doi 10.1111padm.12214TRANSFORMATIONAL LEADERSHIP AND THE.docx

doi: 10.1111/padm.12214
TRANSFORMATIONAL LEADERSHIP AND THE USE
OF NORMATIVE PUBLIC VALUES: CAN EMPLOYEES BE
INSPIRED TO SERVE LARGER PUBLIC PURPOSES?
SANJAY K. PANDEY, RANDALL S. DAVIS, SHEELA
PANDEY AND SHUYANG PENG
This article asks whether and how transformational leadership
in the public sector can influence the
use of normative public values in organizational decisions. We
focus on transformational leader-
ship’s influence on three core normative public values
(representation, equity, and individual rights).
The extent to which public organizations and their employees
emphasize normative public values in
their decision-making can signal important messages to external
stakeholders about respect for and
responsiveness to all citizens, valuing citizens from different
walks of life equally, and respect for
constitutionally guaranteed rights. We propose a model in which
transformational leadership has a
direct influence (infusing) and an indirect influence (convincing
others) on employee use of public
values in organizational decision-making. Empirical tests
provide support for the proposed model,
with the indirect influence (convincing others) providing a
stronger impetus. The article concludes
with a discussion of the results and implications.
Building on Burns’s (1978) seminal contribution, a number of

generic/mainstream man-
agement scholars have made significant contributions to the
study of transformational
leadership (see Bass and Riggio 2006 for a synthesis). The use
of values is at the heart of
transformational leadership and therefore a number of scholars
have characterized trans-
formational leadership as ‘values-based leadership’ (e.g. Shamir
et al. 1993; Brown and
Trevino 2009). This scholarship, however, does not seek to
identify specific values or study
the inculcation or use of specific values as an important
outcome. Instead, the outcomes
of interest pertain to business metrics such as quality,
teamwork, cost effectiveness, and
profitability (Bass et al. 2003; Cha and Edmondson 2006).
Studies referring to public sector transformational leadership
confirm a similar pattern
(Fernandez 2005; Kuipers et al. 2014; Moynihan et al. 2014).
For example, two recent stud-
ies focus on the effect of transformational leadership on
employee use of performance
information (Moynihan et al. 2012; Kroll and Vogel 2014).
Other studies examine the influ-
ence of transformational leadership on follower satisfaction,
organizational goal clarity,
and performance (Oberfield 2012; Vigoda-Gadot and Beeri
2012; Bellé 2013; Caillier 2014;
Jacobsen and Andersen 2015).
As a result, we know little about whether and how
transformational leadership can fos-
ter the use of normative public values in the public sector. This
is matter of great import,
and many public administration scholars have made a case for

the important role of pub-
lic sector leaders in upholding and advancing normative public
values (Terry 1998; Beck
Jørgensen 1999; Denhardt and Denhardt 2003; Bozeman 2007;
Hartley et al. 2015). Public
values encapsulate a normative consensus about citizen rights
and obligations, and pro-
vide the underpinnings for public policy and government action
(Bozeman 2007). Under-
scoring the crucial role organizational leaders play in the use of
public values, Nalbandian
Sanjay K. Pandey is at the Trachtenberg School of Public Policy
and Public Administration, George Washington Univer-
sity, USA. Randall S. Davis is at the Department of Political
Science, Southern Illinois University, USA. Sheela Pandey
is at the Center for Organization Research and Design, Arizona
State University, USA. Shuyang Peng is at the School of
Public Administration, The University of New Mexico, USA.
Public Administration Vol. 94, No. 1, 2016 (204–222)
© 2015 John Wiley & Sons Ltd.
NORMATIVE PUBLIC VALUES AND
TRANSFORMATIONAL LEADERSHIP 205
(2005, p. 311) notes that effective city managers forge ties with
the community ‘on solid
foundations of public values’. City managers, as leaders of their
organizations, can accom-
plish this if they influence other managers to use public values
in decision-making.
This leads to the key questions we examine in this article on

whether and how
transformational leaders in the public sector can influence the
use of normative pub-
lic values in organizational decisions. Early and ongoing
debates on authentic versus
pseudo-transformational leadership provide an important lens
with which to examine
whether or not transformational leaders can influence the use of
normative public values
(Bass and Steidlmeier 1999; Price 2003; Hutchinson and
Jackson 2013). On one side is the
classic formulation of transformational leadership that
highlights authentic transforma-
tional leadership as an exercise steeped in morality. This
morality is deontological and
other-regarding, and is therefore expected to be supportive of
the use of public values.
On the opposing side are two major lines of dissent. First, there
is the argument about
the ‘dark side’ of transformational leadership, positing that it
can be directed to serving
self-interested ends, thereby subverting larger collective
purposes (Conger and Kanungo
1998). Second, scholars focused on the public sector and cross-
sector collaboration argue
that transformational leadership has a performance-oriented
technical bent and cannot be
expected to have an influence on civic and other-oriented values
of employees (Denhardt
and Campbell 2006; Sun and Anderson 2012). This
disagreement is amenable to an
empirical test.
Such an empirical test requires choosing a set of public values.
Although there is no
consensus on a definitive list of public values, it is possible to

identify public values around
which there is widespread agreement. A number of scholars
have argued about the unique
role of the public sector in promoting certain values
(Nalbandian and Edwards 1983; Van
der Wal et al. 2008; Moore 2014; Witesman and Walters 2014).
These include values such
as equity, representation, and individual rights. Taken together,
these values fall in the
important domain where citizen concerns and public
management actions intersect (Beck
Jørgensen and Bozeman 2007). Bozeman and Johnson (2015)
call such values ‘normative
public values’ because they offer compelling justification for
government action to ensure
that all citizens are heard, respected, and treated equally.
How then can transformational leaders foster the use of
normative public values in
organizational decisions? We propose that transformational
leaders motivate their follow-
ers to embrace normative public values through two pathways –
direct appeal (infusion
pathway) and through an appeal to follower values (convince
others pathway). We test
our propositions using data from Phase IV of the National
Administrative Studies Project
(NASP-IV) that surveyed senior managers in local governments.
We begin with a brief
overview of the public values concept we employ and then map
out potential linkage
between transformational leadership and public values. Next,
we introduce the study
model and hypotheses. This is followed by the methods section,
which provides details
on data collection and measurement. Then, we present analysis

and findings, which pro-
vide support for both a direct and an indirect effect of
transformational leadership on the
use of public values in organizational decisions. We conclude
with a discussion of study
implications.
TRANSFORMATIONAL LEADERSHIP
Public values have been an area of remarkable scholarly activity
in recent years with sym-
posia published in the Public Administration Review in 2014
and the American Review of
206 SANJAY K. PANDEY ET AL.
Public Administration in 2015. (For completeness sake, we want
to note that the PAR sym-
posium was steeped in Mark Moore’s notion of public value,
which is distinct from public
values.) Although this research is bringing new perspectives to
the study of public val-
ues, assessments of progress routinely note that it is ‘relatively
little’ (e.g. Davis and West
2009; Beck Jørgensen and Rutgers 2015). This is not
unexpected because, ‘public values
… brings with it all the associations and confusions of the two
highly ambiguous and
contested concepts it unites: Public and Value’ (Beck Jørgensen
and Rutgers 2015, p. 4).

Despite the multiplicity of perspectives, there is meeting of
minds when it comes to public
values that derive from the institutional role of the public sector
in society.
This institutional perspective on the public sector recognizes
the unique role of pub-
lic organizations in society. Moore (2014, p. 466) describes this
role as one of promoting
‘deontological values that account for the degree to which
government has acted fairly
and justly toward its individual citizens’. The inviolability of
such values is echoed by
Davis and West (2009, p. 608) who note that ‘some public
values are tough or core: …
and are not readily exchanged for other values’. Beck Jørgensen
and Rutgers (2015) take
up this theme by cautioning against the reductionist tendency to
conflate such core values
with individual values such as public service motivation.
Both recent and classic scholarship on public values has
embraced the distinctiveness of
the institutional role of the public sector and its prerogative as a
promoter of deontolog-
ical values (Nalbandian 1991; Van der Wal et al. 2008; Moore
2014; Peng et al. 2015). Beck
Jørgensen and Bozeman (2007), in their study of public values
inventory, have noted strong
normative consensus around some core values when it comes to
interactions between cit-
izens and government. Writing in the context of municipal
government, Nalbandian and
colleagues have specified a set of core public values
(Nalbandian and Edwards 1983; Nal-
bandian 1991, 2005).

It is not practical to include a full set of public values and
therefore we focus on three
core normative public values, namely representation, equity,
and individual rights. Rep-
resentation is a crucial value in representative democracies.
Nalbandian (2006, p. 1054)
notes that representation is ‘based on the understanding that
elected officials represent
citizens in the absence of direct democracy’. When elected
officials embrace this value,
public managers are more likely to carefully weigh the
implications of their decision for
all segments of the citizenry. Equity can fuel fierce debates.
Equity demands a just distribu-
tion of resources and ensuring that there are ‘no second-class
citizens’ (Nalbandian 2006,
p. 1054). Individual rights include both property rights and civil
rights and give meaning
to constitutionally sanctioned due process ‘designed to prevent
capricious and arbitrary
government action’ (Nalbandian 2006, p. 1054). The extent to
which public organizations
and their employees emphasize these normative public values in
their decision-making
signals important messages to external stakeholders about
respect for and responsiveness
to all citizens, valuing citizens from different walks of life
equally, and respect for consti-
tutionally guaranteed rights.
Transformational leadership and normative public values
Burns (1978, p. 19) defined transformational leadership thus: it
‘occurs when one or more
persons engage with others in such a way that leaders and
followers raise one another to

higher levels of motivation and morality’. Values were at the
centre of Burns’s (1978) con-
ceptualization of transformational leadership. Burns saw values
as the ultimate levers for
exercising influence, and argued that leaders who are at the
most advanced stage of moral
development are able to build support for universal values such
as ‘justice and empathy’.
Burns distinguished between ‘self-involved’ and ‘public-
involved’ values, and argued that
in order to rise to a higher moral plane, leadership needs to
overcome multiple, press-
ing, and specific daily needs associated with maintenance and
promotion of self-involved
values.
Although a number of leadership scholars have elaborated upon
Burns’s concept of
transformational leadership, the work of Bass and colleagues
has attracted the greatest
following (Bass 1985; Bass and Riggio 2006). Bass’s (1985)
conceptualization of trans-
formational leadership recognizes the importance of articulating
a compelling vision.
Transformational leaders exercise influence through three
mechanisms, namely, idealized
influence, intellectual stimulation, and inspirational motivation.

In exercising idealized
influence, leaders function as role models. Intellectual
stimulation involves encourag-
ing employees to think of old problems in new ways, and
inspirational motivation is
accomplished by articulating an appealing vision of the
organization. A fourth dimen-
sion, individualized consideration, is now regarded as being
more transactional than
transformational (Wright and Pandey 2010, p. 77).
Both accounts of transformational leadership offered by Burns
and Bass work by acti-
vating followers’ higher order goals and therefore offer
plausible mechanisms by which
organizational leaders can influence the use of normative public
values. Burns’s concep-
tion and portrayal of transformational leadership as raising
followers to a higher plane of
morality is more consistent with the pursuit of normative public
values. Bass’s focus on
leadership behaviours seems more technical and geared more
towards the means and less
towards the ends. However, Bass and Steidlmeier (1999)
introduced the idea of authentic
transformational leadership which is very similar to Burns’s
model and would arguably
have a similar effect.
MODELLING THE INFLUENCE OF TRANSFORMATIONAL
LEADERSHIP ON
NORMATIVE PUBLIC VALUES
Our key concepts are: transformational leadership, employees’
value congruence
with organizational values, and employees’ use of public values

in organizational
decision-making. Value congruence is the extent to which
individuals’ values match
with the organizational values (Edwards and Cable 2009). We
propose two mechanisms
through which leaders exercise influence on the use of
normative public values, a direct
effect which we call the ‘infusion pathway’ and indirect effects
which we call the ‘convince
others pathway’. Our naming of these two mechanisms draws
upon Wilson’s work (1989,
p. 217).
We expect transformational leadership to instil and increase use
of normative public
values and to increase value congruence. Value congruence, in
turn, is expected to exercise
a positive influence on the use of public values by employees.
In addition, we propose a
moderated effect of transformational leadership on the use of
normative public values. In
other words, we propose that the effect of value congruence on
is contingent on the level of transformational leadership. Figure
1 provides a conceptual
diagram illustrating the infusion and convince others pathways
in both the mediation and
moderation models.
Transformational leadership and public values – the ‘infusion
pathway’
Burns’s (1978) original conceptualization of transformational
leadership emphasized the
power of values. Burns did not claim this as an original insight;
instead, he argued that this

FIGURE 1 Conceptual diagram
perspective has been handed down from antiquity going back to
Plato. He went so far as
to call leadership ‘a process of morality’ that engaged follower
values (Burns 1978, p. 7). A
number of scholars are sceptical about this, even suggesting that
the charismatic influence
exercised by transformational leaders may have a dark side
(Conger and Kanungo 1998).
The contention of those who caution about this dark side is that
idealized influence and
inspirational motivation, the two commonly associated
mechanisms through which trans-
formational leaders exercise influence, make followers
emotionally vulnerable and subject
to being misdirected or exploited. Price (2003), for example,
argues that leaders, by virtue
of their position, often come to hold beliefs that undercut
authentic transformational lead-
ership. This could include regarding themselves as ‘excepted
from moral requirements
that apply more generally to the rest of us’ (p. 69) and therefore
lead to thinly disguised
self-interested and exploitative behaviours. Similarly,
Hutchinson and Jackson (2013) note
that the ‘dark side’ of transformational leadership exists
because a lower capacity of cog-
nitive moral reasoning can coexist with transformational

behaviours.
Bass and Steidlmeir (1999) contend that such a characterization
is more appro-
priate for pseudo-transformational leaders: ‘[Authentic]
transformational leadership
must rest on a moral foundation of legitimate values. The
opposite is inauthentic or
pseudo-transformational leadership, that of leaders who
consciously or unconsciously
act in bad faith’ (p. 184). A recent study by Groves and
LaRocca (2011) provides empirical
support for the contention that transformational leadership
indeed has a positive effect
on follower values. Groves and LaRocca (2011, p. 522) offer
the following assessment
of their empirical findings: ‘Transformational leadership was
strongly associated with
leader deontological values, suggesting that such leaders’ strong
beliefs in altruism,
universal rights, and principles lay the groundwork for enacting
the key motivational
and inspirational behaviors that drive impressive leadership
outcomes … ’ According to
Groves and LaRocca, followers see transformational leaders as
having a deontological (as
contrasted with teleological) ethical frame. They identify with

followers and do not see
them as mere means to achieve leaders’ ends and therefore
engage with followers in an
authentic (and not instrumental) manner.
Public management research on managing employee values is
consistent with Groves
and LaRocca. Paarlberg and Perry (2007, p. 405) note that
employees are not motivated
merely by ‘values of the organization’. Based on empirical
findings, they contend that
‘employees are motivated by broad societal and cultural values’
(p. 405). Normative pub-
lic values, comprising equity, representation, and individual
rights, contain deontological
imperatives moulded and shaped in the broader social realm in
representative democra-
cies. Organizational leaders in the public sector can reinforce
these values in articulating
the organization’s vision, mission, values and goals. Given
organizational goal ambiguity,
a defining feature of public organizations, transformational
leaders have the opportunity
to talk about values and highlight the moral and ethical
consequences of key decisions
(Rainey 1982; Pandey and Rainey 2006; Sun et al. 2014). We,
therefore, expect that trans-
formational leaders will succeed in infusing organizations with
normative public values,
which in turn will result in greater use of normative public
values in follower-employees’
decision-making. Therefore, we hypothesize:
Hypothesis 1: Transformational leadership is positively
associated with the extent to which employees report
that public values are used to make major organizational

decisions.
Transformational leadership, value congruence and public
values – the ‘convince
others’ pathway
Whereas the direct or ‘infusion pathway’ works by raising the
attractiveness of
broader social and public priorities, the ‘convince others
pathway’ works through
individual–organizational value congruence. Aligning
individual values with collec-
tive/organizational values is one of the key processes that
transformational leaders use.
Bass (1985) has argued that the level of value congruence
should be a key variable in
evaluating the influence of transformational leaders on
followers. Further, value congru-
ence has a demonstrated positive effect on follower
performance, work attitudes, and
behaviours (Meglino et al. 1989; Jung and Avolio 2000;
Edwards and Cable 2009).
We argue that the public sector provides unique opportunities
for transformational
leaders to raise value congruence. Public employees are
attracted to the public sector
because they expect to derive fulfilment and satisfaction from
public sector work but
they are frustrated by organizational goal ambiguity and
pervasive formal and informal
constraints (Pandey and Stazyk 2008; Stazyk et al. 2011). A
number of scholars, over time,
have described these frustrations variously as ‘frustrated service
ethic’ (Buchanan 1975),
‘resigned satisfaction’ (Giauque et al. 2012), etc. Others report
on the negative effects of

organizational tenure on public service values (e.g. Moynihan
and Pandey 2007).
Transformational leaders can break through this frustration on
both affective and cog-
nitive levels by providing a ‘clear line of sight’ between
organizational values and public
values (Paarlberg and Perry 2007). In a comparison of high and
low performing work
units, Paarlberg and Perry (2007, p. 404) document that both
employees and managers in
high performing work units see interactions as having a
personal and social component.
Transformational leadership and its three key mechanisms –
idealized influence, inspira-
tional motivation, and intellectual stimulation – can break the
ennui or meaninglessness
employees experience when they are unable to see how their
work makes a difference.
Goodsell (2010) features one such leader, Jake Jacobsen, who
transformed his agency by
emphasizing individual rights of clients. His agency, like other
social service agencies, had
the twin challenge of serving ‘welfare’ recipients who are
unfairly stigmatized and doing
this with employees who feel powerless and frustrated. At the
top of Jake Jacobsen’s list in
transforming the agency was influencing employee attitudes

towards clients, encouraging
them to recognize their individuality, and treating the individual
client in a respectful and
holistic manner (Goodsell 2010).
Recent research on public sector transformational leadership has
highlighted the
salience of indirect effects of leadership. Writing about the
indirect effects of trans-
formational leadership, Moynihan et al. (2014, p. 98) note that,
‘The indirect effects of
leadership may be among the most powerful but the easiest to
miss.’ They summarize
and point to a number of such mediating variables arguing that
top leaders who serve
in generalist functions have the most influence by setting the
stage for change in these
conditions that in turn lead to desired outcomes. For example,
they argue that leaders can
influence employee perceptions of red tape by influencing
internal communication in the
organization.
However, there are good arguments and evidence in support of
accounting for the mod-
erating effects in addition to a mediating effect. Lord et al.
(1999) proposed that the effec-
tiveness of leadership is contingent on the match between
values and identities promoted
by the leaders and the values and identities embedded in
followers’ self-concept, arguing
that transformational leadership is most effective when follower
self-concept is defined at
the organizational/collective level. This is in line with the
argument that transformational
leadership’s moderating effect is due to a ‘dual effect of

fostering the positive and prevent-
ing the negative effects’ of organizational circumstances (Shin
and Zhou 2007; Kearney
and Gebert 2009, p. 80). Transformational leadership, thus,
creates favourable conditions
for accentuating the positive relationship between employee
beliefs and work-related out-
comes. Thus, our expectation is that transformational leadership
bolsters the relationship
between value congruence and the application of normative
public values to organiza-
tional decisions. In order to account for the entirety of indirect
effects of transformational
leadership, both mediating and moderating effects need to be
taken into account. There-
fore, we offer the following hypotheses:
Hypothesis 2: Transformational leadership is positively
associated with the level of value congruence reported
by the employees.
Hypothesis 3: The level of value congruence reported by the
employees is positively associated with the degree
to which they believe public values are used in major
organizational decisions.
Hypothesis 4: The positive influence of employee value
congruence on the degree to which employees believe
that public values are used in major organizational decisions
will be more pronounced as the transformational
leadership behaviours of organizational superiors increases.
METHODS
Data collection
This study uses data from Phase IV of the National

Administrative Studies Project
(NASP-IV). NASP-IV data were collected from a nationwide
sample in United States local
government jurisdictions with populations of greater than
50,000. NASP-IV surveyed city
managers, deputy/assistant city managers and agency heads. The
agency heads managed
one of the following functions: Finance/Budgeting, Public
Works, Personnel/HR, Eco-
nomic Development, Parks and Recreation, Planning, and
Community Development.
The sampling frame was generated with the assistance of the
International City/County
Management Association. The final sample included 3,316
respondents. When data
collection ended, 1,538 respondents had completed the survey,
for a response rate of 46.4
per cent. The 1,538 respondents came from 545 municipalities.
The analytic database comprised responses from a nationwide
sample of agency heads
of seven different functional areas of municipal government (N
= 1,097) enumerated
earlier. For the purposes of this analysis, we excluded responses
from city managers
and deputy/assistant city managers because respondents were
asked to assess the trans-

formational leadership of the city manager. The city manager is
the top administrative
leader of the municipal organization and typically reports only
to governing bodies
composed of elected officials. Select demographic
characteristics of respondents used
for this analysis are provided in table 1. The average age of
study participants was 51.1
with an inter-quartile range of 11. In the study sample, a
majority of respondents were
male (67.8 per cent), white (83.2 per cent), highly educated
(more than 54 per cent with
graduate degrees), and well compensated (55.7 per cent with
salaries over $100,000).
Measurement, control variables, and measurement model
We used multiple survey items to operationalize the study
variables – transformational
leadership, value congruence, and normative public values.
Transformational leadership
was measured using five items adapted from the work of House
(1998), value congruence
was assessed with three items adapted from the work of
O’Reilly and Chatman (1986) and
Porter et al. (1974) and finally normative public values were
measured with three items
adapted from the work of Galloway and Edwards (1982) and
Nalbandian and Edwards
(1983). The appendix provides extensive information on all the
study measures. We also
used five control variables to account for alternative
explanations. These include the size of
the agency, type of agency, council manager government form,
organizational tenure of the
employee, and employee’s level of education. We control for
the size of city government

(operationalized as the number of employees) because it may be
easier to attain value
congruence in smaller organizations and also for the effects of
to become manifest.
For similar reasons, we use type of agency as a control variable.
To account for this,
we divided organizations into two kinds – control agencies and
service agencies. Control
agencies (e.g. finance/budget agencies, human
resource/personnel agencies, in our sample)
are organizational departments whose clients are primarily other
government agencies.
External service providers are agencies that provide direct
service to the public. Transfor-
mational leadership may also be easier to attain in a council-
manager form of government
given the expanded political and leadership roles of city
managers. To account for this,
we include a variable that identifies the form of government.
We also use two individual
characteristics as control variables. We expect education to
have an important influence
on values. In particular, we expect respondents with a Masters
in Public Administration
(MPA) or related graduate degree to be different from others.
We also control for the time
spent in the organization because the length of association with
the organization can have
a major influence on employee values. We provide descriptive
statistics for all observed
items included in the model in table 2 and the frequencies for
model items in table 3.
We used confirmatory factor analysis (CFA) to examine the

measurement model prior to
constructing the structural equation models (SEM) for
hypothesis testing. Mplus version 7
TABLE 1 Respondent demographics
Frequency Percent
Race
Hispanic 40 3.6%
African American 69 6.3%
White 913 83.2%
Asian/Pacific Islander 25 2.3%
Other 11 1.0%
Total 1,058 96.4%
Missing 39 3.6%
Total 1,097 100.0%
Job
Finance/Budgeting 189 17.2%
Public Works 179 16.3%
Personnel/HR 167 15.2%
Economic Development 118 10.8%
Parks and Rec. 211 19.2%
Planning 168 15.3%
Community Dev. 65 5.9%
Total 1,097 100.0%
Education

Some College 42 3.8%
Bachelor’s Degree 416 37.9%
MPA 270 24.6%
Other 331 30.2%
Total 1,059 96.5%
Missing 38 3.5%
Total 1,097 100.0%
Sex
Male 744 67.8%
Female 353 32.2%
Total 1,097 100.0%
was used to examine the CFA and all associated SEM models.
Figure 2 presents the confir-
matory factor model illustrating the standardized correlations
between transformational
leadership, value congruence, and the application of public
values to major organizational
decisions.
The findings presented in figure 2 indicate that this
measurement model fits the data
well (χ2(41) = 148.211, p < 0.001, RMSEA = .049, CFI = .980,
NNFI(TLI) = .973). The results
from the CFA model indicate that relatively high proportions of
variance (between 57.5
per cent and 87.5 per cent) in questionnaire items are accounted
for by the theoretical con-
structs, which indicates that we have reasonably measured the
constructs of interest. Our
results also indicate that all model constructs are positively
correlated, and significant at
p ≤ 0.001.
ANALYSIS AND FINDINGS

Given that the CFA model fits the data reasonably well, and all
parameters are in the
expected direction, we proceeded with an examination of the
structural equation models.
Figure 3 provides the standardized parameter estimates for the
structural equation model
(SEM). The SEM confirms hypotheses 1 and 2 that
transformational leadership positively
TABLE 2 Descriptive statistics
Mean S.D. Min. Max
1 Normative Public Values1 (equity) 4.761 1.150 1 6
2 Normative Public Values 2 (representation) 4.890 1.102 1 6
3 Normative Public Values 3 (individual rights) 4.946 1.053 1 6
4 Value Congruence 1 (valuable) 4.855 1.023 1 5
5 Value Congruence 2 (priorities) 4.620 1.123 1 5
6 Value Congruence 3 (compatible) 4.341 0.419 1 5
7 Transformational Leadership 1 (vision) 3.845 0.675 1 5
8 Transformational Leadership 2 (example) 4.023 0.853 1 5
9 Transformational Leadership 3 (new thinking) 3.941 1.030 1 5
10 Transformational Leadership 4 (proud) 4.020 0.979 1 5
11 Transformational Leadership 5 (sense of future) 3.850 1.025
1 5
12 Current Tenure 13.140 9.541 0 42
13 Number of Employees 1,747.220 3,201.337 25 40,000

14 Council-Manager Government 0.718 N/A 0 1
15 MPA Degree 0.255 N/A 0 1
16 Service Agency 0.675 N/A 0 1
See appendix for item wording.
TABLE 3 Item frequencies for manifest variables
Frequencies
1 2 3 4 5 6
1 Normative Public Values 1 (equity) 6 24 83 254 409 267
2 Normative Public Values 2 (representation) 5 15 73 205 446
301
3 Normative Public Values 3 (individual rights) 1 23 72 215 360
375
4 Value Congruence 1 (valuable) 2 1 13 119 944 N/A
5 Value Congruence 2 (priorities) 5 13 50 252 761 N/A
6 Value Congruence 3 (compatible) 12 40 79 385 563 N/A
7 Transformational Leadership 1 (vision) 43 137 133 385 370
N/A
8 Transformational Leadership 2 (example) 37 92 138 344 458
N/A
9 Transformational Leadership 3 (new thinking) 25 101 171 384
385 N/A
10 Transformational Leadership 4 (proud) 30 59 191 367 420
N/A
11 Transformational Leadership 5 (sense of future) 45 97 205
348 374 N/A
influences both value congruence (standardized β = .550, p <
0.001) and the use of norma-
tive public values in organizational decisions (standardized β =
.106, p < 0.05). The results
also indicate that value congruence is positively related to the
degree to which one believes

that organizational decisions account for normative public
values (standardized β = .207,
p < 0.001), which supports hypothesis 3.
Although figure 3 illustrates several direct relationships
between model constructs, it
does not provide information regarding the overall influence of
transformational leader-
ship on the application of public values. Transformational
leadership influences the appli-
cation of public values directly, but it also influences the
application of public values indi-
rectly through value congruence. Indirect effects are estimated
as the product of multiple
direct effects (Kline 2005). In this model the indirect effect of
on public values through value congruence is .114 (p < .001).
The total effect is then calcu-
lated by adding the direct relationship between the independent
and dependent variables
FIGURE 2 Standardized parameter estimates for CFA model
to the indirect effect. In this case the overall effect of
transformational leadership on the
application of public values to major organizational decisions is
.220. Taking both the direct
and indirect effects into consideration indicates that the
influence of transformational lead-

ership on the application of public values is positive.
In the SEM we also added five model covariates including
tenure, education, number
of employees, form of government, and department to fully
examine the relationships
between transformational leadership, value congruence, and the
application of public val-
ues to organizational decisions. There are two significant
relationships between the control
variables and the constructs of interest in this study. First, those
employees who work
in service departments exhibit higher degrees of value
congruence compared to those
who work in control agencies. Second, those employees within
council-manager forms
of government report higher levels of transformational
leadership. Table 4 presents the
standardized parameter estimates associated with each of the
control variables.
Finally, we sought to explore whether transformational
leadership moderated the rela-
tionship between value congruence and the application of
normative public values to
organizational decisions. Moderation and mediation are
different processes to the extent
that moderation does not imply causality whereas mediation
does. The mediated model
presented in figure 3 assumes that transformational leadership
causes value congruence,
and value congruence successively causes the application of
public values. Moderation,
on the other hand, occurs when the nature of a relationship
between a dependent variable
and an independent variable changes as a function of a third

moderator variable, but there
is no assumed causal relationship between the independent
variable and the moderator.
To examine the possibility of a moderated relationship, based
on the recommendations
provided by Muthén (2012), we first estimated a model
including a latent variable inter-
action term. The interaction term between transformational
leadership and value congru-
ence was significant at p < .01. The significant, positive
interaction term indicates that the
relationship between value congruence and the application of
normative public values to
major organization decisions becomes more positive at higher
levels of transformational
FIGURE 3 Standardized parameter estimates for SEM
Note: *p = 0.05; **p = 0.01; ***p = 0.001.
TABLE 4 Standardized estimates for model controls
EST S.E. EST/S.E. p
Tenure 0.017 0.033 0.512 0.609
Number of Employees 0.026 0.035 0.752 0.452
Service Agency −0.010 0.033 −0.303 0.762
MPA Degree −0.004 0.033 −0.126 0.900

Council-Manager Government 0.084 0.034 2.492 0.013
Value congruence
EST S.E. EST/S.E. p
Tenure 0.033 0.031 1.074 0.283
Number of Employees −0.006 0.032 −0.190 0.849
Service Agency 0.130 0.031 4.275 0.000
MPA Degree 0.009 0.031 0.308 0.758
Council-Manager Government −0.014 0.031 −0.432 0.666
Normative public values
EST S.E. EST/S.E. p
Tenure 0.051 0.036 1.404 0.160
Number of Employees −0.006 0.039 −0.165 0.869
Service Agency 0.007 0.037 0.182 0.856
MPA Degree −0.042 0.036 −1.156 0.248
Council-Manager Government −0.041 0.037 −1.110 0.267
FIGURE 4 Unstandardized parameter estimates for latent
interaction model
Note: *p = 0.05; **p = 0.01; ***p = 0.001.
leadership, thus supporting hypothesis 4. To more fully explore
the nature of the mod-
erated relationship we next removed control variables from the
model and followed the
steps outlined by Muthén (2012). Figure 4 provides the

unstandardized parameter esti-
mates from the latent interaction model.
In the final step we plotted the interaction effect to depict the
relationship between
value congruence and the application of normative public values
at different values of
transformational leadership. In sum, the graph illustrates that
the largest effect of value
congruence on the application of public values to major
organizational decisions occurs
when employees also perceive that organizational superiors
exhibit high levels of trans-
formational leadership. Figure 5 illustrates the interaction plot.
The findings we present suggest that transformational
leadership increases value con-
gruence and it increases application of normative public values
indirectly by shaping value
congruence. In addition, our findings indicate that the
relationship between value con-
gruence and the use of normative public values is more
pronounced at higher levels of
transformational leadership. Although it is difficult to evaluate
the relative importance
of indirect effects against moderation, it is important to point
out that transformational
leadership is a statistically significant predictor of value
congruence in both the media-
tion and moderation models. Nevertheless, the results from our
moderation model seem
particularly important here. Although the relationship between
value congruence and the
application of normative public values is always positive, the
presence of transformational
leadership leads to a more rapid increase in the use of public

values as value congruence
increases. In sum, both these models indicate that
transformational leadership is an impor-
tant driver of the use of normative public values in
organizational decisions.
CONCLUSION
Our study was motivated by the important question of whether
and how transforma-
tional leadership in the public sector can influence the use of
in organizational decisions. This is a pressing imperative for
public sector organizational
leaders who are expected to uphold and fulfil normative public
values such as equity,
0
0.5
1
1.5
2
2.5

3
1 2 3 4 5 6 7
N
or
m
at
iv
e
P
ub
li
c
V
al
ue
s
Value Congruence
Two-Way Interaction Plot
Transformational Leadership = Mean
Transformational Leadership = +1 SD
Transformational Leadership = -1 SD

FIGURE 5 Relationship between value congruence and public
values at varying levels of transformational
leadership
individual rights, and representation. The ability of public
sector leaders to inculcate into
followers specific normative public values associated with
democracy is substantively
important. This is because decisions that incorporate normative
public values send a sig-
nal about the legitimacy and trustworthiness of public
organizations (Rohr 1986, 2002;
Denhardt and Denhardt 2003; Nalbandian 2005). Public sector
transformational leaders,
in this sense, have the capacity to contribute to the legitimacy
of governing institutions.
This study provides evidence that transformational leadership is
associated with
employees reporting use of normative public values in
organizational decisions. First, the
significant direct relationship between transformational
leadership and the application of
normative public values is consistent with the infusion pathway
hypothesis (hypothesis
1). Our study, therefore, provides evidence consistent with
transformational leaders’
ability to directly influence and instil important public values
directly into followers.
Transformational leaders may do this by engaging employees in
dialogue, in which
public values are discussed, assessed, and confirmed or
modified.
Second, the significant mediating and moderating relationships
support the con-

vince others pathway hypotheses. Transformational leaders can
encourage followers to
believe that their values align with organizational values
(hypothesis 2), which increases
the reported use of public values in decision-making by
increasing value congruence
(hypothesis 3). In addition, transformational leaders accentuate
the favourable connec-
tions between value congruence and the use of normative public
values (hypothesis 4).
Sizeable literatures in public management indicate that the
values and preferences of pub-
lic employees differ from employees in the private sector (e.g.
Rainey 1982; Nalbandian
and Edwards 1983; Houston 2006). This research suggests that
public employees may
enter the public service already embracing normative public
values. However, our find-
ings indicate that transformational leadership is important even
if employees already
hold normative public values. Leaders who display
transformational qualities appear
to facilitate even better outcomes from already favourable
conditions. In sum, the influ-
ence of transformational leaders increases the integration of
normative public values in
follower-employees’ decision-making.

Third, our study reinforces claims that transformational
leadership can play an impor-
tant role in public organizations. The significance of
simultaneously testing the ‘infusion
pathway’ and the ‘convince others pathway’ lies in better
understanding the contingent
benefits of transformational leadership. In other words, this
study helps explain the out-
comes associated with transformational leadership under
favourable and unfavourable
organizational conditions. Favourable organizational conditions,
in the context of this
study, refer to situations where some degree of value
congruence already exists. The
results from the moderation model illustrate that there is always
a positive relationship
between value congruence and the application of normative
public values, but increases
in transformational leadership make the relationship more
pronounced.
Unfavourable organizational conditions refer to those
circumstances where value con-
gruence does not exist prior to the entrance of the
transformational leader. The results from
the mediation model illustrate that increases in transformational
leadership increase value
congruence directly, and thereby lead to increased use of
normative public values indi-
rectly via value congruence. Taken together these results
indicate that transformational
leadership can benefit organizations under unfavourable
circumstances by fostering value
congruence, and it can benefit organizations in favourable
circumstances by accentuat-
ing the positive connection between pre-existing value

congruence and the application of
public values leading to better outcomes.
Despite the insights offered by these findings, it is important to
acknowledge the study’s
limitations. First, there are inherent limitations to cross-
sectional data in providing evi-
dence on actual transformational processes thereby
compromising estimation of mediated
relationships (Cole and Maxwell 2003; Maxwell and Cole
2007). For example, the mediated
relationship between transformational leadership, value
congruence, and public values is
likely dynamic. Further studies can examine how these
processes unfold over time. Sec-
ond, we focused on three key normative public values derived
from a broader constellation
of public values. Including more values could reveal more
complex relationships between
transformational leadership and public values. It is also
important to note that our study
focused on employee reported use of normative public values in
organizational decisions,
which may not completely mirror actual use.
Even though we account for likely alternative explanations, it is
possible that other
important variables were omitted from the study model. For
instance, when examining
the effects of transformational leadership on followers’ attitudes
and behaviours, previous
studies have controlled for variables such as the length of the
leader–follower relationship
(Shin and Zhou 2003), the amount of time one spends with the
leader (Avolio et al. 2004),
and tenure of the leader in the organization (Jung and Sosik

2002). These variables can
influence the salience of transformational leadership on
followers’ use of public values;
future research can evaluate our model with such control
variables included. Furthermore,
our study tested value congruence as the explanatory mechanism
linking transformational
leadership with the use of public values. Other mechanisms such
as empowerment and
organizational commitment can be examined to gain a fuller
understanding of how trans-
formational leaders exercise their influence.
Future research can also test the effect of pseudo-
transformational leadership on
employees’ use of public values. Barling et al. (2008)
operationalize pseudo-
transformational leadership as having low idealized influence
but high inspirational
motivation. Building on previous literature, they argue that
pseudo-transformational
leaders are equally skilled at conveying ideas and beliefs but
the prominent difference is
that they prioritize self-interest rather than collective interest
and the greater good. Adapt-
ing their approach can provide a mechanism to disaggregate
into authentic and pseudo-transformational, and to

independently evaluate the effects of
the two components on the use of normative public values.
Despite these limitations, our
study breaks away from the familiar course charted by
generic/mainstream management
scholarship on transformational leadership and initiates a
meaningful and relevant line of
inquiry into how pubic sector leaders can influence the use of
cherished normative public
values.
ACKNOWLEDGEMENTS
We are grateful to John Nalbandian, Al Roberts, and three
anonymous reviewers for
thoughtful critique that has greatly improved our study. We are
indebted to and inspired
by John Nalbandian’s scholarship on public values. John
championed this as an important
area of inquiry long before the recent resurgence. Needless to
say, any weaknesses are our
responsibility. Finally, we want to note that the authorship
order reflects the relative level
of contribution with the exception that the second author and
third author contributed
equally and are listed in alphabetical order.
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APPENDIX
Normative public values
These items were adapted from the Galloway-Edwards
Professional Values Scale
(Galloway and Edwards 1982; Nalbandian and Edwards 1983).
Respondents rated
the importance of specific values in ‘making major decisions
about public services in
your department’, on a 6-point scale ranging from ‘of little
importance’ to ‘extremely
important’:

1. Equity (a just distribution of resources)
2. Representation (responsiveness to all residents)
3. Individual rights (property rights, civil rights)
Value congruence
Items were based on O’Reilly and Chatman (1986) and Porter et
al. (1974). Value congru-
ence was assessed using three measures rated on a 5-point scale
ranging from ‘strongly
disagree’ to ‘strongly agree’, with higher values indicating
higher value congruence:
1. This organization provides valuable public services.
2. I believe that the priorities of this organization are quite
important.
3. My personal values are compatible with those of this
organization.
The degree to which respondents believe the city manager
exhibited transformational
leadership was assessed using five measures rated on a 5-point
scale ranging from
‘strongly disagree’ to ‘strongly agree’ (based on House 1998),
with higher values indicating
a higher degree of transformational leadership:
1. Clearly articulates his/her vision of the future. (vision)
2. Leads by setting a good example. (idealized influence)
3. Challenges me to think about old problems in new ways.
(intellectual stimulation).
4. Says things that make employees proud to be part of the
organization. (inspirational
motivation)
5. Has a clear sense of where our organization should be in five

years. (vision)
Model controls
We included several control variables to rule out potential
alternative explanations. These
were:
1. Current tenure measured in years.
2. Number of employees within the organization.
3. Education was dichotomized to reflect those who hold an
MPA degree and those who
do not.
4. Department was dichotomized to distinguish service agencies
from control agencies.
Control agencies (finance/budget organizations and human
resource/personnel
agencies) were coded as 0 and external service-providing
agencies (public works,
parks and recreation, economic development, planning, and
community develop-
ment) were coded as 1.
5. Form of government was dichotomized such that 1 represents
council-manager
forms of government and 0 represents all other forms.
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