The role of leaders in generating management innovation^†

^†The research was done at Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Australia.

Abstract

This study provides an empirical insight into the level of management innovation in Australian service organisations, conceptualising management innovation using an integrative framework of management innovation which encompasses four dimensions, new managerial practices, processes, structures and techniques. In addition, the study contributes to the contingency-based literature by examining the role of leaders, in respect to both leadership style (initiating and consideration styles) and the use of controls (diagnostic and interactive use), as drivers of management innovation. Data were collected through a mail questionnaire distributed to 445 middle level managers. The findings show that leadership style influences management innovation with a more initiating style associated with the extent of use of new managerial techniques. Management innovation was also influenced by the use of controls with a more interactive (diagnostic) approach associated with the extent of use of new managerial processes and techniques (practices and structure). In line with the Competing Values Framework, the findings highlight the tension involved in the role of leaders in generating management innovation.

Keywords:

• Management innovation
• leadership style
• consideration
• initiating
• diagnostic
• interactive

Notes

^† The research was done at Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Australia.

1. Middle-level managers involved in this study include finance managers, operations managers, information system managers and human resource managers.

2. While exploratory analysis was undertaken to assess if the interaction between leadership styles and the approaches to using controls affected management innovation, no significant results were found.