Is dark leadership always the devil? The effect of dark leadership on innovation in the hotel industry

Dark leadership (DL) is increasingly discussed in hospitality research, yet its implications for employee innovation (EI) remain theoretically ambiguous. Rather than assuming that DL uniformly suppresses innovation, this study develops a dual-path stress appraisal model to explain how DL is associated with both challenge stress (CS) and hindrance stress (HS), which have opposing associations with EI. Drawing primarily on the challenge-hindrance stress framework, and supported by social exchange theory and the resource-based view, we further examine psychological capital (PsyCap) as a boundary condition that shapes these appraisal processes. Cross-sectional survey data from 385 employees working in hotels and accommodation businesses in China's Yangtze River Delta were analyzed using structural equation modeling, bootstrapped tests of indirect effects, and interaction analyses. DL was positively associated with both CS and HS and negatively associated with EI. CS was positively associated with EI, whereas HS was negatively associated with EI, indicating two competing stress-appraisal pathways. PsyCap strengthened the DL-CS relationship and weakened the DL-HS relationship, but did not significantly moderate the DL-EI relationship. These findings refine the assumption that DL is purely detrimental by showing that its innovation-related associations depend partly on how employees appraise DL-related demands. For hotel managers, the study suggests that reducing destructive leadership remains essential, while stress-appraisal management and PsyCap development may help employees sustain innovation under demanding service conditions.