Enhancing organization demand for innovation through entrepreneurial leadership and employees’ innovative self-efficacy

Abstract

This study aims to understand the direct and indirect effect of entrepreneurial leadership on organization demand for innovation. Over the past years academic debates have mostly focused on individual’s demand for innovation while emphasizing on the organization'ssuccess in producing new products and services to individual customers. However the organizational customers and organization's demand to use innovation in day to day work has been generally neglected. Since previous studies identified leadership as an important determinant of innovation in the organization, this research proposes a conceptual framework to explore the effect of entrepreneurial leadership on organization’s demand for innovation. Many influences will shape the future of one organization. The success of entrepreneurial leadership depends not only on the behaviors of the leader, but also on the characteristics of their followers in demonstrating entrepreneurial behaviors. Employees’ own knowledge and skills to perform the jobs, their personal degree of motivation in continuous learning, are all ultimately linked to their own confidence level or perceived self-efficacy. Therefore this study aims to examine the moderating role of employee innovative self-efficacy toward the relationship of entrepreneurial leadership and organization’s demand for innovation. A sample of Malaysia Top 100 Companies participates in this research and the hypotheses are evaluated using Partial Least Squares (PLS) analysis. This research makes an important contribution by providing empirical evidences that may support entrepreneurial leaders and their firms to identify and generate more opportunities and enact them in ways that increase the organization's receptivity towards innovation.