Marketing from Leadership to Innovation: A Mediated Moderation Model Investigating How Transformational Leadership Impacts Employees’ Innovative Behavior

Abstract

In an increasingly competitive landscape, both researchers and businesses are showing growing interest in promoting employee’s innovative work behavior (EIWB). Although earlier studies have highlighted the significance of transformational leadership (TL) in cultivating innovation among employees, there needs to be more understanding regarding the precise mechanisms and processes by which leaders exert their influence over the IWB of their employees. This study is based on the social exchange theory (SET) and upper echelon theory (UET) to investigate how the relationship between TL and employees’ IWB is mediated by the employees’ intellectual agility (EIA) and the employee’s voice (EV). To the best of researchers’ knowledge, this study represents the pioneering effort to examine the mediating mechanisms of EIA and EV between TL and EIWB within the specific context of small and medium Enterprises (SMEs) in a developing country. An online self-administered questionnaire was utilized to collect data from 430 SMEs in Pakistan. The proposed hypotheses were examined using partial least squares structural equation modeling (PLS-SEM). The study findings revealed a significant influence of TL on EIWB mediated by both their EIA and 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. The study also includes a comprehensive finding and their implications, limitations, and suggestions for future research directions.