Ownership and leadership in building an innovation culture

Abstract

PurposeThe purpose of this paper is to test a culture-building model, CREATE, highlighting the central role of leadership in shaping the predictors of innovation culture. The authors hypothesize that leadership directly predicts innovation culture, as well, as indirectly impacts innovation culture through mediating variables. Also, the authors examine the impact of leadership on innovation by ownership type.Design/methodology/approachA total 631 survey responses were collected from employees of sole proprietorship, family-owned corporations, and non-family corporations. Parallel multiple mediator models were used to test the hypothesized relationships of the variables.FindingsThe findings show that a leadership variable, role modeling, and support for innovation, directly and indirectly predicts an innovation culture. However, it appears that in sole proprietorship and family-owned corporations, leaders impact on innovation culture are through mediating variables, while in non-family corporations, leaders influence innovation through strategy, evaluation, and rewards.Originality/valueThe study shows that the culture-building model, CREATE, can be used as a framework for building an innovation culture in organizations. The study also showed that leaders among sole proprietorships, family-owned corporations, and non-family corporations may need to employ different approaches in building an innovation culture in their organizations.