Transformational leadership or the iron cage: which predicts trust, commitment and team efficacy?

Abstract

This paper investigates the differential effects of transformational leadership and the “iron cage” on trust, commitment and team efficacy at the team level. Transformational leadership has been shown to have positive effects on trust, commitment and team efficacy. However, it could be argued that these results are not due to the leadership but to the idea that the team has developed strong norms that constrain their behavior and “force” them to perform. The rival hypothesis that the iron cage results in trust, commitment and team efficacy is tested using hierarchical regression analysis. We find that transformational leadership in teams predicts trust, commitment and team efficacy over and beyond the perceptions of the iron cage. The iron cage adds to the prediction of commitment only. Results suggest that while encouraging strong values and norms within a team will lead to increased commitment, focusing on transformational leadership in teams is a more effective way to encourage the development of trust, commitment and team efficacy.