The Influence of Job Satisfaction and Cynicism on Readiness
for Change: The Moderating Effect of Transformational
Leadership
Master Thesis, MScBA, specialization Change Management
University of Groningen, Faculty of Management and Organization
August 12, 2009
COEN BOXEM
Student number: 1270893
Willem van Noortstraat 120
3514 GH Utrecht
The Netherlands
T: +31(0)633049069
E: cboxem@hotmail.com
Supervisor/ university
Dr. Cees Reezigt
Supervisor/ field of study
Erik Heyndrickx
FROM SATISFACTION TO CHANGE
The Influence of Job Satisfaction and Cynicism on Readiness for Change: The Moderating Effect of Transformational Leadership
Coen Boxem
University of Groningen
Abstract
In this study the influence of job satisfaction and cynicism on readiness for change was examined. Besides this, the possible moderating effect of transformational leadership on this relationship was investigated. Self report measures were used to measure job satisfaction, dispositional cynicism, management cynicism, change-specific cynicism, readiness for change, and transformational leadership. 57 employees of a large financial institution, which is in the midst of a large transformation process, completed the questionnaire. The following two hypotheses were substantiated by the results of this study: (1) high job satisfaction increases readiness for change; (2) the expected negative effect of high cynicism on readiness for change is weakened by transformational leadership. Employees, who have more appraisals for their job, are more cognitively and emotionally inclined to accept, embrace, and adopt a particular plan to purposefully alter the status quo, than employees with low job satisfaction. Transformational leadership was found to weaken the negative effect of dispositional cynicism on readiness for change. The theoretical and practical implications, as well as the limitations and suggestions for future research will be discussed at the end.
1. INTRODUCTION
1.1 Description of the Organization and the Situation at Hand
My internship was taking place at the Guarantees Centre of ABN Amro in Rotterdam. The president of this department asked me to investigate ‘negativity’ among (part of) the employees of the department.
The department has about eighty fulltime employees. The Guarantees Centre Rotterdam consists out of the following four teams: Service Desk, Secretariat & End Control, Processors (Guarantee Officers), and Administration. Each of these four teams has a team leader. Together the four teams are responsible for producing different types of guarantees for their customers.
The clients of the Guarantee Centre either contact the department directly, or via their ABN Amro bank shop. A client purchases a bank guarantee because they need it in a private- or business deal. Bank guarantees can be used in numerous situations which require financial security. The risk of the client defaulting in payment or delivery is reduced for the beneficiary, because ABN Amro underwrites the agreement between them. Because ABN Amro underwrites the risk of the client defaulting, the client enhances his/her attractiveness as a business partner, both at home and abroad.
Organizational transformations. ABN Amro and its employees faced, and are still facing, major transformations over the last two decades. Starting in February 2007, ABN Amro went through a particularly turbulent period. The main events of this period are summarized below in order to gain insight in the changes the employees at ABN Amro were confronted with.
In February 2007 a minor activist shareholder, TCI, launched the initiative to split up ABN Amro in order to create more shareholders wealth. This initiative was the start of a takeover battle between Barclays bank, and a Consortium of Fortis, the Royal Bank of Scotland, and Banco Santander. This eventually cumulated in a hostile takeover by the Consortium and the spilt-up of ABN Amro between the three partners on October 11th 2007.
The future of ABN Amro remains uncertain nowadays. Former Dutch minister of Finance, Gerrit Zalm, is appointed as the new CEO of ABN Amro on the 21st of November 2008. His task is to lead the integration of ABN Amro and the Dutch part of Fortis. The ABN Amro brand will become leading again in this new to build bank.
Besides these organization wide transformations of ABN Amro, the employees at the Guarantee Centre Rotterdam were also confronted with specific department level changes starting in 2001.
Department level change. In 2001 the organizational structure of the guarantee department of ABN Amro was completely different from what it looks like now. The guarantee business of ABN Amro was organized in regional departments. Starting that year, these regional guarantee departments were centralized to Amsterdam and Rotterdam. This reorganization eventually gave birth to the Guarantee Centre Rotterdam in 2007. This newly formed department has about eighty fulltime employees, of whom the majority came from one of the regional guarantee departments. This reorganization meant large changes for these employees.
The reorganization also brought new management to the Guarantee Centre. Within the period of one year the president of the Guarantee Centre was replaced, as well as the managers of the four teams. In the past, managers at the guarantee department in Rotterdam acted more like co working supervisors. They only focused on hard performance measures, and paid less attention to softer management skills. These supervisors all started their careers as an employee of one of the teams, who were eventually promoted to the management level. As a consequence of this career path, they all possessed great know-how and functioned as experts whom employees could consult on complicated job related questions. The new style team leaders who came from outside the guarantee business were no experts on the job, and did not physically contribute to the processing of the guarantees. Instead, they focused on the organization of the work and others typical managerial tasks.
The change of management is only one of the changes the employees of the Guarantee Centre had to face. Another example is the project ‘GALOP’ that was launched in 2007. This project will have several consequences for the way work is done at the Guarantee Centre. GALOP has a number of goals; the most important are: the introduction of a new service concept, the optimization of channels, the launch of new applications and an accommodating infrastructure, and the off shoring of (administrative) activities to Chennai (India).
The new service concept will have consequences for the work process of the Guarantee Centre. This process will become more customers focused.
At the moment all guarantees which are processed at the Guarantee Centre, are still physically filed and archived. With the introduction of the new infrastructure – ‘GTP’ – the whole work process will be digitalized. The GTP system was already introduced in 2002 at the ‘Trade’ department of ABN Amro. However, this introduction turned out to be a complete disaster. The failed introduction of GTP has not gone unnoticed by the employees at Guarantee Centre, and they are reluctant to embrace its introduction in their department.
The centralization of the regional guarantee departments to Rotterdam, the introduction of the new management (style), and the implications of the GALOP project, have had, and will continue to have, tremendous influence on the employees of the Guarantee Centre Rotterdam.
According to the president of the Guarantee Centre, over the last couple of years some employees seem to have developed a ‘negative work attitude’. This ‘negativity’ reveals itself differently with various employees. Employees seem to, have a general feeling of excessive workload and stress, mistrust management information, be pessimistic about the future of ABN Amro, and to be cynical about organizational changes in general and to the necessity and benefits of GALOP in particular. In addition, short-term absenteeism and sickness rates are relatively high at the Guarantee Centre, compared to a benchmark of other ABN Amro departments.
Because the future of ABN Amro almost certainly implicates more organization wide transformations, and the employees at the Guarantee Centre will be confronted with the impact of GALOP, the question is what effect the possible negativity of the employees has on their willingness to embrace these organizational changes. A second point of attention is how the managers of the Guarantee Centre might be able to positively influence the relationship between the negativity and readiness for change of the employees.
2. LITERATURE
2.1 Concepts
Job Satisfaction. Negativity might be conceptualized as low job satisfaction. According to the classic definition of Locke (1976), job satisfaction is a pleasurable emotional state resulting from the appraisal of one’s job. According to Locke’s ‘Range of Affect Theory’ (1976), job satisfaction is determined by what an employee wants and expects in a job, and what he/she has in a job. Numerous researchers have used this definition as a starting point to investigate the affective dispositions underlying job satisfaction. A large variety of personality measures were used in an attempt to capture these underlying affective dispositions.
One of the personological frameworks which has often been studied, comprises the traits of positive affect and negative affect. Watson and Tellegen (1985), captured these traits in a consensual two-factor model, in which positive affect reflects the extent to which a person feels enthusiastic, active, and alert. High positive affect is a state of high energy, full concentration, and pleasurable engagement. Whereas low positive affect is characterized by sadness and lethargy. In contrast, “negative affect is a general dimension of subjective distress and unpleasurable engagement that subsumes a variety of aversive mood states, including anger, contempt, disgust, guilt, fear, and nervousness, with low negative affect being a state of calmness and serenity” (Watson, Clark, & Tellegen, 1988: 1063). These two dimensions have thereafter been used extensively in self-report mood literature.
Other researchers used the Big Five framework (Goldberg, 1990) as a comprehensive taxonomy to organize traits relevant to job satisfaction. The five dimensions of the Big Five framework are neuroticism, extraversion, openness to experience, agreeableness, and conscientiousness. Judge, Heller, and Mount (2002) – in their meta-study on the relationship between personality traits and job satisfaction – found that four of the Big Five dimensions were significantly related to job satisfaction.
Ilies and Judge (2003) investigated to what extent the dimensions of the positive affect - negative affect model (PA-NA model) and the Big Five framework predicted job satisfaction. They concluded that up to 45 percent of the variance in job satisfaction can be explained by personality (Ilies and Judge, 2003). This might implicate that to some extent the negativity of employees can be explained by personality.
These job attitudes represent a cluster of evaluative feelings about the job, which can be measured on an individual level (Spector, 1985).
Hardin (1967: 27) found that “the desire for specific changes in job aspects is governed not only by the discrepancy between the attractiveness of existing and potential job characteristics, but also by the person's assessment of the very process of change”.
Cynicism. A second construct which might cover the topic of employee ‘negativity’ is
cynicism. Various researchers have studied cynicism as an employee attitude which might pose a threat to organizations (Wanous, Reichers, & Austin, 2000). Based on extensive literature reviews, Andersson (1996), and Dean, Brandes, and Dharwadkar (1998) observed that, despite obvious differences in definitions, there seems to be consensus that cynicism is a negative attitude of employees which can be both broad and specific in focus, and has cognitive, affective and behavioral aspects. According to Dean et al. (1998: 345), cynicism is ‘‘a belief that the organization lacks integrity’’, accompanied by feelings of ‘‘distress, disgust, and even shame’’, which contribute to ‘‘tendencies toward negative, and often disparaging behavior”. Andersson and Bateman (1997) characterized cynicism as frustration, disillusionment, and negative feelings toward, and distrust of a person, ideology, social convention, or institution. This cynicism varies in its specificity from cynicism as a general personality trait, to cynicism about business, business leaders, occupation, organization, and organizational change (Wanous, Reichers, & Austin, 2004). According to Kanter and Mirvis (1989) the opposite of a cynical organization is the
upbeat organization. This upbeat organization can be characterized by honest open management, and the use of tried and true participation techniques such as quality circles and McGregor’s (1960) Theory Y management (Kanter & Mirvis, 1989).
Kanter and Mirvis (1989) identified three stages in the process of the development of cynicism. First, the employee forms unrealistic expectations of oneself, other people, work organizations, and society in general. Thereafter, one becomes disappointed because these expectations are not realized. Finally, there is disillusionment and the sense of being let down, deceived, betrayed, or used by others (Kanter & Mirvis, 1989).
Andersson and Bateman (1997) found a number of causes of cynicism in the workplace. According to them, high levels of executive compensation, poor organizational performance, and harsh, immediate layoffs generate cynicism among white-collar workers. In addition they found that cynicism is negatively related to employee’s intentions to perform organizational citizenship
cynicism is best defined as a specific negative work attitude, and that cynicism toward work is not a stable personality characteristic (Guastello, Rieke, Guastello, & Billings, 1992). In this respect cynicism seems to cover the load of employee negativity at the Guarantee Centre.
Reichers, Wanous, and Austin (1997) introduced the term cynicism against
organizational change. They state that cynicism about organizational change is distinct from
skepticism. Skeptic employees are doubtful about the likelihood of success, but are still reasonably hopeful that positive change will actually occur. As defined by Reicher et al. (1997: 48) “cynicism about change involves a real loss of faith in the leaders of change, and is a response to a history of change attempts that are not entirely or clearly successful. It arises in spite of the best intentions of those responsible for change, even when they belong to rational decision makers who care about the well-being of employees and value their own reputations”. Reichers et
al. (1997) conclude that cynicism is detrimental to the success of a change process. In addition to this, it negatively affects organizational attachment and behavior such as commitment, satisfaction, and absence. The success of organizational change relies on employees’ commitment, discretionary performance, and follow-through, so cynicism has particularly important implications in organizational change (Reichers et al., 1997).
Reichers et al. (1997) see cynicism about organizational change as distinct from resistance to change which according to Kotter and Schlesinger (1979: 107) is caused by: “a desire not to lose something of value, a misunderstanding of the change and its implications, a belief that the change does not make sense for the organization, and a low tolerance for change”.
Stanley, Meyer, and Topolnytsky (2005: 434) identified three potential problems with the way in which cynicism is defined and measured. “First, cynicism is commonly viewed as a complex, multi-facetted, construct”. Therefore, they argue it makes sense to begin with a narrow, more focused, definition of cynicism. Second the “definitions of cynicism vary across level of application” (Stanley et al., 2005: 434). Finally, they question the multi-dimensionality of the construct. Stanley et al. (2005) attempted to avoid these problems, and tried to develop a measure of cynicism about a specific organizational change initiative as well as more general forms of cynicism. Using existing definitions of cynicism they tried to identify the core essence of cynicism. The cognitive component of cynicism was defined as “disbelief of another’s stated or implied motives for a decision or action” (Stanley et al., 2005: 436).
motives for a specific organizational change”. In addition, management cynicism is a disbelief in management’s stated or implied motives for decisions or actions in general; and dispositional
cynicism is a disbelief in the stated or implied motives for their decisions or actions of people in general (Stanley et al., 2005: 436).
Stanley et al. (2005: 457) found that “employees tended to be more cynical about an organizational change when they were cynical about management in general. Interestingly, dispositional cynicism did not relate significantly to change-specific cynicism. Therefore, cynicism about a change seems to be a reaction to experiences within the organization rather than a more general ‘world view’”.
Readiness for change. There is a large and growing literature on the causes, consequences, and strategies of organizational change (Armenakis & Bedeian, 1999). However, research on employees’ reactions to change seems to be lacking (Judge, Thoreson, Pucik, & Welbourne, 1999). Only recently researchers started examining employees’ psychological reactions to change, such as openness to change (Miller, Johnson, & Grau, 1994; Wanberg & Banas, 2000), readiness for change (Armenakis, Harris, & Mossholder, 1993), and coping with
change (Judge et al., 1999).
Researchers have come up with numerous theories explaining the causes of resistance to
change. Piderit (2000) reviewed past empirical research and revealed three different emphases in the conceptualization of resistance. Over the years resistance was seen as a cognitive state, an emotional state, and as a behavior (Piderit, 2000). According to Piderit (2000) each of these three emphases in the conceptualization of resistance has merit, and represents an important part of our experience of, and to responses to change. Therefore, she states that any definition of resistance focusing on only one of these three views is incomplete. Piderit (2000) suggests a multidimensional view of the responses to proposed organizational changes, which integrates the three alternative views of resistance to change. She states that employee responses should be measured along at least three dimensions: emotional, cognitive, and intentional. Within this view, resistance to a change is the situation were employees respond negatively on all three dimensions. Support for a change is represented by a positive response on all three dimensions (Piderit, 2000).
Holt, Armenakis, Field, and Harris (2007: 235) have defined readiness for change “as a comprehensive attitude that is influenced simultaneously by the content (i.e., what is being changed), the process (i.e., how the change is being implemented), the context (i.e., circumstances under which the change is occurring), and the individuals (i.e., characteristics of those being asked to change) involved. Furthermore, readiness collectively reflects the extent to which an individual or individuals are cognitively and emotionally inclined to accept, embrace, and adopt a particular plan to purposefully alter the status quo”.
Herscovitch and Meyer (2002) based the construct commitment to change, on the three component model of commitment developed by Meyer and Herscovitch (2001). They defined commitment to change as “a force (mind-set) that binds an individual to a course of action deemed necessary for the successful implementation of a change initiative (Herscovitch & Meyer, 2002: 475”. This mind-set can reflect “(a) a desire to provide support for the change based on a belief in its inherent benefits (affective commitment to change), (b) a recognition that there are costs associated with failure to provide support for the change (continuance commitment to change), and (c) a sense of obligation to provide support for the change (normative commitment to change)” (Herscovitch & Meyer, 2002: 475). They found that “the three components of commitment to change are distinguishable from the components of organizational commitment”, and “commitment to change contributes over and above organizational commitment to the prediction of employees’ self-reported behavioral support for change” (Herscovitch & Meyer, 2002: 483).
Based on a review of leadership literature Podsakoff, MacKenzie, Moorman, and Fetter (1990) concluded that transformational leadership is multidimensional in nature. They found that “there are at least six key behaviors associated with transformational leaders: (1) identifying and
articulating a vision – behavior on the part of the leader aimed at identifying new opportunities for his or her unit/division/company, and developing, articulating, and inspiring others with his or her vision of the future; (2) providing an appropriate model – behavior on the part of the leader that sets an example for employees to follow, that is consistent with the values the leader espouses; (3) fostering the acceptance of group goals – behavior on the part of the leader aimed at promoting cooperation among employees, and getting them to work together toward a common goal; (4) high performance expectations – behavior that demonstrates the leader’s expectations for excellence, quality, and/or high performance on the part of followers; (5) providing
individualized support – behavior on the part of the leader that indicates that he/she respects followers, and is concerned about their personal feelings and needs; (6) intellectual stimulation – behavior on the part of the leader that challenges followers to re-examine some of their assumptions about their work and rethink how it can be performed” (Podsakoff et al., 1990).
Numerous studies on transformational leadership report positive relations to employees’ performance and behavior (e.g., Judge, & Piccolo, 2004). Bass (1985) cites numerous field studies which found that transformational leader behaviors enhance employees’ job satisfaction, self-reported effort, and job performance. Howell and Frost (1989) found that charismatic leader behavior produce better performance, greater satisfaction, and reduced role conflicts more than directive leader behavior. Finally, according to Podsakoff et al. (1990: 109), “virtually all models of transformational leadership postulate that transformational leaders enhance followers’ work attitudes and satisfaction”. In this sense transformational leadership might enhance the job satisfaction of the employees at the Guarantee Centre.
2.2 Relationships
Stanley et al. (2005) found evidence for a relationship between cynicism and resistance. They concluded that “change-specific cynicism accounted for a significant portion of the variance in the resistance measure even with skepticism controlled” (Stanley et al., 2005: 454).
to develop employees who are more open and committed to organizational change may use transformational leadership as a tool to create such change” (Bommer et al., 2005: 748).
2.3 Model
Because the negativity of the employees at the Guarantee Centre seems to resemble low job satisfaction and/or high cynicism, and because they are faced with organizational change, we are wondering what effects low job satisfaction and/or high cynicism have on employee’s readiness for change.
Because the managers of the Guarantee Centre would like to reduce the negativity of the employees and increase the likelihood of success of the GALOP project, I feel it is relevant to investigate what leadership style positively affects the proposed link between job satisfaction and/or organizational cynicism, and readiness for change.
The possible relationship between these variables is depicted in the model below (see Figure 1). In this model job satisfaction and organizational cynicism are the independent variables. Independent variables are factors which are measured to determine their relationship with a dependent variable. The dependent variable in this study is readiness for change. This factor is measured to determine the effect(s) of the independent variables. Readiness for change is the antecedent condition which’s value is determined by job satisfaction and/or cynicism. The leadership style of the four team leaders is the moderator variable in the model. This factor is a special type of independent variable; it may change the relationship between the independent variables and the dependent variable.
FIGURE 1
Model of the Realization of Readiness for Change
2.4 Hypotheses
Based on the situation at the Guarantee Centre of ABN Amro, the described literature, and the possible relationships depicted in the model (see Figure 1), the following hypotheses were formulated:
Hypothesis 1. High job satisfaction increases readiness for change. Hypothesis 2. High cynicism decreases readiness for change.
Hypothesis 3. The effect of cynicism on readiness for change is stronger than the effect of job satisfaction.
Hypothesis 4. The expected positive effect of high job satisfaction on readiness for change will be enhanced by transformational leadership.
3. METHOD
3.1 Participants
Data were collected at the Guarantee Centre of ABN Amro in Rotterdam. This department contains 68 employees which are distributed between four teams as follows: the Administration team has seventeen employees, there are also seventeen Guarantee Officers, Secretariat & End Control is the largest team with twenty-two employees, and the Service Desk has twelve employees.
3.2 Data Collection
In order to test the hypotheses that were previously described, all employees of the four teams were handed out a questionnaire. The president of the department and the four team leaders were not included in the survey. From the 68 employees who were included in the survey, 57 employees handed in a completed questionnaire. This resulted in a response rate of almost 84 percent.
The questionnaire reported employee’s perceptions on the four previously described concepts: job satisfaction, cynicism, readiness for change, and leadership style. The questionnaire started with some basic categorical questions on employee characteristics as: gender, age, nationality, education, job tenure, team membership, and function level.
The employee’s were also asked for their name, although they were not obliged to provide it. The names were asked to be able to consult certain employees in more detail in order to gain additional insights in certain topics. This is in line with comments made by Avolio, Bass, and Jung (1999) who state that other methodologies than surveys may be used to examine a construct (in their case leadership). They say that “there has been very little effort to confirm survey evaluations of leaders with alternative methodologies such as observation and/or interviews” (Avolio et al., 1999: 459).
The hardcopy questionnaire was accompanied by a cover letter. This letter briefly described the goals of the research, and contained a signed statement by the president of the Guarantee Centre and the researcher assuring complete confidentiality.
3.3 Measures
The questions in the survey were adapted from tested and proven measures developed by other researchers. These measures were selected after an extensive literature review. They were chosen for their reliability, completeness, and suitability to the current research. The items of all measures used were originally formulated in English. However, for the current research they were translated in Dutch. The selected measures are described below.
Job satisfaction. Van Saane, Sluiter, Verbeek, and Frings-Dresen (2003) studied the reliability and validity of job satisfaction instruments. They assessed instruments that had adequate reliability and construct validity for their completeness with respect to different work factors that contribute to job satisfaction. These work factors were categorized in eleven related domains, being: “work content (variety in skills, complexity of a job, or the challenge in a job, role ambiguity, routine); autonomy (individual responsibility for work, control over job decisions); growth/development (personal growth and development, training, or education);
financial rewards (salary, fringe benefits, or employee benefits); promotion (possibility of career advancement, or job level); supervision (support of supervisor, recognition of supervisor, or being treated with fairness); communication (counseling opportunities, feedback); co-workers (professional relations with co-workers, or adequacy of co-workers); meaningfulness; workload (time pressure subjectively perceived, tedium, social problems, interpersonal conflict, or stress); and work demands (involuntarily doing extra work or procedures, structural complexity, insecurity of work situation, or emotional commitment)” (Van Saane et al., 2003: 194). A total of twenty-nine instruments were assessed. Van Saane et al. (2003) concluded that although many different instruments to measure job satisfaction exist, only five out of the twenty-nine instruments they assessed showed sufficient reliability and construct validity.
The ‘Measure of Job Satisfaction’ (MJS) was the only instrument of these five which “included most of the factors that were considered necessary for good content validity” (Van Saane et al., 2003). However, this instrument was developed for a specific job; nurses.
The ‘Job Satisfaction Survey’ (JSS) was originally developed for the social service sector. However, according to Spector (1985) it can be used in other sectors as well. The JSS covers nine of the eleven standard work factors (Van Saane et al., 2003). Only autonomy and growth/development are excluded. The response format has 36 items, on a 6-point Likert scale, ranging from 1 (disagree very much) to 6 (agree very much) (see Table 1).
Analysis revealed that the internal consistency of the JSS in the current research could be improved. By deleting the item, “I have too much to do at work” - which was reversely coded - , the Cronbach’s alpha of the JSS was increased to .90.
Principal component analysis with Oblimin rotation was used to extract the components of the JSS. Nine components did emerge as expected (see Table 2). However, not all variables loaded on the appropriate work factors identified by Spector (1985). In the current study we have used the JSS only as an overall measure of job satisfaction, without going into the individual work factors. As a consequence, the deviant results of the component analysis did not prevent us from using the JSS.
Insert Table 2 about here
In order to be able to cover all the eleven standard work factors identified by Van Saane
et al. (2003) two factors taken from the MJS were added to the questionnaire (Traynor & Wade, 1993). Items on autonomy and growth/development were added to the list of questions on job satisfaction (see Table 3). The MJS uses a five-point Likert scale raging from 1 (very dissatisfied) to 5 (very satisfied). Questions were preceded by a stem question “How satisfied are you with this aspect of your job?”
Insert Table 3 about here
In the current research, the MJS showed a Cronbach’s alpha of .75. Principal component analysis showed two components (see Table 4). However, the variables did not load on these components as expected. Because, the MJS was also used as a general measure of overall job satisfaction, these deviations were neglected again.
Insert Table 4 about here
Insert Table 5 about here
Reliability analysis revealed that the internal consistency of this dispositional- and management cynicism scale could be slightly improved in the current research. By deleting the reversely coded item, “Management is always honest about its objectives”, from the management cynicism scale, the Cronbach’s alpha became .90.
Principal component analysis positively identified the two components found by Stanley
et al. (2005). With component one being the dispositional cynicism scale, and component two being the management cynicism scale (see Table 6).
Insert Table 6 about here
In order to reduce survey length, Stanley et al. (2005) developed single-item measures for both change-specific cynicism, and change-specific skepticism (see Table 7). They reported that, “The single-item cynicism and skepticism measures both correlated significantly with the appropriate multi-item scales (r = .83 and .72, p < .01, respectively), suggesting that the meaningful variance in the single- and multi-item measures is largely overlapping” (Stanley et al., 2005: 440). Responses for these items were made on a five-point Likert scale ranging from 1 (strongly agree) to 5 (strongly disagree).For purposes of this study the items in this scale were recoded, so high scores indicate high cynicism and skepticism.
Insert Table 7 about here
After factor analysis on a preliminary measure, four factors emerged. Factor 1 was labeled appropriateness. Factor 2, termed management support, represents “the extent to which organizational members felt senior leaders supported the change” (Holt et al., 2007: 241). Factor 3, termed change efficacy, reflects “the extent to which organizational members felt confident that they would perform well and be successful” (Holt et al., 2007: 241). Factor 4, labeled personal
valence, measures whether a change is perceived to be personally beneficial by employees. The final version of their questionnaire contained twenty-five items, which were measured on a seven-point Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree) (see Table 8).
Insert Table 8 about here
Reliability analysis on the readiness for change scale revealed that the internal consistency could not be increased by deleting items. The scale showed a Cronbach’s alpha of .88 in the current study.
Principal component analysis revealed six components (see Table 9), whereas Holt et al. (2007) identified only four factors. However, because we solely used the scale as a general measure of readiness for change, this deviation was not considered to be a problem.
Insert Table 9 about here
Leadership style. According to Podsakoff et al. (1990) there is a great deal of consensus among researchers on most of the important elements of transformational leadership behaviors, but not on all. However, in order to make sure that the domain of transformational leadership is adequately tapped into, they included all six dimensions which they have identified – identifying and articulating a vision, providing an appropriate model, fostering the acceptance of group goals, high performance expectations, providing individualized support, and intellectual stimulation – in their measure.
Podsakoff, Todor, Grover, and Huber (1984) developed the ‘Contingent Reward Behavior Scale’ to measure transactional leader behavior. According to Podsakoff et al. (1990),
The leadership behavior scale which was developed by Podsakoff et al. (1990) consists of 28 items, of which 23 items tap into transformational leadership and 5 items measure transactional leadership behavior (see Table 10). All items were scored on a seven-point Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree).
Insert Table 10 about here
Initial confirmatory factor analysis of the leader behavior measures (both transformational as transactional), carried out by Podsakoff et al. (1990), revealed that three of the transformational leadership constructs – articulating a vision, providing an appropriate model, and fostering the acceptance of group goals – might be multiple indicators of an underlying ‘core’ transformational leader behavior dimension. Consequently, in their analyses leader behavior was represented by four first-order transformational leader behavior constructs – high performance expectations, individualized support, intellectual stimulation, and the ‘core’ transformational behavior construct –, and one first-order transactional leader behavior construct – contingent reward behavior.
Principal component analysis for the leadership behavior scale in the current study revealed five components (see Table 11). One of these components completely matched the first-order transactional leader behavior construct. The remaining four components closely resembled the four first-order transformational leader behavior constructs, including the ‘core’ construct, as they were identified by Podsakoff et al. (1990).
Insert Table 11 about here
In the current research, both leadership behaviors scales showed very high internal consistency reliability. The Cronbach’s alphas were .97 and .96, for transformational- and transactional leadership, respectively.
3.4 Data Analysis
The data from the completed questionnaires were processed with SPSS. This statistical program was used to analyze the data and check our assumptions.
4. RESULTS
4.1 Correlations
The means, standard deviations, correlations, and reliabilities of all variables measured in this study, are presented in Table 12. Job satisfaction measured by the JSS was significantly correlated with readiness for change, r = .55, p (one-tailed) < .01. However, job satisfaction measured by the MJS had no significant relationship with readiness for change (r = .17, n.s.). The positive relationship between job satisfaction – based on the JSS – and readiness for change is consistent with Hypothesis 1.
Both dispositional cynicism and management cynicism were significantly (p < .01) related to readiness for change, with r = -.32 and r = -.45, respectively. Change-specific cynicism too correlated significantly with readiness for change, r = -.48, p < .01. These results seem to substantiate Hypothesis 2.
However, job satisfaction seems to be correlated stronger with readiness for change (at least based on the JSS), then cynicism. So, these correlations do not provide initial support for Hypothesis 3.
Transformational leadership was significantly (p < .01) correlated with job satisfaction measured by both the JSS and the MJS, r = .74 and r = .36, respectively. Transformational leader behavior also correlated significantly with dispositional cynicism, r = -.31, p < .05, management cynicism, r = -.55, p < .01, and change-specific cynicism, r = -.39, p < .01. Besides this, transformational leader behavior was significantly correlated with readiness for change, r = .54, p < .01. These correlations might point to a moderating effect of transformational leadership, as predicted in Hypotheses 4 and 5.
Besides these, other significant correlations became apparent. Both age and tenure were significantly (p < .01) correlated with job satisfaction measured by the MJS, r = .50, and r = .46, respectively. Age and tenure also has a significant relationship (p < .05) with management cynicism, r = -.28 and r = -.27, respectively. Tenure was significantly correlated with readiness for change, r = -.25, p < .05.
Changespecific skepticism had a significant relationship with readiness for change, r = -.41, p < .01. Both transformational- as transactional leader behavior correlated significantly (p < .01) with change-specific skepticism, r = -.39 and r = -.34, respectively.
Means, Standard Deviations, Reliabilities, and Intercorrelations of Variables Variable M SD 1 2 3 4 5 6 7 8 9 10 11 12 1. Gender — 2. Age 45.24 8.02 — 3. Tenure 22.78 10.98 .80** — 4. Job satisfaction (JSS) 3.87 0.64 -.11 .22 .07 (.90) 5. Job satisfaction (MJS) 3.43 0.60 -.20 .50** .46** .52** (.75) 6. Dispositional cynicism 3.07 1.40 -.08 -.12 -.10 -.43** -.33** (.91) 7. Management cynicism 3.71 1.33 -.03 -.28* -.27* -.58** -.47** .57** (.86) 8. Change-specific cynicism 2.67 1.01 -.05 -.12 -.03 -.50** -.35** .62** .67** — 9. Change-specific skepticism 3.30 0.89 .01 -.17 -.03 -.49** -.29* .28* .46** .62** —
10. Readiness for change 4.72 0.76 .01 -.15 -.25* .55** .17 -.32** -.45** -.48** -.41** (.88)
11. Transformational leadership 4.59 1.17 -.03 .11 -.01 .74** .36** -.31* -.55** -.39** -.39** .54** (.97)
12. Transactional leadership 4.67 1.59 -.18 .17 .05 .71** .53** -.32** -.54** -.43** -.34** .46** .83** (.96)
Notes. Alpha coefficients are presented on the diagonal in parentheses. Dashes indicate a single-item measure.
4.2 Multiple Hierarchical Regression Analyses Results
The hypotheses were tested using multiple hierarchical regression analysis. This involved a three step hierarchical method. In the first step, the control variables – gender, age, and tenure – were entered. Then, the standardized variables, which were supposed to have a direct effect on the dependent variable, were entered in the second step. These so called independent variables were: job satisfaction – measured by the JSS and MJS –, dispositional- and management cynicism, change-specific cynicism, and transformational leader behavior. In the third step, standardized interaction terms were entered to verify the possible moderating effects of transformational leadership. The results of this analysis are presented in Table 13.
The control variables – gender (b = -.28, t = -1.11, n.s.), age (b = .00, t = 0.05, n.s.), and tenure (b = -.02, t = -1.34, n.s.) – were found to have no significant effects on readiness for change in step 1.
Step 2 of the analyses investigates the direct effects of the independent variables on readiness for change. Hypothesis 1 stated that: “high job satisfaction increases readiness for change”. As expected, job satisfaction – based on the JSS – increases readiness for change, b = .30, t = 2.11, p < .05. However, job satisfaction measured by the MJS did not have a significant effect on readiness for change, b = .02, t = 0.17, n.s.
Unexpectedly, high cynicism did not decrease readiness for change, as stated by Hypothesis 2. Dispositional cynicism had a negative – but non-significant – effect on readiness for change, b = -.05, t = -0.43, n.s., as did management cynicism, b = -.15, t = -1.11, n.s. and change-specific cynicism, b = -.02, t = -0.12, n.s. Furthermore, the effect of job satisfaction (based on the JSS) on readiness for change, was larger than the effects of dispositional-, management-, and change-specific cynicism. These results contradict Hypothesis 3, which stated that: “the effect of cynicism on readiness for change is stronger than the effect of job satisfaction”.
The possible moderating effects of transformational leader behavior were tested in step 3. Contrary to what was predicted (Hypothesis 4), transformational leadership did not have a significant moderating effect on the direct relationship between job satisfaction and readiness for change; b = .00, t = 0.01, n.s., for job satisfaction (JSS) X transformational leadership, and b = -.06, t = -0.56, n.s., for job satisfaction (MJS) X transformational leadership.
and change-specific cynicism, were not significantly moderated by transformational leadership, b = -.21, t = -1.12, n.s. and b = -.22, t = -0.99, n.s., respectively.
TABLE 13
Hierarchical Multiple Regression Analysis
The moderating effect of transformational leader behavior
B SE B β Job satisfaction (MJS) X transformational leadership -.06 .10 -.10 Dispositional cynicism X transformational leadership .57 .18 .77 ** Management cynicism X transformational leadership -.21 .19 -.28 Change-specific cynicism X transformational leadership -.22 .23 -.32
Notes. R² = .09 for Step 1, ∆R² = .47for Step 2 (p < .001), ∆R² = .15 for Step 3 (p < .05).
TABLE 14
Hierarchical Multiple Regression Analysis The moderating effect of transactional leader behavior
B SE B β Job satisfaction (MJS) X transactional leadership .00 .10 .01 Dispositional cynicism X transactional leadership .42 .11 .58 ** Management cynicism X transactional leadership -.23 .17 -.35 Change-specific cynicism X transactional leadership -.19 .20 -.29
Notes. R² = .09 for Step 1, ∆R² = .48for Step 2 (p < .001), ∆R² = .14 for Step 3 (p < .05).
5. DISCUSSION
5.1 Conclusions
In this research we investigated the influence of job satisfaction and cynicism on readiness for change. Besides this, we tested the possible moderating effect of transformational leader behavior on this relationship.
Hypothesis 1 stated that high job satisfaction would increase readiness for change. So, we expected employees who have more appraisals for their job, to be more cognitively and emotionally inclined to accept, embrace, and adopt a particular plan to purposefully alter the status quo. The results of our analyses did indeed support this hypothesized relationship. Employees who were more satisfied with the work factors, salary, promotion, supervision, fringe benefits, contingent rewards, operating procedures, co-workers, nature of the work, and communication, showed a significantly higher degree of readiness for change than employees who have low appraisal for these work factors.
Contrary to job satisfaction, we expected cynicism to have a negative influence on readiness for change. So, Hypothesis 2 stated that high cynicism would decrease readiness for change. We expected employees who disbelief the stated or implied motives for a decision or action of other people in general – dispositional cynicism – and management – management cynicism – to show less readiness for change, than employees who do not have these disbeliefs. In addition, we expected employees who disbelief the stated or implied motives – by management – for a specific organizational change, to have little readiness for change too. Unfortunately, the results of our analyses did not provide support for these hypothesized relationships. We found no significant effect – neither negative nor positive – of dispositional-, management-, or change-specific cynicism on readiness for change. Therefore, high cynicism does not seem to decrease readiness for change.
We hypothesized that the influence of cynicism on readiness for change would be stronger than the influence of job satisfaction. We expected especially employees with high change-specific cynicism, to show little readiness for change. We expected the effect of this cynicism to be stronger than the effects of job satisfaction. However, as mentioned above, high cynicism had no significant effect on readiness for change. So, the results of our analyses do not support our third Hypothesis.
articulating a vision, providing an appropriate model, fostering the acceptance of group goals, having high performance expectations, providing individualized support and intellectual stimulation – to have subordinates who have more job satisfaction. So, therefore transformational leadership would enhance the positively influence of high job satisfaction on readiness for change. However, the results of our analyses did not provide support for this positive moderating effect of transformational leader behavior. So, although we found a significant positive direct effect of high job satisfaction on readiness for change, transformational leadership does not enhance this effect.
We finally hypothesized that transformational leadership would weaken the negative effects of high cynicism on readiness for change. Although we did not find a significant direct effect of cynicism on readiness for change, Hypothesis 5 was partially supported by the results of our analyses. We found that transformational leadership positively moderated the negative effect of dispositional cynicism on readiness for change. So, team leaders who score high on transformational leader behavior weaken the disbelief of employees in the stated or implied motives for a decision or action of other people in general, which in turn results in a higher level of readiness for change.
However, contrary to our expectations, we found a similar moderating effect of transactional leadership on the relationship between dispositional cynicism and readiness for change. So, both transformational-, and transactional leadership weaken the negative effect of dispositional cynicism on readiness for change.
5.2 Theoretical Implications
The findings of this research also contribute to our understanding of the relationship between leadership and readiness for change. We found that, both transformational- and transactional leader behavior positively moderate the relationship between dispositional cynicism, and readiness for change. So, this particular result of our analyses partially clarifies how leadership contributes to the realization of readiness for change.
5.3 Practical Implications
The topic of job satisfaction has had the attention of management for quite some time now. The results of this study emphasize the importance of satisfied employees once again. Hardin (1967: 27) already found preliminary support for the notion that “the desire for specific changes in job aspects is governed not only by the discrepancy between the attractiveness of existing and potential job characteristics, but also by the person's assessment of the very process of change”. The results of the current research show a different relationship between satisfaction and change; employees who are satisfied with various aspects of their current jobs, are also more inclined to accept, embrace and adopt plans for change which might affect their jobs. These results are very important for management, because job satisfaction not only influences the functioning of employees in their current jobs, but also affects their readiness for change. Consequently, those responsible for managing and leading change should take employee’ job satisfaction into account.
Furthermore, managers should be aware of the effects of their leadership style. Transformational- and transactional leader behavior play a role in enhancing readiness for change. Managers who score high on the factors which contribute to transformational- and transactional leadership, can increase readiness for change, by weakening the negative influence of dispositional cynicism of their subordinates. Research indicates that – at least part of – these leader behaviors can be learnt. According to Bass (1990) through training, managers can learn the techniques, and obtain the qualities they need to become transformational leaders. So, companies should invest in training and developing transformational leader behavior of their managers, or change-oriented leadership as it is called by Eisenbach (1999).
5.4 Limitations and Directions for Future Research
measured theoretical constructs. This so called single source effect “occurs presumably because the rater is using a common set of rules, or schematic framework, to evaluate items or scales that represent conceptually distinct constructs” (Avolio, Yammarino, & Bass, 1991: 571). Future research should try to overcome the problem of common method variance by using multiple research methods; such as interviews for example.
Secondly, this research measured the employees’ attitudes at only one point in time. This means that there is no longitudinal data to support our findings. The employees of the department under investigation are subject to lots of uncertainty. So, their attitudes on the measured theoretical constructs might be quite different in the (near) future. Therefore, future research should try to replicate the results of this study, and use longitudinal research to overcome this potential problem.
Thirdly, the sample used in the current study was quite small and employees came only from one department in one particular organization. Therefore, future research should try to replicate the results, by investigating multiple organizations, operating in different industries and cultural contexts.
A fourth limitation is the delicacy of the topic under investigation in the current research. Especially management cynicism is a very touchy subject. Employees were asked whether they disbelieved management in their stated or implied motives for decisions and/or actions in general. Although absolute confidentiality was guaranteed by the researcher and the president of the department, these kinds of questions might induce socially desirable answers. Some employees might not have spoken their mind, because they are afraid to show their true feelings toward management. This might have clouded the actual relationship between cynicism and readiness for change.
A fifth remark is that more research has to be conducted into the exact relationship between cynicism and readiness for change. Contrary to our expectations, we did not find any significant effects of dispositional-, management-, or change-specific cynicism. This might have been caused by the questions on cynicism not being perfectly clear to the employees. Some employees indicated they found it hard to answer these questions, because they did not always know which management layer the questions were referring to. It could be possible that the degree of management cynicism felt by employees differs for their direct managers, and top management. Future research should try to overcome these possible problems, in order to shed more light on the exact effects of cynicism on readiness for change.
dispositional cynicism on readiness for change; however, we found both transformational- and transactional leader behavior to have this effect. Future research should investigate what leadership style is best suited for realizing readiness for change, and/or whether this is contextually dependent.
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ACKNOWLEDGEMENTS
APPENDIX A
Overview of the Recent History of ABN Amro
In 1991 ABN Amro is born from a merger between the ‘Algemene Bank Nederland’ and the ‘Amsterdam-Rotterdam bank’. In the years to come ABN Amro is expanding rapidly by executing major takeovers abroad. During this period the company builds its position in the United States, Brazil, and Italy. In the year 2000, Rijkman Groenink becomes the new CEO of ABN Amro.
In February 2007 ABN Amro is harassed by the ‘Children's Investment Fund’ (TCI); an activist shareholder who possesses just over one percent of ABN Amro’s shares. TCI suggests splitting up ABN Amro in order to create more shareholders wealth.
In order to escape from the pressure of this activist shareholder, ABN Amro commences merger negotiations with the British’s Barclays bank in March 2007. At this time a consortium of Fortis, the Royal Bank of Scotland (RBS), and Banco Santander is also beginning to show interest in parts of ABN Amro. Together these three banks are considering offering a bid on ABN Amro.
On the 23rd of April 2007 Barclays puts forth an offer of Euro 67 billion for ABN Amro. This comes down to Euro 36.25 per share. Part of the deal is that ABN Amro sells LaSalle bank, an American subsidiary, to the Bank of America for Euro 15.5 billion.
A few days later, on the 25th of April 2007, the Consortium makes an indication bid of Euro 39,- per share ABN Amro. One of the conditions of the offer of the Consortium is that ABN Amro does not sell LaSalle. As a reaction ABN Amro invites the three banks to the negotiating table.
The Commercial Chamber of Amsterdam rules on May 3rd 2007, that ABN Amro cannot proceed with selling LaSalle, because ABN Amro has neglected to consult its shareholders on this intention. Because of this verdict the dreamed merger between ABN Amro and Barclays becomes uncertain.
On the 16th of May 2007 ABN Amro commences an appeal at the Supreme Court on the verdict of the Commercial Chamber that it cannot sell LaSalle. Barclays, and the Bank of America, as the potential buyer of LaSalle, also commence an appeal.
The Supreme Court destroys the verdict of the Commercial Chamber on the 13th of July 2007, and approves the proposed sell of LaSalle to the Bank of America by ABN Amro. Barclays is pleased with this verdict, as it can now put forth an offer on a slimmer ABN Amro. The Consortium is less pleased with the verdict because they wanted to buy ABN Amro including LaSalle. In the meanwhile ABN Amro recommends the Barclays’ offer, of Euro 63,- billion in shares to its shareholders.
On July 16th 2007 the Consortium announces it will maintain its initial offer of Euro 38.40 per share, although LaSalle will not belong to ABN Amro anymore. Barclays will not withdraw its bid however, because the offer of the Consortium still has to overcome several barriers before it can get approval from the regulators. In addition, Barclays says they can create more shareholders wealth on the long term than the Consortium.
The Central Work Council of ABN Amro unanimously supports the Board of Directors in its intentions to merge with Barclays on the 20th of July 2007.
On July 23th 2007 Barclays raises its offer to Euro 35.73 per share of ABN Amro. ABN Amro still prefers a merger with British’s Barclays to a takeover by the Consortium. However, on an informative shareholders meeting held on the 20th of September 2007, the CEO of ABN Amro announces he cannot expect shareholders to neglect the financially superior offer of the Consortium over Barclays.
On the 5th of October 2007 Barclay announces it will withdraw its bid on ABN Amro. In addition they state they will hold ABN Amro to the breakup payment of Euro 200,- million that was agreed upon during the takeover negotiations.
On October 11th 2007 the takeover by the Consortium is effectuated. ABN Amro is taken out of the Amsterdam Exchange index. The Consortium, as the new shareholder of ABN Amro, rapidly proceeds with their split-up plans. They present a new organizational structure that shows the contours of the split.
Fortis starts selling ABN Amro parts on April 3rd 2008. This first step includes the Hollandsche Bank Unie (HBU), two corporate clients units, and thirteen business advisory offices.
On the 28th of April 2008 RBS announces that job losses at the acquired ABN Amro parts are inevitable. The next day RBS announces that even more jobs than initially planned will cease to exist. They anticipate that in total about 7,000 fulltime jobs will be cut.
Directors denies rumors about liquidity problems. However, at the end of the week the situation shows to be catastrophic and Fortis is on the edge of bankruptcy.
On the evening of September 28th 2008, the governments of The Netherlands, Belgium, and Luxembourg announce that they together will buy a stake of 49.9 percent in the bank branch of Fortis for the sum of Euro 11.2 billion. In addition, the parts of ABN Amro that were owned by Fortis are offered for sale.
