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http://dx.doi.org/10.7469/JKSQM.2019.47.1.59

The Effect of Small Firm CEOs' Transformational Leadership on Employees' Innovative Behavior  

Kim, Yong-Mook (Department of Business Administration, Graduate School of Soongsil University)
Shin, Ho-Chul (College of Business Administration, Soongsil University)
Publication Information
Journal of Korean Society for Quality Management / v.47, no.1, 2019 , pp. 59-74 More about this Journal
Abstract
Purpose: Despite the fact that the majority of domestic firms are small in size, there have been few studies conducted to understand the leadership effectiveness of small firm CEOs. Based on the upper echelon theory, this study attempts to demonstrate empirically that transformational leadership of small firm CEOs can increase the innovative behavior of employees. In addition, the present study examines mediating effects of CEO trust perceived by employees when transformational leadership affects employees' innovative behavior. Methods: The survey data of CEOs'transformational leadership, innovative behavior of employees, and perceived CEO trust were collected from 176 employees working in domestic small firms. Hierarchical regression analyses were performed to examine the main effects between transformation leadership and innovative behavior and mediating effects of CEO trust perceived by employees. Results: The results show that CEOs' transformational leadership is significantly related to the innovative behavior of employees in the current sample. Results also indicate that CEO trust perceived by employees reveals a mediating effect in the process of transformational leadership affecting innovative behavior. Conclusion: The results show that as suggested by the upper echelon theory, the leadership of small firm CEOs can have a significant impact on positive job-related behaviors and attitudes of employees. The results also contribute to expand on the understanding of the relationship between transformational leadership and innovative behavior by explaining that transformational leadership can mediate trust in CEOs in enhancing employees'innovative behavior. Theoretical and practical implications are reviewed, and limitations of the study and suggestions for future research are addressed.
Keywords
Transformational Leadership; Innovative Behavior; Perceived CEO Trust;
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