Michael Olalekan Adeoti & Yabagi, Bala Ahmed
Department of Business Administration, Federal Polytechnic, Bida, Nigeria.
Abstract
The aim of this study is to propose a framework and state propositions to be tested empirically in future studies. The researcher reviewed scholarly articles on the variables with the aim of stating propositions that are in agreement with theoretical perspectives and extant literature. Drawing from social exchange theory, this study proposed that there would be a positive relationship between innovative work behaviour and performance of public tertiary institutions. Further, a positive relationship between leadership styles (transformational and ethical) and performance of public tertiary institutions is predicted. This study recommends that management of public tertiary institutions and policy makers need to pay adequate attention to enhance productivity via encouragement of positive work attitudes and display of transformational abilities by the management of public tertiary institutions. In conclusion, this paper extends research on organizational performance by proposing a model that has the tendency to create a positive improvement in public sector educational institutions. However, there is a need for empirical studies to test the proposed relationships.
Keywords: Innovative work behaviour, transformational leadership, ethical leadership, and organizational performance.
Introduction
Innovative work behavior has a significant impact on company performance, indicating that the intentional application of new ideas within a company can greatly benefit its success. Innovation plays a crucial role in attracting customers, enabling a company to adapt, thrive, and remain competitive amidst various business challenges. According to Iqbal, Abid, Contreras, Hassan, and Zafar (2020), innovative work behaviour refers to the creation, introduction, and deliberate implementation of new ideas within a work role, group, or organization, with the aim of enhancing overall performance. The importance of fostering innovative work behavior can be supported by three key principles. First, employees often identify problems and propose creative solutions. Second, individuals who thrive in their work are more energized, increasing their propensity to engage in innovative behaviors. Third, creative individuals generate solutions that can be applied to similar situations, leading to improved performance.
This theory is supported by research conducted by Bos-Nehles and Veenendaal (2019) which highlighted the significant impact of innovative work behaviour on company performance. Further, encouraging employees to engage in innovative work behavior can have a positive and profound effect on a company’s overall success.
Research has demonstrated that changes in the workplace can foster innovative work behavior. Innovation involves the introduction of new ideas, practices, procedures, and techniques to individuals, groups, and organizations (Amirudin & Nugroho, 2022). This highlights the importance of leaders as role models in establishing an ethical work environment and cultivating a strong organizational reputation. However, without the presence of innovative behaviour, there can be a negative impact on employee performance. Even innovative companies can fail to reap the benefits of their innovative practices if they are not effectively implemented. A research conducted by Iqbal et al. (2020) have found that ethical leadership does not influence company performance with innovative work behaviour serving as the mediating variable.
Similarly, leadership determines the success and failure of any organization. The world is shifting towards an economy where the essential resource of an organization is its knowledge (Popli & Rizvi, 2016). Leadership style is the manner in which people are directed and motivated by a leader to achieve organizational goals. Leadership style in an organization is one of the key factors that play significant role in enhancing or retarding the interest and commitment of the individuals in the organization (Obiwuru, Okwu, & Nwankere, 2021). The leadership style adopted by organization enhances the achievement of corporate goals.
Empirically, Ojokuku, Odetayo and Sajuyigbe (2012) observed that leadership style is one of the determinants of the success and failure of any proactive organization. Also, Lawal, Kio, and Adebayo (2000) agreed that good leadership is a condition for effective accomplishment of organizational goals and objectives. Effective leadership style of management is a pre-requisite to organizational accomplishment (Uchenwamgbe, 2013). All over the world, organizations attribute their successes to leadership efficiency, that is, the leadership style of the supervisors has a considerable effect on organizational performance (Sun, 2019).
In a study conducted by McGrath and MacMillan (2000), it was reported that there is a significant relationship between leadership styles and organizational performance. Relationship between leadership style and organizational performance has been discussed often. Most research showed that leadership style has a significant effect on organizational performance, and different leadership styles may have a positive correlation or negative correlation with the organizational performance, depending on the variables used by the researchers (Ojokuku, Odetayo, & Sajuyigbe, 2012). The focus of the present study is on transformational and ethical leadership styles. It is imperative to choose these two styles because of the probability that the duo may influence organizational performance positively.
Ethical leadership has a significant impact on company performance due to its role as a coordinator, motivator, and catalyst that drives a company towards success. Ethical leadership is crucial and necessary for supporting a company’s achievement. Ethical leaders exhibit moral behaviour based on a set of values that guide their actions and behaviours, particularly when they hold positions of authority.
Many researchers have worked on leadership styles to estimate their effect on organizational performance (Ogbeide, Groves, & Cho, 2008). For instance, when the leaders give autonomy to the employees, they would be more loyal and motivated to perform efficiently which would enhance organizational productivity with better outcomes (Kim & Beehr, 2018).
Previous studies have focused on the relationship between leadership styles and employees’ productivity in private sectors (Arnett, Sandvik, & Sandvik, 2018; Roundy, Harrison, Khavul, PérezNordtvedt, & McGee, 2018). The researcher is of the view that there is no one best leadership style, the circumstance surrounding the leaders would dictate the right leadership style to adopt, whether transformational or ethical. Hence, the need to focus on how leadership styles affect organizational performance in the public sector in Nigeria.
Also, extant literature focused on negative behaviours such as employees’ deviant behaviour, counterproductive behaviour and intentions to quit among faculty members (Adeoti, Shamsudin & Wan, 2017; Geidam, Njoku, & Bako, 2010; Kura, Shamsudin, & Chauhan, 2015; Kura, Shamsudin, & Chauhan, 2016), but the present study focused on employees’ innovative work behaviour among faculty members and how such behaviours can enhance the performance of public tertiary institutions. Hence, the present study focused on positive work behaviour among faculty members instead of negative behaviours studied by previous researchers.
Conceptual Framework
Organizational Performance
Corporate performance and organizational efficacy are sometimes used interchangeably. Organizational effectiveness assesses how successfully a social system with constrained means and resources, like an organization, accomplishes its objectives without placing an undue burden on its members. When assessing performance, factors including productivity, flexibility, and inter-organizational conflicts are taken into account (Alshebami, 2021). An organization’s performance can be used to measure its level of production and efficacy. Leaders can determine whether these achievements have been realized or not by comprehending the overall performance of the company. Knowing the state of the business will make it simpler for you to create policies. Thus, company proprietors can manage and organize the business better. Business owners can promptly make decisions to enhance organizational functions if there are deficiencies.
Innovative Work Behaviour
Innovation is a complex process with many hazards, positive leadership behavior is considered a key factor in encouraging employee innovation (Hidayati et al., 2019). In this situation, employing innovative work behavior is seen as having benefits for the organization. It is also considered that companies cannot rely solely on the culture that has existed for a long time, but must construct a culture while maintaining the core values of the company. Then, as a driver of innovation within the company, employees are also expected to demonstrate innovative work behavior that can help the company accomplish its objectives and survive in the corporate world. Employees do this to maintain their positions in the company (Kuswati et al., 2021).
Change is an unavoidable thing in human lives. Innovation brings about undesired outcomes (Khan et al., 2022). Khan et al. (2022) propose that adopting an adhocratic culture can foster both innovation and performance, which are crucial for sustainable organizational success in today’s competitive markets.
Leadership
Leaders play a crucial role in ensuring stability, efficiency, and guiding organizations towards their goals. However, the traditional approach to leadership alone may no longer be sufficient in today’s society, as it can lead to ethical issues and social problems. In response, ethical leadership has emerged as a new requirement for leaders in modern organizations (Rosida & Wajdi, 2023). Ethical leadership encompasses both personal and interpersonal aspects, encompassing behaviors, decision-making processes, and relationships that adhere to ethical norms and values (Waskito et al., 2019).
Ethical leadership plays a significant role in providing purpose and motivation to followers within an organization, fostering their adaptability to change and enhancing the quality of work. It encompasses qualities, actions, and behaviors exhibited by leaders that have positive impacts on others. Key characteristics of ethical leaders include honesty, reliability, compassion, and fairness (Ahmad et al., 2022). In today’s dynamic work environment, where high performance is expected from employees, leaders must be responsive to the demands of change, including cultivating an organizational culture that embraces a distinct creative orientation.
Molnár et al. (2021) suggest that ethical leadership plays a role in motivating employees to channel their efforts and abilities towards their work and foster innovation. Ethical leaders emphasize factors that inspire employees to be creative and innovative in order to achieve collective objectives for the betterment of the team and the organization. Leaders are expected to meet the demands of change, which include fostering creativity and innovation. Previous research conducted by Iqbal et al. (2020) supports the notion that ethical leadership has an impact on promoting innovative work behavior.
Theoretical Framework
Social exchange theory
Exchange theorists suggest that human interactions are characterized by social economics, where people are concerned about the inputs they invest in relationships and the outcomes they receive from these relationships (Blau, 1964; Homans, 1961).
Blau’ s perspective is more economic. He argued that social interaction depends much on the anticipated reward. In other words, the next move one makes in enhancing (or degrading) the social relationship depends on what reward is likely to be received. In this manner, Blau argued that people learn to view and value the social relationships more and decide whether the social interaction should be maintained or otherwise.
In the official settings, the rewards could take the forms of supportive leadership, ftraining and development, compensation packages, career advancement, job security, accelerated promotion and more. It is the value of the rewards that determine people’s behaviour and responses toward the social relationship, which means that social relationships are governed by the norms of reciprocity (Gouldner, 1960). That is, people should return benefits given to them in a relationship.
In the present study, the researcher is of the view that the leadership styles exhibited by the management of public tertiary institutions (either transformational or ethical) may determine whether employees will contribute meaningfully or less to the organizational productivity. For instance, norm of reciprocity explains that if employees perceive that the leaders are supportive and ethical towards the employees; all things being equal, such employees may contribute positively to the enhancement of organizational performance.
Trait Theory
Trait theory of leadership is one of the earliest theories of leadership. It focused on the personal attributes of leaders, which comprise physical and personality characteristics, competencies and values. It views leadership mainly from the perspective of the individual leader. Basis of this approach is the assumption that traits produce patterns of behaviour that are coherent amidst the situations. Therefore, leadership traits are considered to be embedded characteristics that people are born with and that remain relatively stable over time. (Mumford, Zaccaro, Harding, Fleishman, & Reiter-Palmon, 2015).
Prior trait scholars studied the personality attributes that they believed were related to leadership effectiveness; an interest on researching exceptional historical figures. According to Fleenor (2021), early researchers viewed leadership as a uni-dimensional personality trait that could be reliably measured and was distributed normally throughout the population; that is an individual difference variable. Many of the early studies on the trait approach focused on the systematic investigation of the significant differences between leaders and followers. It assumes that individuals in higher-level positions possess more leadership traits than those in lower-level positions. To further buttress the fact, a large number of studies were conducted in an attempt to develop reliable and valid measures of leadership traits.
In the present study, transformational ability of a leader is a rare trait in most leaders but if public institutions must reclaim their lost glories, the leaders must be transformational. Also, the level of moral decadence in public tertiary institutions call for concerns. The researcher is of the opinion that ethical leadership is highly essential for improved productivity. Surprisingly, ethical traits are missing in most heads of public institutions in Nigeria as most Vice-Chancellors, Rectors, and College Provosts see their positions as means of financial enrichment for themselves, their family members and close allies.
Relationship between innovative work behaviour and organizational performance
According to Iqbal et al. (2020), Innovative Work Behavior (IWB) can be described as the purposeful generation, introduction, and application of fresh ideas within a work role, group, or organization, with the intention of enhancing the performance of that specific role, group, or organization. Individuals who perceive themselves as thriving in their work tend to exhibit greater levels of IWB compared to those who do not thrive. The presence of innovative work behavior has been shown in previous studies, including research by Iqbal et al. (2020), to have an impact on company performance.
Proposition 1: There is no relationship between innovative work behaviour and organizational performance
Relationship between leadership and organizational performance
According to Ukaidi (2016), leadership style and systemic behavior shifted away from the characteristics of the leader to the style the leader adopted. According to Rowe (2019), records from the style approach recommend that leaders who are devoted to democratic or participatory leadership style seem more successful, compared to managers that adopt autocratic or laissez faire leadership style of management. Complementing Rowe (2019), Yukl (2012) opined that participatory leadership is the best style of leadership in managing an organizational system of any type, and maintained that people react favorably to it in organizations by increased productivity, lower unit cost, good morale and improved labor management relation. However, Yukl (2012) hinted that the worst style of leadership is autocratic or authoritative leadership style which gives rise to high labor management conflicts.
There are different reasons why there should be relationship between leadership style and organizational performance. Today’s intensive and dynamic markets characterize innovation-based competition, price-performance rivalry, decreasing returns and the creative destruction of existing competencies (Venkata-raman 2018). Several studies have suggested that effective leadership behaviors can facilitate the improvement of performance when organizations face these new challenges (McGrath & MacMillan 2000; Teece, Pisano & Shuen 2018). Reviewing the effects of leadership on performance is paramount because leadership is viewed by some scholars as one of the key driving forces for improving a firm’s performance and productivity. According to (Avolio 1999 and Rowe 2019), effective leadership is seen as a major source of management development and sustained competitive advantage for organizational performance improvement (Obiwuru et al. 2021).
Zhu, Chew and Spangler (2005) opined that transactional leadership assists firms to actualize their objectives more efficiently by relating job performance to valued rewards and by guaranteeing that em-ployees have the resources needed to get the job done. McShane & Von-Glinow [2019] stressed that visionary leaders create a strategic insight of some future states, communicate that vision through fram-ing and use of metaphor, model the vision by acting consistently, and build commitment towards the vision (Obiwuru et al. 2021). Zhu et al. (2005) recommended that visionary leadership will result in high levels of cohesion, commitment, trust, motivation, and hence performance in the new organizational environments.
Prior studies have explored the impact of leadership and adhocracy culture in different contexts. Sanchez-Famoso et al. (2023) conducted research in small and medium-sized family companies, examining the integration of ethical leadership, internal social capital, and company performance. Gao, Zhao, and Qu (2020) investigated the effect of person-organization (PO) adhocracy value congruence on employee creativity using fit theory. Alheet et al. (2021) examined the influence of leadership style on innovative work.
According to Sarwar et al. (2020), an ethical leader is an individual who demonstrates moral behaviour both personally and within the corporate setting. Moral behavior is guided by a set of values that influence the actions and conduct of those in positions of authority. When leaders are perceived as trustworthy, considerate, and selfless, employees are more likely to connect with them, engage in positive interactions, and align their interests with the organization’s goals. Previous research by Kim and Thapa (2018) supports this theory, indicating that ethical leadership has a beneficial impact on firm performance.
According to a study by Sarwar et al. (2020), ethical leadership refers to individuals who demonstrate moral behavior both personally and within the organization. This theory is supported by research conducted by Kim and Thapa (2018), which found a positive impact of ethical leadership on firm performance.
Extant literature agreed that ethical leadership has significant impact on innovative work and organizational performance. Ethical leadership sets the tone for a culture that encourages and supports innovation among employees (Molnár et al., 2021; Jia et al., 2022).
Proposition 2: There is no relationship between transformational leadership style and organizational performance
Proposition 3: There is no relationship between ethical leadership style and organizational performance
Method
This research follows a quantitative approach to examine the relationship between innovative work behaviour, leadership style and organizational performance. Quantitative research is a research method rooted in positivism, which involves studying specific population or samples and gathering data via questionnaires (Bougie & Sekaran, 2017). However, the present study aims to make propositions because it is a conceptual paper in nature. Hence, the researcher explored electronic databases such as Google scholar, EBSCOhost, Emerald management plus and other related databases for scholarly articles on the variables with the aim of raising propositions in line with theoretical perspectives.
Research framework
Social exchange theory and past empirical studies agreed with the proposed conceptual framework. Specifically, social exchange theory (Blau, 1964) explains the positive relationship between leadership activities and organizational performance. Further, it is the value of leadership and people’s innovative behaviour and responses that determine the outputs of corporate entities. In other words, social relations are governed by the norms of reciprocity (Gouldner, 1960), which simply states that people would return benefits given to them or values they receive in a relationship. Figure 1.1 presents the conceptual framework.
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Organizational performance |
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Innovative work behaviour
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Leadership: -Transformational -Ethical leadership
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Figure 1.
Conceptual framework
Conclusion
The implications of this research are significant for entities seeking to understand the effects of innovative work behaviour and both transformational and ethical leadership on organizational performance. The findings will provide valuable information for decision-making processes aimed at enhancing corporate performance and organizational success. For future research, it is recommended that future studies should focus on variables such as economic pressure and employees’ commitment, which were not examined in this study.
This study has proposed a framework guided by social exchange theory (Blau, 1964) with the aim of encouraging innovative work behaviour among faculty members in Nigerian public tertiary institutions. More so, management of public tertiary institutions are encouraged to adopt both transformational and ethical leadership approaches to instill innovative work behaviour that may enhance productivity among staff members. Lastly, the researcher is optimistic that future researchers will test the proposed model empirically.
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