Academic journal article Journal of Leadership & Organizational Studies

Authentic Leadership and Positive Psychological Capital: The Mediating Role of Trust at the Group Level of Analysis

Academic journal article Journal of Leadership & Organizational Studies

Authentic Leadership and Positive Psychological Capital: The Mediating Role of Trust at the Group Level of Analysis

Article excerpt

This study investigates the relationship between authentic leadership, trust, positive psychological capital (PsyCap), and performance at the group level of analysis. Data were collected from a small Midwestern chain of retail clothing stores, a context in which the needs for both authentic leadership and a positive sales staff are integral to the firm's performance. Constructs were aggregated to the store (group) level to test relationships between perceptions of authentic leadership, trust in management, positive psychological capital, and performance. Trust in management was found to mediate the relationship between PsyCap and performance and to partially mediate the relationship between authentic leadership and performance. Future discussions and implications are discussed.

Keywords: authentic leadership; psychological capital; trust

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The importance of authentic approaches to leadership is far reaching in both the research and practitioner domains. Economic, geo-political, and technological developments over the past few decades have placed demands on leaders that require them to be transparent, be aware of their values, and guide organizations with a moral/ethical perspective. In turn, organizations are looking to extant research to determine how to select and develop leaders that will add competitive advantage not only by impacting the short-term bottom line but also by leading with values that reflect those of stakeholders and creating a longterm vision. Management scholars have responded to these calls by pursuing research in both authentic leadership and positive psychological capital. Authentic leadership (Walumbwa, Avolio, Gardner, Wernsing, & Peterson, 2008) has been identified as a root construct that may influence leaders who exhibit multiple leadership styles and behaviors, opening up an unexplored area in leadership research. Emerging research in positive psychological capital (Luthans, Avolio, Avey, & Norman, 2007) suggests there is value in management scholars pursuing employee positive deviance, and although considerable research has examined negative deviance in organizations, positivity and its outcomes is largely unexplored.

More recent reviews of leadership theory also highlight that the future direction of leadership research must move away from a hierarchical, leader-centric approach to a more integrative approach in which followers, context, and group levels of analysis are hypothesized and tested to advance leadership theory (Avolio, 2007; Johns, 2006; Meindl, 1995). Furthermore, there is a continued call for leadership research to quantify how leadership behaviors can impact organizational outcomes such as firm performance (Avolio, 2007).

Avolio (2007) suggested that leadership theory has "reached a point in its development at which it needs to move to the next level of integration" (p. 25). He noted that although several researchers have called for integrating all actors in the leadership process, namely, followers, leaders, and the context they are embedded in, a dearth of research has actually tested the role of followers in the leadership process while offering conclusions about their impact on the bottom line. To this end, the current study aims to advance leadership and organizational behavior research by extending the integrative theory of authentic leadership. Included in this theory are the roles of both positive psychological capital (PsyCap) and trust as contributors to firm performance. Furthermore, our study considers the group level of analysis in order to capture what Meindl (1995) deemed necessary for understanding the social construction of leadership. As such, we measure followers' group-level perceptions of authentic leadership, group-level psychological capital, and group-level trust in management as related to group-level financial performance. This level of analysis is based upon social contagion theory, which captures the importance of peer influence among followers in an organizational setting. …

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