Discussion and Conclusion

Over the last three decades or so, the world has witnessed two major developmentsā€”the fast pace of globalization, whereby corporations from around the world have expanded operations into various parts of the world. Initially, we witnessed Western MNEs selling their products to the rest of the world, or establishing manufacturing and/or service operations in emerging economies, in order to capitalize on cheap labour and the availability of highly skilled professionals. However, the last 15-20 years have seen many corporations from emerging economies spreading their wings and establishing operations in the so-called developed world (see, e.g. Tung & Varma, 2008). Furthermore, many of these emerging economy MNEs have gone on to buy western corporations to establish a foothold in those countries. The cornerstone of these moves has been innovation and the concomitant leadership skills available within the organization.

Our contribution lies in using a standardized taxonomy for leadership behaviours, suggesting that these behaviours could be substituted by framing drivers for exploitative and explorative activities, and incorporating the role of motivational and developmental pathways. This allows us to cater to the heterogeneous relationship found between leadership and individual innovation and also helps explain how the presence of just one type of leader behaviour could also result in innovative work behaviour due to the presence of personal and environmental factors that compensate for the missing leader behaviours. With all other factors remaining the same, leaders need to balance task-oriented and change-oriented behaviours in order to encourage innovation at the individual and team level.

Further, other contextual and personal factors apart from leadership could substitute for leader behaviours that are lacking. Therefore, unless the entire gamut of behaviours is explored together and relevant personal and contextual factors are included, studies could show diverse and heterogeneous effects of leadership on innovation.

Another means by which leaders could affect innovation at the team and organizational levels, could be by segregating exploitative and explorative activities to different people, teams, or divisions, a form of structural ambidexterity (Tushman & O Reilly, 1996). The role of integrating the outputs would then lie with higher management. At the level of the individual, such a separation would not be possible.

Some inconsistent findings can be explained using the model and the outline given earlier. Transformational leadership, for instance, is known to have all of change-oriented, task-oriented, and relationship-oriented behaviours (Derue, Nahrgang, Wellman, & Humphrey, 2011); therefore, it would influence innovation through all of the approaches discussed above, and thus, the somewhat consistent (though heterogeneous) finding of the relationship between transformational leadership and innovation.

LMX is a relational form of leadership and characterized by trust, respect and liking of subordinate, increasing engagement. Apart from these a good LMX relationship provides employees the ability to modify their job roles to some extent (Rousseau, Ho, & Greenberg, 2006). And engaged employees could also use job crafting (Bakker, Tims, & Derks, 2012). Thus, LMX affects innovation through the motivational approach. Without the complications of the first two approaches which could be dysfunctional in certain cases, LMX has consistently (and homogeneously) been found to relate to innovation (Rosing et al., 2011).

Leader-initiating structure behaviour by itself would foster only exploitative activities and explorative activities would be neglected, in these cases leader preference for initiating structure behaviour would not be expected to lead to innovation as found by Williams (2004). However, in the presence of external factors which foster explorative activities, leader- initiating structure behaviour provides the impetus for exploitative activities, thus the presence of both results in innovative outcomes as found by Osborn and Marion (2009). Leader consideration behaviours might be acting via the suggested motivational approach, thus being relatively immune to other contextual and personal factors.

By taking a more nuanced view of leader behaviours and the activities involved in individual innovation, it is possible to account for the impact that leadership has on innovation. Given that leadership is one of the most important contextual factors (Tierney et al., 1999) on individual creativity, it stands to reason that leading for innovation requires a balance between behaviours that foster exploitative and explorative activities. Though, via the motivational approach, leaders can empower employees to arrive at this balance themselves, at times it might still be necessary for the leader to step in and make any adjustments necessary.

Leading for innovation is a tightrope act that requires skilful management of a wide repertoire of leadership behaviours. In this chapter we have tried to put forward certain propositions about how various leader behaviours could affect innovation and how other contextual and personal factors could compensate for some deficiencies by leaders in achieving a perfect balance.

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