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Introduction
Recent research has shown that majority of the European and American organizations have embraced the open innovation model to build competitive advantage (von Briel and Recker, 2017). In this regard, the extant literature indicates that leadership plays a vital role in building a competitive advantage by creating organizational synergies and overcoming resistance to change when new initiatives are introduced (Lerner and Tirole, 2005).
Past research has examined the role of different leadership styles–transformational, transactional and participative – in making organizations innovative (see Engelen et al., 2014; Kang et al., 2015; Lee and Cavusgil, 2006; Sarros et al., 2008). Evidently, leaders stimulate followers’ psychological processes for innovative behavior (Gong et al., 2009; Lee, 2008), knowledge creation and sharing procedures (Goh, 2002; Von Krogh et al., 2012) and intellectual capital (Putri, 2015). These elements are essential attributes of the open service innovation paradigm (Chesbrough, 2011). Many studies show that leaders play a key role in the deployment of open innovation as a source of competitive advantage (Chen et al., 2016; Chesbrough, 2011; Fleming and Waguespack, 2007; Laursen and Salter, 2006). Despite these theoretical developments, the influence of leadership styles on the successful deployment of open service innovation is an area which has not received its due attention (Chesbrough, 2011; Lerner and Tirole, 2001; Perrone et al., 2003). Against this backdrop, this paper aims to examine the role of leadership in open service innovation.
A majority of leadership research has focused on generic leadership styles such as transformational, transactional and laissez-faire leadership styles (see Engelen et al., 2014; Kang et al., 2015; Lee and Cavusgil, 2006; Sarros et al., 2008). The advances in leadership theory in the last four decades have resulted in the emergence of new leadership styles such as paternalistic, democratic and authentic leadership styles (Aycan, 2006). This study thus focuses on the relationship of these leadership styles (paternalistic, democratic and authentic) with open service innovation. Additionally, this study examines the mechanism through which these leadership styles affect open service innovation. In this regard, governance is recognized as a mechanism used by organizations to support and control systems to gain competitive advantage.
Research has focused on the effective governance mechanism through which organizations mobilize their...