The mediating effect of psychological empowerment between leadership behaviour and innovative work behaviour in Selangor state development corporation / Azlina Jaapar

The emergence of the Industrial Revolution 4.0 and rapid technology development have forced organisations to focus on innovation in order to sustain their presence in the market. In particular, innovative work behaviour (IWB) is believed to be able to enhance the innovation culture within the organisations. Thus, researchers and practitioners are increasingly interested in investigating IWB, globally. However, empirical research on IWB in the Malaysian context is still limited, especially among the State Economic Development Corporation (SEDC) organisations. The main objective of the present study is to examine employees’ IWB by considering leadership behaviour (transformational leadership and transactional leadership) and psychological empowerment as factors associated with IWB. Social cognitive theory (SCT) was applied as the underpinning theory of the present study as this theory demonstrates human behaviour in the context of personal factors, social environment, and overt behaviour. Thus, the theory supports the objectives of the present study. A quantitative method using online questionnaire survey was used to collect data from 280 employees at the Selangor State Development Corporation (PKNS). To test the hypotheses, the Partial Least Square – Structural Equation Modelling (PLS-SEM) statistical technique was employed to analyse the questionnaire survey data collected using the Smart-PLS 3.0. The findings showed that transformational leadership was positively related to both the IWB and psychological empowerment. The findings also showed that psychological empowerment partially mediated the relationship between transformational leadership and IWB. However, contradictory findings were found on both, the transactional leadership relationships towards the IWB and the mediating effect of psychological empowerment. The findings showed no relationships between the variables, which contributed to the theoretical knowledge by confirming one of the principles of SCT, which stated that leaders may not act as influencers until the followers accepted the behaviour. The findings also provided further evidence that leadership behaviour and the role of psychological empowerment are important in stimulating the employees’ IWB within the organisation. The present study provided valuable practical information to PKNS to further improve the management practices of the organisation. Employees’ IWB can be strengthened when the leaders have self-awareness and enhance their characteristics by applying transformational leadership behaviour. PKNS should also promote psychological states, especially the sense of psychological empowerment among the employees in fostering IWB within the organisation. Limitations and recommendations for future studies were also highlighted and suggested.