Diabolical dictators or capable commanders? An investigation of the differential effects of autocratic leadership on team performance

Autocratic leader behavior is often seen as negative for team morale and performance. However, theories on social hierarchy suggest that autocratic leadership may also positively affect morale and performance through the creation of a psychologically appealing, hierarchically-ordered environment of predictability and security. We propose that autocratic leadership can foster team psychological safety when team members accept the hierarchy within the team. In contrast, when members challenge the hierarchy and engage in intrateam power struggles, autocratic leaders' centralizing power behaviors will clash with team members' competition for power and frustrate members, impairing psychological safety and performance. We find support for these ideas in a study of 60 retail outlets (225 employees and their managers) in the financial services industry. As expected, when team power struggles were low, autocratic leadership was positively related to team psychological safety, and thereby indirectly positively related to team performance. When team power struggles were high, autocratic leadership was negatively related to team psychological safety and thereby indirectly negatively related to team performance. These effects were also found when controlling for leader consideration.