The Role of Communication in Authentic Leadership and Followership Development Through Social Exchange Theory: A Case Study on Traditional Banks and Fintech Companies

Abstract

Authentic leadership is an emerging research construct that is rooted in positive psychology. It is a form of leadership that develops traits such as self-awareness and self-regulation which enables them to be true to themselves and understand their peers as well through transparent communication which leads to positive outcomes such as organizational commitment and citizenship. As such, this study aimed to assess the factors behind these outcomes and to gain an in-depth explanation of how communication plays a role in these positive organizational outcomes. Through 11 conducted semi-structured interviews that focused on assessing the company culture, authentic leadership perception and authentic leadership outcomes, leaders and followers from traditional banks and fintech companies shared their experiences and insights on what constitutes authentic leadership and trust in the workplace. As a result, the findings suggest that communication through quality leader-member exchanges and social-exchange relationships, enable the formation of trust between authentic leaders and followers. This is evidenced by the fintech respondents identifying trust in the workplace while most participants from traditional banks showed an absence of trust in their workplace due to strict adherence to policies. However, it is notable that one traditional bank participant stated that trust is formed in their company which seems to be due to their ability to engage in discussions about existing policies. Further suggesting the role of communication in enabling trust within the workplace.