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Transformational leadership and organizational value systems

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Athena Xenikou
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1 Abstract Purpose: The aim of this study was to examine the role of leadership within organizational settings as a social influence process having an impact on employees' perceptions of core organizational values, which, in turn, are related to individual members' cognitive and affective identification with their work organization. Design/Methodology/Approach: The hypothesized effects were tested in a sample of 230 full-time employees from the educational, financial, and public security sectors. Findings: The SEM results showed that the perception of innovation values mediated the effect of transformational leadership on cognitive identification and goal value orientation. Additionally, goal value orientation mediated the effect innovation and rules value orientations had on affective identification. Transactional contingent reward was found to be directly related to support and rules organizational values whereas an indirect effect of transactional contingent reward on goal value orientation via rules value orientation was also reported. These findings demonstrate the role of leadership in regulating apparently competing organizational values that contribute to organizational identification. Implications: The practical applications of these findings from an HRM perspective are discussed such as the different routes through which organizational members develop emotional and cognitive bonds with their work organization.