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The Mechanism of Leadership Styles Affecting Team
Innovation in the PRC
Duanxu Wang Huijuan Xue Jie Xu
School of Management
Zhejiang University
Hangzhou, 310058, PRC
Email: hjxuer@163.com
Abstract-With increasing international competition
and rapid technological change, innovation has
become the driving force for organizations to win
sustainable competitive advantage. Given the
dominant role of leadership in the workplace, prior
research has suggested that leadership styles have
substantial impact on innovation. However,
potential mechanism of these effects has not yet
been adequately addressed. To shed some light on
this issue, this study investigated the relationship
between different leadership styles and team
innovation with the mediating effects of knowledge
sharing and team communication. Using data from
482 employees and their supervisors in the PRC,
the findings suggested that knowledge sharing and
team communication completely mediated the
negative relationship between authoritarian
leadership and team innovation, and partially
mediated the contributions of transformational
leadership and benevolent leadership to team
innovation. Implications for the adoption of
leadership styles and innovation management were
discussed.
Key words: Leadership styles, knowledge sharing,
team communication, team innovation
I. INTRODUCTION
Innovation management has received
considerable research attention, which refers to
the successful implementation of creative ideas
within an organization [1]. Although a
developing literature is focusing on the
substantial impact of leadership styles on team
innovation [2][3], to date, potential mechanism of
these effects has not been adequately addressed.
Moreover, House (1996) argued that
employees may differ in their reactions to various
styles of leadership [4]. This implies that, instead
of considering just one leadership style effective
for a team, it can be supposed that more than one
leadership style is effective for the team
effectiveness [5]. Thus, the organizations in the
978-1-4244-4639-1/09/$25.00 ©2009 IEEE
transforming period of the PRC are not sure
about which leadership style is suitable for
facilitating the team innovation. To fill these gaps,
we investigated the mechanism of different
leadership styles influencing the team innovation
by the mediating roles of knowledge sharing and
team communication with the sample in the PRC.
II. HYPOTHESE
Leadership is regarded as a means of
encouraging followers to achieve the goals of the
group or organization in which they work.
Several studies have pointed to the role of
leadership in the innovation, particularly in the
areas of creating innovative climate, such as open
interactions between followers and leaders,
practices referring to allowance of autonomy in
the conduct of work [6][7]. Researchers have
tested that leadership styles are closely related to
team innovation [3].
Prior studies have suggested that leadership
styles have a significant effect upon the
motivation, choice and ability of knowledge
sharing [8]. Knowledge sharing represents
knowledge exchange and discussion through
various channels to maximize the value of it. The
effective leaders focus on the free atmosphere
and the guide of the knowledge sharing by
encouragement and rewards. Such behaviors
motivate employees to proactively cooperate
with each other and exploit diverse and
complementary knowledge within the team. In
this context, innovation performance is higher.
According to Almeida and Kogut (1999),
teams that have access to a variety of alternatives
or potentially relevant ideas are more likely to
make connections that could lead to innovation
[2]. Based on the opportunities to obtain novel
information by knowledge sharing, the
knowledge foundation of the team innovation is
facilitated [1], especially in the case where
knowledge cannot be easily codified. Taken
together, we hypothesize that
Hypothesis 1: Knowledge sharing in the team
mediates the relationship between leadership
styles and team innovation.
The knowledge sharing can be accomplished
in the process of communication. The two parties
of knowledge sharing should communicate their
knowledge, consciously and willingly or not, in
some form or other (either by acts, by speech, or
in writing, etc.). However, communication is
something else than but related to knowledge
sharing. Watzlawick, Beavin, and Jackson (1967)
suggest that there are two levels of
communication: the content level that is
informational or topical, and the relational level
that defines role relationships among the
communicators [9]. So it is possible that there are
other goals of communication except sharing
knowledge, for example, strengthening the
relationship between communicators.
A large number of studies have documented
that communication with diverse others can
provide greater insights for innovation [10]. The
effects of the two levels of communication on the
team innovation are as follows: on one hand, the
more of the job-related communication, the more
information and more deeply the team members
can understand. On the other hand, close
communication can promote the trust between
employees, which will in turn provide emotional
support for innovation.
It has been proposed that the communication
atmosphere, communication types and efficiency
are affected by leadership styles [1]. Larson,
Foster & Franz (1998) and Scott & Bruce (1994)
inferred that the efficient leader should be a
consultant, an advisor and a promoter [7][8].
Moreover, Redding (1972) stated that effective
leaders (1)were more communication-oriented
than the ineffective leader and enjoyed speaking
up, (2)tended to be receptive and responsive to
subordinate inquiries, (3)tended to ask or
persuade rather than to tell, and (4) gave advance
notice of changes and explained the why of
things [11]. All of these behaviors would
encourage employees to communicate freely,
which in turn stimulate the innovative behavior.
Hypothesis 2: Team communication mediates
the relationship between leadership styles and
team innovation.
III. METHOD
Out of 536 questionnaires distributed, 482
usable questionnaires were returned, with a
response rate of 90%.The individual-level data
was aggregated at team-level for analysis
purposes. Although aggregation may erase some
information richness, it is common practice
amongst organizational behavior researchers. In
total, there were 102 teams from privately-owned
enterprises, state-owned enterprises and
foreign-invested enterprises represented in the
sample.
We collected data from two sources: the
employees and their supervisors. Three types of
data were collected. First, the employees
completed scales on their supervisors’ leadership
styles. Second, employees participated twice in
this study with a two-week lag. On a separate
questionnaire, they completed the items that
assessed knowledge sharing and team
communication to ensure the quality of the data
by avoiding the memory bias. Finally, a third
questionnaire included items that measured team
innovation was completed by the supervisors of
participating employees.
The entire sample consisted of 132 female
(27%) and 350 male (73%). The average age of
the responding employees was 29 years. The
average company tenure for employees was 6
years, and the average job tenure was 7 years.
More than half (51%) of the respondents had
graduated from college.
IV. Measures
We used five-point Likert-type scale for all
the substantive variables in this study. For all the
English items, the translation and
back-translation procedures were employed.
Slightly modification was made to render the
items to be consistent with the present research
context.
We choose four styles of leadership,
including authoritarian leadership,
transformational leadership, transactional
leadership and benevolent leadership.
Authoritarian leader controls most of the issues
and is inclined to order the subordinates, while
benevolent leader considers the subordinates to
be family member, he/she is kind, gentle and
impart to the followers personal attention [12].
We measured both of them using 8 items from
Farh & Cheng (2000) scales (Authoritarian
leadership: α =0.80; Benevolent leadership:
α =0.92). Transformational leader is active
leader that has four distinguishing characteristics:
charisma, inspiration, intellectual stimulation and
individualized consideration [13]. He or she not
only motivates followers largely through
communication of high expectations, but also
encourages employees to be innovative in their
problem solving. Transactional leader is that -0.08
attempting to satisfy the current needs of 0.24**
followers by focusing on exchanges and
contingent reward behavior and paying close Authoritarian
attention to deviations, irregularities and taking -.164*
leadership
action to make corrections [14]. Bass & Avolio -0.17*
(1995) scale was used to measure both of these -0.19**
leadership styles with 8 items after modification
[14](Transformational leadership: α =0.85,
Transformatio 0.23** Team 0.72**

Transactional leadership: α =0.82). The nal leadership communication

measurement model provided an acceptable fit to
the data: (χ2/df=4.68, RMSEA=0.09, NNFI=0.96,
CFI=0.96). CFA also revealed that all the factor
loadings were statistically significant (factor
loadings≥0.53).
Lu, Leung & Koch (2006) scale was used to
measure the knowledge sharing with 4 items after
modification [8] ( α =0.80). We measured team
communication using 4 items from Lester,
Meglino& Korsgard (2002) scales[15] ( α =0.91).
The measurement model provided an acceptable
fit to the data: (χ2/df=4.68, RMSEA=0.087,
NNFI=0.96, CFI=0.96). The measurement of the
team innovation was based on Neil & Michael
(1998) scale with 6 items [16] ( α =0.93). CFA
revealed that all the factor loadings were
statistically significant (factor loadings≥0.52).
We controlled variables including employees’
gender, age, education level, functions, company
tenure and job tenure. In addition, the types of
the company were also controlled.
V. Results
Fig. 1 presents the results of Structural
Equation Model. The proposed relationship
model of Fig.1 fitted the data fairly well
(χ2/df=4.68, RMSEA=0.09, NNFI=0.96,
CFI=0.96). The results from Fig. 1 confirmed
that in the four kinds of leadership styles, (1)
Knowledge sharing mediates the negative
relationship between authoritarian leadership and
team innovation completely, and the positive
relationship between transformational leadership
and team innovation partially, while it is not
mediator between transactional leadership, the
benevolent leadership and team innovation. Thus,
results partially supported Hypothesis 1. (2)
Team communication mediates the negative
relationship between authoritarian leadership and
team innovation completely, and the positive
relationship between transformational leadership,
the benevolent leadership and team innovation
partially, but not the relationship between
transactional leadership and team innovation.
Thus, Hypothesis 2 was partially supported.
0.21**
Team
.022
0.02 innovation
Transactional
0.01
leadership Knowledge 0.21*
0.14* sharing
0.04
Benevolent
leadership
0.14*
0.04
Fig. 1 The hypothesis model and the results
Ⅵ. DISCUSSION
This study investigated how leadership styles
influenced team innovation in the PRC. The
findings suggested that different leadership styles
affected team innovation by different paths and
directions.
First, authoritarian leadership had negative
effect on the team innovations by the mediator
roles of knowledge sharing and team
communication. It may be resulted from the
authority and control-oriented of the authoritarian
leadership which impeded subordinates deeply
communication and knowledge sharing, in turn
hindered the team innovation.
Second, according to Bass (1985),
transformational leaders provide constructive
feedback to their followers, convince followers to
exhibit extra effort, and encourage followers to
think creatively about complex problems [13]. In
addition, transformational leaders make their
organizations’ missions salient and persuade
followers to forgo personal interests for the sake
of the collective. As a result, these behaviors
enhanced the efficient communication and
knowledge sharing through autonomous
atmosphere and related support. In turn,
transformational leaders may be able to generate
higher levels of team innovation.
Third, in contrast to transformational leaders,
the transactional leaders paid more attention to
the fair exchange and achieving goals [14], which
could not stimulate the willingness of
communication and knowledge sharing only by
rewards and punishment, especially in the
human-oriented society. Thus, transactional
leadership had no effect on the team innovation.
Finally, the benevolent leaders considered the
followers to be family members. They focused
on the development of free and relaxed
atmosphere which would promote the
communication and innovation. However, the
benevolent leadership had no significant effect on
the knowledge sharing. This may be because
benevolent leaders were considered to be
indicator, but not participator in the culture
context of the PRC. Larson, Foster and Franz
(1998) indicated that participating leadership
would have more significant effect on the
knowledge transfer and sharing than the
indicating leadership [6]. In addition, as the
employees’ competitive weapon, knowledge
sharing would be affected by enormous factors
(such as reward policies) except leadership.
This study demonstrated that knowledge
sharing and team communication play important
part in the relationship between different
leadership styles and team innovation. Our
results provided evidence about the choice of
leadership styles to promote innovations.
Because the authoritarian leadership had negative
effect on the team innovation indirectly, but the
transformational leadership had directly and
indirectly positive effect on it, we should avoid
the authoritarian leadership but choose
transformational leadership in team management.
Considering the mediating roles, the team leaders
should pay more attention to the knowledge
sharing and team communication by encouraging
voice behavior, and allowance of greater
autonomy. Furthermore, an excellent leader
should be an innovative example for the
followers to follow. These implications are
meaningful for the teams to enhance innovation
level and develop core competitive abilities.
A limitation of this study should be noted.
We conducted the research in the PRC rather
than in one of the Western countries that often
serve as the context for innovation studies. Thus,
the conclusions established in our study should
be interpreted with care when establishing
generalizations. Further national and
international studies should be carried out.
ACKNOWLEDGEMENT
This research was funded by a Research
Grant of the National Natural Science Foundation
of China, number 70872098.
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