Organizational changes manifest in diverse forms and significant transformations can create emotional responses from both leaders and employees. Such emotional reactions can range from positive to negative, acceptance to resistance, potentially influencing the change process. Failure to address or understand these emotional responses may be harmful to the success of change. Collective attitudes and behaviours of individuals within the organization play a big role and shape organization’s culture therefore determining its capacity to adapt to evolving market demands.

This thesis examines the impact of leader's internal state on employees and organizational change when faced with resistance. The research method employed is qualitative, utilizing structured interviews and observation to collect data. Two managerial-level individuals from a small company operating in the Finnish HVAC industry were interviewed for this research.

The study resulted in highlighted importance on leading with an example which accurately identifies the key aspects of how leaders’ mindset and behaviour affect employees. Such concepts as emotional contagion, self-compassion and emotional intelligence are introduced for a better understanding. There is a significant impact leader has on others, the change process and even their private life, by choosing to be aware.
An aware leader, essential part of successful change, recognizes the underlying reasons for resistance and acknowledges the crucial role of addressing it to ensure successful change management. This requires guidance and support to individuals experiencing emotional responses, recognizing that transforming an entire organization begins by addressing needs of everyone, making a change by one person at a time.