How do Authentic Leaders facilitate Innovation? The roles of Psychological Capital, Work Engagement and Creativity

Abstract

The aim of the present study is to examine how Authentic Leadership might facilitate innovation through the mechanisms of Psychological Capital, Work Engagement and Creativity. We surveyed a sample of leaders and employees (N=79) in three middle sized Norwegian companies, who all share HR-department. They are operating in the fields of banking, real-estate and accounting. We analysed the data using correlational analysis and Path Modelling Analysis to uncover the paths that best could explain how the Authentic Leader influence the innovation process. Our model revealed that Authentic Leaders influence Innovation, not directly but indirectly through Creativity and PsyCap. We did not find the direct link between Work Engagement and Innovation we expected. Instead we found that Work Engagement is influenced indirectly by Authentic Leadership through PsyCap, and is influencing Innovation indirectly through Creativity. The results suggest that developing Authentic Leadership could be a promising and sustainable way to boost the innovative capabilities of organizations by building the employees own resources.