Entrepreneurial leadership and employee innovative behavior: Intervening role of creative self-efficacy

Abstract

BACKGROUND:

Employee innovative behavior is an important factor to boost organizational innovation in order to gain a competitive advantage in the global business market. Several studies have been conducted across the world to explore the effect of different leadership styles on employee innovative behavior and find out diverse results.

OBJECTIVE:

Entrepreneurial leadership has been emerged as a new leadership theory from leadership and entrepreneurship literature to meet the dynamic changes in the 21st century. This study aims to investigate the effect of entrepreneurial leadership on employee innovative behavior, with the intervening role of creative self-efficacy, with the lens of social learning theory.

METHODS:

Data (n = 265) were collected from the textile sector of Pakistan. Four core statistical techniques, i.e., descriptive statics, confirmatory factor analysis, discriminate validity analysis and structural equation modeling were used to analyze the data.

RESULTS:

Results have shown the positive direct influence of entrepreneurial leadership on employee innovative behavior and creative self-efficacy. Likewise, entrepreneurial leadership has an indirect positive influence on employee innovative behavior through creative self-efficacy.

CONCLUSION:

Entrepreneurial leadership is a new leadership theory, which is applicable in any nature and size of the organization. The current study explored the performance mechanism of entrepreneurial leadership on employee innovative behavior with the lens of social learning theory and provides several managerial and theoretical implications.

Keywords

Entrepreneurial leadership innovative behavior creative self-efficacy innovation

Muhammad Shahid Mehmood Muhammad Shahid Mehmood is a Ph.D. candidate at the Donlinks School of Economics and Management, University of Science and Technology Beijing, China. He completed his graduation and post-graduation in business administration with a distinction from GC University and Comsats University, Pakistan, respectively. His research interests include entrepreneurship, entrepreneurial leadership and strategy, innovation, new venture development, corporate entrepreneurship and organizational behavior.

Zhang Jian Zhang Jian is a Professor of Management and Psychology at the Donlinks School of Economics and Management, University of Science and Technology Beijing, China. She received her MS in Psychology from Beijing Normal University, and her Ph.D. in Psychology from Capital Normal University, China. Her research interests lie primarily in the areas of emotions and creativity at workplace, organization behavior, leadership, and consumer psychology.

Faheem Gul Gilal Faheem Gul is currently serving as an Assistant Professor at the Department of Business Administration, Sukkur IBA University, Pakistan. He holds an MS and was awarded a Ph.D. with distinction from the Donlinks School of Economics and Management, University of Science and Technology Beijing, China. His research interests lie primarily in the areas of consumer motivation and emotion with a special focus on brand passion, product design, brand experience, consumer behavior change strategies, and self-determination theory. Dr. Faheem has published over 40 articles in academic journals and his work has appeared in outlets such as the International Journal of Hospitality Management, the Journal of Brand Management, the Journal of Consumer Behavior, the Corporate Social Responsibility and Environmental Management, the Journal of Product and Brand Management, the European Management Journal, the Psychology Research and Behavior Management, the Review of Managerial Science, the European Journal of International Management, the International Journal of Technology, Policy and Management, and the Journal of Advanced Manufacturing Systems.

1 Introduction

Innovation depends on several factors; however, it always starts from the creative effort of individual employees and teams because novel ideas require to use of existing mental frameworks [1]. Existing literature has exposed numerous factors that nurture innovation in the organization especially characteristics of employees [2 –4]. Innovative behavior of employees is a crucial for the better organizational performance through innovation and to lead the competitors in the business markets [5 –7]. Furthermore, the innovative behavior of employees is also important in order to fully utilize the capabilities of human resources for the success of an organization [5, 8]. Employee innovative behavior can be defined as the creation, and implementation of new ideas in the development of procedures, products, and services; however, creativity concept only comprises the generation of novel and valuable ideas [6, 9]. Numerous factors have been observed that effect innovative behavior of employees; such as psychological factors of employees [2, 10], characteristics of the job [2, 11], climate of the organization [12] and leadership styles [2 , 13].

Leadership is an important antecedent to inspire and direct employees towards innovative behavior [2, 10]. However, the results of the previous studies to investigate how different leadership styles influence employee innovative behavior are inconclusive [2, 14]. Several scholars have found that different leadership theories especially transformational leadership positively influence employee innovative behavior [2, 10]. However, others investigated weak or no effect [2, 15]. Therefore, researchers have interrogated the efficiency of these leadership styles to direct the employees to overcome the challenging tasks in the process of innovation [16, 17]. First, these leadership approaches have not designed specifically to foster innovation processes, and second, these leadership styles do not explain the characteristics and processes of the leaders through which they direct employees to create and implement new ideas at the workplace [18]. Thus, it is necessary to cultivate new leadership capabilities to foster the opportunity recognition and exploitation that would improve the innovation process in the organization [19].

In order to foster innovation, organizations must need entrepreneurial leaders who can organize the essential resources and develop such sort of visionary scenarios that inspire the employees towards innovative work [20]. Entrepreneurial leadership is considered to be a crucial factor for economic development in the 21st century [20]. It is an emerging style of leadership which has recently achieved attraction from the research scholars and practitioners, conceptually and empirically [21]. It is a leadership style that entails the ability to direct and encourage the employees to involve themselves in entrepreneurial opportunities recognition and exploitation process in order to realize the organizational goals [22]. Entrepreneurial leaders perform a dual role; they not only motivate their employees to search for innovative business opportunities but also act as role models to encourage them to involve in entrepreneurial activities [22]. Scholars have determined that the characteristics of entrepreneurial leaders are important in order to foster innovation in a challenging environment [19, 23]. But the performance mechanism of how entrepreneurial leaders foster employee innovative behavior by researchers is scarce [19]. Therefore, based on the findings of the existing literature this study is an effort to narrow this gap, through exploring the effect of entrepreneurial leadership on employee innovative behavior.

Existing literature has ascertained the importance of employee psychological factors to improve employee innovative behavior [2, 24]. One of the key psychological factors is CSE, which has been observed as a vital factor to boost employee innovative behavior, which can be defined as the “self-confidence of employees to accomplish creative tasks at the workplace” [25]. Entrepreneurial leaders motivate their employees through effective communication skills [26]. Furthermore, entrepreneurial leaders encourage employees to create and implement news ideas at work [19]. Employees get inspiration to perform creative tasks by observing their entrepreneurial leaders as recommended by social learning theory [27, 28]. CSE is the key predictor of the creative behavior of employees over time [29]. Despite the research on entrepreneurial leadership’s influence on employee innovative behavior [13 , 30], the entrepreneurial leaders’ roles in fostering employee innovative behavior through creative self-efficacy have not been investigated in detail. Therefore, the current study aims to investigate the CSE effect as an intervening variable between entrepreneurial leadership and employee innovative behavior relationship. The research model with hypotheses is shown in Fig. 1.

Fig. 1

Research model with hypotheses.

Overall, the current study aims to examine the effect of entrepreneurial leadership on employee innovative behavior with the intervening effect of CSE. As per the authors’ knowledge, this study is a first attempt to investigate the influence of entrepreneurial leaders on employee innovative behavior through CSE. Therefore, this study is valuable in the sense, that it would be the addition in the leadership literature by exploring the performance mechanism between the association of new leadership style and employee innovative behavior through CSE, with the lens of social learning theory. According to social learning theory (SLT), individuals learn new behaviors by observing and experiences from others, within the context of social interaction [27, 31]. Previous studies have been conducted mostly on this leadership style; either conceptual development or focus on entrepreneurs, and small and medium enterprises [21 , 32]. However, the current study has been conducted in established organizations that would contribute to the leadership literature empirically presenting the effect of this leadership style related to employee’s work outcomes. Furthermore, even though this study has been conducted in the textile sector in a developing country, but the results of such a study would be generalized in any nature and size of business as suggested by the eminent scholars of entrepreneurial leadership [22]. The rest of the study is organized as following sections: a literature review of latent variables used in the study and hypotheses development, data analysis along with results and interpretations, discussions comprising theoretical and managerial implications section, boundaries and future opportunities and finally the conclusion.

2 Literature review

2.1 Entrepreneurial leadership

Entrepreneurial leadership has recently acquired fascination from the scholars of leadership and entrepreneurship [19]. Entrepreneurial actions are vital in any type of organization especially in SMEs in order to pursue the innovation process and to meet the dynamic change in the business market, even in a stable environment to search for business opportunities to get market share [19, 22]. Employees at any level in the organization have to perform entrepreneurial behaviors [22]. Therefore, researchers have introduced a new concept of entrepreneurial leadership in the leadership literature, in order to foster entrepreneurial behavior inside organizations [22]. It is new a leadership approach that has been emerged from entrepreneurship and leadership literature [21]. The basic measures of this leadership approach were developed by Gupta, et al. [33], which has five dimensions framing the challenging, absorbing uncertainty, path clearing, building commitment and specifying limits. The first three characteristics are valuable in order to predict the prosperous future of the organization and the rest of the two characteristics are useful to inspire and direct the subordinates to achieve the desired organizational goals. Researchers have found entrepreneurial leadership is famous for its characteristic such as opportunity recognition and to inspire the followers to perform more entrepreneurial behaviors in order to achieve the opportunities [19 , 32].

Several scholars have defined entrepreneurial leadership. For instance, entrepreneurial leadership entails the characteristics of risk-taking, opportunity recognition, and determination in order to follow through the hardships to accomplish the anticipated goals [34]. It is a leadership style that has the capability to sustain the innovation process in a highly dynamic and unpredictable environment [35]. Entrepreneurial leader’s roles are crucial, especially in entrepreneurial ventures [36]. It includes inspiring and guiding the performances of the followers to accomplish the organizational objectives, which comprise recognition and utilization of entrepreneurial opportunities [22]. It is a leadership style that has the ability to direct employees to identify entrepreneurial opportunities through effective communication, sharing the vision of the organization with employees and motivating them for creative behavior to exploit those opportunities [26]. Therefore, it has been concluded from definitions of entrepreneurial leadership from diverse scholars across the world, that it is a specific style of leadership that entails the characteristics such as opportunity recognition, risk taking and visionary that are essential to foster innovation.

Entrepreneurial leadership is applicable in any form of business irrespective the size and nature of the business and organization [22]. Scholars across the world have empirically validated this concept [19, 24]. Entrepreneurial leadership is important during the innovation process from idea generation to idea diffusion phase, therefore it is an important catalyst for innovation [26]. Organizational success does not depend on only the characteristics of the entrepreneurial leaders but also the capabilities of the followers, organizational and environmental factors [22]. Therefore, organizations should emphasize the entrepreneurial skills of employees in order to create and implant news ideas at the workplace to achieve a competitive advantage.

2.2 Entrepreneurial leadership and employee innovative behavior

Innovative behavior is a practice of employees from ideas creation, to implementation of those ideas for the better performance of the organization [37]. Leadership is a core antecedent of employee innovative behavior; however, stimulating innovation is not an easy process from different perspectives. First, leaders face the hurdles in motivating and guiding employees to use the latest techniques to perform tasks instead of using traditional methods and invest their energy to create and execute novel ideas at workplace [38, 39]. Second, leaders need to develop the abilities of employees to convince others about the value of their ideas [38]. Third, leaders have to develop such kind of strategies and processes that facilitate idea creation and execution at the organizational level [26]. Therefore, leaders play an important role to motivate and direct employees to create and implement novel ideas at work and developing such kind of climate that facilitates the innovation process [19, 26]. Scholars have found that entrepreneurial leadership is an effective leadership style that stimulates the innovation process in challenging and uncertain conditions through its competencies [19, 26].

Entrepreneurial leaders by involving themselves in new opportunity recognition and implementation process at work show the importance of engaging in entrepreneurial behaviors to employees [19, 22]. Entrepreneurial leaders also motivate their followers to involve themselves in the opportunity recognition and exploitation process [19]. Especially, entrepreneurial leaders stimulate the employees creative behaviors by boosting confidence in their capabilities, determining their responsibilities towards creative actions, and eradicating the obstacles that hinder the innovation process [22, 33]. SLT suggests that when employees perform such complex tasks a work; they seek new information, and use it to make a decision in their succeeding behaviors. Additionally, entrepreneurial leaders also inspire their employees through role modeling [22]. Consistent with SLT, it is argued that employees get more confidence to execute innovative tasks, by observing and working with such role models. Entrepreneurial leaders are risk-takers, and they encourage their employees to engage themselves in innovative behavior, instead of doing routine tasks [22]. According to Parzefall, et al. [40] the risk-taking is an essential ability of employees to perform innovative tasks. Based on SLT, it is expected that when employees observe their leader’s risk-taking behaviors; it would develop their confidence to take more risks to perform innovative tasks. Entrepreneurial leaders have the abilities, which are essential to stimulate innovation like risk-taking, visionary, innovativeness, opportunity seeking, inspirational, etc. [19 , 33]. Employees observe and learn such characteristics from their leaders and try to implement in their subsequent behaviors [41]. Therefore, with the lens of SLT, the current study argues that employees learn the characteristics of entrepreneurial leaders by working with and observing, which are essential for innovation, and implement such knowledge in their succeeding behaviors.

Scholars have suggested that entrepreneurial leaders are important to foster innovation in the organization [19, 26]. Thus, it shows that the major task of entrepreneurial leaders is to inspire and direct the behaviors of the employees to seek and utilize new business opportunities at work for the success of the organization [19, 22]. Literature has shown that entrepreneurial leadership positively influences employee innovative behavior. Research has been conducted in Iran, shows that entrepreneurial lenders play an important role to develop employee innovative behavior and opportunity recognition competencies [19]. Newman, et al. [42] have conducted a study in Australia, Canada, and the United Kingdom, which shows that entrepreneurial leadership is positively associated with employee innovative behavior. A study conducted by Miao, et al. [43] in Australia illustrated that EL was positively linked with employee innovative behavior in public sector organizations, with the intervening effect of psychological empowerment. Cai, et al. [24] have found that entrepreneurial leaders boosts the creative skills of employees and teams with the mediating effect of psychological factors in China [24]. Based on SLT and above mentioned studies the following hypothesis is proposed.

H1. Entrepreneurial leadership positively relates to employee innovative behavior

2.3 Mediating role of creative self-efficacy

Creative self-efficacy is the perception of individuals about themselves that they can perform creative tasks [25]. Employees with CSE have the ability to use cognitive means and inner motivation to perform creative tasks [44]. Similarly, the social cognitive theory argued that individuals effort and spend vital time in their work if they believe their actions can produce the desired outcomes [45]. Previous studies have ascertained the fact that CSE is positively associated with creative outcomes [24, 29]. Several individual and contextual factors affect CSC [1, 25]. Existing literature has shown that different leadership styles boost the CSE of employees by inspiring, encouraging and acting as role models for their subordinates [10, 46]. Recently, scholars have investigated that entrepreneurial leadership is valuable in order to influence employee innovative behavior [19, 43]. However, to investigate the impact of this leadership approach on CSE has not paid much attention, especially as an intervening variable in the relationship with innovative behavior. Thus, the currents study aims to narrow this gap by considering CSE as an intervening variable.

Entrepreneurial leaders develop employee CSE beliefs in different ways. For instance, entrepreneurial leaders perform as a model for employees by recognizing and exploiting the entrepreneurial opportunities for business [22]. Entrepreneurial leaders also develop the creative problem-solving abilities of employees by encouraging them to participate in recognizing and exploiting the entrepreneurial opportunities process [33]. Consequently, they feel more confident to take risks and perform creative actions. Entrepreneurial leaders direct employees to achieve organizational goals by facing challenging tasks that include seeking and utilization of business opportunities [22]. Thus, when employees face some challenging tasks; they would seek new solutions and processes to perform such tasks [47]. Each time employees face some challenging task and find out new ways to resolve the problem; it would enhance the CSE of employees, therefore organizational tasks assigned to employees play a crucial role in fostering employee CSE [47]. Entrepreneurial leaders motivate employees towards the achievement of entrepreneurial goals and sustain an entrepreneurial spirit in them [22, 26]. Thus, it would boost the sense of responsibility and CSE of employees [47]. Entrepreneurial leaders have competencies like risk-taking, creativity, and motivation to their subordinates [22 , 48]. Therefore, on the basis of SLT, this study argues that when employees notice their leader’s characteristics and way of doing the things, it would give them encouragement and self-confidence that they can also perform creative actions.

CSE is a vital antecedent to increase creativity in the workplace [1]. Social cognitive theory by Bandura [27], suggests that CSE positively influence innovative behavior due to the following reasons. Employees with a high level of CSE perform innovative behavior because they believe in their creative abilities that would result in spending more time on creative cognitive practices to identify creative solutions to problems [49]. Furthermore, such employees are more confident to create and implement novel ideas in challenging and uncertain conditions in the workplace [50]. An employee with high CSE has characteristics like strong inner motivation, good cognitive abilities, positive emotions and behaviors [51]. Past studies have explored that CSE positively intervenes in the relationship between leadership and employee creative outcomes [10, 24]. It has been explored that leadership has a positive impact on employee CSE beliefs [10, 24]. Hu and Zhao [52] found that employees with high CSE performed more innovative behavior in China. Similarly, Ort and his fellow noticed that employees with high CSE were found to perform innovative behavior [53]. Based on the aforementioned studies following hypotheses are proposed.

H2. Entrepreneurial leadership positively relates to creative self-efficacy.

H3. Creative self-efficacy mediates the relationship between entrepreneurial leadership and employee innovative behavior

3 Research methodology

3.1 Data collection and sample size

Data were collected for the current study via questionnaire from the textile sector of Pakistan. The textile sector was selected to collect data because it is an important production sector of Pakistan that contributes more than 55% of national exports, employs intensive industrial labor force 40 % [54]. Besides its massive supply in the domestic market, Pakistani textile products also compete in the international market; therefore, it is an export-oriented industry and has been a major source of foreign exchange earnings for Pakistan [54]. The textile sector comprises longest production chain, with the value addition at each step of processing comprises the technical departments like weaving, cutting, production planning, quality control, spinning, printing, stitching, quilting; along with other administration departments like human resource management, finance, marketing and supply chain management [54]. Therefore, such types of organizations are ideal to examine the influence of a new leadership theory on employee innovative behavior; because employees have to perform innovative tasks in such technical departments. These organizations are also found to be engaged in a variety of innovative activities and investing resources to introduce technical and on-technical innovations [54]. The main part of investment related to innovation is used in the acquisition of machinery, software, and hardware, along with R&D and training of employees [54].

Mostly data were collected from the organization based in the cities Faisalabad, Multan, Gujranwala, Lahore, and Rawalpindi. In order to collect the data, the main author contacted with human resources department of the targeted organizations. The covering letter was provided to them along with detail of the research purpose and questionnaires. It was assured to them that the information would be retained confidential. Furthermore, directors of the human resource departments were offered to provide the results of the research in order to take benefits from the findings for implementation in their organizations to improve the innovative abilities of their employees. The questionnaires were comprised of two parts; the first part for managers includes the statement related to employee innovative behavior working under their supervision. The second part, for employees, includes the statements related to their managers’ leadership abilities and self-rated statements about their beliefs to perform tasks.

This study used recommendations from the previous studies to reduce the problem of common method biases [55]. Data were collected one month time interval to diminish the common method biases. At period 1, managers were asked to fill the questionnaires about the innovative behavior of their subordinates, while at period 2, the employees were asked to fill the questionnaire about the entrepreneurial leadership style about their managers and creative self-efficacy themselves. Managers filled the questionnaire related to their employee innovative behavior. While employees filled the questionnaire regarding their entrepreneurial leadership abilities, therefore this procedure decreased the effect of the single-source bias. A total of 65 organizations were targeted for data collection. A total of 400 questionnaires were delivered to the managers and employees. A total of 302 pairs of responses were received with a response rate of 75.5 %. Pairs of the questioners collected from managers and employees attach which relate to each other according to assigned numbers. Later on, 265 pairs with a rate of 87.7% were found to be complete and useable for data analysis.

3.2 Measures of construct

All items were adopted from the existing studies, using 5 points Likert scale ranging from 1 = strongly disagree to 5 = strongly agree. Entrepreneurial leadership was measured by eight-items scale developed by [22]. Employees were asked to report the statements based on their perception of their manager’s abilities. Sample items included “My manager has a vision of the future of our business”, “My manager has creative solutions to problems”. This scale has been validated in previous studies [24, 56]. Creative self-efficacy was measured three-items scale developed by [25]. Employees were asked to report the statements about their efficacy for creative work. Sample items included “I feel that I am good at generating novel ideas” and “I am good at finding creative ways to solve problems”. This scale has been validated in previous studies [10, 24]. Employee innovative behavior was measured by the six-item scale developed by [57]. Mangers were asked to report the statement about the innovative behavior of their employees constructed on 5 points Likert scale ranged from 1 = strongly disagree to 5 = strongly agree. Sample items included “This employee generates creative ideas”, “This employee promotes and champions ideas to others”. This scale has been validated in previous studies [30, 43]. In this study, all demographics variables such as age, gender, education, and marital status were controlled. Because such variables can influence creativity [58, 59].

3.3 Data analysis and methods

First, the descriptive statistical techniques were used to measure the different demographic characteristics such as age, experience, gender, and education. Second, mean and standard deviation values were found for all latent variables are used. Convergent validity was confirmed by testing the three tests (Cronbach’s alpha, composite reliability, and average variance extracted). Fourth, discriminant validity was utilized by comparing the values of the square root of AVEs and correlations of latent variables. In order to test the hypotheses and model, structural equation modeling (SEM) technique was used.

4 Results and findings

4.1 Demographic profiles

The demographic attributes of the respondents are represented in Table 1. The male ratio was 87.9% and female respondent was 12.1%. The female ratio is less enough than males because in Pakistan mostly females are housewives. Only 2 target respondents were less than 20 years and the majority of the respondents were older than 30 years age, 52.8% of the total respondents. The sample size of this study is highly educated since 40.8% of respondents’ bachelor and 57.7% were master’s degree holders. The majority of the respondents were married.

Table 1
Demographic attributes

Attributes Freq. %

Gender

Male 233 87.9

Female 032 12.1

Age

<20 years 002 00.8

21–25 035 13.2

26–30 088 33.2

>31 140 52.8

Education

Bachelor 108 40.8

Master 153 57.7

PhD 003 01.1

Others 001 00.4

Marital status

single 095 35.8

married 166 62.6

others* 004 01.5

Attributes	Freq.	%
Gender
Male	233	87.9
Female	032	12.1
Age
<20 years	002	00.8
21–25	035	13.2
26–30	088	33.2
>31	140	52.8
Education
Bachelor	108	40.8
Master	153	57.7
PhD	003	01.1
Others	001	00.4
Marital status
single	095	35.8
married	166	62.6
others*	004	01.5

Note. n = 265; *divorced/widows etc.

4.2 Mean, SD, and correlations

Table 2 represents the means, standard deviation and inter-correlations values of all latent variables along with the demographic attributes used in this study i.e., gender, age, marital status, education, entrepreneurial leadership (IV), creative self-efficacy (MVV) and employee innovative behavior (DV). Entrepreneurial leadership was measured on the 8-item scale, creative self-efficacy by 3-items scale, and employee innovative behavior was measured by 6-item sale. Five points Likert scale was used to report all statements (Strongly disagree = 1 to strongly agree = 5).

Table 2
Mean, Standard Deviation, and Correlations

M SD Gender Age MS Edu. EL IC OI

Gender 1.12 0.33 1

Age 3.38 0.74 –0.332^ 1

M Status 1.66 0.51 –0.275^ 0.512^ 1

Education 1.61 0.53 0.097 0.022 0.051 1

EL 3.90 0.62 –0.043 0.166^ 0.149^* –0.013 1

CSC 3.74 0.76 –0.035 0.069 0.133^* –0.038 0.609^** 1

IB 3.67 0.76 –0.024 0.073 0.136^* –0.085 0.594^ 0.750^ 1

	M	SD	Gender	Age	MS	Edu.	EL	IC	OI
Gender	1.12	0.33	1
Age	3.38	0.74	–0.332^**	1
M Status	1.66	0.51	–0.275^**	0.512^**	1
Education	1.61	0.53	0.097	0.022	0.051	1
EL	3.90	0.62	–0.043	0.166^**	0.149^*	–0.013	1
CSC	3.74	0.76	–0.035	0.069	0.133^*	–0.038	0.609^**	1
IB	3.67	0.76	–0.024	0.073	0.136^*	–0.085	0.594^**	0.750^**	1

Note: n = 265; ^*p < 0.05, ^**p < 0.01; EL = Entrepreneurial leadership; CSC = Creative Self-efficacy; IB = Innovative Behavior; Edu =Education; MS = Marital status.

4.3 Discriminate validity

Table 3 represents the values of the discriminate validity (DSCV) of the constructs. Where * values indicate the values of the AVEs output, while ** indicates the inter-correlated values for each construct. The AVEs values of all constructs are greater than the values of the inter-correlations values of the constructs [60]. It indicates that there is a presence of DSCV among the variables used in this study.

Table 3
Values of discriminate validity

CSE EL IB

CSE 0.806*

EL 0.624** 0.719*

IB 0.743 0.593 0.766*

	CSE	EL	IB
CSE	0.806*
EL	0.624**	0.719*
IB	0.743**	0.593**	0.766*

Note: *values of AVEs; **inter-associations of the constructs; EL = Entrepreneurial Leadership; CSE = Creative Self-Efficacy; IB = Innovative Behavior.

4.4 Convergent validity and reliability

Table 4 represents the values of the convergent validity and reliability of all the variables used in the study through three metrics, i.e., using loadings of all the items of three latent variables, Composite reliability, and average extracted variance. The following results indicate that the values of FL and AVEs are greater than the recommended criteria which are > 0.5. Similarly, the values of CR are greater than the recommend criteria which are > 0.7. Altogether of the results mentioned above and outcome values are presented in the table underneath. The measurement model validity assessments comprised of convergent validity, values of composite reliability test and discriminant validity. Convergent validity was explored by using three indices: composite reliability, average variance extracted and factor loadings. The Cronbach’s alpha value of each construct is shown in Table 4. The alpha values in our model were greater than 0.70, the critical value in the literature suggesting good reliability for all constructs [61]. AVE of each construct was assessed to be higher than the recommended index 0.50, which is considered satisfactory for the study [60]. CR was suggested should be higher than 0.70 [62]. CR index is higher than their AVE index respectively. The results in Table 4 indicate that there is a well-fit between individual measurement and the related factors, which satisfied all pre-requisites of convergent validity. The square root of AVEs for each construct should be larger than the correlations shared between the construct and all potential variables in the model, which can be used to assess discriminant validity [60]. The results of our model demonstrate the good discriminant validity of the research.

Table 4
Constructs reliability and validity

Constructs/Items M SD FL CR AVEs

EL* 0.847 0.650

EL1 3.853 0.841 0.746

EL2 4.030 0.828 0.773

EL3 3.966 0.744 0.727

EL4 3.872 0.859 0.630

EL5 3.917 0.869 0.733

EL6 3.796 0.942 0.702

EL7 3.951 0.924 0.719

EL8 3.849 0.877 0.711

CSE* 0.895 0.516

CSE1 3.540 1.017 0.717

CSE2 3.864 0.871 0.856

CSE3 3.808 0.934 0.837

IB** 0.895 0.586

IB1 3.566 1.135 0.780

IB2 3.630 0.963 0.791

IB3 3.630 0.990 0.738

IB4 3.755 0.942 0.773

IB5 3.691 0.896 0.760

IB6 3.736 0.978 0.751

Constructs/Items	M	SD	FL	CR	AVEs
EL*				0.847	0.650
EL1	3.853	0.841	0.746
EL2	4.030	0.828	0.773
EL3	3.966	0.744	0.727
EL4	3.872	0.859	0.630
EL5	3.917	0.869	0.733
EL6	3.796	0.942	0.702
EL7	3.951	0.924	0.719
EL8	3.849	0.877	0.711
CSE*				0.895	0.516
CSE1	3.540	1.017	0.717
CSE2	3.864	0.871	0.856
CSE3	3.808	0.934	0.837
IB**				0.895	0.586
IB1	3.566	1.135	0.780
IB2	3.630	0.963	0.791
IB3	3.630	0.990	0.738
IB4	3.755	0.942	0.773
IB5	3.691	0.896	0.760
IB6	3.736	0.978	0.751

Note: EL = Entrepreneurial leadership; CSE = Creative Self-efficacy; IB = Innovative Behavior; FL = Factor Loading; CR =Composite reliability; AVEs = Average variance extracted.

4.5 Path coefficients using SEM

Finally, Table 5 represents the path examination results of all the latent variables’ constructs. Results have shown the positive direct and indirect association between all the variables used in this study. A significant positive correlation is found in the direct relationship between entrepreneurial leadership and innovative behavior at 0.61 (p = 0.000). Similarly, a significant positive correlation is found between the association of entrepreneurial leadership and creative self-efficacy at 0.63 (p = 0.000). Finally, the indirect effect of creative self-efficacy through entrepreneurial leadership is also found significant and positive at 0.59 (0.002). Table 5 shows the positive linkage of latent variables through p values with the total effect of each factor on variables as also shown in.

Table 5
Structural equation modeling

Proposed Paths ER TE p* Evaluation

EL⟶IB ± 0.61 0.000 Supporting

EL⟶CSE ± 0.63 0.000 Supporting

EL⟶CSE⟶IB ± 0.59 0.002 Supporting

Proposed Paths	ER	TE	p*	Evaluation
EL⟶IB	±	0.61	0.000	Supporting
EL⟶CSE	±	0.63	0.000	Supporting
EL⟶CSE⟶IB	±	0.59	0.002	Supporting

Note: EL = Entrepreneurial leadership; CSE = Creative Self-efficacy; IB = Innovative Behavior; ER = Expected direction of the relationships; TR = Overall total relationships effects; p = Significance; model fit using SRMR values = 0.071.

5 Discussions

The current study enriches the concept of the entrepreneurial leadership that it is an emerging leadership theory that is in its initial phases of development both theoretically and empirically. The findings of the current study supported the first hypothesis that entrepreneurial leadership had a positive significant effect on employee innovative behavior. These findings also in line with the results of the previous studies [19, 43]. Entrepreneurial leaders have characteristics such as risk-taking, creativity, role modeling, visionary, motivational, etc. Entrepreneurial leaders perform as a role model for employees; consequently, employees seek such characteristics from their leaders by observing and learning. Therefore, employees try to perform in more innovative ways like their leaders as suggested by social learning theory. Entrepreneurial leaders have the abilities to envision the future of the business, and to direct their employees to achieve their vision by involving them in tasks that comprise opportunity recognition and exploitation. Consequently, these practices improve the abilities of employees to perform more innovative actions at workplace. Entrepreneurial leaders also persuade employees to execute the tasks in creative ways in order to produce innovative products and services to lead in the business market.

Furthermore, results also supported the second hypotheses; entrepreneurial leadership had positively effects on employee CSE beliefs. The results are also consistent with the past study [24]. Entrepreneurial leaders boost the CSE of employees in several ways. Entrepreneurial leaders act as role models for employees that boost their confidence to execute innovative tasks. Entrepreneurial leaders engage employees in complex tasks that contain opportunity recognition and exploitation, as a result when employees accomplish such complex tasks; it would build up their beliefs that they can perform innovative tasks. Entrepreneurial leaders encourage the employees to perform creatively that boosts the employees CSE beliefs. Consequently, entrepreneurial leaders perform a significant role to improve the CSE of the employees which is an important psychological state to perform innovative tasks at the workplace. Finally, results supported the third hypothesis that there was a positive intervening effect of CSE between the entrepreneurial leadership and employee innovative behavior.

5.1 Theoretical implications

Through exploring the relationship between deliberate variables, the current study provides numerous theoretical contributions. First, various studies have been conducted to explore the influence of different leadership theories on employee innovative behavior [10, 13]. However, as per the authors’ information, this study is considered to be first to analyze the relationship between entrepreneurial leadership, employee innovative behavior, and CSE. Consequently, this study has enriched the leadership literature by explaining the performance mechanism of entrepreneurial leadership in fostering employee innovative behavior through CSE in a developing country. Second, it has been stated that the influence of entrepreneurial leaders on the employee can also be affected by employee personal and contextual factors [22]. Thus, the current study has explained the process through which entrepreneurial leaders affect the employee psychological factor to boost innovative behavior empirically. Third, previous studies have been conducted mostly to explore the consequences of entrepreneurial leadership in small and medium enterprises, and new ventures [19, 63]. However, the studies to unveil the effect of this leadership style in established organizations are scarce. Therefore, this study makes vital contributions in the leadership literature by means of explaining the detail performance mechanism of entrepreneurial leadership to enhance the employee innovative behavior in established organizations. Fourth, previous studies that have been conducted on entrepreneurial leadership mostly focus on the concept or scale development of entrepreneurial leadership [21, 22]. However, this study has empirically tested the effect of this leadership approach. Finally, prior studies considered it merely a leadership style for owners [21]; however, the current research unblemished the fact that this is a new leadership style that can be used in any form of organization and its application is beneficial at any level of the organization.

5.2 Managerial implications

The current study provides several implications for business leaders and managers to improve the innovative abilities of their employees. First, leaders should direct their employees to perform new tasks at the workplace that involve opportunity recognition and exploitation in order to innovate and lead in the business market. Second, leaders should inspire their employees to think in a more creative way at workplace and provide an environment that supports the innovation process in the organization. Third, leaders should perform in the organization as a role model; consequently, it would affect employees psychologically to act like leaders. Fourth, findings reveal the importance of psychological factors of employees to act in innovative ways as previous studies ascertained such findings [43 , 65]. Therefore, the human resource department should conduct psychometric tests to hire employees in order to check their psychological abilities. Finally, organizations should arrange training programs for their employees in order to develop their creative abilities. Because employees’ characteristics also influence the performance of their leaders as suggested in the previous studies [22, 66]. Consequently, if employees work in an innovative way it will boost the effort of leaders. Organizations should also invest in the training programs for their leaders to improve the entrepreneurial leadership abilities to direct and inspire their employees to achieve organizational goals that entail opportunity recognition and exploitations.

5.3 Limitations and future opportunities

The current study has several limitations along with future direction, which can be acknowledged in forthcoming research. First, this study used the cross-sectional data for analysis to examine the effect of entrepreneurial leadership on the employee innovative behavior. Thus, future studies might use longitudinal data for in-depth analysis. Second, this study used CSE as a mediator between entrepreneurial leadership and employee innovative behavior relationship. Future studies can consider other psychological factors such as entrepreneurial self-efficacy, psychological safety, and inner motivation to explore the intervening and moderating effect of such variables as suggested by other studies too [22]. Third, the current study focused only on employee performance outcomes; however, entrepreneurial leadership is a new leadership approach that needs many other studies to reveal its effect on team and organizational level outcomes. Therefore, future research should consider these team and organizational outcomes with the effect of different variables moderation and mediation. Fourth, in this study data were collected from only one country, further studies would collect data across countries to generalize the results of such scale broadly. Fifth, data were collected for entrepreneurial leadership only from the managerial level in this study, furthermore, in-depth analysis of future research would accumulate data from different levels like supervisors and officers and managers too. Finally, upcoming studies would conduct comparative studies between entrepreneurial leadership and other leadership approaches to ascertain the significance of entrepreneurial leadership as compared to other leadership styles to boost employee and organizational outcomes.

6 Conclusion

Entrepreneurial leadership is a new leadership theory like other leadership approaches, which is applicable in any nature and size of the organization. The findings of the current study explored the performance mechanism of this leadership style on innovative behavior of employees with the lens of social learning theory. Results of the current reveal that entrepreneurial leadership has a positive effect on innovative behavior and employee CSE beliefs. Furthermore, entrepreneurial leadership is positively associated with employee innovative behavior with the intervening effect CSE. Therefore, the findings of this leadership approach are important for entrepreneurs and leaders of the organization to improve employee work outcomes. Thus, the entrepreneurial leaders not only direct their employees towards the achievement of the organizational goals but also motivate their employees psychologically that would positively influence the impact on the employee innovative behavior. Finally, entrepreneurial leadership is still its early stage of development which needs further research to investigate its impact on different employees and organizational outcomes empirically to generalize its results across cultures.

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Entrepreneurial leadership and employee innovative behavior: Intervening role of creative self-efficacy

Abstract

BACKGROUND:

OBJECTIVE:

METHODS:

RESULTS:

CONCLUSION:

Keywords

1 Introduction

2.1 Entrepreneurial leadership

2.2 Entrepreneurial leadership and employee innovative behavior

2.3 Mediating role of creative self-efficacy

3 Research methodology

3.1 Data collection and sample size

3.2 Measures of construct

3.3 Data analysis and methods

4 Results and findings

4.1 Demographic profiles

Table 1 Demographic attributes Attributes Freq. % Gender Male 233 87.9 Female 032 12.1 Age <20 years 002 00.8 21–25 035 13.2 26–30 088 33.2 >31 140 52.8 Education Bachelor 108 40.8 Master 153 57.7 PhD 003 01.1 Others 001 00.4 Marital status single 095 35.8 married 166 62.6 others* 004 01.5

Table 3 Values of discriminate validity CSE EL IB CSE 0.806* EL 0.624** 0.719* IB 0.743** 0.593** 0.766*

Table 5 Structural equation modeling Proposed Paths ER TE p* Evaluation EL⟶IB ± 0.61 0.000 Supporting EL⟶CSE ± 0.63 0.000 Supporting EL⟶CSE⟶IB ± 0.59 0.002 Supporting

5.1 Theoretical implications

5.2 Managerial implications

5.3 Limitations and future opportunities

6 Conclusion

References

Table 3
Values of discriminate validity

CSE EL IB

CSE 0.806*

EL 0.624** 0.719*

IB 0.743 0.593 0.766*

Table 5
Structural equation modeling

Proposed Paths ER TE p* Evaluation

EL⟶IB ± 0.61 0.000 Supporting

EL⟶CSE ± 0.63 0.000 Supporting

EL⟶CSE⟶IB ± 0.59 0.002 Supporting