Employee creativity, organizational change and corporate innovation: mediating effects on the transformational leadership-firm sustainability relationships: evidence from Thailand.

Author:Ussahawanitchakit, Phapruke
Position:Report
 
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  1. INTRODUCTION

    Recently, business markets and environments have been uncertain, turbulent, complex, unstable, and heterogeneous. Firms need to create excellent corporate practices and strategies and build valuable organizational values, norms and cultures in order to promote competitive advantage, enhance organizational performance, gain business survival, and achieve firm sustainability. Accordingly, transformational leadership becomes a key determinant of helping firms explain and drive employee creativity, organizational innovation, business excellence, corporate profitability, and firm sustainability. It refers to an ability of leaders to motivate subordinates to achieve performance beyond expectations by transforming the subordinates' attitudes, beliefs and values as opposed to simply gaining compliance (Rafferty and Griffin, 2004). Mainly, it includes charismatic role modeling, individualized consideration, inspirational motivation, and intellectual stimulation. Executives with great transformational leadership tend to improve operational competencies and capabilities and develop organizational performances and outcomes. Here, firm sustainability is an outcome of firms that provide executives' superior transformational leadership. It is defined as meeting the needs of a firm's stakeholders without compromising its ability to meet the needs of future stakeholders (Petrini and Pozzebon, 2009). Firms are likely to contribute to sustainable development by delivering economic, social and environmental benefits simultaneously.

    For outstandingly relating transformational leadership to firm sustainability, employee creativity, organizational change and corporate innovation are proposed to become mediating effects of the transformational leadership-firm sustainability relationships. First, employee creativity is the creation of valuable, useful new products, services, ideas, procedures, or processes by individuals working together in a complex social system (Kim et al., 2009). Second, organizational change is an ability of firms to respond to fast and unpredictable changes in an increasingly volatile and turbulent business markets and environments by presenting new adaptive activities and flexible systems by being made to appear quick, predominantly intentional and sequential (Tienari and Tainio, 1999). Third, corporate innovation is an adoption of an internally generated or purchased device, system, policy, program, process, product, or service new to the adopting organization (Damanpour, 1991). Then, employee creativity, organizational change and corporate innovation explicitly play significant roles in enhancing the transformational leadership-firm sustainability relationships

    Transformational leadership is associated with firm sustainability through mediating effects of employee creativity, organizational change and corporate innovation. Hence, this study aims at investigating the impacts of transformational leadership, employee creativity, organizational change, and corporate innovation on firm sustainability of information technology businesses in Thailand. In this study, the key research questions are: (1) how transformational leadership has an effect on employee creativity, (2) how transformational leadership has an influence on organizational change, (3) how transformational leadership has an impact on corporate innovation, (4) how employee creativity has a relationship with firm sustainability, (5) how organizational change has an association with firm sustainability, (6) how corporate innovation has an interaction with firm sustainability, (7) whether employee creativity is a mediator of the transformational leadership-firm sustainability relationships, (8) whether organizational change is a mediator of the transformational leadership-firm sustainability relationships, (9) whether corporate innovation is a mediator of the transformational leadership-firm sustainability relationships, and (8) whether the aforementioned relationships are positive.

    This study is outlined as follows. The first section reviews existing significant literature in the areas and streams of transformational leadership, employee creativity, organizational change, corporate innovation, and firm sustainability, links between the concepts of the aforementioned variables, and develops the key research hypotheses of those relationships. The second explicitly details research methods, including data collection, measurements, and statistics. The third gives the results of the analysis and the corresponding discussion. The final summarizes the findings of the study and points out both theoretical and managerial contributions, and presents suggestions for further research and the limitations of the study.

  2. TRANSFORMATIONAL LEADERSHIP, EMPLOYEE CREATIVITY, ORGANIZATIONAL CHANGE, CORPORATE INNOVATION, AND FIRM SUSTAINABILITY

    [FIGURE 1 OMITTED]

    Transformational leadership is hypothesized to have a relationship with employee creativity, organizational change and corporate innovation. Employee creativity, organizational change and corporate innovation are also hypothesized to have an association with firm sustainability. Likewise, they are proposed to mediate the transformational leadership-firm sustainability relationships. The aforementioned relationships are systematically investigated. Thus, the conceptual, linkage, and research model presents the associations among transformational leadership, employee creativity, organizational change, corporate innovation, and firm sustainability as shown in Figure 1.

    2.1 Transformational Leadership

    Transformational leadership refers to an ability of leaders to motivate subordinates to achieve performance beyond expectations by transforming the subordinates' attitudes, beliefs and values as opposed to simply gaining compliance (Rafferty and Griffin, 2004). It includes charismatic role modeling, individualized consideration, inspirational motivation, and intellectual stimulation. Executives with great transformational leadership tend to increase their employees' self-efficacy that is an important motivation of enhancing the employees' belief in their capability to organize and execute the actions required to attain a given goal (Ergeneli et al., 2007). They attempt to raise the need of the employees and promote dramatic changes of individuals, groups, and or organizations. Thus, transformational leadership is likely to provide employee creativity, organizational change and corporate innovation. Also, transformational leadership is defined as an ability of leaders to persuade subordinates to forego individual goals in order to achieve a common higher-order goal by identifying and expressing a clear vision for the future to the subordinates (Schwepker and Good, 2010) It creates personal and professional commitment from the subordinates toward higher-level needs, such as self-esteem and self-actualization (Jung et al., 2008). It is a key determinant of organizational innovation and employee creativity at the workplace through providing vision, support for innovation, autonomy, encouragement, recognition, and challenge. Accordingly, transformational leadership is positively related to employee creativity, organizational change and corporate innovation.

    Transformation leadership becomes a key driver of explaining and enhancing employee creativity, organizational change and corporate innovation. It articulates a shared vision of the future, intellectually stimulates subordinates, provides a great deal of support to individuals, recognizes individual differences, and sets high expectations (Kirkman et al., 2009). It strives to accomplish...

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