Innovative work behavior in SMEs: the role of transformational leadership

Abstract

Purpose

The purpose of this paper is to investigate the determinants of innovative work behavior (IWB) by examining the moderating role of transformational leadership in the context of small and medium enterprises (SMEs).

Design/methodology/approach

The study surveyed 371 employees from SMEs in Bosnia and Herzegovina by adopting convenience sampling. Hierarchical regression was used to test the hypotheses.

Findings

The findings supported the authors’ assumptions that IWB determinants such as psychological empowerment, participation in the decision-making process and organizational justice are positively related to IWB. Besides, transformational leadership moderates the relationship between organizational justice and IWB.

Research limitations/implications

The data for this study was collected by using convenience sampling as well as a cross-sectional survey method, which limits the generalization of results.

Practical implications

To spur the IWB among the employees in SMEs, an organization has to create an environment where psychological empowerment is high, employees have a chance to participate in the decision-making process and organizational rules and procedures are fair. In the case of organizational justice, the relationship shall be stronger if transformational leadership is present.

Originality/value

In SMEs, transformational leadership plays an important role. To the best of the authors' knowledge, this is the first study that demonstrates the moderating effect of transformational leadership on the relationship between one specific IWB determinant and IWB.

Citation

Knezović, E. and Drkić, A. (2021), "Innovative work behavior in SMEs: the role of transformational leadership", Employee Relations, Vol. 43 No. 2, pp. 398-415. https://doi.org/10.1108/ER-03-2020-0124