Abstract

Neotraditional organizations are those that exist to sustain indigenous cultures, practices, and institutions as they compete in modern markets. This study examines how a single mechanism, leader transparency, influences change outcomes in neotraditional organizations. We predict that leader transparency will enhance employee cognition- and affect-based trust toward leadership during times of change, thereby supporting relational dynamics within the organization that enable a smooth transition. We also predict that leader transparency will elevate employee acceptance of new technology during change, thereby enhancing desired functional adjustments within the organization. Finally, we predict that leaders who embrace the indigenous heritage of the firm while implementing change will benefit more from being transparent than leaders who ignore the indigenous heritage of the firm. We find overall support for our predictions. These results enhance our understanding of how leaders of neotraditional organizations can manage change successfully while preserving historical cultures, practices, and institutions.