• No results found

EMPLOYEES’ WILLINGNESS TO TAKE RISKS: THE MISSING LINK BETWEEN LEADER-MEMBER EXCHANGE AND EMPLOYEE CREATIVITY?

N/A
N/A
Protected

Academic year: 2021

Share "EMPLOYEES’ WILLINGNESS TO TAKE RISKS: THE MISSING LINK BETWEEN LEADER-MEMBER EXCHANGE AND EMPLOYEE CREATIVITY? "

Copied!
26
0
0

Bezig met laden.... (Bekijk nu de volledige tekst)

Hele tekst

(1)

EMPLOYEES’ WILLINGNESS TO TAKE RISKS: THE MISSING LINK BETWEEN LEADER-MEMBER EXCHANGE AND EMPLOYEE CREATIVITY?

Master thesis, MScBA, specialization Human Resource Management (HRM) University of Groningen, Faculty of Economics and Business

May 26, 2015

Linda Heeman Student number: 1768700

Kastanjelaan 12 9741 CP Groningen Tel.: +31 613234624 E-mail: l.heeman@student.rug.nl

Supervisor

R. Said

(2)

2 EMPLOYEES’ WILLINGNESS TO TAKE RISKS: THE MISSING LINK BETWEEN

LEADER-MEMBER EXCHANGE AND EMPLOYEE CREATIVITY?

ABSTRACT

Numerous scientific authors stress the importance of employee creativity, as it contributes to organizational innovative capacity and effectiveness, and it enables

organizations to survive in a competitive and turbulent business environment. In previous research, especially leadership and also risk taking were found to influence employee creativity. Extending this line of research, this study specifically considers the mediating effect of employees’ willingness to take risks in the relationship between leader-member exchange (LMX) and employee creativity. LMX and employees’ willingness to take risks were both expected to positively predict employee creativity. Furthermore, LMX was

expected to positively influence employees’ willingness to take risks. Data were obtained by means of online questionnaires among 48 supervisors and 263 employees, employed by organizations in various sectors. LMX and employees’ willingness to take risks were indeed found to positively predict employee creativity, illustrating their importance to managers.

However, no significant relationship was found between LMX and employees’ willingness to

take risks and thus, no mediation-effect exists. Implications of these findings are discussed.

(3)

3 INTRODUCTION

To be successful in the technology-driven Internet age, a company has to attract ‘smart creative’ employees and create an environment where they can thrive. At least, this is what Google’s former CEO Eric Schmidt and former SVP of products Jonathan Rosenberg state in their book “How Google Works” (Business Insider, 2014). Research also underlines this notion, and many scientific authors stress the importance of employee creativity. Creativity, which is defined as “the production of novel and useful ideas in any domain” (Amabile, Conti, Coon, Lazenby & Herron, 1996: 1155), is an essential contributor to organizational innovative capacity and effectiveness (Shalley, Zhou & Oldham, 2004). Additionally, creativity enables organizations to survive in a competitive and turbulent business

environment: it is a way of dealing with uncertainty (Devanna & Tichy, 1990; Perry-Smith &

Shalley, 2003; Shalley et al., 2004). As Schmidt and Rosenberg mention, creativity of

employees is strongly influenced by the context they operate in. Scientific research considers leadership to be an important contextual factor associated with employee creative behavior (Shalley et al., 2004; Shalley & Gilson, 2004). Nonetheless, the relationship between

leadership and employee creativity can be explored in more detail (Mumford, Scott, Gaddis &

Strange, 2002).

Although much leadership research discusses leader traits and behaviors in

combination with employee creativity, a substantial smaller amount of research has been

conducted on followers or the specific relationship between the leader and his followers

(Graen & Uhl-Bien, 1995). Therefore, this study will elaborate upon leader-member exchange

(LMX) theory, which focuses on the dyadic relationship between a leader and a member

(Gerstner & Day, 1997). According to LMX theory, social exchange relationships between

leaders and individual subordinates differ in quality (Liden & Maslyn, 1998; Lunenburg,

2010). Research by Volmer, Spurk and Niessen (2012) suggests that LMX is positively

(4)

4 related to employee creativity, for instance because high quality LMX leads to increased levels of employee autonomy (Amabile, 1996; Liden, Wayne & Sparrowe, 2000). While several authors have argued that LMX is related to employee creativity, there is only limited empirical evidence for the underlying processes of this relationship (Liao, Liu & Loi, 2010;

Volmer et al., 2012). More research is required to examine the mediating variables between LMX and employee creativity and thus, this study will address that issue.

Thinking outside the box, deviating from the status quo, and taking an occasional risk:

this is when creative ideas tend to emerge. The willingness to take risks, which is defined as

“the extent to which a person is willing to engage in the development of new ideas despite the unknown nature of the outcome” (Andrews & Smith, 1996: 181), is therefore a key

contributor to creativity (Andrews & Smith, 1996). Willingness to take risks can be related to both LMX and employee creativity. Employees experiencing a high quality exchange

relationship with their leader are more likely to engage in job-related risk taking (Tierney, Farmer & Graen, 1999). This risk taking allows employees to deviate from usual ways of thinking and come up with new ideas (Andrews & Smith, 1996). Given the above, employees’

willingness to take risks is expected to mediate the relationship between LMX and employee creativity.

This study contributes to research and practice in multiple ways. First, it links LMX to creativity, a relatively understudied relationship (Liao et al., 2010; Volmer et al., 2012).

Second, and more importantly, it explores a viable process that can explain how LMX is related to employee creativity, namely employees’ willingness to take risks. Researching employee creativity is also practically relevant, because creativity forms the basis for all innovation and can thus be a major source of competitive advantage for organizations

(Amabile et al., 1996; Perry-Smith & Shalley, 2003; Shalley et al., 2004). Hence, this research

(5)

5 also aims to advice managers on stimulating employee creativity by means of the exchange relationships they develop with their employees.

Drawing on previous research, this study will elaborate upon the relationships between the studied variables in the theory section, and state the hypotheses. Thereafter, the method of data gathering and the sample, as well as the results of this study will be explained in detail.

Finally, conclusions are drawn, implications are stated, and suggestions for future research are given based upon the results. To test the hypotheses, empirical data were collected among employees and their supervisors from a wide variety of organizations in the Netherlands.

THEORY Leader-member exchange and employee creativity

LMX theory examines the dyadic working relationships between leaders and members (Bauer & Green, 1996; Liden, Sparrowe & Wayne, 1997; Liden, Wayne & Sparrowe, 2000).

It was developed in the early 1970s and originates from role theory and social exchange theory (Liden et al., 1997; Sparrowe & Liden, 1997). Therefore, these sociological theories are first shortly discussed before elaborating upon LMX theory itself.

Role theory focuses on the characteristic patterns of behavior or roles through which

individual organizational members accomplish their work. Individuals are members of social

positions, holding expectations of their own behaviors and the behaviors of others (Biddle,

1986; Liden et al., 1997). Roles are usually not completely specified and can hence be

influenced or defined by other members of the organization. Organizational members will

especially exert pressure with regards to their role-expectations of certain individuals, when

they have an interest in the performance of these individuals. Such informal influencing

processes are referred to as role-making processes. Supervisors seem most important in

influencing and defining the roles of subordinates (Dienesch & Liden, 1986; Liden et al.,

(6)

6 1997). Social exchange theory, on the other hand, “involves a series of interactions that

generate obligations” (Cropanzano & Mitchell, 2005: 874). When a person voluntarily provides a benefit to another person, the other person feels obliged to reciprocate the benefit.

This explains the interdependency between actions of individuals (Cropanzano & Mitchell, 2005; Whitener, Brodt, Korsgaard & Werner, 1998). In general, “the basis for exchange between leaders and members lies in the valued resources each offers the other” (Liden et al., 1997: 76). Social exchange “engenders feelings of personal obligation, gratitude and trust”

and is found much more important than economic exchange (Sparrowe & Liden, 1997: 523).

Social exchanges can involve extrinsic as well as intrinsic benefits (Sparrowe & Liden, 1997;

Whitener et al., 1998). Combining these two perspectives, LMX theory suggests “dyadic relationships and work roles are developed or negotiated over time through a series of exchanges, or ‘interacts’, between leader and member” (Bauer & Green, 1996: 1538).

The quality of the leader-member relationship is influenced by factors such as perceived demographic and personal similarity between the leader and follower, their behaviors, the way followers respond to leader requests, the investment of resources in the relationship, as well as the time available. Leaders distinguish in the treatment of their followers, so that they develop a unique exchange relationship with each of them. Some dyadic exchange relationships evolve into high quality relationships, while others remain of lower quality (Bauer & Green, 1996; Dienesch & Liden, 1986; House & Aditya, 1997;

Murphy & Ensher, 1999).

Followers in high quality exchange relationships are part of the leader’s inner circle of

communication (Lunenberg, 2010). Their relationship with the leader involves a social

element and goes beyond the formal employment contract (Bauer & Green, 1996). A high

quality exchange relationship is characterized by mutual trust, respect, loyalty, openness,

(emotional) support, obligation and reciprocity, as well as increased affective attachment

(7)

7 between leader and member (Bauer & Green, 1996; Dulebohn, Bommer, Liden, Brouer, Ferris, 2012; Gerstner & Day, 1997; Graen & Uhl-Bien, 1995; House & Aditya, 1997; Liden et al., 2000). Additionally, followers in high quality exchange relationships receive special privileges, are invited to participate in decision-making and are given more responsibilities.

Therefore, they experience higher levels of autonomy (Lunenberg, 2010; Wang, Law, Hackett, Wang & Chen, 2005). By providing such social rewards, leaders hope to enhance compliance and loyalty of followers (Whitener et al., 1998). These effects are confirmed by Lunenberg (2010), who discovered that followers in high quality exchange relationships exert higher levels of effort, are more motivated, more committed to the organization and rated higher in productivity and performance than followers in low quality exchange relationships.

A low quality exchange relationship is “based primarily on the formal employment contract” (Bauer & Green, 1996: 1539). Followers in such a relationship are not part of the leader’s inner circle of communication. They receive considerably less attention and rewards than followers in high quality exchange relationships. The leader provides limited support, consideration and assistance to these followers, and not more than strictly necessary

(Lunenberg, 2010). Consequently, the exchange relationship is primarily focused on resources needed for the accomplishment of tasks (Liden et al., 2000). Employees in a low quality exchange relationship are generally less motivated and committed to the organization, and will therefore rarely go beyond what is formally required by their employment contracts (Lunenberg, 2010).

As mentioned before, Amabile et al. (1996: 1155) define creativity as “the production

of new and useful ideas in any domain”. Building on this definition of creativity, ideas are

considered to be new “if they are unique relative to other ideas currently available in the

organization” and described as useful “if they have the potential for direct or indirect value to

the organization, in either the short- or long-term” (Shalley et al., 2004: 934). Employee

(8)

8 creativity can occur across a wide variety of tasks, occupations and industries, and ranges from small or incremental changes to major breakthroughs (Perry-Smith & Shalley, 2003;

Shalley et al., 2004; Shalley & Gilson, 2004).

Although prior research on the relationship between LMX and employee creativity is not very extensive, it has been argued that LMX and employee creativity are positively related (Tierney et al., 1999; Volmer et al., 2012). There are several reasons to assume the presence of this positive relationship. High quality LMX relationships for instance, leads to higher levels of employee responsibility and decision-making influence, and thus to employee autonomy (Liden et al., 2000). Furthermore, “supervisors with high quality exchange relationships, adopt the employee’s perspective, provide helpful advice, and display confidence in their work” (Dienesch & Liden, 1986; Van Dyne, Jehn & Cummings, 2002:

62). Both autonomy and supportive leadership styles have been named important antecedents of employee creativity (Perry-Smith, 2006; Shalley & Gilson, 2004). According to Amabile, Schatzel, Monetal and Kramer (2004), a high quality exchange relationship between leaders and their subordinates leads to employee creativity, because the work environment is

perceived as supportive for creativity or innovation. Moreover, LMX is positively related to employee creativity because employees in high quality LMX relationships experience higher levels of energy (Atwater & Carmeli, 2009), have higher levels of intrinsic motivation

(Tierney et al., 1999), and have higher levels of self-efficacy (Liao et al., 2010), which are all positively related to employee creativity. Given the above, a high quality exchange

relationship between a supervisor and a subordinate is expected to enhance a subordinate’s creativity. Therefore, the first hypothesis is:

Hypothesis 1: LMX is positively related to employee creativity.

(9)

9 Leader-member exchange and employees’ willingness to take risks

As mentioned before, how LMX influences employee creativity remains relatively unclear, and multiple authors have suggested that further investigation of the underlying processes is necessary (Atwater & Carmeli, 2009; Tierney et al., 1999). Therefore, this study will attempt to explain the relationship between LMX and employee creativity, by examining the mediating effect of a variable that can be connected to both LMX and creativity:

employees’ willingness to take risks.

In general, risk is perceived when the outcome of an action is not certain (Andrews &

Smith, 1996). According to Sitkin and Pablo (1992), risk is a characteristic of decisions, and can be defined as “the extent to which there is uncertainty about whether potentially

significant and/or disappointing outcomes of decisions will be realized” (Sitkin & Pablo, 1992: 10). Here, the willingness to take risks is defined as “the extent to which a person is willing to engage in the development of new ideas despite the unknown nature of the

outcome” (Andrews & Smith, 1996: 181). It is about the perspective or orientation that guides a person’s idea generation efforts. If someone is oriented towards risk taking, he or she is more likely to consider nontraditional ways of approaching a situation or a problem (Andrews

& Smith, 1996). On the contrary, someone can also be risk averse (Sitkin & Pablo, 1992).

Employees’ willingness to take risks, sometimes referred to as ‘risk propensity’, can among others stem from intrinsic motivation and the encouragement to take risks, by either

supervisors or the work environment in general (Dewett, 2007; Oldham & Cummings, 1996;

Perry-Smith & Shalley, 2003; Shalley et al., 2004; Sitkin & Pablo, 1992).

Although the relationship between LMX and employees’ willingness to take risks has not been examined thoroughly, LMX is expected to have a positive influence on employees’

willingness to take risks. Tierney and colleagues (1999) concluded, for instance, that

employees in high quality exchange relationships with their supervisors are more likely to

(10)

10 engage in job-related risk taking. Further, they mention that “high LMX leaders encourage risk taking, provide greater job latitude, and expect non-routine behavior form their dyad members” (Tierney et al., 1999: 595). Rosing, Frese and Bausch (2011) underline this notion, by stating that followers in high quality exchange relationships usually trust their supervisors, and are therefore more inclined to take risks and try something new compared to followers in low quality exchange relationships. Therefore, the second hypothesis is:

Hypothesis 2: LMX is positively related to employees’ willingness to take risks.

Employees’ willingness to take risks and employee creativity

Risk taking in general and employees’ willingness to take risks have both been related to employee creativity in multiple previous studies.

Amabile (1983) already considered unrestrained intellectual risk taking to be an essential component for creativity, and according to Mumford et al. (2002), creative work is uncertain and therefore, inherently related to risk taking. The above is confirmed by Perry- Smith (2006), who states that creativity involves risk, because it is about doing something completely different than what has been done before, or about applying an unusual approach to the context. Consequently, the development of new and useful products or processes requires individuals to engage in a process of trial-and-error and thus risk taking (Shalley &

Gilson, 2004).

A person’s willingness to take risks appears to be an important motivational factor for the creative process (Andrews & Smith, 1996; Dewett, 2007). According to Andrews and Smith (1996: 177), “the willingness to take risks is a key contributor to creativity, because it provides motivation to entertain ideas that deviate from the status quo”. Dewett (2007) confirms the positive influence of a person’s willingness to take risks on employee creativity.

Therefore, the third hypothesis is:

(11)

11 Hypothesis 3: Employees’ willingness to take risks is positively related to employee creativity.

Combining the three hypotheses stated above, employees’ willingness to take risks is expected to mediate the positive relationship between LMX and employee creativity.

Therefore, the fourth and final hypothesis is:

Hypothesis 4: The positive relationship between LMX and employee creativity is mediated by employees’ willingness to take risks.

METHODS Sample and procedures

The above stated hypotheses specifically focus on the relationships between

employees and their supervisors, and were therefore tested using data obtained from different organizations. The participating organizations operated in various sectors, ranging from agriculture to banking, retail, healthcare and the governmental sector. Respondents worked for commercial, as well as non-commercial organizations of different sizes. Data were collected by means of online questionnaires. Supervisors of these organizations were contacted via personal networks, or through standardized e-mails that were send to multiple organizations. Given the work-related nature of this research, only employees and supervisors with organizational e-mail addresses were asked to participate. Supervisors were requested to rate employees on creativity. To limit their workload and increase accuracy of ratings, they were only allowed to rate a maximum number of 10 employees. Two types of questionnaires were used: a supervisor questionnaire and an employee questionnaire. Beforehand,

supervisors were provided with information about the subject of this research and were asked

to announce the research to their employees.

(12)

12 As mentioned before, respondents were both supervisors and employees. A total number of 55 supervisors agreed to participate, 52 of which completed the questionnaire.

Forty-eight of these supervisors could actually be linked to employees. From the total number of 475 employees, 263 employees completed the questionnaire. One hundred sixty-four of these employee-respondents were female (62.36 %), while 98 were male (37.26 %). One person did not fill in gender. The mean age of the employees was 40.91 years (SD = 11.84), ranging from 19 to 64 years. With regards to level of education, 64 employees completed their MBO, while 150 had an HBO degree. Their average organizational tenure was 9.59 years (SD

= 9.42), ranging from 0 to 40 years of work experience within the current organization. Of the total number of supervisor-respondents, 19 were female (39.58 %) and 29 were male (60.42

%). The mean age of the supervisors was 44.56 years (SD = 10.69), ranging from 26 to 70 years. With regards to level of education, 25 supervisors had an HBO degree and 12 supervisors had a University degree. The average organizational tenure of the participating supervisors was 12.02 years (SD = 7.42), ranging from 2 to 31 years of work experience within the current organization.

Measures

The questionnaires were conducted in Dutch and each of the variables was measured on a 5-point Likert scale (1 = strongly disagree, 5 = strongly agree).

Leader-member exchange. LMX was measured with eleven items based on the scale

developed by Liden and Maslyn (1998). One of the items used in the questionnaire was: “My supervisor would defend me to others in the organization if I made an honest mistake”.

Cronbach’s alpha was .87.

Employees’ willingness to take risks. Employees’ willingness to take risks was

measured with three items taken from Andrews and Smith (1996). One of these items was: “I

like to take risks when I’m developing ideas”. Cronbach’s alpha was .69.

(13)

13 Employee creativity. Supervisors rated the creativity of their employees. Employee

creativity was measured using three items based on Tierney et al. (1999). One of the items used in the questionnaire was: “… demonstrates originality in his/her work”. For employee creativity, Cronbach’s alpha was .91.

Analytic approach

First, the relationships between the variables will be explored by means of correlations. To test the hypotheses, a regression analysis is conducted. Since this study investigates the mediating effect of employees’ willingness to take risks between LMX and employee creativity, the Baron and Kenny method (1986) will be used to examine mediation.

This method makes use of four steps in establishing mediation. First, the relationship between the independent variable (LMX) and the dependent variable (employee creativity) is

examined. Second, the relationship between the independent variable (LMX) and the mediator (employees’ willingness to take risks) will be examined. Third, the Baron and Kenny method examines whether the mediator (employees’ willingness to take risks) influences the

dependent variable (employee creativity). Finally, this method is used to examine if employees’ willingness to take risks indeed mediates the relationship between LMX and employee creativity by determining whether the direct relationship between LMX and employee creativity becomes less or non-significant when controlling for employees’

willingness to take risks (Kenny, 2014). Additionally, the Sobel Test (1982) will be used to test the significance of the mediation effect.

RESULTS Correlations

Table 1 presents an overview of the means and standard deviations of each of the

variables measured, as well as Cronbach’s alpha for LMX, employees’ willingness to take

(14)

14 risks and employee creativity. More importantly, it shows the correlation coefficients, which measure the strength of the relationship between two variables (Field, 2013). The correlation between LMX and employee creativity is positive and significant (r = .23, p < .01). No significant relationship was found between LMX and employees’ willingness to take risks (r

= -.02, p = .76). Employees’ willingness to take risks, on the other hand, was positively and significantly related to employee creativity (r = .15, p < .05). With regards to the control variables, a negative and significant correlation was found between age and employee creativity (r = -.13, p < .05).

Insert table 1 about here

Regressions

Table 2 presents an overview of the results of the regression analyses. In line with the first hypothesis, a strong positive and significant relationship was found between LMX and employee creativity (B = .40, SE = .11, p < .01). Hypothesis 1 was therefore confirmed. LMX was also expected to positively predict employees’ willingness to take risks (hypothesis 2).

Contrary to these expectations, no significant relationship was found (B = -.02, SE = .08, p = .81), and hypothesis 2 is therefore rejected. Next, employees’ willingness to take risks was argued to predict employee creativity (hypothesis 3). Indeed, a positive significant

relationship between these variables was found (B = .21, SE = .09, p < .05), and therefore

hypothesis 3 was confirmed. Finally, employees’ willingness to take risks was expected to

mediate the positive relationship between LMX and employee creativity (hypothesis 4). As

shown above, a positive and significant relationship was found between LMX and employee

creativity, as well as a positive and significant effect of employees’ willingness to take risks

on employee creativity. However, no significant effect was found of LMX on employees’

(15)

15 willingness to take risks. Moreover, as can be seen in table 2, the effect of LMX on employee creativity does not decrease in strength when controlling for employees’ willingness to take risks (B = .41, SE = .11, p < .01). Hence, mediation is not present. Although the table shows that there does not seem to be a reduction in the strength of the relationship between LMX and employee creativity, for the sake of completeness we also performed the Sobel Test. The results of the Sobel Test demonstrate an insignificant effect (Z = -.25, p = .80), meaning the relationship between leader-member exchange and employee creativity is not significantly reduced when including employees’ willingness to take risks. This confirms the absence of a mediation-effect.

Insert table 2 about here

DISCUSSION AND CONCLUSION

Creativity can be a major source of competitive advantage and therefore knowing about its key predictors is crucial to organizations. Since previous research (e.g. Shalley et al., 2004; Volmer et al., 2012; Andrews & Smith, 1996; Perry-Smith, 2006) found that especially leadership and also risk taking influence employee creativity, this study aimed to investigate the mediating effect of employees’ willingness to take risks in the positive relationship between LMX and employee creativity.

Summary of results

Some results appear to be in line with expectations based on previous research, while others require further consideration. LMX was found to positively predict employee

creativity, confirming the first hypothesis. No significant relationship was found between

LMX and employees’ willingness to take risks, and therefore, the second hypothesis was

(16)

16 rejected. Hypothesis three was confirmed, as employees’ willingness to take risks did

positively predict employee creativity. Lastly, the positive relationship between LMX and employee creativity was not significantly reduced when employees’ willingness to take risks was included in the model. Because LMX is not positively related to employees’ willingness to take risks, mediation is not possible. Therefore, hypothesis four was rejected.

Theoretical and managerial implications

Theoretical implications. LMX was expected to positively predict employee

creativity, since employees in high quality exchange relationships are usually provided with support (for creativity) and autonomy, which are both important antecedents of employee creativity (Amabile et al., 1996; Perry-Smith, 2006; Shalley & Gilson, 2004). The direct relationship between LMX and employee creativity however, has rarely been studied (Liao et al., 2010; Volmer et al., 2012). This study shows that LMX positively and significantly predicts employee creativity, which complements the limited amount of research available on these specific constructs. This result also adds to leadership research in general, as prior research often focused on leader traits and behaviors, instead of the specific relationships between leaders and followers.

Furthermore, LMX was argued to be an important determinant of employees’

willingness to take risks. High quality exchange relationships were expected to lead to more job-related risk taking, because of mutual trust, supervisory encouragement and greater job latitude for employees (Rosing et al., 2011; Tierney et al., 1999). Contrary to these

expectations, no significant relationship between LMX and employees’ willingness to take risks was found. This could be due to the fact that not LMX, but other factors such as intrinsic motivation, supervisory encouragement for creativity or risk preference, inertia and outcome history are better predictors of employees’ willingness to take risks (Dewett, 2007; Sitkin &

Pablo, 1992). Inertia is about the stable patterns people tend to establish over time. This

(17)

17 means that an individual who is risk averse usually continues to act with caution, even when encouraged to behave differently. Outcome history refers to the fact that individuals tend to remain either risk averse or risk seeking, when this behavior appeared to be successful in previous situations (Sitkin & Pablo, 1992). Another reason for the absence of a significant relationship between LMX and employees’ willingness to take risks might have to do with the concept studied. Past research on these constructs has mainly examined LMX in relation to risk behavior, which has actually been identified as an outcome of the willingness to take risks and is thus a different and broader concept (Sitkin & Pablo, 1992). Consequently, it could be that LMX is primarily related to risk behavior, instead of employees’ willingness to take risks. Since the exact relationship between LMX and employees’ willingness to take risks was not extensively studied before, this study contributes to research in showing that no significant relationship between these constructs seems to exist. Nonetheless, further

exploration of the relationship between LMX and risk behavior might be needed.

Moreover, as expected based on multiple previous studies (Amabile, 1983; Andrews, 1996; Dewett, 2007), employees’ willingness to take risks positively and significantly predicts employee creativity. Because creativity is about doing something in a different way than it has been done before, it inevitably involves uncertainty and employees’ willingness to take risks (Mumford et al., 2002; Perry-Smith, 2006). Hence, existing research is complemented by the findings of this study.

Most importantly maybe, the results of this study illustrate that employees’ willingness

to take risks does not explain why LMX and employee creativity are related. This is largely

due to the absence of a significant relationship between LMX and employees’ willingness to

take risks. It implies that the relationship between LMX and employee creativity is probably

best explained by other variables than employees’ willingness to take risks. Past research has

(18)

18 indicated that autonomy or supervisor support (for creativity) may be possible mediators (Liden & Maslyn, 1998; Scandura, Graen & Novak, 1986; Shalley & Gilson, 2004).

Managerial implications. Even though employees’ willingness to take risks appeared

not to mediate the positive relationship between LMX and employee creativity, this research provides managers with some meaningful takeaways. Both LMX and employees’ willingness to take risks can be seen as important predictors of employee creativity and therefore,

managers are recommended to take these into account when establishing an environment in which their employees can creatively thrive.

To facilitate the positive influence of LMX on employee creativity, managers should stimulate the formation of high quality exchange relationships between employees and their supervisors. Interpersonal trust for example – established for instance through employee performance, delegation by the leader or (perceived) similarity in demographic as well as personality characteristics – appeared of great relevance in the development of high quality exchange relationships (Bauer & Green, 1996). This suggests that in practice, leaders should reward good employee performance and provide their subordinates with decision-making authority. Additionally, leaders could be given a course on how to build up and maintain long- term relationships with employees.

In order to positively influence employee creativity through engagement in risk taking, employees should be motivated to be oriented towards taking risks. As mentioned before, intrinsic motivation and supervisor encouragement for creativity have been named

determinants of employees’ willingness to take risks. A few straightforward practical implications can be made. Managers could, for example, enhance intrinsic motivation by giving employees positive feedback. They should refrain however, from providing employees with extrinsic rewards, as these tend to undermine intrinsic motivation (Deci, Koestner, &

Ryan, 1999; Dewett, 2007). Furthermore, managers could clearly express their enthusiasm for

(19)

19 idea generation by the employee, given that this encouragement may lead to employees’

willingness to take risks, risk taking, and subsequently to creative ideas (Dewett, 2007).

Limitations and future directions

Limitations. On a theoretical as well as an empirical level, suggestions can be made to

improve the current study. A theoretical limitation can be found in the relationship between LMX and employees’ willingness to take risks. Although this study assumed employees’

willingness to take risks to be explained by LMX, previous research also mentions other predictors. As stated before, examples of these are: the individual’s risk preference, inertia and outcome history. Therefore, it could be possible that employees’ willingness to take risks is primarily explained by individual characteristics or experiences, instead of the specific relationships between leaders and followers.

On an empirical level, some other limitations are encountered. It could, for instance, be the case that employees’ willingness to take risks and employee creativity are too narrow concepts. Therefore, additional items could be included measuring risk behaviors of

employees, as well as employee innovativeness. These are both broader concepts than employees’ willingness to take risks and employee creativity, respectively (Scott & Bruce, 1994; Sitkin & Pablo, 1992) . Besides this, LMX, employees’ willingness to take risks and employee creativity were measured using either self-report or other-report (supervisor), making the results rather subjective. Using a combination of self-report and other report (supervisor and peer) for each of the concepts measured, more reliable results could be obtained. Objectivity could also be enhanced through the use of less subjective measures for creativity. Examples of these would be copyrights, patents or industrial design rights received by the employee.

Future directions. Because this research was not able to explain one of the processes

underlying the relationship between LMX and employee creativity, future research should

(20)

20 consider other possible mediators. As mentioned above, examples of such mediators are:

autonomy and supervisor support or supervisor support for creativity. These mediators have been related to LMX on the one hand, and creativity on the other (Amabile et al., 1996;

Dienesch & Liden, 1986; Liden & Maslyn, 1998; Shalley & Gilson, 2004). A logical next step would also be to additionally include the somewhat broader concept of risk behavior, which has been connected to LMX in earlier research (Tierney et al., 1999). Subsequently, the effects of risk behavior as a possible mediator can be compared to the findings in this study.

Conclusion

Leader-member exchange and creativity, both vital to organizational survival and effectiveness, are inherently related. The processes underlying the relationship between these variables however, remain somewhat unclear. While theoretically plausible, employees’

willingness to take risks was not empirically found to be a mediator. More research is needed to further investigate this complex relationship.

REFERENCES

Andrews, J., & Smith, D. C. (1996). In search of the marketing imagination: Factors affecting the creativity of marketing programs for mature products. Journal of Marketing Research, 33(2), 174-187.

Amabile, T. M. (1983). The social psychology of creativity: A componential

conceptualization. Journal of Personality and Social Psychology, 45(2), 357-376.

Amabile, T. M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). Assessing the work environment for creativity. Academy of Management Journal, 39(5), 1154-1184.

Amabile, T. M., Schatzel, E. A., Moneta, G. B., & Kramer, S. J. (2004). Leader behaviors and the work environment for creativity: Perceived leader support. The Leadership

Quarterly, 15(1), 5-32.

(21)

21 Atwater, L., & Carmeli, A. (2009). Leader-member exchange, feelings of energy, and

involvement in creative work. The Leadership Quarterly, 20(3), 264-275.

Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182.

Bauer, T. N., & Green, S. G. (1996). Development of leader-member exchange: A longitudinal test. Academy of Management Journal, 39(6), 1538-1567.

Biddle, B. J. (1986). Recent developments in role theory. Annual Review of Sociology, 12, 67- 92.

Business Insider. (2014). Brilliant management advice from Google’s former CEO on how to build a $300 billion company. http://www.businessinsider.com/management-advice- from-googles-eric-schmidt-how-google-works-2014-10?op=1.

Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874-900.

Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125(6), 627-668.

Devanna, M. A., & Tichy, N. (1990). Creating the competitive organization of the 21 st century: The boundaryless corporation. Human Resource Management, 29(4), 455- 471.

Dewett, T. (2007). Linking intrinsic motivation, risk taking, and employee creativity in an R&D environment. R&D Management, 37(3), 197-208.

Dienesch, R. M., & Liden, R. C. (1986). Leader-member exchange model of leadership: A critique and further development. Academy of Management Review, 11(3), 618-634.

Dulebohn, J. H., Bommer, W. H., Liden, R. C., Brouer, R. L., & Ferris, G. R. (2012). A meta-

(22)

22 analysis of antecedents and consequences of leader-member exchange: Integrating the past with an eye toward the future. Journal of Management, 38(6), 1715-1795.

Field, A. (2013). Discovering Statistics Using IBM SPSS Statistics. London: SAGE Publications.

Gerstner, C. R., & Day, D. V. (1997). Meta-analytic review of leader-member exchange theory: Correlates and construct issues. Journal of Applied Psychology, 82(6), 827- 844.

Graen, G. B., & Uhl-Bien, M. (1995). Relationship-based approach to leadership:

Development of leader-member exchange (LMX) theory of leadership over 25 years:

applying multi-level multi-domain perspective. The Leadership Quarterly, 6(2), 219- 247.

House, R. J., & Aditya, R. N. (1997). The social scientific study of leadership: Quo vadis?

Journal of Management, 23(3), 409-473.

Janssen, O., & Van Yperen, N. W. (2004). Employees’ goal orientations, the quality of leader-member exchange, and the outcomes of job performance and job satisfaction.

Academy of Management Journal, 47(3), 368-384.

Keller, G. (2012). Managerial Statistics. South-Western, Cengage Learning.

Kenny, D. A. (2014). Mediation. http://davidakenny.net/cm/mediate.htm.

Liao, H., Liu, D., & Loi, R. (2010). Looking at both sides of the social exchange coin: A social cognitive perspective on the joint effects of relationship quality and

differentiation on creativity. Academy of Management Journal, 53(5), 1090-1109.

Liden, R. C., & Maslyn, J. M. (1998). Multidimensionality of leader-member exchange: An empirical assessment through scale development. Journal of Management, 24(1), 43- 72.

Liden, R. C., Sparrowe, R. T., & Wayne, S. J. (1997). Leader-member exchange theory: The

(23)

23 past and potential for the future. Personnel and Human Resources Management, 15, 47-119.

Liden, R. C., Wayne, S. J., & Sparrowe, R. T. (2000). An examination of the mediating role of psychological empowerment on the relations between the job, interpersonal relationships and work outcomes. Journal of Applied Psychology, 85(3), 407-416.

Lunenburg, F. C. (2010). Leader-member exchange theory: Another perspective on the leadership process. International Journal of Management, Business, and

Administration, 13(1), 1-5.

Mumford, M. D., Scott, G. M., Gaddis, B., & Strange, J. M. (2002). Leading creative people:

Orchestrating expertise and relationships. The Leadership Quarterly, 13(6), 705-750.

Murphy, S. E., & Ensher, E. A. (1999). The effects of leader and subordinate characteristics in the development of leader-member exchange quality. Journal of Applied Psychology, 29(7), 1371-1394.

Perry-Smith, J. E., & Shalley, C. E. (2003). The social side of creativity: A static and dynamic social network perspective. Academy of Management Review, 28(1), 89-106.

Scandura, T. A., Graen, G. B., & Novak, M. A. (1986). When managers decide not to decide autocratically: An investigation of leader-member exchange and decision influence.

Journal of Applied Psychology, 71(4), 579-584.

Scott, S. G., & Bruce, R. A. (1994). Determinants of innovative behavior: A path model of individual innovation in the workplace. Academy of Management Journal, 37(3), 580- 607.

Shalley, C. E., & Gilson, L. L. (2004). What leaders need to know: A review of social and contextual factors that can foster or hinder creativity. The Leadership Quarterly, 15(1), 33-53.

Shalley, C. E., Zhou, J., & Oldham, G. R. (2004). The effects of personal and contextual

(24)

24 characteristics on creativity: Where should we go from here? Journal of Management, 30(6), 933-958.

Sitkin, S. B., & Pablo, A. L. (1992). Reconceptualizing the determinants of risk behavior.

Academy of Management Review, 17(1), 9-38.

Sobel, M. E. (1982). Asymptotic confidence intervals for indirect effects in structural

equations models. In S. Leinhart (Ed.), Sociological methodology 1982 (290-312). San Francisco: Jossey-Bass.

Sparrowe, R. T., & Liden, R. C. (1997). Process and structure in leader-member exchange.

Academy of Management Review, 22(2), 522-552.

Tierney, P., Farmer, S. M., & Graen, G. B. (1999). An examination of leadership and employee creativity: The relevance of traits and relationships. Personnel Psychology, 52(3), p. 591-620.

Van Dyne, L., Jehn, K. A., & Cummings, A. (2002). Differential effects of strain on two forms of work performance: individual sales and creativity. Journal of Organizational Behavior, 23(1), 57-74.

Volmer, J., Spurk, D., & Niessen, C. (2012). Leader-member exchange (LMX), job

autonomy, and creative work involvement. The Leadership Quarterly, 23(3), 456-465.

Wang, H., Law, K. S., Hackett, R. D., Wang, D., & Chen, Z. X. (2005). Leader-member exchange as a mediator of the relationship between transformational leadership and followers’ performance and organizational citizenship behavior. Academy of Management Journal, 48(3), 420-432.

Whitener, E. M., Brodt, S. E., Korsgaard, A. M., & Werner, J. M. (1998). Managers as

initiators of trust: An exchange relationship framework for understanding managerial

trustworthy behavior. Academy of Management Review, 23(3), 513-530.

(25)

25 TABLE 1: CORRELATION TABLE

M SD 1 2 3 4 5

1. Gender

1

1.63 .49

2. Age 40.91 11.84 .02

3. Leader-member exchange (LMX) 3.84 .55 .04 -.08 (.87)

4. Employees’ willingness to take risks

3.22 .73 -.09 -.02 -.02 (.69)

5. Employee creativity 3.52 .96 .02 -.13** .23*** .15** (.91)

1

Dummy coded, 1 = male, 2 = female * p < .10

** p < .05 *** p < .01

Note: Cronbach’s alpha is in parentheses along the diagonal

(26)

26 TABLE 2: HIERARCHICAL REGRESSION TABLE (Mediation)

Employees’

willingness

to take risks Employee creativity: Leader rating Predictors

1 Control variables

Gender

1

H2: -.13 (.09)

H1: .02 (.53)

H3: .07 (.13)

H4: .05 (.12)

Age H2: .00 (.00)

H1: -.01 (.01)*

H3: -.01 (.01)**

H4: -.01 (.01)*

2 Main effects

Leader-member exchange (LMX)

H2: -.02

(.08) H1: .40 (.11)***

H4: .41 (.11)***

Employees’ willingness to take risks

H3: .21 (.09)**

H4: .22 (.08)***

R

2

.01 .06 .04 .09

1

Dummy coded, 1 = male, 2 = female * p < .10

** p < .05

*** p < .01

Unstandardized B coefficients are reported with (Standard Errors)

Referenties

GERELATEERDE DOCUMENTEN

Having seen that the three motivational factors influence the willingness to change and sometimes also directly the change related behaviour, one can understand that the attitude of

Attitude towards the Poli Op Naam, subjective norm and perceived behavioral control all have a significant influence on one’s willingness to change, where attitude is determined to

De eerste hypothese wordt hiermee dus verworpen, de attitude ten opzichte van een goed doel is niet positiever wanneer er een sportevenement georganiseerd wordt door het goede

Taking SET as the basis and taking previous research outcomes into account, it is thus expected that autonomy acts as a moderator in the relationship between

The hypothesis is that personality similarity between follower and leader is positively related to LMX and that there is a positive relationship between group identification and

Based on the approach inhibition theory and former research about the relationship between power and risk-taking, we expect that leader power is associated with increased

Therefore, under high workload employees are less likely to show citizenship behavior as a result of high LMX relationships, because these employees do not have the mental or

In this thesis, I hypothesize that an interpersonal regulatory fit between a supervisor and subordinate leads subordinates to perceive a higher leader-member exchange (LMX), which