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IOSR Journal of Business and Management (IOSR-JBM)
e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 17, Issue 12 .Ver. I (Dec. 2015), PP 01-07
www.iosrjournals.org
DOI: 10.9790/487X-171210107 www.iosrjournals.org 1 | Page
The Impact of Transformational Leadership on Organizational
Change Management: Case Study at Jordan Ahli Bank
Atif Al-Qura'an ,
WISE University, Amman, Jordan
Abstract: The present study has aimed at identifying the impact of the transformational leadership on
organizational change management at Jordan Ahli Bank.To achieve the objectives of the study, a standard
questionnaire was adopted, adjusted and distributed to the population of the study which consisted of the
branches' managers at Jordan Ahli Bank, their numbers were 50 managers, 44 questionnaires have been
returned with 84% response rate. The present study has shown that transformational leadership dimensions
(idealized influence, inspirational motivation , intellectual stimulation , individualized consideration and
empowerment) are affecting organizational change management at the structural , technological and people
level at Jordan Ahli Bank from the branches managers perspective at Jordan Ahli Bank .
Keywords: transformational leadership, change management, Jordan Ahli Bank.
I. Introduction
Organizational change is a necessity for organizations to survive and prosper . In fact , most
organizations compete by changing continuously (Brown & Eisenhardt , 1997)
Organizations in both the private and public sectors are in need of revolutionary , transformational
change . Incremental change and modest improvements won't be enough . Everything must be done better ,
smarter , and faster while doing more with less and building organizations that attract and retain talented leaders
and staff . The organizations that hear this call for change and take a proactive approach to making the changes
that can and must be made have a good chance of thriving . The rest may have difficulty surviving in a new
organization world where uncertainty , constant change , increased competition , frequent restructuring ,
downsizing , budget cuts , and layoffs are becoming common place and a growing number of organizations that
are household names are not able to make it .(D.D.Warrick , 2011)
The degree of change that is required in these times of dynamics and unpredictable economic , social ,
political , technological , and organizational change can best be accomplished by transformational leaders who
have the desire , courage , and skills to make the needed changes and who understand the fundamentals of
transformational leadership . .(D.D.Warrick , 2011)
Present organizations have begun to focus on re-activation and being transformed into ones capable of
meeting future competitive challenges . This has been accompanied by growing concern on the part of
researchers studying transformational leadership .Such type of leadership helps to quickly spot new market
opportunities convenient for the development of proficiency within the organization . A transformational leader
is described as being a person of vision , creativity and inspiration who leads the change .
The most important challenges , however, is creating effective leadership capable to lead the
organization under this changeable turbulent environment into success , continuity and excellence . This can be
achieved by improving performance through an effective type of leadership – transformational leadership . A
large number of studies have been conducted over the last two decades on transformational leadership (Bass ,
1998)
These studies showed that there was a relationship between the behaviors of transformational
leadership and production on both the individual and organizational levels . This paved the way to a study which
aimed at identifying the impact of transformational leadership on management change regarding branches'
managers in the Jordan Ahli Bank .
In the present study we are interested in studying to determine the impact of transformational
leadership on change management. Thus , the purpose of this study is to draw the transformational leadership
literature that is primarily concerned with the capabilities required to enact change successfully . First , we will
describe the latest literature relating to transformational leadership . Next , we will review literature relating to
change management . Finally , we will integrate these literature and links between transformational leadership
and change management .
Despite the voluminous research that has been conducted in this area , a recent computer search failed
to reveal any literature that examined the relevance of transformational leadership to Jordan culture , especially
at commercial banks . This paper reports an exploratory investigation on the relevance and nature of
The Impact Of Transformational Leadership On Organizational Change Management: Case…
DOI: 10.9790/487X-171210107 www.iosrjournals.org 2 | Page
transformational leadership within a Jordanian management context . This paper reveals that the impact of
transformational leadership on change management is not just theoretically sound , but , in fact , empirically
proven . This paper has applicability to any leader , or aspiring leader , in an organizational setting seeking to
improve their abilities .
Jordan Ahli Bank considers one of these organizations that concentrate on continuous and
transformational change on different levels , at the working process level it depends on technology to introduce
the services to it's clients , such as internet services , also currently changes are made at the level of employees ,
including reducing the number of employees those who arrived the age of social security , and the works
currently underway on the development of a new banking system .
II. Theoretical Framework
2.1. Conceptual background and hypotheses
2.1.1. .Transformational leadership
As an idea , transformational leadership was first mentioned in 1973 , in the sociological study
conducted by the author Downton , J . V., "Rebel Leadership : Commitment and Charisma in the revolutionary
process, (Ivana Simic, 1998) .
After that , James McGregeor Burns used the term transformational leadership in his book
"Leadership" (Burns ,1978) .
According to Burns , transformational leadership is a process in which leaders and followers always try
to promote their own psychological ability and motivational capability to higher levels . In this process , the
mutual and growing relationship between leaders and their followers is current (Krishnan , 2004) . Also , Burns ,
made a distinction between transactional leaders and transformational leaders . Transactional Leadership
describes the transaction that occurs between leaders and followers in getting the job done and achieving goals .
In many ways it is another term for management . The leader makes clear what needs to be done and offers
rewards in exchange for individual and group effort directed towards goal attainment . Transformational
leadership describes a process by which leaders bring about significant positive changes in individuals , groups ,
teams , and organizations by using inspiration , vision , and the ability to motivate followers to transcend their
self – interest for a collective purpose (Avolia , Waldman , & Yammarino , 1991) .
In 1985, Barnard M. Bass presented a formal transformational leadership theory which , in addition to
other things also includes the models and factors of behavior (Bass , 1985). He described specific behaviors that
characterized transformational leaders such as being a model of integrity and fairness , setting clear goals ,
having high expectations , encouraging people and providing support and recognition , stirring the emotions and
passions of people , and getting people to look beyond their own self – interest and reach for higher goals .
According to Bass and Avolio (1994) , transformational leaders must exhibit the four factors
commonly known as the "four Is " to bring major changes :
- The idealized influence : It is the style by which the subordinates trust and stimulate their leaders behaviors ,
and they embrace their values and commit to achieve their vision which maximize self- confidence and the
pride of participate with the leader . The transformational leaders minimize using their authorities for personal
benefits , but they employ most of their capacity and experience to motivate the group towards vision related
to their purposes , and usually the leader seeks to persuade the subordinates and attract them for the group
interest , and talking optimistically about the future and form an interesting pictures about the organizational
change .
- The inspirational motivation : It confirms the behavior style and communication that direct the subordinates
and makes them feel the work's value and challenges. The transformational leaders show a lot of enthusiasm
and optimism that have a direct positive impact on the subordinates live and in force the feeling of the group
spirit and inspire the others with what they say and do, their vision does not mislead the others, but enables
them
- The intellectual stimulation : It confirms the dimension of encouraging the subordinates to rethink ideas never
presented. It is the rationale side of the leadership which includes testing the old assumptions which is used as
entrances to solve many problems, but from new corners. The transformational leader focuses on (What) in
the problem instead of (who) .
- The individualized consideration : The humanitarian considerations look to more than developing the
subordinates, it focuses on dealing with each subordinate as a distinguished person, which prevents the
frustration among the subordinates. Usually, the transformational leaders express especial interest of their
The Impact Of Transformational Leadership On Organizational Change Management: Case…
DOI: 10.9790/487X-171210107 www.iosrjournals.org 3 | Page
subordinates needs to achievement and growth. They represent the teacher, trainer and consultant. The open
dialogue trains the subordinates on the listening skills, it is based on the rule of what the subordinate hears and
not on what is said to him or taught to him. The transformational leaders enable their subordinates to take
decisions, and they never stop supporting and directing them and assessing their progress .
- Also (Avolio, etal,1999) added a fifth dimension for transformational leadership , they called employee
empowerment , which indicate to the granting decision making authority and /or creating opportunities to
influence decision , and providing ability to make choices
2.1.2. Organizational change :
Change is a shift in some condition or situation from its present state to a new and different state . A
change can range from minor shifts in procedures or technology to a revolutionary shift in roles within the a
society (Thomas V . Mecca , 2004)
Armstrong (2009) asserts that change is the only thing that remains constant in organizations.
Organizational change is a shift or adaptation of behaviours , values , strategies and techniques that are
intentionally implemented in the workplace with the aim of enhancing individual growth and organizational
performance (Weick & Quinn, 1999)
There tends to be a great deal of consensus amongst researchers regarding the drivers for change ,
finding three major sphere of influence which drive organizational change . These are technological , economic ,
and sociocultural . Escalating technological advancement have provoked a continuing evolution in the shape and
structure of organizations , having a direct influence on the conduct of management . These rapid developments
in technology underpin the dramatic shifts in the economic environment . There is now a great emphasis on
knowledge and human capital , and global boundaries have been eroded to extend operations in dimensions of
both time and distance (Michael L. Jones , 2010) .
An organization that does not adopt changes cannot survive long in market (Boston . M A, 2000) .
Organizational changes provide different significant benefits , it improves competitiveness , improves
financial performance , enhances employees and customer satisfaction and most important is that it leads
organization towards continuous improvement and sustainability , and these changes made the organization as a
whole stronger (Boston . M A, 2000)
Targets of organizational change :(Arthur G . Bedeian &Raymond F .Zammuto , 1991)
- Structural change : involves modifying any of the basic components of structure , included would be
changes in departmentalization , authority , delegation , spans of control , and hierarchical levels .
- Technological change : involves modifying means whereby an organization transforms inputs into outputs ,
by using new equipment , new computer – support system , new tools , and new forms of automation .
- People change : involves modifying the way employees think and act .
2.2. Literature Review
2.2.1. Arabic Studies
Several studies have been carried out in terms of transformational leadership and organizational change
in developed and Arab contries , therefore, too many empirical studies conducted to examine the impact of
transformational leadership on organizational change. The researcher concentrated on some of these studies as
follow:
Kamil Hawajreh. (2010) sought to examined the relationship between the learning organization and
perceived organizational readiness for strategic change in Petra University in Jordan . Learning organization
constructs were identified on the basis of seven dimensions : create continuous learning opportunities , promote
inquiry and dialogue , encourage collaboration and team learning , create systems to capture and share learning ,
empower people toward a collective vision , connect the organization to its environment , and provide strategic
leadership for learning organizational readiness for change was identified on the basis of employees' perceptions
of their organization's readiness for change by utilizing the attitudes toward change concept . The result of the
study suggested that first , participants' highest perceived level of the action imperative for the learning
organization was providing leadership , whereas system connection was the lowest . Second , participants' level
of each of the seven action imperatives of the learning organization were positively and significantly related to
their perceptions of organizational readiness for change . Third , providing leadership and the overall
dimensions of the learning organization questionnaire had the highest correlation with organizational readiness
for change .
The Impact Of Transformational Leadership On Organizational Change Management: Case…
DOI: 10.9790/487X-171210107 www.iosrjournals.org 4 | Page
In her study, Ragad M . Khrrofa (2010) , Aimed to show the nature of the relationship between the
power of leadership on achieving organizational change in industrial organizations in Nineveh province of Iraq
. The study showed that there is a relationship and effect between the power of leading in terms of variables and
the organizational change in terms of fields .
Ahmad Salih & Muhammad Mubaideen (2013), study the “The Administration Leadership Between
Transactional and Transformational Leadership and Its Impact in the Implementation of the Strategic Objectives
of the Ministry of Environment of Jordan – a Field Study in the Large Industrial Companies”. The study aimed
to identifying the effect of transactional and transformational leadership approaches on the implementation of
strategic objectives for Jordanian Ministry of Environment . The study concluded that the effect of
transformational leadership approach was more than the effect of transactional leadership approach in
implementation of strategic goals of Jordanian Ministry of Environment .
In addition to that, Hasan Ali Al-zu'bi (2011) "Investigating the Relationship Between Corporate
culture and Organizational Change : An Empirical Investigation" , the study examined the relationship between
corporate culture and attitudes toward organizational change in the Jordanian insurance companies registered in
the Amman Stock Exchange . The study showed that there is a relationship between corporate culture and the
affective , cognitive , and behavioral tendency of attitudes toward organizational change .
While , Ali Abaas conducted a study in title of "Impact of Managerial Leadership Styles on Changing
Decision Making Process : An Applied Study in Jordanian National Electricity Company " (2012) , The study
aimed to investigate the impact range of managerial leadership styles (Autocratic , Democratic and Loose ) on
the decision making process , and the resistance range of subjects to the decisions and in its implementation , the
results showed that there is a different leadership styles existed in that company , and the democratic style has a
strong and positive impact on the decision making process , while the loose leadership style has less impact ,
but autocratic style has a negative impact .
Also , Maha . M Al-Khaffaf conducted a study in title of " Appling Change Management Critical
Success Factors in Bank of Jordan and Capital Bank" (2012) , The study aimed to identify the application of the
concept critical success factors of change management in both Jordan Bank and Capital Bank for each bank ,
compare these factors among this two banks in order to develop a new change model . The results indicated that
the following seven critical success factors were the one that both Banks agreed upon : resources , top
management support , quality , employee satisfaction , training , technology , process and systems . Also , the
study showed no statistical significant variation among the surveyed banks in terms of change management
component .
Yassin k . Al Kresheh , etal ,(2013) , conducted a study in title of "The Impact of Change Factors on
Achieving Organizational excellence : A model Arab Potash Company , Jordan (APC) " , the study aimed to
determine the impact of change factors at organizational excellence among employees in the (APC) , the results
indicated that perceptions of respondents toward the change factors was medium , although their perceptions
toward the organizational excellence was high , also , there was an impact of change factors in organizational
excellence .
Ahmed Yousef Dudin and Roa'a Adnan Al-rababah (2015) , conducted a study in title of "Strategic
Leadership and their Effect on Managing Organizational Change : Case Study ZARQA University " , the study
aimed to identify the effects of strategic leadership on managing of the organizational change in Zarqa
University , the study concluded that there was an effect of strategic leadership on managing the organizational
change , also , there was an effect of creative and transactional leadership on managing the organizational
change , while , there was no effect for the transformational leadership on managing the organizational change .
2.2.2. Foreign Studies
Paul Chou (2013) , conducted a study in title of "The Effect of Transformational Leadership on
Follower's Affective Commitment to Change " , the study aimed to explore the mechanism through which
transformational leadership influences employees' affective commitment to change at farmers' associations in
Taiwan . The results indicated that transformational leadership not only directly affects employees' affective
commitment to change , but also indirectly affects employees' affective commitment to change via perceived
organizational support and affective commitment to the organization .
Muhammad Hussain Uddin (2013) conducted a study in the title of "Role of Transformational
Leadership in Organizational Change : mediating Role of Trust" , To examine the relationship the author
collected the data via questionnaires from the banking sector of Pakistan . The results indicated that there was
significant relationship between the transformational leadership with organizational change and trust was
playing the mediating role .
The Impact Of Transformational Leadership On Organizational Change Management: Case…
DOI: 10.9790/487X-171210107 www.iosrjournals.org 5 | Page
Elham Gorgani , and etal , (2014) , conducted a study in title of "investigate the Role of
Transformational Leadership in Organizational Change : Case Study of an Industrial Company in Iran " , the
study sought to achieve leadership roles in organizational change , the results showed leadership in the cognitive
skills , practical skills and social skills of managers has had a significant positive impact on organizational
change .
Study Hypotheses
On the basis of literature evidence , following hypothesis have been developed :
H 1: There is positive impact with statistical significant at level (α ≤ 0.05) for transformational leadership
dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized consideration
and empowerment ) on structural change .
H 2: There is positive impact with statistical significant at level (α ≤ 0.05) for transformational leadership
dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized consideration
and empowerment ) on technological change .
H 3: There is positive impact with statistical significant at significant level (α ≤ 0.05) for transformational
leadership dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized
consideration and empowerment ) on people change .
III. Research Method
Population of the study
The participants in this study consisted of the branches' managers of Jordan Ahli Bank , their numbers
were 50 managers , 44 questionnaire have been returned with 84% response rate . To achieve the objectives of
this study , a standard questionnaire was adopted from already developed questionnaires .
IV. Results and Analysis
Multiple regression model was run in order to test the hypothesis , at statistical significant level (α ≤ 0.05) , as
the following :-
Table 1 shows the first hypothesis test as the following :-
item α Beta R R Square α
Idealized influence 0.820 0.065 0.525 0.275 0.026
Inspirational
motivation
0.328 0.408-
Intellectual
stimulation
0.042 0.518
Individualized
consideration
0.048 0.553
empowerment 0.744 0.104
constant 0.613 0.738
Simple correlation coefficient (R) between independent variables (transformational leadership
dimensions) and dependent variable (structural change) is (0.525) ,which indicate that there is a medium
positive correlation between the two variables , and the coefficient of determination (R- Square) is equal to
(0.275) , which means the independent variables (transformational leadership dimensions) was able to explain
(0.275) of change in the dependent variable and the rest is due to other factors , and the value of significant level
(α) for the impact of transformational leadership dimensions on the structural change is equal to (0.026) , which
is less than the specific value (0.05) and thus the first hypothesis accepted .
Table 2 shows the second hypothesis test as the following :-
item α Beta R R Square α
Idealized influence 0.906 0.038- 0.605 0.366 0.003
Inspirational
motivation
0.621 0.231
Intellectual
stimulation
0.018 0.683
Individualized
consideration
0.139 0.460
empowerment 0.865 0.061-
constant 0.386 -1.426
The Impact Of Transformational Leadership On Organizational Change Management: Case…
DOI: 10.9790/487X-171210107 www.iosrjournals.org 6 | Page
Simple correlation coefficient (R) between independent variables (transformational leadership
dimensions) and dependent variable (technological change) was (0.605) ,which indicate that there is a medium
positive correlation between the two variables , and the coefficient of determination (R- Square) is equal to
(0.366) , which means the independent variables (transformational leadership dimensions) was able to explain
(0.366) of change in the dependent variable and the rest is due to other factors , and the value of significant level
(α) for the impact of transformational leadership dimensions on the technological change is equal to (0.003) ,
which is less than the specific value (0.05) and thus the second hypothesis accepted .
Table 3 shows the third hypothesis test as the following :-
item α Beta R R Square α
Idealized influence 0.747 0.066- 0.667 0.444 0.000
Inspirational
motivation
0.776 0.084-
Intellectual
stimulation
0.239 0.210
Individualized
consideration
0.000 0.778
empowerment 0.688 0.091
constant 0.998 0.002
Simple correlation coefficient (R) between independent variables (transformational leadership
dimensions) and dependent variable (people change) was (0.667) ,which indicate that there is a strong positive
correlation between the two variables , and the coefficient of determination (R- Square) is equal to (0.444) ,
which means the independent variables (transformational leadership dimensions) was able to explain (0.444) of
change in the dependent variable and the rest is due to other factors , and the value of significant level (α) for the
impact of transformational leadership dimensions on the technological change is equal to (0.000) , which is less
than the specific value (0.05) and thus the third hypothesis accepted .
V. Conclusions
The results have shown that transformational leadership dimensions are affecting organizational
change management at the structural , technological and people level at Jordan Ahli Bank from the branches
managers perspective , also the results have shown that the transformational leadership dimensions (idealized
influence , inspirational motivation , intellectual stimulation , individualized consideration and empowerment )
are applied in a high level at the branches managers of Jordan Ahli Bank .
Suggestion for Future Research
The present study has been applied at one commercial bank in Jordan (Jordan Ahli Bank) , and in
future for results generalizations purpose , it is suggested to conduct a comparative study of commercial banks
in Jordan. then it is suggested to check the demographic linkages and other work related attitudes relationship
with transformational leadership.
References
[1]. Ahmad Salih & Muhammad Mubaideen (2013), “The Administration Leadership Between Transactional and Transformational
Leadership and Its Impact in the Implementation of the Strategic Objective" , Dirrasat , Administration Sciences , Vol . 40 , No. 1 ,
pp 58-74 .
[2]. Ahmed Yousef Dudin and Roa'a Adnan Al-rababah (2015) "Strategic Leadership and their Effect on Managing Organizational
Change : Case Study ZARQA University " , European Journal of Business and Social Sciences , Vol . 3 , No.12 , pp.81-89.
[3]. Ali Abaas , "Impact of Managerial Leadership Styles on Changing Decision Making Process : An Applied Study in Jordanian
National Electricity Company " (2012) , Journal of Islamic University in Managerial and Economic Studies , Vol .20 , No.1 ,pp.
129-157 .
[4]. Arthur G . Bedeian &Raymond F .Zammuto , 1991, Organizations Theory and Design , 1st
ed , Dryden Press , pp 562-563 .
[5]. Avolio , B.Bass ,B and Junge, D.(1999) , "Re- Examining the Components of Transformational and Transactional Leadership
Using Multifactor Leadership Questionnaire" , Journal of Occupational and Organizational Psychology, Vol 72(4), 405-573.
[6]. Avolio , Bruce , Waldman , David , & Yammarino , Francis (1991) . Leading in the 1990's : The Four I's of Transformational
Leadership . Journal of European Industrial Training , 15 , (4) , 9-16Brown ,S.L., & Eisenhardt , K.M.(1997). The art of continuous
change : linking complexity theory and time – paced evolution in relentlessly shifting organizations . Administrative science
Quarterly , 42, 1-34.
[7]. Armstrong , M (2009) A Handbook of Human Resource Management Practice . London : Kogan Page .
[8]. Bass , B ., 1998. Transformational leadership : Industrial , military, and educational impact , Lawrence Erlbaum Associates ,
Mahwah , NJ.
[9]. Bass , Bernard M .(1985) . Leadership and Performance Beyond Expectation . New York : Free Press.
[10]. Bass , B and Avolio , B (1994) , Improving organizational effectiveness through transformational leadership , United States library
of congress , 23
[11]. Burns , J,M .(1978). Leadership. New York : Harper & Row
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[12]. Boston , M A (2000) , Management Decision and Research Center , Washington , D C : V A Health Services Research and
Development Service , Office of Research and development , Dep . of Veterans Affairs
[13]. D.D. Warrick , (2011) . "The Urgent Need for Skilled Transformational Leaders : Integrating Transformational Leadership and
Organization Development " , Journal of Leadership , Accountability and Ethics , Vol .8(5) , 11-26.
[14]. D.D. Warrick , (2011) .Ibid.
[15]. Ivana Simic , 1998 ,"Transformational Leadership – The Key to Successful Management of Transformational Organizational
Change ", The scientific Journal FACTA Universitatis Series :economics And Organization , Vol. 1, No 6, 1998 pp . 49-55.
[16]. Elham Gorgani , and etal , (2014) , "investigate the Role of Transformational Leadership in Organizational Change : Case Study of
an Industrial Company in Iran " , Applied Mathmatics in Engineering , Management and Technology , 2 (4) , pp. 416-420 .
[17]. Hasan Ali Al-zu'bi (2011) "Investigating the Relationship Between Corporate culture and Organizational Change : An Empirical
Investigation", Journal of Emerging Trends in Economics and Management Sciences , 2. (2) , pp. 111-116 .
[18]. Kamil Hawajreh. (2010) ,The Learning Organization and Perceived Organizational Readiness for Strategic Change , Journal of
Human Sciences , Issue 45 , Year 7th
, Jan. 2010 , pp 1- 30.
[19]. Krishnan , V .R , (2004) ."Impact of transformational leadership on followers' influence strategies ". Leadership and Organization
Development Journal ,Vol .25 No .1 ,pp.58-72.
[20]. Maha . M Al-Khaffaf " Appling Change Management Critical Success Factors in Bank of Jordan and Capital Bank" (2012) ,
American Academic and Scholarly Research Journal , Vol . 4 m No . 3 .
[21]. Muhammad Hussain Uddin (2013) , "Role of Transformational Leadership in Organizational Change : mediating Role of Trust",
Journal of Business and Management , Vol.7, Issue2(Jan-Feb.2013),pp 72-76.
[22]. Paul Chou (2013) , "The Effect of Transformational Leadership on Follower's Affective Commitment to Change " , World Journal
of Social Sciences , Vol. 3 , No. 1 , pp. 38-52.
[23]. Ragad M . Khrrofa (2010) , The Power of Leadership as a Tool to Support the Organizational Change : A Pilot Study to a Sample
of Administrative Leadership in Some Industrial Organizations in Nineveh Province , Al- Rafideen Development Journal , No. 99 ,
Vol. 32 , pp .1-18.
[24]. Thomas V . Mecca , Ed . D , 2004 , Basic concepts of organizational change for administrative leaders ,paper adapted from a series
of papers developed for presentations at both the 1999 Conference of the South Carolina Technical Education Association and the
2003 National Science Foundation's Principal Investigators Annual Conference .
[25]. Weick , K . E .& Quinn ,R . E . (1999) .Organizational change and development . Annual Review of Psychology , 50 (1) , 361-386 .
[26]. Michael L. Jones , 2010 , What do managers do during major organizational change , in Proceeding of the 2010 LABR & ITlC
Conference , The Clute institute for Academic Research , Littleton , University of Wollongong , Research Online , Co ., 1-16 .
[27]. Yassin k . Al Kresheh , etal ,(2013) , "The Impact of Change Factors on Achieving Organizational excellence : A model Arab
Potash Company , Jordan (APC) " , Derassat , Administrative Sciences , Vol.40 , No. 2 ,pp. 211-239.

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The Impact of Transformational Leadership on Organizational Change Management: Case Study at Jordan Ahli Bank

  • 1. IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 17, Issue 12 .Ver. I (Dec. 2015), PP 01-07 www.iosrjournals.org DOI: 10.9790/487X-171210107 www.iosrjournals.org 1 | Page The Impact of Transformational Leadership on Organizational Change Management: Case Study at Jordan Ahli Bank Atif Al-Qura'an , WISE University, Amman, Jordan Abstract: The present study has aimed at identifying the impact of the transformational leadership on organizational change management at Jordan Ahli Bank.To achieve the objectives of the study, a standard questionnaire was adopted, adjusted and distributed to the population of the study which consisted of the branches' managers at Jordan Ahli Bank, their numbers were 50 managers, 44 questionnaires have been returned with 84% response rate. The present study has shown that transformational leadership dimensions (idealized influence, inspirational motivation , intellectual stimulation , individualized consideration and empowerment) are affecting organizational change management at the structural , technological and people level at Jordan Ahli Bank from the branches managers perspective at Jordan Ahli Bank . Keywords: transformational leadership, change management, Jordan Ahli Bank. I. Introduction Organizational change is a necessity for organizations to survive and prosper . In fact , most organizations compete by changing continuously (Brown & Eisenhardt , 1997) Organizations in both the private and public sectors are in need of revolutionary , transformational change . Incremental change and modest improvements won't be enough . Everything must be done better , smarter , and faster while doing more with less and building organizations that attract and retain talented leaders and staff . The organizations that hear this call for change and take a proactive approach to making the changes that can and must be made have a good chance of thriving . The rest may have difficulty surviving in a new organization world where uncertainty , constant change , increased competition , frequent restructuring , downsizing , budget cuts , and layoffs are becoming common place and a growing number of organizations that are household names are not able to make it .(D.D.Warrick , 2011) The degree of change that is required in these times of dynamics and unpredictable economic , social , political , technological , and organizational change can best be accomplished by transformational leaders who have the desire , courage , and skills to make the needed changes and who understand the fundamentals of transformational leadership . .(D.D.Warrick , 2011) Present organizations have begun to focus on re-activation and being transformed into ones capable of meeting future competitive challenges . This has been accompanied by growing concern on the part of researchers studying transformational leadership .Such type of leadership helps to quickly spot new market opportunities convenient for the development of proficiency within the organization . A transformational leader is described as being a person of vision , creativity and inspiration who leads the change . The most important challenges , however, is creating effective leadership capable to lead the organization under this changeable turbulent environment into success , continuity and excellence . This can be achieved by improving performance through an effective type of leadership – transformational leadership . A large number of studies have been conducted over the last two decades on transformational leadership (Bass , 1998) These studies showed that there was a relationship between the behaviors of transformational leadership and production on both the individual and organizational levels . This paved the way to a study which aimed at identifying the impact of transformational leadership on management change regarding branches' managers in the Jordan Ahli Bank . In the present study we are interested in studying to determine the impact of transformational leadership on change management. Thus , the purpose of this study is to draw the transformational leadership literature that is primarily concerned with the capabilities required to enact change successfully . First , we will describe the latest literature relating to transformational leadership . Next , we will review literature relating to change management . Finally , we will integrate these literature and links between transformational leadership and change management . Despite the voluminous research that has been conducted in this area , a recent computer search failed to reveal any literature that examined the relevance of transformational leadership to Jordan culture , especially at commercial banks . This paper reports an exploratory investigation on the relevance and nature of
  • 2. The Impact Of Transformational Leadership On Organizational Change Management: Case… DOI: 10.9790/487X-171210107 www.iosrjournals.org 2 | Page transformational leadership within a Jordanian management context . This paper reveals that the impact of transformational leadership on change management is not just theoretically sound , but , in fact , empirically proven . This paper has applicability to any leader , or aspiring leader , in an organizational setting seeking to improve their abilities . Jordan Ahli Bank considers one of these organizations that concentrate on continuous and transformational change on different levels , at the working process level it depends on technology to introduce the services to it's clients , such as internet services , also currently changes are made at the level of employees , including reducing the number of employees those who arrived the age of social security , and the works currently underway on the development of a new banking system . II. Theoretical Framework 2.1. Conceptual background and hypotheses 2.1.1. .Transformational leadership As an idea , transformational leadership was first mentioned in 1973 , in the sociological study conducted by the author Downton , J . V., "Rebel Leadership : Commitment and Charisma in the revolutionary process, (Ivana Simic, 1998) . After that , James McGregeor Burns used the term transformational leadership in his book "Leadership" (Burns ,1978) . According to Burns , transformational leadership is a process in which leaders and followers always try to promote their own psychological ability and motivational capability to higher levels . In this process , the mutual and growing relationship between leaders and their followers is current (Krishnan , 2004) . Also , Burns , made a distinction between transactional leaders and transformational leaders . Transactional Leadership describes the transaction that occurs between leaders and followers in getting the job done and achieving goals . In many ways it is another term for management . The leader makes clear what needs to be done and offers rewards in exchange for individual and group effort directed towards goal attainment . Transformational leadership describes a process by which leaders bring about significant positive changes in individuals , groups , teams , and organizations by using inspiration , vision , and the ability to motivate followers to transcend their self – interest for a collective purpose (Avolia , Waldman , & Yammarino , 1991) . In 1985, Barnard M. Bass presented a formal transformational leadership theory which , in addition to other things also includes the models and factors of behavior (Bass , 1985). He described specific behaviors that characterized transformational leaders such as being a model of integrity and fairness , setting clear goals , having high expectations , encouraging people and providing support and recognition , stirring the emotions and passions of people , and getting people to look beyond their own self – interest and reach for higher goals . According to Bass and Avolio (1994) , transformational leaders must exhibit the four factors commonly known as the "four Is " to bring major changes : - The idealized influence : It is the style by which the subordinates trust and stimulate their leaders behaviors , and they embrace their values and commit to achieve their vision which maximize self- confidence and the pride of participate with the leader . The transformational leaders minimize using their authorities for personal benefits , but they employ most of their capacity and experience to motivate the group towards vision related to their purposes , and usually the leader seeks to persuade the subordinates and attract them for the group interest , and talking optimistically about the future and form an interesting pictures about the organizational change . - The inspirational motivation : It confirms the behavior style and communication that direct the subordinates and makes them feel the work's value and challenges. The transformational leaders show a lot of enthusiasm and optimism that have a direct positive impact on the subordinates live and in force the feeling of the group spirit and inspire the others with what they say and do, their vision does not mislead the others, but enables them - The intellectual stimulation : It confirms the dimension of encouraging the subordinates to rethink ideas never presented. It is the rationale side of the leadership which includes testing the old assumptions which is used as entrances to solve many problems, but from new corners. The transformational leader focuses on (What) in the problem instead of (who) . - The individualized consideration : The humanitarian considerations look to more than developing the subordinates, it focuses on dealing with each subordinate as a distinguished person, which prevents the frustration among the subordinates. Usually, the transformational leaders express especial interest of their
  • 3. The Impact Of Transformational Leadership On Organizational Change Management: Case… DOI: 10.9790/487X-171210107 www.iosrjournals.org 3 | Page subordinates needs to achievement and growth. They represent the teacher, trainer and consultant. The open dialogue trains the subordinates on the listening skills, it is based on the rule of what the subordinate hears and not on what is said to him or taught to him. The transformational leaders enable their subordinates to take decisions, and they never stop supporting and directing them and assessing their progress . - Also (Avolio, etal,1999) added a fifth dimension for transformational leadership , they called employee empowerment , which indicate to the granting decision making authority and /or creating opportunities to influence decision , and providing ability to make choices 2.1.2. Organizational change : Change is a shift in some condition or situation from its present state to a new and different state . A change can range from minor shifts in procedures or technology to a revolutionary shift in roles within the a society (Thomas V . Mecca , 2004) Armstrong (2009) asserts that change is the only thing that remains constant in organizations. Organizational change is a shift or adaptation of behaviours , values , strategies and techniques that are intentionally implemented in the workplace with the aim of enhancing individual growth and organizational performance (Weick & Quinn, 1999) There tends to be a great deal of consensus amongst researchers regarding the drivers for change , finding three major sphere of influence which drive organizational change . These are technological , economic , and sociocultural . Escalating technological advancement have provoked a continuing evolution in the shape and structure of organizations , having a direct influence on the conduct of management . These rapid developments in technology underpin the dramatic shifts in the economic environment . There is now a great emphasis on knowledge and human capital , and global boundaries have been eroded to extend operations in dimensions of both time and distance (Michael L. Jones , 2010) . An organization that does not adopt changes cannot survive long in market (Boston . M A, 2000) . Organizational changes provide different significant benefits , it improves competitiveness , improves financial performance , enhances employees and customer satisfaction and most important is that it leads organization towards continuous improvement and sustainability , and these changes made the organization as a whole stronger (Boston . M A, 2000) Targets of organizational change :(Arthur G . Bedeian &Raymond F .Zammuto , 1991) - Structural change : involves modifying any of the basic components of structure , included would be changes in departmentalization , authority , delegation , spans of control , and hierarchical levels . - Technological change : involves modifying means whereby an organization transforms inputs into outputs , by using new equipment , new computer – support system , new tools , and new forms of automation . - People change : involves modifying the way employees think and act . 2.2. Literature Review 2.2.1. Arabic Studies Several studies have been carried out in terms of transformational leadership and organizational change in developed and Arab contries , therefore, too many empirical studies conducted to examine the impact of transformational leadership on organizational change. The researcher concentrated on some of these studies as follow: Kamil Hawajreh. (2010) sought to examined the relationship between the learning organization and perceived organizational readiness for strategic change in Petra University in Jordan . Learning organization constructs were identified on the basis of seven dimensions : create continuous learning opportunities , promote inquiry and dialogue , encourage collaboration and team learning , create systems to capture and share learning , empower people toward a collective vision , connect the organization to its environment , and provide strategic leadership for learning organizational readiness for change was identified on the basis of employees' perceptions of their organization's readiness for change by utilizing the attitudes toward change concept . The result of the study suggested that first , participants' highest perceived level of the action imperative for the learning organization was providing leadership , whereas system connection was the lowest . Second , participants' level of each of the seven action imperatives of the learning organization were positively and significantly related to their perceptions of organizational readiness for change . Third , providing leadership and the overall dimensions of the learning organization questionnaire had the highest correlation with organizational readiness for change .
  • 4. The Impact Of Transformational Leadership On Organizational Change Management: Case… DOI: 10.9790/487X-171210107 www.iosrjournals.org 4 | Page In her study, Ragad M . Khrrofa (2010) , Aimed to show the nature of the relationship between the power of leadership on achieving organizational change in industrial organizations in Nineveh province of Iraq . The study showed that there is a relationship and effect between the power of leading in terms of variables and the organizational change in terms of fields . Ahmad Salih & Muhammad Mubaideen (2013), study the “The Administration Leadership Between Transactional and Transformational Leadership and Its Impact in the Implementation of the Strategic Objectives of the Ministry of Environment of Jordan – a Field Study in the Large Industrial Companies”. The study aimed to identifying the effect of transactional and transformational leadership approaches on the implementation of strategic objectives for Jordanian Ministry of Environment . The study concluded that the effect of transformational leadership approach was more than the effect of transactional leadership approach in implementation of strategic goals of Jordanian Ministry of Environment . In addition to that, Hasan Ali Al-zu'bi (2011) "Investigating the Relationship Between Corporate culture and Organizational Change : An Empirical Investigation" , the study examined the relationship between corporate culture and attitudes toward organizational change in the Jordanian insurance companies registered in the Amman Stock Exchange . The study showed that there is a relationship between corporate culture and the affective , cognitive , and behavioral tendency of attitudes toward organizational change . While , Ali Abaas conducted a study in title of "Impact of Managerial Leadership Styles on Changing Decision Making Process : An Applied Study in Jordanian National Electricity Company " (2012) , The study aimed to investigate the impact range of managerial leadership styles (Autocratic , Democratic and Loose ) on the decision making process , and the resistance range of subjects to the decisions and in its implementation , the results showed that there is a different leadership styles existed in that company , and the democratic style has a strong and positive impact on the decision making process , while the loose leadership style has less impact , but autocratic style has a negative impact . Also , Maha . M Al-Khaffaf conducted a study in title of " Appling Change Management Critical Success Factors in Bank of Jordan and Capital Bank" (2012) , The study aimed to identify the application of the concept critical success factors of change management in both Jordan Bank and Capital Bank for each bank , compare these factors among this two banks in order to develop a new change model . The results indicated that the following seven critical success factors were the one that both Banks agreed upon : resources , top management support , quality , employee satisfaction , training , technology , process and systems . Also , the study showed no statistical significant variation among the surveyed banks in terms of change management component . Yassin k . Al Kresheh , etal ,(2013) , conducted a study in title of "The Impact of Change Factors on Achieving Organizational excellence : A model Arab Potash Company , Jordan (APC) " , the study aimed to determine the impact of change factors at organizational excellence among employees in the (APC) , the results indicated that perceptions of respondents toward the change factors was medium , although their perceptions toward the organizational excellence was high , also , there was an impact of change factors in organizational excellence . Ahmed Yousef Dudin and Roa'a Adnan Al-rababah (2015) , conducted a study in title of "Strategic Leadership and their Effect on Managing Organizational Change : Case Study ZARQA University " , the study aimed to identify the effects of strategic leadership on managing of the organizational change in Zarqa University , the study concluded that there was an effect of strategic leadership on managing the organizational change , also , there was an effect of creative and transactional leadership on managing the organizational change , while , there was no effect for the transformational leadership on managing the organizational change . 2.2.2. Foreign Studies Paul Chou (2013) , conducted a study in title of "The Effect of Transformational Leadership on Follower's Affective Commitment to Change " , the study aimed to explore the mechanism through which transformational leadership influences employees' affective commitment to change at farmers' associations in Taiwan . The results indicated that transformational leadership not only directly affects employees' affective commitment to change , but also indirectly affects employees' affective commitment to change via perceived organizational support and affective commitment to the organization . Muhammad Hussain Uddin (2013) conducted a study in the title of "Role of Transformational Leadership in Organizational Change : mediating Role of Trust" , To examine the relationship the author collected the data via questionnaires from the banking sector of Pakistan . The results indicated that there was significant relationship between the transformational leadership with organizational change and trust was playing the mediating role .
  • 5. The Impact Of Transformational Leadership On Organizational Change Management: Case… DOI: 10.9790/487X-171210107 www.iosrjournals.org 5 | Page Elham Gorgani , and etal , (2014) , conducted a study in title of "investigate the Role of Transformational Leadership in Organizational Change : Case Study of an Industrial Company in Iran " , the study sought to achieve leadership roles in organizational change , the results showed leadership in the cognitive skills , practical skills and social skills of managers has had a significant positive impact on organizational change . Study Hypotheses On the basis of literature evidence , following hypothesis have been developed : H 1: There is positive impact with statistical significant at level (α ≤ 0.05) for transformational leadership dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized consideration and empowerment ) on structural change . H 2: There is positive impact with statistical significant at level (α ≤ 0.05) for transformational leadership dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized consideration and empowerment ) on technological change . H 3: There is positive impact with statistical significant at significant level (α ≤ 0.05) for transformational leadership dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized consideration and empowerment ) on people change . III. Research Method Population of the study The participants in this study consisted of the branches' managers of Jordan Ahli Bank , their numbers were 50 managers , 44 questionnaire have been returned with 84% response rate . To achieve the objectives of this study , a standard questionnaire was adopted from already developed questionnaires . IV. Results and Analysis Multiple regression model was run in order to test the hypothesis , at statistical significant level (α ≤ 0.05) , as the following :- Table 1 shows the first hypothesis test as the following :- item α Beta R R Square α Idealized influence 0.820 0.065 0.525 0.275 0.026 Inspirational motivation 0.328 0.408- Intellectual stimulation 0.042 0.518 Individualized consideration 0.048 0.553 empowerment 0.744 0.104 constant 0.613 0.738 Simple correlation coefficient (R) between independent variables (transformational leadership dimensions) and dependent variable (structural change) is (0.525) ,which indicate that there is a medium positive correlation between the two variables , and the coefficient of determination (R- Square) is equal to (0.275) , which means the independent variables (transformational leadership dimensions) was able to explain (0.275) of change in the dependent variable and the rest is due to other factors , and the value of significant level (α) for the impact of transformational leadership dimensions on the structural change is equal to (0.026) , which is less than the specific value (0.05) and thus the first hypothesis accepted . Table 2 shows the second hypothesis test as the following :- item α Beta R R Square α Idealized influence 0.906 0.038- 0.605 0.366 0.003 Inspirational motivation 0.621 0.231 Intellectual stimulation 0.018 0.683 Individualized consideration 0.139 0.460 empowerment 0.865 0.061- constant 0.386 -1.426
  • 6. The Impact Of Transformational Leadership On Organizational Change Management: Case… DOI: 10.9790/487X-171210107 www.iosrjournals.org 6 | Page Simple correlation coefficient (R) between independent variables (transformational leadership dimensions) and dependent variable (technological change) was (0.605) ,which indicate that there is a medium positive correlation between the two variables , and the coefficient of determination (R- Square) is equal to (0.366) , which means the independent variables (transformational leadership dimensions) was able to explain (0.366) of change in the dependent variable and the rest is due to other factors , and the value of significant level (α) for the impact of transformational leadership dimensions on the technological change is equal to (0.003) , which is less than the specific value (0.05) and thus the second hypothesis accepted . Table 3 shows the third hypothesis test as the following :- item α Beta R R Square α Idealized influence 0.747 0.066- 0.667 0.444 0.000 Inspirational motivation 0.776 0.084- Intellectual stimulation 0.239 0.210 Individualized consideration 0.000 0.778 empowerment 0.688 0.091 constant 0.998 0.002 Simple correlation coefficient (R) between independent variables (transformational leadership dimensions) and dependent variable (people change) was (0.667) ,which indicate that there is a strong positive correlation between the two variables , and the coefficient of determination (R- Square) is equal to (0.444) , which means the independent variables (transformational leadership dimensions) was able to explain (0.444) of change in the dependent variable and the rest is due to other factors , and the value of significant level (α) for the impact of transformational leadership dimensions on the technological change is equal to (0.000) , which is less than the specific value (0.05) and thus the third hypothesis accepted . V. Conclusions The results have shown that transformational leadership dimensions are affecting organizational change management at the structural , technological and people level at Jordan Ahli Bank from the branches managers perspective , also the results have shown that the transformational leadership dimensions (idealized influence , inspirational motivation , intellectual stimulation , individualized consideration and empowerment ) are applied in a high level at the branches managers of Jordan Ahli Bank . Suggestion for Future Research The present study has been applied at one commercial bank in Jordan (Jordan Ahli Bank) , and in future for results generalizations purpose , it is suggested to conduct a comparative study of commercial banks in Jordan. then it is suggested to check the demographic linkages and other work related attitudes relationship with transformational leadership. References [1]. Ahmad Salih & Muhammad Mubaideen (2013), “The Administration Leadership Between Transactional and Transformational Leadership and Its Impact in the Implementation of the Strategic Objective" , Dirrasat , Administration Sciences , Vol . 40 , No. 1 , pp 58-74 . [2]. Ahmed Yousef Dudin and Roa'a Adnan Al-rababah (2015) "Strategic Leadership and their Effect on Managing Organizational Change : Case Study ZARQA University " , European Journal of Business and Social Sciences , Vol . 3 , No.12 , pp.81-89. [3]. Ali Abaas , "Impact of Managerial Leadership Styles on Changing Decision Making Process : An Applied Study in Jordanian National Electricity Company " (2012) , Journal of Islamic University in Managerial and Economic Studies , Vol .20 , No.1 ,pp. 129-157 . [4]. Arthur G . Bedeian &Raymond F .Zammuto , 1991, Organizations Theory and Design , 1st ed , Dryden Press , pp 562-563 . [5]. Avolio , B.Bass ,B and Junge, D.(1999) , "Re- Examining the Components of Transformational and Transactional Leadership Using Multifactor Leadership Questionnaire" , Journal of Occupational and Organizational Psychology, Vol 72(4), 405-573. [6]. Avolio , Bruce , Waldman , David , & Yammarino , Francis (1991) . Leading in the 1990's : The Four I's of Transformational Leadership . Journal of European Industrial Training , 15 , (4) , 9-16Brown ,S.L., & Eisenhardt , K.M.(1997). The art of continuous change : linking complexity theory and time – paced evolution in relentlessly shifting organizations . Administrative science Quarterly , 42, 1-34. [7]. Armstrong , M (2009) A Handbook of Human Resource Management Practice . London : Kogan Page . [8]. Bass , B ., 1998. Transformational leadership : Industrial , military, and educational impact , Lawrence Erlbaum Associates , Mahwah , NJ. [9]. Bass , Bernard M .(1985) . Leadership and Performance Beyond Expectation . New York : Free Press. [10]. Bass , B and Avolio , B (1994) , Improving organizational effectiveness through transformational leadership , United States library of congress , 23 [11]. Burns , J,M .(1978). Leadership. New York : Harper & Row
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