Transformational Leadership and Innovative Behavior of Employees: History
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Contributor:
Hitmi Khalifa Alhitmi
,
Syed Haider Ali Shah
,
Rabia Kishwer
,
Nida Aman
,
Mochammad Fahlevi
,
Mohammed Aljuaid
,
Petra Heidler

There is a significant influence of transformational leadership (TL) on employee’s innovative work behavior (EIWB) mediated by both their employees’ intellectual agility (EIA) and employee’s voice (EV). These findings empower leaders to recognize their pivotal roles in nurturing innovation within their enterprises and crafting an optimal culture and climate conducive to innovative endeavors. Furthermore, this insight enables leaders to establish innovative environments that promote employees’ confident sharing of ideas and concepts. 

  • transformational leadership
  • employees’ innovative work behavior
  • employees’ intellectual agility
  • employee voice

1. Introduction

In today’s intense competition and rapid technological progress, innovation is pivotal [1][2]. Encouraging innovation among employees is considered a prime method to cultivate both innovation and organizational achievement [3][4]. In the realm of demanding knowledge-based work environments, the focus of researchers and practitioners has turned to the pivotal role that managers play as leaders in inspiring employees to engage in innovation. As a result, researchers have observed a growing interest in uncovering strategies for encouraging individual employees to exhibit creative behaviors through applying transformational leadership (TL) [4][5]. Researchers assert that in the rapidly evolving landscape of modern business, organizations striving for success must refrain from leaning on obsolete management theories [6]. Instead, they emphasize that impactful leadership is the foremost catalyst for driving meaningful and effective change [7][8].
Abundant evidence exists to demonstrate that leaders possess the capability to impact employee outcomes [9][10][11] significantly. In enhancing an individual’s creativity and innovation, scholars suggest that both their work environment and social factors play a substantial role in influencing these aspects [12]. Research on creativity indicates that among the most significant contextual factors shaping creativity are leadership and supervision [13]. Moreover, given the current competitive landscape that firms encounter, change-oriented leadership becomes imperative [14], which has the potential to cultivate employee innovation amid shifting circumstances [15]. However, how TL influences the employee’s innovative work behaviors (EIWB) remains insufficiently explored in research. Although scholars have examined the link between individual perceptions of TL and employees’ creativity, representing the initial stage of innovation [16][17], there has been limited focus on investigating the impact of TL on EIWB. Gaining a deeper comprehension of the mechanisms and processes by which TL influences EIWB demands a greater degree of theoretical accuracy [18].
Similarly, prospering and enduring in an increasingly knowledge-centered society based on the capacity to engage in the exploration and generation of novel inventions, manufacturing methodologies, knowledge dissemination, and corporate frameworks is also vital [19]. These competencies, called innovativeness, are considered essential assets that bridge a company’s intrinsic innovation capabilities with the outcomes stemming from the innovation process [7]. Innovativeness is also considered an intangible asset within human organizational capital expertise. Nurturing the growth of employees’ intellectual capacities empowers businesses to effectively convert knowledge into sought-after new product lines, processes, and services demanded by the market [20]. Multiple empirical studies have provided evidence that the ability to transform and take advantage of information enhances both innovative capacities and organizational achievement [21]. Therefore, enhancing innovation agility yields a positive impact on overall innovation in the organization. Furthermore, there needs to be more research in the existing literature that explores the relationship between TL and employee’s Intellectual Agility (EIA) concerning identifying innovative work opportunities.
Employee voice (EV) is characterized by the expression of employees’ opinions, thoughts, concerns, and ideas concerning various aspects of their jobs, to improve the working environment and the overall functioning of the organization [22]. It signifies an individual’s inclination to engage in active discussions about change and generate ideas. Voice pertains to behavior that emphasizes the articulation of positive challenges aimed at achieving progress rather than mere criticism [23]. EV has been acknowledged as a significant factor impacting creativity and innovation at individual, group, and organizational tiers [24]. The examination of EV in relation to TL holds relevance for small and medium enterprises (SMEs), given that the compact size and relational approach of these enterprises empower leadership to inspire and encourage employees to showcase innovative behaviors [25]. Examining EV in the context of TL remains pertinent for SMEs, as the intimate scale and relational nature of these businesses enable leaders to motivate and foster innovative behaviors among employees [25]. Researchers in organization development define EV as an individual’s expression aimed at problem-solving. Moreover, scholars view EV as the method through which employees can enhance an organization’s operations and tackle work-related issues that impede overall innovation and performance in SMEs [26][27].
TL serves as a catalyst, motivating employees to engage in decision-making and proactively undertake initiatives as creative ideas and deal with challenges that hinder organizational learning and innovation [28]. However, even though EV plays a pivotal role in fostering innovation across various organizational types, the concept continues to need more thorough theoretical exploration and comprehensive research within the context of SMEs [28][29]. Moreover, a scarcity of research exists concerning EVs within the context of developing countries.
The concept of innovation climate (IC) involves how employees interpret and understand reward policies, practices, procedures, support, and expectations [30]. It acts as a perceptual structure that empowers businesses and provides meaningful work environments [31]. IC is defined as the shared anticipation, perceptions, or endorsement of innovation as perceived by individuals. Further, without an IC in SMEs, employees lack the motivation, resources, supportive culture, and skills necessary to engage in EIWB. Establishing an environment that promotes and nurtures innovation is crucial for unlocking the creative potential of employees within SMEs [32]. IC is considered as an investment in resources. Further, it plays a role in facilitating the creation and application of novel ideas, ultimately leading to the development of personal resources [33]. When the organization promotes IC, employees tend to display a greater inclination toward enhancing the existing work environment through innovative means [34][35]. The study suggests that EV and EIA serve as a mediating factor between TL and EIWB. Moreover, contextual elements enhance the influence of EV and EIA on EIWB. In the presence of strong IC prevails within an organization, employees are more likely to receive encouragement and even rewards for their innovative ideas [31].

2. Transformational Leadership and Innovative Behavior of Employees

2.1. Definitions

2.1.1. Transformational Leadership (TL)

TL is characterized by five essential elements: vision, inspirational communication, supportive leadership, intellectual stimulation, and personal recognition, as outlined by Rafferty and Griffin [36]. Vision entails articulating an idealized future aligned with organizational values. Inspirational communication involves conveying positive and motivating messages about the organization, fostering motivation and confidence [36]. Supportive leadership includes demonstrating concern for followers and addressing their individual needs. Intellectual stimulation encompasses enhancing employees’ interest in and awareness of problems encouraging innovative problem-solving approaches [36]. Lastly, personal recognition entails acknowledging and rewarding efforts, such as praising accomplishments and acknowledging progress toward specific goals [36].

2.1.2. Employee’s Innovative Work Behavior (EIWB)

In the present study, the researcher emphasizes the significance of generating novel ideas as the fundamental starting point for innovation, aligning with Kanter’s [37] perspective. Within the SME sector, EIWB has emerged as a pivotal source of competitive advantage [38]. This behavior encompasses various activities aimed at identifying, refining, altering, embracing, and executing ideas, as highlighted by De Jong and Den Hartog [39]. It refers to the proactive initiative of employees who, after analyzing work-related challenges or solutions, apply their newfound ideas, ultimately leading to innovative outcomes, as suggested by Chen et al. [40]. To excel in today’s swiftly evolving landscape and enhance their operational performance, SME establishments must embrace EIWB, a necessity underscored by Hoang et al. [41]. This approach is essential for delivering superior services and ensuring sustained business growth.

2.1.3. Employee Voice (EV)

EV is defined as thoughts, concerns, and ideas that employees share regarding their job-related matters, aiming to improve the working environment and overall organizational functioning [22]. It signifies an individual’s inclination to engage in discussions about change and contribute novel ideas actively. More precisely, “voice” signifies behavior that emphasizes the expression of constructive challenges to facilitate progress rather than mere criticism [42].

2.1.4. Employee’s Intellectual Agility (EIA)

EIA is a facet of intellectual capital often considered a synonym for the wider concept of organizational agility. While organizational agility refers to the ability of firms to create new value by adjusting organizational strategies and resources [43][44], EIA is about creating an appropriate environment within organizations in which staff can invest their efforts in the formulation of responses to organizational challenges through the modification of existing structures and the creation of innovative strategies.
In this study, EIA involves establishing a conducive environment within organizations, enabling employees to channel their energy into developing responses to organizational challenges. This process involves modifying existing structures and devising innovative strategies. Furthermore, EIA represents a new aspect of human capital that significantly enhances a company’s innovativeness. It encompasses employees’ ability to adapt their thinking patterns, proactively acquire new knowledge, and generate distinctive solutions to cope with both present and future challenges [45].

2.1.5. Innovation Climate (IC)

IC can be characterized as the extent to which an organization’s values and norms emphasize innovation [46]. IC can be described as the shared expectations, perceptions, or encouragement for innovation as perceived by individuals. It represents an employee’s outlook on the procedures, policies, and behaviors that promote the creation and implementation of new ideas in the workplace [47].

2.2. Transformational Leadership (TL) and Employee’s Innovative Work Behavior (EIWB)

TL comprises five essential attributes, specifically visionary outlook, motivational communication, encouraging leadership, intellectual stimulation, and individual acknowledgment [36]. TL inspires followers through their visionary guidance and motivates them through delegating autonomy, acknowledging recognition, and encouraging them to think in alignment with the broader organizational goals [4][9][48]. TL engages both the organization and its members in critical and innovative thinking, playing a vital role in building positive change and innovation within the organizational context [28][49]. TL has been recognized as a strong organizational strategy for stimulating organizational innovation [50], employee behaviors, and performance beyond their roles [51]. Furthermore, TL molds followers’ sense of security in their work and presents an appealing vision for the future [52]. In such scenarios, followers may demonstrate a keen inclination to embrace novel approaches for accomplishing their tasks [53].
Innovation entails the creation, dissemination, and application of novel ideas to improve workplace tools and processes [54]. Distinguishing between innovation and creativity, creativity involves the generation of fresh and valuable ideas [55]. However, innovation is centered on execution rather than solely generating ideas [55]. It entails the deliberate introduction and application of novel and enhanced approaches to tasks and processes [56]. Hence, implementation constitutes an inherent component of innovation, serving to convert creativity into tangible actions or outcomes [23]. The process of developing new ideas as a fundamental element is regarded as the inception of innovation [37]. In the SMEs, EIWB has emerged as a crucial driver of competitive advantage [28]. For SMEs to deliver high-quality services and enhance their business performance, the adoption of EIWB is imperative to thrive in a rapidly evolving environment [28]. Drawing from the SET, TL engages followers in social exchange processes rooted in companionship and strong interpersonal trust. Therefore, employees who experience personalized care and support from TL exhibit a high dedication to generating, advocating for, and actualizing daily ideas aimed at elevating individual service levels.

2.3. The Mediating Role of Employee’s Intellectual Agility (EIA)

SMEs are frequently recognized as the primary catalysts for driving economic growth. Thriving and enduring within an increasingly knowledge-oriented society based on the capacity to actively engage in the exploration, generation, and experimentation of novel innovations, product lines, manufacturing methodologies, knowledge dissemination, and corporate frameworks [57]. These capabilities, often referred to as innovativeness, are esteemed as crucial assets that serve as the bridge connecting a firm’s innate innovation capacities with the results generated by the innovation process [7][21]. Innovativeness is considered an intangible asset ingrained within the expertise of human organizational capital. Nurturing employees’ intellectual potential empowers organizations to transform accumulated knowledge into new lines of products, services, or processes that align with market demands [20].
The significance of knowledge management has been acknowledged for over three decades within academic literature. Knowledge is embedded within the human capital of organizations, and it is the organizational challenge to effectively develop and utilize the capacity of individual knowledge in the process of value creation. Within the realm of organizational dynamics, the repository of organizational human capital takes center stage, thereby underscoring the pivotal role of comprehending the inherent agility within human resources. This comprehension is instrumental in unlocking a comprehensive grasp of organizational agility in its entirety. This type of agility is referred to as EIA [57]. EIA is the establishment of forward-looking incentives to promote individual learning encompassing shifts in structure and systems. Moreover, the recent literature on knowledge management recognized the importance of cultivating an environment conducive to optimizing employee effort and innovation. These initiatives involve diverse realms, such as supporting knowledge and skills, nurturing self-assurance, and proficiency, cultivating enthusiasm and motivation to confront challenges, and advancing the removal of potential barriers. Moreover, multiple empirical studies have provided evidence that adeptness in transforming and harnessing information enhances both innovative capacities and overall organizational accomplishments [7]. Therefore, enhancing EIA produces a positive impact on overall organizational innovation.
Leaders and managers play a pivotal role in cultivating an innovation-friendly atmosphere, EIA and capabilities invariably contribute to achieving innovation’s success [57]. EIA involves the process of comprehending the challenges encountered by firms and subsequently translating this acquired knowledge into actionable steps within a business context. Further, it involves adapting the skills and expertise inherent to the business to effectively address the evolving demands of a dynamic environment [7]. As a result of such investments, employees develop a sense of appreciation towards their respective organizations for endowing them with invaluable resources encompassing new knowledge, skills, abilities, and various other attributes (KSAOs). Once equipped with these resources, employees are motivated to disseminate them amongst their peers and colleagues, thereby encouraging a culture of knowledge management behaviors. Moreover, engagement in firm-specific knowledge management behaviors stimulates employees to cultivate, advocate for, and execute novel concepts and methodologies, which elevate their capacity for innovation.

2.4. The Mediating Role of Employee’s Intellectual Agility (EIA)

SMEs are frequently recognized as the primary catalysts for driving economic growth. Thriving and enduring within an increasingly knowledge-oriented society based on the capacity to actively engage in the exploration, generation, and experimentation of novel innovations, product lines, manufacturing methodologies, knowledge dissemination, and corporate frameworks [57]. These capabilities, often referred to as innovativeness, are esteemed as crucial assets that serve as the bridge connecting a firm’s innate innovation capacities with the results generated by the innovation process [7][21]. Innovativeness is considered an intangible asset ingrained within the expertise of human organizational capital. Nurturing employees’ intellectual potential empowers organizations to transform accumulated knowledge into new lines of products, services, or processes that align with market demands [20].
The significance of knowledge management has been acknowledged for over three decades within academic literature. Knowledge is embedded within the human capital of organizations, and it is the organizational challenge to effectively develop and utilize the capacity of individual knowledge in the process of value creation. Within the realm of organizational dynamics, the repository of organizational human capital takes center stage, thereby underscoring the pivotal role of comprehending the inherent agility within human resources. This comprehension is instrumental in unlocking a comprehensive grasp of organizational agility in its entirety. This type of agility is referred to as EIA [57]. EIA is the establishment of forward-looking incentives to promote individual learning encompassing shifts in structure and systems. Moreover, the recent literature on knowledge management recognized the importance of cultivating an environment conducive to optimizing employee effort and innovation. These initiatives involve diverse realms, such as supporting knowledge and skills, nurturing self-assurance, and proficiency, cultivating enthusiasm and motivation to confront challenges, and advancing the removal of potential barriers. Moreover, multiple empirical studies have provided evidence that adeptness in transforming and harnessing information enhances both innovative capacities and overall organizational accomplishments [7]. Therefore, enhancing EIA produces a positive impact on overall organizational innovation.
Leaders and managers play a pivotal role in cultivating an innovation-friendly atmosphere, EIA and capabilities invariably contribute to achieving innovation’s success [57]. EIA involves the process of comprehending the challenges encountered by firms and subsequently translating this acquired knowledge into actionable steps within a business context. Further, it involves adapting the skills and expertise inherent to the business to effectively address the evolving demands of a dynamic environment [7]. As a result of such investments, employees develop a sense of appreciation towards their respective organizations for endowing them with invaluable resources encompassing new knowledge, skills, abilities, and various other attributes (KSAOs). Once equipped with these resources, employees are motivated to disseminate them amongst their peers and colleagues, thereby encouraging a culture of knowledge management behaviors. Moreover, engagement in firm-specific knowledge management behaviors stimulates employees to cultivate, advocate for, and execute novel concepts and methodologies, which elevate their capacity for innovation.

2.5. The Mediating Role of Employee Voice (EV)

EV incorporates the input of employees, comprising their remarks, reflections, concerns, and ideas related to their job roles to enhance the overall organizational operations and work environment [22]. It indicates an individual’s inclination to actively discuss change and generate ideas. Moreover, it is referred to as a behavior that emphasizes the articulation of constructive challenges to facilitate progress rather than mere criticism [42]. As integral members of the organization, employees contribute their perspectives and recommendations to enhance the operational aspects of the organization, thereby offering their input to make the organization more competitive [23]. EV includes the voluntary or structured communication of ideas, viewpoints, recommendations, or alternative strategies directed toward a particular recipient within or outside the organization. This communication is driven by the intention to rectify an undesirable situation and enhance the present functioning of the organization, group, or individual [58]. Scholarly literature uniformly agrees that “voice” constitutes a behavior rooted in problem-solving, change-driven, and improvement-focused actions. Further, it also includes activities like speaking up and whistleblowing, all of which contribute to many favorable outcomes, including organizational innovation [28][29]. Therefore, it is significant for organizations to make dedicated endeavors to establish such mechanisms that promote an environment where employees can actively participate in voice behaviors [59][60].
Existing literature indicates that leadership holds significance in shaping innovation within organizations. However, there remains a scarcity of research investigating the specific mechanisms through which TL impacts EIWB [28][61], particularly in SMEs [62][63]. TL can engage in personal interactions and communication with each employee, explicating the necessity and path towards innovative work [34]. Moreover, they can inculcate a sense of confidence among employees, assuring them that their ideas and suggestions will be duly acknowledged and considered for top management agenda points for decision-making. Incorporating employees’ ideas and suggestions into the organizational decision-making process empowers SMEs to enhance innovation and EIWB [48].
TL has the capacity to encourage open communication and whistleblowing behaviors, enabling the identification and reporting of practices that impede organizational innovation [64]. The inspirational communication skills of a TL have the potential to build confidence in employees, motivating them to highlight errors and offer suggestions for innovation without hesitation. Recognition, trust, and encouragement in leadership have been firmly established as pivotal factors that influence the development of EV behaviors that promote innovative practices [28][65]. Based on SET, the initial behaviors of support are instrumental in shaping the reciprocal interactions within social exchange processes [66]. TL purposefully conveys a belief in the capabilities of followers and inspires them to strive for a more promising future [67]. TL is characterized by a willingness to comprehend followers’ concerns and take suitable measures to address specific individuals’ needs [68]. TL can achieve this by actively listening, engaging in direct conversations with staff members, fostering an environment where they can express themselves freely, and providing support for voice behavior [34].

2.6. The Moderating Role of Innovation Climate (IC)

IC refers to the way employees perceive various aspects of organizational activities, such as organizational support, practices, reward policies, procedures, and expectations within the organization [30]. It serves as a perceptual framework through which businesses can create purposeful work environments that yield the desired outcomes for employees [31]. The organizational climate holds a crucial and strategic role in shaping and influencing innovation [23]. Innovation paves the way for a culture that promotes creative thinking while also embracing the notion of learning from previous mistakes [69]. Moreover, IC signifies an environment where individual ideas hold significance, facilitating both individual and organizational growth [70]. Similarly, it is an environment that fosters and amplifies novel ideas while also nurturing a high degree of adaptability [71].
In line with the COR theory, a fundamental requirement for individuals to safeguard against resource depletion and accumulate resources is the necessity to invest in them [72]. This implies that individuals possessing a greater abundance of resources exhibit greater proficiency in orchestrating and accumulating resources, which leads them towards less vulnerability and resource attrition. When the IC within an organization is robust, employees exhibit a heightened inclination toward enhancing the existing work environment through innovative efforts [34]. Moreover, they can tap into a broader array of internal resources by effectively integrating, managing, and judiciously harnessing emotions. With the same notion, a diminished IC within the organization can result in the exhaustion of emotional resources among employees. In situations where these lost resources are not replenished, employees may curtail the corresponding behaviors to avert further resource diminishment [72].
EIA serves as a mediator between TL and EIWB. However, contextual factors magnify the influence of EIA on EIWB. In the presence of IC, employees are more prone to receive encouragement and potential rewards for their innovative ideas within the business [31]. An empirical study unveiled that employees who possess EIA align themselves closely with the organization’s goals and values, demonstrating a willingness to exceed standard expectations in furthering those objectives [7]. Furthermore, these individuals derive greater job satisfaction and perceive their capabilities to perform their work more effectively [7]. Therefore, firms that encourage a strong IC are more inclined to prioritize the cultivation and implementation of innovative concepts [31]. A work environment conducive to innovation fosters norms and practices that are endorsed and incentivized by organizations prioritizing dynamic shifts and assuming added responsibilities [73]. Therefore, in an environment where innovation and risk-taking are endorsed, employees experience a sense of empowerment and attribute their accomplishments to their voluntary involvement in novel endeavors [74]. Second, the organizational climate conducive to innovation strongly underscores the values of learning, sharing, advocating, and articulating novel ideas while also facilitating a high level of adaptability [75]. This, in turn, reinforces their sense of self-determination and confidence, prompting them to appraise the outcomes of their efforts more positively [76]. Such a perspective facilitates employees’ access to additional resources and amplifies their involvement in innovative activities [77].
Third, previous studies have highlighted the necessity of cultivating a positive climate to foster innovation and creativity within an environment that champions a robust and influential EV [65]. Particularly, an IC is characterized by the appreciation of individual ideas, creating an environment conducive to flourish [70]. In scenarios where an organization boasts a high level of IC, there is a pronounced exchange of information, resources, and support between the leader and members. These interactions between leaders and members are characterized by loyalty, amicability, reciprocal trust, and a profound appreciation for each other’s competencies [78]. Thus, employees are likely to display a higher level of resilience towards vulnerability, driven by their high positive anticipations of the conduct and initiatives of TL. In such a context, employees are more inclined to vocalize their thoughts and translate concepts into innovative outcomes. This inclination is nurtured by a strong IC, which motivates them to convert their ideas into tangible innovation practices [79]. Furthermore, this climate inspires fellow employees to generate more pragmatic solutions for the firm’s challenges [79].

This entry is adapted from the peer-reviewed paper 10.3390/su152216087

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