Although studies have shown that inflated self-perceptions of transformational leadership behavior negatively affect leader performance insight into the underlying processes explaining this relationship is lacking. The current study addresses this gap by identifying vertical conflict between leaders and subordinates as one such underlying process. Using a sample of 52 leaders supervising 259 subordinates it was found that leader self-enhancement of transformational leadership behavior is significantly and positively related to vertical conflict about both task and relationship issues. Results further indicate that vertical task conflict rather than vertical relationship conflict mediates the negative relationship between leader self-enhancement and leader performance.
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