THE ROLE OF LEADERSHIP IN CREATING A CLIMATE OF CHANGE,
READINESS FOR CHANGE AND COMMITMENT TO THE
ORGANIZATION:
Towards successful change implementation. A Field study at NSHispeed
Master thesis, MscBA, specialization Change Management University of Groningen, Faculty of Business and Economics
December, 2011
GERDIE WERKMAN Student number: 1623028 Tweede Willemstraat 30a
9725 JK Groningen Tel; +31 6 46 74 23 25 Email: g.werkman.1@student.rug.nl Supervisor/ university Drs. H.P. van Peet 2nd Supervisor/ university Dr. J. Rupert
Supervisor/ field of study Mw. J. Blank & Mw. H. de Leeuw
Managers Telesales NSHispeed Utrecht
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ABSTRACT
The data for this research is provided by the Telesales department of NSHispeed. This department takes care of the reservations that are made by telephone. The employees of this department are facing a change from a sales-oriented to service–oriented department. According to the literature, Climate of Change, Readiness for Change and Commitment to the organization lead to successful change implementation. Literature suggests that these factors can be influenced by leadership. This quantitative research investigates whether and which relationship transactional leadership and transformational leadership have with these variables. Literature suggests that transformational leadership is the most suitable leadership style for influencing these variables. The results show that transformational leadership is the best predictor of Climate of Change. However, it is Transactional leadership that positively influences Readiness for Change and Commitment to the organization. This means that the supervisors of NSHispeed Telesales need to demonstrate both transformational and transactional leadership to influence factors that lead to successful change implementation. However, more transactional leadership should be used. In the current situation, the employees already perceive more transactional leadership than transformational leadership from their supervisors. Taking into account the results of this research this is a positive situation.
Keywords: Climate of Change, Readiness for Change, Commitment, Transactional leadership, Transformational leadership.
Title: THE ROLE OF LEADERSHIP IN CREATING COMMITMENT, READINESS FOR CHANGE AND CLIMATE OF CHANGE: Towards successful change implementation.
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TABLE OF CONTENTS
Masterthesis Gerdie Werkman | P a g e 4 1. INTRODUCTION
External events and crises trigger changes far more than planned events (Dyer, 1985); therefore organizations have to be prepared to react quickly in changing environments. However changes may be initiated by external events; the outcome of the change will be shaped by internal processes within the organization (Neves, 2009). These days, changes occur more often and therefore organizations need to develop the ability to be receptive and open to change (Bouckenooghe, Devos & van den Broeck, 2009,). Lyons, Swindler and Offner (2009) even state that the future success of organizations will rest on their ability to be agile and adapt to changes. Change is unavoidable whether organizations are ready for it or not. However, it is vital for an organization to be change ready before trying to implement and manage any kind of change (Todnem, 2007). Thereby, actions have to be taken in order to ensure that the behaviour of employees’ changes with the aim that the desired outcomes are achieved (Armenakis and Bedeian, 1999). According to Neves (2009) it can be difficult for organizations to motivate their members to support and work toward the successful implementation of change. Bouckenooghe et al. (2009) subscribe this point by saying that “people in general are not motivated to change unless there are compelling reasons to do so.” They mention that the most important factor in managing and planning change projects effectively is creating a basis that supports change (Bouckenooghe et all, 2009).
Masterthesis Gerdie Werkman | P a g e 5 Several authors described the importance of the change readiness of employees in order to achieve a successful change (Armenakis et al., 1993; Holt et al., 2007). Readiness for change in this case refers to “involving people’s belief and intentions regarding the extent to which changes are needed and their perception of individual and organizational capacity to successfully make those changes” (Armenakis et al., 1993). However, this is not the only factor that is important in achieving change success. Another factor of vital importance to organizational change is the climate of change (Tierney, 1999) which refers to “the internal circumstances under which change occurs” (Bouckenooghe et al., 2009). Additionally, literature suggests that commitment to the organization is also a determinant of change success (Iverson, 1997). Commitment to the organization is “the strength of an individual's identification with and involvement in a particular organization” (Porter et al., 1974). This literature suggests that in order to create an environment, in which it is easier to achieve successful change implementation in the future, a climate of change, readiness for change and commitment to the organization should be enhanced. Therefore, NSHispeed has to consider these constructs in their organizational change plans.
Masterthesis Gerdie Werkman | P a g e 6 1.1. Situation at the organization
This research is performed at a department of the Nederlandse Spoorwegen. This department is NSHispeed and their core business is to provide international rail transport of the NS. The head office of NSHispeed is located in Amsterdam. Customers can buy tickets for this train by using diverse sales channels. One of these channels is the call center of NSHispeed also called “Telesales” which is located in the head office of the Nederlandse Spoorwegen in Utrecht. The workforce of this sales channel is divided in three teams. The first is the Sales and Internet Support Desk, this team is responsible for the sale of tickets and for answering incoming phone calls concerning internet questions with the aim to help the clients buying their tickets online. The second team arranges tickets for big groups. The third team is the administration team which is responsible for all cases around payment. The whole department consists of 56 employees. Additionally, there are two managers, two planners and six supervisors working at this department. The two managers together fulfill a job of 1.6 FTE and have many different tasks like making business plans, controlling supervisors, participate in commercial meetings etc. The two planners make the work schedules, track call and waiting times, providing forecasts etc. Supervisors’ tasks
The focus of this research is on the leadership of the six supervisors of this department. The supervisors are responsible for the quantitative and qualitative performance of their own group of employees. The supervisor’s tasks are twofold. De first part is about supervising, which means answering the question of employees when these get stuck, control the waiting times, call times and breaks of the employees. The aim of this task is to track the incoming phone calls from the day and make sure that they are answered as soon as possible. The activities focus on the quantity of the work. The second task of the supervisor is to coach their employees. The aim of the coaching sessions is to improve quality of communication with the clients.
1.2.1. History 1996-2005
Masterthesis Gerdie Werkman | P a g e 7 supervisor also collected these documents in a file. The points of improvement were told to the employee and he/she was expected to solve these points. This process was labeled as the “coaching” process. At that time, every supervisor had 25 employees in his team which needed to be “coached.” After many years the managers concluded that this way of coaching/leading was not very effective because the same improvement points kept coming back in the files of the employees. Therefore, they decided to introduce another structure for the coaching process.
2005-2007
In 2005 a new coaching structure was introduced and lasted till 2007. Two women were appointed to take care of the whole coaching process while the other five supervisors focused solely on supervisor tasks like technical support and control. In order to fulfill the coaching task effectively, both women took a training that was offered by NSHispeed which was provided by a professional coaching institution. During these years the coaching process consisted of the following actions. Three conversations a day were recorded on a tape recorder and discussed with the employees. The conversations were evaluated through the use of a “conversation document”. This document was introduced in these years and contains all the points of a successful conversation. The results of this evaluation were placed in a performance sheet. The measures were mostly quantitative focusing on handle time and amount of sales. Due to cost cutting in the organization the management was forced to introduce the old structure again. This was the structure of all supervisors having the same tasks, coaching and supervising together.
2007-Today
Masterthesis Gerdie Werkman | P a g e 8 Begin of the change
In 2008 the managers of NSHispeed Telesales noticed the content of the phone calls switched from reservation to internet information and service questions. In reaction to this, the Internet Support Desk was introduced. This was an emergency plan and its presence was not communicated to the employees in advance. In order to inform the employees, the managers organized a meeting with all the employees. In this meeting they communicated that from now on they are going to change slowly from a sales-oriented to a service-oriented culture. This meeting was the first meeting about the change subject. However, no clear specifications about the change were given. The focus of the meeting was mainly about the long-term view of the top management of NSHispeed. Their desire was to realize all the sales through the internet in 2015. The task of the call center therefore should change in a more supportive one. In the past four years the customer demand for service is intensified. Therefore, the goals of the employees changed from quantitative to qualitative goals. The new goals aim at a higher client satisfaction, more pro-active service delivery, encourage switch to the internet channel and a more commercial attitude of the employees. This can be defined as a client-centered approach. This approach is aimed at understanding the needs and wishes of the individual clients and to provide them with relevant information. Providing relevant information pro-actively to individual clients is defined as service-oriented at NSHispeed.
Change support for employees and supervisors.
Four years ago the employees got a commercial training provided by a professional organization. Since this training, the employees did not get any further training because the budgets for training were frozen. Last year the managers bought an e-learning training which aimed at developing a client-centered attitude. This training is a one-time computer-based training on individual level. Every employee needed to fulfill this training. However, there was no follow-up from this e-learning.
Masterthesis Gerdie Werkman | P a g e 9 on how to realize these goals. It is for this reason that, according to the supervisors, every supervisor has his own way of supervising and coaching. For example, where the first is more focused on hard results the other is more focused on the process of improvement. Also, some supervisors keep the employees strict to rules and procedures where others give the employees their own responsibilities.
1.2. Problem Statement
The supervisors keep a file about every employee in which the improvement and attention points are placed. Nowadays, the managers conclude that the coaching goals do not get realized and the same improvement points come back every time. The managers think the coaching is not done effectively because goals are not met. The managers are concerned about this situation because they are afraid that the employees are not ready to make the change from sales to a service department. It seems that the employees already have hard times realizing small changes in their daily work with this type of coaching. However, when this change is realized great adaptations in the work of the employees have to be made.
As is concluded in the introduction, the readiness for change of employees, the climate of change in the organization and the organizational commitment are crucial to implement a successful change. Because Telesales has the ambition to make the big change from a sales-oriented to a service-oriented department, these constructs, that can be influence by leadership, need to be considered. The supervisors are the persons who talk with the employees about their behavior and performance and try to influence this through coaching According to Hersey and Blanchard (1988) “the process of influencing the activities of an individual or group to achieve certain objectives in a given situation” can be defined as leadership. The supervisors perform leadership towards their employees while trying to improve the quantity and quality of the goals and use their leadership in order to influence the behaviour of their employees.
Selection of independent variables
Masterthesis Gerdie Werkman | P a g e 11 use both leadership styles in one person. Third, the procedures and standardized forms the supervisors use during their coaching session are highly task-oriented. Therefore, it can be questioned whether the coaching sessions aim at personal development (which is part of transformational leadership) or at performance improvement (which is a characteristic of transactional leadership). Finally, the supervisors mentioned during the interviews that they think they all use different styles in the coaching session. One might be more relations-oriented were the other is more task-oriented. It is therefore interesting to know whether the employees perceive different styles and whether they perceive the styles as more transactional or transformational. The effect of these different leadership styles on the climate of change of the organization, commitment to the organization and readiness for change of the employees of NSHispeed will be the focus of this research.
1.3. Research objectives
The aim of this research is to make a contribution to the existing literature and the development of theory. In order to achieve this, this research will mainly focus on finding a relationship between the two leadership styles, and the three variables that contribute to an environment receptive to change. These constructs are; readiness for change, climate of change and commitment to the organization. The goal of this research is to conclude whether a specific leadership style influences (one or more of) the three dependent variables which lead to a “positive” change environment. In addition, this research aims at providing insights to the management of NSHispeed Telesales. Nowadays, this department is in the early stages of a change from a sale to a service oriented culture. The managers would like to gain insights in how to create an environment in which change can be implemented more easily. According to the literature, the abovementioned constructs can contribute to the creation of an environment receptive of change and can be influenced by leadership. Therefore, this research focusses on finding the most effective leadership style in this specific situation. The supervisors can try to adopt this effective style in order to prepare their employees for the upcoming change.
1.4. Research question.
Masterthesis Gerdie Werkman | P a g e 12 leadership influences readiness for change of employees, climate of change of the organization and employees’ organizational commitment. The managers of NSHispeed are interested in these constructs because the future brings about a change at the department. Many different leadership styles are identified by different authors. This research will investigate whether and which influence the transactional and transformational leadership styles have on the change readiness of the employees of NSHispeed Telesales, the climate of change and on their commitment to the organization. In order to investigate these relations the following research question is proposed.
“Which influence does transactional and transformational leadership have on the readiness for change of employees, climate of change and on commitment to the organization?”
2. THEORETICAL FRAMEWORK
This research aims at finding the relation between leadership and the three variables, Climate for Change, Readiness for Change and Commitment to the organization. The reason for incorporating three variables lies in the fact that change success is influenced by individual characteristics as well as contextual characteristics. Climate of Change is a contextual characteristic were Readiness for Change is an individual characteristic (Holt et al., 2007; Bouckenooghe et all, 2009). In addition, in times of change, interpersonal characteristics are important to be effective. Commitment is an interpersonal characteristic which can be used to increase organizational effectiveness (Bouckenooghe et al., 2009)
2.1. Climate of Change
Organizational climate reflects the underlying cultural assumptions the organization holds (Schein, 1999). A good understanding of climate is important in planned organizational change because climate shapes employees’ perceptions of the change process itself. Organizational climate is a context characteristic which affects the way change is implemented (Van Dam, Oreg & Schyns, 2008) and plays an important role in organizational change (Schneider, Brief & Guzzo, 1996).
Masterthesis Gerdie Werkman | P a g e 13 reactions to a planned organizational change are related to the extent to which the organization’s climate is change-oriented (Tierney, 1999). More specific, “the extent to which the organizational climate is perceived as being oriented towards development” is an important factor in the work context of employees and is related to the change process (Van Dam et al., 2008). An issue of vital importance in organizational change is “the way perceptions of organizational change climate are shaped among employees” (Tierney, 1999). The nature of a change conducive climate consists of five preconditions, which are: 1.) A general willingness to take risks or break from the status quo. 2.) The presence of a high level of trust among organizational members. 3.) The presence of operational freedom for employees. 4.) Openness of communication. 5.) Employee development (Tierney, 1999).
The definition of climate of change that will be used in this research comes from Bouckenooghe et al. (2009). These authors conceive climate of change in terms of “general context characteristic conducive of change,” it represents “the internal circumstances under which change occurs.” The questionnaire that will be used to measure this construct in this research also comes from these authors. In their framework they assumed that climate of change consist of five factors. 1. General support by supervision, this is a general internal context factor which refers to “the overall support provided by management.” 2. Trust in leadership. This factor measures “the trustworthy communication by senior management in general.” 3. Cohesion, this refers to the extent of cooperation and trust in the competence of team members. 4. Participation. This item refers to participatory management and not to actual involvement in the implementation of change. 5. Politicking. This describes the perceived level of political games within the organization (Bouckenooghe et al., 2009).
2.2 Readiness for Change
Masterthesis Gerdie Werkman | P a g e 14 status quo ” (Holt et al., 2007). When readiness for change exists, the organization is prepared for change and resistance is reduced. The opposite is also true, this means that, if organizational members are not ready, the change may be rejected, and organizational members may initiate negative reactions such as sabotage, absenteeism, and output restriction (Bouckenooghe et al., 2009). For this reason managers should focus on creating readiness for change (Neves 2009). It is useful to assess the organization’s readiness for change in order to lead change efforts (Armenakis et al., 1993). This research uses the validated measure from Bouckenooghe et al. (2009) to assess change readiness. These authors perceive change readiness as a multifaceted concept comprising of three dimensions, which are: Emotional readiness for change; this can be seen as the affective reactions towards change. The items selected to measure this factor aim at “capturing the feelings about a specific change project being introduced.” Cognitive readiness for change is the factor that measures the “beliefs and thoughts organizational members hold about the outcomes of the change.” Intentional readiness for change is the “extent to which employees are willing to put their energy en effort into the change process.” The benefit of a multifaceted view of readiness for change is that it is better at capturing the complexity of the phenomenon (Bouckenooghe et al., 2009). These different dimensions, which reflect different reactions to change, do not necessarily overlap and can occur in different stages of the change process (George and Jones, 2001; Piderit, 2000). Additionally, this multifaceted construct involves both readiness for change in general as the readiness for a specific change. The cognitive readiness for change items measures the attitude towards change in general. Emotional readiness and intentional readiness for change items both measure the reactions towards a specific change (Bouckenooghe et al., 2009).
2.3. Organizational Commitment
Masterthesis Gerdie Werkman | P a g e 15 involvement in a particular organization.” Meyer and Herscovitch (2001) state, that commitment in general, can be defined as “a force that binds an individual to a course of action of relevance to one or more targets”. Commitment to the organization plays a significant role in organizational change because “it predicts a stable, long-term relationship between employees and employers. In addition, Organizational commitment was found to be the next most important determinant of organizational change (Iverson, 1997). It was shown that committed employees will show higher levels of engagement, extra effort, and lower fluctuation in crisis situations (Korek, 2010). Employees with high organizational commitment are “more congruent with the goals and values of the organization, willing to expend considerably more effort on the behalf of the organization, and thus more likely to accept organizational change.”
Meyer and Allen (1990) developed a three-component model of commitment. They state that commitment involves three components: affective commitment, normative commitment and continuance commitment. These three components all describe the link between the employee and the organization. The first component affective commitment refers to “employees' emotional attachment to, identification with, and involvement in, the organization” (Meyer and Allen, 1990). Second, they identify the normative component which refers to ‘employees' feelings of obligation to remain with the organization.” Finally, continuance component refers to “commitment based on the costs that employees associate with leaving the organization.” Employees with a strong continuance commitment remain at the organization because they need to (Meyer and Allen, 1990).
2.4. Leadership
Masterthesis Gerdie Werkman | P a g e 16 3.4.1. Leadership styles
In this research transactional leadership and transformational leadership are the selected leadership styles. These styles were developed by Burns in 1978. In 1985, Bass applied this work to organizational management (Kuhnert & Lewis, 1987). According to Burns (1978) does transactional leadership occur when, “one person takes the initiative in making contact with others for the purpose of an exchange of something valued; that is, leaders approach followers with an eye toward exchanging." However, transformational leadership has a broader base, ‘it involves shifts in the beliefs, the needs, and the values of followers” (Burns, 1978). Transactional leadership and transformational leadership are contrasting leadership styles. However, they are related. This means that the two leadership styles are distinct but not mutually exclusive (Avolio and Bass, 1997). The same leader may use both types of leadership at different times, in different situations. The differences between the leadership styles lie in the process by which the leader motivates employees and in the types of goals set (Hater & Bass, 1988).
Transformational leadership
Masterthesis Gerdie Werkman | P a g e 17 Transactional Leadership
A simple definition of transactional leadership is that it “involves an agreement between the leader and the led which promises a reward upon the attainment of a clearly defined goal” (Burns, 1978). Transformational leaders recognize both the needs of their followers and what they must do to reach specific outcomes. Additionally, they clarify the followers’ role and see how the fulfillment of needs will lead to the realization of goals (Bass, 1985). Bass, (1985) identified four components of transactional leadership; Contingent Reward, Active Management by Exception, Passive management by exception and Laissez-Faire leadership. In contingent rewarding the leader clarified what is needed to be done and provided appropriate support for concession by the follower (Seltzer & Bass, 1990). The second factor; management by exception, can be decomposed in an active and a passive variant (Hater & Bass, 1988). Active management by exception means that leaders monitor the performance of followers and take corrective action when performance does not meet standards. The existence of rules is meant to avoid mistakes (Bass, 1997). Passive Management by exception is characterized by failing to take action before problems become serious (Bass, 1997). Lastly, Laissez-faire leadership indicates non-leadership. In this type the leader does avoids to make decisions or take any action (Aronson, 2001). Burns (1978) argues that transactional leadership has the greatest number of leader-follower relationships and is therefore more widely observed than transformational leadership which is its counterpart.
2.5. Hypotheses
Masterthesis Gerdie Werkman | P a g e 18 2.5.1. Leadership styles and Climate of Change
A direct link between management practices and employee climate perceptions exist (Scheider and Bowen, 1985). Tierney (1999) shows that the relation with the immediate supervisor influences employee climate perceptions. The Leader-Member-Exchange approach (LMX) can be used to explain this relation (Tierney, 1999). The LMX theory states that supervisors develop mutual relationships with their employees. These relationships can range from a high LMX dyad to a low LMX dyad. A high LMX dyad is characterized by a “highly interactive, interpersonally supportive association”, and is related to transformational leadership, were a low LMX dyad is a less interactive, very formal association (Tierney, 1999) and is related to transactional leadership (Graen and Uhl-Bien 1995). In the theoretical framework the five preconditions for a change conducive climate are mentioned. Literature shows that there is a stronger leader influence on these five change climate perceptions among employees sharing a high-quality relationship with their supervisor. This means that employees who experience a higher quality LMX relationship with their supervisor will perceive the climate as change-conducive Tierney (1999). An underlying reason for this is that LMX “has been linked to employee propensity to take risks and deviate from the status quo” (Tierney, 1999). This causes high LMX employees to demonstrate a higher inclination towards job-related risk-taking and non-routine types of behaviors than low LMX employees (Graen and Cashman, 1975). Another reason for this lies in the strong level of mutual trust and emotional support between members of high LMX relationships (Duchon et al., 1986) These strong levels results in high LMX members gaining a good degree of job autonomy, flexibility, and decision-making authority (Graen and Cashman, 1975). In addition, one of the critical activities of high LMX supervisors and thus transformational supervisors is the collection and dissemination of information intended to facilitate high LMX employees with making informed decisions, performing tasks effectively, and having a general sense of what is going on within the broader organization (Graen, 1989). High LMX is related to transformational leadership and therefore it can be assumed that when supervisors display transformational leadership their followers will perceive the climate as more change conducive (Tierney, 1999). Given these findings the following hypotheses are proposed.
Masterthesis Gerdie Werkman | P a g e 19 Hypothesis 1b: A higher amount of perceived transactional leadership will lead to lower perceptions of a change conducive climate.
2.5.2. Leadership styles and Readiness for Change
In the introduction was already mentioned that leadership plays an important role in creating readiness for change. Coch & French (1948) stated that readiness for change of employees can be achieved by proactive behavior of the leader. This proactive behavior should be aimed at influencing the beliefs, attitudes, intentions and finally the behavior of the follower. Bringing about these shifts in the beliefs, needs and values of the followers is done through transformational leadership (Burns, 1978). Therefore, transformational leadership includes the proactive behavior that is necessary to influence readiness for change. In addition, Jones et al. (2005) stress the point that some change management strategies are important in creating readiness for change. These are: communication and involvement which can be seen as characteristic of an organization which focusses on engaging and developing its employees. Engaging and developing employees are both inclined in transformational leadership. Personal development is a part of the fourth factor ’individual consideration” (Seltzer & Bass, 1990) were engagement is inclined in intellectual stimulation. Again, strategies of transformational leadership seem to be important in creating change readiness. Consequently, transformational leadership is one of the most effective styles to set conditions which are necessary to create readiness for change (Bommer et al., 2005). Burns (1978) describes that transactional leadership is the most appropriate leadership style when an organization is operating under stable conditions. In contrast, transformational leadership is most appropriate in dynamic conditions (Burns, 2009). Because readiness for change is related to organizational change, and transformational leadership is the most suitable leadership style in organizational change, it can be concluded that in case of creating readiness for change, transformational leadership is the most effective leadership style. This leads to the following hypotheses:
Masterthesis Gerdie Werkman | P a g e 20 Hypothesis 2b: A higher amount of perceived transactional leadership will lead to a lower amount of employees‘readiness for change.
2.5.3. Leadership styles and Organizational Commitment
Masterthesis Gerdie Werkman | P a g e 21 Hypothesis 3a: A higher amount of perceived transformational leadership will lead to a higher amount of employee commitment to the organization.
Hypothesis 3b: A higher perceived of perceived transactional leadership will not lead to higher nor lower amount of employee commitment to the organization.
2.6 Conceptual model
In the conceptual model, which is demonstrated in figure 1, the independent variable is leadership. This construct is divided in two leadership styles, transactional and transformational leadership. Commitment to the organization, Climate of change and Readiness for change are the dependent variables. All the constructs consist of more factors. The hypothesized relationships are displayed by the arrows. The “+” suggests a positive relation and the “- “suggests a negative relation. The “+/-“sign means that no relation between the variables is suspected.
The measurement scales of Climate for change and Readiness for change are derived from an article by Bouckenooghe et al. (2009). Prior to their research, these authors assumed that Climate for change is one of the key components that make or break readiness for change. The results of their research show that there is a relationship between some factors of Climate for Change with some factors of Readiness for change. However, this relationship is limited because they are not significant for the factors of climate for change, nor for all the factors of change readiness. Because these results are limited and do not count for all the factors of readiness for change and climate for change and because incorporating all the different factors within each construct goes beyond the scope of this research these relations will not be included in the this research. An elaboration on this point can be found in the limitations section.
Masterthesis Gerdie Werkman | P a g e 23 3. METHODS
3.1 Introduction
The methodology section describes the method that was used to perform this research. In addition, it describes the statistical tests that were used to generate the results. Problems in business and management can be researched in both quantitative and qualitative ways (Blumberg et al. 2011). Both methods have their own advantages and disadvantages. In advance of this research the management question was proposed clearly. In addition, it was preferred that all the participants participated in this research, however, little time was available to perform this research. Quantitative research can be performed in less time than qualitative research. In using qualitative research the research design may evolve or adjust during the course of project. This is in contrast with quantitative research were the research design is determined before commencing the project (Cooper and Schindler, 2008). Therefore, a quantitative method was selected for this research.
A quantitative method that can be used is the self-administered survey. This is a method that uses a standardized set of questions given to individuals or groups. The results of these questionnaires can be consistently compared and contrasted. A few advantages of self-administered surveys are that they are perceived as more anonymous, it allows contact with otherwise inaccessible respondents and it requires minimal staff. In addition, the costs of a self-administered survey are less than surveys via personal interviews and the respondent participates without researcher assistance (Blumberg et al. 2011). These advantages are very desirable for this specific research and therefore, self-administered surveys will be used in this research. The aim of this quantitative research is to determine whether a relation exist between the independent and dependent variables. The dependent variables are: Readiness for change, Commitment to the organization and Climate of change. The independent variables can be defined as Transformational and Transactional leadership.
3.2. Data Collection
Masterthesis Gerdie Werkman | P a g e 25 3.3. Questionnaire testing
After the selection of the items and questions was finished, the selected questions had to be translated in Dutch. The translation of the questions was done personally. However, these translations had to be tested to make sure the translation was done in a proper way. In order to test this, the questionnaire and its translations were discussed with two Change Management students and two persons with another academic background. While judging the translations the four testers checked two things: a.) is the translation complete and adequate? b.) Are the questions easy to understand? This discussion led to different adaptations in the original translated questionnaire. The final translated questionnaire had to be pretested. Pretesting is a critical activity for successful development of a survey (Cooper and Schindler, 2008). There are several pretests that can be performed, however, to test this survey the ‘participant pretesting method’ was selected. The first test was performed by one manager of the department who is a former front-line employee of this department. After this, the questionnaire was discussed with a randomly appointed employee. These discussions led to a few adaptations in the formulation of the questions.
3.4. Measurement and Validation of Constructs.
Masterthesis Gerdie Werkman | P a g e 26 degree to which a research instrument is able to provide evidence based on theory” (Cooper & Schindler, 2008). Construct validity can be determined by performing factor analysis. Factor analysis is “a collection of methods used to examine how underlying constructs influence the responses on a number of measured variables” (De Coster, 1998). In this research the Principal Components Analysis is used to perform the factor analysis. The reliability of scales can be measured by determining the cronbach’s alpha. Values less than 0.6 are poor, those between 0.6 and 0.7 are acceptable and those above 0.8 are considered to be good (Sekaran and Bougie, 2010).
Climate of Change
The construct climate of change was measured with a questionnaire from Bouckenooghe et al. (2009). These authors state that the construct ‘Climate of Change’ consist of the five factors that were mentioned in the theoretical section. The original scale for Climate of Change consists of 18 items. However, because of the aforementioned constraints, a selection of these questions had to be made. It was considered to be important to include items from each factor of the construct Climate for Change in order to represent all the factors. The questions with the highest item loading of each factor in the factor analysis of Bouckenooghe et al. (2009) were identified and the items that fit the content of the research were selected for the final questionnaire. An overview of the amount of selected questions from each factor is shown in Table 1. The reliability of this scale was measured with the cronbach’s alpha. The cronbach’s alpha of these 10 items was .549. The results showed that when the item COC1R was removed the value would be .648. The factor analysis also showed that this item loaded on two components. Therefore, this item was removed from the scale. No further items were deleted because the reliability would decrease when more items were removed from the scale.
Masterthesis Gerdie Werkman | P a g e 27 leadership. This can be explained by the fact that Trust in leadership, Politicking and Participatory management represent behaviors of the leaders and are therefore related to the leadership scales which also measure leadership behavior. In addition, COCPM1 has a high factor loading on transformational leadership what suggest that transformational leaders are also able to use participatory management. Additionally, COCC2 (cohesion) loaded on transformational leadership. This is not completely unusual because question COCC2 is stated as: I have trust in my colleges. The statistical program probably identified “trust” as a common theme and did not distinguish between trust in colleagues and trust in leadership.
Readiness for Change
To measure readiness for change the validated questionnaire of Bouckenooghe, Devos & van den Broeck (2009) was used. This questionnaire consists of 9 items which are all used to measure this construct. The value of the cronbach’s alpha of these 9 items was .862 which is an excellent value. The factor analysis revealed no inconsistencies and removing items from the scale would reduce the reliability. Therefore, all the items are included in the scale. Cognitive readiness and Emotional readiness loaded on one component and Intentional readiness loaded on another component. Politicking is related to Cognitive and Emotional readiness for Change. The reason for his might be that attitudes, behaviors and actions of management influences the way employees perceive them as being capable of implementing a change and the way they feel about the change.
Commitment to the organization
Masterthesis Gerdie Werkman | P a g e 28 about this factor were included in the questionnaire. The cronbach’s alpha of this scale is .790. No items were removed from this scale because this would not increase reliability nor did it improve the consistency of the factor analysis.
The results show CMAF2R 2, CMAF3R and CMAF5R (affective commitment) loaded on the component of transactional leadership. These factors refer to the emotional commitment to the organization. CMAF4 (affective commitment) loaded on the component of cognitive and emotional readiness for change. This can be explained by the content of the question. Question CMAF 4 is: “I have the feeling that the problems of my organization are my own” which can be seen as a cognitive process. CMCON1R and CMCON2R (continuance commitment) measure the intention of staying in the organization and loaded also on the component of intentional readiness to change. Both factors measure the intention towards future activities. In addition, CMAF1 (affective commitment) loaded on the intentional readiness component. The question is stated as: “I would be very happy to spend the rest of my career in this organization.” This item therefore also measures intentions to stay and consider the future. CMNOR1, CMNOR2 and CMNOR3 loaded on a single component.
Transformational leadership
Masterthesis Gerdie Werkman | P a g e 29 cronbach’s alpha of .649. The analysis revealed that the reliability increases when item TRF 3 was removed. The factor analysis showed that this item loaded on two components. Therefore, this item was removed from the scale. In addition, removing item TRF 4 would increase reliability. The factor analysis showed that this item loads on another component than the other items of transformational leadership. This item was removed from the scale what resulted in a cronbach’s alpha of .724. As a result, all items of transformational leadership load on one component after removing these two items.
Transactional leadership
Masterthesis Gerdie Werkman | P a g e 30 TABLE 1.
Overview questionnaire items.
Factors Amount of questions Questions in original questionnaire Code
Climate of Change 10 18 COC
General support by supervisors 3 4 COCGS
Trust in Leadership 2 4 COCTL
Cohesion 2 4 COCC
Participatory Management 2 3 COCPM
Politicking 1 3 COCPOL
Readiness for Change 9 9 RD
Cognitive Readiness for Change 3 3 RDCOG
Intentional Readiness for Change 3 3 RDINT
Emotional Readiness for Change 3 3 RDEM
Commitment to the Organization 10 24 CM
Affective Commitment 5 8 CMAF
Masterthesis Gerdie Werkman | P a g e 31
Normative Commitment 3 8 CMNOR
Leadership 10 34
Transformational leadership 5 23 TRF
Transactional leadership 5 11 TRA
TOTAL 39 85
TABLE 2.
Results reliability analysis
Scale Cronbach’s alpha
Climate for Change .648
Readiness for Change .862
Transformational leadership .724
Transactional leadership .867
Commitment to the organization .790
4. RESULTS 4.1. Introduction
Masterthesis Gerdie Werkman | P a g e 32 the relation between two variables and regression tries to find a numeric explanation for the dependent variable through one or more independent variables. First, a short overview of the descriptive statistics is given. Second, the results of the correlation and regression analyses are demonstrated. From these results can be derived whether the proposed hypotheses need to be rejected or accepted. An overview of these results can be found in the last table of this section.
4.2. Descriptive statistics
In this paragraph, the descriptive statistics are analysed. The demographic variables included the items age and gender. In the original questionnaire a question about tenure was included. However, because the statistics revealed that the majority of the values are missing they were not included in this research. The demographics can be found in Table 3. This table shows some interesting results. First, there was a great majority of female participating in the research. There are 36 females against 4 males. Because there were only 5 missing values these results are representative for the whole department. Second, the table shows that the mean age, of the males and females have close values. At third, the table shows that the mean ages of as well the males as the females are relatively high.
TABLE 3. Demographics
Gender Number and percentage of total Age (Mean)
Male 4 (8.9%) 45.25
Female 36 (80.0%) 47.15
Missing 5 (11.1%)
Total 45 (100%) 46.96
The mean and the standard deviation of the responses on the different items are shown in Table 4. A first look at the table shows that overall; the standard deviations are relatively high which means that the opinions of the employees about the items are relatively widely spread.
The mean of the variable Climate of Change is 4.5 which is a value between “no opinion” and somewhat agree and the standard deviation is moderate. This means that the participants have slightly positive perceptions of a climate for change. In addition, the majority of the employees feel about this the same.
Masterthesis Gerdie Werkman | P a g e 33 the opinions among the employees is lower than with other factors. In addition, this construct gained the most positive reactions of all constructs.
The employees that are participating in this research are slightly positive towards their commitment to the organization. In addition, the perceptions of this commitment are moderately spread.
Higher perceptions about the amount of transactional leadership than the amount of transformational leadership exist among the employees. The participants somewhat agree with perceiving their leader as transactional. In contrast, not much transformational leadership is perceived. The standard deviations of these constructs are both moderate what means that the opinions among employees are moderately spread.
TABLE 4. Descriptive Statistics
Mean Standard
Deviation
1. Climate of Change 4.5 1.5
2. Readiness for Change 4.9 1.3
3. Commitment 4.3 1.5
4. Transformational leadership 4.3 1.5
5. Transactional leadership 4.9 1.5
4.3. Correlations.
In this paragraph, the correlations between the factors in the model are determined. The results of the correlation analysis can be found in table 5. These results give a first impression of the relations between the dependent and independent variables and between the different dependent variables.
4.3.1. Climate of change
Masterthesis Gerdie Werkman | P a g e 34 This correlation shows a statistical relation and not a causal relation. The value of Climate for Change can only be explained for a small amount by Readiness for Change. The variables Transactional leadership and Commitment to the organization also show this small significant positive relationship which means that the value of Climate for Change can only be explained for a small amount by Transactional leadership and Commitment. The correlation efficient between Climate of Change and Transformational leadership however, is significantly higher. This means that Climate for Change can be explained by Transformational leadership by a greater amount than the other variables.
4.3.2. Readiness for Change
The construct Readiness for Change correlates with Climate of Change, Commitment and Transactional leadership. The correlation between Readiness for Change and Climate of Change was discussed previously. The correlation between Readiness for Change and Commitment to the organization is relatively high. This means that the value of Readiness for Change can for a relatively high amount be explained by Organizational commitment. The correlation efficient between Readiness for Change and Transactional leadership is moderate. However, no correlation between Readiness for Change and Transformational leadership was found.
4.3.3. Organizational commitment.
Commitment correlates with Climate of Change, Readiness for Change and Transactional leadership. The correlations between Organizational commitment, Climate of Change and Readiness for Change were discussed before. The correlation efficient between Organizational commitment and Transactional leadership was relatively high which means that the value of Organizational commitment can by a relatively high amount be explained by Transactional Leadership. No correlation between Commitment and Transformational leadership was found.
4.3.4. Leadership styles.
Masterthesis Gerdie Werkman | P a g e 35 TABLE 5.
Results Correlations
1. 2. 3. 4. 5.
1.Climate of Change
2. Readiness for Change .38*
3. Commitment .35* .59**
4. Transformational leadership .64** .20 .17
5.Transactional leadership .44** .44** .54** .58**
*=Correlation is significant at the 0.05 level (2-tailed) **= Correlation is significant at the 0.01 level (2-tailed)
4.4. Regression analysis
This section will show the results of the regression analysis. Regression analysis is used when one independent variable is included in the model. Multiple regression is used when two or more independent variables are included in the model. In this case, both regression and multiple regression will be performed to test the hypotheses and determine the best predictor. Transformational leadership and Transactional leadership are the two independent variables.
4.4.1. Leadership and Climate of Change.
Masterthesis Gerdie Werkman | P a g e 36 TABLE 6.
Results multiple regression analysis: Climate of Change Regression Coefficient Sig. R2 F Transformational leadership .35 .00 .42 .00 Transactional leadership .07 .43
The regression coefficients are non-standard
The hypothesis concerning the relation between Transformational leadership and Climate of Change was proposed as: A higher amount of perceived transformational leadership will lead to higher perceptions of a change conducive climate. Because the multiple regression analysis shows that these constructs have a significant positive relationship this hypothesis is accepted.
The hypothesis concerning the relation between Transactional leadership and Climate of Change was proposed as: A higher amount of perceived transactional leadership will lead to lower perceptions of a change conducive climate. Because the multiple regression analysis shows that these constructs do have a significant positive relationship this hypothesis is rejected. The relationship might be significant but not in the negative direction as was proposed.
4.4.2. Leadership and Readiness for Change
Masterthesis Gerdie Werkman | P a g e 37 regression analysis was performed. The results show that Transactional leadership has a significant positive relation with Readiness for change. In contrast, transformational leadership has no significant relationship with this construct. The results can be found in table 7.
TABLE 7.
Results multiple regression analysis: Readiness for Change Regression Coefficient Sig. R2 F Transformational leadership -.08 .54 .20 .01 Transactional leadership .36 .01
The regression coefficients are non-standard
The hypothesis concerning the relation between Transformational leadership and Readiness for Change was proposed as: A higher amount of perceived transformational leadership will lead to a higher amount of employees’ readiness for change. Because the multiple regression analysis shows that these constructs do not have a significant relationship this hypothesis is rejected.
The hypothesis concerning the relation between Transactional leadership and Readiness for Change was proposed as: A higher amount of perceived transactional leadership will lead to a lower amount of employees ‘readiness for change. Because the multiple regression analysis shows that these constructs do have a significant positive relationship this hypothesis is rejected. This analysis found a significant relation between a leadership style and readiness for change. However, this significant relationship was found in another direction than the proposed hypothesis and was therefore rejected.
4.4.3. Leadership and Commitment to the organization.
Masterthesis Gerdie Werkman | P a g e 38 Commitment to the organization. The regression coefficient is .383 (p=<.05). In order to determine the best predictor of Commitment to the organization a multiple regression analysis was performed. The results show that Transactional leadership has a very strong significant positive relation to Organizational Commitment. Transformational leadership however, has no relation to Commitment. The results of this analysis are shown in Table 8.
TABLE 8.
Results multiple regression analysis: Commitment to the organization. Regression Coefficient Sig. R2 F Transformational leadership -.18 .14 .32 .00 Transactional leadership .48 .00
The regression coefficients are non-standard
The hypothesis concerning the relation between Transformational leadership and Commitment to the organization was proposed as: A higher amount of perceived transformational leadership will lead to a higher amount of employee commitment to the organization. Because the multiple regression analysis shows that these constructs do not have a significant relationship this hypothesis is rejected.
Masterthesis Gerdie Werkman | P a g e 39 TABLE 9.
Overview hypotheses
Hypotheses Item Transformational
Leadership Transactional Leadership Accepted/Rejected Hypothesis 1a Climate of Change Significant positive effect on item. (.39; p<.01) Accepted Hypothesis 1b Climate of Change Significant effect on item (.260 p=<.05) Rejected
Hypothesis 2a Readiness for
Change
No significant
effect on item
(p>.05)
Rejected
Hypothesis 2b Readiness for
Masterthesis Gerdie Werkman | P a g e 40 5. DISCUSSION
5.1 Introduction
In this section the results of the previous chapter are being discussed. The goal of this section is to generate new insights on the topics under research and to provide practical insights. The focus of this discussion is to find an answer to the proposed research question; “Which influence does transactional and transformational leadership have on climate of change, the readiness for change of employees and on commitment to the organization?” First a short introduction of the most crucial findings is given. Further, every paragraph discusses the results of the influence of transactional leadership and transformational leadership on one dependent variable. In addition, management implications on how to improve the current situation are provided.
Theory and reality
Theory suggests that transformational leadership is the most effective leadership style in influencing the constructs that increase the likelihood of successful change initiatives. Therefore, the proposed hypotheses state that transformational leadership positively influences all the dependent variables. However, only one hypothesis is confirmed by the results of this research. In contrast, the results show that transactional leadership has positive relations to the constructs readiness for change and organizational commitment and is therefore, in this specific situation and under these conditions, the most suitable leadership style. Transformational leadership influences Climate of Change.
Masterthesis Gerdie Werkman | P a g e 41 5.2. Leadership and Climate of Change
The theory suggests that transformational leadership is the most effective leadership style in developing a climate for change because transformational leaders engage in high leader-member exchange relationships. These relationships are considered to positively influence change conducive climate (Tierney, 1999). Following this line of thinking the following hypothesis was proposed: A higher amount of perceived transformational leadership will lead to higher perceptions of a change conducive climate. The results of the study confirmed this hypothesis. The construct ‘Climate of Change” showed a positive relationship with transformational leadership. This means that the supervisors of NSHispeed Telesales should demonstrate transformational leadership in order to create a change conducive climate. This result is in line with the statement of Tierney (1999) that transformational leadership results in perceptions of a more change conducive climate.
In contrast to transformational leadership, literature suggests that transactional leaders engage in low leader-member exchange which will result in lower perceptions of change conducive climate. Therefore, the following hypothesis concerning transactional leadership and climate of Change was proposed. A higher amount of perceived transactional leadership will lead to lower perceptions of a change conducive climate. The results of the analysis do not confirm this hypothesis. The results show that transactional leadership has significant negative poistive with Climate of Change.
Masterthesis Gerdie Werkman | P a g e 42 Situation and implications NSHispeed Telesales
Bouckenooghe et al. (2009) already found that Climate of Change is one of the factors that play a prominent role in understanding the processes that lead to successful change implementation. Also, an issue of vital importance in organizational change is “the way perceptions of organizational change climate are shaped among employees” (Tierney, 1999) Developing a climate of change is therefore a favorable condition for implementing organizational change. The implication of this finding is that the leaders of the NSHispeed Telesales department have to demonstrate transformational leadership in order to create a climate that is conducive of change. However, there are additional actions that can be taken into account to increase the individual factors of climate of change. These will be explained in the next section.
The results of the current situation at NSHispeed Telesales demonstrate that the employees of NSHispeed Telesales gave slightly positive values to Climate of Change. This means that they do not perceive the climate as change conducive. However, Climate for Change is an important factor in implementing change successfully (Tierney, 1999) and it therefore favorable to achieve high results. As stated before, Climate of Change consists of five factors which can be influenced by different interventions. These factors are; General support by supervisors, Trust in leadership, Cohesion, Participatory Management and Politicking. Because these actors have many differences they are discussed separately. Creating trust can be done by for example, engaging in transformational leadership behaviors such as role modeling (Podsakoff et al., 1990; Rich, 1997), by creating fair processes (Korsgaard, Schweiger, & Sapienza, 1995), and by allowing followers to participate in decision making (Magner, Welker, & Johnson, 1996).
Masterthesis Gerdie Werkman | P a g e 43 More cohesion is positive for the organization and the planned change. Odom et all. (1990) suggest that managers in organizations who desire to create greater levels of cohesion should “begin a concerted effort to be more people oriented, encouraging, equitable, trusting and allowing of greater personal freedom.” In addition, removing bureaucratic barriers will somewhat improve cohesion.
In the case of Politicking, it is desirable to have the lowest amount of Politicking as possible because the majority of research has viewed organizational politics as a negative phenomenon (Kacmar & Baron, 1999). Politicking represents one of many potential stressors in organizational settings and stimulates anxiety –provoking reactions (Ferris, Frink, Galang, et al., 1996). The perceived amount of politicking may be reduced by a high amount of Trust in Leadership (Ferris et al., 1996) and therefore, the managers of NSHispeed should undertake the aforementioned actions to increase Trust in leadership when they desire to reduce the perceived amount of politicking.
5.3. Leadership and Readiness for Change
Literature suggests that transformational leadership is the most effective leadership style in creating readiness for change (Bommer et al., 2005). The reason for this is that managers perceived as predominantly transformational in their style of leadership, have staff with higher levels of motivation, job satisfaction, and performance, than managers with a predominantly transactional style (Bass, 1997). Therefore, the following hypothesis was proposed: A higher amount of perceived transformational leadership will lead to a higher amount of employees’ readiness for change. The results of the analyses however, show no support for this hypothesis. More specific, the regression analyses including the construct ‘Readiness for Change”, showed that transformational leadership does not influence Readiness for Change at all.
Masterthesis Gerdie Werkman | P a g e 44 (Metcalfe and Metcalfe, 2005). This suggests that transactional leadership is not effective in creating readiness for change. In order to test this, the following hypothesis was tested. A higher amount of perceived transactional leadership will lead to a lower amount of employees ‘readiness for change. This hypothesis was rejected because the results of the analyses did not confirm this hypothesis. The correlation analysis, as well as the multiple regression analysis showed that transactional leadership has a very strong positive relation to this construct.
The results of this research do not confirm the widely accepted theory that transformational leadership is the most effective leadership style in creating change readiness. In contrast, transactional leadership seems to be the most effective. This means that, in order to increase the level of readiness for change, the supervisors should demonstrate transactional leadership. One explanation of this phenomenon is provided by West et al. (1993) who describe that aacceptance of change is a negotiation and communication process between management and employees and can only be successful implemented when everyone accepts the change (West et al. 1993). Therefore, leaders cannot speed up the change by introducing new ideas but they must follow the logic of the transactional way to slowly generate this acceptance (West et al. 1993).
Situation and implications NSHispeed Telesales
From the theoretical section already became clear that readiness for change of employees is very important in achieving successful change implementation. High readiness for change results in positive behavior towards the change. At this moment the results show that on average most of the employees of Telesales are somewhat ready for change. Readiness for Change however, generated the highest results of all the variables.
Masterthesis Gerdie Werkman | P a g e 45 commitment to the end state which can be a powerful motivator for change (Armenakis et al., 1993). Efficacy may be viewed as the perceived ability to overcome discrepancy. Persuasive communication can be done both oral and verbal. The most effective form of persuasive communication is in person speeches because it establishes a personal focus and permits multiple information cues and immediate feedback (Armenakis et al., 1993). Active participation refers to the way change managers manage opportunities for organizational members to learn through their own activities, and thereby send readiness messages indirectly. There are three forms of Active participation:
a.) Directly involving individuals in activities which are rich in information that can reduce resistance (Armenkis et al., 1993). For example: Invite employees of NSHispeed telesales to meetings about the change process.
b.) Vicarious learning: This means, observing others who already apply the new techniques. This can enhance someone’s confidence in adopting the new system (Armenkis et al., 1993). For example: Organize an excursion to another company were these forms of techniques are already used. Employees can then see and maybe try how these techniques work.
c.) Enactive mastery: This actually means taking small steps in change. The success of the small steps can generate confidence regarding the challenge of a greater change implementation (Armenakis et al., 1993) For example: celebrate every sub goal that is being achieved with the whole department.
5.4. Leadership and Commitment to the organization.
