Too close for creativity? How employee risk-taking shapes the LMX–creativity relationship in Asian businesses

Purpose This study examines the curvilinear relationship between Leader-Member Exchange (LMX), risk-taking and employee creativity within organizational settings. The research aims to explore how varying levels of LMX and risk-taking influence creativity among employees. Design/methodology/approach Data were collected from 312 employees and 74 managers across organizations in central Punjab, Pakistan. The study employed regression analyses to investigate the curvilinear effects of LMX on employee creativity, mediated by risk-taking behavior. Findings The results indicate that employee creativity reaches its peak at moderate levels of risk-taking. Additionally, LMX exhibits a curvilinear indirect effect on creativity through risk-taking. In high-LMX relationships, risk-taking negatively affects creativity, while in low-LMX relationships, the effect on creativity is insignificant. Practical implications These findings emphasize the importance of adopting a balanced approach to LMX and risk-taking in organizations. Managers should be mindful of how their relationships with employees influence risk-taking behavior and creativity, adjusting their leadership strategies to optimize creative outcomes. Originality/value This study provides new insights into the nuanced relationship between LMX, risk-taking and creativity. It highlights the conditions under which LMX can either enhance or hinder creativity, contributing to the ongoing discourse on leadership and innovation in organizational research.