Abstract
INTRODUCTION: Managers assume a pivotal role during periods of organizational change, yet there exists a notable gap in our understanding of how their emotional exhaustion may impact their capacity to generate readiness to change within their teams. Grounded in the conservation of resources theory (COR), this study explores the crossover effect of managers' emotional exhaustion on team readiness to change. We expect this to occur through higher levels of laissez-faire leadership, which impacts the teams' psychological safety. METHODOLOGY: Data was gathered within a Canadian governmental organization undergoing two significant changes-cultural change and digitalization-with a specific focus on leadership as a pivotal factor in preparing teams for change. Employing surveys from 372 team members and 62 managers affected by this change, we conducted path analysis to empirically test the proposed model across 74 teams and their respective managers. RESULTS: Managers' emotional exhaustion has a negative indirect effect on team readiness to change. The double mediation pathway implies a positive relationship on laissez-faire leadership, which hinders psychological safety. In turn, psychological safety hampers team readiness to change. CONCLUSION: Managers must invest significant resources to fulfill their roles and responsibilities during strategic change. Those who feel exhausted during change may look for ways to protect some of their resources by reducing the time and energy they invest leading their team. This self-preserving resource strategy has detrimental consequences on teams' effectiveness during change due to an indirect crossover effect that affects the levels of psychological safety on the team.