Bending Without Breaking: How Cognitive Flexibility Converts Despotic Strain into Creative Response

Purpose—Despotic leadership imposes strict control and punitive authority, often draining employees’ psychological resources. Yet, employees do not respond uniformly. Drawing on Conservation of Resources (COR) theory, we test how cognitive flexibility and self-regulation difficulty explain creative responses, and how value congruence conditions these effects. Design/Methodology/Approach—We conducted a multi-wave, multi-source survey in Pakistan’s service sector, followed by a controlled 2×2 factorial designed study. Findings—Despotic leadership reduced creativity directly (β = −.27 “contrary to our prediction”) but enhanced it indirectly through cognitive flexibility (effect = .080). Self-regulation difficulty increased under despotic leadership (β = .312), and the indirect effect was also not significant. The interaction between despotic leadership and value congruence was significant for cognitive flexibility (β = .18) but not for self-regulation difficulty. The results of Study 2 were consistent. Practical Implications and Limitations—Organizations need to invest in training to help employees learn how to be flexible and maintain adaptive thinking under pressure. An organization can monitor self-regulation, as prolonged exposure to despotism might drain resources. Strengthening value alignment can buffer this strain and sustain creativity. However, the study relied on data from Pakistan and partly self-reported measures; future work should validate these findings in other contexts with multi-source data and longitudinal data. Originality/Value—This research integrates destructive leadership and creativity literatures, showing that under specific relational and cognitive conditions, employees can transform adverse leadership contexts into opportunities for creative adaptation.