CEO transformational leadership and firm performance: A moderated mediation model of TMT trust climate and environmental dynamism

Hao-Chieh Lin (), Trang Thi Ha Dang () and Yu-Sheng Liu ()
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Hao-Chieh Lin: National Sun Yat-sen University
Trang Thi Ha Dang: National Cheng Kung University
Yu-Sheng Liu: Institute of Labor, Occupational Safety and Health, Ministry of Labor

Asia Pacific Journal of Management, 2016, vol. 33, issue 4, No 6, 1008 pages

Abstract: Abstract This study examines the role of top management team (TMT) trust climate in the relationship between CEO transformational leadership (TFL) and firm performance under dynamic environments. The research results based on a sample collected from firms in Vietnam show that TMT trust climate is a key mediator which can convert CEO TFL into better performance outcomes. Moderated-mediation analyses further reveal that the mediating effect of TMT trust climate is more significant in less dynamic environments. Our study contributes to the TFL theory by identifying a critical mechanism that intervenes in the relationship between CEO-level TFL and firm performance. We reveal how CEOs exert leadership influence on subsequent TMT dynamics and performance outcomes by navigating external environments. Moreover, our study offers insights with regard to the trust theory by uncovering TMT-level intragroup trust as a mediator, and thus complements most of prior examinations that focus on the moderating role of trust in workplace team contexts.

Keywords: CEO transformational leadership; Trust climate; Team climate; Top management team; Environmental dynamism; Vietnam (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (14)

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DOI: 10.1007/s10490-016-9468-x

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