Entrepreneurial Leadership Alone is Not Sufficient: Organizational Innovation as a Hidden Mechanism for Building an Innovation Culture

Abstract

This study aimed to analyze the relationship between entrepreneurial leadership and innovation culture within organizations, examining organizational innovation as an intermediary organizational mechanism that explains the transmission of leadership effects to the cultural level. The study employed a descriptive-analytical approach using quantitative methods. Data were collected through a questionnaire distributed to a sample of 207 executives and managers from senior management, department heads, and administrative staff at Mobilis in Algeria. The data were analyzed using partial least squares structural equation modeling (PLS-SEM). The results showed a strong and statistically significant positive effect of entrepreneurial leadership on organizational innovation (β = 0.502, P < 0.001), explaining approximately 25.2% of the variance in organizational innovation. The results also revealed a direct positive effect of entrepreneurial leadership on innovation culture (β = 0.242, P < 0.001), although this effect was of limited strength. In contrast, organizational innovation demonstrated a strong impact on fostering a culture of innovation (β = 0.560, P < 0.001), and, along with entrepreneurial leadership, contributed to explaining approximately 50.7% of the variance in innovation culture. The results also confirmed a partial but strong mediating role for organizational innovation, with an indirect effect (β = 0.281, P < 0.001), and the overall effect of entrepreneurial leadership exceeding the direct effect. The study concludes that building a sustainable culture of innovation is not achieved through entrepreneurial leadership alone, but requires translating it into innovative organizational practices.