Leadership Research Summary:
- The reasons for new venture team instability gradually have become a vital issue in the entrepreneurship literature. While chief executive officers’ (CEOs) leadership behaviors is regarded as a critical element of governance within new venture teams, few studies explored the role played by CEOs’ leadership behaviors in new venture team stability. Drawing on the transactional-transformational leadership model, this study divides CEOs’ leadership behaviors in new ventures into two categories, namely, transformational and transactional leadership behaviors. Based on the social exchange theory and the social information processing theory, this study constructs a moderating mediation model to understand how transformational and transactional leadership affects new venture team stability. In this model, knowledge hiding is used as mediating role and team collectivism is used as moderating role.
- Three-wave and two-source data was collected from 66 new ventures in China and an ordinary least squares hierarchical regression model and Hayes’ moderated-mediation approach were applied to test the hypotheses. The results show transformational leadership and transactional leadership are positively related to new venture team stability.
- Knowledge hiding mediates the association between transformational leadership and new venture team stability and that between transactional leadership and new venture team stability. Moreover, a high level of team collectivism corresponds to a stronger relationship between transformational leadership and knowledge hiding and a greater indirect effect of transformational leadership on new venture team stability through knowledge hiding.
- This study explores the mechanisms and boundary conditions of the effect of transformational leadership, transactional leadership, and new venture team stability, which is an enrichment to the study of governance within new venture teams. It enlightens managers to take effective measures to reduce knowledge hiding and maintain team stability in new venture teams.
Leadership Research Findings:
- This study also offers four practical implications for NVT members. First, the study found that TFL and TAL are positively associated with NVT stability. Therefore, CEOs could improve NVT stability by adopting TFL and TAL behaviors depending on the specific context. Furthermore, the study indicates TFL has an effect on NVT stability beyond the effect of TAL. Hence, TFL could be prioritized by CEOs. Moreover, CEOs could participate in training sessions in which they can reflect on their own leadership behaviors and learn how to effectively implement TFL and TAL behaviors to realize some leadership functions (Burmeister et al., 2020).
- Second, given the importance of knowledge hiding for NVT stability, NVT members should pay more attention to the knowledge management process, particularly to knowledge hiding. Peng (2013) suggested that members who have strong territorial feelings regarding their own knowledge are more likely to withhold knowledge. Therefore, NVT members can reduce knowledge hiding by changing the layout of offices (e.g., demolishing physical walls; Singh, 2019) to maintain team stability.
- Third, the results suggest that knowledge hiding mediates the association between TFL and TAL and NVT stability. On the one hand, CEOs could reduce knowledge hiding within their NVTs through TFL behaviors, such as involving their teams in the goal formation process during planning meetings and utilizing software to build internal communication channels (Burmeister et al., 2020). On the other hand, CEOs could devise a short-term incentive mechanism to reward team members for sharing knowledge to suppress knowledge hiding and improve NVT stability. For example, CEOs can clearly and formally compensate knowledge sharers by giving them stock ownership and economic rewards (Van Dijk et al., 2020).
- Fourth, this study indicates that team collectivism strengthens the indirect effect of TFL on NVT stability through knowledge hiding. TFL behaviors may be operated alongside a high level of team collectivism to improve the effectiveness of leadership behaviors. On the one hand, CEOs could adopt more TFL behaviors to realize leadership functions when team collectivism is high. On the other hand, team collectivism stems from members’ experience of working alone or collaboratively (Wagner III et al., 2012). Thus, a transformational CEO could intervene in their members’ practice with managerial measures to intentionally cultivate team collectivism or select collectivist members to form the NVT. For example, the CEO could evidently and frequently involve other NVT members in decision-making, pursue collective goals and share responsibility, and plan informal social events for the team, such as dinners and travel activities (He et al., 2014).