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Data were collected from 86 international assignees in multinational project teams in an oil and gas corporation. Results revealed a positive relationship between transformational leadership and the outcomes. Trust in the team partially mediated the relationship between transformational leadership and team performance, and environmental dynamism moderated the direct effect between transformational leadership and team performance. Our results provide support for the applicability of transformational leader behaviors in contexts with varying degree of complexity.
Keywords transformational leadership, dynamic work environment, team performance The globalizes, fast paced knowledge era creates new challenges for leaders in multinational corporations establishing international projects around the world (Barkeep, Beam, & Manikin, 2002). In these international project organizations, leaders often have to navigate in ambiguous, volatile, and unpredictable work environments. Parallel to this development, researchers have for a long time been encouraged to explore contextual influences on leadership (Prewar & Eastman, 1997).
This request is yet to be met (Porter & McLaughlin, 2006) and research on leadership in specific contexts is still needed (Elide & Intonation, 2009). The present study is inducted in an international project context, and builds on three premises. First, many researchers have stated that the suitability of transformational leadership varies according to the context (De Hooch, Den Warthog, & Conman, 2005; Angles, Pearce, & Homeliest, 2006). The relevance of transformational leader behaviors in a wide range of contexts has been supported during several decades (Bass & Origin, 2006; Den Warthog, House, Hangers, Iris-Quintillion, & Doorman, 1999).
Although research has indicated a high relevance of transformational leadership in project- intensive organizations (Keenan & Den Warthog, 2004), studies investigating ramifications leadership in project contexts have been scarce. One objective of this study is to contribute to an increased understanding of how transformational leadership interacts with contextual characteristics in an international project environment and its impact on team performance.
Second, although the relationship between transformational leadership and positive individual outcomes has been supported in numerous studies, we concur with researchers highlighting the necessity of more empirical research on the relationship between transformational leadership and team outcomes (Iodine, Yammering, Atwater, & Spangles, 2004). One way of attaining increased knowledge about this relationship is through the use of mediators representing team processes or characteristics of the team.
Our study thus investigates how transformational leadership affects team performance, and the potential mediating role of team trust. Third, according to a recent critical examination of leadership effectiveness criteria (Hillier, Decipher, Murals, & Dotty, 2011), work adjustment on international assignments is yet to be investigated as an outcome of leader behavior. This is surprising since low levels of work adjustment re argued to be one of the main reasons for premature termination of international assignments (Black & Greenest, 1999).
Considering the costs of international assignment failure and the increasing rates in the international assignee 1 University of Oslo, Oslo, Norway Corresponding Author: Gёran Gunderson, Oslo, Norway Email: ggu@live. No Gunderson et al. 47 Figure 1 . Research model population, as stated by the Graduate Management Admission Council (GAMMA; 2008), we claim findings from this study to be highly relevant for leadership development practitioners working in multinational corporations. We therefore investigate the legislation between transformational leadership and work adjustment as suggested by Kramer, Wayne, and Gasworks (2001).
Transformational Leadership Transformational leadership has been an extraordinary popular research topic during the past decades. Transformational leadership theory (Bass, 1999) was presented as a wider theory about specific leadership behaviors and their influence on performance. Today transformational leadership theory includes three specific leadership behaviors: idealized influence/inspirational motivation, individualized consideration, and intellectual stimulation (Viola, Bass, & Jung, 1999; Bass, 1999).
Transformational leadership behaviors extend transactional leadership, the mutual exchange process between a leader and a follower, by expressing high performance expectations, articulating an exciting vision, and providing individualized support (see Foodstuff, MacKenzie, Norman, & Fetter, 1990). Through these behaviors, transformational leaders align team members’ goals and values, and foster collective optimism, team efficacy, and identification with the team (Bass & Origin, 2006), which in turn leads to increased performance among employees and organizations (see Wang, Oh, Courting, & Collect, 2011).
Research has shown that transformational leadership correlates with a wide range of positive outcomes for employees, work teams, and organizations. For example, transformational leadership is connected to subordinates’ satisfaction with the leader and Job satisfaction (e. G. , Mechanic & Keller, 2007), follower motivation and leader effectiveness Judge & Piccolo, 2004), performance (Diva, Eden, Viola, & Shaman, 2002), and organizational citizenship behavior (Foodstuff et al. , 1990). Altogether, these findings provide support for the effects of transformational leadership on a range of positive outcomes.
Some scholars have suggested that transformational leadership behaviors should be ideal in any setting, industry, or culture (e. G. , Bass & Origin, 2006). Based on data collected in 62 different countries, the Global Leadership and Organizational Behavior Effectiveness research program (GLOBE; House, Hangers, Javelin, Doorman, & Guppy, 2004) found that the charismatic/value-based leadership and the team-oriented leadership dimensions were contributing to a leaders’ success in nearly all cultural contexts.
These two leadership dimensions are now regarded as universally endorsed, suggesting that managers around the world generally presume Hess behaviors to contribute to being an outstanding leader (Den Warthog et al. , 1999). These dimensions have strong similarities with the transformational leadership theory (e. G. , Bass & Origin, 2006), and the present study (Figure 1) aims to elaborate on assumptions about universality by examining the effectiveness of transformational leadership in an international project context.
This allows us to provide valuable input on the 48 variation of the effectiveness of transformational leadership according to the context in which it is examined. Journal of Leadership & Organizational Studies 19(1) & Howell, 1999). Consistent with research mentioned above (e. G. , Bass & Origin, 2006), we expect that the effects of transformational leadership behaviors on team performance are stronger when the work environment is perceived as highly dynamic. Hence, the following hypothesis is tested: Hypothesis 2: The relationship between transformational leadership and team performance is positively moderated by dynamic work environment.
Team Performance Leadership characteristics such as individualized consideration, intellectual stimulation, and vision provide teams with direction and motivation toward high performance (e. G. , Iodine et al. 2004). Research on team leadership indicated that transformational leadership has a direct effect on team performance (e. G. , Bass, Viola, Jung, & Person, 2003; Burke et al. , 2006). A recent meta-analysis showed that the effects of transformational leadership on team performance were consistent across different performance criteria (Wang et al. , 2011).
In line with this meta- analysis pointing out stronger effects of transformational leadership on team performance compared with individual performance, we argue that transformational leadership behaviors (I. E. , fostering the acceptance of group goals, providing an appropriate model, articulating a vision) have a positive effect on team performance. Hypothesis 1: Transformational leadership is positively related to team performance. Trust in the Team Considerable research has investigated the link between transformational leadership and performance, and trust in the leader operates as a mediator in this relationship (e. . , Jung & Viola, 2000). Trust can however have several referents, being directed at a designated team leader and at the team as a whole (Gillespie, 2003). It is reasonable to believe that trust in the leader may be necessary, but not sufficient for sigh team performance; team members also need to trust each other to achieve maximum performance. Several recent research findings have supported this inference. Investigating cross-functional teams, Webber (2002) emphasized the team leader’s mission to develop a climate for team trust as a meaner to achieve high effectiveness.
Despite research indicating the importance of leadership on team trust, the relationship has received little empirical attention (Lee, Gillespie, Mann, & Wearing, 2010). In an international project context, team trust is of high importance as one depends on the open exchange of knowledge and information to ensure effective team functioning. We argue that project team members have a higher confidence in the team’s competence when the team is governed by transformational leadership principles such as inspiring vision and the provision of support, and that this leads to a heightened level of trust in the team.
Furthermore, we argue that the effect of transformational leadership on team trust will be contingent on the context in which the team is operating. Lastly, we propose that a heightened level of trust in the team will be positively related to team performance. Hence, we assume that trust n the team acts as a mediator between transformational leadership and team performance and that dynamic work environment serves as a moderator.
Thus, the following hypothesis is tested in an international project context: Hypothesis 3: Trust in the team acts as a mediator in the relationship between transformational leadership and team performance, and dynamic work environment moderates the indirect effect of transformational leadership on team performance through trust in the team. Dynamic Work Environment Studies involving potential moderators and mediators have received increasing attention in research on transformational leadership and team performance (Iodine et al. , 2004; Guppy, Hang, & Nirvana, 2010).
Exploring how leadership interacts with the context, several authors have suggested that transformational leadership would be more prevalent and more effective when the environment is unstable, uncertain, and turbulent (e. G. , Walden & Yammering, 1999). Research from Walden, Ramirez, House, and Purina (2001) showed that leader charisma predicted financial performance under conditions of perceived environmental uncertainty, but not under conditions of certainty. Furthermore, De Hooch, Den Warthog, Conman, et al. (2004), and De Hooch et al. 2005) found that charismatic leadership was positively related to perceived effectiveness in highly dynamic contexts. We argue that in low dynamic work environments the respective leader can easily provide clarity and describe appropriate response patterns for the team. However, in highly dynamic work environments, expectations about appropriate response patterns are unclear, because few cues in the environment can be associated with specific actions; this causes team members to search for cues in the environment to guide their behavior.
In these contexts, transformational leaders are more able to influence followers through their charisma, vision, and inspirational motivation (Shaman 49 Work Adjustment and Job Satisfaction International project staff is required to adjust to life in a different culture, to interact with new colleagues and host nationals, and to adapt to a new position with corresponding tasks and responsibilities (Black & Stephens, 1989). This can cause significant strain on the individual, and it is argued that multinational corporations often underestimate the challenges related to global staffing and expatriation (Cowlings, Scullion, & Morley, 2007).
Previous research literature has focused on required individual characteristics of the international assignee and their impact on job performance (e. G. , Mol, Born, Willingness, & Van Deer Molten, 2005). We concur with Kramer et al. (2001) who claimed that it is too early to dismiss the leader as a facilitator toward followers’ work adjustment on international assignments. We purpose that one of the main responsibilities of a leader on international assignments is to clarify work procedures and performance standards. In support of this, Black (1988) reported that role ambiguity among international assignees actively influenced work adjustment.
Also, as transformational leader behaviors have been found to reduce levels of employee Job stress (Foodstuff, MacKenzie, & Boomer, 1996), we expect the potential impact of transformational leadership to be especially relevant to the assignees’ work adjustment due to the increased complexity in international assignments. As previously mentioned, insights into the mechanisms of work adjustment are highly important for international project organizations due to the high costs associated with premature termination of the assignment.
We repose that transformational leaders provide support on issues related to openness and cooperation with employees from different cultural backgrounds, and that transformational leadership facilitates the assignees’ adjustment to their supervisor, their colleagues, and their Job responsibilities. Thus, we postulate the following: Hypothesis 4: Transformational leadership is positively related to work adjustment in an international project context. Most studies have found clear support for the existence of a positive relationship between transformational leadership and Job satisfaction (Dumdum, Lowe, & Viola, 2002; Judge & Piccolo, 2004).
Studies have considered diverse organizational settings, ranging from business to governmental to nonprofit sectors (Bono & Judge, 2003). To our knowledge, this relationship is yet to be investigated in an international project context. Thus, we expect to find support for the following hypothesis: Hypothesis 5: Transformational leadership is positively related to Job satisfaction in an international project context. Method Sample The survey was distributed to 544 employees working in international projects in a Norwegian company in the oil and gas industry with an extensive portfolio of projects around the world.
In total, 309 employees completed the survey (57% response rate). To make sure only international assignees were included in our sample, we excluded host nationals working in their home country (e. G. , Norwegian working in Norway), which reduced the sample size from 309 to 286. Of the remaining participants (N 286), 251 (87%) were male and 35 (13%) were female. Their age ranged from 26 to 64 years (M = 47, SD = 8. 8). Organizational tenure ranged from less than 1 to 36 years (M = 9. 7, SD = 9. ), whereas international work experience varied from 2 months to more than 20 years (M = 3. 7, SD = 3. 7). Nearly all respondents (98%) worked in teams with more than one nationality represented (M = 4. 4, SD = 2. 2). The participants were located in 28 different countries and represented 18 different nationalities, but a large majority (87%) was of Norwegian nationality. The survey was administered in English, the official working language in the corporation, to all team members and team leaders in expatriate positions through a web-based solution.
Respondents were told that the information they provided was collected anonymously, and that the survey was not evaluating the individual, project, or company performance. The data were collected as UN-nested responses (I. E. , not grouped and analyzed in teams) to ensure complete anonymity for the teams and the team leaders. No questions that could identify the team leaders’ identity were included in the survey. Measures Transformational leadership. We measured transformational leadership with the transformational leader behaviors inventory (TTL) developed by Foodstuff et al. 1990), dividing transformational leadership into six key behavioral subdivisions: articulating a vision, providing an appropriate model, fostering the acceptance of roof goals, high performance expectations, individualized support, and intellectual stimulation. In line with Viola et al. (1999) and Mechanic and Keller (2007), transformational leadership was treated as one higher order construct in this study. A sample item for transformational leadership was “My team leader insists on only the best performance” (high performance expectations).
Respondents were asked to provide an appropriate number on a Liker-type scale ranging from 1 (strongly disagree) to 7 (strongly agree), with their nearest team leader in mind. The internal consistency of this scale was . 96. Dynamic work environment. We measured dynamic work environment with De Hooch et al. ‘s (2005) scale of perceived dynamic work environment consisting of three items. The item “To what extent does your work environment offer 50 great opportunities for change” was reworded to “To what extent does your work environment frequently change” to better capture the study context of international project teams.
To clarify interpretations of the work environment concept to respondents, we also included an introductory text adopted from Walden et al. ‘s (2001) measure of perceived environmental uncertainty encouraging respondents to insider economic, social, political, and technological aspects of the environment. A sample item was “What is the extent of challenge in your work environment”. Electrotype scale anchors ranged from 1 (not at all) to 7 (very much so). The internal consistency in our study was acceptable (a = . 75; Devils, 2003) and is in line with previous measures of similar constructs (Walden et al. , 2001).
Trust in the team. The level of reliance between team members was measured using the five-item reliance scale from the Behavioral Trust Inventory developed by Gillespie (2003). A ample item was “How willing are you to rely on your team’s task-related skills and abilities. ” Respondents were asked to provide an appropriate number on a Liker- type scale from 1 (completely unwilling) to 6 (completely willing). The internal consistency amounted to . 84. Team performance. Team performance was measured with the scale developed by Pain, Mann, and Priori-Merle (2001), a measurement previously used in project management research.
The scale measures team process and team outcome, reported as a prerequisite in any comprehensive measure of team performance (Britannic & Prince, 1997). A sample item was “My team has chosen appropriate courses of action to meet project objectives”. Respondents were asked to provide Liker-type ratings from 1 (strongly disagree) to 5 (strongly agree). Cockroach’s alpha was . 82. Work adjustment. The three-item work adjustment scale from the expatriate adjustment scale developed by Black (1988) was used to measure work adjustment.
A sample item reads as follows: “How adjusted are you to performance standards and expectations in your Job. ” Respondents were asked to rate their adjustment on a Liker-type scale from 1 (not at all adjusted) to 7 (very well adjusted). Cockroach’s alpha was . 79. Job satisfaction. The Job Satisfaction Index developed by Cherished and Thus (1980) was used to measure Job satisfaction. One item was removed because it negatively affected Cockroach’s alpha. Finally, the internal consistency amounted to . 70, a respectable level (Devils, 2003).
A sample item was “How satisfied are you with the person who supervises you (your organizational superior). ” Liker-type scale anchors ranged from 1 (not at all satisfied) to 5 (very satisfied). Control variables. The respondents were asked to provide their organizational tenure, their international work experience, and the number of nationalities represented in their respective work team. To control for the potential effect of proximity (Intonation & Atwater, 2002), we asked participants whether they were located in the same area/building/ floor as their respective team leader.
We also asked Journal of Leadership & Organizational Studies 19(1) respondents to indicate how long they have been working with their current team leader in order to control for tenure as a variable potentially affecting subordinate ratings of their leader. Results Statistical Procedures Hierarchical regression analysis was used to investigate the relationship between leader behaviors and team performance, and the moderating effect of dynamic work environment and the mediating effect of team trust on the relationship between transformational leadership and team performance.
To test the combination of moderation and mediation, we followed the procedures as outlined by Mueller, Judd, and Yester (2005) and Edwards and Lambert (2007). First, to test the path between independent and dependent variable, we regressed the interaction of ramifications leadership and dynamic work environment on team performance (Step 3). Second, to test the path between independent variable and mediator, we regressed the interaction of transformational leadership and dynamic work environment on team trust. This analysis required that trust in the team was included as an outcome variable in a separate model.
Third, to test the path between the mediator and the dependent variable, we regressed the interaction of dynamic work environment and team trust on team performance (Steps 4 and 5). Hierarchical regression analysis was also used to explore the relationship between ramifications leadership on work adjustment and Job satisfaction. With respect to data aggregation, we calculated the interclass correlation (ICC) between assignees located in different countries and criteria variables. The ICC was . 02 for Job satisfaction, . 01 for team performance, and . 02 for work adjustment.
The low CICS indicated that the location clusters did not need further investigation, and that hierarchical linear regression could be applied instead of multilevel regression. Table 1 presents the meaner, standard deviations, and correlations of all study variables. Of he control variables, organizational tenure was positively related to Job satisfaction. Tenure with the leader was negatively related to Job satisfaction and positively related to work adjustment. International work experience was positively related to work adjustment. In Hypothesis 1 we stated that transformational leadership would be positively related to team performance.
Transformational leadership was associated with team performance with a standardized regression coefficient of . 50 (Table 2) indicating a medium to large effect size (Cohen, 1988). Hence, this hypothesis was supported. Hypothesis 2 stated that dynamic work environment would positively moderate the relationship between transformational leadership and team performance. Results from the third step (Table 2) showed a significant, but negative Table 1 . Meaner, Standard Deviations, Correlations, and Reliabilities Variable 1 . Organizational tenure 2. International experience 3.