Transformational Leadership and Climate of Trust: Mediating Role of Organizational Justice

Abstract

Despite universal agreement on the consequences of the organizational trust climate, little attention has been given to studying its determinants. This study aimed to investigate the role of managers’ transformational leadership behavior in developing trust climate in the hotel industry. Based on the social exchange theory, this study also examined the mediation effect of organizational justice in the relationship between managers’ transformational leadership and trust climate. Data were collected from 323 full-time employees engaged in three-star Bangladeshi hotels. The study employed a PLS-SEM approach to test the hypotheses. Results exposed the significant impact of managers’ transformational leadership on the hotels’ trust climate, and organizational justice mediates the aforementioned relationship. These findings highlight the role of managerial transformational leadership and organizational justice in developing and nurturing a climate of trust. Based on the results, the study offers theoretical and practical implications, along with further research directions.