Entrepreneurial Leadership and Innovative Work Behaviour: Moderating Role of Islamic Work Ethics

Abstract

The present environmental complexity resulting from technological advancements has made it critical for firms to promote innovation in their activities, products, services and outputs. Innovation is a solution to everyday management problems to successfully adapt to workplace challenges and unanticipated occurrences, the invention of new ideas to improve the workflow and the advancement of novel products and services. However, for a firm to be innovative, it is essential to be led by an entrepreneurial lead. Therefore, we aim to examine the impact of entrepreneurial leader(ship) (EL) on employees’ innovative work behaviour (IWB) with moderating role of Islamic Work Ethics (IWE), with a theoretical lens of Social Cognition and Resource-Based view. To achieve these objectives a self-administered survey questionnaire was circulated among managers, owners and employees of small and medium enterprises (SMEs) in Islamabad. The Partial Least Squares Structural Equation Modelling (PLS-SEM) model was applied for hypotheses testing. The results of SEM demonstrate that EL significantly influences the IWB of employees in SMEs. Similarly, IWE also shows a significant effect on the employees’ IWB. However, an insignificant effect for IWE as a moderator between EL and IWB is observed. Overall, the findings of this research contribute to the existing body of knowledge by conceptualising a theoretical and practical model of entrepreneurial leadership predicting employees’ IWB in SMEs.