Navigating the innovation dilemma: the paradox of leader’s self-confidence in conflict management

Purpose This study aims to investigate the circumstances where the positive influences of leader’s self-confidence are weakened in situations of conflict management (CM) arising due to innovation implementation. Specifically, this study tests the moderating influence of financial slack, internal opposition posturing and performance feedback on the relationship between self-confidence and conflict management styles (CMS). The findings are not complete. Design/methodology/approach This experimental study was conducted in two stages: In Stage 1, the authors studied moderating effects of financial slack (sound/unsound) and internal opposition posture (encouraging/ discouraging) on the relationship between leader’s self-confidence and CMS, namely, dominating, integrating and avoiding. In Stage 2, the authors studied the moderating effect of performance feedback (success/failure) on the relationship between leader’s self-confidence and three CMS. Data were collected from 268 senior-level Indian managers in Stage 1, out of which 235 managers also responded in Stage 2. These participants assumed the positions of chief executive officers (CEOs) within major Indian manufacturer specializing in electrical components, enabling us to empirically test the proposed model. Furthermore, a qualitative analysis of 10 semistructured interviews with Indian CEOs were conducted to enrich the discussion of the results. Findings Leader’s self-confidence determined the three CMS with highly self-confident leaders displaying irrational behavior in persisting with innovation through dominating style. Internal opposition posture and performance feedback exerted main effects on dominating style. Research limitations/implications This study supports behavioral decision theory of firm and escalation of commitment theory. Practical implications This study underscores the need for personality and self-awareness training amongst senior managers to mitigate irrational behavior due to excessive self-confidence and enhanced effective CM. Originality/value This study identifies a crucial boundary condition where high self-confidence in innovation implementation may lead to irrational behavior and ineffective CM.