Cynicism About Organizational Change: The Mediating Role of Justice Transformational Leadership, Cohesion Perceptions, and Employee

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The Journal of Applied

Behavioral Science
http://jab.sagepub.com

Transformational Leadership, Cohesion Perceptions, and Employee


Cynicism About Organizational Change: The Mediating Role of Justice
Perceptions
Cindy Wu, Mitchell J. Neubert and Xiang Yi
Journal of Applied Behavioral Science 2007; 43; 327
DOI: 10.1177/0021886307302097
The online version of this article can be found at:
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Transformational Leadership, Cohesion


Perceptions, and Employee Cynicism About
Organizational Change
The Mediating Role of Justice Perceptions

Cindy Wu
Mitchell J. Neubert
Baylor University

Xiang Yi
Western Illinois University

The impact of supervisors transformational leadership (TFL), informational and


interpersonal justice, and group cohesion perceptions on employee cynicism about
organizational change (CAOC) was investigated in a sample of 469 employees
from a large Chinese organization undergoing major organizational change. Results
indicate that (a) TFL is negatively related to employee CAOC; (b) employee perceptions of group cohesion moderate the relationship between TFL and CAOC
such that the higher the cohesion perceptions, the stronger the influence of TFL on
employee CAOC; (c) the moderating effect of cohesion perceptions on the
TFLCAOC relationship is fully mediated by interpersonal justice; and (d) informational and interpersonal justice partially mediate the TFLCAOC relationship.
The theoretical and practical implications of the process by which TFL impacts
CAOC are discussed.
Keywords: cynicism about organizational change; transformational leadership;
justice perceptions; cohesion perceptions; China

THE JOURNAL OF APPLIED BEHAVIORAL SCIENCE, Vol. 43 No. 3, September 2007 327-351
DOI: 10.1177/0021886307302097
2007 NTL Institute

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THE JOURNAL OF APPLIED BEHAVIORAL SCIENCE

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M
assive economic reform and the restructuring of Chinese firms have positioned
China as a significant global power in the marketplace (Z.-M. Wang, 2003). Yet,
China remains one of the least studied regions by management scholars (Tsui,
Schoonhoven, Meyer, Lau, & Milkovich, 2004). This scarcity in Chinese studies,
particularly on organizational change in a Chinese context, raises the question of
whether research findings on organizational change based on Western theories are
generalizable to China because employees in emerging markets may hold different
values from those in developed countries (Kiggundu, 1989).
The Chinese culture is described as highly collective oriented, performance oriented,
and institutional oriented (Hofstede, 1980; Javidan, Dorfman, de Luque, & House,
2006; Triandis, 1995). The ambitious project GLOBE (Javidan et al., 2006) suggests
that the Chinese culture values the cultivating and nurturing of personal relationships
because of the Confucius influence that emphasizes relationships and community. The
performance-oriented aspect of the Chinese culture also portrays an effective leader as
one who can develop an exciting vision for employees (Javidan et al., 2006). Theories
originated in Western cultures that are similar or related to this conceptualization of
effective management and leadership practices in China are transformational leadership
(TFL; Bass, 1997), employees subjective perceptions of cohesion in the group or work
unit (Bollen & Hoyle, 1990), and the leader-referent, social aspects of perceived organizational justice (including informational and interpersonal justice; Colquitt, 2001;
Greenberg, 1993). This study theorizes and then examines the mediating and moderating relationships among transformational leadership, informational justice, interpersonal justice, group cohesion perceptions, and their influences on employees cynical
attitude toward organizational change in a Chinese organization that is undergoing
major administrative change, including abolishment of lifetime employment, implementation of a new performance evaluation system, and introduction of continuous
improvement programs.
Cynicism is characterized as frustration, disillusionment, and negative feelings
toward and distrust of a person, ideology, social convention, or institution (Andersson
& Bateman, 1997), varying in its specificity from cynicism as a general personality
trait to cynicism about business, business leaders, occupation, organization, and organizational change (Wanous, Reichers, & Austin, 2004). It has particularly important
implications in organizational change because the success of organizational change

We wish to thank the editor and three anonymous reviewers for their helpful comments and suggestions.
An earlier version of this article was presented at the Academy of Management meetings in Honolulu, HI,
August 2005. This project was supported by the Faculty Travel Assistance Grant from Baylor University.
Cindy Wu is an assistant professor in the Department of Management at Baylor University. Her current
research focuses on leadership, organizational justice, and service management.
Mitchell J. Neubert is Chavanne Chair of Christian Ethics in Business and the H.R. Gibson Chair in
Management Development at Baylor University. His teaching and research focus is to equip principled
leaders to effectively lead individuals, teams, and organizational change.
Xiang Yi is an assistant professor in the Department of Management at Western Illinois University. Her
research interests include leadership, cross-cultural studies, creativity, and workfamily issues.
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

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relies on employees commitment, discretionary performance, and follow-through


(Reichers, Wanous, & Austin, 1997). However, an organizational change process usually creates uncertainty and inevitably encounters setbacks or challenges before the
change effort is judged an obvious success. In emerging economies such as China,
administrative organizational change (change of organizational structure and administrative processes such as new ways to recruit and train personnel or different allocations of firm resources and profits) tend to encounter even greater resistance relative
to technical change (introduction of new products, services, and production process
technology) because it produces a greater departure from existing organizational routines (Zhou, Tse, & Li, 2006). Where uncertainty abounds and difficulties arise,
employee cynicism can emerge and reduce commitment to organizational change,
which subsequently impacts individual performance (Neubert & Cady, 2001).
Although previous studies on organizational change in China have shown that
company leaders charisma contributes to employee job attitudes during change
(Zhou et al., 2006; Zhou, Gao, Yang, & Zhou, 2005), they did not consider the
equally important role of first-line supervisors. An exploratory study indicated that
the effectiveness of ones supervisor is an important antecedent to employee cynicism about organizational change (CAOC; Wanous, Reichers, & Austin, 2000). Yet,
what supervisory effectiveness entails in the context of change remains unclear.
Based on theories of leadership, we test the influence of supervisors transformational leadership because of its collective orientation that is congruent with the
Chinese culture (Jung & Avolio, 1999). Transformational leadership is defined as a
leadership style that stimulates followers to change their beliefs, values, capabilities,
and motives to raise performance beyond self-interest for the benefit of the organization (Avolio, 1999). Although identified as a change-oriented leadership
(Eisenbach, Watson, & Pillai, 1999), TFL has rarely been examined in an organizational change context. Some researchers even contend that the absence of continuous change may make the charisma or idealized influence components of TFL
unnecessary (Hinkin & Tracey, 1999). The first goal of this study is to address this
important issue. Specifically, we test whether TFL helps reduce employees cynical
attitude about organizational change in a Chinese context. In addition to this direct
effect, we also examine the process through which TFL influences employee CAOC.
Although numerous studies on TFL report positive relations to employees performance and behavior (e.g., Judge & Piccolo, 2004), these studies still leave many
questions unanswered (Yukl, 1998). One such question is the mechanism by which
TFL leads to enhanced employee performance and behavior (Bass, 1999; Bono &
Judge, 2003; Dvir, Eden, Avolio, & Shamir, 2002). We propose that employees
informational and interpersonal justice perceptions are mechanisms that mediate
TFL influences. Informational justice and interpersonal justice, formerly conceptualized as interactional justice, are differentiated from procedural justice in that their
consequences are delivered through leaders as opposed to the organization as a
system (Masterson, Lewis, Goldman, & Taylor, 2000). These constructs are identified as leader referenced and therefore would be closely related to leadership effectiveness; yet, we are not aware of any studies examining how particular types of
leadership influence employee informational and interpersonal justice perceptions.
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THE JOURNAL OF APPLIED BEHAVIORAL SCIENCE

September 2007

The second goal of this study therefore is to test whether employees informational
and interpersonal justice perceptions mediate the transformational leadership influence on employee cynical attitude about organizational change in a Chinese setting.
The context of this study, a Chinese company undergoing major administrative
change, plays a crucial role that raises another important research question: Does
TFL influence employee CAOC in this particular context as the theories rooted in
the Western cultures predict? Disagreement has existed among scholars of TFL on
whether the effect of TFL, a leadership theory originated in the Western culture, is
transferable cross-culturally (Bass, 1997; Pillai, Scandura, & Williams, 1999).
Following previous studies (Jung & Avolio, 1999; Spreitzer, Perttula, & Xin, 2005;
Walumbwa & Lawler, 2003), we adopt a uniform functional universality perspective
(Bass, 1997), which refers to the generalizability of a relationship between two variables cross-culturally but to varying degrees, arguing that the effect of TFL would
be more pronounced in collectivist societies such as China (Jung & Avolio, 1999;
Walumbwa & Lawler, 2003) because of its cultural emphasis on aligning individual
interests and values to those of the group or organization (Shamir, House, & Arthur,
1993). Although people from collectivist cultures tend to value the needs and wants
of the in-group more than those of individuals (Hofstede, 1980), the degree to which
they see the group as in-group is determined by their own subjective evaluation
(Triandis, 1995). Along this line, we take a step further to test whether an individuals perception of group cohesion, perception about group closeness, similarities,
bonding, and his or her personal motivations to remain in the group (Carron &
Brawley, 2000), further enhances the influence of TFL. Our third goal therefore is to
examine whether individual employees group cohesion perceptions moderate and
further enhance the impact of TFL on employee CAOC.
In sum, the current study seeks to contribute to the literature by examining the influence of TFL on employees cynical attitude in organizational change in a Chinese context. First, we test whether supervisors TFL helps reduce employee CAOC. Next, we
test whether employee informational and interpersonal justice perceptions mediate the
influence of TFL on employee CAOC. Third, we examine whether employees perceptions about group cohesion moderate this relationship.

CAOC, JUSTICE PERCEPTIONS, AND


TRANSFORMATIONAL LEADERSHIP
Cynicism in general has been described as a personality trait (Pope, Butcher, &
Seelen, 1993). But in the organizational setting, research has found unpleasant experience or psychological contract breach as an antecedent of cynicism (Andersson &
Bateman, 1997; Johnson & OLeary-Kelly, 2003), suggesting that it is susceptible to
contextual influences. Employee cynicism about organizational change is defined as a
pessimistic viewpoint about change efforts being successful because those responsible
for making change are blamed for being unmotivated, incompetent, or both (Wanous
et al., 2000, p. 133). Supervisors are likely viewed as proximal influences on their
direct reports because they are perceived as the principal agents of the organization in
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communicating necessary information and providing support to employees during


organizational change (Cole, Bruch, & Vogel, 2006; Larkin & Larkin, 1996). Initial
research findings have supported this notion. Cole et al. (2006) for example found that
supervisors support for employees is negatively related to employee CAOC. Wanous
et al. (2000) also reported that supervisor behaviors such as keeping people informed,
providing information, caring about employees, and trying to understand each
employees point of view are negatively related to employee CAOC. Similar results
were also reported in longitudinal study conducted in a union setting, where after the
change of committee by reelection, union committee persons were judged as more
effective when they demonstrated these behaviors (Wanous & Reichers, 1998). Many
behaviors depicted in these studies pertain to issues of the transformational leadership
style and informational and interpersonal justice.
Transformational leaders motivate employees to transcend individual goals for the
sake of the team or organization (Bass, 1985). They achieve this by articulating a clear
vision, bonding individual and collective interests (Pawar & Eastman, 1997), and transforming the needs, values, preferences, and aspirations of followers from self interests
to collective interests (Shamir et al., 1993). Transformational leadership is composed of
four dimensions: individualized consideration, inspirational motivation, idealized influence (trait and behavior), and intellectual stimulation (Bass, 1985). Individualized consideration involves leaders paying attention to each followers needs and wants by
mentoring, supporting, encouraging, and coaching followers to use their competence.
Inspirational motivation involves leaders articulating a compelling vision to be achieved
by using affective and values-relevant arguments to generate a sense of identification
with the collectivity. Idealized influence is concerned with leaders serving as a role
model to the followers by sacrificing personal benefits for the good of the group, setting
a personal example for the followers, and holding a high moral standard in every decision. Intellectual stimulation entails leaders challenging their followers to view problems from different perspectives and encouraging them to be problem conscious. A
recent meta-analysis confirmed the validity of transformational leadership as a positive
influence on employee satisfaction with ones supervisor, follower job satisfaction, follower motivation, and leader effectiveness (Judge & Piccolo, 2004). Cross-cultural findings also generally agree with these positive relationships, although the strength may
vary (Jung & Avolio, 1999; Walumbwa & Lawler, 2003). Followers under TFL tend to
rate supervisors as satisfactory and effective; therefore, these leaders are less likely to
be judged as incompetent or unmotivated, and thus, employee CAOC would be low.
Robust relationships with such individual work outcomes as organizational citizenship behavior, job satisfaction, organizational commitment, turnover intentions,
and job performance have been established in organizational justice research
(Cohen-Charash & Spector, 2001; Colquitt, Wesson, Porter, Conlon, & Ng, 2001;
Rupp & Cropanzano, 2002). The behavior of a management representative particularly is concerned with interactional justice (Bies & Moag, 1986), which is referred
to as the social side of justice and can be further decomposed into two separate
facets: informational justice and interpersonal justice (Greenberg, 1993) as shown by
recent empirical evidence (Colquitt, 2001). Informational justice is concerned with
the degree to which employees are provided with knowledge and explanations about
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procedures that are implemented and the outcomes that are distributed. Interpersonal
justice characterizes the degree to which employees are treated with respect, dignity,
and sensitivity by the authority figure they interact with (Greenberg, 1993). Being
the principal agents of the organization through which information flows (Cole et al.,
2006), immediate supervisors are management representatives who impact justice
perceptions through their interpersonal behavior (Cohen-Charash & Spector, 2001).
Therefore, immediate supervisors leadership style is most likely to influence
employees CAOC through informational and interpersonal justice perceptions.
Particularly, supervisors TFL style is likely to influence employee CAOC by elevating informational and interpersonal justice perceptions.
The definition of TFL also suggests that informational and interpersonal justice perceptions mediate the influence of TFL on CAOC. Specifically, leaders who demonstrate individualized consideration seek to understand each followers concerns about
organizational change and therefore are able to address them effectively by listening
attentively, coaching, and mentoring based on individual employees needs, abilities,
and aspirations (Bass, 1997). As a result, followers are less likely to blame the change
agent for being unconcerned and incompetent because they are provided with relevant
information (i.e., informational justice) in a supportive manner (i.e., interpersonal justice). Similarly, leaders who use inspirational motivation are able to concurrently communicate information and promote individual worth. Such leaders deliver information
about organizational change through their personal enthusiasm and a clear vision. This
personal approach depicts a vivid picture of the future that is to be achieved collectively and prevents followers from wavering in organizational change because it provides information as to what needs to be done and why (Bass, 1997). Therefore,
employees are more likely to feel esteemed and informed and, as a result, less likely
to be pessimistic or cynical about the organizational change.
Likewise, idealized influence and intellectual stimulation are likely to reduce
employee CAOC because of enhanced informational and interpersonal justice.
Sincere optimism exhibited by leaders own conduct in embodying vision-consistent
principles and values instills in followers the pride and confidence to envision themselves in the new vision (Bass, Avolio, Jung, & Berson, 2003). Because leaders are
the makers of the meaning in an organization (Brockner & Higgins, 2001), leaders
who demonstrate idealized influence provide information about organizational
change by effectively translating the change into approved behaviors that would lead
to positive results. This role modeling and the process of instilling pride in employees are likely to enhance informational and interpersonal justice. Similarly, leaders
who practice intellectual stimulation encourage followers to express creative ideas
by questioning old assumptions, traditions, and beliefs. The freedom to experiment
and possibly fail conveys that employees and their ideas are valued. Furthermore, it
also allows employees to remain cognitively flexible and therefore be more open to
new ideas (Deci & Ryan, 1980). Thus, employees are more likely to feel valued and
understand the rationale behind the change when faced with uncertainty and challenge caused by organizational change. Consequently, they are less likely to be pessimistic about the likely success of the change initiative as a result of just treatment
by their supervisors.
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

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Based on the aforementioned discussion, we propose the following hypotheses:


Hypothesis 1: Supervisor TFL is negatively related to follower CAOC.
Hypothesis 2: Informational justice perception mediates the relationship between supervisor TFL and
employee CAOC.
Hypothesis 3: Interpersonal justice perception mediates the relationship between supervisor TFL and
employee CAOC.

THE MODERATING ROLE OF PERCEIVED GROUP COHESION


Because leadership is embedded within the organization, contextual characteristics play a significant role in the emergence and effectiveness of leadership (Osborn,
Hunt, & Jauch, 2002). Lau, Tse, and Zhou (2002) showed that at least for Chinese
companies, company group culture is positively related to the degree to which
employees are attuned to, feel positive about, and have reduced skepticism of the
results of change. In a similar vein, Lau and Ngo (2001) also indicated that Chinese
companies with a group orientation have a higher tendency to change and initiate
innovative activities. Consistent with the collectivist Chinese culture, company
group culture seems to create an environment that offers receptivity for the changeoriented and collective-oriented transformational leadership (Pawar & Eastman,
1997). However, cultural differences in the way leadership influences are manifested
are not only across cultures but also within cultures (Pillai et al., 1999), whether it is
national culture or company culture. Social psychologists therefore have advocated
studying subjective culture that assesses individuals mental representations of the
context in which they exist as opposed to the external structures and artifacts
(Triandis, 1995). We measure this subjective evaluation of company group culture
embedded in the Chinese collectivist culture by assessing individual employees perceptions of cohesion in their work unit.
Although group cohesion has been treated as a group-level variable (Mullen &
Copper, 1994), defined as the group members tendency to stay with the group or a
larger social entity (Bollen & Hoyle, 1990; Dion, 2000), researchers also recognize that
it is individuals unique experience that contributes to their own perception of group
cohesion (Dion, 2000; Podsakoff & MacKenzie, 1995). Group cohesion perceptions
particularly reflect an individuals perceptions about group closeness, similarity, bonding, and his or her personal motivations to remain in the group (Carron & Brawley,
2000). In contrast to the composite of group members feelings toward the group,
Bollen and Hoyle (1990) contended that measuring each members perception of cohesion captures the role the group plays in an individual members life and therefore is a
better predictor of other subjective phenomena (e.g., individual attitudes) expressed by
each group member. The appropriate level of cohesion to be measured should follow
closely from ones theoretical question (Dion, 2000). Given that our research question
was concerned about individual group members perceptions, we regarded cohesion as
an individual-level perception that captures each individuals unique experience.
We propose that an individuals perception of group cohesion may facilitate
receptivity to TFL because aspects of TFL employ references to the collective,
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which highlights the salience of collective identity in employees self-concept


(Shamir et al., 1993) and is congruent with a group environment perceived to be
highly cohesive. Specifically, when employees perceive their work unit as cohesive,
they sense that bonding and closeness of the work unit are strong, an indication of
their ties to the in-group (Nibler & Harris, 2003). Collectivists, including Chinese,
behave very differently in the presence of in-groups and out-groups. The emphasis
on collective welfare, harmony, and duties typically applies only to the in-groups and
usually does not extend to out-groups (Kim, 1994). Collectivists in their in-groups
value obedience to the in-group authority, security, and harmony (Nibler & Harris,
2003), which enable the leader to more easily exert his or her influence. It follows
that in a Chinese context, when leaders frame the organizational change as a collective vision and joint effort, individuals who treat their work unit as an in-group,
which is manifested by the perceived strong bonding and closeness in the workplace,
are more ready to identify with and be influenced by collective-oriented TFL.
Therefore, we propose the following hypothesis:
Hypothesis 4: Employees perceptions about group cohesion moderate TFL influences on employee
CAOC such that the higher the group cohesion perceptions, the stronger the TFLCAOC relationship.

Moreover, the aforementioned discussion also suggests that perceptions of informational and interpersonal justice could be the mechanisms by which the overall
moderated effect of TFL on CAOC is produced. Specifically, TFL, because of its
collective focus, would yield a greater magnitude of employee attitudinal and behavioral results when employees work unit is perceived as congruent with this collective approach of leadership. That is, transformational leaders are likely to be
perceived as providing employees with relevant information in the change process
because of their ability to articulate a clear collective vision and the rationale behind
it and because of them serving as a role model to show employees the appropriate
behavior in the midst of inevitable uncertainties in the change process. This effect of
TFL is further enhanced by a work unit that is close-knit because it provides a facilitating context for the collective-oriented TFL.
Furthermore, the social information processing perspective of motivation suggests that individuals develop their attitudes and behaviors based on the available
social information that is salient and consistent (OReilly & Caldwell, 1985;
Salancik & Pfeffer, 1978). One such source of social information is the immediate
social context (e.g., networks of coworkers) one is in. The context may influence
ones interpretation of the situation by making certain aspects of the situation salient
and by exposing individuals to the expressed attitudes of others. Because group
cohesion depicts group closeness, similarity, bonding, and individuals desire and
motivation to maintain their membership in the group (Carron & Brawley, 2000),
individuals in cohesive groups tend to comply with the salient attitudes and expectations in the social context. As such, researchers contend that group cohesion facilitates information consistency in the environment (OReilley & Caldwell, 1985). In
a similar vein, we argue that the effect of informational justice perceptions on CAOC

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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

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would be enhanced through the affirmation from unit members who share similar
and consistent opinions (i.e., high group cohesion). We propose:
Hypothesis 5: Informational justice mediates the moderated relationship between TFL, group cohesion perceptions, and employee CAOC such that the higher the group cohesion perceptions, (a)
the stronger the influence of TFL on informational justice and (b) the stronger the influence of
informational justice on CAOC.

Likewise, we also expect that interpersonal justice mediates the moderating effect
of cohesion perceptions. Specifically, transformational leaders, because of their personal and individualized coaching style of leadership, tend to be perceived as treating employees with respect and dignity, thereby elevating interpersonal justice
perceptions. Meanwhile, because of the collective vision depicted by transformational leaders, a context perceived as being cohesive provides congruency with the
collective-oriented TFL and therefore would magnify the TFL influence on interpersonal justice. In addition, the heightened interpersonal justice perceptions,
through the affirmation of members in a close-knit unit, would further increase in its
magnitude of influence on employee CAOC based on the social information processing perspective. Therefore, we propose:
Hypothesis 6: Interpersonal justice mediates the moderated relationship between TFL, group cohesion
perceptions, and employee CAOC such that the higher the group cohesion perceptions, (a) the
stronger the influence of TFL on interpersonal justice and (b) the stronger the influence of interpersonal justice on CAOC.

We presented the conceptual framework of the hypothesized relationships in


Figure 1.

METHOD
Research Setting, Sample, and Procedures

The setting for this research was a large Chinese petroleum company undergoing
major administrative organizational change. The changes included abolishing lifetime employment, implementing a new performance evaluation system, and introducing continuous improvement programs through quality circles and regular
meetings and forums. Data were collected through survey administration a year after
the changes began. This time frame ensured that employees had ample time to form
their opinions about change as well as to experience the influence of their supervisors in the midst of the change.
In phone interviews with the general manager prior to the survey administration,
we were able to establish that these were the first substantial change initiatives
within the organization, and therefore employees cynical attitudes about organizational change were not likely to be influenced by their previous experience with
changes in the company. Furthermore, the norm of stability in our state-owned focal

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Informational
Justice
Perceptions (IFJ)

Transformational
Leadership
(TFL)

Cohesion
Perceptions

Cynicism about
Organizational
Change (CAOC)

Interpersonal
Justice
Perceptions (IPJ)

FIGURE 1: Conceptual Framework for the Study

organization in a noncompetitive planned economy (at least up to the time of our


data collection) also excluded the possibility of employee cynicism due to lack of
change attributed to leaders lack of capability or motivation to initiate change
(Wanous et al., 2004).
We conducted an introductory session with all the managers (including the HR
staff) to inform them to distribute the informed consent first, collect back the signed
consent, and then administer the anonymous survey. We then handed the surveys to
these managers to distribute to their first-line supervisors and employees after they
agreed to follow this survey administration procedure. The completed surveys were
returned anonymously and directly to the human resource department via the internal company mailing system to reduce employees socially desirable responses.
Among the 650 surveys distributed, 467 surveys were completed and usable, resulting in a response rate of 72%. Of the respondents, 68% in the sample were men, and
32% were women. The average age was 35.7 years old. The average job tenure was
15.6 years. Of the respondents, 74% were not in any managerial positions. All
respondents were Chinese.
Measures

We followed Brislins (1980) translation-back translation procedure to create a


Chinese version of the questionnaire.
Cynicism about organizational change. We used Reichers et al.s (1997) eightitem scale to measure employee CAOC. Participants responded to a 5-point scale
ranging from 1 (strongly disagree) to 5 (strongly agree). A sample item is The
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

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people who are responsible for solving problems around here dont have the skills
that are needed to do their jobs. The coefficient alpha was .86.
Transformational leadership. We employed the Multifactor Leadership Questionnaire
(MLQ) Form 5X-Short (Bass & Avolio, 1995) to measure TFL. Each dimension of
TFL was measured with four items on a 5-point scale ranging from 1 (strongly disagree) to 5 (strongly agree). Sample items include My supervisor talks optimistically about the future and My supervisor gets me to look at problems from many
different angles. In the instructions, we asked the participants to evaluate their
immediate supervisor based on their interactions on issues relevant to the organizational change. Similar to prior research, the dimensions of TFL showed strong correlations (rs = .43 to .69). Because prior research indicated that dimensions failed to
show discriminant validity (Bycio, Hackett, & Allen, 1995) and because we did not
specify hypotheses on dimensions of TFL, we averaged the 20 items to form a single index of TFL. This practice is also consistent with prior research on TFL using
the MLQ as the instrument (e.g., Bass et al., 2003; Bono & Judge, 2003; Dvir et al.,
2002). The coefficient alpha was .89.
Group cohesion perceptions. We measured employee perceived cohesion by the
three-item measure developed by Podsakoff and MacKenzie (1994). Participants
responded to the items on a 5-point scale ranging from 1 (strongly disagree) to 5
(strongly agree). A sample item is The members of my work group stand up for
each other. The coefficient alpha was .75.
Informational and interpersonal justice. We used Colquitts (2001) five-item
measure to assess informational justice and his four-item measure to assess interpersonal justice. Participants responded to a 5-point scale ranging from 1 (not at all)
to 5 (completely). They were asked in the instructions to evaluate their interactions
with their immediate supervisor on the matters relevant to the organizational change.
A sample item for informational justice is Has he/she communicated details in a
timely manner? A sample item for interpersonal justice is Has he/she treated you
with respect? Coefficients alpha for informational justice and interpersonal justice
measures were .84 and .85, respectively.
Control variables. We controlled for respondents sex, age, education, organizational tenure, and managerial tenure to ensure that the influence of leadership is
above and beyond relevant demographic variables. We included these demographic
variables because of their potential relevance to the independent and dependent variables as suggested by previous research and the top management of the company.
Particularly, because of lifetime employment, the extremely low turnover rate until
the organizational change took place, and the tradition of promotion from within,
employee age, education, organizational tenure, and managerial tenure all helped
capture the level of status an employee enjoyed, which was difficult to measure yet
potentially critical in influencing employees perceptions of not only organizational
change but justice and group cohesion. Sex was also included as a control based on
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the top managements suggestion that because the majority of the managerial staff
in this company was men, female respondents were likely to have different perspectives of organizational change relative to their male counterparts. Including these
control variables would help us partition out the variance attributable to the alternative explanations.
Remedies and Assessment of Common Method Biases

Because all of our measures were taken from the employees, we took several procedural remedies related to questionnaire design to minimize common method
biases following the suggestions by Podsakoff, MacKenzie, Lee, and Podsakoff
(2003). First, we reordered the items in the questionnaire so that the dependent variable followed rather than preceded the independent variables. This tactic reduces the
effects of consistency artifacts (Podsakoff & Organ, 1986). Second, to minimize the
possibility that social desirability serves as the common factor in explaining variances, we ensured anonymity in a statement in the informed consent that urged
respondents to answer as honestly as possible. Third, all the question items in the
survey were adopted from well-validated measures that have been tested and refined
to include items that measure a construct with a clearly defined domain; therefore,
very little room was left for subjective interpretations that allow consistency artifacts
to govern the responses to questions.
In addition, we conducted a Harmans single-factor test (Podsakoff et al., 2003;
Podsakoff & Organ, 1986) to examine whether one single factor emerged to account
for the majority of the variances in the variables. The result indicated that eight factors with eigenvalues greater than one were extracted, accounting for 61% of the
variance in total. The first component accounted for 30% of the total variance, indicating that the single factor did not account for the majority of the variance.
Furthermore, we conducted a confirmatory factor analysis (CFA) with all variables
combined as one factor. The poor model fit with the data (2/df = 18.22; goodnessof-fit index [GFI] = .78; comparative fit index [CFI] = .77; root mean square error of
approximation [RMSEA] = .18) suggested that although obtained from a single
source, the study variables are unlikely to be dominated by one unobserved common
variance factor. Therefore, we concluded that common method bias was not a major
concern in the current study.

RESULTS
Following the methods employed by H. Wang, Law, Hackett, Wang, and Chen
(2005), we first conducted three tests to verify the distinctiveness of TFL and the two
hypothesized mediating variables, informational justice and interpersonal justice.
First, we conducted a dimension-level CFA including TFL, informational justice,
interpersonal justice, cohesion perceptions, and CAOC in the model. We used four
dimensions of TFL as the indicators and randomly averaged the informational justice, interpersonal justice, cohesion perceptions, and CAOC items to create two
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

339

indicators for each construct (H. Wang et al., 2005). Second, we adopted Cohen and
Cohens (1983) test of correlations from a single sample to verify whether there is
significant difference in the correlations between the independent variable (CAOC)
and each of the variables under study. Unequal correlations would suggest discriminant validity. Finally, in hierarchical regression, we entered TFL and observed the
change in R2 after entering informational justice and interpersonal justice.
Significant change in R2 would also imply that these two justice perceptions
explained additional variance in CAOC above and beyond TFL.
Table 1 shows the CFA results. As indicated, the baseline five-factor model fit the
data adequately (2 = 232.24; df = 55; GFI = .94; CFI = .95; RMSEA = .07). We also
tested alternative models, combining informational justice with TFL (Model 1),
interpersonal justice with TFL (Model 2), two justice perceptions with TFL (Model
3), and all five factors (Model 4), against the baseline five-factor model. Significant
2 tests showed that all of the alternative models fit the data significantly worse
than the five-factor model, providing evidence for distinctiveness of TFL, informational justice, interpersonal justice, cohesion perceptions, and CAOC.
The results of Cohen and Cohens (1983) t test of differences between two
Pearson correlations from the same sample also suggest discriminant validity
between transformational justice and justice perceptions. The correlation between
CAOC and TFL is significantly different from both those between CAOC and informational justice (t = 2.26, df = 464, p < .05) and between CAOC and interpersonal
justice (t = 2.49, df = 464, p < .01). Finally, the significant R2 change in the regression equation when informational justice was entered (F = 36.39, p < .01) and
when interpersonal justice was entered (F = 51.97, p < .01) after controlling for
TFL also indicated that informational justice and interpersonal justice perceptions
explained variance in CAOC above and beyond TFL. This and the results from the
other two tests suggest that TFL, informational justice, and interpersonal justice are
distinct constructs.
Table 2 displays means, standard deviations, and correlations among all variables. CAOC is significantly and negatively related to TFL, informational justice,
interpersonal justice, and cohesion perceptions. TFL is positively and significantly related to interpersonal justice and informational justice and cohesion
perceptions.
To test the proposed moderation hypothesis, we conducted hierarchical regression
analyses. Following Aiken and Wests (1991) suggestions, we centered variables that
are the components of the interaction term in the moderation analysis. Table 3 summarizes the results of regression analysis for testing Hypothesis 1, which states that
supervisors TFL is negatively related to followers CAOC, and Hypothesis 4, which
states that employees perceptions about group cohesion moderate the TFL influences on employee CAOC. At Steps 1 through 4, we entered the control variables,
TFL, cohesion perceptions, and the interaction between TFL and cohesion perceptions. Table 2 indicates that the R2 associated with TFL was statistically significant
(in Step 2), lending support to Hypothesis 1. The R2 change was also significant with
the addition of the interaction term, indicating the presence of significant interaction
between TFL and cohesion perceptions. Figure 2 illustrates that the pattern of the
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340

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**p < .01.

Model 4

Model 3

Model 2

Model 1

Baseline model

Model

Five factors: transformational leadership


(TFL), informational justice, interpersonal
justice, cohesion perceptions, and
cynicism about organizational
change (CAOC)
Four factors: TFL and informational justice
were combined as one factor
Four factors: TFL and interpersonal justice
were combined as one factor
Three factors: TFL informational justice
and interpersonal justice were combined
as one factor
One factor: TFL informational justice,
interpersonal justice, and CAOC all
combined as one factor

Factors

TABLE 1

999.42

633.20

529.27

412.79

232.24

65

62

59

59

55

df

767.18**

400.96**

297.03**

180.55**

.78

.83

.87

.89

.94

Goodness-ofFit Index

Comparison of Measurement Models

.74

.84

.87

.90

.95

Comparative
Fit Index

.16

.13

.12

.10

.07

Root Mean Square


Error of Approximation

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341

1.32
35.73
11.10
15.60
2.38
3.63
3.87
3.35
3.68
2.90

M
0.47
5.28
2.52
4.68
5.12
0.49
0.68
0.71
0.71
0.67

SD

.05
.08
.03
.08
.03
.07
.06
.12*
.05

NOTE: Internal reliabilities are on the diagonal, in parentheses (n = 469).


a. Dummy variable, male = 1, female = 2.
*p < .05, two-tailed test. **p < .01, two-tailed test.

1. Sexa
2. Age
3. Education
4. Organizational tenure
5. Managerial tenure
6. Transformational leadership
7. Cohesion perceptions
8. Informational justice
9. Interpersonal justice
10. Cynicism about organizational change

Variable

TABLE 2

.21**
.60**
.36**
.03
.01
.02
.05
.03

.32**
.18**
.03
.05
.01
.03
.01

.16**
.10*
.01
.14**
.06
.05

.09*
.08
.11**
.06
.01

(.89)
.37**
.65**
.54**
.33**

(.75)
.33**
.31**
.17**

Zero-Order Correlations and Descriptive Statistics for the Study Variables

(.84)
.61**
.41**

(.85)
.43**

(.86)

10

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September 2007

TABLE 3

Results of Regression Analysis of Cynicism About Organizational Change on


Transformational Leadership, Cohesion Perceptions, and Their Interaction
R2

Independent Variable
Step 1: Controls
Sex
Age
Education
Organizational tenure
Managerial tenure
Step 2: Transformational leadership
Step 3: Cohesion perceptions
Step 4: Transformational Leadership Cohesion Perceptions

.01

.12**
.12**
.15**

R2
.01

F
0.58

.11**
.00
.02**

62.95**
0.12
11.69**

.05
.04
.02
.01
.05
.37**
.05
.16**

a. Beta weights are reported for the final step (n = 469).


*p < .05, two-tailed test. **p < .01, two-tailed test.

3.5
3

CAOC

2.5
High Cohesion
Perceptions

2
1.5

Low Cohesion
Perceptions

1
0.5
0
Low

High

TFL
FIGURE 2: Interaction Between Transformational Leadership (TFL) and Cohesion Perceptions
on Cynicism About Organizational Change (CAOC)
NOTE: We used one standard deviation above and below the mean to represent high and low levels of
transformational leadership.

two-way interaction was consistent with Hypothesis 4. There is overall moderation


of the TFL influence. Specifically, the influence of TFL on CAOC was strongest
when employees group cohesion perception was high.
To test mediated moderation, we followed the steps suggested by Muller, Judd, and
Yzerbyt (2005). Similar to Baron and Kennys (1986) steps for testing mediation, there
are also several steps to test mediated moderation. We also centered variables that are
the components of the interaction term in the mediated moderation analysis. According
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

343

TABLE 4

Results of Hierarchical Regression Analysis


for Mediated Moderation (n = 469)

Independent Variables
Controls
Sex
Age
Education
Organizational tenure
Managerial tenure
Transformational leadership (TFL)
Moderator: Cohesion perceptions
TFL Cohesion Perceptions
Mediators
IFJ
IPJ
IFJ Cohesion Perceptions
IPJ Cohesion Perceptions
F
R2
Adjusted R2
df

Model 1: Cynicism
About Organizational
Change (CAOC)

.05
.04
.02
.01
.05
.37**
.05
.16**

9.93**
.15
.13
460

Model 2a:
Informational
Justice (IFJ)

.03
.11*
.00
.15**
.08*
.59**
.12**
.01

47.46**
.45
.44
460

Model 2b:
Interpersonal
Justice (IPJ)

.09*
.13*
.06
.05
.05
.45**
.09*
.12**

26.87**
.32
.30
460

Model 3:
CAOC

.01
.10
.00
.03
.08
.11*
.03
.05
.20**
.33**
.07
.17**
16.10**
.30
.28
458

*p < .05, two-tailed test. **p < .01, two-tailed test.

to Muller et al. (2005), mediated moderation can only be established if first of all the
overall moderating effect (between TFL and cohesion perceptions) is significant on the
dependent variable (CAOC). Then, either or both of the following two conditions need
to be met: (a) The effect of the overall interaction (between TFL and cohesion perceptions) on the mediators (informational justice and interpersonal justice) should be
nonzero and the partial effects of the mediators (informational justice and interpersonal
justice) on the dependent variable (CAOC) should also be nonzero, and/or (b) the
effects of the independent variable (TFL) on the mediators (informational justice and
interpersonal justice) are nonzero and the interactional effects between the moderator
(cohesion perceptions) and mediators (informational justice and interpersonal justice)
on CAOC are also nonzero. Lastly, the moderation of the residual effect of the independent variables (the interaction between TFL and cohesion perceptions on CAOC
when the mediators and the interactions between the mediators and moderator are
included in the equation) on CAOC should disappear or be reduced in magnitude compared to the overall effect of moderation. We summarized the statistical results for testing mediated moderation in Table 4.
Table 4 shows the hierarchical regression results for Hypotheses 2 through 6
regarding the mediating roles of informational and interpersonal justice. In Model 1,
we regressed employee CAOC on control variables, TFL, group cohesion perceptions, and the interaction between TFL and group cohesion perceptions. Both TFL
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and the interaction term contributed significantly to CAOC. In Models 2a and 2b, the
hypothesized mediators, informational justice and interpersonal justice, were
regressed on the control variables, TFL, group cohesion perceptions, and the overall
interaction term (between TFL and cohesion perceptions). Because we hypothesized
that both informational and interpersonal justices would be the mediators, a multivariate regression analysis was first conducted for the omnibus test, with the same
independent variables included in Model 1. The omnibus multivariate regression
analysis showed that the independent variables overall contributed to informational
and interpersonal justice (Wilkss = .50, F = 24.09, df = 16, p < .01). Therefore,
we proceeded to conduct two univariate regression analyses on informational and
interpersonal justice, respectively, to identify whether TFL and the interaction term
were significant. As Models 2a and 2b indicate, TFL contributed significantly to
both informational justice and interpersonal justice above and beyond the control
variables. The interaction term however was significantly related to only interpersonal justice but not informational justice. In Model 3, we regressed CAOC on control variables, TFL, cohesion perceptions, the interaction between TFL and cohesion
perceptions, two hypothesized mediators (informational justice and interpersonal
justice), the interaction between informational justice and cohesion perceptions, and
the interaction between interpersonal justice and cohesion perceptions.
The results indicate that both TFL and the interaction between TFL and cohesion
perceptions contributed to CAOC significantly and negatively (Model 1), which fulfilled the first condition. The interactional effect between TFL and cohesion perceptions was significant on interpersonal justice but not informational justice (Models
2a and 2b), but both interpersonal and informational justice were significant when
regressed on CAOC (Model 3). Therefore, Condition a in Step 2 is fulfilled for interpersonal justice but not informational justice. Furthermore, the effects of TFL on
informational justice and interpersonal justice were significant (Model 2), and the
interaction between cohesion perceptions and interpersonal justice was significant
on CAOC, whereas the interaction between cohesion perceptions and informational
justice was not significant (Model 3). As a result, Condition 2b for mediated moderation was also fulfilled for interpersonal justice but not informational justice. Finally,
the moderating effect of cohesion perceptions on TFL was reduced from .16 (p <
.01, Model 1) to .05 (ns, Model 3), which fulfilled the last condition for mediated
moderation. These findings suggest that the overall moderating effect of cohesion
perceptions on the TFLCAOC relationship was fully mediated by interpersonal justice but not informational justice. Hypothesis 6 was therefore supported, whereas we
found no evidence supporting Hypothesis 5.
Although informational justice did not mediate the moderation, TFL was significant when predicting informational justice and interpersonal justice (Models 2a and
2b), and the effect of TFL on CAOC was reduced from .37 (p < .01 in Model 1) to
.11 (p < .05 in Model 3) when both mediators (interpersonal and informational justice) were included in the model. These findings indicate that informational justice
and interpersonal justice partially mediated the effect of transformational leadership
on CAOC, lending support to Hypotheses 2 and 3. The results of the hypotheses testing are presented in Figure 3.
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

345

Informational
Justice
Perceptions (IFJ)

Transformational
Leadership
(TFL)

Cohesion
Perceptions

Cynicism about
Organizational
Change (CAOC)

Interpersonal
Justice
Perceptions (IPJ)

FIGURE 3: Conceptual Framework Showing the Results of Hypotheses Testing


NOTE: Dotted lines denote nonsupported hypotheses.

DISCUSSION
Despite the extensive research on transformational leadership, an immediate
supervisors transformational leadership rarely has been examined in the context of
organizational change in spite of the suggestion that supervisory effectiveness is an
antecedent to employees attitudes about change (Wanous et al., 2000). We are also
not aware of studies examining supervisors transformational leadership influences
in organizational change in a Chinese context, an area that is in need of more
research attention (Tsui et al., 2004). The current study addressed this research gap
by investigating the impact of supervisors transformational leadership on employee
cynicism about organizational change in a large Chinese organization. In this context, transformational leadership was negatively related to CAOC. Furthermore, our
findings indicate that this relationship was mediated by employees informational
and interpersonal justice perceptions and enhanced when employees perceived their
work group as cohesive. In addition, the overall moderating effect of cohesion perceptions on the TFLCAOC relationship was fully mediated by interpersonal justice.
A significant contribution of this study is that it uncovers the followers psychological processes by which transformational leadership yields its influence on
employee CAOC. Wanous et al. (2000) identified a number of leadership characteristics that may reduce employee CAOC. Expanding their initial results, our findings
indicate that interpersonal and informational justice perceptions mediate the
TFLCAOC relationship. Although organizational justice researchers have tested
the impact of employee justice perceptions on the quality of leadermember
exchange (e.g., Rupp & Cropanzano, 2002), to our knowledge, the current study is
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the first one to test agent-referent justice perceptions (i.e., interpersonal and informational justice; Colquitt, 2001) as the mediating mechanisms of leadership.
Another contribution of our research is theorizing an interactional approach by
identifying whether employee perceptions of group cohesion enhance the effectiveness
of transformational leadership. This advances research in another area of transformational leadership that is in need of investigation (Avolio & Bass, 1988). Because transformational leadership is collective oriented, its effectiveness is enhanced in a
collective context. Recent cross-cultural findings that transformational leadership has
a more pronounced influence on employee attitudes in collectivistic cultures than individualistic cultures are consistent with this context-congruency argument (Walumbwa
& Lawler, 2003). In the literature of leadership substitutes (Howell, Dorfman, & Kerr,
1986), factors that boost the leadership effectiveness are identified as leadership
enhancers. Because cohesion perceptions did not contribute to CAOC as a main effect,
it did not meet the necessary conditions for a leadership substitutehaving a positive
and direct relationship with the dependent variable (Howell et al., 1986). Rather, our
results indicate that group cohesion perceptions serve as a leadership enhancer when
it is high and a leadership neutralizer when it is low.
Furthermore, no other studies have tested supervisors transformational leadership
on followers cynical attitude toward organizational change in a Chinese setting.
Therefore, the current study also adds to the literature by confirming the generalizability of transformational leadership to a nonWestern setting, where studies on
transformational leadership and organizational change have been understudied.
Limitations

Although the use of a Chinese sample provided support for the generalizability and
robustness of transformational leadership across cultures, the characteristics of the
Chinese culture may also limit the generalizability of the current findings to the Western
societies. As a collective-oriented leadership style, the impact of transformational
leadership on employee CAOC and other attitudes toward change may be more pronounced in collectivistic societies (e.g., China) than individualistic societies (e.g., the
United States). This may explain previous research that found a nonsignificant relationship between transformational leadership and employee commitment to an organizational change program in a U.S. organization (Neubert & Cady, 2001). In addition,
because of the collectivist orientation in our study context that would potentially yield
a higher average level of group cohesion, future research is needed to replicate the current findings in a Western organization.
Furthermore, the organization we studied went through a specific type of organizational change, administrative organizational change, which tends to encounter
even greater resistance relative to technical change in emerging economies such as
China (Zhou et al., 2006). This may somewhat limit the generalizability of our findings to other types of organizational change. As China is going through various
forms of massive enterprise reform, we encourage future research to replicate and
expand our current model and findings to other types of organizational change.
Another possible limitation of our study is that all the measures were collected from
employees, making our data vulnerable to common method biases (Podsakoff et al.,
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Wu et al. / CYNICISM ABOUT ORGANIZATIONAL CHANGE

347

2003). Our methodological approach is consistent with our theoretical approach of


focusing on individual attitude and perception of leadership. As such, obtaining multiple response sources such as supervisors reporting on employee attitudes or supervisors self-reporting their own leadership and behaviors may not provide better measures
than employees self-reports (Podsakoff et al., 2003). In addition to the remedial strategies we adopted in the questionnaire design, both Harmans single-factor test
(Podsakoff et al., 2003; Podsakoff & Organ, 1986) and confirmatory factor analysis
indicated that common method bias is not a concern in our study. Even so, future
research that includes multiple sources of data or collects data at multiple points in
time is strongly encouraged to completely eliminate common method biases.
Finally, we collected the data a year after the beginning of the change to ensure that
employees responded to the questions with greater accuracy because of the adequate
length of time during which they experienced the organizational change. Although the
cross-sectional design of this study limits us from asserting a causal relationship
between transformational leadership and employee CAOC, two previous longitudinal
studies showed consistent findings that prudent first-level leadership indeed resulted in
less CAOC (Wanous et al., 2000) and higher leadership effectiveness (Wanous &
Reichers, 1998). Future longitudinal research is needed to further confirm the causality of the TFLCAOC relationship to make additional contribution to the literatures of
transformational leadership and organizational change.
Practical Implications

This research suggests several practical implications for those who manage
change, particularly administrative change, where the new organizational structure
and/or administrative processes would yield a greater departure from existing organizational routines. It appears from our research that the power of transformational
leadership lays in its personal focus (Bass, 1985). Immediate supervisors impact justice perceptions through their interpersonal behavior (Cohen-Charash & Spector,
2001). Although transformational leadership has a dispositional component (Judge
& Bono, 2000), it also can be developed (Dvir et al., 2002; Kelloway, Barling, &
Hellur, 2000). As such, it is critical that plans for change include training supervisors in interpersonal communication skills. Training supervisors to demonstrate
transformational leadership behaviors will help effectively manage organizational
change by reducing employees cynical attitudes toward organizational change.
Our research also suggests that the context (as perceived by employees) in which
transformational leadership is enacted impacts its degree of influence. A perceived
cohesive or group-oriented environment, particularly in a Chinese context, enhances
the influence of transformational leaders in reducing cynicism. In other words, for
transformational leadership to have its greatest impact, supervisors should not only
be trained in leadership skills but also in skills for building a cohesive group.
Moreover, followers must be afforded the time, opportunity, and resources necessary
to engage in group activity that facilitates cohesion.
Finally, the booming economic development and globalization that is fostering changes in Chinese organizations, particularly in state-owned organizations
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(Z.-M. Wang, 2000) such as the one surveyed in this study, accentuates the importance of understanding change management in China. Developing management
competencies to respond to these changes is of great practical interest (Z.-M. Wang,
2003). Despite the doubts of transferability of Western management theories to
developing economies (Erez, 1994), our research provides initial evidence that
developing transformational leadership is an effective way to manage organizational
change in Chinese organizations. In fact, the collective orientation of Chinese firms
may even enhance the impact of transformational leadership. Although there is much
more to be learned about Chinese employees responses to change, this research confirms that transformational leadership is critical, possibly even more so in China than
in Western contexts, to managing employees cynicism about change.
Across the world, organizations are undergoing change in response to a competitive global business environment. Despite the assertions that transformational
leadership is critical to implementing successful change, there is paucity of theoretically grounded empirical field studies examining transformational leadership in the
context of organizational change. This research advances knowledge for managing
change by finding that transformational leadership influences employee cynicism
about organizational change and by identifying mediating and moderating mechanisms that influence its impact.
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