The role of leadership and organizational climate in fostering innovation in construction

Abstract

Leadership has been identified by many researchers as one of the most important antecedents of innovation. Previous studies tend to conclude that transformational leadership, through motivating followers to change their status quo, has a higher positive impact on organizational innovation when comparing with transactional leadership. However, the relationships between transformation leadership and innovation are inconsistent. These contradictory findings, to certain extent, suggest that the influences of leadership on innovation can be influenced by various mediators, such as innovation climate in an organization. Leaders foster innovative behaviours of followers by creating a climate that facilitates the innovative activities through, for instance, forming organizational routines to assist in achieving innovation. This organizational climate, in turn, influence the impact of leadership on innovation. Innovation has found to be essential in enhancing work effectiveness, efficiency, and business performance in the construction sector. However, hindered by various factors, construction has long been recognized as low in innovation. Success of innovation requires intimate collaboration between multiple stakeholders in developing innovation blueprint and sustaining commitment towards innovation in technically complex areas. However, due to the different value propositions amongst organisational members, tension may arise, which affects the collaboration. Hence, this study aims to investigate the mediating effects of organizational innovation climate on the leadership-innovation relationships. A questionnaire survey is designed which adopts: i) the multifactor leadership questionnaire for assessing the perceived leadership style, ii) the innovation culture scale, and iii) the innovation scale for measuring the ability of an organization to innovate as perceived by followers. The relationships are tested by factor analyses, reliability analyses, correlation analysis, and multiple regression modelling using SPSS and Lisrel. Seven factors are identified, including charisma, intellectual stimulation, individualized consideration (transformational leadership) and contingent reward (transactional leadership) for leadership; support for innovation and resource supply for innovation culture; and innovation performance. The findings reveal that support for innovation plays a significant mediating role on the influences of both transactional and transformational leaderships on innovation. The results of this study lay solid platform for further longitudinal, qualitative studies for the dynamic intertwining relationship between leadership and innovation culture across the organizational innovation process.