SME innovation and employee creativity: The role of entrepreneurial leadership
-
DOIhttp://dx.doi.org/10.21511/ppm.20(4).2022.42
-
Article InfoVolume 20 2022, Issue #4, pp. 560-572
- Cited by
- 774 Views
-
246 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Entrepreneurial leadership and innovation are needed for small and medium enterprises (SMEs) to survive and grow. Entrepreneurial leaders must unlock and use their employees’ creativity to innovate. Moreover, they should foster creativity, risk-taking, and teamwork to secure business growth and success. Therefore, this study analyzes the link between entrepreneurial leadership, creativity, and innovation among SMEs. The aim is to identify the traits that lead to entrepreneurial leadership which helps in fostering creativity and innovation among SMEs in Saudi Arabia.
The study is based on primary data from employees, managers, and owners of SMEs in the capital region of the Kingdom of Saudi Arabia. Two hundred and eighty-one responses were collected. However, only two hundred and forty-eight responses were left for the final analysis. The results of the study indicate that entrepreneurial leadership positively influences organizational innovation and employee creativity among SMEs, where the coefficient was found to be significant. Next, no mediation relationships involving creativity were noted between entrepreneurial leadership and organizational innovation. However, entrepreneurial leadership has been identified as a critical driver of innovation and employee creativity in SMEs. Furthermore, the study suggests that SMEs need to foster a culture of innovation to unleash employee creativity. Finally, the study can have important implications for practitioners and academic scholars.
Acknowledgment
This project was supported by the Deanship of Scientific Research at Prince Sattam Bin Abdulaziz University under the research project (PSAU-2022/01/20421).
- Keywords
-
JEL Classification (Paper profile tab)M10, M12, M13, O30
-
References62
-
Tables5
-
Figures2
-
- Figure 1. Proposed hypothesized model
- Figure 2. Final structural model
-
- Table 1. Construct reliability and validity
- Table 2. Discriminant validity (Fornell-Larcker criterion)
- Table 3. Discriminant validity (heterotrait-monotrait ratio)
- Table 4. Mediation analysis
- Table A1. Questionnaire
-
- Akbari, M., Bagheri, A., Imani, S., & Asadnezhad, M. (2021). Does entrepreneurial leadership encourage innovation work behavior? The mediating role of creative self-efficacy and support for innovation. European Journal of Innovation Management, 24(1), 1-22.
- Anderson, N., Potočnik, K., & Zhou, J. (2014). Innovation and creativity in organizations: A state-of-the-science review, prospective commentary, and guiding framework. Journal of Management, 40(5), 1297-1333.
- Aristana, I. N., Wisnawa, I. M. B., Sriasih, A. A. K., & Junipisa, N. M. E. (2022). Entrepreneurial leadership and employee creativity: Moderation and mediation perspectives. Jurnal Ekonomi Dan Bisnis, 25(2), 199-236.
- Bagheri, A., Akbari, M., & Artang, A. (2022a). How does entrepreneurial leadership affect innovation work behavior? The mediating role of individual and team creativity self-efficacy. European Journal of Innovation Management, 25(1), 1-18.
- Bagheri, A., Newman, A., & Eva, N. (2022b). Entrepreneurial leadership of CEOs and employees’ innovative behavior in high-technology new ventures. Journal of Small Business Management, 60(4), 805-827.
- Cai, W., Lysova, E. I., Khapova, S. N., & Bossink, B. A. (2019). Does entrepreneurial leadership foster creativity among employees and teams? The mediating role of creative efficacy beliefs. Journal of Business and Psychology, 34(2), 203-217.
- Chan, C. M., Teoh, S. Y., Yeow, A., & Pan, G. (2019). Agility in responding to disruptive digital innovation: Case study of an SME. Information Systems Journal, 29(2), 436-455.
- Chen, M.-H. (2007). Entrepreneurial Leadership and New Ventures: Creativity in Entrepreneurial Teams. Creativity and Innovation Management, 16(3), 239-249.
- Cogliser, C. C., & Brigham, K. H. (2004). The intersection of leadership and entrepreneurship: Mutual lessons to be learned. The Leadership Quarterly, 15(6), 771-799.
- De Jong, J., & Den Hartog, D. (2010). Measuring innovative work behaviour. Creativity and Innovation Management, 19(1), 23-36.
- Eggers, F. (2020). Masters of disasters? Challenges and opportunities for SMEs in times of crisis. Journal of Business Research, 116, 199-208.
- Farmer, S. M., Tierney, P., & Kung-McIntyre, K. (2003). Employee creativity in Taiwan: An application of role identity theory. Academy of Management Journal, 46(5), 618-630.
- Fernald, L. W., Solomon, G. T., & Tarabishy, A. (2005). A new paradigm: Entrepreneurial leadership. Southern Business Review, 30(2), 1-10.
- Fontana, A., & Musa, S. (2017). The impact of entrepreneurial leadership on innovation management and its measurement validation. International Journal of Innovation Science, 9(1), 2-19.
- Fornell, C., & Larcker, D. F. (1981). Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics. Journal of Marketing Research, 382-388.
- Freeman, D., & Siegfried Jr., R. L. (2015). Entrepreneurial Leadership in the Context of Company Start-Up and Growth. Journal of Leadership Studies, 8(4), 35-39.
- Gupta, V., MacMillan, I. C., & Surie, G. (2004). Entrepreneurial leadership: Developing and measuring a cross-cultural construct. Journal of Business Venturing, 19(2), 241-260.
- Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM). Sage Publications.
- Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Partial least squares structural equation modeling: Rigorous applications, better results and higher acceptance. Long Range Planning, 46(1-2), 1-12.
- Harrison, C., Paul, S., & Burnard, K. (2016). Entrepreneurial Leadership: A Systematic Literature Review. International Review of Entrepreneurship, 14(2), 235-264.
- Hejazi, S. A. M., Malei, M., & Naeiji, M. J. (2012). Designing a scale for measuring entrepreneurial leadership in SMEs. 2012 International Conference on Economics Marketing and Management IPEDR. Singapore.
- Hoang, G., Luu, T. T., Nguyen, T. T., Du, T., & Le, L. P. (2022). Examining the effect of entrepreneurial leadership on employees’ innovative behavior in SME hotels: A mediated moderation model. International Journal of Hospitality Management, 102, 103142.
- Hu, L., Park, J. H., Wu, C., & Hooke, A. (2014). Entrepreneurial leadership and innovativeness: The mediating role of team psychological safety. Academy of Management, 2014(1), 12470.
- Huang, S., Ding, D., & Chen, Z. (2014). Entrepreneurial Leadership and Performance in Chinese New Ventures: A Moderated Mediation Model of Exploratory Innovation, Exploitative Innovation and Environmental Dynamism. Creativity and Innovation Management, 23(4), 453-471.
- Hughes, D. J., Lee, A., Tian, A. W., Newman, A., & Legood, A. (2018). Leadership, creativity, and innovation: A critical review and practical recommendations. The Leadership Quarterly, 29(5), 549-569.
- Hunter, L., & Lean, J. (2014). Investigating the role of entrepreneurial leadership and social capital in SME competitiveness in the food and drink industry. The International Journal of Entrepreneurship and Innovation, 15(3), 179-190.
- Iqbal, A., Latif, K. F., & Ahmad, M. S. (2020). Servant leadership and employee innovative behaviour: Exploring psychological pathways. Leadership and Organization Development Journal, 41(6), 813-827.
- Iqbal, A., Nazir, T., & Ahmad, M. S. (2022). Entrepreneurial leadership and employee innovative behavior: An examination through multiple theoretical lenses. European Journal of Innovation Management, 25(1), 173-190.
- Ireland, R. D., Hitt, M. A., & Sirmon, D. G. (2003). A model of strategic entrepreneurship: The construct and its dimensions. Journal of Management, 29(6), 963-989.
- Isaksen, S. G., & Akkermans, H. J. (2011). Creative climate: A leadership lever for innovation. The Journal of Creative Behavior, 45(3), 161-187.
- Islam, T., & Asad, M. (2021). Enhancing employees’ creativity through entrepreneurial leadership: Can knowledge sharing and creative self-efficacy matter? VINE Journal of Information and Knowledge Management Systems.
- Kline, R. B. (2006). Principles and Practice of Structural Equation Modeling. New York: The Guilford Press.
- Koh, D., Lee, K., & Joshi, K. (2019). Transformational leadership and creativity: A meta-analytic review and identification of an integrated model. Journal of Organizational Behavior, 40(6), 625-650.
- Koryak, O., Mole, K. F., Lockett, A., Hayton, J. C., Ucbasaran, D., & Hodgkinson, G. P. (2015). Entrepreneurial leadership, capabilities and firm growth. International Small Business Journal, 33(1), 89-105.
- Kuratko, D. F. (2007). Entrepreneurial leadership in the 21st century: Guest editor’s perspective. Journal of Leadership & Organizational Studies, 13(4), 1-11.
- Lee, A., Legood, A., Hughes, D., Tian, A. W., Newman, A., & Knight, C. (2020). Leadership, creativity and innovation: A meta-analytic review. European Journal of Work and Organizational Psychology, 29(1), 1-35.
- Li, C., Makhdoom, H. U. R., & Asim, S. (2020). Impact of Entrepreneurial Leadership on Innovative Work Behavior: Examining Mediation and Moderation Mechanisms. Psychology Research and Behavior Management, 13, 105-118.
- Lowman, M., Trott, P., Hoecht, A., & Sellam, Z. (2012). Innovation risks of outsourcing in pharmaceutical new product development. Technovation, 32(2), 99-109.
- Mascitelli, R. (2000). From experience: Harnessing tacit knowledge to achieve breakthrough innovation. Journal of Product Innovation Management, 17(3), 179-193.
- Mazzei, M. J., Flynn, C. B., & Haynie, J. J. (2016). Moving beyond initial success: Promoting innovation in small businesses through high-performance work practices. Business Horizons, 59(1), 51-60.
- Mehmood, M. S., Jian, Z., & Akram, U. (2020). Be so creative they can’t ignore you! How can entrepreneurial leader enhance the employee creativity? Thinking Skills and Creativity, 38, 100721.
- Mehmood, M. S., Jian, Z., & Waheed, A. (2019). The influence of entrepreneurial leadership on organisational innovation: Mediating role of innovation climate. International Journal of Information Systems and Change Management, 11(1), 70-89.
- Mehmood, M. S., Jian, Z., Akram, U., & Tariq, A. (2021). Entrepreneurial leadership: The key to develop creativity in organizations. Leadership and Organization Development Journal, 42(3), 434-452.
- Mokhber, M., Vakilbashi, A., Zamil, N. A. M., & Basiruddin, R. (2016). Impact of entrepreneurial leadership on organization demand for innovation: Moderating role of employees’ innovative self-efficacy. International Review of Management and Marketing, 6(3), 415-421.
- Naushad, M. (2021). Investigating determinants of entrepreneurial leadership among SMEs and their role in sustainable economic development of Saudi Arabia. The Journal of Asian Finance, Economics and Business, 8(4), 225-237.
- Naushad, M., & Sulphey, M. M. (2020). Prioritizing Technology Adoption Dynamics among SMEs. TEM Journal, 9(3), 983-991.
- Newman, A., Herman, H., Schwarz, G., & Nielsen, I. (2018). The effects of employees’ creative self-efficacy on innovative behavior: The role of entrepreneurial leadership. Journal of Business Research, 89, 1-9.
- Nguyen, P. V., Huynh, H. T. N., Lam, L. N. H., Le, T. B., & Nguyen, N. H. X. (2021). The impact of entrepreneurial leadership on SMEs’ performance: The mediating effects of organizational factors. Heliyon, 7(6), e07326.
- Nitzl, C., Roldán Salgueiro, J. L., & Cepeda-Carrión, G. (2016). Mediation analysis in partial least squares path modeling: Helping researchers discuss more sophisticated models. Industrial Management & Data Systems, 116(9), 1849-1864.
- Park, J. H., Da Hu, L., Wu, C., & Hooke, A. (2014). Entrepreneurial leadership and innovativeness: The mediating role of team psychological safety. The Korean Leadership Quarterly, 5(3), 25-61.
- Paudel, S. (2019). Entrepreneurial leadership and business performance. South Asian Journal of Business Studies, 8(3), 348-369.
- Ramamoorthy, N., Flood, P. C., Slattery, T., & Sardessai, R. (2005). Determinants of innovative work behaviour: Development and test of an integrated model. Creativity and Innovation Management, 14(2), 142-150.
- Renko, M., El Tarabishy, A., Carsrud, A. L., & Brännback, M. (2015). Understanding and Measuring Entrepreneurial Leadership Style. Journal of Small Business Management, 53(1), 54-74.
- Ribeiro, N., Duarte, A. P., Filipe, R., & Torres de Oliveira, R. (2020). How authentic leadership promotes individual creativity: The mediating role of affective commitment. Journal of Leadership & Organizational Studies, 27(2), 189-202.
- Roomi, M. A., & Harrison, P. (2011). Entrepreneurial leadership: What is it and how should it be taught? International Review of Entrepreneurship, 9(3).
- Sari, S. A., & Ahmad, N. H. (2022). Connecting the Dots: Linking Entrepreneurial Leadership and Strategic Agility towards SME Competitiveness. Vision: The Journal of Business Perspective.
- Sarwoko, E. (2020). Entrepreneurial Leadership and Innovative Work Behavior: The Role of Creative Self-efficacy. Journal of Economics, Business, & Accountancy Ventura, 23(2), 183-193.
- Shafique, I., Ahmad, B., & Kalyar, M. N. (2020). How ethical leadership influences creativity and organizational innovation: Examining the underlying mechanisms. European Journal of Innovation Management, 23(1), 114-133.
- Shanker, R., Bhanugopan, R., Van der Heijden, B. I., & Farrell, M. (2017). Organizational climate for innovation and organizational performance: The mediating effect of innovative work behavior. Journal of Vocational Behavior, 100, 67-77.
- Soomro, B. A., Shah, N., & Mangi, S. (2019). Factors affecting the entrepreneurial leadership in small- and medium-sized enterprises (SMEs) of Pakistan. World Journal of Entrepreneurship, Management and Sustainable Development, 15(1), 31-44.
- Sulphey, M., & Naushad, M. (2019). The position of intellectual capital among Saudi banks. Marketing and Management of Innovations, 4, 11-21.
- Wibowo, A., & Saptono, A. (2018). Does entrepreneurial leadership impact on creativity and innovation of elementary teachers? Journal of Entrepreneurship Education, 21(2), 1-9.