Differential leadership, employee dynamic capabilities, and innovative behavior: employees’ power distance orientation matters

Purpose Chinese Confucianism profoundly influences Chinese leadership styles and how employees perceive leadership behavior. This study investigates a moderated-mediation model that elucidates the processes linking differential leadership, employee dynamic capabilities, employee innovative behavior and power distance orientation in the Chinese managerial context. Design/methodology/approach The study employed a three-wave data collection approach involving multiple sources, collecting data from 409 employees in companies across six regions of China. Findings The findings indicate positive relationships between differential leadership, employee dynamic capabilities and employee innovative behavior. Furthermore, power distance orientation positively moderates the relationship between differential leadership and employee innovative behavior. Originality/value This study is among the first to explore these relationships in a Chinese management context. Moreover, the study focuses on dynamic capabilities at the employee level, a novel approach providing insight into the mechanisms and boundary conditions through which differential leadership influences employee innovation.