THE MODERATING INFLUENCE OF TRANSFORMATIONAL LEADERSHIP ON THE RELATIONSHIP BETWEEN ENTREPRENEURIAL LEADERSHIP AND EMPLOYEE ENGAGEMENT

Abstract

Leadership unlocks creativity through a variety of mechanisms, but the specific mechanisms have not yet been identified. Entrepreneurial Leadership and Transformational Leadership play critical roles in driving innovative work behavior and organizational outcomes such as employee engagement. Data were analyzed using a cross-sectional quantitative approach with simulated responses (N=300) representing employees in knowledge-intensive industries. A structural equation model (SEM) and bootstrapping techniques were used to test direct and mediated relationships. The results indicate that transformational leadership significantly enhances work engagement, the effect being mediated in part by the emotional intelligence of a leader and in full by the creative self-efficacy of employees. Moreover, entrepreneurial leadership positively influences innovative work behaviors, with work engagement serving as a significant mediator. The above evidence suggests that entrepreneurial leaders stimulate innovation both by setting strategic directions and by motivating their teams. Although both styles are essential to innovation through engagement, their effects appear to occur simultaneously rather than sequentially. It concludes that an effective leadership style for innovation requires a combination of behaviors. Organizers are recommended to develop HR programs that encourage transformational as well as entrepreneurial behavior in supervisors in order to maximize employee commitment. Transformational leaders provide inspirational, emotionally intelligent support to build commitment, while entrepreneurial leaders channel that commitment into novel outcomes.