Page 1 of 15

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 08

September 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 331

Perceived Transformational Leadership Style as

Determinant of Subordinates’ Trust. Perspective

of Malaysian Local Authorities.

Mohd Hamran Mohamad*1

; Khulida Kirana Yahya2

, Zulkiflee Daud3 & Hassan Al

Banna Mohamed4

*1 Lecturer, Faculty of Defence Management and Studies, National Defence University of

Malaysia, Kem Sungai Besi, 57000, Kuala Lumpur, Malaysia

Email: hamran@upnm.edu.my

2 &3 Lecturer, School of Business Management, College of Business, Universiti Utara Malaysia,

06000, UUM Sintok, Kedah, Malaysia

Email: khulida@uum.edu.my, zulkiflee@uum.edu.my

4 Lecturer, Faculty of Defence Management and Studies, National Defence University of

Malaysia, Kem Sungai Besi, 57000, Kuala Lumpur, Malaysia

Email: addmity@gmail.com

Abstract:

The purpose of this study is to examine the

influence of transformational leadership

style on subordinates’ trust using 300

questionnaires responded by the employees

(support staff group) of local authorities

(LAs) located in the central region of

peninsular Malaysia. The measurement

scale employed in this study has met the

acceptable levels of validity and reliability

tests of the study. However, performing

confirmatory factor analysis based on

structural equation modeling (SEM) has

remained some items of single component of

transformational leadership style. Thus,

transformational leadership are measured

based on single construct as a first order

model analysis. Regression result of SEM

analysis indicated that trust was influenced

by the transformational leadership style.

Further, this study provided the discussions

and implications from the findings.

Keywords: Transformational leadership

style, Trust, Local Authority, Structural

Equation Modeling

1. INTRODUCTION

Leadership is probably known as a person

who has power and establishes the direction

of a nation and in principle could affect the

organizational management (Bono & Judge,

2003, 2005; Yukl, 1989). In an

Page 2 of 15

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 08

September 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 332

organizational context, leadership plays

important role to bring the organizational

competitiveness (Bass & Avolio, 1994;

Bryman, 1992). In attaining the organization

objectives, leaders express the values and

motivations, the wants and needs, and the

aspiration and expectation of both leaders

and followers based on his/her interaction

style (Howell & Avolio, 1993; Hartog,

Muijen & Koopman, 1997). Basically,

interactions in the traditional leadership

approach focus on the degree of job targets

achievement by the subordinates as targeted

by their leaders (Bass, 1985; Howell &

Avolio, 1993). Differently, interactions in

the contemporary leadership approach

emphasize more on the relationship strength

with subordinates, such as developing

subordinates’ trust, mutual decision-making,

democratic style, and personal concerns

(Avolio, Bass & Jung, 1999; Bycio, Hacket

& Allen, 1995). It is understood that

contemporary and traditional based

interaction styles have related to different

behaviors which is divided in two major

forms; transactional leadership and

transformational leadership (Avolio et al.,

1999; Hartog et al., 1997; Howell & Avolio,

1993).

Previous studies in the area of human

resource management had emphasized the

internal properties of the organizational

leadership (Spreitzer, 1995; Byrman, 1992;

Yukl, 2002). It is found that, previous

studies had given much attention on

transactional leadership and

transformational leadership as a famous

features of the organizational leadership

(Bass, 1999; Hartog et al., 1997). Basically,

transactional leadership is based on fair

negotiations in the context of demands and

rewards that drive to the state of mutual

agreement between leaders and their

subordinates (Felfe & Schyns, 2002). Both

leaders and subordinates act as partners who

mutually deal for a good work and good

incomes. It is sort of exchange process

which the followers who meet the leaders’

wishes will be rewarded (Bass, 1985; Burns,

1978; Jabnoun & AL-Rasasi, 2005).

Transactional leaders are supposed to do job

based on task roles and requirements as well

as showing their responsibilities and

expectations to achieve organizational and

job goals.

However, in today’s competitive business

environment, many organizations perceive

the appropriateness of transformational

leadership as alternative of transactional

leadership to be practiced in realizing their

strategies and goals (Bass, 1994, 1999,

Howell & Avolio, 1993). Transformational

leadership refers to the leaders who are able

to develop their followers’ full potentials,

higher needs, good value systems, moralities

and motivation which may instill followers

to unite, change goals and beliefs (Bass,

1994, 1999; Bycio et al., 1995), and

sacrifice their personal-interests in order to

succeed organizational interests.

Lately, some leadership researches indicate

the leaders who properly practice

transformational style in leading their

followers would promote their followers’

trust (Azman et al., 2010). Transformational

leadership is basically based on the facets of

intellectual stimulation, individualized

Page 3 of 15

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 08

September 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 333

consideration, individualized influenced

attributed, and individualized influence

behavior and inspirational motivation (Bass

& Avolio, 2004). Intellectual stimulation

relates to intelligence, rationality, logic and

careful problem solving in organizations

(Dionne, Yammarino, Atwater & Spangler,

2003). Leaders’ behaviors are based on

stimulating followers to re-evaluating

traditional ways of doing things, taking

reasonable actions and encourage creativity

(i.e., interesting and challenging tasks) (Bass

& Avolio, 2004; Yammarino & Dubinsky,

1994).

Individualized consideration leader is a

leader who actively respond to the

followers’ concerns and improvement needs.

This make the leaders disclose followers’

potentials by performing coaching and

mentoring activities, perform frequent

feedback and match the followers’ needs to

the organizational strategy and goals (Bass

& Avolio, 1994; Avolio, Zhu, Koh &

Bhatia, 2004; Kark & Shamir, 2002).

Individualized influenced attributed shows

the capabilities of the leaders to obviously

set up and freely sharing the vision and goal

challenges to followers (Bass & Avolio,

1994). This behavior encourages leaders to

motivate followers to attain the targeted

goals confidently (Bass & Avolio, 1994;

Shamir, House & Arthur, 1993). Meanwhile,

individualized influence behavior refers to a

leader who demonstrate a role model in

giving strong supports to followers to

succeed their job and motivating followers

to perform beyond their personal interests

(Bass & Avolio, 1993, 1994).

Trust is theoretically defined as “the belief

that a partner’s word or promise is reliable

and a party will fulfill his/her obligations in

the relationship” (Schurr and Ozanne, 1985).

Trust is an essential element in relational

exchange because relationships

characterized by trust are mainly valued that

parties will show the willingness to commit

themselves to such relationships (Hrebiniak,

1974). From an individual unit of analysis,

trust is often viewed as a psychological state

of employees, where a person who has a

confidence and belief of their organization

will strongly invoke his/her trust in

organization. This may lead to better job

performance (Mayer, Davis & Schoorman,

1995). Within a transformational leadership

framework, the leader who effectively

implement transformational processes, such

as intellectual stimulation, individualized

consideration, individualized influenced

attributed, and individualized influence

behavior in managing organization functions

may lead to an increased trust among the

employees to their organization (Bartram &

Casimir, 2007)

Surprisingly, a careful observation about

such relationship reveals that the effect of

the transformational leadership practices on

employees’ trust occurred in LAs should be

proven especially in line with the

seriousness of Malaysian government to

transform the public service through

government transformation program

roadmap (GTP Roadmap , 2010). The nature

of this relationship is interesting, but little is

known about the impact of transformational

leadership on employees’ trust in the context