The impact of trust in leadership on organizational transformation

Abstract

During periods of transformation or in other uncertain and volatile business environments, high levels of work engagement-the extent to which employees identify with their role in an organization-enable leaders to implement change more effectively. A study conducted in Bangladesh's banking sector explores the influence of transformational leadership on work engagement and examines the mediating effect of trust in that relationship. Taking place in a context of significant organizational change, the study shows that a transformational leadership approach enhances work engagement. It also shows that the influence that a transformational leader has on the level of work engagement is subject to the degree of trust that employees have in their leader. The findings highlight the need to foster bonds between leaders and their followers and to pay close attention to the most critical antecedents of trust in leadership.

Employee engagement and organizational change initiatives: Does transformational leadership, valence, and trust make a difference?

“…Bangladesh's banking sector has been going through a major transition process to compete in competitive global markets and meet customers' demands. The banking sector is described as facing a slow‐motion crisis (Islam et al., 2020a; Regi & Golden, 2019). The immediate challenges facing the banking sector are upgrading their product line‐up, modernization, and the development of a suitable IT infrastructure.…”

“…Further challenges are posed by the growth of artificial intelligence, the development of green banking models, and enriched banking supervision methods. Research has shown that some banks in Bangladesh are failing to deal with these challenges (Islam et al., 2020a). The 2019 Global Competitiveness Index reported that the banking sector in Bangladesh had the worst performance among all the countries in South Asia (Schwab, 2019).…”

“…Work engagement is commonly known as an employee's positive behavior and attitude from tasks that result in positive work‐related outcomes (Islam et al., 2020a). Prior research has identified various determining factors of employee work engagement, including intrinsic and extrinsic corporate social responsibility (Chaudhary & Akhouri, 2018), empowerment (Mubarak & Noor, 2018), HR practices and task performance (Guan & Frenkel, 2018), organizational learning (Song et al., 2018), error management culture (Guchait et al., 2018), and professional identity (Zhang et al., 2018).…”

“…Employee engagement has been an issue of central concern in the study of organizational change management (Faupel & Süß, 2019; Islam et al., 2020a). In the context of organizational change, employee engagement can be defined as the employee's active and enthusiastic physical, psychological, and emotional participation in the process of organizational transformation.…”

“…Different studies have highlighted various factors that have a positive influence on the level of employee work engagement (Amor et al., 2020; Breevaart & Bakker, 2018; Ghadi et al., 2013; Hawkes et al., 2017; Islam et al., 2020b). Likewise, employee work engagement has been shown to be a predictor of both employee proactive behavior (Schmitt et al., 2016), and supportive behavior by employees during periods of organizational change (Islam et al., 2020a).…”