Laissez-faire leadership, team knowledge exchange, and team performance

Abstract

Knowledge is a key strategic asset that enables an organization to thrive in an increasingly volatile and competitive environment. In modern organizations, teams are the basic unit in which knowledge is stored, disseminated, exploited, and created. As knowledge work relies heavily on team members who possess relevant expertise and experience rather than solely on team leaders who hold a dominant position, researchers have questioned whether a hands-off leadership approach could be more effective for team knowledge work. The answers to such a question depend on the team dynamics elicited by leaders who withdraw from exerting top-down influences and leave the decision latitude to the team members. In this dissertation, I adopt the Input-Process-Output framework of teams to examine how laissez-faire leadership, along with task characteristics and team composition, influences team knowledge exchange processes and team outputs. I propose that laissez-faire leadership creates an ambiguous task environment and intensifies both team knowledge sharing and team knowledge hiding. Knowledge sharing among team members is essential to achieve team performance goals, but team members may worry that sharing their insights with other team members will carry a cost by undermining the uniqueness of their knowledge and the value of their contribution to the team. Thus, team knowledge exchange may involve dual processes that simultaneously facilitate and/or inhibit the dissemination of knowledge within a team. Team members may share knowledge of tasks, roles, relationships, and equipment, but they may also intentionally hide their insights and original ideas. In addition, the effects of laissez-faire leadership may depend on the design of a task, such as knowledge interdependence (i.e., whether the team members rely on each other for the knowledge to complete team tasks), and on the differences in the team members’ characteristics, such as knowledge specialization (i.e., whether the team members possess specialized knowledge and expertise). I expect that knowledge interdependence and knowledge specialization may strengthen the effects of laissez-faire leadership on team processes, which in turn influence team task performance and team creative performance. I collected data from 284 employees and their supervisors from 85 teams in an information technology company in eastern China. The results show that laissez-faire leadership has a series of negative team consequences, including a greater incidence of team knowledge hiding and in turn worse team task performance and creative performance, as well as a lower incidence of team knowledge sharing, which ultimately leads to worse team task performance. Team knowledge sharing and team knowledge hiding have discriminant and incremental validity in predicting team task performance and team creative performance. Both factors mediate the relationship between laissez-faire leadership and team task performance, but only team knowledge hiding explains the relationship between laissez-faire leadership and team creative performance. The positive influence of laissez-faire leadership on team knowledge hiding is stronger when knowledge specialization is high or when knowledge interdependence is high. The negative influence of laissez-faire leadership on team knowledge sharing, however, is strengthened by knowledge specialization but weakened by knowledge interdependence. Theoretical and practical implications of these findings are discussed.