Navigating power dynamics: the role of political skill in fostering employee creativity

Abstract

This study investigates how employees' political skill fosters creativity through high-quality leader–member exchange (LMX) and whether performance-based LMX differentiation strengthens this relational process. In doing so, it addresses the limited understanding of the relational mechanisms and contextual conditions underlying the relationship between political skill and employee creativity. Drawing on social exchange theory and role differentiation theory, we analyzed matched supervisor–subordinate data from 247 employees nested within 50 teams in a Sino-Japanese joint venture in Taiwan using hierarchical linear modeling. The results showed that employees' political skill fostered creativity indirectly through high-quality LMX, with LMX fully mediating this relationship. Furthermore, performance-based LMX differentiation strengthened both the positive relationship between LMX and employee creativity and the conditional indirect effect of political skill on creativity through LMX. These findings highlight the importance of merit-based relationship management in fostering employee creativity. This study advances the HRM and organizational behavior literature in three ways. First, it explains how political skill fosters employee creativity through relational exchange processes, extending political skill research beyond direct performance effects. Second, it identifies performance-based LMX differentiation as a critical team-level boundary condition that determines when high-quality exchange relationships are most conducive to employee creativity. Third, by examining a Sino-Japanese joint venture in Taiwan, the study provides evidence from an underexplored Asian organizational context, extending the generalizability of political skill and LMX research beyond the predominantly Western contexts represented in the existing literature. These findings also highlight the importance of developing employees' political skill and implementing merit-based relationship management practices to foster employee creativity.