Abstract

This study aims to empirically examine the impact of organisational leadership on organisational innovation in the aviation industry in Saudi Arabia. The study adheres to the traditional scientific paradigm and estimates parsimonious specifications instructed by the theoretical framework advanced in Setiawan et al., (2021). A questionnaire has been custom designed to collect data from employees in the General Authority of Civil Aviation (GACA) in Saudi Arabia and Alpha Star Aviation Services Company. A total of 355 respondents returned completed questionnaires. The results of the study show that employees’ perceptions in the aviation industry in Saudi Arabia concerning the underlying leadership style that promotes innovation their organisation is transformational leadership. This is as opposed to other styles of organisational leadership: the transactional style and the passive-avoidant style. The study further shows that the positive and statistically significant impact of transformational leadership on organisational innovation is mediated by the levels of employee creativity and organisational culture. The study reports that such mediation, though well-pronounced and statistically significant at all traditional levels, falls short of the full mediation criterion. This suggests that the mediating influences of employee creativity and organisational culture are not sufficient conditions, in themselves, and the impact of transformational leadership on organisational leadership is required. This indicates that other mechanisms may still matter in mediating the relationship between organisational leadership and organisational innovation, and those other mechanisms should be the aim of future research. This study shows that inspirational motivation tends to drive organisational innovation the most in the KSA aviation industry, and then behavioural idealised influence is of secondary importance. The study performs and reports robustness analyses which confirm the integrity of the data for use in PLS analysis. This study informs aviation stakeholders in Saudi Arabia, how to drive positive change to foster a culture of innovation, and achieve sustainable growth and success in an increasingly dynamic and competitive industry.