The influence of ethical leadership on innovative performance: modeling the mediating role of intellectual capital

Abstract

PurposeRecent research studies have increasingly suggested leadership as a major antecedent to encourage innovative work behavior among business employees. Empirical studies which investigated the influence of various leadership aspects such as style and ethics on employees' innovative performance and unraveled the mechanism through which leadership exerts its impact on employees' innovative work behavior were restricted. Thus, the purpose of this research was to investigate the relationship between ethical leadership and employees' innovative performance by focusing on the mediating role of two forms of the intellectual capital (IC), i.e. human capital and social capital.Design/methodology/approachData for present research were collected through in person administered questionnaire-based survey from the managerial level employees of the targeted sample of the manufacturing firms. Furthermore, due consideration was given while selecting the individuals from R&D departments of these organizations, who were typically involved in knowledge-intensive jobs and where application of intellectual assets was needed.FindingsEthical leadership was observed as to positively influencing employees' innovative performance. Two forms of IC, i.e. human capital and social capital were observed as playing mediating role in the ethical leadership – employees' innovative performance relationship.Originality/valueThe contemporary research study adds value in the literature of the ethical leadership. The most imperative theoretical contribution of the present research study underlines the psychological process, i.e. IC by which ethical leaders encourage innovative behavior among employees.