Effect of Transformational Leadership on Followers' Affective and Normative Commitment: Culture as Moderator

Using a sample of 98 employees working in U.S., India, and China, the study shows that affective and normative commitment are positively related to transformational leadership. Normative commitment is higher in India-China combined than in the U.S. Transformational leadership is positively related to normative commitment in India and China but not in the U.S. and to affective commitment in the U.S. and India but not in China. [An earlier version of this paper was presented at the annual conference of the Administrative Sciences Association of Canada, Halifax (Nova Scotia), May 2008.] Leadership has been a popular theme in both managerial and academic world for a long time. This interest was further energized after Burns (1978) introduced the model of transformational leadership in his seminal work. According to him, transformational leadership engages everyone in such a way that both leaders and followers raise one another to higher levels of motivation and morality (p. 20). Transformational leaders develop positive relationships with subordinates and motivate performance that accomplishes specific goals. Translating this into project management teams, team members are encouraged by transformational leaders to focus on the interests and goals of the group rather than on their own needs and interests. In addition, transformational leadership has been found to have a positive effect on the organization's productivity and financial results (Neuhauser, 2007). Organizational commitment is a bond or linking of the individual to the organization (Leong, Furnham, & Cooper, 1996). Over the past two decades, the construct of organizational commitment has witnessed a flurry of research activity. The burgeoned interest in commitment stems from its demonstrated linkage with variables that have an influence on organizational effectiveness (Putti, Aryee, & Phua, 1990). Research has shown that organizational commitment is positively related to employee retention; simply stated, employees committed to an organization are less likely to leave. Such commitment benefits both employees and organizations (Fulford & Rothman, 2007). Increased international economic activities, globalization of markets, mobility of technology, and changes in workforce demographics have heightened interest in understanding and addressing ways of motivating culturally diverse workforces, on the part of both multinational corporations and indigenous companies. For companies to operate and compete effectively and efficiently, they must understand the cultural implications involved in motivating employees. Unfortunately, little is known about how different leadership styles might interact with cultural orientation to influence work-related outcomes (Walumbwa & Lawler, 2003). This paper reports a study that analyzed how the relationship between transformational leadership and follower's organizational commitment varies across individualistic and collectivistic cultures. Great Lakes Herald Vol 3, No 1, March 2009 Page 23 THEORY AND HYPOTHESES Transformational Leadership Burns (1978) defined transformational leaders as those that are able to lift followers up from their petty preoccupations and rally around a common purpose to achieve things never thought possible. Transformational leadership encompasses role modeling, handling of personal relationships with subordinates, duty orientation of the manager, critical thinking, and so on (Singh & Krishnan, 2007). Transformational leaders seek to raise the consciousness of followers by appealing to higher ideals and moral values such as liberty, justice, equality, peace, and humanitarianism, and not to baser emotions such as fear, greed, jealousy, or hatred (Masood, Dani, Burns, & Backhouse, 2006). The most common facet of transformational leadership among different definitions is that of vision. There are two visionary factors: expert and analytical, and visionary and futuristic. These influence reported performance in the organizations. For example, long-term motivation (a cultural dimension) can be achieved by offering appealing visions to the subordinates (Hautala, 2005). Other critical leadership competencies are strategic thinking, relationship building, execution, and people development (Neuhauser, 2007). There are five dimensions of transformational leadership—idealized influence attributed, idealized influence behavior, inspirational motivation, intellectual stimulation, and individualized consideration. It has been found that charismatic or transformational leadership is positively related to the effectiveness of the leader, subordinate's effort, and job satisfaction and to the subordinate's organizational commitment. In addition, the effects of charismatic leadership on subordinates would be different if charisma is operationalized as an individual-level phenomenon or a group-level phenomenon, and it has been shown that charismatic leadership is more effective at increasing group performance than at increasing individual performance (DeGroot, Kiker, & Cross, 2000). Stewart (2006) did a meta-analysis of 93 studies and found that transformational leadership exhibited a consistently positive relationship with collective performance. Zhu, Chew, and Spangler (2005) found that human-capital-enhancing human resource management fully mediated the relationship between CEO transformational leadership and subjective assessment of organizational outcomes. Although transformational leadership is applicable to most organizational situations, the emergence and effectiveness of such leadership may be facilitated by some contexts and inhibited by others (Garg & Krishnan, 2003). Johnson and Dipboye (2008). examined the moderating effect of task type on the effectiveness of charismatic leadership through a laboratory manipulation of the content (visionary, nonvisionary) and delivery (expressive, unexpressive) of a leadership speech, along with the charisma conduciveness of performance tasks. As expected, they found that visionary content and expressive delivery resulted in higher attributions of charismatic leadership. In addition, visionary content led to better quality of performance on more charisma-conducive tasks. Great Lakes Herald Vol 3, No 1, March 2009 Page 24 Six main transformational leadership behaviors that relate to organizational citizenship are: articulating a vision, providing an appropriate model, fostering the acceptance of group goals, expecting high performance, and providing individualized support and intellectual stimulation. Organizational citizenship behaviors comprise altruism, conscientiousness, sportsmanship, courtesy, and civic virtue. Although transformational leader behaviors may have no direct effect on organizational citizenship behavior, they influence both employee trust and satisfaction (Masood et al., 2006). Sosik and Dinger (2007) examined the relationship between leaders' personal attributes, leadership style and vision content. They found that charismatic leadership was most positively associated with inspirational vision themes, whereas contingent reward leadership was most positively associated with instrumental vision themes. Leaders' need for social approval, self-monitoring, and need for social power moderated these relationships. Transformational leaders set examples to be emulated by their followers. As suggested by Burns (1978), when leaders are morally more mature, those they lead display higher moral reasoning. Authentic transformational leadership must rest on a moral foundation of legitimate values (Burns, 1978). Moral obligations are grounded in a broader conception of individuals within community and related social norms and cultural beliefs. To be transformational, the leader has to be morally uplifting (Bass & Steidlmeier, 1999). It is required of a transformational leader to bridge ethical relativism by forging a platform of common values and congruence of interests. Transformational leaders can use performance appraisal system as a vehicle for individualizing the development of subordinates and guiding their future career development paths. Instead of simply catering to the immediate self-interests of followers, the transformational leader broadens followers' interest towards transcending self-interests for the good of the group, by increasing awareness about the issues of consequence, and increasing the need for growth and self-actualization. As building of inspiration and self-confidence is associated with transformational leadership, effort and performance from subordinates of such leaders are beyond normal expectations. Transformational leadership results in increased employee satisfaction (Waldman, Bass & Einstein, 1987). Great Lakes Herald Vol 3, No 1, March 2009 Page 25 Organizational Commitment Organizational commitment has been defined and measured in several different ways. Attitudinal organizational comitment is the strength of an individual's identification with, and involvement in, a particular organization (Leong, Furnham & Cooper, 1996). Two distinct theoretical orientations have emerged in defining organizational commitment: moral and calculative. Organizational commitment from a moral orientation is measured along three attitudinal factors: identification, involvement, and loyalty. Identification is the degree to which employees accept the organization's goals, values, and objectives as their own. It is the basis for attachment to the organization. Involvement is the intensity of the employee's attachment to the organizational work role. Loyalty is an evaluation of the attachment to the organization as indicated by the employee's warm, affective regard for the organization. The calculative perspective, on the other hand, assumes that individuals negotiate and bargain with their organization to produce a positive balance of rewards and costs that they incur in the organization. The greater the positive relationship, the more personal commitment there will be towards the organization (Barge & Schlueter, 1988). There are three components of organizational commitment: affective, continuance, and normative commitment (Carmeli, 2003). Affective commitment refers to an employee's emotional attachment to, identification with, and involvement in the organization. Continuance commitment refers to an employee's perceived costs of leaving the organization. Normative commitment refers to an employee's obligation to remain in an organization (Bryant, Moshavi & Nguyen, 2007). The nature of these commitment components might differ, but one way or the other, they have a similar impact on employees' decision to continue or discontinue their employment with the organization (Caykoylu, Egri & Havlovic, 2007). The three-component model of commitment is important because, although all three forms of commitment decrease the likelihood of individuals leaving an organization, there are different antecedents and consequences associated with each form of commitment. Consequently, managers should be aware of the manner in which their employees are committed to the organization and attempt to foster the different components of commitment in their employees (Coleman, Irving & Cooper, 1999). An individual's attitude toward career is described as career commitment. Commitment to career affects individuals' behaviors. Highly career-committed individuals may be more motivated when their expectations are satisfied by the organization than those who are less committed. Regarding the effect of the organization's career-oriented practices perceived by the employees, individuals become affectively committed to the organization when they perceive that the company is pursuing internal promotion, provides proper training, and that supervisors do a good job in providing information and advice concerning their careers. Individuals with high career commitment and low affective commitment tend to leave the company because they do not believe that the current company is satisfying their career needs or goals. Employees' continuance commitment, on the other hand, is increased when they believe that the company is doing its best to prevent layoffs (Chang, 1999). Experiencing burnout would lead employees to be less committed to the organization, and thus more likely to quit their job. If employees are feeling emotionally exhausted by their work, are developing depersonalized views of the people they serve, and are feeling that they are not accomplishing much, then they would probably become less enthusiastic and accepting of the organization's goals, less dedicated to achieving them, and more prone to withdrawing from work (both psychologically and physically). The three aspects of burnout syndrome viz., higher levels of emotional exhaustion and depersonalization, and lower levels of personal accomplishment, are each related to lower levels of commitment. In addition, organizational commitment is positively correlated with pleasant supervisor and coworker contact, and negatively correlated with both types of unpleasant contact. Together, it can be summarized that interpersonal relationships at work may be instrumental in explaining the variation in stress reactions within a work setting which is homogenous in regard to job stressors (Leiter & Maslach, 1988). Great Lakes Herald Vol 3, No 1, March 2009 Page 26 There are three views provided for the relationship between locus of control (LOC), an indicator of beliefs, and affective commitment. First, those with an internal LOC (internals) are likely to report higher levels of commitment because they perceive that they have control over their work environment. Second, because internals are likely to perceive more alternatives than those with an external LOC (externals) and because choice is related to commitment, internals will feel more committed to the organization that they decide to join. Third, because internals are more likely to take action when dissatisfied with a situation (particularly by leaving the organization), only committed internals are expected to remain with an organization. Externals are more likely to perceive that they have fewer employment alternatives than internals, which in turn could lead externals to develop continuance commitment to their organizations (Coleman, Irving & Cooper, 1999). Studies on mentoring indicate that, the better the relationship between mentors and mentees in the formal mentoring program, the more the mentees will be motivated to work hard and feel committed to their organization. More specifically, mentees who are physically proximate to their mentors, who are under less time pressure, and have work schedules that do not conflict with those of their mentors are more motivated and committed than those who are physically distant from their mentors, are under more time pressures, and have work schedules that conflict with those of their mentors. In addition, mentees are more motivated and committed when their mentors like and respect them, and enjoy interacting with them (Orpen, 1997). Consistent with social exchange theory, perceived organizational support addresses the organization's commitment to its employees. More favorable exchanges should strengthen employee attraction to the employee relationship and increase commitment. Human resource practices such as internal labor markets, hiring selectivity, training, grievance resolution mechanisms, benefits, employee involvement, incentive pay, union pressure, compensation cuts, and downsizing affect organizational commitment. In particular, if one views employee involvement programs to be generally consonant with the decentralization of decision making (a structural method for increasing worker autonomy) and programs designed to increase employee 'voice', the overall pattern of results converges to provide support for an 'empowerment' effect. Thus, it appears that organizational practices and characteristics that provide for the expression of worker interests are the strongest organizational determinants of employee commitment (Fiorito, Bozeman, Young & Meurs, 2007). Organizational commitment is a very powerful predictor for some outcomes like job satisfaction and intention to quit, but much less for others like mental and physical health. Job satisfaction is a multi-dimensional construct and includes satisfaction with co-workers, with supervisors and with work in general (Walumbwa & Lawler, 2003). Organizational commitment is a good predictor of job satisfaction and intent to quit after taking into account occupational stress and demographic variables. The result showing organizational commitment as being negatively related to ill health and intention to quit, and positively related to job satisfaction implies that commitment is advantageous to individuals and to the organization (Leong, Furnham & Cooper, 1996). More empowerment, more effective supervision, less role ambiguity and better job motivating potential improve organizational commitment and job satisfaction levels. The more the roles expected of employees become unclear, the less committed they will become towards their organization. Employees' having to face role conflict does not necessarily translate into a direct decrease in commitment levels. However, it negatively influences job satisfaction levels and thus indirectly causes commitment levels to decrease (Caykoylu, Egri & Havlovic, 2007). Great Lakes Herald Vol 3, No 1, March 2009 Page 27 Stress-outcomes and goal-performance relationships are among the major areas in the management literature where the mediating role of commitment is apparent. It is generally assumed that committed employees are more prepared to achieve organizational goals than non-committed employees. Commitment has also been found to mediate the relationship between work-related characteristics and employee performance. There is partial mediation by organizational commitment between work climate and self-rated performance. Those found to be committed rate their performance more positively than those who are less committed. Commitment fully mediates the relationship between job security and withdrawal cognitions. On the other hand, organizational commitment partially mediates the relationship between work climate and immediate supervisor rated performance. That is, employees who positively perceive their work climate tend to show higher levels of performance, because they are highly committed (Suliman, 2002). Organizational commitment of followers is influenced by transformational leadership (Lok & Crawford, 2004). Transformational leadership theory emphasizes the role of empowerment as a central mechanism of building commitment to the organization's objectives (Bass, 1999). Empowered employees are more likely to reciprocate with higher levels of commitment to their organization. By showing respect and confidence in their followers, transformational leaders are able to bring a high degree of trust and loyalty on the part of followers to the extent that followers are willing to identify with the leader and the organization. As a result, followers trust in and emotionally identify with the leader, such that they are willing to stay with the organization—even under very difficult circumstances. Walumbwa, Wang, Lawler, and Shi (2004) used data from China and India and found that transformational leadership was positively related to organizational commitment and job satisfaction, and negatively related to job and work withdrawal. They also found that collective efficacy mediated the contribution of transformational leadership to job and work withdrawal and partially mediated the contribution of transformational leadership to organizational commitment and job satisfaction. Great Lakes Herald Vol 3, No 1, March 2009 Page 28 Hypothesis 1. Followers' organizational commitment is positively related to transformational leadership. Although transformational leadership has been conceptually and empirically linked to organizational commitment, there has been little empirical research focusing on the processes by which transformational leaders influence followers' level of organizational commitment. It is also possible that different moderating variables are involved in the effects of transformational leadership. Krishnan (2005) examined the role of leader-follower relationship duration in the effect of transformational leadership on follower's terminal value system congruence and identification (cognitive outcomes) and on attachment and affective commitment (affective outcomes). He found that the positive effect of transformational leadership on the outcomes is enhanced by the duration of relationship between leader and follower in the case of congruence and identification, but not in the case of attachment and affective commitment. Avolio, Zhu, Koh, and Bhatia (2004) used a sample of staff nurses in Singapore to show that psychological empowerment mediated the relationship between transformational leadership and organizational commitment. Similarly, structural distance between the leader and follower moderated the relationship between transformational leadership and organizational commitment. Culture could be another moderating variable in the relationship between transformational leadership and follower's organizational commitment.