Relationships between leadership styles and organisational innovation in Vietnamese public enterprises: the mediating role of employee creativity

Nguyen, Nhat Tan (2020) Relationships between leadership styles and organisational innovation in Vietnamese public enterprises: the mediating role of employee creativity. PhD thesis, University of Nottingham.

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Innovation plays an increasingly important role in the survival and growth of all organisations irrespective of public or private enterprises. Although public enterprises are critical vehicles for innovation, their innovative activities are lower and less efficient than private-owned ones, respectively in emerging and developing economies compared to developed ones. While research pointed out weak innovative capabilities of Vietnamese state-owned and private enterprises and the underdeveloped national innovation systems, most innovative activities occurred in technical, product and process arena. As an immediate source of sustainable competitive advantage, studies on organisational innovation at workplaces, business practices and external relations that refer to organisational methods are still rare in terms of academic publications, particularly regarding the performance of Vietnamese enterprises. Inadequate research on innovation are also recorded in the manufacturing and processing industry in Vietnam, specifically public coffee enterprises.

Additionally, leadership remains an important factor that influences creativity and innovation in the organisations. Prior studies affirmed the existing linkages between leadership styles, specifically transformational and transactional leadership, employee creativity and innovation at the organisational level. However, these interrelationships are not fully understood, which is evidenced by the fact that the potential mediating role of employee creativity has not been unveiled. Moreover, existing gaps in the relationship between leadership role and innovation also influence the organisational effectiveness of public enterprises, which necessitates further investigation. Therefore, expanding and replicating past research, this study aims to look into the linkages between transformational leadership, transactional leadership and its dimensions on employee creativity and components of organisational innovation at public enterprises operating in the Vietnamese coffee sector. Additionally, employee creativity as a potential mediator in the leadership styles – organisational innovation relationships was examined.

A cross-sectional, quantitative and non-experimental correlation design was adopted in this study. Data were collected using a questionnaire from 369 employees working across departments in 39 Vietnamese public coffee enterprises nationwide utilising cluster sampling technique. IBM-SPSS and AMOS software were used to test the proposed theoretical model following by formulated hypotheses based on the collected data. Accordingly, descriptive analysis, inferential statistics, confirmatory factor analysis, measurement of fit indices as well as analyses for modification purposes were conducted. Additionally, by applying structural equation modelling approach, the path coefficient total effects of all variables on the dependent construct were investigated and assessing the mediating effect was also proceeded.

Findings of this study revealed that transformational leadership, transactional leadership, employee creativity were significant predictors of organisational innovation. Regarding the relationship between transformational leadership, its four dimensions and organisational innovation, transformational leadership was instrumental to organisational innovation. Moreover, apart from idealised influence, inspirational motivation, intellectual stimulation and individualised consideration were found to significantly influence business practices, workplace organisation and external relations and these effects were positive. The analysis of the relationship between transactional leadership and organisational innovation revealed that two dimensions of transactional leadership, namely contingent rewards and management by exception active had a significantly negative effect on three dimensions of organisational innovation. Similarly, findings partially supported the significantly positive effect of all dimensions of transformational leadership on employee creativity except for idealised influence. On the other hand, transactional leadership and its two dimensions were detrimental to employee creativity. Besides, employee creativity was found to significantly affect all dimensions of organisational innovation. Finally, employee creativity partially mediated transformational leadership - organisational innovation relationship. Likewise, the transactional leadership – organisational innovation relationship was also partially mediated by employee creativity.

Results of this study contribute to literature on leadership styles, creativity and innovation, looking into the context of Vietnamese public enterprises in the coffee industry. Specifically, this study provides precious empirical results in examining the effects of transformational and transactional leadership on employee creativity and organisational innovation. Accordingly, organisational innovation is more likely to be fostered by the positive influence of leadership behaviours and the improvement of employee creativity. Therefore, it benefits the management of organisations and policy makers by enlightening the management to recognise which leadership style will effectively suit public enterprises in tandem with promoting employee creativity to foster organisational innovation. Additionally, results also highlighted the significant role of employee creativity in enhancing the positively direct effect of transformational leadership on organisational innovation and modifying the negatively direct effect of transactional leadership on organisational innovation. Thus, the management of public enterprises in Vietnam should employ flexible and reformed policies regarding benefits and competitive gains to improve employee creativity, which in turns boosts organisational innovation. Equally important, selecting employees with required skills and appropriate personality profile concerning creative abilities must be considered during the recruitment process in the enterprises.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Hooi, Carol Lai Wan
Mohan, Avvari Visveswara
Keywords: transactional leadership, creativity, organisational innovation, business, coffee industry, Vietnamese public enterprises
Subjects: H Social sciences > HD Industries. Land use. Labor
Faculties/Schools: University of Nottingham, Malaysia > Faculty of Arts and Social Sciences > Nottingham University Business School
Item ID: 57817
Depositing User: Nguyen, Nhat Tan
Date Deposited: 22 Feb 2020 04:40
Last Modified: 27 Jul 2020 00:59

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