Does Perceived Societal Impact Moderate the Effect of Transformational Leadership on Value Congruence? Evidence from a Field Experiment

Transformational leadership, it is argued, aligns employees' values with those of their organization. Empirical research has found a positive relationship between transformational leadership and value congruence. Yet studies rely predominantly on cross-sectional research designs that limit causal conclusions and have not uncovered the potential contextual conditions of this argument. This article argues that transformational leadership positively affects value congruence in public service organizations, but only when employees see that their jobs impact the well-being of other people and society. To test the relationship between transformational leadership and value congruence and the moderating effect of perceived societal impact, the article combines a field experiment on 79 managers of public service organizations and a balanced survey panel of their 583 employees. Consistent with the expectation, results indicate heterogeneous treatment effects, implying that employees' perceived societal impact is important to consider when transformational leaders strive to align the values of individual employees and the organization.