AHRMR

Article Details

Vol. 5 No. 3 (2025): September

Transformational Leadership, Organizational Culture, Change Management, and Employee Engagement

https://doi.org/10.35912/ahrmr.v5i3.3542
30 Sep 2025

Abstract

Purpose: This study aims to analyze the influence of transformational leadership, organizational culture, change management, and employee engagement on readiness to change within the Indonesian banking sector. It highlights how leadership behavior and cultural alignment shape employees’ willingness and preparedness to adapt to organizational transformation.

Research Methodology: Data were collected from 201 permanent employees of Tier-4 banks (Bank Mandiri, BRI, BNI, and BCA) through online questionnaires using a quantitative cross-sectional design. Analysis was conducted using partial least squares structural equation modeling (PLS-SEM) to test the relationships among the variables.

Results: The structural model indicated that transformational leadership significantly predicted organizational culture (? = 0.625; t = 15.332; p < 0.001) and change management (? = 0.318; t = 4.270; p < 0.001). Change management significantly increased employee engagement (? = 0.535; t = 9.250; p < 0.001), and employee engagement, in turn, predicted readiness to change (? = 0.601; t = 11.758; p < 0.001).

Conclusions: The results confirm that transformational leadership, effective change management, and strong organizational culture collectively foster employee engagement and readiness for change. These factors are crucial for maintaining the adaptability and competitiveness of Indonesia’s banking industry.

Limitations: This study focuses on Tier-4 banks, limiting its generalizability to smaller institutions. Future studies could include broader sectors and longitudinal data.

Contributions: This research contributes empirical evidence to the human resource management literature by identifying engagement as a key mediating factor between leadership and readiness to change, providing strategic insights for organizational transformation.

Keywords

Change Management Employee Engagement Organizational Culture Readiness to Change Transformational Leadership

How to Cite

Widjajakusuma, K., & Anindita, R. (2025). Transformational Leadership, Organizational Culture, Change Management, and Employee Engagement. Annals of Human Resource Management Research, 5(3), 421–436. https://doi.org/10.35912/ahrmr.v5i3.3542

Download Citation

Endnote/Zotero/Mendeley (RIS) BibTeX

References

  1. Ababneh, O. M. A. (2020). The Impact of Organizational Culture Archetypes on Quality Performance and Total Quality Management: The Role of Employee Engagement and Individual Values. International Journal of Quality & Reliability Management, 38(6), 1387–1408. https://doi.org/10.1108/IJQRM-05-2020-0178
  2. Ababneh, O. M. A., Lefevre, M., & Bentley, T. (2019). Employee Engagement: Development of a New Measure. International Journal of Human Resource Development and Management, 19(2), 105–134. https://doi.org/10.1504/ijhrdm.2019.098623
  3. Al-ali, A. A., & Singh, S. K. (2017). Change Management Through Leadership: The Mediating Role Of Organizational Culture. International Journal of Organizational Analysis, 25(4), 723–739. https://doi.org/10.1108/IJOA-01-2017-1117
  4. Alnuaimi, S. (2013). Effective Leadership in Implementing Change in Arab Culture: The Case of the Abu Dhabi Police (Issue May) Manchester Metropolitan University]. Retrivied from https://e-space.mmu.ac.uk/id/eprint/324755
  5. Alqatawenh, A. S. (2018). Tranformational Leadership Style and its Relationship with Change Management. Business: Theory and Practice, 19, 17–24.
  6. Arimie, C. J. (2020). Employer-Employee Relations and Employee Engagement in a Tertiary Institution in Benin-City, Edo State. Annals of Management and Organization Research, 1(1), 9–24. https://doi.org/10.35912/amor.v1i1.199
  7. Armenakis, A. A., & Harris, S. G. (2002). Crafting a Change Message to Create Transformational Readiness. Journal of Organizational Change Management, 15(2), 169–183. https://doi.org/10.1108/09534810210423080
  8. Bagga, S. K., Gera, S., & Haque, S. N. (2023). The Mediating Role of Organizational Culture: Transformational Leadership and Change Management in Virtual Teams. Asia Pacific Management Review, 28(2), 120–131. https://doi.org/10.1016/j.apmrv.2022.07.003
  9. Bailey, C. (2016). Human Resource Management Review Employee Engagement: Do Practitioners Care what Academics Have to Say - and Should They. Human Resource Management Review, 32(1). https://doi.org/10.1016/j.hrmr.2016.12.014
  10. Bevan, R. (2011). Keeping Change on Track. The Journal for Quality and Participation, 34(1), 4-9.
  11. Busari, A. H., Khan, S. N., Abdullah, S. M., & Mughal, Y. H. (2020). Transformational Leadership Style, Followership, and Factors of Employees’ Reactions Towards Organizational Change. Journal of Asia Business Studies, 14(2), 181–209. https://doi.org/10.1108/JABS-03-2018-0083
  12. Castel, P., & Friedberg, E. (2010). Institutional Change as an Interactive Process: The Case of the Modernization of the French Cancer Centers. Organization Science, 21(2), 311–330. https://doi.org/10.1287/orsc.1090.0442
  13. Chien, J. (2015). The Impact of Change Management on Employee Satisfaction and Engagement. International Journal of Business, Human and Social Sciences, 9(5), 1717–1722.
  14. Denison, D. R., Haaland, S., Goelzer, P., Denison, D. R., Haaland, S., & Goelzer, P. (2015). Corporate Culture and Organizational Effectiveness: Is There a Similar Pattern Around the World. Advances in Global Leadership, 3, 205–227. https://doi.org/10.1016/S1535-1203(02)03011-3
  15. Epitropaki, O., Sy, T., Martin, R., Tram-Quon, S., & Topakas, A. (2013). Implicit Leadership and Followership Theories “In The Wild”: Taking Stock of Information-Processing Approaches to Leadership and Followership in Organizational Settings. Leadership Quarterly, 24(6), 858–881. https://doi.org/10.1016/j.leaqua.2013.10.005
  16. Errida, A., & Lotfi, B. (2021). The Determinants of Organizational Change Management Success: Literature Review and Case Study. International Journal of Enginerring Business Management, 13, 1–15. https://doi.org/10.1177/18479790211016273
  17. Faupel, S., Süß, S., Faupel, S., & Süß, S. (2018). The Effect of Transformational Leadership on Employees During Organizational Change - An Empirical Analysis The Effect of Transformational Leadership on Employees During Organizational Change - An Empirical Analysis. Journal of Change Management, 19(3), 1–22. https://doi.org/10.1080/14697017.2018.1447006
  18. Ghasabeh, M. (2021). Transformational Leadership: Implementing a Cultural Approach in Organizations. The Journal of Values-Based Leadership, 14(1), 1-15. https://doi.org/10.22543/0733.141.1340
  19. Gholamzadeh, D., Khazaneh, A. T., & Nabi, M. S. (2014). The impact of leadership styles on organizational culture in Mapsa company. Management Science Letters, 4, 2161–2170. https://doi.org/10.5267/j.msl.2014.7.030
  20. Hair, J., Babin, B., Anderson, R., & Black, W. (2019). Multivariate Data Analysis. England: Pearson Prentice.
  21. Hamstra, M. R. W., Yperen, N. W. V., Wisse, B., & Sassenberg, K. (2011). Transformational-Transactional Leadership Styles and Followers ’ Regulatory Focus Fit Reduces Followers ’ Turnover Intentions. Journal of Personnel Psychology, 10(4), 182–186. https://doi.org/10.1027/1866-5888/a000043
  22. Hinkin, T. R., & Tracey, J. B. (1999). The relevance of charisma for transformational leadership in stable organizations. Journal of Organizational Change Management, 12(2), 105–119. https://doi.org/10.1108/09534819910263659
  23. Holt, D. T., Armenakis, A. A., Feild, H. S., & Harris, S. G. (2007). Readiness for organizational change: The systematic development of a scale. Journal of Applied Behavioral Science, 43(2), 232–255. https://doi.org/10.1177/0021886306295295
  24. Holt, D. T., & Vardaman, J. M. (2010). Readiness for Change. Journal of Change Management, 10(4), 445–447. https://doi.org/10.1080/14697017.2010.517905
  25. Hussain, S. T., Lei, S., Haider, M. J., & Akram, T. (2021). Transformational Leadership and Organizational Change Examining the Mediational Approach of Knowledge Sharing. International Journal of Asian Business and Information Management, 12(2), 84–95. https://doi.org/10.4018/IJABIM.20210401.oa5
  26. Ichdan, D. A., & Maryani, M. (2024). The Impact of Innovation, Corporate Social Responsibility, Environmental Practices, and Organizational Culture on Organizational Sustainability. Annals of Management and Organization Research, 5(4), 297–310. https://doi.org/10.35912/amor.v5i4.2236
  27. Islam, M. N., Furuoka, F., & Idris, A. (2021). Employee Engagement and Organizational Change Initiatives: Does Transformational Leadership, Valence, and Trust Make a Difference. Global Business and Organizational Excellence, 40(3), 50–62. https://doi.org/10.1002/joe.22078
  28. Jason, L. W. (2016). Employee Engagement For Change Readiness: A Qualitatie Exploration Of The Dynamics (Issue November) Capella University]. Retrivied from https://www.proquest.com/openview/b784576d261c07993b48ff908eb7a98e/1?pq-origsite=gscholar&cbl=18750
  29. Jati, M. K. K., Hassan, S., Harman, M. H., Jabar, S. A., & Majid, M. A. A. (2015). Transformational Leadership and Organizational Culture: A Case of MAHB. Procedia Economics and Finance, 31(15), 425–435. https://doi.org/10.1016/S2212-5671(15)01217-4
  30. Joseph, O. O., & Kibera, F. (2019). Organizational Culture and Performance: Evidence From Microfinance Institutions in Kenya. Sage Open, 9(1), 1-11. https://doi.org/10.1177/2158244019835934
  31. Kaira, P. (2022). The Mediating Role of Employee Engagement in the Relationship between Emotional Intelligence and Change Management. International Journal of Scientific Development and Research, 7(5), 246–257. doi:https://doi.org/10.3390/bs13020131
  32. Kegan, R., & Lahey, L. L. (2009). Immunity to Change (Leadership for the Common Good). New York: Harvard Business Review Press.
  33. Lasrado, F., & Kassem, R. (2021). Let's Get Everyone Involved! The Effects of Transformational Leadership and Organizational Culture on Organizational Excellence. International Journal of Quality & Reliability Management, 38(1), 169-194. doi:https://doi.org/10.1108/IJQRM-11-2019-0349
  34. Lubis, A. S., Lumbanraja, P., Absah, Y., & Silalahi, A. S. (2022). Human Resource Competency 4.0 and its Impact on Bank Indonesia Employees’ Readiness for Transformational Change. Journal of Organizational Change Management, 35(4-5), 749–779. https://doi.org/10.1108/JOCM-02-2021-0045
  35. Lyons, J. B., Swindler, S. D., & Offner, A. (2009). The Impact of Leadership on Change Readiness in the US Military. Journal of Change Management, 9(4), 459–475. https://doi.org/10.1080/14697010903360665
  36. Makumbe, W. (2016). Predictors of Effective Change Management: A Literature Review. African Journal of Business Management, 10(23), 585–593. https://doi.org/10.5897/AJBM2016.8208
  37. Matthysen, M., Harris, C., Mandela, N., & Africa, S. (2018). The Relationship between Readiness to Change and Work Engagement: A Case Study in an Accounting Firm Undergoing Change. SA Journal of Human Resource Management, 16(1), 1-11. https://doi.org/10.4102/sajhrm.v16i0.855
  38. Millar, C., Hind, P., & Magala, S. (2012). Sustainability and the Need for Change: Organisational Change and Transformational Vision. Journal of Organizational Change Management, 25(4), 489–500. https://doi.org/10.1108/09534811211239272
  39. Muawanah, A., Purwana, D., & Luddin, M. R. (2020). The Influence of Transformational Leadership, Organizational Culture and Trust on the Organizational Citizenship Behaviour of Agricultural Service, Banten Province. International Journal of Academic Research in Business and Social Sciences, 10(14), 238–245. https://doi.org/10.6007/ijarbss/v10-i14/7692
  40. Munthe, D., & Mariatin, E. (2022). The Effect of Employee Engagement on Readiness to Change. Journal of Research in Humanities and Social Science, 10(9), 175–177.
  41. Nazari Poor, E., & Zahedi, M. (2024). Exploring Institutional Collaborative Culture and Task Accomplishment in Industrial Settings: A Case Study of Industries in Iran. Annals of Management and Organization Research, 6(2), 91–105. https://doi.org/10.35912/amor.v6i2.2114
  42. Neves, P. (2009). Readiness for Change: Contributions for Employee's Level of Individual Change and Turnover Intentions. Journal of change management, 9(2), 215-231. doi:https://doi.org/10.1080/14697010902879178
  43. Onyango, W. P. (2014). Effects of Organization Culture on Change Management : A Case of the Vocational Training Centre for the Blind and Deaf Sikri. European Journal of Business and Management, 6(34), 204–215.
  44. Onyekwelu, N. P., Nwogwugwu, N. O., & Anizoba, A. S. (2021). Organizational climate and employee engagement: A commercial bank perspective in Southeast Nigeria. Annals of Management and Organization Research, 2(3), 161–173. https://doi.org/10.35912/amor.v2i3.805
  45. Ortega-Parra, A., & Sastre-Castillo, M. Á. (2013). Impact of perceived corporate culture on organizational commitment. Management Decision, 51(5), 1071–1083. https://doi.org/10.1108/MD-08-2012-0599
  46. Pakdil, F., & Leonard, K. M. (2014). Criteria for a lean organisation : development of a lean assessment tool. International Journal of Production Research, 52(15), 4857–4607. https://doi.org/10.1080/00207543.2013.879614
  47. Pathiranage, Y. L. (2020). A Literature Review on Organizational Culture towards Corporate Performance. International Journal of Management, Accounting and Economics, 7(9), 522–544.
  48. Pattnaik, A. (2016). An Overview of the Effect of Change Management on Employee Engagement. Research Journal of Management Sciences, 5(5), 8–10.
  49. Piri, M., & Abdi, M. (2025). The impact of transformational leadership on employee performance: The mediating role of innovative work behaviour. Annals of Management and Organization Research, 7(1), 111–125. https://doi.org/10.35912/amor.v7i1.2536
  50. Poturak, M., Meki?, E., Hadžiahmetovi?, N., & Budur, T. (2020). Effectiveness of Transformational Leadership among Different Cultures. International Journal of Social Sciences & Educational Studies, 7(3), 119–129. https://doi.org/10.23918/ijsses.v7i3p119
  51. Rajala, I., Ruokonen, I., & Ruismäki, H. (2012). Organizational culture and organizational change at Arts universities. Social and Behaviors Sciences, 45, 540–547. https://doi.org/10.1016/j.sbspro.2012.06.591
  52. Ratina, N. A., Lestariani, R. I., & Syah, T. Y. R. (2021). The Effect of Transformational Leadership on Affective Commitments with Job Satisfaction and Organizational Culture as An Intervening Variable. Journal of Multidisciplinary Academic, 4(6), 447–452. https://doi.org/10.21070/acopen.5.2021.1960
  53. Saks, A. M. (2019). Antecedents and Consequences of Employee Engagement Revisited. Journal of Organizational Effectiveness: People and Performance, 6(1), 19-38. doi:https://doi.org/10.1108/JOEPP-06-2018-0034
  54. Schaufeli, W. B., Bakker, A. B., & Salanova, M. (2006). The Measurement of Work Engagement With a Short Questionnaire A Cross-National Study. Educational and Psychological Measurement, 66(4), 701–716. https://doi.org/10.1177/0013164405282471
  55. Schneider, B., Ehrhart, M. G., & MacEy, W. H. (2013). Organizational Climate and Culture. Annual Review of Psychology, 64, 361–388. https://doi.org/10.1146/annurev-psych-113011-143809
  56. Senjaya, V., & Anindita, R. (2020). The Role of Transformational Leadership and Organizational Culture Towards Organizational Commitment Through Job Satisfaction Among Mining Industry Employee. Journal of Applied Management, 18(4), 767–782. https://doi.org/10.21776/ub.jam.2020.018.04.15
  57. Shin, J., Taylor, M. S., & Seo, M.-G. (2012). Resources for Change: the Relationships of Organizational Inducements and Psychological Resilience to Employees' Attitudes and Behaviors toward Organizational Change. Academy of management Journal, 55(3), 727-748. doi:https://doi.org/10.5465/amj.2010.0325
  58. Sinha, D., & Sinha, S. (2020). Managing in a VUCA World: Possibilities and Pitfalls. Journal of Technology Management for Growing Economies, 11(1), 17-21. doi:https://doi.org/10.15415/jtmge.2020.111003
  59. Smith, I. (2006). Continuing Professional Development and Workplace Learning - 15: Achieving Successful Organisational Change - Do’s and Don’ts Of Change Management. Library Management, 27(4-5), 300–306. https://doi.org/10.1108/01435120610668232
  60. Sonenshein, S., & Dholakia, U. (2012). Explaining Employee Engagement with Strategic Change Implementation : A Meaning-Making Approach Explaining Employee Engagement with Strategic Change Implementation : A Meaning-Making Approach. Organization Science, 23(1), 1–23. https://doi.org/10.1287/orsc.1110.0651
  61. Soumyaja, D., Tj, K., & Bhattacharyya, S. (2011). Employee Readiness to Change and Individual Intelligence : The Facilitating Role of Process and Contextual factors. International Journal of Business Insights & Transformation, 4(2), 85–92.
  62. Too, A. (2018). Effect of Organizational Culture on Change Management in Country Goverment in Kenya a Case Study of Country Goverment of Nakuru. International Journal of Business Management and Economic Review, 1(6), 64–77.
  63. Vidal, M. (2007). Lean Production, Worker Empowerment, and Job Satisfaction: A Qualitative Analysis and Critique. Critical Sociology, 33(1-2), 247–278. https://doi.org/10.1163/156916307X168656
  64. Whelan-berry, K. S., & Somerville, K. A. (2010). Linking Change Drivers and the Organizational Change Process: A Review and Synthesis. Journal of Change Management, 10(2), 175–193. https://doi.org/10.1080/14697011003795651
  65. Zulkarnain, Z., Hadiyani, S., Ginting, E. D., & Fahmi. (2024). Commitment, Employee Engagement and Readiness to Change among Oil Palm Plantation Officers. SA Journal of Human Resource Management, 22, 1-8. doi:https://doi.org/10.4102/sajhrm.v22i0.2471

License

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Authors

1 . Kresna Widjajakusuma
Universitas Esa Unggul, Jakarta, Indonesia
2 . Rina Anindita
Universitas Esa Unggul, Jakarta, Indonesia

Downloads

View PDF

Statistics

Downloads

Download data is not yet available.

Issue

Vol. 5 No. 3 (2025): September
Section: Articles
Contact Us
WhatsApp Instagram Facebook LinkedIn Email