The Mediating Effect of Organizational Climate on the Relationship between Leadership Styles and Their Components on Innovative Behaviour

Abstract

This study investigated the mediating effect of organizational climate on the relationship between transformational and transactional leadership styles on innovative behaviour. 1 1 15th International Entrepreneurship Forum (15th IEF) Conference Conference Theme The Globalisation and Internationalisation of SMEs AND New Ventures: Travels with Eclectic Charlie, Digital Mary, Networked Nadia and Impactful Shona. Venice, Italy 14–16 December 2016. The effect of each component of transformational and transactional leadership styles on innovative behaviour was also investigated. A sample of 3,180 respondents from 52 South African companies participated in this research. Four main hypotheses and six sub-hypotheses were tested using multiple regression analysis. The results revealed that indeed organizational climate mediates the relationship between transformational and transactional leadership styles on innovative behaviour as well as their components. The study substantiated the expected positive relationship between transformational leadership style and innovative behaviour. Furthermore, the results showed that among the components of transformational leadership styles, inspirational motivation and intellectual stimulation influence innovative behaviour positively. This study showed that in an environment conducive to innovation, the transactional leadership style has no influence in enhancing employees’ innovative behaviour. This study provided new insight into the nature of the relationship between leadership styles, organizational climates and innovative behaviour.