Paradoxical leadership moderates social capital’s link to absorptive capacity, ultimately driving small firm performance.
Authors
Siddharth Gaurav Majhi, Department of Information System Management, Indian Institute of Management Sambalpur, Sambalpur, India
Saurav Snehvrat, Department of Strategic Management, XLRI Xavier School of Management, Jamshedpur, India
Sanjay Chaudhary, Associate Professor, Jindal Global Business School, O.P. Jindal Global University, Sonipat, Haryana, India
Summary
Purpose: This paper aims to examine the impact of social capital on the performance of small firms and the role played by paradoxical leadership (encompassing both humility and narcissism) and absorptive capacity (ACAP) in affecting this relationship.
Design/methodology/approach: This paper uses multi-source cross-sectional survey data from 205 small automotive ancillary firms in Punjab, India. The data were analyzed using partial least squares-based structural equation modeling as well as the bootstrapping method (PROCESS macro in SPSS).
Findings: Paradoxical leadership moderates the relationship between social capital and ACAP. Further, potential absorptive capacity mediates the relationship between social capital and realized absorptive capacity (RACAP), which directly impacts firm performance. However, paradoxical leadership does not exhibit a significant moderating effect on the translation of potential to RACAP.
Originality/value: Firm leadership is crucial for the social capital and external knowledge absorption in resource-constrained small firms. This paper elucidates the role of paradoxical leadership (balance of chief executive officer (CEO) humility and CEO narcissism) in developing ACAP and for translating social capital into ACAP and finally firm performance. Apart from contributing to the literature at the nexus of leadership styles and ACAP, the paper also brings more clarity to the role played by paradoxical leadership in helping small firms take advantage of social capital in boosting their performance.
Published in: International Journal of Productivity and Performance Management
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