and 2. Participation alone
TABLE 4
Regression Analysis Study 1
Variables Model 0 Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
β β β β β β β Age .05 .08 .04 .06 .01 .01 .02 Tenure .05 .00 .05 .01 .00 .01 .00 Gender -.12 -.06 -.12 -.07 -.02 -.01 -.01 Ownership .45** .47** .46** Trusting others .15** .16** .16** Being trusted -.12* -.10* -.11* Cynicism -.18** -.22** -.22** Workload -.17** -.17** -.16** Participation .32** .29** .06 .06 Charismatic Leadership .21** .16** -.10* -.10* R² .01 .11** .06** .14** .47** .47** .48** Notes: n = 356 ** p < 0.01 * p < 0.05
Hypothesis 2 tests if charismatic leadership is related to readiness for change through the tested mediating variables. The results are presented in table 4. Charismatic leadership alone (model 2) showed a significant β = .21, p < 0.01 and accounts for 6 percent of the variance of readiness for change. When the mediating variables are added the explanatory value increases to 47 percent (model 5). Meanwhile, the regression slope of charismatic leadership decreases to β = -.10, p< 0.05. This outcome suggests that charismatic leadership negatively influences an individual’s readiness for change when the contextual variables are added to the regression model. This interesting outcome is further explored in the discussion paragraph. Similar to model 4, model 5 also shows a negative value for being trusted (β = -.10 , p< 0.05). When being trusted function as a single mediating variable a positive relation is found (β = .21 , p< 0.01). Based upon the regression analysis trusting others (β = .16, p < 0.01), being trusted (β = -.10 , p < 0.05), ownership (β = .47, p < 0.01), cynicism (β = -.22, p < 0.01), and workload (β = -.17, p < 0.01) function all as mediators.
each other. Because together charismatic leadership and participation predict 14 percent of the variance of readiness for change. While independently the maximum explained variance is 11 percent for participation.
Study 2
To test the generality of the theoretical framework the same hypothesized relations were expected to be found in study 2. Therefore the previous described conditions to find support for mediation are applicable to study 2 as well. Table 5 shows the regression analysis for study 2. Participation alone (model 1) showed a significant β = .47, p < 0.01 and accounts for 27 percent of the variance of readiness for change. When the mediating variables are added the explanatory value of the regression model increases to 69 percent. In study 2 trusting others (β = .29 , p < 0.01), ownership (β = .40 , p < 0.01), and cynicism (β = -.24 , p < 0.01) function as mediators for the relationship between participation and readiness for change.
In contrast with study 1, workload and being trusted are not related to readiness for change. The indication for a non-relationship between workload and readiness for change is already present in table 3. But no indication was found for a non-relationship between being trusted and readiness for change. Additional regression analysis reveals that being trusted as a single mediator positively relates to readiness for change β = .32 , p < 0.01. Further, the regression slope of participation decreases to β = .02 (ns) (model 4) and lost its significance. Thus, in study 2 support is found for hypotheses 1 a, c, and d.
TABLE 5
Regression Analysis Study 2
Variables Model 0 Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Hypothesis 2 tests if charismatic leadership is related to readiness for change through the tested mediating variables. The results are presented in table 5. Charismatic leadership alone shows a significant β = .34, p < 0.01 and accounts for 16 percent of the variance of readiness for change. When the mediating variables are added the explanatory value increases to 70 percent. The regression slope of charismatic leadership shrinks to β -.11 (ns) and lost its significance. Although charismatic leadership lost its significance in comparison to study 1 the value remains negative. Similar to study 1, charismatic leadership significantly differs from zero with a Sobel test score of 5.53, p < 0.01.
In contrast with study 1, workload and being trusted are not related to readiness for change. Consequently, in study 2 support is found for a relationship between charismatic leadership and readiness for change mediated by trusting others, ownership, and cynicism. Thus, hypotheses 2 a, c, and d are supported while no support is found for hypotheses 2 b, and e. Finally, table 5, model 3, shows that in study 2 participation and charismatic leadership work independently from each other. Because together charismatic leadership and
DISCUSSION
The purpose of this study was to investigate the effects of charismatic leadership and participation through mediation of trusting others, being trusted, ownership, cynicism and, workload on employees readiness for change. The idea behind this study is to identify how and why these strategies contribute to readiness for change. First, charismatic leadership and participation contribute positively to readiness for change and are therefore effective
strategies to develop readiness for change. Second, the relationship between participation and readiness for change is mainly indirect and occurs via the mediators, ownership, trusting others and cynicism.
Further, in study 1 charismatic leadership shows apart from a positive relationship with readiness for change through the mediating roles of ownership, being trusted, trusting others, workload, and cynicism a negative relationship with readiness for change. This finding is quite remarkable, because previous research on leadership predicted that a charismatic leadership style was summit (Lowe, Kroeck and Sivasubramaniam, 1996; Podsakoff et al., 1996; Judge and Piccilo, 2004). Perhaps it still is the most effective style, but it has a downside that becomes visible via the mediating variables that already explain the positive relationship between charismatic leadership and readiness for change. The negative outcome of charismatic leadership addresses two important issues. First, the behaviour of an
employees’ line manager has a strong effect on an individual’s change attitude. Second, this is the first study that exposes that charismatic leadership can have a negative impact on attitudes towards change as well.
organizational change, it does not explain the negative relationship between charismatic leadership and readiness for change found in study 1.
The negative relationship between charismatic leadership and readiness for change suggest that charismatic leadership can also act in opposition to change (Levay, 2010). To explain why charismatic leadership contributes negatively to readiness for change it is necessary to reflect the context of the organizational change in study 1. Study 1 used a major information system (IS) change to assess the effects of charismatic leadership and
participation on employee’s readiness for change. When interviewing managers and
employees a pattern of disbelieve with the IS emerged. The IS was introduced in stages and a dozen Police forces in The Netherlands already used the IS, some for at least 6 months. These regions reported reliability and user friendliness problems. Further, reports came in of an excessive time consuming and crashing IS. These messages had influence on managers’ behaviour when it concerned the IS. Levay (2010) proposes that charismatic leadership can be used to defend the status quo. Although this could be the case, it is more likely that managers showed opposite charismatic leadership behaviour because the IS did not meet the essential adoption terms for technology acceptance, namely, ease of use and usefulness (Venkatesh, Morris, Davis, 2003; Boddy, Boonstra, Kennedy, 2005).
Similar to previous results on charismatic leadership and trust (Podsakoff, 1996; Yukl, 1999; Gillespie and Mann, 2004), charismatic leadership correlates in study 1 positively with trusting others (table 2). Further, trusting others is in study 1 as expected positively related to readiness for change. The second trust dimension, being trusted, showed a less
straightforward relationship with readiness for change. The feeling of being trusted is
positively correlated with charismatic leadership (table 2), but relates negatively to readiness for change. A logical explanation for this unordinary finding is that because employees feel more trusted and respected by their managers and colleagues they tend to be less conformist towards the change and express themselves more quickly (Liu, Zhu, Yang, 2010). This is strengthened by managers who cannot conceal their doubts about the IS due to negative reports, own experiences, and messages from other Police forces.
provide additional opportunities for employees to practice and become more familiar with the system. As a result, the involved employees are able to work more easily with the IS. The negative relationship between workload and readiness derives from the problems employees encountered when the IS was implemented. Unfortunately the reported problems in previous Police forces weren’t solved. As a result the North Eastern Police force encountered the same problems as the preceding Police forces.
Study 2 used a merger to find support for the tested hypotheses. Both charismatic leadership and participation are effective strategies in creating readiness for change. Similar with study 1 trusting others, ownership, and cynicism function as mediators. Thus, based on both studies ownership, trusting others are prerequisites to develop readiness for change.
The findings of study 1 and 2 between charismatic leadership and cynicism are in line with former empirical research (Bommer, 2005; Rubin et al. 2009). Also, in both studies cynicism was negatively related to readiness for change. Concluding, future change agents should consider the existent level of cynicism present in their organization. The more cynicism present, the more change agents effort is necessary to ensure that negative feelings about previous change attempts don not seriously harm the current change initiative.
Fortunately, charismatic leadership and participation are effective strategies to deal with cynicism (Tesluk, 1995; Brown 2008; Bommer, 2005; table 2, 3).
According to study 1 and 2 ownership is the most important mediating variable predicting the relationship between both predictor variables and readiness for change. Participating employees show stronger feelings of possession and commitment towards the change. These feelings of ownership create a certain bond with the change resulting in improved attitudes towards change. Similar, charismatic leadership and especially empowering leadership behaviours result in stronger feelings of ownership. Empowering leadership behaviours such as delegating tasks and sharing responsibility enhance the feeling of ownership. These enhanced ownership feelings resulted in improved attitudes towards change.
Implications for managers
The findings of both studies have several implications for management and specific change agents when initiating planned organizational change. Change agents should consider the important role of line managers in building employees attitudes towards change in planned organizational change initiatives. The negative relationship between charismatic leadership and readiness for change should also raise attention to nuance the idea that employees resist change, although managers are employees as well. While top-management commitment is necessary to initiate the change (Dunphy, 2000) line managers have a key role in developing readiness for change (Conger, 2000). To develop readiness for a merger, participation is an effective strategy. Probably due to the creation of a better understanding for the underlying reasons, information position, the development of individual and group relations between the merging organizations, and a feeling of ownership towards the new organization. Thus, where employee’s commitment is important, a more participative style is better (Burnes, 2004, p. 509).
In case of introducing an IS change agents should stimulate participation of employees in the implementation phase. Implicitly the outcomes of this study found evidence for the importance of training. Complementary, Collerette, Legris and Manghi (2006) analyzed an IS change at the Geneva Police Department and concluded that the success depends upon: a solid training programme; intensive individual guidance in the field by colleagues to favour a quick learning of the system; an implementation cycle concentrated over a short time; in work units of a manageable size. Further, managers often have a double role in IS changes. First, they are supposed to act as change agents. Second, they are change target as well. In the IS case this double role led to counterproductive leadership behaviour.
Implications for future research
Though it can be assumed that attitude predicts behaviour, the theory of cognitive dissonance suggests that either way is possible when people feel dissonance (Burnes, 2004). Thus, to improve the predictive value of the readiness for change construct additional empirical research is necessary to assess the role of readiness for change on behavioural change related outcome variables.
Thereafter, future research should focus on how the different readiness dimensions are influenced. Although not taken into account in this research, it is expectable to find different influence patterns among the affective, cognitive and intentional readiness dimension.
Finally, research on both predictor variables (charismatic leadership and participation) in different profit and non-profit organizations as well as different change projects is welcome to investigate the generality of both variables as strategies to develop readiness for change.
CONCLUSION
The development of readiness for change when facing a merger or the implementation of an IS is heavily depending upon an employee’s feeling of ownership towards the change and trust in those initiating and leading the change. Cynicism, in other words an employee’s negative previous experience with organizational change influences readiness for change in the opposite direction. Charismatic leadership behaviour of line managers as well as
participation in the change process effectively affect the mediating variables ownership, trusting others, and cynicism. In turn, these variables predict employee’s readiness for change. Though charismatic leadership can have a detrimental effect on employees readiness for
change when his/her line manager openly expresses his/her concern about the change. The
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APPENDIX 1 Items in scales
In the left column the original Dutch items are given, supplemented by a translation in English in the right column.
Readiness for change Affective readiness
Ik voelde mij opgelucht vanwege de verandering
I felt relieved by the change
De verandering maakte mij overstuur* The change made me upset *
Ik was gespannen vanwege de verandering* I was tensed because of the change *
Ik had een goed gevoel over de verandering I had a good feeling about the change
Ik was bang vanwege de verandering* I was afraid because of the change *
Ik was erg enthousiast vanwege de verandering I was very excited by the change
Cognitive readiness
Ik dacht dat de verandering schadelijk zou zijn voor de manier waarop ik werk*
I thought the change would be detrimental to the way I work *
Ik dacht dat de manier waarop wij werken negatief beinvloed zou worden door de verandering*
I thought the way we work would be adversely affected by the change * Ik dacht dat de verandering een negatief effect
zou hebben op mijn werk*
I thought the change would have a negative impact on my work *
Ik dacht dat door de verandering de prestaties van de politie op de lange termijn zouden toenemen
I thought that by changing the performance of the police in the long term would
increase Ik dacht dat de politie voordeel zou behalen uit
de verandering*
I thought the police would gain benefit from the change *
Ik dacht dat ik persoonlijk voordeel zou halen uit de verandering
I thought I would get personally benefit from the change
Intentional readiness
Ik sprak met enthousiasme over de verandering naar anderen
I spoke with enthusiasm about the change to others
Ik had de intentie om de verandering te steunen I had the intention to support the change Ik sprak open over de voordelen van de
verandering
I spoke openly about the benefits of the change
Ik stimuleerde anderen om met de verandering aan de slag te gaan
I encouraged others to get started with the change
Ik heb mij beklaagd over de verandering bij collega’s*
I have complained about the change to colleagues *
Ik zocht naar manieren om te voorkomen dat de verandering ingevoerd zou worden*
I searched for ways to prevent the change being introduced *
Participation
Over wat de bedoeling is van de verandering werd ik, ...
Regarding the purpose of the change, I was…
Bij wat de verandering voor mijn werk betekent werd ik, ...
Regarding what the change means for my job, I was…
Bij het besluit om mijn afdeling te laten werken met de verandering werd ik, ...
Regarding the decision to let my department work with the change, I was…
Bij het beschrijven van het doel werd ik, ... Regarding the goal description, I was…
Bij het proces om de verandering te optimaliseren werd ik, ...
In the process of optimizing the change, I was…
Bij het ontwerpen van het projectplan voor de verandering werd ik, ...
Regarding the design of the change project plan, I was…
Trusting others
Ik had alle vertrouwen dat de mensen die de verandering begeleiden het goede deden.
I trust the people who implement the change for doing this well
Ik vertrouwde erop dat de directie de
verandering voldoende aandacht zou geven.
I trust top mamagement to provide the change with sufficient attention
Ik geloof dat wij gezamenlijk een success willen maken van de verandering.
I trust that my colleagues together will make the change a success
Being trusted
Mijn collega’s respecteren mij wanneer ik met de verandering werk.
My colleagues respect me when I work with the change
Mijn directe leidinggevende respecteert mij wanneer ik werk met de verandering.
My direct boss respects me when I work with the change
De directie respecteert mij wanneer ik werk met de verandering.
Top management respects me when I work with the change
Ownership
Ik voel mij persoonlijk verantwoordelijk voor het welslagen van de verandering
I feel personnally responsible for the success of the change
Wanneer de verandering niet juist wordt gebruikt, spreek ik mensen daarop aan.
When the change is not used well by someone I address it to them
Cynicism
Het is moeilijk om hoopvol te zijn over de toekomst, omdat de houding van mensen in deze organisatie negatief is
It is hard to be hopefull about the future because people have such bad attitudes
Mensen in deze organisatie krijgen lof die ze niet verdienen, voor werk dat ze niet doen
People ge credit they don't deserve for work they don't do
Inspanningen om veranderingen te
ontwikkelen worden erkend bij de politie.*
Efforts to develop changes are recognized within the police
Veranderingen ten aanzien van de manier van werken binnen de politie leveren vooral problemen op
Changes to the usual ways of doing things at the police are more trouble than they are worth
Ik heb het grotendeels opgegeven om veranderingen voor te stellen
I've pretty much give up trying to make suggestions for improvements
Persoonlijk initiatief wordt niet gewaardeerd binnen de politie.
Personal initiative isn't appreciated at the police
Items marked with an asterisk (*) were reverse coded.
Workload
Mijn werklast is toegenomen door de verandering
My workload has increased through the change
Werken met de verandering kost mij meer tijd dan toen wij de verandering nog niet kenden
Working with the change costs more time than before we had this
Vanwege de verandering kom ik niet meer aan mijn andere werk toe
