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**Chapter 11**

**Provisional chapter**

**The Effects of Authentic Leadership on Employees'**

**The Effects of Authentic Leadership on Employees'** 

Authentic leadership has recently become a matter of significant interest in the fields of politics, economics, society, and culture as well as leadership. This study examines the effects of authentic leadership on employees' well-being and determines whether relational cohesion can regulate the effects that occur between the two. In this regard, the study conducted empirical research with 950 employees of Korea's leading manufacturers, public enterprises, and financial firms. The results demonstrated that team leaders' authentic leadership increased employees' eudaimonic well-being but did not significantly affect hedonic well-being. However, when there was a high perception of relational cohesion that showed collaborative and integrated relationships with team members, the effects of authentic leadership on employees' well-being were significantly positive, thereby verifying the interaction effect between the two. In particular, this result stemmed from controlling the effects of transformational and ethical leadership, both of which represent conventional forms of leadership, and is thus significant. Finally, the study provided in-depth discussions on the implications of the research results for orga-

**Keywords:** authentic leadership, hedonic well-being, eudaimonic well-being, relational

The concept of authentic leadership was introduced by various researchers and practitioners who perceived that there is a restriction to the market-oriented limitless competition paradigm. As conventional leadership theories came to lay too much stress on the eloquence, gestures, and skills of leaders in the 2000s, an increasing number of people thought of leadership

> © 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

© 2018 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use,

distribution, and reproduction in any medium, provided the original work is properly cited.

DOI: 10.5772/intechopen.76427

**Well-Being and the Role of Relational Cohesion**

**Well-Being and the Role of Relational Cohesion**

Additional information is available at the end of the chapter

Additional information is available at the end of the chapter

http://dx.doi.org/10.5772/intechopen.76427

Moonjoo Kim

Moonjoo Kim

**Abstract**

nizations and teams.

**1. Introduction**

cohesion, team leader, Korean firms

#### **The Effects of Authentic Leadership on Employees' Well-Being and the Role of Relational Cohesion The Effects of Authentic Leadership on Employees' Well-Being and the Role of Relational Cohesion**

DOI: 10.5772/intechopen.76427

#### Moonjoo Kim Moonjoo Kim

Additional information is available at the end of the chapter Additional information is available at the end of the chapter

http://dx.doi.org/10.5772/intechopen.76427

#### **Abstract**

Authentic leadership has recently become a matter of significant interest in the fields of politics, economics, society, and culture as well as leadership. This study examines the effects of authentic leadership on employees' well-being and determines whether relational cohesion can regulate the effects that occur between the two. In this regard, the study conducted empirical research with 950 employees of Korea's leading manufacturers, public enterprises, and financial firms. The results demonstrated that team leaders' authentic leadership increased employees' eudaimonic well-being but did not significantly affect hedonic well-being. However, when there was a high perception of relational cohesion that showed collaborative and integrated relationships with team members, the effects of authentic leadership on employees' well-being were significantly positive, thereby verifying the interaction effect between the two. In particular, this result stemmed from controlling the effects of transformational and ethical leadership, both of which represent conventional forms of leadership, and is thus significant. Finally, the study provided in-depth discussions on the implications of the research results for organizations and teams.

**Keywords:** authentic leadership, hedonic well-being, eudaimonic well-being, relational cohesion, team leader, Korean firms

#### **1. Introduction**

The concept of authentic leadership was introduced by various researchers and practitioners who perceived that there is a restriction to the market-oriented limitless competition paradigm. As conventional leadership theories came to lay too much stress on the eloquence, gestures, and skills of leaders in the 2000s, an increasing number of people thought of leadership

© 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2018 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

as a means to satisfy the selfish interests and desires of business owners and managers [1]. The bankruptcy of the massive energy firm Enron in the USA triggered severe criticism over finances, firms, and capital used without morality; it also emphasized the need for morality among chief executive officers (CEOs). Under the free market economy, firms only emphasized showy leadership skills to produce maximum financial results in a short period of time: they made the error of determining the success of a leader only in terms of financial success [2].

Based on the issues raised thus far, this study first verifies whether authentic leadership helps the positive health of employees by determining the effects of authentic leadership on hedonic and eudaimonic well-being among employees of manufacturers, financial firms, and public enterprises. In particular, this study expects to verify whether there is a pure effect of authentic leadership by controlling the effects of transformational leadership, which is known to be very effective, and ethical leadership, which is known to be conceptually similar to authentic leadership. Second, this study will verify the interaction effect with authentic leadership by examining whether relational cohesion among team members moderates the relationship between authentic leadership and employees' well-being. Finally, based on the results of the verifications, this study will provide theoretical and practical implications for actual workers of organizations by determining whether authentic leadership can be an alternative for conventional leadership.

The Effects of Authentic Leadership on Employees' Well-Being and the Role of Relational Cohesion

http://dx.doi.org/10.5772/intechopen.76427

195

Authentic leadership is "a pattern of leader behavior that draws upon and promotes both positive psychological capacities and a positive ethical climate, to foster greater self-awareness, an internalized moral perspective, balanced processing of information, and relational transparency on the part of leaders working with followers, fostering positive self-development" ([16], p. 94). Researchers present slightly different elements of authentic leadership; however, self-awareness and self-regulation are commonly provided by many researchers [4, 6, 17]. Self-awareness is realizing and clearly perceiving a leader's values, identity, and purposes [6, 9]. This is a concept that includes acting toward a true self based on the perception that one must know oneself and understand the relevant vision and belief [18]. Self-regulation is about conducting certain behaviors and regulating such behaviors to minimize the gap between the

In addition, relational transparency and balanced information processing between a leader and team members are viewed as constructs of authentic leadership. Relational transparency indicates that the leader can honestly show his/her ego to others including team members. In other words, the leader can open-mindedly talk about and reveal his/her negative aspects and shortcomings in addition to any positive aspects [16]. The way in which the leader, who is at a higher level in terms of the organizational hierarchy, reveals his/her weaknesses without constraint to team members and makes efforts to become closer in terms of relationships encourages the team members to trust the leader [16, 19]. Such trust ultimately contributes to building reliable and meaningful leader-member relationships [20]. Balanced information processing is objectively analyzing, reviewing, and processing related information in terms of the leader's decision-making. In other words, it indicates the ability of the leader to accept objections to his/her ideas and to accept criticisms of mistakes. In general, people have difficulty objectively analyzing or accepting criticisms and negative feedback about their weaknesses and faults. However, authentic leaders make efforts to accept such information, regardless of whether it decreases or increases self-esteem, as long as it is for the development of the organization and its members [4].

**2. Theoretical background**

**2.1. Authentic leadership and employees' well-being**

ideal self and the real ego established through self-awareness [4, 6].

Accordingly, researchers began to study the limitations of the existing forms of leadership [3–5]. They also showed interest in authentic leadership, whereby the leader is honest with himself/herself and strives to achieve goals based on genuine relationships with subordinates [6–8]. Authentic leadership indicates leadership that constantly practices self-awareness and self-regulation while exerting a positive influence on the leader, subordinates, and the organization [9]. In other words, authentic leaders perceive themselves in terms of an understanding of who they are by determining the advantages and disadvantages of their egos and making efforts to reduce the gap between their ideal egos and present egos through self-regulation. Unlike conventional leadership that affects performance by powerfully exerting authority over work and subordinates, leaders who are honest with themselves instead of others contribute more greatly to the long-term and short-term performance of organizations and teams.

Along with the changes in the leadership paradigm, another adjustment that modern organizations are facing is the expansion of the team-based system. This system began to expand in order to promote greater organizational performance and efficiency. It has now established its place in countless firms and become the most important unit for organizational performance. Korean firms are also actively using the team-based system to increase productivity, as in other countries. Further, the human resource (HR) system has changed to the extent that evaluation and reward are also based on teams. This approach places more stress on the leadership of the team leader who is the immediate supervisor of a team. The team leader's authentic leadership may have a significant effect on the attitudes and behaviors of team members. Accordingly, this study will analyze the effects of team leaders' authentic leadership on employees' well-being. Recently, an increasing amount of attention is paid to the well-being of employees within an organization, an approach that appears to produce good results [10]. Studies on performance have mostly focused on tangible and objective performance, such as hard performance [11]. Thus, the current study will consider employees' well-being, which can represent soft performance [12], as the key outcome variable, thereby determining the effects of team leaders' authentic leadership on hedonic and eudaimonic well-being. While hedonic well-being is intended to gain happiness by obtaining pleasure and avoiding pain, eudaimonic well-being seeks profound happiness and self-realization beyond present pleasure and satisfaction [5, 13, 14].

Furthermore, it is argued that relational cohesion among team members in a situation whereby a team's performance leads to an organization's performance may moderate the effects of authentic leadership on employees' well-being. Since task interdependence increases among team members and teamwork is important, the effects of relationships among team members may be significant alongside the leadership style of the team leader. Relational cohesion shows an awareness that integrated social entity should be maintained among people in terms of their relationships [15]; thus, it can be a driving force that leads to high performance.

Based on the issues raised thus far, this study first verifies whether authentic leadership helps the positive health of employees by determining the effects of authentic leadership on hedonic and eudaimonic well-being among employees of manufacturers, financial firms, and public enterprises. In particular, this study expects to verify whether there is a pure effect of authentic leadership by controlling the effects of transformational leadership, which is known to be very effective, and ethical leadership, which is known to be conceptually similar to authentic leadership. Second, this study will verify the interaction effect with authentic leadership by examining whether relational cohesion among team members moderates the relationship between authentic leadership and employees' well-being. Finally, based on the results of the verifications, this study will provide theoretical and practical implications for actual workers of organizations by determining whether authentic leadership can be an alternative for conventional leadership.
