Change-Oriented Leadership and Frugal Innovations: A Moderated Mediation Model of Readiness to Change and Learning Goal Orientation

Abstract

Purpose - Whether or not organizations can produce fugal innovations depends on the people involved in the innovation process. This paper aims to investigate whether leaders could influence their subordinates' change readiness by employing a leadership style called “change-oriented leadership” and what role is played by the learning goal orientation of individuals for frugal innovations. Study Design/Methodology/Approach - The researchers of this study use the temporal separation method, and data was collected in two phases at one-month intervals with a sample of 313 permanent employees working in the pharmaceutical and textile sectors. Findings - The researchers of this study found that change-oriented leaders significantly increase frugal innovations. This effect is mediated by employees' self-reported change readiness and moderated by their learning goal orientation. Our results demonstrate that leaders substantially influence the degree of change readiness for organizations to develop frugal innovations. Our study also highlights that if people have a learning goal orientation, their change readiness is not fixed but can be altered by their social environment, especially by organizational leaders. Research Limitations- Developing economies are facing the challenges of higher costs which stress that how organizations can reduce it, and the idea of frugal innovation is one of them. For that purpose, from the organizational point of view, there is a need for a learning environment that provides a platform for individual and team learning and critical thinking which may lead to better implementation of frugal innovation. Further, from the individual level perspective self-efficacy (creative, change, and occupational) may help the employees to take initiative for the achievement of organizational goals (i.e., frugal innovation). Implications-This study has implications for current theories about frugal innovations, which view people’s lack of change readiness as a significant impediment. Also, these implications have for current theories about change-oriented leadership, which we expand to the societally important realm of frugal innovations. Originality/Novelty- Our findings guide organizations and policymakers who want to enable frugal innovations to ensure the competitiveness of their organizations and the growth of economies, especially in developing countries.