INFORMACIÓN ECONÓMICO FINANCIERA DEL EMISOR

The empirical investigation succeeded in providing, in a quantitative manner, a broader and more comprehensive picture of the relationship between leadership style, organisational climate, innovation and organisational performance. This was achieved by achieving three separate objectives. Achieving these empirical objectives addressed several gaps identified in the literature review.

From the results pertaining to Objective 6, it is evident that it is useful to utilise both transformational and transactional leadership styles to enhance employees’ innovative behaviour. It is most important to report that transformational leadership, as found in the literature, is a slightly more important driver of innovation than transactional leadership.

When the dimensions of transformational leadership are observed in more detail, most followers revealed that inspirational motivation and intellectual stimulation have the most influence on innovation. From the transactional perspective, contingent reward related most with innovation, suggesting followers who are rewarded for their efforts and recognised for good performance are more inclined to be innovative.

It is important to note in Objective 6 that the empirical results sketch leadership style as a complex phenomenon whereby not all elements of transformational or transactional leadership style present a straightforward influence on followers' innovative behaviour. Nonetheless, it is concluded that a transformational leadership style is generally the most effective style to promote innovative behaviour. As such, leaders are urged to be transformational in their interactions with subordinates. A model more complex than any of those presented in Objectives 1 and 2 is presented in Objective 7. This depicts the nature of the relationship between leadership style, climate, innovation and organisational performance, illustrated in Figure 1. The model showed a clear link between organisational climate and innovation as well as a link between organisational climate and organisational performance.

Incremental Radical Performance Transformational Transactional Climate .19* .06* .16* .42** .14* .19** .05 -.06 .45** .06 .34** .02 -.02

Figure 1: A model depicting the relationship between leadership style, organisational climate, innovation and organisational performance.

**p < 0.01; *p < 0.05

Interestingly the model shows that neither the transformational leadership style nor the transactional leadership style is appropriate to directly foster innovation. However, the results revealed that a transformational leadership style has an indirect effect to innovation, and this is through the climate that it creates. In other words, if the objective is to increase organisational performance using innovation as an enabler, then it is thus important for leaders to focus on a transformational leadership style in order to create an organisational climate that is conducive to innovation.

These findings depart from what was reported with Objective 1 (prior studies on leadership style, innovation and performance) and Objective 6 (an empirical study from Dataset 1), and suggest that the leadership style-innovation link is not direct. This makes a valuable contribution by demonstrating that this link is not direct but rather occurs through organisational climate. The findings support the conclusion drawn in Objective 2 (prior studies on organisational climate, innovation and performance), which stated that an effective innovation strategy can be achieved only if a strong climate for innovation exists in the organisation. The findings further downplay the effect of transactional leadership on the leadership style-innovation relationship. This

study is justified as it demonstrates how complex models provide a deeper insight into this phenomena.

In Objective 8, the nature of the relationship between innovation and organisational performance was examined using objective measures. It is evident that innovation impacts positively on organisational performance only when a certain objective measure of organisational performance is used. The results revealed that innovation has a significant impact on organisational performance when measured in return on equity (ROE), but no relationship was found when return of assets (ROA) and price earnings (P/E) were analysed. It can be concluded that if the main goal of the organisation is to attract shareholders by increasing shareholder value, then the organisation should aggressively adopt innovation as part of organisational strategy. 10.2 Cumulative summary and concluding remarks

A literature search was conducted to gain a better understanding of the relationship between leadership style, organisational climate, innovation and organisational performance. It was concluded that scholars often study these constructs in isolation with little reference to all four constructs in the same study.

Despite the limited literature available on these constructs, it was possible to gain a better understanding of the concepts and that allowed the researcher to define these constructs comprehensively. The synthesis of the articles that investigated the relationship between “leadership”, “innovation” and “performance” showed that transactional leadership style is more effective in driving innovation, whereas transformational leadership style is more effective in improving organisational performance. The synthesis of articles that investigated the relationship between “climate”, “innovation” and “performance” revealed that an effective innovation strategy can be achieved only if a strong climate for innovation exists in the organisation. This finding reaffirmed the importance of and the need for research into all four variables in one study. It was then concluded that a model of the relationship between leadership style, climate, innovation and organisational performance is needed and will contribute significantly to the current body of knowledge. The literature review thus justified the design and the method adopted for the empirical study.

Before the conceptual model explaining the relationship between these constructs was developed, particular attention was given to the measures of innovation and performance, as well as the method used in previous studies, as from the literature review, these seem to be problematic. The analysis of the method used in prior studies revealed standard procedures in conducting such research as well as providing a clear picture of what is an acceptable procedure to follow when conducting a study on these constructs. Further analysis provided some understanding of what constitutes “radical” and “incremental” innovation and provided guidelines on the most effective approach for measuring organisational performance.

The aforementioned analysis provided a sound basis for the development of a conceptual model explaining the relationship between leadership style, climate, innovation and organisational performance. Firstly, a measurement model of the relationship between the components of transformational and transactional leadership style and innovative behaviour was developed and tested. The results confirmed that both transformational and transactional leadership drive employee’s innovative behaviour in the organisation. More importantly, the results showed that not all components of transformational and transactional leadership drive innovative behaviour. It was therefore concluded that, as found in prior studies, transformational and transactional leadership styles are both necessary to drive the innovation strategy. Secondly, a path analysis was used to test a comprehensive model of the relationship between leadership style, climate, innovation and organisational performance. The results revealed the link between transformational leadership, innovation and organisational performance. Contrary to previous findings, the transactional leadership style-innovation relationship did not yield in this study. The results reaffirmed the findings of the literature review by showing the importance of organisational climate in fostering innovation and organisational performance. Central to the results is that the relationship between transformational leadership and innovation is indirect, and that this occurs through organisational climate.

The aforementioned model was developed based on the perceptions of employees. To mitigate that, an effort was made to ground the model in more “objective” data, thus part of the model was tested using publicly available financial data. The study succeeded in showing the positive relationship between innovation and organisational

performance. This additional step demonstrated that parts of the model presented in this research can be validated using “objective” data