The relationship between leadership styles and employee-driven innovation: the mediating role of leader–member exchange

Abstract

PurposeThe purpose of this study is to explore the association of two opposite leadership styles with employee-driven innovation and how the leader–member exchange mediates these relationships.Design/methodology/approachThe authors used online surveys administrated in two waves to collect data from 315 employees working in the banking sector in Norway. Exogenous variables, which include empowering and directive leadership styles, were measured at time 1, while the endogenous variables of the leader–member exchange and employee-driven innovation were measured at time 2. The data were analysed using structural equation modelling.FindingsThe findings confirmed that empowering leaders are more likely to have a positive relationship with their subordinates and in turn, stimulate employee-driven innovation. Conversely, the directive leadership style was found to have a negative relationship with the quality of the relationship between leaders and subordinates. It was also found that the association of directive leadership with employee-driven innovation was negative and indirect through the leader–member exchange.Research limitations/implicationsThe data for the study were collected from a single organisation, which limits the generalisability of the study. Several other leadership styles were not covered in this study.Originality/valueThis paper provides empirical evidence to support the association between leadership styles and employee-driven innovation. Analyses of these relationship types are unavailable in the employee-driven innovation literature.