A Review of The Relationship Between Leadership Style and Innovation: Insights and Directions for Future Research

This chapter aims to critically reflect on the available literature on leadership style and innovation, and especially to assess the linkages between these variables. It starts with an overview of leadership studies, tracing the historical emergence and development of leadership theories, from the Great Man theory, trait theory and leader behaviour theory to situational and contingency theories of leadership. It then delves deeply into the transformational theory, owing to the vast amount of research focus that appears to be dedicated to this theory. The chapter critically analyses the scope of transformational theory, and explores the gaps that may need refinement in order for the theory to remain relevant in the current, 21st Century, business environment. The chapter also discusses innovation theory and literature related to different perspectives on innovations, including the radical and disruptive views, the ambidextrous perspective, design thinking, open, lean and horizontal models, and their impacts on organizational performance. The chapter then turns to explore the linkages between managing innovation, leadership style and organizational performance. The review in this chapter adds to the existing literature and provides support for the contention that innovation impacts organizational performance, while leadership has a moderating impact on this relationship.