We expand the research on authentic leadership by examining its impact on external stakeholders in the context of a crisis. Using signaling theory as our theoretical perspective, we examine the incremental impact of authentic leadership on trust, organizational advocacy and the decision to invest in an organization, over and above that of leader ability.
We conducted a scenario-based online study (2 × 2 factorial design) with 221 working adults to explore these relationships.
Support was found for all three hypotheses. This includes the direct effect of authentic leadership and the three outcomes of trust, organizational advocacy and decision to invest after controlling for the impact of leader ability in each hypothesis.
We contribute to the research literature on authentic leadership by examining the impact of authentic leadership on an external stakeholder in the context of a crisis. We also utilize signal theory as an underlying framework to explain the nature and scope of this relationship, with an emphasis on the crisis context.
