Journal of Business Research 65 (2012) 429437

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Journal of Business Research

Authentic leadership promoting employees' psychological capital and creativity

Armnio Rego a,, Filipa Sousa b, 1, Carla Marques c, 2, Miguel Pina e Cunha d, 3
a

Universidade de Aveiro, Portugal

Escola Superior de Educao e Cincias Sociais, Instituto Politcnico de Leiria, Morro do Lena, Alto do Vieiro, 2411-901 Leiria, Portugal
c
Departamento de Economia, Sociologia e Gesto, Universidade de Trs-os-Montes e Alto Douro, Av. Almeida de Lucena, 1, 5000-660 Vila Real, Portugal
d
Nova School of Business and Economics, Rua Marqus de Fronteira, 20, 1099-038 Lisboa, Portugal
b

a r t i c l e

i n f o

Article history:
Received 1 December 2009
Received in revised form 1 April 2010
Accepted 1 September 2011
Available online 28 October 2011
Keywords:
Psychological capital
Creativity
Authentic leadership

a b s t r a c t
Two hundred and one employees report their psychological capital, as well as their supervisors' authentic leadership. Supervisors describe the employees' creativity. The main ndings show that authentic leadership predicts
employees' creativity, both directly and through the mediating role of employees' psychological capital. The
study empirically validates theoretical arguments that suggest integrating authentic leadership and psychological capital in research, and indicates that both may foster employees' creativity, a crucial resource for helping organizations to face competitive challenges, take advantage of business opportunities, and improve organizational
effectiveness.
2011 Elsevier Inc. All rights reserved.

1. Introduction
Authentic leadership (AL) is as a pattern of leader behavior that
draws upon and promotes both positive psychological capacities
and a positive ethical climate, to foster greater self-awareness, an internalized moral perspective, balanced processing of information, and
relational transparency on the part of leaders working with followers,
fostering positive self-development (Walumbwa, Avolio, Gardner,
Wernsing, & Peterson, 2008: 94). In recent years, the topic is a target
of great interest both among scholars (e.g., Avolio & Gardner, 2005;
Walumbwa et al., 2008) and practitioners (e.g., George, 2003). Both
argue that AL promotes positive employees' attitudes and behaviors
and contributes to organizational performance. More empirical research is necessary for continuing to test this premise.
This paper merges the AL, psychological capital (PsyCap; Luthans,
Youssef, & Avolio, 2007), and creativity literatures, and shows how
AL predicts employees' creativity both directly and through the mediating role of PsyCap (Fig. 1). PsyCap is an individual's positive
The authors are grateful to Bruce J. Avolio, William L. Gardner, and Fred O.
Walumba for their permission to use the Authentic Leadership Questionnaire. They
are also grateful to Fred Luthans, Bruce J. Avolio, and Carolyn M. Youssef for their permission to use the PsyCap questionnaire. Miguel Cunha acknowledges support from
Nova Forum.
Corresponding author at: Departamento de Economia, Gesto e Engenharia Industrial, Universidade de Aveiro, 3810-193 Aveiro, Portugal. Tel.: + 351 234 370 024;
fax: + 351 234 370 215.
E-mail addresses: armenio.rego@ua.pt (A. Rego), msousa@esel.ipleiria.pt (F. Sousa),
smarques@utad.pt (C. Marques), mpc@novasbe.pt (M.P. Cunha).
1
Tel.: + 351 244 820 300; fax: + 351 244 820 310.
2
Tel.: + 351 259 302 200; fax: + 351 259 302 249.
3
Tel.: + 351 212 822 725; fax: + 351 213 873 973.
0148-2963/$ see front matter 2011 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2011.10.003

psychological state of development characterized by: (1) having

condence (self-efcacy) to take on and put in the necessary effort
to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and, when necessary, redirecting paths to goals (hope) in
order to succeed; and (4) when beset by problems and adversity, sustaining and bouncing back and even beyond (resilience) to attain success (Luthans, Youssef, & Avolio, 2007: 3). The study answers calls to
integrate AL and PsyCap literatures (Gardner, Avolio, Luthans, May, &
Walumbwa, 2005; Yammarino, Dionne, Schriesheim, & Dansereau,
2008) and helps to understand the process through which AL contributes to employees' creativity.
Studying the antecedents of employees' creativity is important because, to survive and prosper, organizations need to take full advantage
of their employees' creative potential, so that innovation, change, learning, performance, and competitiveness can be sustained. Creativity in
the workplace represents the production of novel and useful ideas or
solutions concerning products, services, processes, and procedures
(Amabile, 1988, 1997; Oldham & Cummings, 1997). The goal of creative
performance is to solve problems, to roll out new products and services,
to take advantage of business opportunities, and to improve organizational effectiveness.
Individual creativity is a function of individual and social/contextual
factors (Egan, 2005; Oldham & Cummings, 1997; Shalley & Gilson,
2004). One of the most relevant contextual factors is leadership. Several
researchers focus on identifying the role of specic leadership behaviors
and leaders' characteristics in supporting, suppressing, facilitating, or inhibiting creativity (e.g., Hirst, van Dick, & van Knippenberg, 2009; Mumford,
Scott, Gaddis, & Strange, 2002; Oldham & Cummings, 1997; Rego, Sousa,
Cunha, Correia, & Saur, 2007; Reiter-Palmon and Illies, 2004; Shalley &

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A. Rego et al. / Journal of Business Research 65 (2012) 429437

Authentic
leadership

Employees
PsyCap

Employees
creativity

Fig. 1. Hypothesized model.

Gilson, 2004; Shin & Zhou, 2003; Tierney, Farmer, & Graen, 1999; Zhou,
2003; Zhang & Bartol, 2010; Zhou & George, 2003; Wang and Cheng,
2010). These behaviors include transformational leadership, emotional
intelligence, close monitoring, developmental feedback, supportive supervision, controlling supervision, benevolent leadership, leader encouragement of creativity, leader inspirational motivation, and empowering
leadership.
Studies also focus on employees' characteristics and attitudes that
make them more creative. For example, Amabile (1983) suggests
domain-relevant skills (knowledge and expertise), creativity-relevant
processes (including cognitive styles, cognitive strategies, and personality variables), and task motivation (attitudes and motivation, such as intrinsic motivation) as predictors of creativity. Woodman, Sawyer, and
Grifn (1993) model includes personality variables, cognitive factors,
intrinsic motivation, and knowledge. Ford (1996) includes sense making, motivation, knowledge and ability. According to Egan (2005), the
studies identify a consistent number of individual factors associated
with individual creativity, including esthetic sensitivity, attraction to
complexity, broad interests, intuition, and tolerance of ambiguity.
This paper adds to such lines of research, answering to a call of
Shalley and Gilson (2004) for more research focusing on the interaction
between personal characteristics and work context. The study focuses
on how AL (a contextual factor) predicts employees' creativity, both directly and through the mediating role of employees' PsyCap (a personal
strength). The paper hypothesizes that AL promotes employees' creativity because authentic leaders encourage employees' PsyCap (Avolio,
Gardner, Walumbwa, Luthans, & May, 2004; Yammarino et al., 2008),
with employees with higher PsyCap being more creative (Avolio et al.,
2004; Bandura, 1997; Rego, Machado, Leal, & Cunha, 2009). The study
also posits direct relationships between AL and creativity because authentic leaders may promote employees' creativity through mechanisms other than PsyCap. For example, AL may improve the quality of
leadermember exchange, thus increasing employees' trust and the
sense of freedom to propose unconventional ideas, and introduce conicting opinions without fear (Avolio & Gardner, 2005; Avolio et al.,
2004; Brower, Schoormanb, & Tan, 2000; Ilies, Morgeson, & Nahrgang,
2005; Liden, Sparrowe, & Wayne, 1997; Prati, Douglas, Ferris, Ammeter,
& Buckley, 2003; Scott & Bruce, 1994). Employees may also feel psychologically safer, thus taking initiative for facing problems and opportunities in creative ways (Edmondson, 1999; Prati et al., 2003).
The remainder of the paper structures as follows. The second section
discusses arguments leading to the hypotheses. The third and fourth
sections present the method and results, respectively. The nal section
discusses the main ndings, the limitations of the research, and some
avenues for future research. The study seeks to contribute to enriching
a research stream that is in an early stage of development and to a literature that is still short on empirical studies (Walumbwa et al., 2008;
Yammarino et al., 2008). Considering that most studies about leadership come from the USA (House & Aditya, 1997), the paper also responds to a call for research in more culturally diverse samples
(Gelfand, Erez, & Aycan, 2007; Walumbwa et al., 2008).

2. Theory and hypotheses

2.1. The authentic leadership construct
The AL construct comprises four dimensions: (1) Self-awareness is
the degree to which the leader demonstrates an understanding of

how (s)he derives and makes sense of the world and is aware of his
or her strengths, limitations, how others see him or her, and how
(s)he impacts others (Kernis, 2003; Walumbwa et al., 2008); (2) Balanced processing is the degree to which the leader shows that (s)he
objectively analyzes the relevant data before coming to a decision
and solicits views that challenge deeply held positions (Gardner et
al., 2005; Walumbwa et al., 2008); (3) Internalized moral perspective
refers to the degree to which the leader sets a high standard for
moral and ethical conduct, guides actions by internal moral standards
and values (versus group, organizational, and societal pressures), and
expresses decision making and behaviors that are consistent with
such internalized values (Avolio & Gardner, 2005; Gardner et al.,
2005; Walumbwa et al., 2008); (4) Relational transparency is the degree to which the leader presents his/her authentic self (as opposed
to a false or distorted self) to others, openly shares information, and
expresses his/her true thoughts and feelings, reinforcing a level of
openness with others that provides them with an opportunity to be
forthcoming with their ideas, challenges, and opinions.
Empirical evidence (e.g., Kernis & Goldman, 2005; Walumbwa et
al., 2008, forthcoming) shows that a core AL factor can emerge from
the relationships among the four dimensions. Walumbwa et al.
(2008, forthcoming) nds that individual factors do not add any
meaningful incremental validity beyond the common core higher factor, thus suggesting that the variance attributable to overall AL is
more important than the variance imputable to each individual dimension of the AL construct. Considering AL as a core construct is
also conceptually plausible, the literature proposing that the four AL
dimensions are self-regulatory processes governed, partially, through
leaders' internal standards and their evaluations of their own behavior (Gardner et al., 2005).
Therefore, the study hypothesizes considerable overlap among the
four dimensions, and that the higher order AL construct will help to explain the conceptual and empirical overlap discussed above. Some research (Walumbwa, Luthans, Avey, & Oke, 2009; Walumbwa et al.,
2008) also nds effects of AL on important work attitudes and behaviors, after controlling the effects of ethical and transformational leadership. Although the present study cannot include these latter constructs
(because some organizations that participate in the study require applying a short survey), evidence suggests that the construct has incremental validity regarding those older leadership constructs.
2.2. The PsyCap construct
The PsyCap construct comprises four dimensions: self-efcacy, optimism, hope, and resilience. PsyCap meets conceptual and empirical criteria of being distinct from other constructs (Luthans, Avolio, Avey, &
Norman, 2007; Youssef & Luthans, 2007). While Peterson and Seligman's
(2004) character strengths and virtues are trait-like (relatively stable
and difcult to change), the PsyCap is state-like, and thus relatively malleable and open to development. Both theory-building and prior research
on hope, resilience, optimism, and efcacy indicate that such personal
strengths are amenable to development (Luthans, Avey, Avolio, Norman,
& Combs, 2006; Luthans, Avolio, Avey, & Norman, 2007; Luthans, Youssef,
& Avolio, 2007). Such a state-like nature also differentiates PsyCap from
positively-oriented organizational behavior trait-like constructs, such as
Big Five personality dimensions or core self-evaluations (Judge, Bono,
Erez, & Thoresen, 2003).
Earlier research suggests that commonalities among the four dimensions allow considering PsyCap as a core construct (Luthans, Avey, &
Patera, 2008; Luthans, Avolio, Avey, & Norman, 2007). This higherorder core construct has both conceptual (Luthans & Youssef, 2004;
Luthans, Youssef et al., 2007) and empirical (Luthans, Norman, Avolio,
& Avey, 2008; Luthans, Youssef, & Avolio, 2007) support. As a core construct, PsyCap represents one's positive appraisal of circumstances and
probability for success based on motivated effort and perseverance
(Luthans, Avolio, Avey, & Norman, 2007: 550).

A. Rego et al. / Journal of Business Research 65 (2012) 429437

Empirical ndings show that PsyCap predicts variables such as job

satisfaction, organizational commitment, and work performance
(Larson & Luthans, 2006; Luthans, Avolio, Avey, & Norman, 2007;
Luthans, Norman, Avolio, & Avey, 2008; Youssef & Luthans, 2007).
Next, the paper discusses how employees' PsyCap may work as partial mediator in the relationship between AL and employees'
creativity.
2.3. PsyCap as predictor of creativity
2.3.1. Self-efcacy
Self-efcacious people believe in their abilities to mobilize the motivation, cognitive resources, and courses of action necessary to successfully perform a specic task within a given context (Stajkovic &
Luthans, 1998). Those individuals are likely to choose challenging
tasks and endeavors, apply their efforts and motivational resources
to accomplish their goals, and persevere in the face of obstacles and
difculties (Bandura, 1997; Luthans, 2002; Luthans & Youssef,
2004). This combination of challenging goals, motivational energy,
and perseverance motivates individuals to propose new and useful
ideas for reaching goals. Self-efcacy is a generative capability, with
Bandura (1997) suggesting that this psychological strength is essential for creative productivity. Several studies reveal positive relationships between self-efcacy and creativity (e.g., Choi, 2004; Prabhu,
Sutton, & Sauser, 2008; Tierney & Farmer, 2004).
2.3.2. Hope
Being resolute in pursuing goals, hopeful employees tend to be
risk-takers and look for alternative pathways when the old ones are
blocked (Snyder, 1994, 2002). Most hopeful individuals enjoy goal
pursuit, being more intrinsically motivated and looking for creative
ways when implementing their agency energy (Amabile, 1988,
1997; Oldham & Cummings, 1997; Shalley & Gilson, 2004; Snyder,
2002). When hopeful individuals do not attain goals, they use the
feedback to improve goal pursuit thoughts and strategies, thus
being more energetic and prone to look for alternative and creative
ways to overcome obstacles (Rego et al., 2009). In short, hope feeds
creativity (Rego et al., 2009).
2.3.3. Optimism
Optimists take credit for favorable events in their lives, strengthening their self-esteem and morale, which in turn may lead to greater creativity (Goldsmith & Matherly, 2000; Lyubomirsky, Tkach, & DiMatteo,
2006). Optimists distance themselves from unfavorable life events,
thus diminishing the likelihood of experiencing depression, guilt, selfblame, and despair. Thus, optimists are less likely to give up and more
likely to have a more positive outlook on stressful situations, to experience positive emotions, to persevere when facing difculties, and to
look for creative ways to solve problems and take advantage of opportunities (Fredrickson, 2001; Youssef & Luthans, 2007).
2.3.4. Resilience
Resilient people are able to overcome, steer through, bounce back
and reach out to pursue new knowledge and experiences, deeper relationships with others and [nd] meaning in life (Luthans, Youssef, &
Avolio, 2007: 123). Research suggests that resilience relates to creativity
(Cohler, 1987; Helson, 1999). Resilient employees have zestful and energetic approaches to life, are curious and open to new experiences
(Tugade, Fredrickson, & Barrett, 2004), and improvise in situations predominantly characterized by change and uncertainty (Youssef &
Luthans, 2007). As such, resilient employees are likely to develop new
ways of doing things when facing difculties, failures, and opportunities. They are more able to recover from negative emotional experiences
and more prone to experience positive emotions in the midst of stressful events. Literature suggests that positive emotions relate to creativity

431

(Fredrickson, 2001; Philippe, Lecours, & Beaulieu-Pelletier, 2009;

Tugade et al., 2004).
2.3.5. PsyCap
As discussed above, theoretical and empirical reasons allow considering self-efcacy, optimism, hope, and resilience as important
facets of a core PsyCap construct, rather than focusing on any one individual dimension in particular. One can expect that the combined
motivational effects of the four dimensions will be broader and
more inuential than any one of the constructs individually (Luthans,
Avolio, Avey, & Norman, 2007). Synergistic effects among the four
components may occur. Resilience allows employees to re-establish
self-efcacy after experiencing a failure in trying to creatively solve
a problem or taking advantage of an opportunity. Optimism allows
employees to keep their self-efcacy intact after realizing that a creative proposal did not work. Optimistic, hopeful, and self-efcacious
people are potentially more resilient to adversity (Bandura, 1997;
Luthans, Youssef, & Avolio, 2007). If a self-efcacious employee is
more creative because (s)he accepts signicant challenges and carries
out cognitive and creative efforts to achieve goals, such a propensity
is stronger if (s)he also has high hope (Luthans, Avolio, Avey, & Norman, 2007): (s)he does not only accept challenges and make an effort
to achieve goals, but also identies subgoals and creative pathways to
achieve those goals, and overcomes such obstacles by pursuing multiple and creative pathways. As Luthans, Avolio, Avey, and Norman,
(2007: 551) point out, employees who embody high levels of overall
PsyCap may be stronger performers because of the number and level
of positive psychological constructs manifested through their cognitions, motivation, and ultimately their behavior than would those
who only exhibit hope, or resilience, or optimism, or self-efcacy in
a given situation. Hence: H1: employees with higher PsyCap are
more creative.
2.4. AL as predictor of PsyCap
Several reasons support the prediction that AL inuences employees' PsyCap. Gardner et al. (2005: 345) argue that authentic
leaders draw from the positive psychological states that accompany
optimal self-esteem and psychological well-being, such as condence,
optimism, hope and resilience, to model and promote the development of these states in others.
2.4.1. Self-efcacy
Observing exemplary behaviors and psychological strengths in authentic leaders (i.e., through vicarious learning), and receiving constructive criticism and feedback in a respectful and developmental
manner from them, employees may develop more condence in
their abilities to pursue goals (Ilies et al., 2005; Luthans & Youssef,
2004; Luthans, Youssef, & Avolio, 2007). When authentic leaders solicit views that challenge deeply held positions and openly share information with employees, one may expect that employees become
more self-condent (Kirkman & Rosen, 1999; Walumbwa et al.,
2008). Considering that authentic leaders focus on followers'
strengths, unleash their potential (Gardner & Schermerhorn, 2004),
and constantly emphasize their growth, employees' self-efcacy potentially develops through the effect of the self-fullling prophecy
(Avolio et al., 2004; Gardner et al., 2005; Luthans, Youssef, & Avolio,
2007).
2.4.2. Hope
Avolio et al. (2004: 809) observe: Because authentic leaders have
the ability to remain realistically hopeful and trustworthy, such
leaders can enhance followers' hope by establishing not only their
willpower, but also by including in their comments positive aspects
of the waypower or directions to pursue that enhance a follower's
sense of self-efcacy. Authentic leaders provide senses of self-

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A. Rego et al. / Journal of Business Research 65 (2012) 429437

determination, security, and trust, which enable followers to focus

their energies on goal-related endeavors and on nding different
pathways for solving problems and benetting from opportunities
(Avolio et al., 2004; Edmondson, 1999; Ilies et al., 2005). Over time,
because authentic leaders are viewed as more credible sources of
input and feedback (Walumbwa et al., 2008), employees likely persevere toward goals and, when necessary, redirect paths to goals in
order to succeed. Positive emotions and self-efcacy that employees
develop when led by authentic leaders may also make them more
able to sustain their willpower and to develop waypower for reaching
challenging goals (Avolio et al., 2004; Gardner & Schermerhorn, 2004;
Luthans, Youssef, & Avolio, 2007).
2.4.3. Optimism
Several authors suggest that AL fosters employees' optimism
(Avolio et al., 2004; De Hoogh & Den Hartog, 2008; Gardner & Schermerhorn, 2004; McColl-Kennedy & Anderson, 2002). For example,
Gardner and Schermerhorn (2004: 275) note that one task of the authentic leaders is to raise optimism. Avolio et al. (2004) stress that
authentic leaders inuence employees' optimism by increasing their
identication with the leaders and encouraging their positive emotions. De Hoogh and Den Hartog (2008) reveal that ethical leadership
(an authentic-like leadership; Avolio et al., 2004) relates signicantly
with employees' optimism about their future. In their view, by being
fair, caring about followers' feelings, promoting transparent and open
communication, rewarding ethical conduct, and investing followers
with voice, such leaders make employees more positive and optimistic about their organization and work situation, and more willing to
remain and contribute to its success. In short, because authentic
leaders tend to use more active, adaptive, and positive approaches toward problem solving, they are more likely to motivate and challenge
employees to do the same (Peterson, 2000; Walumbwa et al., 2009).
2.4.4. Resilience
Gardner and Schermerhorn (2004: 277) argue that one task of
the authentic leaders is strengthening resilience. These leaders may
carry out such a task through several routes (Gardner et al., 2005;
Luthans & Youssef, 2004; Luthans, Youssef, & Avolio, 2007), including: (a) promoting good interpersonal relationships, thus developing
conditions so that employees receive social support in adverse times,
this support being important for sustaining resilience; (b) increasing
employees' self-condence and psychological safety, which makes
them more able to face problems and adversities with resilience; (c)
promoting employees' positive emotions, these emotions helping to
develop resilience (Tugade et al., 2004). As the authors argue (p.
278), [a]uthentic leaders capitalize on individual resilience by ensuring that others have the support they need to (1) recover from adversity, and (2) not only withstand but thrive when faced with high
levels of positive change. They anticipate potential adversity or
strains, make contingency plans to support and help employees
cope with them, and are available and responsive when such persons
reach out to them.
2.4.5. PsyCap
Due to the reasons explained above, synergistic effects upon the
several PsyCap capabilities may occur when leaders are authentic.
For example, when developing the employees' self-efcacy, hope,
and optimism, authentic leaders also increase the employees' psychological resources that help them to bounce back when facing difculties, drawbacks, and failures. Resilience and optimism encouraged by
an authentic leader may allow employees to keep their self-efcacy
intact or re-establish self-efcacy after experiencing a failure. Optimistic, hopeful, and self-efcacious people are potentially more resilient. Through contagion effects (Ilies et al., 2005; Norman, Luthans, &
Luthans, 2005), the psychological strengths of authentic leaders may
promote the employees' overall PsyCap. In short, as Yammarino et al.

(2008) suggest, AL potentially inuences positive psychological capabilities such as PsyCap. Hence: H2. Stronger authentic leadership associates with higher employees' PsyCap.
2.5. PsyCap as partial mediator of the relationship between AL and employees' creativity
The arguments above suggest that employees led by authentic
leaders develop higher PsyCap and that this psychological resource
drives them to be more creative. However, other mechanisms explain
why authentic leaders may nurture employees' creativity. Being selfaware, transparent with employees, guided by internal ethical standards, and able to analyze objectively all relevant data (including employees' dissenting opinions and proposals), authentic leaders
promote employees' trust and respect (Avolio et al., 2004; Deluga,
1994; Dirks & Ferrin, 2002; Gardner et al., 2005; Ilies et al., 2005;
Walumbwa et al., 2008). Trust and respect are important because
people experience greater emotional safety and feel free to propose
unconventional ideas and introduce conicting opinions without
fear (Avolio et al., 2004; Edmondson, 1999; Prati et al., 2003; Rego
et al., 2007). Considering their balanced processing and relational
transparency, authentic leaders feel less threatened by the changes
that employees' ideas may imply, and are more inclined to welcome
their creative suggestions (Michie & Gooty, 2005). Their selfawareness and balanced processing make them more cautious when
evaluating employees' ideas (Zhou & George, 2003) and more able
to understand how they are biased toward some people's ideas.
Due to their ethical self-guidance, relational transparency, and capacity for processing data in an unbiased way, authentic leaders are
able to provide constructive criticism and feedback in a fair, respectful, informational, and developmental (rather than controlling) manner (Avolio et al., 2004; Michie & Gooty, 2005; Zhou, 2003; Zhou &
George, 2003). These informational practices provide employees
with relevant information to improve their performance without
pressure for a particular outcome, and they are thus more inclined
to search for and propose creative ideas to face problems and opportunities. Authentic leaders also promote employees' intrinsic motivation (Ilies et al., 2005), which can act as a trigger of creativity
(Amabile, 1997; Deci & Ryan, 1985; Kernis, 2003; Oldham & Cummings, 1997; Tierney et al., 1999). Intrinsic motivation is crucial for
creativity because an intrinsically motivated person tends to be (a)
curious and learning oriented, (b) cognitively exible, (c) willing to
take risks, and (d) persistent when facing obstacles, challenges, and
opportunities (Deci & Ryan, 1985; Zhou, 2003).
Through positive social exchanges with their followers, authentic
leaders may also inspire them to work with more enthusiasm and excitement and to experience other positive emotions (Avolio et al.,
2004; Ilies et al., 2005; Prati et al., 2003; Zhou & George, 2003).
These positive emotions can broaden the employees' scope of attention (increasing the number of cognitive elements available for association) and the scope of cognition (increasing the breadth of those
elements that are treated as relevant to the problem), thus increasing
the probability of creative activities (Fredrickson, 2001). The following two hypotheses follow from this discussion: H3. Stronger authentic leadership associates with higher employees' creativity. H4.
Employees' PsyCap partially mediates the effect of AL on employees'
creativity.
3. Method
3.1. Sample and procedures
Participants in the study are 201 employees, working in 33 commerce organizations operating in Portugal. Organizations compete
in several sectors (e.g., food, clothing, appliances, sports, toys, footwear, and ofce materials, furniture, and equipment). All participants

A. Rego et al. / Journal of Business Research 65 (2012) 429437

(68.0% female) are shop assistants. Mean age is 26.4 years (standard
deviation: 4.1), and mean organizational tenure is 3.2 years (SD:
2.0). 8.4% of the individuals have nine or fewer years of schooling,
41.8% have between 10 and 12 years, and 49.8% have at least an undergraduate degree. The mean length of supervisor-employee contact
is 2.8 years (SD: 1.7).
After obtaining the permission of the organizations' leaders, the
researchers approach the employees in their workplaces. Individuals
report their supervisors' AL and their PsyCap. Supervisors rate the
employees' creativity at work (each supervisor rating only one of
their respective employees). Shalley and Gilson (2004: 35) argue
that managers play a key role in that they are often the individuals
best suited to make the determination of whether an employee's outcome should be regarded as creative. To avoid any form of embarrassment, subordinates and supervisors ll in their questionnaires in
separate locations. To guarantee anonymity, the participants deliver
their responses under sealed cover directly to the researchers. To reduce common method bias (Podsakoff, MacKenzie, Lee, & Podsakoff,
2003), the study also uses different formats and/or ranges for the
AL, PsyCap, and creativity measures (see the next sub-sections).

3.2. Authentic leadership measurement

The study uses the 16 ve-point items of the Authentic Leadership
Questionnaire (Copyright 2007 Authentic Leadership Questionnaire
(ALQ) by Bruce J. Avolio, William L. Gardner, and Fred O. Walumbwa.
All rights reserved in all media. Distributed by Mind Garden, Inc.
www.mindgarden.com) for measuring AL. The questionnaire measures
four dimensions: self-awareness, relational transparency, internalized
moral perspective, and balanced processing. Sample items are: (a)
Seeks feedback to improve interactions with others (self-awareness);
(b) Says exactly what he or she means (relational transparency); (c)
Demonstrates beliefs that are consistent with actions (internalized
moral perspective); (d) Listens carefully to different points of view before coming to conclusions (balanced processing). A rst translator
translates the items from English to Portuguese, and a second translator
independently back-translates them to English. Both translators discuss
discrepancies between the original and the back-translated versions.
Two bilingual Portuguese scholars again discuss the nal version, and
the authors make nal adjustments.
Individuals report the frequency (0: not at all; 4: frequently, if
not always) with which their supervisors adopt the 16 behaviors/attitudes. Conrmatory factor analysis (using LISREL with the maximum likelihood estimation method) tests the four-factor model.
Because t indices are unsatisfactory (e.g., RMSEA: 0.12; GFI: 0.82),
the study uses standardized residuals and modication indices for locating sources of misspecication (Bagozzi & Baumgartner, 1994).
After deliberation based on both techniques, the study discards four
items (one regarding internalized moral perspective, two regarding
relational transparency, and one regarding balanced processing). A
well-tted 12-item model emerges (Table 1). All Cronbach Alphas
are higher than 0.70. A second-order factor model, where the four
AL dimensions load on a higher AL factor, t the data satisfactorily
(Table 1). Comparison of the rst- and second-order models shows
no signicant change in relative to the difference in degrees of freedom ((2) = 0.68; p = 0.71). The t indices of the single latent factor (all 12 items loading on a single factor model) are unsatisfactory
(e.g., RMSEA: 0.15). The comparison of this single latent factor with
the second-order factor model shows a signicant change in relative to the difference in degrees of freedom ((4) = 190.66;
p b 0.001). Taking these ndings into account, the study considers
AL as a core construct. To obtain a composite AL score: (1) the study
averages the items for each of the four subscales to arrive at a composite average for each subscale; (2) then, the study averages the averages for each of the four subscales. Cronbach Alpha is 0.91.

433

Table 1
Employee-reported authentic leadership: Conrmatory factor analysis (completely
standardized solution).
1st-order
factor model

2nd-order
factor model

Cronbach
alphas

Lambdas Fit indices Lambdas Fit indices

Self-awareness
Item # 13
Item # 14
Item # 15
Item # 16
Balanced processing
Item # 11
Item # 12
Internalized moral
perspective
Item # 6
Item # 8
Item # 9
Relational transparency
Item # 1
Item # 3
Item # 4
Authentic leadership
Self-awareness
Relational transparency
Internalized moral
perspective
Balanced processing
Chi-square
Degrees of freedom
Chi-square/degrees
of freedom
Root mean square error
of approximation
Goodness of t index
Adjusted goodness
of t index
Comparative t index
Incremental t index
Relative t index

0.92
0.79
0.88
0.89
0.92

0.79
0.88
0.89
0.92

0.89
0.85

0.88
0.86

0.85

0.88
0.87
0.85
0.82

0.86
0.85
0.82

0.87
0.78
0.82

0.87
0.78
0.82

0.86

0.91
0.96
0.88
0.86
0.89
92.96
48
1.9

93.64
50
1.9

0.07

0.07

0.93
0.88

0.93
0.88

0.97
0.97
0.93

0.97
0.98
0.94

In brackets and bold: Cronbach alphas.

Item numbers are those of ALQ.

For testing the impact of removing items on the internalized moral

perspective, relational transparency, and balanced processing dimensions, the study correlates scores as computed with the nal versus
the original set of items. Correlations are, respectively, 0.99, 0.96
and 0.95. For overall AL, the correlation between scores as computed
with the initial versus the nal set of items is 0.99.
3.3. Psychological capital measurement
For measuring PsyCap, the study uses the questionnaire proposed by
Luthans, Youssef, and Avolio (2007), comprising 24 six-point items (1:
strongly disagree; ; 6: strongly agree) and measuring self-efcacy,
optimism, hope, and resilience (six items per dimension). Sample items
are: (a) I feel condent in representing my work area in meetings with
management (self-efcacy); (b) When things are uncertain for me at
work, I usually expect the best (optimism); (c) I can think of many
ways to reach my current work goals (hope); (d) I usually take stressful
things at work in stride (resilience). Two bilingual individuals, working
independently, translate the scales to the Portuguese language. Both individuals develop an iterative discussion for solving disagreements and
for reaching a single version. Two other bilingual individuals, working
independently, back-translate the Portuguese version to English. The
rst author compares these back-translated versions with the original,
and solves disagreements and discrepancies through an iterative discussion with both individuals. The rst author also consults and discusses the nal version with three organizational members (Brislin,
Lonner, & Thorndike, 1973).

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A. Rego et al. / Journal of Business Research 65 (2012) 429437

A conrmatory factor analysis (using LISREL with the maximum

likelihood estimation method) tests how the four-factor model ts
the data. Although RMSEA is satisfactory (0.08), several other t indices are not (e.g., GFI: 0.82) and two Lambdas are lower than 0.50. The
study removes these two items and, after analyzing standardized residuals and modication indices for locating sources of misspecication, removes a third one. A reasonably well-tted 21-item model
emerges (Table 2). All Lambdas are higher than 0.50. All reliabilities
are higher than 0.80. The t indices of a second-order factor model,
with the four factors loading onto an overall PsyCap factor, are satisfactory (Table 2). Comparison of the rst- and second-order shows no
signicant change in relative to the difference in degrees of freedom ((2) = 1.12; p = 0.56). The t indices of a single latent factor
(all 21 items loading on a single factor) are unsatisfactory (e.g.,
RMSEA: 0.11). The comparison of this single latent factor with the
second-order factor model shows a signicant change in relative
to the difference in degrees of freedom ((4) = 227.67; p b 0.001).
Taking these ndings into account, the study considers PsyCap as a
core construct. To obtain a composite PsyCap score: (1) the study averages the items for each of the four subscales to arrive at a composite
average for each subscale; (2) then, the study averages the averages
for each of the four subscales. Cronbach Alpha is 0.90.
For testing the impact of removing items on the hope, resilience,
and optimism dimensions, the study correlates scores as computed
with the nal versus the original set of items. Correlations are,
Table 2
Psychological capital: Conrmatory factor analysis (completely standardized solution).
Four-factor
model

2nd-order
factor model

Cronbach
alphas

Lambdas Fit indices Lambdas Fit indices

Self-efcacy
Item # 1
Item # 2
Item # 3
Item # 4
Item # 5
Item # 6
Hope
Item # 7
Item # 9
Item # 10
Item # 11
Item # 12
Resilience
Item # 14
Item # 15
Item # 16
Item # 17
Item # 18
Optimism
Item # 19
Item # 20
Item # 21
Item # 22
Item # 24
PsyCap
Self-efcacy
Hope
Resilience
Optimism
Chi-square
Degrees of freedom
Chi-square/Degrees
of freedom ratio
Root mean square error
of approximation
Goodness of t index
Non-normed t index
Comparative t index
Incremental t index

0.87
0.67
0.76
0.78
0.66
0.78
0.74

0.67
0.76
0.78
0.66
0.78
0.74

0.70
0.71
0.80
0.83
0.74

0.70
0.70
0.80
0.83
0.74

0.74
0.75
0.77
0.76
0.72

0.74
0.73
0.77
0.76
0.72

0.64
0.51
0.76
0.85
0.75

0.64
0.51
0.76
0.85
0.75

0.85

0.85

0.82

0.90
0.92
0.92
0.84
0.89
378.11
183
2.1

379.26
185
2.1

0.07

0.07

0.85
0.90
0.91
0.91

0.85
0.90
0.91
0.91

Item numbers are those of Luthans, Youssef, and Avolio (2007, pp. 237238).

respectively, 0.99, 0.98, and 0.98. For overall PsyCap, the correlation
between scores as computed with the initial versus the nal set of
items is 0.99.
3.4. Employees' creativity measurement
For measuring employees' creativity, the study uses four items
proposed by Zhou and George (2001), representing new and useful
ideas. Sample items are: (1) This employee comes up with new
and practical ideas to improve performance; (2) This employee suggests new ways to increase quality. Rego et al.'s (2007) Portuguese
translation is used. Supervisors report how frequently the employee
adopts the ve behaviors, on a scale ranging from 1 (never) to 5 (frequently). Cronbach Alpha is 0.90.
3.5. Conrmatory factor analyses for testing discriminant validity and
common source effects
The study carries out a series of dimension-level conrmatory factor analyses to examine whether the three variables of the study capture distinct constructs versus common source effects. The threefactor model ts the data well (e.g., RMSEA: 0.08; GFI: 0.91; NNFI:
0.95; CFI: 0.96; IFI: 0.96). The study tests three other models: (1) A
two-factor model, where employees' PsyCap and creativity merge
into a single factor, does not t the data satisfactorily (e.g., RMSEA:
0.16; GFI: 0.78); (2) Another two-factor model, where AL and employees' PsyCap merge into a single factor, also does not t the data
satisfactorily (e.g., RMSEA: 0.19; GFI: 0.74); (3) The single factor
model also does not t the data satisfactorily (e.g., RMSEA: 0.22;
GFI: 0.67). These ndings provide support for the discriminant validity of AL, PsyCap, and creativity.
Following Podsakoff et al. (2003), the study compares two models
for examining the extent to which the results are due to common
methods variance. The rst model includes three factors: four indicators loading on the AL factor, four indicators loading on the PsyCap
factor, and four items loading on the creativity factor. The second
model is identical to the rst except for the addition of a latent method variance factor comprising the 12 items/indicators. No substantive
difference exists between the t indices of either model (e.g., RMSEA
for both models is the same). These ndings suggest that common
source bias does not constitute a serious threat to the validity of the
study.
3.6. Controlling for clustering the data
For assessing if aggregating individual scores at the organizational
level is statistically justiable, the study uses intraclass correlation
(ICC). ICC is a measure of within-group consensus, the median value
in organizational research typically being 0.12 (James, 1982). For AL,
PsyCap, and creativity, ICC is lower than 0.01. These ndings suggest
that aggregating scores is not justied.
4. Results
Table 3 presents means, standard deviations, and correlations.
Several control variables intercorrelate, but none correlates signicantly with AL, PsyCap, or creativity. AL relates positively with employees' PsyCap and creativity. Employees' PsyCap and creativity
intercorrelate positively. Therefore: (a) employees with higher PsyCap are more creative and (b) employees with higher PsyCap and creativity are those whose leaders are more authentic.
Structural equation modeling (using LISREL with the maximum
likelihood estimation method) tests the causal model, considering
both the nal and the initial set of items for measuring AL and PsyCap.
The study uses employees' gender, age, schooling, tenure, and length
of supervisorsubordinate contact as control. The ndings (see Fig. 2,

A. Rego et al. / Journal of Business Research 65 (2012) 429437

435

Table 3
Means, standard deviations, and correlations.

1.
2.
3.
4.
5.
6.
7.
8.

Employees' gender (a)

Employees' age
Employees' schooling (b)
Employees' tenure
Subordinate-supervisor length of contact (years)
Authentic leadership
Employees' overall PsyCap
Employees' creativity

Mean

SD

26.4
2.4
3.2
2.8
2.9
3.7
3.0

4.12
0.64
2.06
1.71
0.72
0.63
0.81

0.16
0.36
0.03
0.03
0.02
0.07
0.01

0.45
0.55
0.44
0.03
0.00
0.01

0.04
0.08
0.01
0.12
0.09

0.72
0.02
0.01
0.04

0.04
0.03
0.13

(0.91)
0.65
0.65

(0.90)
0.71

(0.90)

In brackets: Cronbach alphas.

(a) 0: female; 1: male.
(b) 1: nine or fewer years of schooling; 2: 1012 years; 3: at least an undergraduate degree.
In brackets: Cronbach alphas.
p b 0.05.
p b 0.001.

depicting standardized path coefcients) show that all predicted

paths are signicant, for both models. The model is saturated, and
the t is perfect, also for both models.
The t indices of a full mediated model, without the path between
AL and employees' creativity, are unsatisfactory (e.g., RMSEA is 0.36
and 0.38, respectively, when the study considers the nal and the
original set of items for measuring AL and PsyCap). The ndings support the four hypotheses, suggesting that AL predicts employees' creativity both directly and through the mediating role of employees'
PsyCap.
5. Discussion and conclusions
5.1. Main ndings
Creativity is the rst step in innovation, and innovation is crucial
for long-term organizational success (Amabile, 1997). Thus, organizations need to take advantage of and facilitate the creativity of their
employees. This study may help organizations and researchers to
identify ways to address these needs. The ndings suggest that AL is
an important predictor of employees' creativity and help to understand the processes through which the relationship operates. Authentic leaders promote employees' creativity because employees develop
higher PsyCap, thus being more creative. The ndings also show direct relationships between AL and employees' creativity, suggesting
that other variables/mechanisms than PsyCap operate in the process
that makes the employees led by authentic leaders more creative. Future studies may explore the inuence of variables such as identication with the supervisor, psychological empowerment, work
engagement, trust, feelings of meaningful work, intrinsic motivation,
positive emotions, leadermember exchange, and followers' authenticity. For example, do authentic leaders promote employees' creativity because the employees feel empowered, engaged, happier,

0.67***
(0.68***)

Authentic
leadership
R2: 0.04 (0.03)

Employees
PsyCap
R2: 0.45 (0.47)

0.34***
(0.37***)

0.49***
(0.46***)

Employees
creativity
R2: 0.59 (0.59)

Fig. 2. Structural equation modeling for predicting employees' creativity (standardized

path coefcients). ***p b 0.001. The paths related to the control variables (gender, age,
schooling, tenure, and the length of supervisorsubordinate contact) are not shown.
Numbers outside (in) brackets represent the model as estimated with the nal (initial)
set of items of the authentic leadership and the PsyCap measures.

intrinsically motivated, and develop greater commitment toward

their leaders?
The predictive value of AL for employees' PsyCap is also important
because PsyCap relates with variables such as job satisfaction, organizational commitment, happiness at work, and in-role and extra-role performance (Avey, Wernsing, & Luthans, 2008; Luthans, Avolio, Avey, &
Norman, 2007; Luthans, Norman, Avolio, & Avey, 2008; Youssef &
Luthans, 2007). Therefore, the study indirectly corroborates theoretical
and empirical evidence showing that authentic leaders may be able to
foster employee ourishing and performance (Gardner et al., 2005;
Walumbwa et al., 2008). This is a contribution to a eld where empirical
studies remain scarce (Walumbwa et al., 2008; Yammarino et al., 2008),
mainly regarding the mediating variables that explain the impact of AL
in outcomes with organizational relevance.
5.2. Limitations and future studies
The study is not without its limitations and future studies are necessary for a better understanding of why authentic leaders impact employees' creativity. First: the data do not allow an unquestionable
determination of the hypothesized causality, other causal links and explanations being plausible. For example, employees with higher PsyCap
and creativity levels may motivate leaders to reciprocate and to be more
transparent with them and to solicit views that challenge deeply held
positions. Leaders may feel free to behave more authentically if they
perceive high levels of psychological and creative resources in their employees. Performing creativity acts may induce positive emotions of
pride and achievement in employees (Fredrickson, 2003), making
them more prone to describe their leaders positively (Brief & Weiss,
2002). Such employees' positive emotions may also inuence the
leaders' emotions through emotional contagion (Barsade, 2002), thus
motivating leaders to behave more authentically toward subordinates
(Ilies et al., 2005). A supervisor may report more creativity in his/her
subordinates, not because subordinates are necessarily more creative,
but because the subordinates' PsyCap improves the quality of leader
member exchange, and creates a halo effect that induces the supervisor
to be more benevolent when reporting the employees' creativity. The
relationship between employee PsyCap and creativity may emerge because creative employees develop solutions and make proposals that
make them feel more optimistic and self-efcacious. Authentic leaders
may experience more positive emotions, thus being more benevolent
while describing the employees' creativity, regardless of the real creative behaviors. Future studies may use longitudinal and experimental
or quasi-experimental methods for having a clearer picture of the causality nexus.
Second: the study uses a convenience sample, including only employees working in commerce. Future studies may test the

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A. Rego et al. / Journal of Business Research 65 (2012) 429437

hypothesized model with employees from other types of organizations

and industries. Third: only one mediating variable is included. Future
studies may include other mediating variables for explaining why authentic leaders tend to promote their employee's creativity. Fourth: future studies may also test the degree to which some personal
characteristics (e.g., propensity to trust, positive and negative affect, individualistic/collectivistic values, and personal virtues and strengths
such as gratitude, forgiveness, compassion, love, kindness, and honesty)
moderate the relationships between AL and employees' creativity. For
example, are employees with higher scores on gratitude, compassion,
and forgiveness more/less sensitive to AL? Are in-group collectivistic
employees more sensitive to perceptions of AL than individualistic
ones? Do employees with higher positive affect respond more positively to leader authenticity? Fifth: future studies may adopt team and/or
organizational levels of analysis and test if the collective phenomena
identied by Walumbwa et al. (2009) also perform when studying collective creativity. Sixth: Studying a single culture may produce some idiosyncratic ndings. For example, does the feminine and highly ingroup collectivistic features of the Portuguese culture (Hofstede, 1991;
House, Hanges, Javidan, Dorfman, & Gupta, 2004) make Portuguese employees more sensitive to authentic leaders than the employees from
masculine and low in-group collectivistic cultures? Future studies may
use a cross-cultural research method for testing if culture moderates
the relationship between AL and dependent variables.

5.3. Implications for management and concluding remarks

In spite of the above-mentioned limitations, the study suggests that
the AL and PsyCap constructs interrelate, and that both may help employees to be more creative. Indirectly, the study suggests that (a) selecting leaders with authentic features and (b) implementing training and
development actions aimed at increasing AL (Avolio & Gardner, 2005;
Gardner et al., 2005; Luthans & Avolio, 2003) and PsyCap (Luthans et al.,
2006; Luthans, Youssef, & Avolio, 2007; Luthans, Avey, & Patera, 2008)
may have a positive impact on employees' psychological resources and
performance. Developing employees' PsyCap through processes other
than AL may also pay off in terms of employees' creativity. Through
these PsyCap enhancing tools, managers and organizations may also stimulate other positive consequences of this psychological strength, including workplace performance, job satisfaction, work happiness, and
organizational commitment (Luthans et al., 2005; Luthans, Youssef, &
Avolio, 2007; Luthans, Avey, & Patera, 2008; Youssef & Luthans, 2007;
Walumbwa et al., 2009). Luthans and Youssef (2004) suggest that organizations need to invest not only in human and social capital, but also in
psychological capital; and George (2003: 9) argues: we need leaders
who lead with purpose, values, and integrity; leaders who build enduring
organizations, motivate their employees to provide superior customer
service, and create long-term value for shareholders. This study suggests
that both claims make sense, not only from a theoretical point of view, but
also from an empirical one.

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