The role of CEO transformational leadership and innovation climate in exploration and exploitation

Abstract

Purpose The purpose of this paper is to investigate the relationship among CEO transformational leadership, innovation climate and organizational innovation through exploration and exploitation. Design/methodology/approach A questionnaire, designed as a self-reported survey, was distributed to individuals working in teams in US-based corporations, with a collected sample size of 215 organizations. Findings Results show that CEO transformational leadership has a direct positive effect on organizational innovation and an indirect effect through innovation climate. CEO leadership is more impactful for exploitation, compared to innovation climate, which has more influence on exploration. Research limitations/implications This study is the first to integrate CEO transformational leadership and innovation climate with exploration and exploitation outcomes. A research limitation is that there is a higher percentage of female than male respondents and a lower of percentage of female CEOs in this study. A further limitation is self-report which can lead to common method bias. Practical implications The close connection among CEO transformational leadership, innovation climate and organizational innovation suggests that evaluating, supporting and training CEO transformational leadership becomes a vital activity for boards, investors and managers. If management wants to increase exploration, they should pay particular attention to creating a climate that is supportive of innovation. Organizations should recruit and train CEOs for transformational leadership and regularly assess climate to ensure innovation results. Originality/value The main contribution of this study is highlighting the role of innovation climate as a mediator between CEO transformational leadership and the outcome of organizational innovation which is measured by exploration and exploitation activities.

Dampak Kepemimpinan, Budaya Organisasi dan Perilaku Kerja Inovatif Terhadap Kinerja Pegawai Puskesmas

“…Temuan ini sejalan dengan penelitian sebelumnya yang menyatakan bahwa perilaku kerja yang inovatif memiliki pengaruh positif dan signifikan terhadap kinerja. [14][15][16][17][18] . Hal ini berarti bahwa semakin positif praktik inovasi karyawan, kinerja karyawan yang lebih baik.…”

How Transformational Leadership Fuels Employee’s Creative Performance Behaviors in the Workplace?

“…Employees creative efficacy can be aroused also by the fact that transformational leader facilitates employees in formulating and implementing their innovation plans and try to link them with organizational innovation strategies (Sattayaraksa & Boon-itt, 2016). A leader who exhibits TFL vitalizes and spur employee's willingness for exploration, fostering a learning climate and promoting employees risk-taking in the workplace (Zuraik & Kelly, 2018). Hence, drawing from TFL theory, this study takes a new look at how a supervisor with TFL behavior spurs employees creative Efficacy Beliefs of employees in the workplace.…”

“…TFL is among the most widely studied constructs (Bass & Steidlmeier, 1999;Jung et al, 1995) and attracting considerable widespread interest due to its fundamental qualities (Bass & Avolio, 1990;Bass, 2000) that broadening and elevating followers' confidence to perform beyond their expectations (Kang et al, 2015). For examples, TFL has been associated with different employee positive behaviors, such as innovation performance (Sattayaraksa & Boon-itt, 2016;Zuraik & Kelly, 2018), innovation behavior (Afsar et al, 2014),work engagement (Fernando & Caputi, 2012), creativity (Khalili, 2016),employee's entrepreneurial behavior (Afsar, Badir, Saeed, & Hafeez, 2016),followers 'attitudes (Castro, Mar, Periñan, & Casillas, 2008), Page147 knowledge-exchange behaviors (Castro et al, 2008). Although, within the framework of these important qualities that shape employees' attitudes, TFL is likely to become an important factor of creative Efficacy Beliefs and employee creative performance.…”

Strengthening Managerial Innovation Behavior in the SMEs

“…Despite the theoretical foundation that link TFL with different innovation outcomes, previous works have overlooked on the role of TFL on organizational innovation and individual-level innovation behavior, such as employee's creativity (Khalili, 2016;Jaiswal & Dhar, 2015), manager's innovation behavior (Kang, Solomon, & Choi, 2015), innovative work behavior (Afsar, Badir, & Bin Saeed, 2014), organizational culture (Jung et al, 1995), innovation climate (Zuraik & Kelly, 2018). However, the role of TFL at the top organizational level on the managerial innovation behavior still need more studies.…”

“…To maintain its competitiveness and sustainability in today's fast-paced changing and highly aggressive business condition, organizations need to settle new efforts into innovativeness (Khalili, 2016). Jaiswal & Dhar, (2015); Zuraik & Kelly, (2018) added that organizational managers need to address today's conglomerate customer disputes with new and creative solutions to keep pace with changing market demands. In this view, Henk, Volberda, Van Den Bosch, & Heij, (2013), suggested managerial innovation as an organizational internal change agent.…”