Authentic Leadership and Planned Organisational Change Implementation: The Mediating Role of Leader-Member Exchange

Abstract

This study is an empirical research conducted to examine if leader–member exchange (LMX) positively mediates the effect of authentic leadership (AL) on planed organisational change implementation (POCI). To conduct the study, the research considered the case of the banking industry in Ethiopia as the target population, with particular emphasis on the Commercial Bank of Ethiopia (CBE), a government bank, and Oromia International Bank (OIB), a privately owned bank. The respondents of the study are 312 randomly selected branch managers and assistant branch managers of both banks operating in the Addis Ababa district. The research adopted quantitative and two-phase cross-sectional research design. Regarding the data used for the analysis for this research, the predicting variables (AL and LMX) were taken from assistant branch managers and the data on POCI was taken from branch managers. To test the magnitude of the relationship, the research mainly employed Pearson’s’ coefficient of correlation and the mediation analysis was conducted using Hayes’s PROCESS MACRO Model 4 with a bootstrap of 5,000 and confidence interval of 95%. Based on the statistical outcome, the study has found that there is a statistically significant positive correlation between the predicting (AL), the mediating (LMX), and the outcome variables (POCI). Moreover, the study unveiled that leader–member exchange positively mediates the effect of authentic leadership on planed organisational change implementation, which is in congruence with the hypothesis set.

Keywords: Authentic Leadership, Leader-Member Exchange, Planned Organisational Change Implementation

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