Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2021 Vol: 27 Issue: 3

The Impact of Entrepreneurship Leadership Styles On the Innovation Process A Study On A Sample of Mobile Phone Companies in the Hashemite Kingdom of Jordan

Ayad Fadhil Thabit Aldawoodi, University of Babylon

Abstract

Many changes have been affecting organizations and their ability to grow and even to survive. Perhaps the most prominent ones are; globalization, information technology, and especially hyper-competition (child. 2015) Hyper-competition, as introduced "An environment characterized by intense and rapid competitive moves, in which competitors move quickly to build advantage and erode the advantage of their company must be proactive and flexible to the level it can survive and, more importantly, outperform its competitors," writes Richard D'Aveni (2014). Being proactive and flexible means possessing the ability to implement newly generated ideas before competitors. In other words; being "innovative" (Burrus, 2013). According to Desouza et al. (2019). In order to examine the success of innovation program in an organization, the existence of a defined innovation process must be assured.

Keywords

Hyper-Competition, Globalization, Innovative, Information Technology.

Introduction

Because of the positive impact of innovation on the company's ability to grow and outperform its competitors (Hana, 2013), it would be indispensable for companies to determine factors that could affect this significant phenomenon and enhance its role in improving their competitive positions.

Several studies have revealed a mix of personal, contextual, and organizational factors which are responsible for innovation, and shed the lights on the role of people in delivering innovation (Kanter, 2014). Many of those studied, such as the studies of wipulanusat et al, (2017); Shafique and Bah (2016). Keating et al, (2015); Al- Alousi et al (2014); Sheikh Ali and Ibrahim (2014); Ye et al, (2011); Kijk (2010); Wang et al. (2009); Yang and wei (2019); Lee and liu (2018) & Arago'n- Correa et al, (2015) have focused on how different leadership styles can unleash this capability – innovation- in their organizations, but unfortunately, they didn't focus on the process of innovation which is considered by desouza et al, (2019) as a sign for the success of innovation program.

One of the study's key goals is to determine the extent to which employees at Jordan's registered mobile phone service providers understand the various stages of the innovation process by measuring their involvement in the process. Furthermore, the study investigates the impact of the most popular leadership styles on the innovation process in order to discover which has the greatest impact.

Significance of the Study

Innovation is a method of providing economic development prospects and increasing the competitiveness of a firm (Chen & Muller, 2010), which are the major concerns of all organizations. Scholars show that in the 21st- century innovation is a primary source of competitive advantage, additionally, innovation is seen to be stimulated and originated from leadership (Agbor, 2018). For this reason, it is needful for companies to promote innovation by adopting a preferable style of leading in order to stimulate followers' innovativeness. The significance of this study stems from its evaluation to the extent to which employees are involved in the different stages of innovation process and from its recommendations that will suggest the most effective leadership practices to be approached for enhancing employees' involvement in the innovation process. Moreover, this study is the first to be conducted in Jordan- according to investigate the relationship between leadership style and the innovation process, to the best of the researcher's knowledge It might also be utilized to pave the way for future study by emphasizing the importance of leadership style and the innovation process in the local and regional workplace.

The telecommunication sector in Jordan strongly contributes to GDP growth and many sectors are benefited directly from this sector such as the transportation, education, manufacturing, and trade (Abu Doleh & Al- Hawarden, 2017). Therefore, the significance of this study stems also from being conducted in such vital companies- mobile phone service providers in Jordan.

Research Problem

It is critical for companies that want to survive and develop to have robust innovation procedures in place in order to innovate effectively and efficiently (Desoua et al, 2019). Despite the fact that the value of innovation has been demonstrated in the literature, the trip that an idea takes from conception to implementation has not been investigated.

For such reasons, innovation process has attracted the researcher's attention to examine how leadership styles affect its effectiveness and efficiency. Thus, the problem of the study can be summarized in the following question: What effect do various leadership styles have on the innovation process?

Research Objective

The study's major goal is to look at the impact of leadership styles on the innovation process, with taking transformational, transactional, lissez- faire, autocratic and Democratic leadership styles as the possible styles. Hence, following are the objectives of the current.

  1. To identify the leadership styles adopted by leaders in the three registered mobile phone service providers in Jordan as perceived by employees.
  2. To explore the level of innovation in the three registered mobile phone service providers in Jordan as perceived by employees.
  3. The purpose of this study was to determine the impact of leadership styles on the innovation process in Jordan's three registered mobile phone service providers.
  4. To identify the leadership style that has the highest impact on the innovation process in the three registered mobile phone service providers in Jordan.
  5. To see how each accepted leadership style affects the innovation process among Jordan's three registered mobile phone service providers.
  6. To see if the demographics of the respondents have an impact on the impact of leadership styles on the innovation process in Jordan's three registered mobile phone service providers.

Research Questions

The following questions are meant to also be answered by this study:

  1. How do employees in the three registered mobile phone service providers perceive the leadership styles that are practiced by their leaders?
  2. How do employees in the three registered mobile phone service providers in Jordan perceive their involvement in the innovation process?
  3. How do leadership styles affect the innovation process and how employees view it in the three registered mobile phone service providers?
  4. What is the leadership style that has the highest impact on the innovation process in the three registered mobile phone service providers?
  5. How does each leadership style affect innovation among the three registered mobile phone service providers?
  6. In the three registered mobile phone service providers, to what extent do demographic features of followers influence the impact of leadership styles on innovation?

Research Hypotheses

Based upon the literature, research supposed that leadership styles positively affect innovation (Lee and Liu, 2008, Arago'n – correa et al, 2015) Given prior studies- as the best researcher's knowledge- didn't examine The researcher in this study used papers that tested innovation hypotheses to create research hypotheses on the effects of leadership styles on innovation as a process. As a result, the following key hypothesis was tested in this study: The major hypothesis is that leadership styles have a significant favourable impact on the innovation process at the level of (0.05).

Five sub- hypotheses have been formulated from the literature as follow: Shafique and Beh (2016); Gumusluoglu & Ilsev (2006); and Jung et al. (2013) Transformational leadership has been found to have a greater impact on innovation than transactional leadership. Has a higher impact on innovation than transactional leadership. Thus, the researcher formulized the following hypothesis:

Sub-hypothesis 1: A transformational leadership style has a considerable favourable impact on the innovation process at the level of (0.05).

According to the social exchange theory, "obligations are formed through a sequence of exchanges between persons who are in a position of reciprocal interdependence," (Saks, 2016), it is supposed that employees are to obligate to perform in a  desired way in exchange for favorable things that their organizations obligated to provide Thus, the researcher supposed that employees who are reported to transactional leaders will be involved in the innovation process, given that innovation process is a success factor for organizations (Desouza et al, 2009). Hence, the researcher hypothesized.

Sub-hypothesis 2: there is a significant impact at the level of (a ≤ 0.05) of the transactional leadership style on the innovation process.

Al- Alousi et al. (2014); Sheikh Ali & Ibrahim (2014), and Al- shaqha'a (2013) studied the impact of laissez- faire leadership style on organizational innovation, corporate innovation, and creativity respectively, and they found that such a style significantly affects each of the tested dependent variables which are related hypothesized.

Sub-hypothesis 2: There is a significant impact at the level of (a ≤ 0.05) of the transactional leadership style on the innovation process.

Al- AlouSI et al. (2014); Sheikh Ali and Ibrahim (2014); and Al- Shaqha'a (2003) studied the impact of laissez- faire leadership style on organizational innovation, corporate innovation, and creativity respectively, and they found that such a style significantly affects each of the tested dependent variables which are related to the innovation process in a way or another . Accordingly, the following hypothesis formulated:

Sub- hypothesis 3: There is a significant impact at the level of (a ≤ 0.05) of the laissez- faire leadership style on the innovation process.

Al- Alousi et al. (2014); and Wang et al. (2019) found that autocratic leadership negatively affects innovation, while Al- Shaqha'a (2013) found that autocratic leadership style positively affects innovation However, the researcher hypothesized the following:

Sub- Hypothesis 4: There is no significant difference at the level of (a≤0,05) of the autocratic leadership style on the innovation process.

Democratic leadership is considered by followers as a favorable leadership style since it is a people- oriented style, therefore Democratic leadership has a significant effect over innovation as found by Quaar (2015); Al- Alousi et al. (2014) Smooch (2016), and Al- Shaquha'a (2013) Hence the researcher built the following hypothesis:

Sub- hypothesis 5: There is a significant difference at the level of (a ≤ 0,05) of the Democratic leadership styles on the innovation process.

Operational Definitions

Leadership is the process of directing people by influencing or by forcing- depending on the adopted leadership style- to act in a way that guarantees accomplishing certain desired goals effectively and efficiently.

Leadership style; is a set of behaviours that determine the way whereby a leader direct his/ her followers to act in a way that guarantees accomplishing certain desired goals effectively and efficiently.

Innovation: The journey that an idea goes through, which starts from creating the idea and ends in the implementation.

Transformational leadership: the manner whereby a leader handles his/ her followers as collaborator who are to be leaders in the future, encourage them to do more than the basic expectations of what they can do, pay special attention to each employee individually, stimulate them to think in new ways, and act in way that show him/ her as a role model for followers.

Transactional leadership: The style of leading whereby a leader emphasizes the transaction in order to get the job done

Laissez- faire leadership: Is the style whereby a leader act at the level of zero leadership.

Autocratic leadership: Is the level full supervision, whereby a leader makes all decisions alone, concerns tasks accomplishment rather than followers 'happiness, and motivate followers by punishments.

Theoretical Background

Leadership

Leaders and leadership are two intertwined concepts that are difficult to be separated, thus, when talking about leadership, it is considered in terms of persons who demonstrate examples of leadership (Bertocci, 2019). So, it is important to discuss the main qualities that characterize respected leaders in different contexts in order to identify some contemporary framework of leadership.

Before reviewing leadership, a distinction needs to be made between leadership and management. Leadership, and management are both necessary for success in today's business environment and must go hand in hand, but they are not the same. Management is about practices and procedures that are used to cope with complexity emerged in organizations, while leadership is about coping with the change that has become so important because business world has become more competitive and more volatile, "more change always demands more leadership" (Kotter, 2011) . Furthermore, management is about doing things right, while leadership is about doing the right things (Carroll, et al. 2015)

Definitions of Leadership

There is no universal agreement about how leadership is defined, where leadership definition vary according to the point of view of each researcher (Al- Shaqha's, 2013).According to Bass (2010). "As a focus of group activities, as a means of inducing compliance, as an exercise of influence, as a specific kind of act, as a type of persuasion, as a power relationship, as a tool for achieving goals, as an impact of interaction, and as a differentiated role, leadership has been seen, and as the initiation of structure. "Bertocci (2019) defined leadership as "the combination of characteristics or personality traits in an individual that compels that person to inspire others to achieve goals that without the leader's motivation would not normally be accomplished." Obviously, Bertocci has mainly focused on the 'exercise of influence' aspect of Bass's definition of leadership. While leadership has been defined as "the skill of persuading a group of individuals to act towards reaching a common objective" by Ward (2017). She claims that good leadership is based on good ideas (whether original or borrowed). However, in order to be effective, those ideas must be communicated to others in such a way that they will act as the leader wishes.

Hiriyappa (2019) has reviewed several definitions of leadership which have been formulated by different researchers and writers over time, such as: Alford and Beatty, Chester, Terry, Koonts and O'Donnel, peter Drucker, and others. From their definitions, Hiriyappa concluded to four key points about leadership.

  1. Leadership is an influence relationship among, leaders and followers who strive for real change and outcomes that reflect their shared purposes.
  2. Leadership is the use of non- coercive power to shape goals, motivate behaviour towards their attainment.
  3. Leadership entails more than just a personality trait, tradition, opportunism or appointment but connected specifically with the way one actually behaves towards oneself and others. Leadership defined as guidance of others in their pursuits, often by organizing, directing, coordinating, supporting, and motivating their efforts. IT looks for Reciprocal, Transactional, Transformational, cooperative and Adaptive.
  4. Leaders are defined as "those who influence the behaviour of others without force." Accordingly, due to variances in defining leadership, and the absence of agreement upon a single definition, the researcher defines leadership as the process of directing people by influencing or by forcing- depending on the adopted leadership style- to act in a way that guarantees accomplishing certain desired goals effectively and efficiently.

Leadership Theories

There are as many theories on leadership as there are philosophers, researchers and scholars who have studied and ultimately published their leadership theories. Based on the review of the literature that the researcher made, the following are the main studied theories:

The "Great Man" Theory

According to this theory, leaders are not like other people, They possess some intrinsic attributes that enable them to lead effectively (MSG, 2018). This notion holds that leaders are born, not formed, and that they have certain characteristics (Prasad, 2014; and Amanchukwu et al., 2015). Critics claim that the "great man" paradigm treats leadership solely as a masculine trait, particularly in terms of military command (Cherry, 2012).

The traits theory

This theory proposes that some specified traits differentiate leaders from other individuals (Colbert et al, 2012). As it suggested that people are born with some certain qualities that excel them in leadership roles (Mutanchiang et al, 2016) . Although trait theory has determined the main traits and qualities that distinguish leaders from other individuals, it couldn't explain people who possess those qualities but are not leaders (Amanchukwu et al, 2015). Therefore, scholars tended to find new explanations for effective leadership.

Behavioral Theories

Unlike the great man hypothesis, these beliefs are founded on the concept that effective leaders are not born, but created (Ralph, 2010 ). Because behavioral theories of leadership focus on leaders' actions rather than their mental qualities or internal attributes, non-leaders can learn to become leaders by being taught and observed (Cherry, 2017). Hiriyappa (2019) is the one who has mentioned it the most:

Adair's theory: As cited by Hiriyappa (2019) , Adair's theory is based on appropriate behaviors for the situations. Thus, it believes effective leadership lies in how the leader behaves to meet the needs of the task, the group, and the individual.

The Ohio studies relating to Leadership Theories: More than a thousand dimensions of leadership behavior had been resulted by Ohio studies, before they were narrowed only into two dimensions as follow (Robbins & Judge, 2012):

Initiating structure in which a leader identifies the roles to be performed by him/ her, and structures the roles of followers in order to accomplish goals Such behavior tries to organize tasks, objectives, and work relationships. Leaders who approach this behavior assign certain tasks to subordinates, expect standardized level of performance from workers, and stress meeting deadlines.

Consideration in which a leader emphasizing in his job relationships on respecting employees' ideas, regarding their feelings, and maintaining the mutual trust. Leaders with high 'consideration' are friendly and approachable, help followers with their personal problems, treat all followers as equals, and express appreciation and support.

The Michigan Studies Relating to leadership Theories: Michigan studies were carried out in the same period as Ohio studies and came up with two behavioral dimensions (Hiriyapp, 2019):

Job-centered leadership is characterized by a focus on completing the group's duties, the use of supervision and processes, and the use of force, incentive, and lawful power to influence followers' behavior and performance.

Employee- centered leadership behavior in which leaders emphasize the people doing the work rather the work itself, believe in engaging subordinates in the decision- making process, and focus on subordinates' personal advancement, growth, and achievement.

These Michigan's two dimensions are closely related to the Ohio state dimensions. Employee- centered leadership is similar to consideration in terms of taking care of followers foremost, and job- centered leadership is similar to initiating structure in terms of concentration mostly on the job accomplishment. Therefore, most leadership researchers use the terms synonymously (Robbins and Judge, 2012).

The Managerial Grid Theory of Leadership by Blake and Mouton: The managerial Grid is used in analyzing the leadership behavior. Blake and Mouton created a two-dimensional grid expressing managerial style based on the Ohio and Michigan endpoints. (Hiriyappa, 2019), the first dimension focuses on tasks and the other one focuses on the relationships with the subordinates. However, the managerial grid quantifies the degree to which the focus is on results or the focus is on the relationships with the subordinates (Borland et al, 2014). Blake and Mouton (2014) have designed two dimensional (concern for production and concern for people).

Contingency Theories

Successful leadership, according to the contingency theories, Depending on a variety of contextual factors, which leadership style is best suited for the circumstance may be determined (Prasad, 2014). According to leadership academics White and Hudson, genuinely effective leadership is not only about a leader's traits, but also about achieving the correct balance between their behaviors, their followers' needs, and their circumstances (Cherry, 2017). Robbins & Judge (2012) have considered four theories to be classified under the contingency theories; the fielder model, path- goal theory, the situational theory, and the leader- participation model/ theory.

Leader- Member Exchange Theory (LMX)

According to this theory, because of the time and work pressures they face, leaders form special, positive relationships with a small group of their followers (dubbed the in group), who receive the leaders' most trust and attention, and are more likely to receive special privileges, while other followers (dubbed the out group) are in the out-group. (Robbins and Judge, 2012). The benefits that in group members receive are in return of the roles they play in supporting leaders, helping them in decision making, taking some of their responsibilities, and providing them with advice (Goethals et al, 2014). As cited by Lussier and Achua (2015), this theory proposes that in group members Higher work satisfaction, improved performance, fewer turnover, greater dedication, creativity, innovation, and corporate citizenship behavior will all be beneficial consequences.

Literature Review

Introduction

In this section, the researcher included the most related previous Arabic and foreign studies to the variables in- hand. The following is a summary of the most related studies collected from different sources.

Arabic studies (from within the Arab world)

The study conducted by ouaar (2015), entitled "The purpose of "The Role of Leadership Styles in the Development of Administrative Creativity" was to assess the impact of different leadership styles (transformational, transactional, participative, and paternalistic) on administrative creativity within the Saidal Group in Algeria's pharmaceutical industry. The study's findings were as follows: Leadership styles practiced in saidal group were transformational, transactional and participative with relatively high means, compared with the paternalistic leadership.

In saidal group for the pharmaceutical business, there was a high level of administrative ingenuity.

In the Saidal Group, there were substantial positive connections between administrative creativity and leadership styles (transformational, transactional, participative, and paternalistic).

Al- Alousi et al, (2014), in their study "Impact of leadership styles in Organizational innovation", aimed to reveal the impact of leadership styles on organizational innovation in the private sector banks in Kurdistan Region, Iraq. The main results of the study are:

There was a negative impact of autocratic leadership style on organizational innovation.

Sheikh Ali and Ibrahim (2014) investigated the impact of leadership styles on corporate innovation dimensions in the telecommunication business in Mogadishu, Somalia, in their paper "The impact of Leadership style on corporate innovation: survey from - Somalia." The effects of 1) transactional leadership style was investigated in this study.

On corporate innovation, there are three types of leadership styles: 1) transformational leadership; 2) laissez-faire leadership. Transformational leadership style (=.485, t= 6.571, P.001), transactional leadership style (=.262, t= 3.263, P.001), and laissez-faire leadership style (=.463, t= 6.211, p.001) were found to have statistically significant and favorable effects on business innovation. "The association between leadership styles (Democratic leadership style, free leadership style, and authoritarian leadership style) and creativity of employees in the General Department of Passports (GDP) in Al- Reyad, Saudi Arabia," according to an Alshaqua research published in 2003. The following were the study's main findings:

The most practiced leadership style in the GDP was the Democratic leadership style with a relatively high mean, followed by the autocratic then the free leadership styles with a relatively low means.

The components of managerial creativity were practiced at a medium level in the GDP.

There was a favorable association between the degree of employee Creativity in the GDP in Al- Reyad and the leadership styles (democratic leadership style, free leadership style, and autocratic leadership style).

Foreign studies (from outside the Arab world)

Wipulanusat et al, (2017) conducted a study entitled Exploring leadership styles for innovation: an Exploratory factor analysis, in which they aimed to discover the key leadership styles that influence innovation in the Australian public service (APS) by analyzing data from the 2014 APS staff census, which included 3125 engineering professionals from around the Commonwealth of Australia. According to the exploratory factor analysis, the structure of APS is made up of two variables that explain 77.6% of the variance in leadership.

Cacique and Beh (2016) investigated the function of transformational and transactional leadership in encouraging innovation both directly and through absorptive capacity in their paper "The Role of Leadership Styles to Promote Innovation: Empirical Evidence from a Developing Country." Data was obtained from small and medium-sized businesses using a clustered sampling methodology.

In an attempt to investigate the relationship between leadership styles (transformational and transactional styles) and organizational performance by considering innovation (exploratory and exploitative) in manufacturing companies of Guilan province, Ibrahim et al, (2016) conducted a study entitled "relationship between leadership styles and organizational performance by considering innovation in manufacturing companies of Guilin province". Results showed that transformational leadership had a positive relationship with exploratory innovation and a negative relationship with exploitative innovation, while transactional leadership had a negative relationship with exploratory innovation and a positive relationship with exploitative innovation.

Ahmad and Kasim (2016) aimed in their study, The Effects of transformational leadership towards teachers innovative behavior in schools, to identify the impact of transformational leadership of principals towards teacher's innovative behavior in the school. The study found that transformational leadership principals had affected and contributed to teacher's innovative behavior. Based on this result, the researchers recommended school leaders to practice transformational leadership to improve the behaviors of innovative teachers, and thus, to improve school performance.

Kroes's study (2015), entitled "The Link Between Transformational Leadership and Innovative Work Practices: The study "The Role of Self-Efficacy and the Effect of Perceived Organizational Support on Innovative Work Behavior" investigated the direct link between transformational leadership and innovative work behavior (IWB) in Dutch companies, which was mediated by employees' self-efficacy. According to the findings of this investigation, Tran.

The Impact of Leadership Styles on Innovation Management – A Examine and Synthesis is the title of a study undertaken by Jesting et al, (2015) to review the research findings on the impact of various leadership styles on innovation management. A framework that structures existing insights into four generic dimensions: people, means, effects, and goals were developed. Based on this framework, studies on directive and participative leadership, interactive leadership. Charismatic leadership, transformational leadership, transactional and instrumental leadership, strategic and CEO leadership, and shared and distributed leadership were review.

Summary of Results

The descriptive statistics reported that employees perceive the transactional leadership practices as the most dominant theme of leadership styles practiced by their leaders and supervisors with a high level, followed by the democratic leadership practices and the transformational leadership practices with high levels also, and finally the laissez- faire leadership practices and the autocratic leadership practices with moderate levels.

As for level of innovation, results showed that the mean value is (3.92). This indicates a high level of innovation.

All leadership styles achieved together nearly (R2= 27%) of the variance in the innovation process. Transformational leadership was found to be the strongest driver for the innovation with path coefficient value of (0.316), followed, with a large gap, by the autocratic leadership with path coefficient value of (0.016), as these two styles were the only significant paths.

The low variance that the proposed leadership styles have achieved in the innovation process may be explained by the inappropriate leadership practices that leaders in the selected population practice. As the descriptive statistics indicated that the transactional leadership is the dominant theme; however, testing the impact of the leadership styles in promoting the innovation revealed that transformational leadership has the highest effect.

Thus, the researcher provides a direction and a suggestion for leaders and supervisory to adopt transformational leadership style, as it is proved that such style could promote employees' engagement in the innovation process.

Testing the effect of leadership styles on innovation process separately have revealed different results from the results garnered in the full model, such results are expected, as the full model test the effect of all the styles together on the innovation process, accordingly the styles when compared together at once the variance power vary. Even the results of the separated models revealed that the different styles can affect the employee engagement in the innovation process; still the transformational leadership is the dominant style in both the full and separated models. However, the conclusion that may be drawn from testing all the styles together is that when comparing the effect of all the styles on the innovation proves at once, only the transformational one is the main driver for that innovation, followed by the autocratic style

The results of retesting the models while including the demographic characteristics revealed only minor changes was achieved in the coefficient of determination R2, path coefficient, and the significance T- statistics.

Suggestions and Recommendations

Based on the results, some recommendations are provided

Leaders need to reconsider the leadership styles they practice. As results revealed that their dominant leadership style is transactional leadership style, whose practice explained a lower variance in innovation levels compared to the transformational style which revealed the highest effect on innovation process.

Leaders need to view subordinates as collaborators not followers, as leadership practices, as leadership practices in the last decade was oriented toward more participative forms rather than autocratic ones. To assure the collaboration of subordinates, leaders can transform subordinates and stimulate them to look at old problems in new ways that represent the essence

Future studies are required to adopt different methodologies when investigating such issues to provide more in- depth insights.

Future studies are recommended to investigate the study subject as perceived by leaders, to understand why such leaders may adopt such leading styles.

Future studies should include more sectors to enhance the generalizability of the results.

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