CEOs' Transformational Leadership and Managers' Innovative Behavior: The Investigation of Intervening Effects in an Entrepreneurial Context
Open AccessIn this study, I attempt to identify the intervening mechanisms between transformational leadership and innovative behavior in an entrepreneurial context. Based on an intensive literature search, transformational leadership was hypothesized to be a direct predictor of innovative behavior. More importantly, transformational leadership has been shown to affect both firm climate and followers' passion. Thus, I hypothesized that both organizational-level and individual-level intervening variables could also be found in an entrepreneurial context. To test these hypotheses, I collected data from 39 fast-growing firms, with 39 participating CEOs and 105 participating managers. The study utilized a correlational research method with multilevel structural equation modeling. Since the goal is to examine both direct and indirect effects between CEOs' transformational leadership and managers' innovative behavior, the key variables in the statistical analysis are transformational leadership, entrepreneurial climate, entrepreneurial passion, and innovative behavior. The result showed that CEOs' transformational leadership was positively related to managers' innovative behavior. In addition, managers' entrepreneurial passion partially mediated this relationship. I also found that CEOs' transformational leadership behaviors enhanced firm-level entrepreneurial climate. My findings have important research and practical implications for understanding how entrepreneurs' psychological processes contribute to motivate managers' innovative behavior within an entrepreneurial firm.
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