Authentic Leadership and Openness to Change in Pakistani Service Industry: The Mediating Role of Trust and Transparent Communication

Abstract

Organizations to engage in strategic change initiatives to remain competitive. Leadership is the top determinant of successful change. This study investigated the factor affecting the employee’s openness to change during process of change and how leadership affects that. We proposed a theoretical framework, modifying (Yue, Men, & Ferguson, 2019) by incorporating Authentic in place of transformational Leadership. We hypothesized that authentic leadership affect organisational trust during change both directly, as well as by inducing transparent communication. Trust would in turn positively affect openness to change. Authentic leadership included 1. Self-Awareness, 2. Relational Transparency, 3. Balanced Processing, and 4. Internalized Moral Perspective, dimensions. Whereas, transparent communication consisted of 1. Participation, 2. Substantiality, 3. Accountability, Factors. Empirical validity was established by conducting a survey using close ended questionnaire. Data was collected from 310 employees working across different service industry in Karachi, and analyzed using confirmatory factor analysis and structured equation modeling. The finding revealed that transparent communication and authentic leadership have significance direct and indirect relationship with employees’ openness to change. Organizational trust has significant relationship with employees’ openness to change during change process. However Authentic leader has weak direct relation with transparent communication and there is no significance relationship between authentic leadership and trust with mediating role of transparent communication. However, trust significantly mediate all the factors of authentic leadership except Self-Awareness, and Openness to Change. Similarly, trust also mediated Substantiality, and Accountability factors of communication, and openness. Lastly, substantiality also offered a partial mediatory role between authentic leadership and trust.

How and when does authentic leadership reduce employee resistance to change? An explanation from uncertainty management theory

“…Second, while previous studies have considered the emotion of trust and its mediating role in linking authentic leadership and employee reactions toward change (Agote et al. , 2016; Basit and Siddiqui, 2020), our research introduces a new mediating mechanism (i.e. perceived uncertainty) from a cognitive perspective to explain the impact of authentic leadership on employee resistance to change, extending existing research.…”

“…Few studies have considered the emotional aspect and the mediating role of trust in linking authentic leadership and employee reactions toward change (Agote et al. , 2016; Basit and Siddiqui, 2020). Our research, drawing on UMT, examines the cognitive processes through which employees perceive environmental uncertainty during the change process.…”

“…, 2016). Similarly, Basit and Siddiqui (2020) investigated the mediating role of employee organizational trust between authentic leadership and openness to change. By considering employee emotions and the mediating role of trust, valuable insights are gained into the complex dynamics of authentic leadership and its influence on employee reactions during organizational change.…”

“…Inspired by a desire to gain a more nuanced understanding of the impact of authentic leadership on employees' reactions to change, a limited body of research has embraced an emotional perspective, emphasizing the role of employee emotions in change and investigating how authentic leadership, through trust, affects employees' emotions during the change process (Agote et al, 2016). Similarly, Basit and Siddiqui (2020) investigated the mediating role of employee organizational trust between authentic leadership and openness to change. By considering employee emotions and the mediating role of trust, valuable insights are gained into the complex dynamics of authentic leadership and its influence on employee reactions during organizational change.…”

Determinants of Employees’ Openness to Change: Insights from Service and Manufacturing Sectors of Pakistan

“…The relationship between authentic leadership and citizenship behavior is also mediated by organization trust. Relational transparency is vital in developing trust when it has disintegrated, particularly in reestablishing trust (Basit, 2020). Bakari et al (2019) attempted to discover the link between authentic leadership and employee commitment.…”