An empirical examination of leader-member exchange and transformational leadership as predictors of innovative behavior

It is proposed that, the extent to which organizational members are innovative will be positively related to their attitude towards innovation, quality of exchange with managers, and the extent to which managers exhibit transformational leadership. Further, it is proposed that subordinate performance and similarity with the leaders is related to the quality of leader-subordinate exchange. The model was tested on a sample of 223 dyads in a manufacturing setting. Initial analyses failed to distinguish between the measures of transformational leadership and quality of exchange. Accordingly, reduced scales of the two constructs were used. Results indicate that quality of leader-subordinate exchange is positively related to innovative behavior in a number of ways. First, a direct effect of quality of exchange was found. Second, quality of exchange seemed to influence innovation by supporting such behavior. Third, quality of exchange seemed to influence innovation by building commitment to the organization. Transformational leadership seemed to positively influence innovative behavior by indirectly influencing attitudes and norms regarding innovation. However, a negative direct relationship between transformational leadership and innovative behavior was also found. The thesis also examines the forces underlying quality of exchange. It found quality of exchange to be positively related to subordinate performance and attitudinal similarity with the leader.