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Abstract
Innovative behavior is an essential factor in ensuring a competitive edge and it has great importance for the growth of companies. A leader’s ability to correctly develop strategies and products based on innovation provides an efficient tool for an organization to increase profits and compete in the marketplace. Support for innovation must emanate from the highest levels of the organization, and the employees must embrace and act on it.
This research investigates the perceived effects of transactional and transformational leadership styles and their interaction with employee behavioral elements leading to their affect on innovation behavior within the organization. Focusing on innovation as an everyday phenomenon in which employees exhibit proactive problem-solving and implement proactive ideas. Companies continue to increase productivity, not solely by big new ideas; but, by incremental efficiency produced by these innovation behaviors.
This study sheds light on the importance of employee behavioral elements and leadership styles in promoting innovation within organizations. The results show that a sense of power among employees positively impacts innovation, while emotional exhaustion has a negative impact. Transactional leadership was found to have a positive impact while also mitigating the negative impact of employee exhaustion. However, it is important to note that transactional leadership may not be effective in all contexts, and it may hinder innovation in employees with low exhaustion. These findings emphasize the crucial role of leadership in fostering a positive and supportive environment enabling innovation to thrive and highlight the need for organizations to consider the impact of employee behavioral elements and leadership styles on innovation.