Collaborative innovation in the Pakistan’s dairy industry: effectiveness of managerial leadership and organizational readiness

Abstract

Buyer-supplier relationships have become increasingly important for generating innovation in the food industry. Despite extensive literature in this area of research, the most specific question of managerial leadership fostering innovation collaboratively has received considerably less attention.This could be one reason why collaborative innovation remains largely elusive for managers.Scholars have urged the theoretical development and empirical validation in this area of inquiry.The study empirically relates two important areas of strategic management research: the managerial leadership and the organizational readiness to innovate collaboratively. More specifically, the study examined the impact of transformational and transactional leadership behaviours (as measured by MLQ) on organizational readiness capabilities such as adaptability, information exchange, organizational learning culture and contracting to determine how managers influence and prepare their organizations for innovation through buyer-supplier relationships in the context of agribusiness such as Pakistan's dairy industry.Two theoretical lenses namely full range leadership and dynamic capabilities view were used to review the literature for proposing the conceptual model for the study. The conceptual model was tested through Partial Least Squares Structural Equation Modelling (known as path modelling). The path model was employed by using a Likert-scaled questionnaire through 372 cross sectional valid surveys. Face-to-face method was utilized to collect data for empirical testing of relationship, if any, exists between managerial leadership behaviours and organizational readiness capabilities thereby fostering collaborative innovation performance. Further, twenty nine key informant interviews were recorded to discuss the path modelling results of the study.The structural model showed a good fit with the quantitative data through reliability and validity.The analysis provided the strong support for all (fifteen) hypotheses. Both transformational and transactional behaviours were found to have positive impact on organizational readiness capabilities for generating innovation through buyer-supplier relationships. The passive/avoidant behaviours were also tested and found significantly negative for generating collaborative innovation performance thereby eliminated for the advance modelling.The study findings revealed managers should utilize both transformational and transactional leadership behaviours to prepare their organizations for the purpose of innovation through buyersupplier relationships in the enterprise model of Pakistan's dairy industry. Further, the study identified adaptability, information exchange, organizational learning culture and contracting as the underlying mechanisms through which leadership influences collaborative innovation performance.ii In the PLS-SEM study results, transactional behaviours exhibited greater significance in comparison with the transformational behaviours. While, transformational behaviours after dr...

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“…Inner model or structural model investigates the relation of variables which are identified by the theory (Yaseen, 2015). The estimates determine the level of prediction of these variables as compared to goodness of fit in the Covariance based approach (F. Hair Jr et al, 2014;Hair Jr et al, 2016).…”