When inclusive leadership promotes innovation: the role of team psychological safety and leader power distance orientation

IntroductionInclusive leadership is important for employee innovation because it encourages employees to speak up, share ideas, and try new ways of working. However, inclusive leadership may not have the same effect in all teams. It is therefore necessary to explain how inclusive leadership promotes innovation and when its effect may become weaker. Based on social information processing theory, this study examines the mediating role of team psychological safety and the moderating role of leader power distance orientation.MethodsData were collected in three waves from 475 employees nested within 93 teams led by 93 team leaders in Chinese IT firms. Multilevel analysis was used to test the proposed relationships.ResultsInclusive leadership was positively related to employee innovative behavior and team psychological safety. Team psychological safety further promoted employee innovative behavior. Leader power distance orientation weakened the positive relationship between inclusive leadership and team psychological safety. The positive effect of inclusive leadership on team psychological safety was significant when leader power distance orientation was low, but non-significant when it was high. The conditional indirect effect of inclusive leadership on employee innovative behavior through team psychological safety was also significant only when leader power distance orientation was low.DiscussionThese findings show that inclusive leadership promotes employee innovation by creating a psychologically safe team environment, but this process becomes weaker when leaders have a stronger power distance orientation. This study helps explain why inclusive leadership may be more effective in some teams than in others.