Leadership Style in Relation to Organizational Change and Organizational Creativity: Perceptions from Nonprofit Organizational Members

• Author: Nancy Da Silva,Stephanie Lutz Allen,Joseph E. Smith
• DOI: http://doi.org/10.1002/nml.21078
• Date: 01 September 2013
• Published date: 01 September 2013

Leadership Style in Relation to

Organizational Change and

Organizational Creativity

Perceptions from Nonprofit

Organizational Members

Stephanie Lutz Allen,

1

Joseph E. Smith,

2

Nancy Da Silva

2

1SoundCure, 2San Jose State University

As the environment within which organizations act continues to

change and becomes increasingly competitive, maintaining an

organizational climate that supports change and encourages

creativity is a key objective for organizational leaders. This

article examines the relationship between leadership style (trans-

formational, transactional, laissez-faire) and members’ percep-

tions of the psychological climate for organizational change

readiness and psychological climate for organizational creativity.

Results indicate that transformational leaders have a direct

positive relationship with psychological climate for organiza-

tional change readiness and organizational creativity, while

laissez-faire leaders have a negative relationship.

Keywords: leadership, organizational culture, change readiness,

faith-based service

MANY ACADEMICS AND PRACTITIONERS have argued that leader-

ship is key in maintaining organizational viability (Bass

and Avolio 1994; Collins 2001; Peterson et al. 2008;

Waldman, Ramírez, House, and Puranam 2001). For instance, in a

Correspondence to: Nancy Da Silva, Department of Organization and Management,

San Jose State University, One Washington Square, San Jose, CA 95192–0070.

E-mail: nancy.dasilva@sjsu.edu

NONPROFIT MANAGEMENT & LEADERSHIP, vol. 24, no. 1, Fall 2013 © 2013 Wiley Periodicals, Inc 23

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21078

24 ALLEN, SMITH, DA SILVA

Nonprofit Management & Leadership DOI: 10.1002/nml

study of organizations that made the shift from mediocre to sus-

tained profitability, Collins (2001) identified leadership as the first

and most important element in helping companies achieve greater

effectiveness. Further support for the importance of leadership on

organizational performance is evident in Waldman et al.’s (2001)

study linking leader charisma to organizational performance in un-

certain environments.

With today’s ever-changing and competitive environment, one

approach leaders can take to create a competitive advantage is to

foster an organizational climate that encourages and supports

change and creativity. Organizations that are effective at making

incremental as well as radical organizational changes are oftentimes

better positioned to survive in today’s environment (Haveman 1992;

Henderson and Clark 1990). Furthermore, organizations that

develop creative ideas that lead to innovative products and services

can also gain a competitive advantage (Damanpour and Schneider

2006; Oke, Munshi, and Walumbwa 2009; Tellis, Prabhu, and

Chandy 2009; Yuan and Woodman 2010). This article examines

leadership style in relation to the psychological climate for

organizational change readiness and the psychological climate

for organizational creativity.

The article contributes to the literature by examining

leadership, change readiness, and creativity within the nonprofit

context of churches. While most of the research in this area has

focused on for-profit corporations, nonprofit organizations also

need to adapt to meet the needs of a changing mobile society

(Heuser and Shawchuck 1993). Specifically, churches have been

criticized for being stuck in the past (Parsons and Leas 1993),

lacking a vision or direction (Malphurs 1999), and being fearful of

change (Heuser and Shawchuck 1993). Therefore, to revitalize a

church, leadership is critical (Phelan 2005), and thus the pastor of

the congregation plays a crucial part in rejuvenating the church’s

role in our society.

In addition to change readiness, researchers (for example,

Barrett, Balloun, and Weinstein 2005; Jaskyte 2004) have also

acknowledged the importance of creativity within nonprofits, and

again, there has been limited attention in this field. Similar to for-

profit organizations, nonprofits must create innovative products and

services in order to meet the needs of the individuals they serve.

A key determinant of whether an organization is innovative is its

leadership (King and Anderson 1990; Osborne 1998; Schein 1985).

Thus, leaders need to create and manage an organizational climate

that promotes creativity and innovation.

We begin our discussion with leadership and the three broad

types of leader styles, followed by a discussion of psychological

climate and the specific domains of organizational change readiness

and organizational creativity.

With today’s ever-

changing and

competitive

environment, one

approach leaders

can take to create

a competitive

advantage is to

foster an

organizational

climate that

encourages and

supports change

and creativity.