Impacts of transformational leadership on organizational change capability: a two-path mediating role of trust in leadership

Thanh Thi Cao and Phong Ba Le

European Journal of Management and Business Economics, 2022, vol. 33, issue 2, 157-173

Abstract: Purpose - Given the important role of change capability for organizational development and competitive advantage, the purpose of this study is to clarify the influences of transformational leadership (TL) on organizational change capability (OCC) via mediating roles of two specific aspects of trust in leadership namely disclosure-based trust and reliance-based trust. Design/methodology/approach - Structural equation modeling is applied to test the degree of influences of TL and employee trust on OCC via empirical data collected from 376 participants in 115 small and medium firms in China. Findings - The results show the positive and significant impacts of TL and aspects of employee trust in leadership on OCC. It indicated that disclosure-based trust in leadership has a greater influence on change capability in comparison with the effect of reliance-based trust in leadership. Especially, the findings have shown the evidence supporting the mediating mechanism of aspects of employee trust in leadership between TL and OCC. Research limitations/implications - This study provides the practical initiatives that highlight the importance of applying TL style to build and improve the trust of employees in their leadership for fostering OCC. Originality/value - The paper has significantly advanced and deepened insight of how transformational leaders nurture employee’s specific shades of trust in leadership for fostering OCC. The valuable findings of this study contribute to enriching the theoretical basis of organizational behavior and change management, and can be used to analyze and explain the relationships between TL, employee’s trust in leadership and organizational capability for change.

Keywords: Transformational leadership; Organizational change capability; Employee trust; Disclosure-based trust; Reliance-based trust (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ejmbep:ejmbe-06-2021-0180

DOI: 10.1108/EJMBE-06-2021-0180

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