Impact of Transformational Leadership and the Mediating Effect of Employees' Perception of Organizational Change on Affective, Normative and Continuance Commitment

Abstract

Purpose: The purpose of this research paper is to study the influence of transformational leadership on employees' perception of the change and the impact of the different levels of commitment towards change in a semi-conductor multinational company in Malaysia. Design/Methodology/Approach: The partial least squares of structural equation modelling (PLS-SEM) approach was deployed to validate and examine the research theoretical framework, and conduct the hypothesis testing. Findings: The result reveals transformational leadership and employees' perception of the changes to be highly predictive of the employees' commitment with regard to the organizational changes. It also indicates that employees' perception of the change has a significant mediating effect on the relationship between transformational leadership and affective, normative, and continuance commitment. Implications/Originality/Value: Management must be sensitive to employees' reaction for the change initiatives to be successful and it is noteworthy for management to understand the employees' perception of the changes, support their needs.