The downside of transformational leadership when encouraging followers to network ☆ Marc H. Anderson a, ⁎, Peter Y.T. Sun b,1 a Iowa State University, Department of Management, College of Business, 2350 Gerdin Business Building, Ames, IA 50011-1350, USA b University of Waikato, Centre for Enterprise & Leadership, Waikato Management School, Hamilton 3240, New Zealand article info abstract Article history: Received 16 August 2014 Received in revised form 29 April 2015 Accepted 26 May 2015 Available online 20 June 2015 Handling Editor: Shelly Dionne Network scholars argue that one responsibility of leaders is to help their followers develop social capital. We suggest that one way leaders do this is by encouraging followers to engage in network- ing behavior. However, we argue that such encouragement is more effective when leaders are seen as less transformational, because followers are then less able to benefit from their leaders’ so- cial capital. We support our arguments with a study of 142 followers and their leaders. Our find- ings show that followers engage in greater networking behaviors when encouraged by their leaders to do so, but this association is moderated by leaders’ transformational leadership style such that it is stronger as transformational leadership behaviors decrease. We thus introduce an unrecognized cost of leaders’ transformational leadership behaviors. Our findings contribute to re- search on networking behavior by investigating the role of transformational leadership style, and suggest avenues for research linking social capital and leadership. © 2015 Elsevier Inc. All rights reserved. Keywords: Leader encouragement Transformational leadership Networking behavior Social capital Introduction The significant impact of social networks on individual performance within organizations is well-established (for reviews see Carpenter, Li, & Jiang, 2012; Kilduff & Brass, 2010). The size and configuration of employees' networks determines their social capital (Coleman, 1988)—defined as “the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit” (Nahapiet & Ghoshal, 1998, p. 243). Higher levels of social capital have been linked to a variety of benefits, including higher levels of career success (Seibert, Kraimer, & Liden, 2001) and entrepreneurial innovation (Miguèlez, Moreno, & Artìs, 2011). Given the recognized importance of social capital for individuals' performance and success, researchers have argued that individuals should be proactive in developing social capital (Adler & Kwon, 2002; Gabbay & Leenders, 2001). A primary means of developing social capital is through networking behavior, which is the ability of individuals to both develop and use diverse networks of people (Ferris et al., 2005). Given the recognized importance of social capital for individuals' performance and success, scholars have argued that leaders should help their followers develop their social capital (e.g., Balkundi & Kilduff, 2005). In their discussion of a network perspective on leadership, Balkundi and Kilduff (2005, p. 953) claim that “leader effectiveness involves building social capital that benefits individuals in the organization and extending the social networks of subordinates to facilitate career advancement.” They further argue that “One measure of leader effectiveness, therefore, is the success of the leader in promoting the social networks and leadership potential of subordinates” (p. 953). While we argue that a primary way leaders help their followers develop their social capital is The Leadership Quarterly 26 (2015) 790–801 ☆ Both authors contributed equally and authorship order is alphabetical. ⁎ Corresponding author. Tel.: +1 515 520 2217. E-mail addresses: mha@iastate.edu (M.H. Anderson), petersun@waikato.ac.nz (P.Y.T. Sun). 1 Tel.: +64 7 838 4283; fax: +64 7 838 4270. http://dx.doi.org/10.1016/j.leaqua.2015.05.002 1048-9843/© 2015 Elsevier Inc. All rights reserved. Contents lists available at ScienceDirect The Leadership Quarterly journal homepage: www.elsevier.com/locate/leaqua