Inclusive leadership and team climate: the role of team power distance and trust in leadership

This study aims to examine the direct effect of inclusive leadership on team climate in the context of small manufacturing firms. Specifically, this study seeks to advance extant studies by focusing on the role of team power distance and trust in leadership in moderating the relationship between inclusive leadership and team climate. Several studies have addressed the impact of leadership, one of the major investigated research areas in organisational behaviour and its pertinent outcomes such as team performance, motivation and job performance (Eisenbeiss et al., 2008; Kinnunen et al., 2016). Moreover, studies examining the impact of leadership on team climate have increased substantially (see Kinnunen et al., 2016; Sharma and Bhatnagar, 2017; Xue et al., 2011).

According to Kinnunen et al. (2016), team climate refers to “an individual's perceptions of his/her proximal work environment” (p. 332) that impact the behaviour of team members in the workgroup (Xue et al., 2011). Leadership and climate are interwoven as leaders are regarded as key drivers of team climate (Chiu et al., 2021). A significant characteristic of these extant studies has been the focus on transformational leadership style to examine the effects on team climate (Kinnunen et al., 2016). In contrast, less is known about the relevance of inclusive leadership behaviours, such as openness, availability, accessibility, fairness and equality and encouraging diverse contributions (Nembhard and Edmondson, 2006; Randel et al., 2018; Ye et al., 2019), which are crucial for team climate. Inclusive leadership has some forms of comparison with transformational leadership; however, inclusive leadership is a distinct and participative form of leadership that is directly conducive to team climate. Furthermore, transformational leadership and other leadership styles differ from inclusive leadership because of the lack of focus on inclusion and diversity issues, minimising uneven power dynamics among leaders and team members, fairness and shared decision-making (Jiang et al., 2022; Randel et al., 2018). In addition, inclusive leadership facilitates an inclusive climate when team members are valued for their contributions to the work tasks (Ashikali et al., 2021). Also, the capabilities of leaders to ensure that their workgroup feel a sense of inclusion to contribute to the decision-making process foster belongingness and uniqueness among members of the workgroup (Randel et al., 2018).

Studies show team members' reaction to leadership behaviours relies on a favourable team climate (Ali et al., 2022; Eisenbeiss et al., 2008). In addition, teams with low cooperation and participation bring about an inadequate team climate that restricts the capacity of a team leader to recognise and create important goals (Ali et al., 2022). Team climate is particularly important in the manufacturing industry because employees with a strong perception of their work environment are fully committed to ensuring the delivery of high-quality products. The focus on addressing power dynamics concerns, supporting team members, building relationships, ensuring justice and equity and emphasis on shared decision-making has increased attention on inclusive leadership (Korkmaz et al., 2022; Nembhard and Edmondson, 2006; Randel et al., 2018). Also, there are relationships between inclusive leadership and employee outcomes (e.g. innovative work behaviour) (Javed et al., 2019a, b) and team outcomes (team innovation and team performance) (Mitchell et al., 2015; Ye et al., 2019). Since employees' attributes influence team climate and drive performance in the work environment (Sun et al., 2014), it is expected that inclusive leadership is likely to facilitate team climate at the team level.

In addition, the relationship between inclusive leaders and their followers is likely to be influenced by social exchanges (Choi et al., 2015; Korkmaz et al., 2022; Morinaga et al., 2023). Previous studies on inclusion and inclusive leadership have utilised the social exchange theory (SET) to examine the impact of inclusion and its importance for individuals, groups and organisations (Shore et al., 2011; Xiaotao et al., 2018). According to Korkmaz et al. (2022), the phenomenon of reciprocity especially in showing appreciation explains the effectiveness of inclusive leadership. SET is a generally established theory in inclusive leadership research because of reciprocal exchanges between leaders and followers and the aspect of expressing appreciation (Aboramadan et al., 2022; Ahmed et al., 2020; Korkmaz et al., 2022). For instance, when team members are aware that their leaders value and appreciate their contributions to the team and organisation, especially when inclusive leadership behaviours of openness, accessibility, availability and involvement in decision-making are exhibited, this manifests positive social exchange, and team members reciprocate the goodwill (Byrd, 2022; Javed et al., 2019a, b).

Furthermore, the relationship between inclusive leadership and team climate, and the moderating effects need to be investigated. Team members' perceptions of the effectiveness of inclusive leadership may be affected by trust in leadership and cultural values such as team power distance. Hence, the need to examine the effectiveness of an inclusive leadership style in a different cultural context (Ye et al., 2019). The study demonstrates that team power distance and trust in leadership can explain the effectiveness of inclusive leadership on team climate. Interpersonal relationships are based on trust; hence, trust is pivotal for leadership effectiveness in thriving organisations (Siyal, 2023). Previous research has examined the moderation effects of trust in leadership on different leadership styles and employee and team outcomes (Chan and Mak, 2014; Gu et al., 2018; Ötken and Cenkci, 2012; Siyal, 2023; Siyal et al., 2023; Zhang et al., 2021; Zhou et al., 2022). For instance, results from a study by Siyal (2023) found that trust in leader strengthened the direct relationship between inclusive leadership and work engagement. Siyal et al. (2023) used a sample of 410 leaders-employees in the hospitality industry in China, and the results indicated that high trust in leadership strengthened the direct relationship with inclusive leadership, work engagement and psychological empowerment. Further, the research findings from Ötken and Cenkci (2012) revealed the moderating effect of trust in leadership on the relationship between paternalistic leadership and ethical climate. Siyal (2023) suggests examining the moderating role of trust in leadership on inclusive leadership and its outcomes to promote high-quality relationships between leaders and subordinates. Hence, this research indicates that trust in leadership can strengthen the relationship between inclusive leadership and team climate.

Likewise, the literature on the influence of leadership on employee and team outcomes has demonstrated the moderating role of power distance (Ahmad and Gao, 2018; Du et al., 2022; Hu et al., 2018; Kirkman et al., 2009; Liu and Liao, 2013; Wang et al., 2022; Vuong and Hieu, 2023; Yang et al., 2017). Power distance as a cultural value concept can be instrumental to how subordinates react to their leaders (Kirkman et al., 2009). Nigeria is a country that tolerates the social stratification of power and has a high-power distance culture (Olasina and Mutula, 2015; Oruh and Dibia, 2020). Furthermore, there is a strong emphasis on groups and upholding trust in the interaction between leaders and subordinates in Nigeria. Previous studies have investigated the moderating effect of team power distance and found that team power distance moderates the relationship between servant leadership and team efficacy (Yang et al., 2017). Yang et al.’s (2017) study indicates that a large power distance can reduce the positive relationship between servant leadership and team efficacy, thus lessening the interactions between leaders and team members. Ahmad and Gao (2018) study conducted on the banking sector in Pakistan found that power distance orientation moderated the relationship between ethical leadership and psychological empowerment, and that the relationship is strengthened for subordinates with low-power distance orientation. Additionally, Vuong and Hieu (2023) study of commercial banks in Vietnam revealed that power distance orientation negatively moderated the relationship between empowering leadership, knowledge sharing and innovative work behaviour. Hence, examining the moderating role of team power distance on the relationship between inclusive leadership and team climate is worthwhile. Considering the above, the study proposes that team power distance can strengthen the relationship between inclusive leadership and team climate. Therefore, based on the theoretical foundation of SET, this study is among the first to investigate the moderating role of team power distance and trust in leadership in the relationship between inclusive leadership and team climate.

To respond to the research gap on the role of inclusive leadership, this current study addresses the following research questions: How does inclusive leadership influence team climate? And what effect does team power distance and trust in leadership have on the relationship between inclusive leadership and team climate? This study's research questions originate from the need to acknowledge that inclusive leadership is a promising leadership style while at the same time seeking to better understand the team processes that emerge from leadership and lead to an effective team climate. This research responds to the recent call by Chiu et al. (2021) to investigate the pivotal leadership style that can better facilitate team climate because the effectiveness of transformational leadership might be lessened for the team climate with a productivity or manufacturing priority.

Using a team-level survey (individuals nested in 59 teams) among 247 employees from small manufacturing firms in Nigeria, this present study makes several contributions to the inclusive leadership literature. First, by drifting away from the scholastic routine of exploring transformational leadership as a dominant leadership style and its effects on team climate and having as a focal point the role of inclusive leadership on team climate, this present study contributes to advancing extant studies on the relationship between leadership and team climate. Second, the study confirms that inclusive leadership can predict team climate, thus providing further evidence for the effectiveness of inclusive leadership on team outcomes (Jia et al., 2022; Ye et al., 2019). By drawing on SET and introducing team power distance and trust in leadership as moderators in the model, this study addresses the pertinent question of how inclusive leadership is of more importance to organisations. From a research perspective, this study reinforces existing research on inclusive leadership on the relevance of these moderators, that can better facilitate our understanding of how these team-level processes lead to an effective team climate. Third, from a practice perspective, this study provides insights for organisational managers about inclusive leadership behaviours which clearly indicate that innovative ideas are welcomed and recognised, which would help establish a supportive team climate favourably disposed towards creative activities.

The paper is organised as follows: First, the review of the literature and discussion of the theoretical background. Second, the study hypothesises the impact of inclusive leadership on team climate and the role of team power distance and trust in leadership in moderating the relationship between inclusive leadership and team climate. Third, the study discusses the research methods, including data collection, measurement and analysis. Finally, the paper ends with theoretical and practical implications, limitations and recommendations for future research and conclusion.

The norm of reciprocity determines SET (Fan et al., 2021), which is regarded as an influential conceptual perspective across several disciplines, e.g. management, social psychology, sociology and anthropology (Cropanzano and Mitchell, 2005; Cropanzano et al., 2017). SET is a theoretical foundation which helps to understand the importance of inclusive leadership at the individual, team and organisational level (Choi et al., 2015; Qi and Liu, 2017; Xiaotao et al., 2018). Scholars have asserted that social interrelationships between leaders and employees are portrayed by long periods of mutual commitment and reciprocity (Fan et al., 2021). Furthermore, there has been an increase in the number of empirical studies on how inclusive leadership prompts social exchange activities with employees (Aboramadan et al., 2022).

According to SET, the good treatment exhibited by supervisors towards subordinates creates an obligation to return the goodwill (Yasin et al., 2023). Blau (1964) defined SET as the “voluntary actions of individuals that are motivated by the returns they are expected to bring and typically do in fact bring from others” (p. 91). SET underscores the unrestricted beneficial exchange between organisations and employees with the optimism that favourable treatment will be reciprocated (Javaid et al., 2023; Gould-Williams and Davies, 2005). Leaders and their employees engage in exchange activities as leaders ensure that suitable measures are in place to guide their employees to act in accordance with the job regulations, and employees gain satisfaction by conforming to the favoured leadership style (Yuan et al., 2022). When leaders base their social relationships with employees on mutual trust and motivation, employees reciprocate the actions of their leaders by being committed to the organisation and delivering its objectives (Ma and Tang, 2022). According to Gould-Williams and Davies (2005), trust is essential in developing social exchange relationships between two or more persons to entrench reciprocity and increasing the “positive work attitudes” of employees and make them desirous to remain with the organisation. Gould-Williams and Davies (2005) emphasised that the absence of trust could lead to flawed outcomes such as demotivation, nonchalance, negativity and pessimism between a group of people.

The supportive environment created by inclusive leaders to appreciate employees' contributions to the workgroup demonstrates that a reciprocal relationship at the team level will be distinct according to the diversity of team members. Extant research has affirmed the relevance of SET as a theoretical framework to explain the positive impact of inclusive leadership and team creativity (Ma and Tang, 2022). Hence, SET constitutes the theoretical foundation of this study.

Leadership and team climate have been examined in previous studies, and organisational leadership has been suggested as an important element that influences the perception of climate in organisations (Gil et al., 2005). Anderson and West (1998) defined team climate using the following four factor model: vision, participative safety, task orientation and support for innovation. Vision refers to work groups having plain and attainable objectives that they focus on. Participative safety refers to active participation in work group relationships and interactions in a nonthreatening climate. Task orientation refers to a total commitment to excellence in task performance, and support for innovation refers to the “expectation, approval and practical support of attempts to introduce new and improved ways of doing things in the work environment” (West, 1990, p. 38). Based on the distinctive influence of organisational leaders, team members can be helped to have an explicit understanding of team climate (Sun et al., 2014). Since inclusive leaders maintain a good relationship with their team members, they are available to involve team members in decision-making provide the avenue for team autonomy, they empower their employees to commit to the task and influence team climate. Leader behaviours help to perpetuate a positive organisational work climate and “a positive climate is reinforced as followers begin to adopt the organisation's values, internalizing them as their own” (Kinnunen et al., 2016, p. 333).

Inclusive leadership, introduced by Nembhard and Edmondson (2006, p. 947), refers to “words and deeds exhibited by a leader or leaders that indicate an invitation and appreciation for others' contributions.” Inclusive leadership is distinct from other leadership styles notably, transformational leadership (Ashikali et al., 2021; Ye et al., 2019) because inclusive leaders display openness, accessibility and availability in their relationship with their subordinates (Jia et al., 2022; Ye et al., 2019). Moreover, management scholars suggest that inclusive leadership, compared to other leadership styles, promotes diverse contributions and employees' perceptions of belongingness (Al-Atwi and Al-Hassani, 2021; Kuknor and Bhattacharya, 2022; Randel et al., 2018; Shore and Chung, 2022). The positive outcomes of inclusive leadership have been discussed in previous studies, including team innovation (Ye et al., 2019), team creativity (Jia et al., 2022) and innovative work behaviour (Javed et al., 2019a, b). Based on SET (Blau, 1964), inclusive leadership is closely associated with reciprocity. The norm of reciprocity directs the social exchange process whereby an individual is obligated to repay the goodwill received from another (Emerson, 1976). Therefore, reciprocity can be an important process to explain the effectiveness of inclusive leadership on team climate. Thereafter, Carmeli et al. (2010) contend that inclusive leaders display the attributes of openness, availability and accessibility in their interactions with followers. Hence, inclusive leadership will facilitate team climate based on the key features of inclusive leadership.

The seminal work of Blau (1964) on exchange and power in social life has set the stage for what has metamorphosed into an influential theory on social exchange. Blau's early attempts provided the theoretical base for understanding social exchange and social processes at different organisational levels. The premise of SET is that employees are desirous of their contribution to the team, they increase their endeavour due to the fair treatment they receive from their leaders and reveal their usefulness as to why they merit the status of inclusion in the decision-making of the team (Xiaotao et al., 2018). When employees are treated fairly by their leaders in the workplace, and their interactions are based on mutual trust, they reciprocate the good favour in the future by engaging in actions or behaviours that will improve their performance (Ahmed et al., 2020; Lee, 2022; Le and Nguyen, 2023; Sürücü et al., 2023; Wu and Lee, 2017).

Additionally, inclusive leadership is invaluable in fostering belongingness and uniqueness in the workplace and recognises the differences in opinions of team members in a workgroup and encourages distinct contributions of team members and the exchange of diverse ideas (Ashikali et al., 2021; Randel et al., 2018). Also, employees' engagement with the organisation and their immediate supervisors generates a strong recognition with the team, positive perceptions of team leaders, reciprocity and mutual trust. Therefore, taken together, the following hypothesis is proposed:

Power distance is a cultural value concept because the imbalance of status, power and authority is an intrinsic part of the organisational environment (Cole et al., 2013). Power distance refers to the extent to which individuals may differ in accepting the legitimacy of unequal distribution of power (Cole et al., 2013; Hofstede, 2001; Hu and Judge, 2017). The concept of power distance by Hofstede (1980) focuses on the societal level (Hu et al., 2018). However, studies examining power distance have been tested at other levels of analysis, such as individual and teams (Cole et al., 2013; Hu et al., 2018; Liu et al., 2018). Paulus et al. (2005) emphasised that in low power distance teams, individuals expect that inequalities of power distribution should be reduced when subordinates are consulted by their superiors, whereas, in high-power distance teams, power inequalities between superiors and subordinates are expected and necessary.

Team power distance has been defined as shared preferences of team members “regarding the degree to which their leader's directives should be respected and shown deference” (Cole et al., p. 963). Team power distance does not elucidate authoritative or submissive behaviours; instead, it focuses on the essential perceptions of leaders' behaviours and the reactions of employees or subordinates (Cole et al., 2013; Hu and Judge, 2017). Additionally, when team members value power distance, there will be an increase in the power distance of the team (Liu et al., 2018). According to Hu and Judge (2017), there is an increased emphasis on leader agency in teams with high-power distance as they envisage their leaders to issue explicit instructions to them, whereas teams with low team power distance display little agentic inclinations as they would rather have leaders collaborate with them, involve them in decision-making and power sharing.

This study contends that team power distance orientation may moderate the relationship between inclusive leadership and team climate. Paulus et al. (2005) argued that low-power distance during team relationships encourages trust and shared decision-making and eradicates conflicts due to misunderstanding, while high-power distance in teams results in unresolved conflicts. SET was employed to further explain how inclusive leaders relate with their subordinates to facilitate team climate. First, inclusive leaders create an open atmosphere for the exchange of ideas in work teams which brings about confidence and autonomy in work tasks. Second, high-power distance team leaders are prone to engaging in autocratic behaviours, which reduces communication in the team, intolerance for disagreement and criticism from subordinates, which may be seen as disobedience. Third, high-power distance team leaders feel that their subordinates are obliged to readily act in accordance with their instructions, which will not create an avenue for participation in decision-making (Cole et al., 2013), thus weakening social exchange relationships. On the other hand, low-power distance team leaders encourage participation in decision-making from their team members and ensure fair treatment of every team member. A high team power distance creates the impression that the team leader is dominant and expected to provide strong leadership (Hu et al., 2018). In this situation, inclusive leaders with a moderate outlook and who are keen to welcome contributions from team members might face uncertainty because team members may feel uneasy when they are approached to discuss work issues and propose work ideas.

Fourth, a high team power distance orientation may view inclusive leadership as not ideal, thus incapacitating the impact of inclusive leadership on team climate. Contrastingly, when work teams possess low team power distance orientation, there is a great desire to participate in power sharing. Therefore, the argument is that inclusive leaders are well-suited to engage team members with low team power distance because of their affinity for contributing to the team's task and initiating new ideas. Furthermore, inclusive leadership behaviours facilitate the social exchange process with a low power distance orientation. Taken together, the following hypothesis is proposed:

According to Ötken and Cenkci (2012), trust is a key area of research and has been recognised as a paramount feature of various leadership theories (e.g. transformational leadership and leader–member exchange) and is crucial for the goodwill of an organisation. Rousseau et al. (1998) provided a widely accepted definition of trust as “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behaviour of another” (p. 395).

Trust in leader depicts the reaction of subordinates on the motivation from their leader (Chan and Mak, 2014). Inclusive leadership acknowledges that treating others fairly prompts employees' trust in leadership. The reciprocal high-quality interaction between leaders and subordinates establishes a high level of trust that predicts subordinates' behaviour (Chan and Mak, 2014; Ötken and Cenkci, 2012; Yuan et al., 2022). Establishing an open atmosphere whereby inclusive leaders facilitate knowledge exchange and creative ideas fosters a team climate that supports leaders and develops high-quality mutual relationships with team members (Jia et al., 2022; Ye et al., 2019; Yuan et al., 2022). Moreover, trust enhances employees' productivity and devotion to their job (Zhou et al., 2022).

Drawing on SET, the impact of inclusive leadership on team climate can be described in which trust in leadership serves as a moderator (Ötken and Cenkci, 2012). The SET explains the processes in which inclusive leadership behaviours of openness, accessibility and availability create a positive perception in the minds of subordinates, which will eventually bring about an inclination to reciprocate the leader's goodwill (Aboramadan et al., 2022). First, inclusive leaders are attentive to the needs of their subordinates by encouraging them to share their knowledge and ideas. This strengthens knowledge sharing and signifies constant communication to create an environment that shapes the team's climate (Qi and Liu, 2017). Second, inclusive leaders emphasise fairness and justice by treating everyone equally and supporting their team members with essential resources and the provision of autonomy (Hirak et al., 2012). Third, inclusive leadership encourages team members to work for the workgroup's general interests, which facilitates team efficiency, diminishes workplace conflicts and promotes team climate (Qi and Liu, 2017). Fourth, team members have a strong reliance on their team leaders and are prepared to repay the benevolence by contributing in ways that are useful to the team (Javed et al., 2019a).

This study considers the moderating role of trust in leadership in the relationship between inclusive leadership and team climate because trust is an indispensable factor in the day-to-day activities of an organisation. When there is a high trust in leadership, this helps shape the perception of team climate in organisations. In summary, this study argues that leaders provide guidance for employees (Ötken and Cenkci, 2012) and interpersonal relationships are crucial to determining the extent of trust in an organisation. Therefore, based on the above arguments, the following hypothesis is proposed:

The conceptual model hypothesised in this study is shown in Figure 1.

The study samples were taken from multiple small manufacturing organisations in Nigeria, with industries widely distributed into textile, furniture, bakery and palm oil production firms. Data were collected from the team members and surveyed with measures of inclusive leadership, team climate, trust in leadership, team size and provided personal data. The team members received instructions about the purpose of the internet-based research via telephone and e-mail after they indicated interest in participating in the study. The participants were guaranteed anonymity and absolute confidentiality of the data obtained from them, and participation was voluntary. The survey was launched by giving the team members a weblink and a randomly generated team code. The generated code aims to match the team members' responses with their respective teams.

The research participants were considered because they are employees (team members) who work in functional areas such as marketing, finance, sales, administration and operations. Before the main data collection, a pilot study was conducted to check the satisfactory level of the survey questionnaire. The pilot questionnaire was discussed with a group Head of Marketing of a major company in Nigeria, in addition to three academics and two doctoral candidates from the management field. Following that, the survey questionnaire was tested among 27 team members and comments were received for improvements, which helped modify the research instrument.

A total of 400 employees nested in 59 teams were contacted to participate in the research using a link to Qualtrics. Finally, 247 team members completed the survey giving a response rate of 61.75%. Table 1 provides the demographic profile of the sample. Additionally, common method bias is recognised to be a source of risk since respondents completed the survey from each manufacturing firm. Therefore, as recommended by Podsakoff et al. (2003) that Harman's single factor test can be employed to address common method bias, the variables (inclusive leadership, team power distance, trust in leadership and team climate) were loaded onto one common factor using SPSS. Mehmood et al. (2022) suggest that the single factor accounted for should be lower than 50% of the variance. In this study, it emerged that the highest variance explained by a single factor was 34.3%, therefore showing no common method bias in the study's data.

Inclusive leadership was measured with a modified version of the nine items developed by Carmeli et al. (2010). Sample items included “My leader is open to hearing new ideas.” Items were rated on a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Cronbach's α of this scale was 0.934.

Team climate was measured with a modified version of fourteen-item Team Climate Inventory (TCI) developed and tested by Kivimaki and Elovainio (1999). Sample items included “My team's objectives are achievable.” Items were rated on a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Cronbach's α of this scale was 0.908.

Team power distance was measured with a modified six-item scale developed by Dorfman and Howell (1988). Sample items included “Leaders should make most decisions without consulting team members.” Items were rated on a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Cronbach's α of this scale was 0.834.

Trust in leadership was measured with a modified version of the five-item developed by Leung et al., (2001). Sample items included “I feel a strong loyalty to my team leader.” Items were rated on a 5-point Likert scale ranging from 1 (never) to 5 (always). Cronbach's α of this scale was 0.898.

Control variables: Team size was controlled by asking team members to provide information about the size of their team. Also, the study controlled for team tenure, i.e. the number of months/years team members have worked together.

Since the study variables were assessed by the team members, which focused on their shared perceptions, the individuals' perceptions of inclusive leadership, team power distance, trust in leadership and team climate were aggregated to the team level (Chan, 1998). To justify the appropriateness of aggregation of variables, the intraclass correlations (ICC1)—this explains the level of variance that is attributed to the team, and the reliability of the means (ICC2), and within-group agreement (r_wg) was calculated (Bliese, 2000; James et al., 1984; LeBreton and Senter, 2008). LeBreton and Senter (2008) recommended these values for r_wg(j): 0.00–0.30 (lack of agreement), 0.31–0.50 (weak agreement), 0.51–0.70 (moderate agreement), 0.71–0.91 (strong agreement) and 0.91–1.00 (very strong agreement). In this study, the following values were generated for ICC1, ICC2 and r_wg(j) for the variables: inclusive leadership (ICC1 = 0.16, ICC2 = 0.45, r_wg = 0.98), team power distance (ICC1 = 0.33, ICC2 = 0.67, r_wg = 0.83), trust in leadership (ICC1 = 0.30, ICC2 = 0.64, r_wg = 0.90) and team climate (ICC1 = 0.24, ICC2 = 0.57, r_wg = 0.82). These values originate from the small teams' size in the study sample (with an average team size of 4.2 members). Bliese (2000) recommended a value of 0.05 for ICC(1), whereas ICC2 is largely determined by the team size from each team (Ali et al., 2021; Bliese, 2000) and studies have indicated that ICC2 values above 0.25 are desirable (Ali et al., 2021), hence low to moderate ICC2 values, between-team variability (significant F test statistics), significant high value of within-group agreement (r_wg above 0.70) provide a strong justification for data aggregation (Ali et al., 2021; Shin et al., 2016). Taken together, the results support the aggregation of the measures of inclusive leadership, team power distance, trust in leadership and team climate to the team level.

Descriptive statistics, exploratory factor analysis (EFA) and reliability analysis were generated using IBM SPSS Statistics v. 28. Table 2 reports the means, standard deviations, reliabilities and correlations between the variables. Also, Table 3 shows the constructs reliability and validity.

The Cronbach alpha for the study measures ranges from 0.834 to 0.934, thus higher than 0.7 threshold. The factor loading of the measurement items had a minimum value of 0.6. Mahmud et al. (2020) suggest that higher factor loadings are necessary for the study's items. Also, factor loadings below 0.7 should be eliminated to increase composite reliability and average variance extracted (AVE) values (Hair et al., 2020). Hence, factor loadings less than 0.70 for items in team power distance and team climate respectively were removed. The composite reliability coefficients range from 0.888 to 0.945, which is above the recommended threshold of 0.60 according to Fornell and Larcker (1981). Additionally, the AVE ranges from 0.608 to 0.718, which is above the recommended threshold of 0.50 suggested by Fornell and Larcker (1981).

Moreover, a confirmatory factor analysis (CFA) was conducted using IBM AMOS v. 26 to test the model fit and determine the discriminant validity of the study's variables (inclusive leadership, team power distance, trust in leadership and team climate). Some of the indices used to assess how the measurement model fits the data include the Comparative Fit Index (CFI); Tucker–Lewis Index (TLI); Root Mean Square Error of Approximation (RMSEA) and Standardized Root Mean Squared Residual (SRMR). Values above 0.90 for CFI and TLI, and 0.05 or below for RMSEA, χ²/df less than 3 and 0.08 for SRMR indicate an acceptable fitting model (see Hu and Bentler, 1999). Moreover, the presence of the three indices indicates there is indeed an acceptable model fit.

The results, as reported showed that the four-factor model, which included inclusive leadership, power distance, trust in leadership and team climate, showed a good model fit to the data (χ² = 588.297, df = 291, χ²/df = 2.022, CFI = 0.93, TLI = 0.92, RMSEA = 0.06, SRMR = 0.05) than other alternative models such as the three-factor model (χ² = 955.145, df = 294, χ²/df = 3.249, CFI = 0.84, TLI = 0.82, RMSEA = 0.10, SRMR = 0.09); two-factor model (χ² = 1725.289; df = 298, χ²/df = 5.790, CFI = 0.65, TLI = 0.62, RMSEA = 0.14, SRMR = 0.13); or one-factor model (χ² = 2443.258; df = 299, χ²/df = 8.17, CFI = 0.48, TLI = 0.44, RMSEA = 0.17, SRMR = 0.16). Hence, the results demonstrate that there is satisfactory discriminant validity in the study model.

The variance inflation factor (VIF) was checked to detect any multicollinearity of variables issues. The VIF values are lower than 2.5. According to Hair et al. (2014), a VIF value above 4.0 indicates multicollinearity problems in the analysis. Therefore, it is established that there are no multicollinearity concerns and proceeded to test the study's major hypotheses. The direct and interaction effects were tested using SmartPLS 4.0 to examine the data via partial least square structural equation modelling (PLS-SEM). PLS-SEM is a unique and powerful technique commonly used in management and social science research (Gelaidan et al., 2023; Matzler et al., 2015; Mehmood et al., 2022). Nguyen et al. (2018) argued that PLS-SEM allows scholars to analyse the measurement (e.g. construct reliability and validity) and structural model (assess relationships among study constructs and test hypotheses) concurrently. Also, PLS-SEM permits the analysis of moderator and mediator variables. Soetanto et al. (2022) asserted that PLS-SEM is relevant for complex models and analysis of multiple hypotheses with a small sample size. Hence, the study model and sample present the need to utilise the PLS-SEM technique to avoid nonunique solutions.

As Table 4 indicates, Hypothesis 1 proposed that inclusive leadership has a positive and direct effect on team climate. After controlling for team tenure and team size, the findings show that inclusive leadership positively and significantly predicts team climate (β = 0.524, p = 0.000). Hence, hypothesis 1 is supported. As argued by Jia et al. (2022), inclusive leaders facilitate good interpersonal relationships with their subordinates and provide them with support mechanism to aid their productivity.

Hypothesis 2 and 3 proposed the moderating role of team power distance and trust in leadership on the relationship between inclusive leadership and team climate. In Table 4, the interaction terms were displayed and indicate that team power distance moderates the relationship between inclusive leadership and team climate (β = 0.230, p = 0.002). The results of the bootstrapping analysis indicate that the direct effect of inclusive leadership on team climate was positive and significant when team power distance orientation is low. Also, trust in leadership moderates the relationship between inclusive leadership and team climate (β = 0.144, p = 0.024). This demonstrates that the direct effect of inclusive leadership on team climate was positive and significant when trust in leadership is high.

Figure 2 depicts the role of team power distance in moderating the relationship between inclusive leadership and team climate using a simple slope analysis (Aiken and West, 1991). As shown in Figure 2, the interaction effect on team climate was stronger in low team power distance compared with high power team distance. Furthermore, Figure 3 displays the pattern of interaction of trust in leadership between inclusive leadership and team climate. The finding indicates that the interaction effect was stronger under high trust in leadership than under low trust in leadership. Thus, Hypotheses 2 and 3 are supported.

The aim of this current study is to develop a comprehensive understanding of how inclusive leadership influences team climate and the moderating role of team power distance and trust in leadership. Using data collected from small manufacturing industries in Nigeria—the largest economy in Africa, the findings establish that there is a direct and positive relationship between inclusive leadership and team climate, and the study also found support for the interactive effects of team power distance and trust in leadership on the inclusive leadership-team climate link. Considering the above, this research's theoretical and practical implications are provided below.

This study suggests several theoretical implications. First, this study enhances the inclusive leadership literature by incorporating inclusive leadership and team climate into a cohesive framework. Extant studies have examined the role of team climate in the workplace (teams) or organisation (Eisenbeiss et al., 2008; Kinnunen et al., 2016; Xue et al., 2011) while giving limited attention to inclusive leadership. These research findings empirically support the positive impact of inclusive leadership on team climate. Also, the study emphasised that inclusive leadership is a promising leadership style that helps organisational leaders foster team climate in organisations. Furthermore, by focusing on a sample of small manufacturing firms in Nigeria, the study findings substantiate the generality of the effectiveness of inclusive leadership (Ye et al., 2019) in the Nigerian context.

Second, the study findings contribute to the literature on inclusive leadership. Previous studies have focused on the relationship between the dominant leadership styles—transformational leadership on team climate (e.g. Cheng et al., 2016; Kinnunen et al., 2016; Sun et al., 2014), which hitherto had limited understanding in the leadership literature of an emerging relational leadership style conducive for team climate. This research extends Chiu et al.’s (2021) work in examining the leadership style that is better suited to facilitate team climate. The focus on inclusive leadership depicts a considerable boost to the literature by providing an enriching understanding of a distinctive leadership style that is beneficial for team climate. An inclusive leader supports individuals to fully contribute to the team, helps subordinates to share creative ideas and promotes inclusion among group members (Randel et al., 2018). This study extends extant knowledge on inclusive leadership by asserting that inclusive leadership can bolster the social exchange between leaders and employees in the organisation through team processes. Moreover, the team processes play a crucial role in promoting team climate. Based on SET, this study contributes to knowledge on this subject matter by examining the role of team power distance and trust in leadership towards inclusive leadership and team climate.

Third, this study has implications for understanding the influence of inclusive leadership. Inclusive leaders have a direct influence on team climate. Essentially, it is important that inclusive leaders foster the team climate to enable team members to unite in their perceptions of behaviours that are relevant to the team's work processes. This finding aligns with the recent viewpoint on the contextual influence of inclusive leadership at different levels of organisations (e.g. organisational climate) to encourage inclusion (Randel et al., 2018).

Fourth, the study reveals the moderating role of team power distance and trust in leadership, thus they demonstrably underscore the relevance of team processes to expound how inclusive leadership influences team climate. Even though existing studies have acknowledged several team processes (e.g. social identity) which are critical for better knowledge of team climate (Cheng et al., 2016; Xue et al., 2011), the mechanisms that can be applied by team leaders for climates are understudied (Chiu et al., 2021).

Fifth, this research provides additional understanding in theorising and testing the moderating role of team power distance and trust in leadership. Empirical studies on inclusive leadership in small manufacturing firms are limited. Following the studies of Hu et al. (2018) and Cole et al. (2013), the importance of team power distance on team members' relations with their leaders can determine organisational outcomes. Hence, team power distance is an important research context in organisations that deserves attention in the inclusive leadership literature. This study reveals the interesting empirical finding that team power distance is a relevant subject that strengthens the positive relationship between inclusive leadership and team climate. This finding is consistent with the results of Guo et al. (2022) that power distance moderates the relationship between inclusive leadership and employee voice behaviour. Thus, this finding contributes to inclusive leadership and team climate literature on the effect of team power distance in organisations. Also, consistent with other leadership theories, employees with trust in their leaders expect the support of their leaders in job demands for work fulfilment (Chan and Mak, 2014).

The study results present insights and practical implications. First, the findings suggest that inclusive leadership play a paramount role in understanding team climate among small manufacturing firms. Furthermore, the findings provide evidence that inclusive leadership should be of utmost importance for organisational leaders to engage with teams to promote openness, availability and accessibility to foster a climate for creativity and innovation. Specifically, this study suggests that the combination of inclusive leadership, team power distance and trust in leadership is essential to promoting team climate. Hence, it is recommended that organisational leaders should supervise teams with low power distance to lessen unfavourable consequences and encourage a positive team climate.

Second, organisations can create different assessment mechanisms, e.g. webinars, and inclusion training theatres, that focus on pertinent inclusive leadership matters. Organisations should choose competent managers with inclusive leadership attributes, such as openness, availability and accessibility, to monitor inclusion and effectiveness of inclusive leadership in the manufacturing industry. Training sessions on fostering belongingness and uniqueness among employees may also be applicable. Notably, organisations should emphasise the group assessment of inclusive leadership behaviours in the feedback, observation, performance data and benchmarks of leaders. Organisational leaders should exhibit inclusive leadership behaviours such as encouraging diverse contributions, ensuring justice and equity, and supporting their team members, therefore creating an environment which welcomes the expression of opinions (Randel et al., 2018).

Third, manufacturing businesses should endeavour to create an outstanding social exchange relationship to directly strengthen team climate, for instance, establishing an organisational culture that facilitates inclusion in diverse cultural contexts. This study reveals that employees working in the manufacturing firms were born in the 1980s and 1990s, constituting 91.9% of the survey respondents. These respondents are aware of the need to participate in shared decision-making to integrate the diverse viewpoints presented and feel a sense of inclusion in the team (Randel et al., 2018). Hence, leaders should improve the team's work by appreciating team members' uniqueness, ensuring participation in team deliberations and promoting trust in leadership within the team and organisation.

Lastly, this study has discerned that team members with low power distance orientation to inclusive leadership gravitate towards power sharing and participation in decision-making. This study reveals that inclusive leaders are best suited to engage with team members because of the open atmosphere to express their thoughts and the willingness to discuss work-related problems with their subordinates. Leaders should develop good interpersonal relationships with team members and welcome diverse approaches from them without the fear of retribution. This study suggests that a low team power distance orientation is crucial to enhancing social exchange relationships between inclusive leaders and team members.

The study has the following limitations, which provides direction for future research. First, cross-sectional multiple source data was collected from employees nested in teams using the survey approach and this may lead to common method bias. To reduce the impact of common method bias, future research is recommended to obtain data from team members and team leaders of the same team using longitudinal or experimental approaches to illustrate the causal effect of inclusive leadership and team climate.

Second, the study sample was restricted to small manufacturing industries (textile, furniture, bakery and palm oil production firms), which may suggest questions around generalisability of the study findings. Therefore, future research is recommended to examine the causal effects of the variables in large and medium manufacturing industries. Also, future studies could consider involving participants from diverse industries and organisational sizes to provide additional insights into inclusive leadership. Mahmud et al. (2020) suggested that there are several sectors in the manufacturing industry that have diverse features. Therefore, this study recommends that other sectors within the manufacturing industry could be considered to provide an understanding of the effect of inclusive leadership on team climate. Third, the research data were obtained from the sub-Saharan African context (Nigeria). The collectivistic culture in Nigeria means that employees tend to have high trust in their leaders. Sertel et al. (2022) argued that leadership attributes may differ depending on individuals, teams, cultures, organisations and countries. Hence organisational factors such as culture and policies can determine leadership effectiveness in organisations. Also, the variations of power distance across different cultures should be considered since the perception of power distance and trust in leadership may vary across different cultural contexts, which could impact upon the perception of inclusive leadership and team climate. Also, individuals may possess different personality traits and diverse experiences, such as the nature of tasks and the degree of interdependence among team members, while perceiving inclusive leadership behaviours. Future research is recommended to examine the potential impact of individual differences within the team context as regards power distance and trust in leadership on the relationship between inclusive leadership and team climate. Therefore, future studies may replicate the study's theoretical model in various sectors/industries in developed and developing countries contexts or emerging economies.

Lastly, the research on the influence of inclusive leadership on team climate was conducted at the team level. Other team-level factors, such as team voice behaviours, can be critical in examining the effect of inclusive leadership. Organisational-level factors (e.g. organisational culture) can be explored to better understand the effect of these processes on team climate. Therefore, future research could focus on team-level and organisational-level factors in the aforementioned relationships.

This study has as a focal point inclusive leader and the fundamental mechanisms that enhance team climate in the Nigerian context. Drawing on SET, the findings indicate that inclusive leadership can promote a strong team climate for employees, as progressive leadership interventions can be instrumental in achieving inclusion and diversity in organisations. Moreover, it underscores the essential role of team power distance and trust in leadership in this process. Finally, the study provides directions for future research to improve the understanding of team climate in developing/emerging market economies.

This research was supported by the author’s Lancaster University Management School Doctoral Studentship Award. The author also thanks Olufunmilola (Lola) Dada and Danny Soetanto for their guidance and supervision in writing this article.