Linking transformational leadership and continuous improvement

Abstract

Purpose The purpose of this study is to investigate employee trust in the leader as the underlying mechanism between transformational leadership and employees’ organizational identification and their continuous improvement efforts. Design/methodology/approach Survey data were collected from 282 employees, working in 8 different private and public sector organizations from the banking, higher education, telecommunications and health sectors in Pakistan. Structural equation modeling was used to test the study hypotheses. Findings The results support the hypothesized relationships showing that trust in the leader partially mediates the relationship of transformational leadership with organizational identification and continuous improvement efforts. Research limitations/implications This study relied upon cross-sectional data, which does not satisfy the conditions to establish causality. Practical implications The results of this study will help organizations and practitioners to understand the importance of trust between transformational leaders and followers, which ultimately results in higher organizational identification and continuous improvement. Originality/value Using the broader framework of social exchange theory (Blau, 1964), this study contributes to the extant employee – organization relationship literature by proposing and testing trust in the leader as an underlying psychological mechanism that can explain the impact of transformational leadership on employees’ organizational identification and their continuous improvement efforts.