The Consequences of Authentic Leadership and Psychological Capital: A Unit level, Multi-rater, Intervention and Longitudinal Study

Abstract

Drawing on managerial theories (e.g. social learning theory, emotion contagion and broaden-and-build theory, conservation of resource theory, goal setting theory, and social exchange theory), this study proposes a comprehensive model that links authentic leadership to organizational citizenship behaviour by means of key mediating variables (i.e. role modeling, psychological capital, and work competence). Further, underpinned by the nature of psychological capital (PsyCap), which is state-like and open to development, this study proposesthat authentic leaders’ PsyCap can be enhanced by PsyCap intervention, which in turn amplifies the transmission effect on the consequences of authentic leadership.

This study examines these propositions not only at individual but also at team level. Survey questionnaires have been conducted with multisource in 2 rounds in 3 manufacturing in China, including a sequential of activities including one pilot survey, 1st round survey (N=774 individuals; N=89 teams), PsyCap intervention training (N=39 leaders in the treatment group, N=48 leaders in the control group), and 2nd round survey (N=620 individuals; N=87 teams). This study is an experimental research using randomized controlled trials (RCT) to divide the control group and the treatment group who received the PsyCap intervention.

Several procedural techniques (e.g. incentive, protecting respondents’ identification, blinding the treatment group) have been incorporated in order to increase response rate and reduce the risk of common method bias. This study is a longitudinal research included a complete panel design, making the possibility to reveal causality among the studied variables. These features build up its very high methodological quality of longitudinal research.

This study tests the propositions with powerful statistical techniques. Firstly, this study uses confirmatory factor analyses (CFA) to identify the best measurement model. Secondly, this study uses structure equation modeling (SEM) to test causal hypothesised models. Finally, Using SEM a 2-step group analysis has been conducted to test for the equivalence of causal structure between the treatment group and control group. The result indicates significant different effects in the causal paths in the structure models at both individual and team level. This provides strong support of the effects of PsyCap intervention.

The results from SEM reveal some substantial new findings. Key findings are that, authentic leadership does not directly predict employees’ PsyCap, but transmits its effect through role modeling. Employees’ PsyCap does not contribute to OCB, but transmits its main effects through work competence. These findings are more in-depth than corresponding prior studies. Another new finding is that training leaders’ PsyCap has effects on their role modelling, which in turn influence employees’ PsyCap, work competence and OCB. This finding makes its contribution unique and significant, as it is the first PsyCap intervention study examining the transmitting effect from team leader to team members. It is also the 1st study to examine developmental character of PsyCap as well as its behaviour impacts from PsyCap intervention in Chinese context.

The findings are discussed with respect to earlier findings. Suggestions for future research are proposed.