Journal of Organizational Change Management

Transformational leadership in the context of organizational change

Regina Eisenbach, Kathleen Watson, Rajnandini Pillai,
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 JOCM
12,2 Transformational leadership
in the context of organizational
change
80 Regina Eisenbach, Kathleen Watson and Rajnandini Pillai
College of Business Administration, California State University,
San Marcos, USA
Keywords Leadership, Management styles, Organizational change
Abstract The importance of leadership to the change management process is underscored by
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the fact that change, by definition, requires creating a new system and then institutionalizing the
new approaches. While change management depends on leadership to be enacted, to date there
has been little integration of these two bodies of literature. Thus, the purpose of this article is to
draw parallels between the change literature and the leadership literature; specifically, the
transformational leadership literature that is primarily concerned with the capabilities required to
enact change successfully. This is done by describing areas of convergence between the two
literatures that point to the appropriateness of transformational leadership in enacting change.
Finally, the papers in the special issue are previewed by identifying their underlying themes.
What it takes to be a leader in the 1990s and beyond is really handling change (Roberto
Goizueta, late Chairman and CEO of the Coca-Cola Company).
Change oriented models of leadership have sustained the interest of managers
and scholars alike because of their promise of extraordinary individual and
organizational outcomes. As we move closer to the new millennium, models of
outstanding leadership such as transformational, charismatic, and visionary
leadership, which focus on organizational transformation, are likely to become
even more important to organizations because of the breathtaking changes
foreseen in the business and political environment. These include workforces
with a greater degree of demographic diversity, technological change, and
increased international competition which will place new demands on the
leaders of tomorrow (House, 1995). The importance of leadership to the change
management process is underscored by the fact that change, by definition,
requires creating a new system and then institutionalizing the new approaches
(Kotter, 1995).
While change management depends on leadership to be enacted, to date
there has been little integration of these two bodies of literature. The key role
leaders play in the change process has been noted by change theorists, yet there
is no conclusive research that focuses on this relationship between leadership
and change (Almaraz, 1994). Recent theoretical research has attempted to
integrate change as a contextual variable influencing transformational
leadership (Pawar and Eastman, 1997). Such research focuses on determining
Journal of Organizational Change
when organizations will be more receptive to transformational leadership and
Management, Vol. 12 No. 2, 1999,
pp. 80-88. # MCB University Press,
the match between receptivity level and the actual transformational leadership
0953-4814 process. However, Pawar and Eastman (1997) do not address the issue of the
 capabilities of transformational leaders required to carry out the pertinent Transformational
change process. leadership
Thus, the purpose of this article is to draw parallels between the change
literature and the leadership literature; specifically, 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 change management. Next, we will review theories of change oriented 81
leadership. Finally, we will integrate these literatures and link them to the
articles that comprise this special issue.

Types of change: incremental, radical, continuous

Tushman and Romanelli's (1985) punctuated equilibrium model of change
emphasizes the discontinuous nature of change. Long periods of small
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incremental change are interrupted by brief periods of discontinuous, radical

change. These occasional dramatic revolutions or punctuations overcome
organizational inertia, which alters the organization frame. The deep structure,
or metacontext, persists and limits change during stages of equilibrium (Roach
and Bednar, 1997). The metacontext, which Gersick (1991) refers to as the
``design of the playing field and rules of the game'' (Gersick, 1991, p. 16)
changes during metamorphosis. Advocates of the punctuated equilibrium
model (Miller and Friesen, 1980) support the view that organizations are both
inertial and adaptable as they evolve through stages of convergence in which
only incremental change takes place, and reorientation, during which
fundamental change occurs. Nadler and Tushman (1989) discuss the skills
managers need to navigate the turmoil of metamorphosis.
Gersick (1994) expanded her earlier work on change in project groups
(Gersick, 1988, 1989) to the organizational level of analysis. She concluded that
two distinct mechanisms, temporal pacing and event pacing, were used to
modulate the speed and course of organization change. She suggests that
temporal pacing is well suited to nonroutine situations as it offers the
possibility for punctuated change at milestone transition points. It also serves
as a check against escalating commitment (Staw, 1981). The key is to match the
organization's pacing to the rate of change in its particular environment.
In contrast, event-based pacing is shown to be well suited to fostering
incremental change. The focus is on specific events that signal when actions
should be initiated or corrections made. Its focus is on keeping on a given track
and is motivated by the desire to achieve specific outcomes.
Sastry (1997) also found that time-based pacing, rather than responding to
events in the external environment, is beneficial in turbulent environments. In
calm environments, managers can use external pacing, where change is
triggered by environmental shifts. Sastry (1997), using the punctuated
organizational change model, studied why organizations may fail following
reorientation. He concluded that organizations need time to reap the benefits of
earlier reorganization ± time free of further restructuring. He proposes a trial
period during which change is suspended. Sastry (1997) uses the example of a
 JOCM transformational leader, Jack Welch of General Electric, as evidence that this
12,2 trial period works in real-world organizations. Without an explicit trial period
of ``soft initiatives,'' Welch suggests, GE would not have realized the
performance gains in the 1990s set in motion by the major changes in GE's
businesses and management structure implemented in the 1980s (Sastry, 1997).
A recent article by Brown and Eisenhardt (1997) argues that, although the
82 punctuated equilibrium model has academic interest, it is not representative of
the experience of many firms. They drew theoretical insights about the
structure and processes that characterize firms that compete by changing
continuously. Their study of multiple-product innovation in the computer
industry focuses on an industry characterized by an extraordinary rate of
change. Brown and Eisenhardt (1997) argue that organizational survival
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depends on the firm's ability to engage in rapid and continuous change, in

contrast to the rare, episodic phenomenon described by the punctuated
equilibrium model.

Enacting change
Ford and Ford (1994) use models of logic to provide different understandings of
the change process. They argue that our understanding of organization change
will vary depending on the logic that is deployed. The logic of dialectics
emphasizes conflict or struggle as the basis for change. The conflict between
the forces for and against change are two opposing actions that ``work at each
other'' until one dominates and the resulting outcome is a synthesis that is
distinct but contains elements of the forces for and against change. This model
assumes that dissatisfaction with the status quo is necessary before change can
occur. In contrast, the logic of trialectics proposes that change occurs through
attraction. Changes do not result from ``pushes'' or pressure to move away from
the present situation, but instead result from being ``pulled'' toward or attracted
to different possibilities.
In addition to developing these models of logic, change researchers have
sought to describe other aspects involved in implementing successful change.
Brown and Eisenhardt (1997) identified three key characteristics of successful
managers in continuously changing organizations. Successful managers
provided clear responsibility and priorities with extensive communication and
freedom to improvise. Analogous to jazz improvisation, these managers created
an environment that supports intensive communication in real time, within a
structure of a few, very specific rules. The limited structure provides
framework without which there are too many degrees of freedom. Yet, these
fundamentals provide a firm backdrop against which individual members can
be creative.
A second characteristic of successful managers is exploration of the future
by experimenting with a wide variety of low-cost probes. They argue that low-
cost probes enhance learning about future possibilities. This learning
 opportunity is critical because, while the future is uncertain, it is possible to Transformational
learn something about it. Learning makes it easier for leaders to anticipate and leadership
even create the future (Brown and Eisenhardt, 1997).
Third, effective managers link current projects to the future with predictable
(time-paced rather than event-paced) intervals and choreographed transition
procedures. Familiar routines are created by predictable timing and by
transition procedures that link the present to the future. They use the term 83
``links in time'' to portray explicit organizational practices that address past,
present and future time horizons and the transitions between them. Rhythms
are created that enable people to pace their work and synchronize their energies
with one another, creating a focussed flow of attention that enhances
performance. Consistent with Gersick (1991), performance is further enhanced
if the rhythm created by the transition process becomes synchronized with the
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rhythm of change in the environment.

Theory of change oriented leadership

Given the change literature's emphasis on the importance of the leader in
enacting change, we next turn our attention to a discussion of a leadership
theory that is intimately tied to change: transformational leadership.
One of the most comprehensive leadership theories of organizational
transformation is the theory of transformational and transactional leadership.
Burns (1978) developed the initial ideas on transformational and transactional
leadership in the political context and Bass (1985) further refined them and
introduced them into the organizational context. Transactional leadership
develops from the exchange process between leaders and subordinates wherein
the leader provides rewards in exchange for subordinates' performance.
Transformational leadership behaviors go beyond transactional leadership and
motivate followers to identify with the leader's vision and sacrifice their self-
interest for that of the group or the organization (Bass, 1985). Bass' (1985)
conceptualization of transformational leadership includes charisma or idealized
influence (followers trust in and emotionally identify with the leader),
intellectual stimulation (followers are encouraged to question their own ways of
doing things) and individualized consideration (assignments are delegated to
followers providing them with learning opportunities). Descriptive research by
Tichy and Devanna (1990) shows that transformational leaders engage in a
process, which includes a sequence of phases: recognizing the need for change,
creating a new vision, and then institutionalizing the change. A review of the
literature on change oriented or outstanding leadership, which also includes
charismatic and visionary leadership (House, 1995), indicates that the ``majority
of the approaches share the common perspective that by articulating a vision,
fostering the acceptance of group goals, and providing individualized support,
effective leaders change the basic values, beliefs, and attitudes of followers so
that they are willing to perform beyond the minimum levels specified by the
organization'' (Podsakoff et al., 1996, p. 260).
 JOCM Most of the research on the transformational and charismatic leadership
12,2 paradigms has focussed on its relationship to individual and organizational
outcomes such as job satisfaction and performance (both subjective and
objective). These studies have been conducted in a variety of settings using lab,
field, and archival data and a variety of samples that include private and public
sector organizations, students, military leaders, presidents, and different
84 national cultures (Bass, 1990; House et al., 1991; Pillai et al., in press; Podsakoff
et al., 1996). According to Bass (1995), charisma, attention to individualized
development, and the ability and willingness to provide intellectual stimulation
are critical to leaders whose firms are faced with demands for renewal and
change.
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Links between transformational leadership and change

management
As the above descriptions of the change and transformational leadership
literatures illustrate, there is a need to integrate these perspectives to gain a
greater understanding of how to effectively enact change. It is our belief that
the leadership and change literatures both show that certain transformational
leadership qualities are uniquely appropriate for leading certain types of
change. For example, research in the leadership area supports the idea that
transformational leadership is better for non-routine situations (Bass, 1985).
Furthermore, Pawar and Eastman (1997) propose that organizations will be
more receptive to transformational leadership when adaptation (as opposed to
efficiency) is the goal. In the change literature, the definition of event-based
pacing (i.e. centered on maintaining status quo and achieving specific goals
(Gersick, 1994)) may be a better fit with transactional leadership that
emphasizes clarification of goals, follower compliance through incentives and
rewards, with a focus on task completion (Bass, 1995). In order to further this
argument, we next describe areas of convergence between the two literatures
that point to the appropriateness of transformational leadership in enacting
change.
Transformational, charismatic, and visionary leaders can successfully
change the status quo in their organizations by displaying the appropriate
behaviors at the appropriate stage in the transformation process. When there is
a realization that the old ways no longer work, such leaders may undertake the
task of developing an appealing vision of the future. A good vision provides
both a strategic and a motivational focus. It provides a clear statement of the
purpose of the organization and is, at the same time, a source of inspiration and
commitment. Consistent with Ford and Ford (1994), this view holds that leaders
create change by providing a vision that is attractive to followers rather than
creating dissatisfaction with the status quo. There is yet no consensus in the
transformational leadership literature concerning whether a crisis or
dissatisfaction with the status quo is necessary for transformational leadership
 to occur. Leaders may not need to create dissatisfaction with the present, but Transformational
instead may provide a vision of a possible future that is attractive and leadership
engaging (Kouzes and Posner, 1988).
Even without dissatisfaction or crisis, both literatures suggest it is critical
that the leader be a change champion who can assemble and motivate a group
with enough power to lead the change effort (Kotter, 1995). The change
literature also suggests that a leader's ability to effectively use inducements 85
and interventions that get people to change is only effective if people have an
active need that the change can satisfy.
As described in the change literature, in order to pull or attract followers to
different change possibilities (see Ford and Ford, 1994), the leader must craft an
appealing vision that takes into consideration the underlying needs and values
of the key stakeholders. Once this vision is developed, the leader must
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implement the change. This could be done through intellectual stimulation,

whereby the leader sets challenging goals for the employees and motivates
them to rethink old ways of doing business. The leader frames the change by
appealing to follower needs for achievement and growth that induces the
follower to find the change attractive. The process may also be facilitated if the
leader shows individualized consideration where he or she provides support,
coaching and guidance to the employees. Coaching and guiding behaviors are
particularly important in large-scale transformation and in the development of
self-managing work teams. A number of modern corporations are adopting the
team approach to structuring the organization, which in itself is a major
transformation of the culture.
A transformational leader would be a good facilitator of this process by
promoting the creation of a culture that encourages team-decision making and
behavioral control (Manz and Sims, 1990). Individualized consideration would
also play a role in neutralizing the inevitable resistance that is bound to
accompany the transformational process. The leader must work at getting
large numbers of people in the organization involved in the transformation
process. Otherwise, it is likely to be greeted with cynicism and strong
resistance from key constituents, which is a sure-fire route to failure. This idea
that the transformational leader creates a culture which embraces change is
consistent with the change literature research by Brown and Eisenhardt (1997).
Their description of the three key characteristics of successful managers in
continuously changing organizations proposes that the successful leader
creates a system (i.e. an organizational culture) that is neither too rigid (over-
controlling the change process) nor too chaotic (so the change process falls
apart).
Throughout the transformation process, the leader should set high
performance expectations and reward behaviors that are directed toward
fulfillment of the vision. It is also important that the leader models the
behaviors that are required to institutionalize the change and sets the
standards for the rest of the organization to emulate. As Kotter (1995) argues,
change sticks only when it becomes ``the way we do things around here'', when
 JOCM it seeps into the bloodstream of the corporate body. This is similar to Sastry's
12,2 (1997) conclusion that enforcing a waiting period after every significant change
in strategic orientation is necessary to maintain competence. The
transformational leader can play a critical role in communicating how the
changes have led to better performance and ensuring that the next generation
of top management personifies the new approach (Kotter, 1995).
86
Transformational leadership in the context of change
The papers in this special issue all seek to bridge the gap between the change
management and transformational leadership literatures. More importantly,
they attempt to answer the basic question of how leaders deal with change and
why transformational leadership may be a successful way to enact change.
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From a theoretical perspective, these articles may potentially advance research

in both the leadership and change areas because they address the following
issues:
. The integration of diverse bodies of literature.
. Methodological issues in measuring transformational leadership.

Integrating diverse literatures

Each paper integrates change and leadership with very different streams of
research. For example, Pamela Tierney uses work on organizational climate,
LMX, and group dynamics to support her study of the leaders' role in creating a
favorable climate for change. Similarly, Tony Simons draws on concepts from
the literature on fads, trust, and credibility to develop the construct of
``behavioral integrity'' which he proposes is central to effective change
management.

Measurement of transformational leadership

The difficulty of measuring constructs such as leadership and change makes
examining methodological issues particularly important. In their study, Tim
Hinkin and Bruce Tracey use quantitative measures and recommend
refinement of the leading instrument designed to measure transformational
leadership. Ken Parry expands the methodology used to investigate the
transformational leadership phenomenon by using a qualitative, grounded
theory approach.
In addition to these papers' contribution to building theory in the leadership
and change areas, they also contribute to the practice of leading successful
change. The following practice-related themes emerge in the articles that
follow:
. Leadership qualities that enable leaders to successfully enact change.
. Social influence processes that enable leaders to successfully enact
change.
 Qualities enabling leaders to successfully enact change Transformational
Tony Simons' discussion of this quality of behavioral integrity proposes that leadership
this new construct is a ``pivotal challenge'' of successful change management.
This conceptual paper argues that transformational leaders who wish to enact
change should take care to match their espoused and enacted values. They
should do this even though the environment of continuous organizational
change makes such congruence very difficult. 87
Timothy Hinkin and Bruce Tracey present an empirical piece that describes
successful leadership in more stable organizations. The lack of continuous
change may make the charisma or idealized influence dimensions of
transformational leadership unnecessary. The authors point to the importance
of the setting in transformational leadership and argue that contextual
variables (such as environmental change) play a role in determining whether
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charismatic leadership is effective in a given organization.

Social influence processes enabling leaders to successfully enact change

Pamela Tierney's empirical study shows that the quality of relationships with
supervisors and fellow team members may be used as vehicles to create a
favorable climate for change. Furthermore, Ken Parry's study concludes this
issue by adding that a successful strategy for dealing with continuous
organizational change is to resolve followers' uncertainty about the change
process and enhance their adaptability through frequent communication,
training, and mentoring.
As mentioned throughout this article, the importance of successfully
enacting change is a critical issue facing today's organizational leaders. The
articles presented in this special issue were chosen because they all provide
insights into this crucial topic. Moreover, they address concerns of both
academics and practitioners as we all attempt to gain a greater understanding
of how leaders can and should enact change.

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