The Hidden Cost of Empowerment: How Differentiated Empowering Leadership Influences Knowledge Hiding Among Generation MZ Employees?

In today’s dynamic business environment, organizations increasingly adopt empowering leadership to foster autonomy and flexibility. However, differentiated empowering leadership (DEL), which distributes authority unequally among employees, may inadvertently lead to negative consequences. This study examines the impact of DEL on knowledge hiding among Generation MZ employees, emphasizing the mediating role of knowledge-based psychological ownership and the moderating effect of task interdependence. Drawing on conservation of resources (COR) theory, we argue that employees who perceive an unfair distribution of authority may develop a defensive ownership of their knowledge, leading them to engage in knowledge hiding as a protective mechanism. Utilizing survey data from 393 employees across 94 teams in 12 Chinese firms, we employed hierarchical linear modeling (HLM) to test our hypotheses. The results indicate that DEL significantly increases knowledge hiding through heightened psychological ownership of knowledge. Additionally, task interdependence moderates this relationship, such that employees in highly interdependent tasks exhibit reduced tendencies to withhold knowledge. This study contributes to leadership and management literature by demonstrating how the perception of unequal empowerment influences employee behaviors. It highlights the paradoxical effect of psychological ownership, which, while traditionally associated with positive outcomes, can also drive detrimental behaviors like knowledge hiding. Furthermore, the study underscores the role of task interdependence as a mitigating factor, suggesting that fostering collaborative work environments can alleviate the adverse effects of DEL.