The interactive effect of leadership, climate, and strategy on innovation

Abstract

Innovation is one of the most important resources of the 21st century and crucial for organisations to keep a competitive advantage. Organisations are complex systems and therefore, several aspects of an organisation affect innovation in a direct or indirect manner. Several researchers have looked at how aspects of organisation contribute to innovation, yet few researchers have looked at the effect these aspects have on innovation when they internet together. The variables chosen for this study were transformational leadership, organisational climate, and organisational strategy which are three variables which have been found to relate to organisation innovation by several authors. This study looked at how the interaction of the variables of transformational leadership, organisational climate, and organisational strategy internet to predict innovation using a quantitative approach and hierarchical regression analysis. The sample was made out of employees from four Maltese companies who agreed to help in this study and the total sample was made up of 108 participants. The results show that all three are significant predictors of innovation and when combined using a hierarchical linear regression model they can predict 62% of the variance of innovation. The strongest predictor of innovation was found to be organisational strategy, followed by organisational climate, and finally leadership. However, the study did not find evidence that the interaction of these variables contribute to innovation over and above their individual contributions. This study also provides further theoretical implications for the future study of these three variables and innovation as well as practical implications which can be implemented in organisations.