PERSON-ORGANIZATION VALUE CONGRUENCE: HOW TRANSFORMATIONAL LEADERS INFLUENCE WORK GROUP EFFECTIVENESS BRIAN J. HOFFMAN University of Georgia BETHANY H. BYNUM Human Resources Research Organization RONALD F. PICCOLO Rollins College ASHLEY W. SUTTON University of Georgia Using multilevel structural equations modeling, we examine the extent to which the influence of transformational leadership on work group effectiveness flows through follower perceptions of person-organization or person-supervisor value congruence. Results indicate that the group-level effect of transformational leadership on work group effectiveness was fully accounted for by the group-level impact of transforma- tional leadership on follower perceptions of person-organization value congruence, not by its impact on follower perceptions of person-supervisor value congruence. These results are discussed in the context of leadership as a ���sense-making��� process and the practical barriers faced by transformational leaders in modern organizations. Despite clear support for the impact of ���transfor- mational leadership��� on a host of organizational outcomes (Judge & Piccolo, 2004 Lowe, Kroeck, & Sivasubramaniam, 1996), the ���underlying influ- ence processes for transformational leadership are still vague��� (Yukl, 1999: 287). Several propositions have been forwarded to explain observed effects, most of which have focused on single, individual- level reactions to a leader (e.g., trust [Podsakoff, McKenzie, Moorman, & Fetter, 1990] self-efficacy [Shea & Howell, 1999]) as explanations for individ- ual outcomes (e.g., job satisfaction [Kirkpatrick & Locke, 1996] job performance [Piccolo & Colquitt, 2006]). Among the most commonly proposed ex- planations of transformational leadership is value congruence, which characterizes the state of con- gruence between an individual���s values and those of his or her work environment (Burns, 1978 Jung & Avolio, 2000 Shamir, 1991 Shamir, House, & Arthur, 1993 Weber, 1947). Although value congruence is consistently pro- posed as a central explanatory variable in the lead- ership process, past theory differs with respect to the conceptualization of value congruence, with some authors proposing correspondence between followers and their direct supervisor (Burns, 1978 Jung & Avolio, 2000) and others proposing congru- ence with organizational values (van Knippenberg, van Knippenberg, De Cremer, & Hogg, 2004). De- spite differing theoretical predictions associated with each conceptualization of value congruence and prior empirical support for the distinctness of person-organization and person-supervisor value congruence (Kristof-Brown, Zimmerman, & John- son, 2005), leadership research has not yet di- rectly compared these two forms of value congru- ence as explanatory variables of transformational leadership. Examinations of explanatory mechanisms of transformational leadership in general, and of value congruence in particular, have been con- ducted almost exclusively at the individual level and have included little consideration of how these mechanisms operate at the group level of analysis. However, given that transformational leadership The authors are indebted to Tim Judge, Jason Colquitt, Peter Bamberger, and three anonymous reviewers for their insightful comments on earlier versions of this article. Editor���s note: The manuscript for this article was ac- cepted during the term of AMJ���s previous editor, Duane Ireland. Academy of Management Journal 2011, Vol. 54, No. 4, 779���796. 779 Copyright of the Academy of Management, all rights reserved. Contents may not be copied, emailed, posted to a listserv, or otherwise transmitted without the copyright holder���s express written permission. Users may print, download or email articles for individual use only.

theory was originally proposed to capture effective leadership of group- and organization-level activity (Bass, 1985 Burns, 1978), and that the performance of a leader���s work group is perhaps the most impor- tant conceptualization of leader effectiveness (Di- onne, Yammarino, Atwater, & Spangler, 2004 Kai- ser, Hogan, & Craig, 2008), additional study is needed that specifies the transformational leader- ship process at the group level while examining variation in work-unit-level outcomes. Accordingly, the primary purpose of this study is to provide a direct comparison of the mediating roles of person-organization and person-supervisor value congruence in the relationship between transformational leadership and work unit effec- tiveness. In so doing, we answer calls from both the leadership (Yammarino, Dionne, Chum, & Dan- serau, 2005) and the person-environment (PE) fit literatures (Jansen & Kristof-Brown, 2006) by con- ceptualizing transformational leadership and fol- lower value congruence at the group level of anal- ysis. Figure 1 presents a model of proposed relationships among this study���s primary variables. LITERATURE REVIEW Transformational Leadership and Unit Effectiveness Transformational leaders are theorized to in- fluence their followers by heightening followers��� self-awareness, instilling a sense of purpose and mission in followers, and influencing them to tran- scend lower-order needs and goals for the sake of the long-term benefit of the group to which they belong (Bass, 1985). Four ostensibly distinct di- mensions of leader behavior are traditionally asso- ciated with transformational leadership: (1) ideal- ized influence/charisma (more recently split into ���idealized attributed��� and ���idealized��� behaviors [Bass & Avolio, 1995]), whereby leaders influence followers by arousing strong emotions and loyalty from them (2) inspirational motivation, whereby a leader communicates high expectations, uses sym- bols and imagery to focus effort, and expresses the importance of organizational purposes (3) intellec- tual stimulation, whereby a leader increases fol- lowers��� awareness of problems and encourages them to view problems from a new perspective and (4) individualized consideration, whereby a leader provides support and encouragement by giving personal attention to and successfully advising followers. In keeping with seminal conceptualizations of transformational leadership theory (Bass, 1985 Burns, 1978), empirical research has shown that transformational leaders lead more innovative teams (Keller, 1992, 2006), encourage behaviors that contribute positively to a team environment (e.g., ���organizational citizenship��� [Piccolo & Colquitt, 2006 Podsakoff & MacKenzie, 1997]), and ultimately, lead more effective work units (Judge & Piccolo, 2004). Given this theoretical and empirical support, we expect transformational leadership to be associ- ated with work unit effectiveness. FIGURE 1 Between���Work Group Full Mediation Model with Fully Standardized Coefficientsa Intellectual Stimulation Person-Organization Value Congruence Person-Supervisor Congruence Work Group Effectiveness Transformational Leadership Inspirational Motivation Idealized Influence Individualized Consideration .78* .69* .68* .43* (.19) .85* .90* .88* .75* ���0.54 a Path weights are completely standardized path coefficients. The value in parentheses is the completely standardized path weight when person-organization and person-supervisor congruence are added to the model. * p .05 780 August Academy of Management Journal

Transformational Leadership and Value Congruence In recent years, extensive research has been de- voted to understanding the implications of congru- ence between an individual���s preferences, motives, and values and characteristics of his or her work environment (Edwards & Cable, 2009 Hoffman & Woehr, 2006 Kristof-Brown et al., 2005). Although person-environment congruence can be conceptu- alized using a variety of different components (e.g., an individual���s needs and an environment���s abili- ties to meet those needs goal congruence and in- terest fulfillment), value congruence, or the extent to which an individual���s values are consistent with those revealed in his or her organization, is perhaps the most frequently examined conceptualization, yielding significant effects on a variety of outcomes (e.g., Hoffman & Woehr, 2006 Kristof-Brown et al., 2005 Meglino & Ravlin, 1998). In the leadership literature, value congruence provides an explanation for why followers relate to leaders and pledge their loyalty and support (Burns, 1978 Conger, 1999 Klein & House, 1995 Shamir et al., 1993 Weber, 1947). Transformational leaders articulate a vision that emphasizes the way in which collective goals are consonant with fol- lower values, causing followers to regard organiza- tional goals as their own and submit extra effort toward goals and accomplishments (Bono & Judge, 2003 Shamir et al., 1993). The followers of trans- formational leaders are proposed to view work as a reflection of deep underlying values. Exerting effort toward accomplishing these value-laden goals is intrinsically motivating because doing so (1) allows followers to behave in ways that reflect important values, (2) is consistent with followers��� self-con- cepts, and (3) becomes equated with a moral state- ment by followers (Shamir et al., 1993 van Knip- penberg et al., 2004). Similarly, it is possible that although transformational leaders do not directly alter follower values, they are effective in their ability to frame and link follower and work values so that they become more congruent in the eyes of the followers (Klein & House, 1995). In either case, the critical role of follower perceptions of value congruence to the leadership process is clear. Perceptions of person-supervisor value congru- ence. In his seminal conception of transformational leadership, Burns noted, ���The genius of leadership lies in the manner in which leaders see and act on their own and their follower���s values��� (1978: 19). The centrality of followers��� consistency with leader values has been echoed in theoretical accounts of the transformational leadership process put forth over the past 30 years (Avolio & Bass, 1988 Burns, 1978 Conger & Kanungo, 1987 Klein & House, 1995). More generally, the typically ���leader-cen- tric��� approach to the study of leadership goes hand- in-hand with research emphasizing the role of lead- ers��� personal values. If follower perceptions of consistency with leader values account for the influence of transfor- mational leaders, one explanation may be follow- ers��� desire to maintain a high-quality relationship with an attractive leader (Howell, 1988 Kets de Vries, 1988 Shamir, 1991). A leader who exudes self-confidence and deep personal concern for the well-being of his or her employees is likely to en- gender a strong sense of pride, commitment (Di- onne et al., 2004), and desire among followers to emulate the leader���s attitude and behavior, foster- ing the perception that their personal values are congruent with those of the leader. A relationship of this type is akin to an influence relationship predicated on referent power (Kelman, 1958 Ku- disch, Poteet, Dobbins, Rush, & Russell, 1995), a form of influence relationship typified by a follow- er���s efforts to emulate his or her leader (Conger & Kanungo, 1987 Kark, Shamir, & Chen, 2003). Empirical research has supported the notion that perceptions of person-supervisor value congruence account for the effectiveness of transformational leaders. In a laboratory study examining creativity, Jung and Avolio (2000) found that person-supervi- sor value congruence mediated the relationship be- tween transformational leadership and the quality of follower performance, noting that a leader���s ef- fort to encourage followers to internalize a compel- ling vision resulted in a higher level of perceived value congruence. More recently, Brown and Trevin ��o (2006) reported that person-supervisor value congruence, operationalized at the group level of analysis, fully mediated the effect of char- ismatic leadership on interpersonal deviance. We therefore hypothesize: Hypothesis 1. Transformational leadership is positively related to a follower���s person-super- visor value congruence. Hypothesis 2. Follower person-supervisor value congruence is positively related to the effectiveness of a leader���s work group. Perceptions of person-organization value con- gruence. Although person-organization value con- gruence is proposed as a key proximal outcome of transformational leadership (Shamir et al., 1993 Weber, 1947), no empirical research has yet inves- tigated the interplay between transformational leadership and person-organization value congru- ence. Instead, research has referred to ���organiza- 2011 781 Hoffman, Bynum, Piccolo, and Sutton