Journal of Islamic Business and Management

2021, 11(01), 126-143

[Link]

PRIMARY RESEARCH

Impact of Paternalistic Leadership on Organizational Readiness for

Change: Mediating Role of Employee Engagement and Moderating Role
of Islamic Work Ethics

Muhammad Qaiser Shafi 1∗, Ali Raza 2 , Ali Haider Bajwa 3 , Nafla Gul 4
1,4
Faculty of Management Sciences, Riphah International University, Islamabad, Pakistan
2
Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan
3
Faculty of Management Sciences, International Islamic University, Islamabad, Pakistan

Keywords Abstract.
Paternalistic Leadership Purpose: This study aims to investigate the impact of paternalistic
Organizational Readiness leadership on organizational readiness for change: mediation of
Employee Engagement employee engagement and moderation of Islamic work ethics (IWE).
Islamic Work Ethics Methodology: The sample size for this research is 203. The data were
collected from faculty of private and public sector educational institutes
that were in process of change. SPSS has been utilized for data analysis.
Received: 21 July 2020 Findings: Using Leader-Member Exchange (LMX) as a theoretical
Accepted: 07 November 2020 lens, the results indicate paternalistic leadership significantly positively
impacts organizational readiness for change; employee engagement acts
as a mediating agent between paternalistic leadership and organizational
readiness for change; IWE moderates between the relationship of
paternalistic leadership and employee engagement.
Significance: The mediation of employee engagement and moderation
of IWE between paternalistic leadership and organizational readiness
for change is still under research so this makes our research a unique
contribution.
Limitations: This research shall add to the Islamic ethical principles of
employees alongside output which will advantage the organization as
well as employees.
Implications: This research has managerial implications for change
agents, organizational development (OD) consultants; policymakers of
educational institutions, and professionals regarding change strategies,
benefits, and the Islamic business environment.

KAUJIE Classification: H48, T6

JEL Classification: M12, M5

∗
Corresponding author: Muhammad Qaiser Shafi
†
Email: [Link]@[Link]; ORCID: [Link]

Creative Commons CC BY: This article is distributed under the terms of the Creative Commons Attribution 4.0 License
[Link]
2021 Journal of Islamic Business and Management Vol. 11 Issue 01 127

INTRODUCTION
Knowledge to manage organizational change and successful execution of change programs
can be simplified by analysis of individual willingness to change. Armenakis and Fre-
denberger (1997) defined readiness as "a mindset that exists among employees during the
implementation of organizational changes. It comprises of belief, attitude and intention of
change target members regarding the need for and capability of implementing organizational
change" (p. 144). The perception of readiness is exciting for workforce’ feedbacks to change,
it plays a significant part in organizational change (Bartunek & Rousseu, 2006; Oreg &
Vocalla, 2011). Moreover, readiness is a prime factor, intricate in preliminary support of
employees for change imaginations (Armenakis & Fredenberger, 1993; Holt et al., 2007).
Organizational readiness for change is a multidimensional concept influenced by opinions in
the mindset of employees that they have skills to execute a future change because it is good
for the organization, moreover, they have management support and the proposed change is
beneficial for employees (Armenakis et al., 2007). Leadership is a central issue for discussion
(House et al., 2004). Our zone of attention is paternalistic leadership, paternalistic is a pros-
perous part of management literature, but there is still debate between researchers that how
to describe paternalistic leadership and its success. Despite, different authors have different
definitions of paternalistic leadership, but the recent definition of paternalistic leadership is
"a style that combines strong discipline and authority with fatherly benevolence" (Farh &
Cheng, 2000).
The human relation effort indicates that if leaders are team-focused, instead of instrumen-
talization, workers would be more mollified and more creative (Bassu & Green, 1997). So,
when a manager becomes paternalistic and has good behavior with his employees then it’s
easy to bring change in the organization and employees are ready for the change. Studies on
paternalistic evolution from Asia disparate Weber’s controlling idea and claimed that pater-
nalistic leaders be responsible for cooperation and look after their dependents (Redding et
al., 1994). Mostly work on paternalistic leadership has been done in the Asia region but with
different variables, here we examine that how readiness of change in an organization occurs
when a leader is paternalistic. As per the literature, most research studies have been done
on organization change for readiness by taking different leadership styles, but here in this
research paper we took paternalistic leadership style and examined its impact on organization
readiness for change, moreover added Islamic work ethics and employee engagement.
Though, the majority of research work in this domain, as well as in the larger subject
field of business ethics, has been carried out on the experiences in the American and few
European countries (Lim, 2003; Rizk, 2008). In Muslim countries, this concept is still
under-researched. Islam e.g. has its code of conduct that is derivative from the Holy Qur’ān
and Sunnah. In a manner alike Weberian Protestantism, Islam gives the conceptual basis for
a range of individual qualities that endorse financial growth (Ali, 1992). Up to now, only a
few scholars have worked on IWE (Ali, 1992; Ali & Al-Kazemi, 2007; Rahman et al., 2006).
Since Pakistan is an Islamic republic, where most of the organizational work is based on
Islamic principles. Therefore based on this contextual reality, it is essential to explore the
effect of IWE. The studies by multiple authors have highlighted that Islamic work ethics
128 Shafi, M. Q., Raza, A., Bajwa, A. H., & Gul, N. - Impact of paternalistic leadership .... 2021

impact most of the organizational decisions concerning their precursors (Ahmad et al., 2019;
Din et al., 2019; Nasution & Rafiki, 2019). As per the literature, there exists a gap to address
IWE as a moderator between leadership style and change management.
Employee engagement is another construct that needs to be focused on during the process
of organizational change. It is defined as "a positive, fulfilling, work-related state of mind that
is characterized by vigordin, dedication, and absorption" (Schaufeli et al., 2002). Modern
organizations need to rely on those employees who put in extra effort, are committed, and
give their best. Previous studies show that employee engagement is key to a competitive
edge from an organizational point of view (Bakker & Schaufeli, 2008; Macey & Schneider,
2008). Employee engagement has a critical role in organizational readiness to change; this
importance has been highlighted by many researchers that this relationship needs to be
explored (Makikangas et al., 2019; Mitra et al., 2019; Roczniewska & Higgins, 2019). The
creativity embedded in the paternalistic leadership leads to organizational readiness to change
and this aspect is currently missing in the literature (Du & Luo, 2020; Karakitapoglu-Aygun
et al., 2020; Nazir et al., 2020; Soomro et al., 2020). Using LMX as a theoretical lens, the
objective of our research is to address the research gap to inspect the association between
paternalistic leadership and organizational readiness to change with the mediation of em-
ployee engagement and moderation of IWE (Khan & Gul, 2020). This all literature evidence
highlights the gap which still exists in the literature and this study will contribute to fulfilling
this gap.
The target sector chosen for our research is public and private universities. The ratio-
nale behind choosing public and private universities is that now educational institutions are
moving towards enterprise resource planning (ERP) from traditional/ conventional learning
management systems. Secondly, to suggest implications for change agents; OD consultants,
policymakers of educational institutions, and professionals regarding change strategies, bene-
fits, and Islamic business environment. This research paper contributes knowledge about the
crucial role of paternalistic leadership during organizational change as change is a must for
survival and growth in the 21st century.

LITERATURE REVIEW
Paternalistic Leadership
Paternalistic leadership is a form of fatherly managerial style, which is used to manage and
protect employees who are expected to be faithful and respectful. A paternalistic leader is
appropriate for an organization where the structure is the formal and hierarchical and creative
thinking of subordinates is not required. Gelfand et al. (2007) defined paternalism as "a
hierarchical relationship in which a leader guides professional and personal lives of subor-
dinates in a manner resembling a parent and in exchange expects loyalty and admiration".
Paternalistic leadership is "a style that combines strong discipline and authority with fatherly
benevolence" (Farh & Cheng, 2000). Researches point out that paternalistic leadership is
not a cohesive concept; it has 03 dimensions: authoritarianism, benevolence, and morality
(Aycan, 2006; Farh & Cheng, 2000). Authoritarianism speaks of a leader’s behavior that
has strong control & authority over its assistants and wants undisputed respect from them.
2021 Journal of Islamic Business and Management Vol. 11 Issue 01 129

Chinese managers set up a centralized structure to frequently ratify these standards and
assume a father-like role with a straight & commanding leadership style (Peng et al., 2001).
Benevolence indicates that a leader shows apprehension for his assistant’s personal and
family life. Mortality defined a leader’s behavior that shows greater ethical charisma and
honesty by acting generously and leading from the front. Allah directs a leader to show
the power of his examples instead of the examples of his power (3:51). Leader-Member
Exchange (LMX) theory gives details about paternalistic leadership and recent research
from Turkey found LMX to be an important link of paternalistic leadership. According to
Pellegrini and Scandura (2006), paternalism indicates voluntary obedience, then, an assistant
who practices high levels of belief, responsibility, and obedience in their dealings with a
leader (i.e. LMX) may admit the leader’s power as a father. Moreover, paternalism requires
a significant investment by a leader, & for that reason, leaders may be keener to involve in
paternalistic activities with followers with whom they have good-quality LMX relationships.
Overall, paternalistic leadership is a father-like role and provides protection, care, and safety
to the workers’ professional and individual lives demanding faithfulness and obedience
(Pelegrini & Scandura, 2008).

Organization Readiness for Change

Readiness is debatably one of the major issues intricate in workers’ preliminary support for
change steps and activities (Armenakis et al., 1999). However the idea of readiness might be
initially presented by Jacobson (1957) the basis for readiness as a distinctive concept has been
inserted within numerous conceptual frameworks of the procedure by which change dissolve.
For this purpose, over the past few years, vast numbers of research studies were conducted in
this area of change management to examine the predictive elements of employee’s readiness
towards organizational change and its diverse levels of effect (Armenakis et al., 1993; Chawla
& Kelloway, 2004; Cinite et al., 2009; Cunningham et al., 2002; Erturk, 2008; Madsen et al.,
2005; Peach et al., 2005; Rafferty & Simon, 2006). Various theories, theoretical frameworks,
and empirical research studies have been applied to examine numerous features of organiza-
tional change. Therefore, literature implies that employee’s readiness is more effective for
the successful execution of organizational change programs (Eby et al., 2000; Madsen et al.,
2005; Rafferty & Simon, 2006). A researcher has shown that the support of employees for
the execution of organizational change will direct an organization to develop dynamic change
(Cinite et al., 2009; Jones et al., 2005). However, literature also explains that employees in
an organization are further multifaceted henceforth, their awareness views, and attitude turns
into serious and competitive in successfully implementing change programs (Armenakis et
al., 1993; Weber & Weber, 2001). So, change experts, are working to discover a possible
diverse grouping of positive employee readiness aspects to motivate employees’ readiness for
successfully executing organizational change (Cunningham et al., 2002; Madsen et al., 2005).

Paternalistic Leadership and Organizational Readiness for Change

Schneider et al. (1996) highlighted the significance of establishing an atmosphere for orga-
nizational change. If people don’t agree on the change that exists in the organization then
130 Shafi, M. Q., Raza, A., Bajwa, A. H., & Gul, N. - Impact of paternalistic leadership .... 2021

the organization can’t go for change (Schneider et al., 1996). Lewin’s (1951) several papers
discussed a three-step process to implement change. First organization unfreeze their current
system and then in the second phase in which an organization moves where it wants to go
and third Re-freeze stage in which organization currently at most wanted state and changes
become established. Research shows that readiness for change is like Lewin’s un-freezing
concept (Armenakis et al., 2009). A message for change should revolve among members of
the organization and employees should have self-assurance that they have the aptitude to bring
changes (Armenakis & Harris, 2002). It is explained that Readiness-creating message will
have more effect if the person is more honest, and genuine that convey a message (Armenakis
& Harris, 2009). So concerning leadership, if the leader acts as a change representative, as
in many circumstances, then change readiness takes place in the organization as workers
trust and respect their leader. As in the introduction, it shows that that first time we see
the impact of paternalistic leadership on readiness for change so, here we see the impact of
transformational and transactional leadership on readiness for change because transforma-
tional and transactional leaders are the same as Paternalistic Leaders. As per Bass (1985),
transactional leadership is a process in which leaders are responsible for reward and punish
for employees’ performance as in one dimension of paternalistic leadership authoritarianism
also speaks about how leaders have strong control or authority over their assistants. Bass
(1985) also shows that transformational leadership has positive qualities like charisma, care
about the individual, aptitude, and willingness to provide intellectual motivation as other
dimensions of paternalistic leadership benevolence: leader shows care for his assistants and
mortality defined a leader’s that have charismatic personality and honesty through acting
generously and leading by example. As explained by definition that transformational leaders
pay more attention to change. A real transformational leader transforms the thinking, views,
and attitude of supporters (Podsakoff et al., 1990). At the corporate level, a transformational
leader is who brings initiation, implement new ways in the organizations (Northouse, 2004).
Therefore, an efficient transformational leader is capable to bring change to the organization.
Previous studies support this concept. For example, Graetz (2000) used a qualitative case
study and his result shows that a leader must have the vision, authorized, and strengthen
his or her followers. The distinctiveness that Graetz (2000) explained is the dimensions of
the transformational leader as well as paternalistic leader behavior. It is showed that the
transformational leader’s behavior was linked with lower-level worker’s cynicism as regards
organizational change. Transactional leadership will also be significantly positively related
to organizational readiness for change but less. So transactional leaders don’t provide a
vision for the organization so employees are uncertain and feel hesitant to involve in change
activates. Based on the above arguments, we hypothesize that
H1: Paternalistic leadership significantly positively affects Organization readiness for change.

Paternalistic Leadership and Organization Readiness for Change: Mediating Role of

Employee Engagement
The term employee engagement is established mainly by researchers of business studies,
management, organizational behavior (OB) discipline, and psychology (Welch, 2011). Many
2021 Journal of Islamic Business and Management Vol. 11 Issue 01 131

researchers described Employee engagement as a "satisfying, positive job-related skill, state

of mind and it also existed as a good health and positive work affect at the workplace"
(Schaufeli & Bakker, 2004; Sonnentag, 2003). Employee engagement has 03 dimensions:
vigor, dedication, and absorption (Schaufeli et al., 2002). It shows a significant impact
on output and employee retention by executing employee engagement (Bhatnagar, 2007).
Engaged employees tend to be more concerned about their organization’s success and go the
extra mile to achieve success (Glaspie & Nesbitt 2004, James et al., 2011). Leadership is
deliberated in relation to help employee’s engagement in the literature (Suharti & Suliyanto,
2012). The behavior of a leader with its subordinates affects employee’s engagement in
the organization (Saks, 2006). Moreover, leaders’ support and care for employees is set up
of a positive relationship on employee engagement. If the leader shows more concern and
welcomes the opinion of its subordinates, the work engagement is higher than expected to
be (Suharti & Suliyanto, 2012). Furthermore, there is a positive influence of benevolent
and moral leadership on the outcomes of employees (Wang & Cheng, 2010). It is found
in a study that there exists a significant positive association between these dimensions and
subordinate performance (Wang et al., 2011). However, authoritarian leadership style con-
tains control over their subordinates, so a lot of research has found that there is a negative
relationship between authoritarian leadership style and employee job attitudes (Chan et al.,
2013). However, numerous studies have revealed that leader authorizing behavior towards
employees has a positive impact on their work engagement (Mendes & Stander, 2011). It is
found that employee engagement has a role in organizational readiness for change. Employee
engagement shows a vital role in employee acceptance of the change (Iverson, 1996; Yousef,
2000). It is also found that highly committed workers are more ready to accept organizational
change if it is beneficial for them (Lau & Woodman 1995). Studies show that employees
who are highly engaged in their work are more willing to put effort to bring change to the
organization, so it is showed that they develop a positive attitude towards organizational
change (Iverson, 1996).
H2: Employee engagement significantly and positively affects organization readiness for
change.
H3: Employee engagement mediates the relationship between Paternalistic leadership and
Organization readiness for change.

Paternalistic Leadership and Employee Engagement: Moderation of Islamic Work

Ethics
The word "ethics" is derived from the Greek word "ethos" which means "character" (Ahmet
& Akdogan, 2012). The terminology "IWE" is drawn from Weber"s theory of protestant work
ethics (Qayyum et al., 2018). Islamic work ethics is the behavior that’s either forbidden or
encouraged for employees at the workplace in overcoming hurdles delaying the success of an
organization (Yousef, 2000). Islamic work ethics forbid idleness, laziness at the workplace,
and wasting time in unproductive work, it is believed that the person who has done these
kinds of action at the workplace is usually unproductive and fails in life because of their
attitude. It is a new aspect of business ethics to improve the workplace environment in an
132 Shafi, M. Q., Raza, A., Bajwa, A. H., & Gul, N. - Impact of paternalistic leadership .... 2021

organization. Employees who implement Islamic work ethics in their workplace not only
perform better but also have good behavior with their colleagues (Khan et al., 2015).
Employees face many problems related to ethics at their workplace like corruption, lying,
bullying, stealing, and monetary cons. Islam shows the standards of success for Muslims that
do their daily activities and business activates according to Qur’ān and Hadith and it is openly
detected that only those get success who invite others towards good (Yousef, 2000). The
Holy Qur’ān puts too much emphasis on ethics as "You are the best nation has been raised for
mankind; you enjoin right conduct, forbid evil and believe in Allah" (3:110). "And let there
be from you a group inviting to all to that is good (Khair), enjoining what is right (maruf),
and forbidding what is wrong (munkar)" (3:104). The eventual message of the Holy Qur’ān
and Sunnah teaches and orders the best of ethics in the personal as well as professional life
of an individual (Athar et al., 2016). Islamic values have its impact on leadership styles.
It is showed that the spiritual abilities of managers affect transformational and charismatic
leadership and paternalistic leadership (Bekis, 2006). In Middle East countries, leadership
styles tend to be highly strict as Islam supports loyalty, respect, and obedience for superiority
to work-related values (Yeganeh & Su, 2008). Thus in western countries, management styles
lead towards high performance. In the Arab world, significances are classically focused on
family safety, family coordination, and paternalism while in the United States of America
effort is on independence, liberty, and self-assurance.
H4: Islamic work ethics moderates the relationship between Paternalistic leadership and
employee engagement in such a way that this relationship gets stronger when IWE is high.

FIGURE 1. Research Model

METHODOLOGY
Participants of the Study
In Pakistan, now most organizations bring technology and new methods to survive in this
competitive environment, so for that purpose employee readiness is more effective for the
2021 Journal of Islamic Business and Management Vol. 11 Issue 01 133

successful execution of organizational change program. Leadership is the most important

element for an employee’s readiness, when employees have faith in their leaders they can
easily go for a change. This can be experimental in most of the organizations in Pakistan.
Therefore, the data is collected from two educational institutions that recently went through
the technological change process. The convenience sampling technique has been used to
collect data from the teaching faculty of private and public sector educational institutions
of Pakistan. Total 400 questionnaires were distributed from which 253 were completed and
returned, 50 were partially filled and thus not utilizable making the response rate 50.75%. As
part of research ethics, all members were guaranteed privacy and confidentiality to guarantee
the rationality of their reactions. As far as demographics are concerned, most of the partici-
pants were married (70%) males (83.3%) with an average age from 26 to 40 years (67.5%).
The majority of them were Assistant professors and administrative jobs (46.8%) and as far as
experience is concerned, 57.5% of respondents were having less than 10 years of experience.

Scales/ Measures Used

All variables of study in hand have been measured using a 5 point Likert scale where 1
symbolized Strongly Disagree and 5 symbolized Strongly Agree.
Paternalistic Leadership
PL was measured using a 17 item scale developed by Cheng et al. (2000). Sample item
contained "My supervisor handles what is difficult to do or manage in everyday life for me".
The Cronbach alpha for this variable was 0.753.
Islamic Work Ethics
IWE was measured using a 17 item scale developed by Ali (1992). Sample items included
"Dedication to work is a virtue." The alpha for this scale was 0.941.
Employee Engagement
Employee Engagement has been measured using a 09 item scale developed by Schaufeli et
al. (2006). Sample items included "Today, I was proud of work that I do". The Cronbach’s
alpha reliability for this variable is 0.877.
Readiness for Change
Readiness for change was measured by using 6 item scale developed by Holt et al. (2007).
Sample items included "I usually try to convince people in my company to accept change".
The Cronbach’s alpha for this scale was 0.748.

TABLE 1
One-way ANOVA
Readiness for Change
F. Statistics P-Value
Gender 9.37 .01
Age 6.29 .00
Marital Status 5.85 .02
Position 38.15 .00
Job Tenure 9.18 .00
134 Shafi, M. Q., Raza, A., Bajwa, A. H., & Gul, N. - Impact of paternalistic leadership .... 2021

Control Variables
A one-way ANOVA test was done to resist the disparity in readiness for change based
on demographic variables used in the study. Findings showed that one-way ANOVA (see
Table 1) point out important variances in the readiness for change i.e. dependent variable
through gender (F= 9.37, p < .01), age (F= 6.29, p < .00), marital status(F= 5.85, p < .02),
position (F=38.15, p < .00) and job tenure (F=9.18, p <.00). After that, factors recognized
as significant were moved as control variables in step one of regression analysis.

RESULTS

Mean, Standard deviation, and Correlation results are presented in Table 2.

TABLE 2
Mean, S.D and correlation
Mean S.D 1 2 3 4
PL 3.44 .403
ROC 3.67 .535 .259**
IWE 3.66 .778 .231** .589**
EE 3.58 .532 .356** .451** .577** 1
** Correlation is significant at the 0.01 level (2-tailed).
N= 203, PL=Paternalistic Leadership, ROC= Readiness for Change
IWE= Islamic Work Ethics, EE= Employee Engagement

The table point toward that Paternalistic leadership has a significant positive correlation
with organization readiness for change (0.259, p ≤ 0.05) which gives preliminary support for
hypothesis 1. On the other hand, paternalistic leadership has significant positive relationship
with IWE (0.231, p ≤ 0.05), & EE (0.356, p ≤ 0.05). IWE displayed a positive associa-
tion with ROC (0.581, p ≤ 0.05). EE showed positive correlation with ROC (0.451, p ≤ 0.05).

Regression Analysis Moderation

Regression analysis was performed to check the variation in the dependent variable because
of demographics, independent, mediator, and moderator. The findings got from the regression
analysis are presented in Table 3.
2021 Journal of Islamic Business and Management Vol. 11 Issue 01 135

TABLE 3
Regression analysis-moderation
Readiness for Change
Step 1 β R2 ∆R2
Control Variable 0.127
Step 2
PL .126**
IWE .464** 0.470 0.343
Step 3
PLxIWE .983** 0.605 0.135
N=203, Pl = Paternalistic Leadership, IWE= Islamic
work ethic and EE = Employee Engagement = p < .00**

Hypothesis 4 was tested by using moderated regression analysis; where the control variable
was entered in Step One. In step two, Independent and moderator variables were entered.
At the end of step three, the interaction term (product of IV and moderator variable) was
entered, which if comes significant, verifies moderation.
The result of moderated regression analysis is presented Table 3 (Step 3) indicate that IWE
moderates the relationship between PL and employee engagement ( β = 0.983, p < 0.05; ∆R2
0.135), and as a result hypothesis H4 is supported.

Mediation Analysis
As for the H3 is concerned, it was supposed that employee engagement mediates the rela-
tionship between PL and ORC. The mediation method as proposed by Preacher and Hayes
(2008) is used for this analysis.

TABLE 4
Mediated regression analysis
B SE T p
PL → ORC .3450 .0906 3.8070 .0002
PL → EE .4704 .0871 5.4003 .0000
EE → ORC .1504 .0892 1.6856 .0000
PL→ EE → ORC .4138 .0675 6.1306 .0000
Bootstrap results for an indirect effect
Indirect effect LL 95% CI UL 95% CI
.1947 .1129 .2822

Table 4 gives a summary of the mediation analysis performed. Initially, it was found that
PL is positively related to ORC ( β = .3450, p < 0.05); H1 is supported. It is found that PL
is positively related to EE ( β = 0.4704, p < 0.05); EE is positively related to ORC ( β =
.1504, p< 0.05) indicates H2 is supported. And finally, it is found that the PL to ORC in the
136 Shafi, M. Q., Raza, A., Bajwa, A. H., & Gul, N. - Impact of paternalistic leadership .... 2021

presence of mediator ( β = .4138, p< 0.05). Both LL and UL have the same positive sign
and don’t contain zero in between, which indicates that partial mediation exists. Hence H3 is
supported.

DISCUSSION
The analysis supported all hypotheses of this study. Paternalistic leadership was found to
have a positive effect on organizational readiness for change of the employee. When an
organization introduces new technologies and wants a change in the organization, it is only
possible when employees are ready for the change. So, concerning leadership, people respect
and trust their leader, and if the leader represents a change agent that change is possible.
That means when companies changing processes, want loyalty and attachment of worker
and want to bring the change they should follow a paternalistic leader style to bring positive
employee reactions rather than bring change without any planning which may have a negative
impact on employees. These findings are in line with previous studies (Podsakoff et al., 1990,
Northouse, 2004), researchers have long suggested that PL May develop ROC. Employee
engagement has a significant positive relation with paternalistic leadership and organizational
readiness for change. Actions of a leader with his assistant’s effect employee’s engagement in
the organization. Moreover, employee engagement shows a very important role in employee
acceptance of the change. It is meant that when companies want to change then they also have
a look at employee engagement in their organization because it is very easy for managers to
bring change after those findings. Past studies also support that EE positively affects PL and
ROC (Wang & Cheng 2010).
Employee engagement shows a vital role in employee acceptance of the change (Yousef,
2000; Iverson 1996). Studies show that employees who are highly engaged with the organi-
zation are more willing to put effort to bring change to the organization, so it is showed that
they develop a positive attitude towards organizational change (Iverson, 1996).
Islamic Work Ethics indicates that it has a significant positive relationship with paternalis-
tic leadership and employee engagement. These results are reliable with our view that the
Islamic code of conduct inspires followers to obtain and share their knowledge with their
colleagues. The Holy Qur’ān shows the importance of being polite, modest, and helpful in
both personal and professional life. Islam shows the values of achievement for Muslims that
do in their daily actions and occupation activates according to Qur’ān and Hadith, only those
get success who invite others towards good (Yousef, 2000). Islamic values have its impact on
leadership styles. It is showed that the spiritual abilities of managers affect transformational
and charismatic leadership (paternalistic leadership) (Bekis, 2006). In Middle East countries,
leadership styles tend to be highly strict as Islam supports loyalty, respect, and obedience for
superiority to work-related values (Yeganeh & Su, 2008). Therefore, the results of the study
in hand support the preceding intellectual arguments on the role of IWE in affecting PL and
EE.
2021 Journal of Islamic Business and Management Vol. 11 Issue 01 137

Theoretical Implications
Using LMX as a theoretical lens, the present study tested the mediating role of employee
engagement and the moderating role of Islamic Work Ethics between the relationship of
paternalistic leadership and organizational readiness for change.

Managerial and Practical Implications

Top management like Chancellors, VC’s, Deans, and Head of departments (HOD’s) are
suggested to offer their workforce a helpful business setting, particular attention must be
given to engaging employees in seminars, workshops, and training where the major focus may
be emphasizing the welfare of continues development and loyalty with the organization and
leader. In the same way, managers should follow and focus on emerging the Islamic culture
where Islamic principles, code of conduct, and ethical values are provided. Islamic code
e.g. ākhirah, itqān, muh. āsabah, ijtimā‘ı̄yah, and mushawārah, etc is an entire set of values
for every phase of human life. It shall add to the Islamic ethical principles of employees
alongside output which will advantage the organization as well as employees.

Limitations and Direction for Future Research

The data has been gathered from the faculty of only 02 private and public sector educational
institutions of Pakistan, which recently went through the change process. Further studies are
recommended to be conducted on the same subject matter in other emerging Asian countries
to enhance the generalizability of this study. The study in hand included a sample size of 203
respondents which was selected by using the convenience sampling technique. To reassure
the generalizability of the present study, researchers are suggested to use a larger sample size
in the future. Future studies must also take into account multi-source data collection methods
to avoid common method bias. This research is an outcome of Paternalistic leadership’s
impact on organizational readiness for change. It is suggested that researchers may study
other leadership styles e.g. Laissez-Faire leadership, spiritual leadership, servant leadership
that is being mostly followed in Asian countries.

Conclusion
To conclude, organization readiness for change is not only vital but also is a requirement of
the 21st century for organizational survival and growth, and secondly, paternalistic leadership
plays a crucial role during organizational change. Our research paper contributes to the
knowledge about the leadership role in change management. Our work may also instigate the
organizations to think about the fatherly leadership style, employee engagement, and Islamic
ethical values, which lead organizations to successfully manage the organizational change
and may increase their success and productivity.

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