Transformational Leadership, Cohesion Perceptions, and Employee Cynicism About Organizational Change: The Mediating Role of Justice Perceptions

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2007 43: 327Journal of Applied Behavioral ScienceCindy Wu, Mitchell J. Neubert and Xiang Yi

PerceptionsCynicism About Organizational Change: The Mediating Role of Justice

Transformational Leadership, Cohesion Perceptions, and Employee

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Transformational Leadership, CohesionPerceptions, and Employee Cynicism AboutOrganizational ChangeThe Mediating Role of Justice Perceptions

Cindy WuMitchell J. NeubertBaylor University

Xiang YiWestern Illinois University

The impact of supervisors’ transformational leadership (TFL), informational andinterpersonal justice, and group cohesion perceptions on employee cynicism aboutorganizational change (CAOC) was investigated in a sample of 469 employeesfrom a large Chinese organization undergoing major organizational change. Resultsindicate that (a) TFL is negatively related to employee CAOC; (b) employee per-ceptions of group cohesion moderate the relationship between TFL and CAOCsuch that the higher the cohesion perceptions, the stronger the influence of TFL onemployee CAOC; (c) the moderating effect of cohesion perceptions on theTFL–CAOC relationship is fully mediated by interpersonal justice; and (d) infor-mational and interpersonal justice partially mediate the TFL–CAOC relationship.The theoretical and practical implications of the process by which TFL impactsCAOC are discussed.

Keywords: cynicism about organizational change; transformational leadership;justice perceptions; cohesion perceptions; China

THE JOURNAL OF APPLIED BEHAVIORAL SCIENCE, Vol. 43 No. 3, September 2007 327-351DOI: 10.1177/0021886307302097© 2007 NTL Institute

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Massive economic reform and the restructuring of Chinese firms have positionedChina as a significant global power in the marketplace (Z.-M. Wang, 2003). Yet,China remains one of the least studied regions by management scholars (Tsui,Schoonhoven, Meyer, Lau, & Milkovich, 2004). This scarcity in Chinese studies,particularly on organizational change in a Chinese context, raises the question ofwhether research findings on organizational change based on Western theories aregeneralizable to China because employees in emerging markets may hold differentvalues from those in developed countries (Kiggundu, 1989).

The Chinese culture is described as highly collective oriented, performance oriented,and institutional oriented (Hofstede, 1980; Javidan, Dorfman, de Luque, & House,2006; Triandis, 1995). The ambitious project GLOBE (Javidan et al., 2006) suggeststhat the Chinese culture values the cultivating and nurturing of personal relationshipsbecause of the Confucius influence that emphasizes relationships and community. Theperformance-oriented aspect of the Chinese culture also portrays an effective leader asone who can develop an exciting vision for employees (Javidan et al., 2006). Theoriesoriginated in Western cultures that are similar or related to this conceptualization ofeffective management and leadership practices in China are transformational leadership(TFL; Bass, 1997), employees’ subjective perceptions of cohesion in the group or workunit (Bollen & Hoyle, 1990), and the leader-referent, social aspects of perceived orga-nizational justice (including informational and interpersonal justice; Colquitt, 2001;Greenberg, 1993). This study theorizes and then examines the mediating and moderat-ing relationships among transformational leadership, informational justice, interper-sonal justice, group cohesion perceptions, and their influences on employees’ cynicalattitude toward organizational change in a Chinese organization that is undergoingmajor administrative change, including abolishment of lifetime employment, imple-mentation of a new performance evaluation system, and introduction of continuousimprovement programs.

Cynicism is characterized as frustration, disillusionment, and negative feelingstoward and distrust of a person, ideology, social convention, or institution (Andersson& Bateman, 1997), varying in its specificity from cynicism as a general personalitytrait to cynicism about business, business leaders, occupation, organization, and orga-nizational change (Wanous, Reichers, & Austin, 2004). It has particularly importantimplications in organizational change because the success of organizational change

328 THE JOURNAL OF APPLIED BEHAVIORAL SCIENCE September 2007

We wish to thank the editor and three anonymous reviewers for their helpful comments and suggestions.An earlier version of this article was presented at the Academy of Management meetings in Honolulu, HI,August 2005. This project was supported by the Faculty Travel Assistance Grant from Baylor University.

Cindy Wu is an assistant professor in the Department of Management at Baylor University. Her currentresearch focuses on leadership, organizational justice, and service management.

Mitchell J. Neubert is Chavanne Chair of Christian Ethics in Business and the H.R. Gibson Chair inManagement Development at Baylor University. His teaching and research focus is to equip principledleaders to effectively lead individuals, teams, and organizational change.

Xiang Yi is an assistant professor in the Department of Management at Western Illinois University. Herresearch interests include leadership, cross-cultural studies, creativity, and work–family issues.



relies on employees’ commitment, discretionary performance, and follow-through(Reichers, Wanous, & Austin, 1997). However, an organizational change process usu-ally creates uncertainty and inevitably encounters setbacks or challenges before thechange effort is judged an obvious success. In emerging economies such as China,administrative organizational change (change of organizational structure and admin-istrative processes such as new ways to recruit and train personnel or different allo-cations of firm resources and profits) tend to encounter even greater resistance relativeto technical change (introduction of new products, services, and production processtechnology) because it produces a greater departure from existing organizational rou-tines (Zhou, Tse, & Li, 2006). Where uncertainty abounds and difficulties arise,employee cynicism can emerge and reduce commitment to organizational change,which subsequently impacts individual performance (Neubert & Cady, 2001).

Although previous studies on organizational change in China have shown thatcompany leaders’ charisma contributes to employee job attitudes during change(Zhou et al., 2006; Zhou, Gao, Yang, & Zhou, 2005), they did not consider theequally important role of first-line supervisors. An exploratory study indicated thatthe effectiveness of one’s supervisor is an important antecedent to employee cyni-cism about organizational change (CAOC; Wanous, Reichers, & Austin, 2000). Yet,what supervisory effectiveness entails in the context of change remains unclear.Based on theories of leadership, we test the influence of supervisors’ transforma-tional leadership because of its collective orientation that is congruent with theChinese culture (Jung & Avolio, 1999). Transformational leadership is defined as aleadership style that stimulates followers to change their beliefs, values, capabilities,and motives to raise performance beyond self-interest for the benefit of the organi-zation (Avolio, 1999). Although identified as a “change-oriented leadership”(Eisenbach, Watson, & Pillai, 1999), TFL has rarely been examined in an organiza-tional change context. Some researchers even contend that the absence of continu-ous change may make the charisma or idealized influence components of TFLunnecessary (Hinkin & Tracey, 1999). The first goal of this study is to address thisimportant issue. Specifically, we test whether TFL helps reduce employees’ cynicalattitude about organizational change in a Chinese context. In addition to this directeffect, we also examine the process through which TFL influences employee CAOC.

Although numerous studies on TFL report positive relations to employees’ per-formance and behavior (e.g., Judge & Piccolo, 2004), these studies still leave manyquestions unanswered (Yukl, 1998). One such question is the mechanism by whichTFL leads to enhanced employee performance and behavior (Bass, 1999; Bono &Judge, 2003; Dvir, Eden, Avolio, & Shamir, 2002). We propose that employees’informational and interpersonal justice perceptions are mechanisms that mediateTFL influences. Informational justice and interpersonal justice, formerly conceptu-alized as interactional justice, are differentiated from procedural justice in that theirconsequences are delivered through leaders as opposed to the organization as asystem (Masterson, Lewis, Goldman, & Taylor, 2000). These constructs are identi-fied as leader referenced and therefore would be closely related to leadership effec-tiveness; yet, we are not aware of any studies examining how particular types ofleadership influence employee informational and interpersonal justice perceptions.

Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE 329



The second goal of this study therefore is to test whether employees’ informationaland interpersonal justice perceptions mediate the transformational leadership influ-ence on employee cynical attitude about organizational change in a Chinese setting.

The context of this study, a Chinese company undergoing major administrativechange, plays a crucial role that raises another important research question: DoesTFL influence employee CAOC in this particular context as the theories rooted inthe Western cultures predict? Disagreement has existed among scholars of TFL onwhether the effect of TFL, a leadership theory originated in the Western culture, istransferable cross-culturally (Bass, 1997; Pillai, Scandura, & Williams, 1999).Following previous studies (Jung & Avolio, 1999; Spreitzer, Perttula, & Xin, 2005;Walumbwa & Lawler, 2003), we adopt a uniform functional universality perspective(Bass, 1997), which refers to the generalizability of a relationship between two vari-ables cross-culturally but to varying degrees, arguing that the effect of TFL wouldbe more pronounced in collectivist societies such as China (Jung & Avolio, 1999;Walumbwa & Lawler, 2003) because of its cultural emphasis on aligning individualinterests and values to those of the group or organization (Shamir, House, & Arthur,1993). Although people from collectivist cultures tend to value the needs and wantsof the in-group more than those of individuals (Hofstede, 1980), the degree to whichthey see the group as in-group is determined by their own subjective evaluation(Triandis, 1995). Along this line, we take a step further to test whether an individ-ual’s perception of group cohesion, perception about group closeness, similarities,bonding, and his or her personal motivations to remain in the group (Carron &Brawley, 2000), further enhances the influence of TFL. Our third goal therefore is toexamine whether individual employees’ group cohesion perceptions moderate andfurther enhance the impact of TFL on employee CAOC.

In sum, the current study seeks to contribute to the literature by examining the influ-ence of TFL on employees’ cynical attitude in organizational change in a Chinese con-text. First, we test whether supervisors’ TFL helps reduce employee CAOC. Next, wetest whether employee informational and interpersonal justice perceptions mediate theinfluence of TFL on employee CAOC. Third, we examine whether employees’ per-ceptions about group cohesion moderate this relationship.

CAOC, JUSTICE PERCEPTIONS, ANDTRANSFORMATIONAL LEADERSHIP

Cynicism in general has been described as a personality trait (Pope, Butcher, &Seelen, 1993). But in the organizational setting, research has found unpleasant experi-ence or psychological contract breach as an antecedent of cynicism (Andersson &Bateman, 1997; Johnson & O’Leary-Kelly, 2003), suggesting that it is susceptible tocontextual influences. Employee cynicism about organizational change is defined as “apessimistic viewpoint about change efforts being successful because those responsiblefor making change are blamed for being unmotivated, incompetent, or both” (Wanouset al., 2000, p. 133). Supervisors are likely viewed as proximal influences on theirdirect reports because they are perceived as the principal agents of the organization in




communicating necessary information and providing support to employees duringorganizational change (Cole, Bruch, & Vogel, 2006; Larkin & Larkin, 1996). Initialresearch findings have supported this notion. Cole et al. (2006) for example found thatsupervisors’ support for employees is negatively related to employee CAOC. Wanouset al. (2000) also reported that supervisor behaviors such as keeping people informed,providing information, caring about employees, and trying to understand eachemployee’s point of view are negatively related to employee CAOC. Similar resultswere also reported in longitudinal study conducted in a union setting, where after thechange of committee by reelection, union committee persons were judged as moreeffective when they demonstrated these behaviors (Wanous & Reichers, 1998). Manybehaviors depicted in these studies pertain to issues of the transformational leadershipstyle and informational and interpersonal justice.

Transformational leaders motivate employees to transcend individual goals for thesake of the team or organization (Bass, 1985). They achieve this by articulating a clearvision, bonding individual and collective interests (Pawar & Eastman, 1997), and trans-forming the needs, values, preferences, and aspirations of followers from self intereststo collective interests (Shamir et al., 1993). Transformational leadership is composed offour dimensions: individualized consideration, inspirational motivation, idealized influ-ence (trait and behavior), and intellectual stimulation (Bass, 1985). Individualized con-sideration involves leaders paying attention to each follower’s needs and wants bymentoring, supporting, encouraging, and coaching followers to use their competence.Inspirational motivation involves leaders articulating a compelling vision to be achievedby using affective and values-relevant arguments to generate a sense of identificationwith the collectivity. Idealized influence is concerned with leaders serving as a rolemodel to the followers by sacrificing personal benefits for the good of the group, settinga personal example for the followers, and holding a high moral standard in every deci-sion. Intellectual stimulation entails leaders challenging their followers to view prob-lems from different perspectives and encouraging them to be problem conscious. Arecent meta-analysis confirmed the validity of transformational leadership as a positiveinfluence on employee satisfaction with one’s supervisor, follower job satisfaction, fol-lower motivation, and leader effectiveness (Judge & Piccolo, 2004). Cross-cultural find-ings also generally agree with these positive relationships, although the strength mayvary (Jung & Avolio, 1999; Walumbwa & Lawler, 2003). Followers under TFL tend torate supervisors as satisfactory and effective; therefore, these leaders are less likely tobe judged as incompetent or unmotivated, and thus, employee CAOC would be low.

Robust relationships with such individual work outcomes as organizational citi-zenship behavior, job satisfaction, organizational commitment, turnover intentions,and job performance have been established in organizational justice research(Cohen-Charash & Spector, 2001; Colquitt, Wesson, Porter, Conlon, & Ng, 2001;Rupp & Cropanzano, 2002). The behavior of a management representative particu-larly is concerned with interactional justice (Bies & Moag, 1986), which is referredto as the social side of justice and can be further decomposed into two separatefacets: informational justice and interpersonal justice (Greenberg, 1993) as shown byrecent empirical evidence (Colquitt, 2001). Informational justice is concerned withthe degree to which employees are provided with knowledge and explanations about




procedures that are implemented and the outcomes that are distributed. Interpersonaljustice characterizes the degree to which employees are treated with respect, dignity,and sensitivity by the authority figure they interact with (Greenberg, 1993). Beingthe principal agents of the organization through which information flows (Cole et al.,2006), immediate supervisors are management representatives who impact justiceperceptions through their interpersonal behavior (Cohen-Charash & Spector, 2001).Therefore, immediate supervisors’ leadership style is most likely to influenceemployees’ CAOC through informational and interpersonal justice perceptions.Particularly, supervisors’ TFL style is likely to influence employee CAOC by ele-vating informational and interpersonal justice perceptions.

The definition of TFL also suggests that informational and interpersonal justice per-ceptions mediate the influence of TFL on CAOC. Specifically, leaders who demon-strate individualized consideration seek to understand each follower’s concerns aboutorganizational change and therefore are able to address them effectively by listeningattentively, coaching, and mentoring based on individual employee’s needs, abilities,and aspirations (Bass, 1997). As a result, followers are less likely to blame the changeagent for being unconcerned and incompetent because they are provided with relevantinformation (i.e., informational justice) in a supportive manner (i.e., interpersonal jus-tice). Similarly, leaders who use inspirational motivation are able to concurrently com-municate information and promote individual worth. Such leaders deliver informationabout organizational change through their personal enthusiasm and a clear vision. Thispersonal approach depicts a vivid picture of the future that is to be achieved collec-tively and prevents followers from wavering in organizational change because it pro-vides information as to what needs to be done and why (Bass, 1997). Therefore,employees are more likely to feel esteemed and informed and, as a result, less likelyto be pessimistic or cynical about the organizational change.

Likewise, idealized influence and intellectual stimulation are likely to reduceemployee CAOC because of enhanced informational and interpersonal justice.Sincere optimism exhibited by leaders’ own conduct in embodying vision-consistentprinciples and values instills in followers the pride and confidence to envision them-selves in the new vision (Bass, Avolio, Jung, & Berson, 2003). Because leaders arethe makers of the meaning in an organization (Brockner & Higgins, 2001), leaderswho demonstrate idealized influence provide information about organizationalchange by effectively translating the change into approved behaviors that would leadto positive results. This role modeling and the process of instilling pride in employ-ees are likely to enhance informational and interpersonal justice. Similarly, leaderswho practice intellectual stimulation encourage followers to express creative ideasby questioning old assumptions, traditions, and beliefs. The freedom to experimentand possibly fail conveys that employees and their ideas are valued. Furthermore, italso allows employees to remain cognitively flexible and therefore be more open tonew ideas (Deci & Ryan, 1980). Thus, employees are more likely to feel valued andunderstand the rationale behind the change when faced with uncertainty and chal-lenge caused by organizational change. Consequently, they are less likely to be pes-simistic about the likely success of the change initiative as a result of just treatmentby their supervisors.




Based on the aforementioned discussion, we propose the following hypotheses:

Hypothesis 1: Supervisor TFL is negatively related to follower CAOC.Hypothesis 2: Informational justice perception mediates the relationship between supervisor TFL and

employee CAOC.Hypothesis 3: Interpersonal justice perception mediates the relationship between supervisor TFL and

employee CAOC.

THE MODERATING ROLE OF PERCEIVED GROUP COHESION

Because leadership is embedded within the organization, contextual characteris-tics play a significant role in the emergence and effectiveness of leadership (Osborn,Hunt, & Jauch, 2002). Lau, Tse, and Zhou (2002) showed that at least for Chinesecompanies, company group culture is positively related to the degree to whichemployees are attuned to, feel positive about, and have reduced skepticism of theresults of change. In a similar vein, Lau and Ngo (2001) also indicated that Chinesecompanies with a group orientation have a higher tendency to change and initiateinnovative activities. Consistent with the collectivist Chinese culture, companygroup culture seems to create an environment that offers receptivity for the change-oriented and collective-oriented transformational leadership (Pawar & Eastman,1997). However, cultural differences in the way leadership influences are manifestedare not only across cultures but also within cultures (Pillai et al., 1999), whether it isnational culture or company culture. Social psychologists therefore have advocatedstudying “subjective culture” that assesses individuals’ mental representations of thecontext in which they exist as opposed to the external structures and artifacts(Triandis, 1995). We measure this subjective evaluation of company group cultureembedded in the Chinese collectivist culture by assessing individual employees’ per-ceptions of cohesion in their work unit.

Although group cohesion has been treated as a group-level variable (Mullen &Copper, 1994), defined as the group members’ tendency to stay with the group or alarger social entity (Bollen & Hoyle, 1990; Dion, 2000), researchers also recognize thatit is individuals’ unique experience that contributes to their own perception of groupcohesion (Dion, 2000; Podsakoff & MacKenzie, 1995). Group cohesion perceptionsparticularly reflect an individual’s perceptions about group closeness, similarity, bond-ing, and his or her personal motivations to remain in the group (Carron & Brawley,2000). In contrast to the composite of group members’ feelings toward the group,Bollen and Hoyle (1990) contended that measuring each member’s perception of cohe-sion captures the role the group plays in an individual member’s life and therefore is abetter predictor of other subjective phenomena (e.g., individual attitudes) expressed byeach group member. The appropriate level of cohesion to be measured should followclosely from one’s theoretical question (Dion, 2000). Given that our research questionwas concerned about individual group members’ perceptions, we regarded cohesion asan individual-level perception that captures each individual’s unique experience.

We propose that an individual’s perception of group cohesion may facilitatereceptivity to TFL because aspects of TFL employ references to the collective,




which highlights the salience of collective identity in employees’ self-concept(Shamir et al., 1993) and is congruent with a group environment perceived to behighly cohesive. Specifically, when employees perceive their work unit as cohesive,they sense that bonding and closeness of the work unit are strong, an indication oftheir ties to the in-group (Nibler & Harris, 2003). Collectivists, including Chinese,behave very differently in the presence of in-groups and out-groups. The emphasison collective welfare, harmony, and duties typically applies only to the in-groups andusually does not extend to out-groups (Kim, 1994). Collectivists in their in-groupsvalue obedience to the in-group authority, security, and harmony (Nibler & Harris,2003), which enable the leader to more easily exert his or her influence. It followsthat in a Chinese context, when leaders frame the organizational change as a collec-tive vision and joint effort, individuals who treat their work unit as an in-group,which is manifested by the perceived strong bonding and closeness in the workplace,are more ready to identify with and be influenced by collective-oriented TFL.Therefore, we propose the following hypothesis:

Hypothesis 4: Employees’ perceptions about group cohesion moderate TFL influences on employeeCAOC such that the higher the group cohesion perceptions, the stronger the TFL–CAOC relationship.

Moreover, the aforementioned discussion also suggests that perceptions of infor-mational and interpersonal justice could be the mechanisms by which the overallmoderated effect of TFL on CAOC is produced. Specifically, TFL, because of itscollective focus, would yield a greater magnitude of employee attitudinal and behav-ioral results when employees’ work unit is perceived as congruent with this collec-tive approach of leadership. That is, transformational leaders are likely to beperceived as providing employees with relevant information in the change processbecause of their ability to articulate a clear collective vision and the rationale behindit and because of them serving as a role model to show employees the appropriatebehavior in the midst of inevitable uncertainties in the change process. This effect ofTFL is further enhanced by a work unit that is close-knit because it provides a facil-itating context for the collective-oriented TFL.

Furthermore, the social information processing perspective of motivation sug-gests that individuals develop their attitudes and behaviors based on the availablesocial information that is salient and consistent (O’Reilly & Caldwell, 1985;Salancik & Pfeffer, 1978). One such source of social information is the immediatesocial context (e.g., networks of coworkers) one is in. The context may influenceone’s interpretation of the situation by making certain aspects of the situation salientand by exposing individuals to the expressed attitudes of others. Because groupcohesion depicts group closeness, similarity, bonding, and individuals’ desire andmotivation to maintain their membership in the group (Carron & Brawley, 2000),individuals in cohesive groups tend to comply with the salient attitudes and expec-tations in the social context. As such, researchers contend that group cohesion facil-itates information consistency in the environment (O’Reilley & Caldwell, 1985). Ina similar vein, we argue that the effect of informational justice perceptions on CAOC




would be enhanced through the affirmation from unit members who share similarand consistent opinions (i.e., high group cohesion). We propose:

Hypothesis 5: Informational justice mediates the moderated relationship between TFL, group cohe-sion perceptions, and employee CAOC such that the higher the group cohesion perceptions, (a)the stronger the influence of TFL on informational justice and (b) the stronger the influence ofinformational justice on CAOC.

Likewise, we also expect that interpersonal justice mediates the moderating effectof cohesion perceptions. Specifically, transformational leaders, because of their per-sonal and individualized coaching style of leadership, tend to be perceived as treat-ing employees with respect and dignity, thereby elevating interpersonal justiceperceptions. Meanwhile, because of the collective vision depicted by transforma-tional leaders, a context perceived as being cohesive provides congruency with thecollective-oriented TFL and therefore would magnify the TFL influence on inter-personal justice. In addition, the heightened interpersonal justice perceptions,through the affirmation of members in a close-knit unit, would further increase in itsmagnitude of influence on employee CAOC based on the social information pro-cessing perspective. Therefore, we propose:

Hypothesis 6: Interpersonal justice mediates the moderated relationship between TFL, group cohesionperceptions, and employee CAOC such that the higher the group cohesion perceptions, (a) thestronger the influence of TFL on interpersonal justice and (b) the stronger the influence of inter-personal justice on CAOC.

We presented the conceptual framework of the hypothesized relationships inFigure 1.

METHOD

Research Setting, Sample, and Procedures

The setting for this research was a large Chinese petroleum company undergoingmajor administrative organizational change. The changes included abolishing life-time employment, implementing a new performance evaluation system, and intro-ducing continuous improvement programs through quality circles and regularmeetings and forums. Data were collected through survey administration a year afterthe changes began. This time frame ensured that employees had ample time to formtheir opinions about change as well as to experience the influence of their supervi-sors in the midst of the change.

In phone interviews with the general manager prior to the survey administration,we were able to establish that these were the first substantial change initiativeswithin the organization, and therefore employees’ cynical attitudes about organiza-tional change were not likely to be influenced by their previous experience withchanges in the company. Furthermore, the norm of stability in our state-owned focal




organization in a noncompetitive planned economy (at least up to the time of ourdata collection) also excluded the possibility of employee cynicism due to lack ofchange attributed to leaders’ lack of capability or motivation to initiate change(Wanous et al., 2004).

We conducted an introductory session with all the managers (including the HRstaff) to inform them to distribute the informed consent first, collect back the signedconsent, and then administer the anonymous survey. We then handed the surveys tothese managers to distribute to their first-line supervisors and employees after theyagreed to follow this survey administration procedure. The completed surveys werereturned anonymously and directly to the human resource department via the inter-nal company mailing system to reduce employees’ socially desirable responses.Among the 650 surveys distributed, 467 surveys were completed and usable, result-ing in a response rate of 72%. Of the respondents, 68% in the sample were men, and32% were women. The average age was 35.7 years old. The average job tenure was15.6 years. Of the respondents, 74% were not in any managerial positions. Allrespondents were Chinese.

Measures

We followed Brislin’s (1980) translation-back translation procedure to create aChinese version of the questionnaire.

Cynicism about organizational change. We used Reichers et al.’s (1997) eight-item scale to measure employee CAOC. Participants responded to a 5-point scaleranging from 1 (strongly disagree) to 5 (strongly agree). A sample item is “The


TransformationalLeadership

(TFL)

InformationalJustice

Perceptions (IFJ)

InterpersonalJustice

Perceptions (IPJ)

Cynicism aboutOrganizational

Change (CAOC) Cohesion

Perceptions

FIGURE 1: Conceptual Framework for the Study



people who are responsible for solving problems around here don’t have the skillsthat are needed to do their jobs.” The coefficient alpha was .86.

Transformational leadership. We employed the Multifactor Leadership Questionnaire(MLQ) Form 5X-Short (Bass & Avolio, 1995) to measure TFL. Each dimension ofTFL was measured with four items on a 5-point scale ranging from 1 (strongly dis-agree) to 5 (strongly agree). Sample items include “My supervisor talks optimisti-cally about the future” and “My supervisor gets me to look at problems from manydifferent angles.” In the instructions, we asked the participants to evaluate theirimmediate supervisor based on their interactions on issues relevant to the organiza-tional change. Similar to prior research, the dimensions of TFL showed strong cor-relations (rs = .43 to .69). Because prior research indicated that dimensions failed toshow discriminant validity (Bycio, Hackett, & Allen, 1995) and because we did notspecify hypotheses on dimensions of TFL, we averaged the 20 items to form a sin-gle index of TFL. This practice is also consistent with prior research on TFL usingthe MLQ as the instrument (e.g., Bass et al., 2003; Bono & Judge, 2003; Dvir et al.,2002). The coefficient alpha was .89.

Group cohesion perceptions. We measured employee perceived cohesion by thethree-item measure developed by Podsakoff and MacKenzie (1994). Participantsresponded to the items on a 5-point scale ranging from 1 (strongly disagree) to 5(strongly agree). A sample item is “The members of my work group stand up foreach other.” The coefficient alpha was .75.

Informational and interpersonal justice. We used Colquitt’s (2001) five-itemmeasure to assess informational justice and his four-item measure to assess inter-personal justice. Participants responded to a 5-point scale ranging from 1 (not at all)to 5 (completely). They were asked in the instructions to evaluate their interactionswith their immediate supervisor on the matters relevant to the organizational change.A sample item for informational justice is “Has he/she communicated details in atimely manner?” A sample item for interpersonal justice is “Has he/she treated youwith respect?” Coefficients alpha for informational justice and interpersonal justicemeasures were .84 and .85, respectively.

Control variables. We controlled for respondents’ sex, age, education, organiza-tional tenure, and managerial tenure to ensure that the influence of leadership isabove and beyond relevant demographic variables. We included these demographicvariables because of their potential relevance to the independent and dependent vari-ables as suggested by previous research and the top management of the company.Particularly, because of lifetime employment, the extremely low turnover rate untilthe organizational change took place, and the tradition of promotion from within,employee age, education, organizational tenure, and managerial tenure all helpedcapture the level of status an employee enjoyed, which was difficult to measure yetpotentially critical in influencing employees’ perceptions of not only organizationalchange but justice and group cohesion. Sex was also included as a control based on




the top management’s suggestion that because the majority of the managerial staffin this company was men, female respondents were likely to have different perspec-tives of organizational change relative to their male counterparts. Including thesecontrol variables would help us partition out the variance attributable to the alterna-tive explanations.

Remedies and Assessment of Common Method Biases

Because all of our measures were taken from the employees, we took several pro-cedural remedies related to questionnaire design to minimize common methodbiases following the suggestions by Podsakoff, MacKenzie, Lee, and Podsakoff(2003). First, we reordered the items in the questionnaire so that the dependent vari-able followed rather than preceded the independent variables. This tactic reduces theeffects of consistency artifacts (Podsakoff & Organ, 1986). Second, to minimize thepossibility that social desirability serves as the common factor in explaining vari-ances, we ensured anonymity in a statement in the informed consent that urgedrespondents to answer as honestly as possible. Third, all the question items in thesurvey were adopted from well-validated measures that have been tested and refinedto include items that measure a construct with a clearly defined domain; therefore,very little room was left for subjective interpretations that allow consistency artifactsto govern the responses to questions.

In addition, we conducted a Harman’s single-factor test (Podsakoff et al., 2003;Podsakoff & Organ, 1986) to examine whether one single factor emerged to accountfor the majority of the variances in the variables. The result indicated that eight fac-tors with eigenvalues greater than one were extracted, accounting for 61% of thevariance in total. The first component accounted for 30% of the total variance, indi-cating that the single factor did not account for the majority of the variance.Furthermore, we conducted a confirmatory factor analysis (CFA) with all variablescombined as one factor. The poor model fit with the data (χ2/df = 18.22; goodness-of-fit index [GFI] = .78; comparative fit index [CFI] = .77; root mean square error ofapproximation [RMSEA] = .18) suggested that although obtained from a singlesource, the study variables are unlikely to be dominated by one unobserved commonvariance factor. Therefore, we concluded that common method bias was not a majorconcern in the current study.

RESULTS

Following the methods employed by H. Wang, Law, Hackett, Wang, and Chen(2005), we first conducted three tests to verify the distinctiveness of TFL and the twohypothesized mediating variables, informational justice and interpersonal justice.First, we conducted a dimension-level CFA including TFL, informational justice,interpersonal justice, cohesion perceptions, and CAOC in the model. We used fourdimensions of TFL as the indicators and randomly averaged the informational jus-tice, interpersonal justice, cohesion perceptions, and CAOC items to create two




indicators for each construct (H. Wang et al., 2005). Second, we adopted Cohen andCohen’s (1983) test of correlations from a single sample to verify whether there issignificant difference in the correlations between the independent variable (CAOC)and each of the variables under study. Unequal correlations would suggest discrim-inant validity. Finally, in hierarchical regression, we entered TFL and observed thechange in R2 after entering informational justice and interpersonal justice.Significant change in R2 would also imply that these two justice perceptionsexplained additional variance in CAOC above and beyond TFL.

Table 1 shows the CFA results. As indicated, the baseline five-factor model fit thedata adequately (χ2 = 232.24; df = 55; GFI = .94; CFI = .95; RMSEA = .07). We alsotested alternative models, combining informational justice with TFL (Model 1),interpersonal justice with TFL (Model 2), two justice perceptions with TFL (Model3), and all five factors (Model 4), against the baseline five-factor model. Significant∆χ2 tests showed that all of the alternative models fit the data significantly worsethan the five-factor model, providing evidence for distinctiveness of TFL, informa-tional justice, interpersonal justice, cohesion perceptions, and CAOC.

The results of Cohen and Cohen’s (1983) t test of differences between twoPearson correlations from the same sample also suggest discriminant validitybetween transformational justice and justice perceptions. The correlation betweenCAOC and TFL is significantly different from both those between CAOC and infor-mational justice (t = 2.26, df = 464, p < .05) and between CAOC and interpersonaljustice (t = 2.49, df = 464, p < .01). Finally, the significant R2 change in the regres-sion equation when informational justice was entered (∆F = 36.39, p < .01) andwhen interpersonal justice was entered (∆F = 51.97, p < .01) after controlling forTFL also indicated that informational justice and interpersonal justice perceptionsexplained variance in CAOC above and beyond TFL. This and the results from theother two tests suggest that TFL, informational justice, and interpersonal justice aredistinct constructs.

Table 2 displays means, standard deviations, and correlations among all vari-ables. CAOC is significantly and negatively related to TFL, informational justice,interpersonal justice, and cohesion perceptions. TFL is positively and signifi-cantly related to interpersonal justice and informational justice and cohesionperceptions.

To test the proposed moderation hypothesis, we conducted hierarchical regressionanalyses. Following Aiken and West’s (1991) suggestions, we centered variables thatare the components of the interaction term in the moderation analysis. Table 3 sum-marizes the results of regression analysis for testing Hypothesis 1, which states thatsupervisors’ TFL is negatively related to followers’ CAOC, and Hypothesis 4, whichstates that employees’ perceptions about group cohesion moderate the TFL influ-ences on employee CAOC. At Steps 1 through 4, we entered the control variables,TFL, cohesion perceptions, and the interaction between TFL and cohesion percep-tions. Table 2 indicates that the ∆R2 associated with TFL was statistically significant(in Step 2), lending support to Hypothesis 1. The R2 change was also significant withthe addition of the interaction term, indicating the presence of significant interactionbetween TFL and cohesion perceptions. Figure 2 illustrates that the pattern of the




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To test mediated moderation, we followed the steps suggested by Muller, Judd, andYzerbyt (2005). Similar to Baron and Kenny’s (1986) steps for testing mediation, thereare also several steps to test mediated moderation. We also centered variables that arethe components of the interaction term in the mediated moderation analysis. According


TABLE 3

Results of Regression Analysis of Cynicism About Organizational Change onTransformational Leadership, Cohesion Perceptions, and Their Interaction

Independent Variable R2 ∆R2 ∆F β a

Step 1: Controls .01 .01 0.58Sex –.05Age –.04Education .02Organizational tenure –.01Managerial tenure .05

Step 2: Transformational leadership .12** .11** 62.95** –.37**Step 3: Cohesion perceptions .12** .00 0.12 –.05Step 4: Transformational Leadership × Cohesion Perceptions .15** .02** 11.69** –.16**

a. Beta weights are reported for the final step (n = 469).*p < .05, two-tailed test. **p < .01, two-tailed test.

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to Muller et al. (2005), mediated moderation can only be established if first of all theoverall moderating effect (between TFL and cohesion perceptions) is significant on thedependent variable (CAOC). Then, either or both of the following two conditions needto be met: (a) The effect of the overall interaction (between TFL and cohesion percep-tions) on the mediators (informational justice and interpersonal justice) should benonzero and the partial effects of the mediators (informational justice and interpersonaljustice) on the dependent variable (CAOC) should also be nonzero, and/or (b) theeffects of the independent variable (TFL) on the mediators (informational justice andinterpersonal justice) are nonzero and the interactional effects between the moderator(cohesion perceptions) and mediators (informational justice and interpersonal justice)on CAOC are also nonzero. Lastly, the moderation of the residual effect of the inde-pendent variables (the interaction between TFL and cohesion perceptions on CAOCwhen the mediators and the interactions between the mediators and moderator areincluded in the equation) on CAOC should disappear or be reduced in magnitude com-pared to the overall effect of moderation. We summarized the statistical results for test-ing mediated moderation in Table 4.

Table 4 shows the hierarchical regression results for Hypotheses 2 through 6regarding the mediating roles of informational and interpersonal justice. In Model 1,we regressed employee CAOC on control variables, TFL, group cohesion percep-tions, and the interaction between TFL and group cohesion perceptions. Both TFL


TABLE 4

Results of Hierarchical Regression Analysisfor Mediated Moderation (n == 469)

Model 1: Cynicism Model 2a: Model 2b:About Organizational Informational Interpersonal Model 3:

Independent Variables Change (CAOC) Justice (IFJ) Justice (IPJ) CAOC

ControlsSex –.05 .03 .09* –.01Age –.04 –.11* –.13* –.10Education .02 –.00 –.06 –.00Organizational tenure –.01 .15** .05 .03Managerial tenure .05 .08* .05 .08Transformational leadership (TFL) –.37** .59** .45** –.11*Moderator: Cohesion perceptions –.05 .12** .09* –.03TFL × Cohesion Perceptions –.16** .01 –.12** –.05

MediatorsIFJ –.20**IPJ –.33**IFJ × Cohesion Perceptions –.07 IPJ × Cohesion Perceptions –.17**

F 9.93** 47.46** 26.87** 16.10**R2 .15 .45 .32 .30Adjusted R2 .13 .44 .30 .28df 460 460 460 458

*p < .05, two-tailed test. **p < .01, two-tailed test.



and the interaction term contributed significantly to CAOC. In Models 2a and 2b, thehypothesized mediators, informational justice and interpersonal justice, wereregressed on the control variables, TFL, group cohesion perceptions, and the overallinteraction term (between TFL and cohesion perceptions). Because we hypothesizedthat both informational and interpersonal justices would be the mediators, a multi-variate regression analysis was first conducted for the omnibus test, with the sameindependent variables included in Model 1. The omnibus multivariate regressionanalysis showed that the independent variables overall contributed to informationaland interpersonal justice (Wilks’s Λ = .50, F = 24.09, df = 16, p < .01). Therefore,we proceeded to conduct two univariate regression analyses on informational andinterpersonal justice, respectively, to identify whether TFL and the interaction termwere significant. As Models 2a and 2b indicate, TFL contributed significantly toboth informational justice and interpersonal justice above and beyond the controlvariables. The interaction term however was significantly related to only interper-sonal justice but not informational justice. In Model 3, we regressed CAOC on con-trol variables, TFL, cohesion perceptions, the interaction between TFL and cohesionperceptions, two hypothesized mediators (informational justice and interpersonaljustice), the interaction between informational justice and cohesion perceptions, andthe interaction between interpersonal justice and cohesion perceptions.

The results indicate that both TFL and the interaction between TFL and cohesionperceptions contributed to CAOC significantly and negatively (Model 1), which ful-filled the first condition. The interactional effect between TFL and cohesion percep-tions was significant on interpersonal justice but not informational justice (Models2a and 2b), but both interpersonal and informational justice were significant whenregressed on CAOC (Model 3). Therefore, Condition a in Step 2 is fulfilled for inter-personal justice but not informational justice. Furthermore, the effects of TFL oninformational justice and interpersonal justice were significant (Model 2), and theinteraction between cohesion perceptions and interpersonal justice was significanton CAOC, whereas the interaction between cohesion perceptions and informationaljustice was not significant (Model 3). As a result, Condition 2b for mediated moder-ation was also fulfilled for interpersonal justice but not informational justice. Finally,the moderating effect of cohesion perceptions on TFL was reduced from –.16 (p <.01, Model 1) to –.05 (ns, Model 3), which fulfilled the last condition for mediatedmoderation. These findings suggest that the overall moderating effect of cohesionperceptions on the TFL–CAOC relationship was fully mediated by interpersonal jus-tice but not informational justice. Hypothesis 6 was therefore supported, whereas wefound no evidence supporting Hypothesis 5.

Although informational justice did not mediate the moderation, TFL was signifi-cant when predicting informational justice and interpersonal justice (Models 2a and2b), and the effect of TFL on CAOC was reduced from –.37 (p < .01 in Model 1) to–.11 (p < .05 in Model 3) when both mediators (interpersonal and informational jus-tice) were included in the model. These findings indicate that informational justiceand interpersonal justice partially mediated the effect of transformational leadershipon CAOC, lending support to Hypotheses 2 and 3. The results of the hypotheses test-ing are presented in Figure 3.




DISCUSSION

Despite the extensive research on transformational leadership, an immediatesupervisor’s transformational leadership rarely has been examined in the context oforganizational change in spite of the suggestion that supervisory effectiveness is anantecedent to employees’ attitudes about change (Wanous et al., 2000). We are alsonot aware of studies examining supervisors’ transformational leadership influencesin organizational change in a Chinese context, an area that is in need of moreresearch attention (Tsui et al., 2004). The current study addressed this research gapby investigating the impact of supervisors’ transformational leadership on employeecynicism about organizational change in a large Chinese organization. In this con-text, transformational leadership was negatively related to CAOC. Furthermore, ourfindings indicate that this relationship was mediated by employees’ informationaland interpersonal justice perceptions and enhanced when employees perceived theirwork group as cohesive. In addition, the overall moderating effect of cohesion per-ceptions on the TFL–CAOC relationship was fully mediated by interpersonal justice.

A significant contribution of this study is that it uncovers the followers’ psycho-logical processes by which transformational leadership yields its influence onemployee CAOC. Wanous et al. (2000) identified a number of leadership character-istics that may reduce employee CAOC. Expanding their initial results, our findingsindicate that interpersonal and informational justice perceptions mediate theTFL–CAOC relationship. Although organizational justice researchers have testedthe impact of employee justice perceptions on the quality of leader–memberexchange (e.g., Rupp & Cropanzano, 2002), to our knowledge, the current study is


TransformationalLeadership

(TFL)

Interpersonal Justice

Perceptions (IPJ)

Cynicism aboutOrganizational

Change (CAOC) Cohesion

Perceptions

InformationalJustice

Perceptions (IFJ)

FIGURE 3: Conceptual Framework Showing the Results of Hypotheses TestingNOTE: Dotted lines denote nonsupported hypotheses.



the first one to test agent-referent justice perceptions (i.e., interpersonal and infor-mational justice; Colquitt, 2001) as the mediating mechanisms of leadership.

Another contribution of our research is theorizing an interactional approach byidentifying whether employee perceptions of group cohesion enhance the effectivenessof transformational leadership. This advances research in another area of transforma-tional leadership that is in need of investigation (Avolio & Bass, 1988). Because trans-formational leadership is collective oriented, its effectiveness is enhanced in acollective context. Recent cross-cultural findings that transformational leadership hasa more pronounced influence on employee attitudes in collectivistic cultures than indi-vidualistic cultures are consistent with this context-congruency argument (Walumbwa& Lawler, 2003). In the literature of leadership substitutes (Howell, Dorfman, & Kerr,1986), factors that boost the leadership effectiveness are identified as leadershipenhancers. Because cohesion perceptions did not contribute to CAOC as a main effect,it did not meet the necessary conditions for a leadership substitute—having a positiveand direct relationship with the dependent variable (Howell et al., 1986). Rather, ourresults indicate that group cohesion perceptions serve as a leadership enhancer whenit is high and a leadership neutralizer when it is low.

Furthermore, no other studies have tested supervisors’ transformational leadershipon followers’ cynical attitude toward organizational change in a Chinese setting.Therefore, the current study also adds to the literature by confirming the generaliz-ability of transformational leadership to a non–Western setting, where studies ontransformational leadership and organizational change have been understudied.

Limitations

Although the use of a Chinese sample provided support for the generalizability androbustness of transformational leadership across cultures, the characteristics of theChinese culture may also limit the generalizability of the current findings to the Westernsocieties. As a collective-oriented leadership style, the impact of transformationalleadership on employee CAOC and other attitudes toward change may be more pro-nounced in collectivistic societies (e.g., China) than individualistic societies (e.g., theUnited States). This may explain previous research that found a nonsignificant rela-tionship between transformational leadership and employee commitment to an organi-zational change program in a U.S. organization (Neubert & Cady, 2001). In addition,because of the collectivist orientation in our study context that would potentially yielda higher average level of group cohesion, future research is needed to replicate the cur-rent findings in a Western organization.

Furthermore, the organization we studied went through a specific type of organi-zational change, administrative organizational change, which tends to encountereven greater resistance relative to technical change in emerging economies such asChina (Zhou et al., 2006). This may somewhat limit the generalizability of our find-ings to other types of organizational change. As China is going through variousforms of massive enterprise reform, we encourage future research to replicate andexpand our current model and findings to other types of organizational change.

Another possible limitation of our study is that all the measures were collected fromemployees, making our data vulnerable to common method biases (Podsakoff et al.,




2003). Our methodological approach is consistent with our theoretical approach offocusing on individual attitude and perception of leadership. As such, obtaining multi-ple response sources such as supervisors reporting on employee attitudes or supervi-sors self-reporting their own leadership and behaviors may not provide better measuresthan employees’ self-reports (Podsakoff et al., 2003). In addition to the remedial strate-gies we adopted in the questionnaire design, both Harman’s single-factor test(Podsakoff et al., 2003; Podsakoff & Organ, 1986) and confirmatory factor analysisindicated that common method bias is not a concern in our study. Even so, futureresearch that includes multiple sources of data or collects data at multiple points intime is strongly encouraged to completely eliminate common method biases.

Finally, we collected the data a year after the beginning of the change to ensure thatemployees responded to the questions with greater accuracy because of the adequatelength of time during which they experienced the organizational change. Although thecross-sectional design of this study limits us from asserting a causal relationshipbetween transformational leadership and employee CAOC, two previous longitudinalstudies showed consistent findings that prudent first-level leadership indeed resulted inless CAOC (Wanous et al., 2000) and higher leadership effectiveness (Wanous &Reichers, 1998). Future longitudinal research is needed to further confirm the causal-ity of the TFL–CAOC relationship to make additional contribution to the literatures oftransformational leadership and organizational change.

Practical Implications

This research suggests several practical implications for those who managechange, particularly administrative change, where the new organizational structureand/or administrative processes would yield a greater departure from existing orga-nizational routines. It appears from our research that the power of transformationalleadership lays in its personal focus (Bass, 1985). Immediate supervisors impact jus-tice perceptions through their interpersonal behavior (Cohen-Charash & Spector,2001). Although transformational leadership has a dispositional component (Judge& Bono, 2000), it also can be developed (Dvir et al., 2002; Kelloway, Barling, &Hellur, 2000). As such, it is critical that plans for change include training supervi-sors in interpersonal communication skills. Training supervisors to demonstratetransformational leadership behaviors will help effectively manage organizationalchange by reducing employees’ cynical attitudes toward organizational change.

Our research also suggests that the context (as perceived by employees) in whichtransformational leadership is enacted impacts its degree of influence. A perceivedcohesive or group-oriented environment, particularly in a Chinese context, enhancesthe influence of transformational leaders in reducing cynicism. In other words, fortransformational leadership to have its greatest impact, supervisors should not onlybe trained in leadership skills but also in skills for building a cohesive group.Moreover, followers must be afforded the time, opportunity, and resources necessaryto engage in group activity that facilitates cohesion.

Finally, the booming economic development and globalization that is foster-ing changes in Chinese organizations, particularly in state-owned organizations




(Z.-M. Wang, 2000) such as the one surveyed in this study, accentuates the impor-tance of understanding change management in China. Developing managementcompetencies to respond to these changes is of great practical interest (Z.-M. Wang,2003). Despite the doubts of transferability of Western management theories todeveloping economies (Erez, 1994), our research provides initial evidence thatdeveloping transformational leadership is an effective way to manage organizationalchange in Chinese organizations. In fact, the collective orientation of Chinese firmsmay even enhance the impact of transformational leadership. Although there is muchmore to be learned about Chinese employees’ responses to change, this research con-firms that transformational leadership is critical, possibly even more so in China thanin Western contexts, to managing employees’ cynicism about change.

Across the world, organizations are undergoing change in response to a compet-itive global business environment. Despite the assertions that transformationalleadership is critical to implementing successful change, there is paucity of theoret-ically grounded empirical field studies examining transformational leadership in thecontext of organizational change. This research advances knowledge for managingchange by finding that transformational leadership influences employee cynicismabout organizational change and by identifying mediating and moderating mecha-nisms that influence its impact.

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Transformational Leadership, Cohesion Perceptions, and Employee Cynicism About Organizational Change: The Mediating Role of Justice Perceptions