Authentic leadership, psychological capital, acceptance of change, and innovative work behaviour in non‐profit organisations

Abstract

This paper examines whether authentic leadership provides the resources employees need to build their psychological capacities and well‐being so that they can embrace organisational change and engage in innovative work behaviour (IWB) within non‐profit organisation (NPO). The paper builds on previous research examining the antecedents of IWB such as ‘innovation‐enabling culture’ and psychological capital (PsyCap). The new variables examined in this study are authentic leadership and acceptance of change. Utilising a structural equation modelling methodology, 248 surveys from Australian not‐for‐profit employees were analysed revealing that authentic leadership accounted for more than a fifth of the variance of PsyCap; PsyCap, age, and authentic leadership accounted for 40% of employees’ well‐being; and age, leadership, and acceptance of change accounted for a quarter of their IWB, although acceptance of change was not directly related to IWB. The main contribution of this paper is in explaining why authentic leadership is an important ingredient for building an ‘innovation‐enabling culture’ for NPO employees, suggesting that such leadership provides a pathway for developing effective workplace relationships built on trust and ethical decision making. Such behaviour builds a supportive culture for developing employees’ personal resources, which promotes the conditions for promoting IWB.Points for practitioners Authentic leadership behaviour provides a platform for developing the psychological capacities of employees in non‐profit organisations (NPOs) contracted to deliver social services to Australians. Authentic leadership behaviours and psychological capital enhance employees’ well‐being. Authentic leadership behaviours and psychological capital are significant building blocks of an innovation‐enabling culture in NPOs.