Research on the Role of Leadership in Organization Transformation Essay

Excerpt from Essay :

Organizational Innovation

Role Of Leadership And Employees In Organizational Innovation

Organizational success in the current global environment characterized with significant challenges is highly dependent on innovation and creativity. Innovation and creativity contribute to the success of organizational interventions, thereby, contributing to its competitiveness. The current global environment is characterized by rapid adoption of new technologies, reduction in the life cycle of products, and globalization. As such, it implies the need for the organizations to become creative and innovative to compete, survive, lead, and grow in the wake of these challenges. Similarly, significant evidence shows that leadership and the employees play an important role in driving innovation and creativity within the organization. For instance, studies have shown that leadership styles such as transformational and transactional leadership styles, influences innovation, and creativity within the organization positively. However, limited knowledge on the contextual factors under which the effect occurs exists.

Similarly, empirical evidence has that organizational stakeholders play a role in promoting the realization of innovation and creativity objectives within the organization. In specific, the employees play a pivotal role in ensuring the effective adoption of the strategies required for the realization of creativity and innovativeness within the organization. Providing the employees with a working environment that takes into consideration their varied needs, promotes innovation as compared to environments that fail to consider their needs (Hu & Chen, 2013). Therefore, the following analysis provides a proposal for a study that aims at creating an understanding of the role the leadership and employees play in ensuring organizational innovation.


Organizational innovation is among the fundamental sources of value creation that influences its long-term survival in a dynamic business environment. Leaders and other organizational employees play a significant role in influencing the realization of the desired organizational innovation. As stated by Thamrin, (2012) leaders promote innovation and creativity within their organizations by creating an open environment that ensures free sharing of information between its stakeholders. Similarly, empirical evidence points the need for employee motivation for organizational innovation to occur.

Besides, Hu & Chen (2013) showed that the executive management of the organization can promote organizational innovation and creativity by promoting the creation of transformational leadership that recognizes the provision of rewards for improvement and tolerating of mistakes. Scholars such as Phoocharoon (2013) and Thamrin (2012) agree that innovation and creativity within the organization is measured by the successful implementation of new organizational methods of executing various activities. However, Gumusluoglu & Ilsev (2009) argue that the innovation does not have to be a new phenomenon in the world, but to the organization as it promotes the creation of significant opportunities for the organization to implement new, creative, and innovative practices.

Over the recent past, the use of transformational and transactional leadership styles within organizations has gained significant attention from different organizational stakeholders across the world. Significant evidence shows that organizations that use transformational and transactional leadership styles have reported an increase in their performance secondary to their innovation and creativity. Transformational and transactional leadership recognizes the need for the provision of the organizational environment that recognizes the varied needs of the employees and use of collaborative actions, thereby, promotion of innovation and creativity. Innovative organizations enjoy the continued competitiveness of the organization and sustainability of its interventions as there is a continuity in the generation of new organizational ideas. While most consider organizational innovation a broad-spectrum perspective, evidence provided by Thamrin (2012) shows it a personal level initiative. Innovation and creativity within an organization occurs because of the actions and efforts of individuals having expertise experience in specific tasks, thereby, specialization and innovativeness.

Theoretical Foundation

Transformational and transactional leaders have been shown by significant evidence to influence organizational innovation. Such leaders promote innovation and creativity within the organizational context by using intellectual stimulation of the employees and inspirational motivation. Such leaders recognize the fact that motivational theories such as Maslow's hierarchy of needs model underpin the ability of the organizations to achieve their innovation and creativity objectives. According to Phoocharoon (2013), transformational and transactional leaders play a championing role in influencing organizational innovation by building the self-confidence, self-esteem, and self-efficacy of their employees.

According to Hu & Chen (2013), transformational leadership has four basic components that influence organizational innovation and creativity. Among them, include charismatic responsibility in modeling other employees, individualized consideration of organizational stakeholders and factors, the
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intellectual stimulation of the employees, and inspirational motivation. As such, it becomes evident that there is a strong correlation between the roles of the leadership style used in the organization, employees, and organizational innovation.

Literature review

According to Uzkurt, Kumar, & Ensari (2013), innovation refers to the successful implementation of organizational, creative ideas. Hu & Chen (2013) suggest that organizational leadership and stakeholders such as the employees are amongst the most critical factors that influence innovation and creativity within the organization. This occurs through the fact that leaders of the organization affect organizational characteristics such as culture, reward systems, resources, and strategies. Similarly, employees affect innovation within the organization, as they are the adopters of the interventions that aim at improving the performance and organizational innovation. A combination of different theoretical approaches underpins the ability of the leaders and employees of an organization to adopt the required strategies that promote innovation and creativity.

For instance, theory X and Y of McGregor provides a better understanding of the underpinning factors that the leaders should provide to their employees for innovation and creativity to be achieved. According to the theory, employees who fall under category are not motivated to perform as expected, and, therefore, require constant supervision and motivators to act in accordance with the stated practices. Employees falling under the category Y are motivated to achieve organizational objectives, thereby, do not require constant supervision. Such theories provide organizational leaders with the insights into the variables that should be provided to the employees for innovation to be achieved (Hu & Chen, 2013).

A study conducted by Hu & Chen (2013) revealed that a combination of different variables underpins the success of the process. For instance, the study showed that variables such as the level of knowledge among the leaders and the employees, the leadership styles, attitude, and the presence of motivational factors influence innovation within an organization. Similarly, Liao & Wu, (2010) show that involving the organizational stakeholders in implementing the strategies aiming at promoting innovation prove effective in ensuring sustainability and the empowerment of the organizational stakeholders. Based on the above, the subtopics of the variables that will guide the research include transformational leadership and innovation, leadership style and motivation, and innovation and organizational size. The study will try to evaluate the relationship existing between transformational leadership and innovation, motivation and innovation, and the organizational size with the employees in central focus.

Problem statement

It is not known to most organizations across the globe how top performing organizations maintain their competitiveness and improved performance irrespective of the dynamic challenges in the marketplace. It is recognizable that the current global business environment faces significant dynamic changes such as stiff competition between organizations, changes in the consumer preferences, inflation, and increasing costs of production that reduce the profit margins of the organizations. As such, organizations have responded to the dynamicity by adopting different strategies to maintain their sustained performance, such as embracing the use of strategic marketing interventions such as product and price promotion. However, little is known to these organizations that their success depends on the use of creative and innovative strategies that ensure the provision of products and services meeting the consumer needs.

As stated by Osborn & Marion (2009) innovation provides organizations with value that contributes to their competitiveness in the marketplace. Similarly, innovation provides such organizations with insights into the future needs of the consumers and the strategies that they should adopt for the provision of products and services meeting their demands. Therefore, it is apparent that it is only until when organizations understand the role played by leadership style and employees in promoting innovation, is when they will realize their performance objectives as those of the best performing organizations globally.

Research questions

Basing on the analysis, the following research questions will guide the research;

a) What is the role of leadership and the employees in facilitating innovation within the organization?

b) What are the theoretical underpinnings that influence the effectiveness of leadership used in an organization to deliver the expected innovation results?

The research questions are qualitative in nature as they aim at creating an understanding of the ways in which organizational stakeholders and the leadership style of the organization influences innovation. Similarly, it bridges the gaps identified in past studies that have failed to illuminate the light into the theoretical approaches used to facilitate innovation within an organization.

Significance of the research

Innovation, leadership, and organizational stakeholders such as the employees are among the concepts that underpin organizational theory. Two compelling issues that have a strong relationship with organizational innovation continue to intrigue researchers in the current global environment characterized with significant dynamic factors. Among…

Sources Used in Documents:


Eisenbeiβ, S.A., & Boerner, S. (2010). Transformational Leadership and R&D Innovation: Taking a Curvilinear Approach. Creativity and Innovation Management, 19(4), 364-372.

Gumusluoglu, L., & Ilsev, A. (2009). Transformational Leadership, Creativity, And Organizational Innovation. Journal of Business Research, 62(4), 461-473.

Hu, H., Gu, Q., & Chen, J. (2013). How and when does transformational leadership affect organizational creativity and innovation?: Critical review and future directions. Nankai Business Review International, 4(2), 147-166.

Liao, S., & Wu, C. (2010). System perspective of knowledge management, organizational learning, and organizational innovation. Expert Systems with Applications, 37(2), 1096-1103.

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