Leadership Behaviours for Creativity and Innovation in China:
A Case Study of a Four-Phase Organisational Transformation from Paternalism to Ambidexterity

Abstract

Creativity and innovation capability have become crucial to the long-term sustainable development of enterprises(Amabile, 1988; Amabile & Pratt, 2016; Anderson, Potočnik, & Zhou, 2014; Woodman, Sawyer, & Griffin, 1993). This study investigated the key elements contributing to building enterprises’ innovative capability and how leadership behaviours strengthen such capability in the Chinese business context. The creativity and innovation process are getting increasingly complex and dynamic. It is no longer an independent but a collaborative activity among all organisational stakeholders. Leadership plays a critical role in driving creativity and innovation. The relationship between leadership and innovation has been deeply investigated, particularly in the Western cultural context(Mumford & Hemlin, 2017). However, the role of leadership is culturally bounded. Theories developed in Western countries may not be applied in Eastern countries. So forth, exploring the relationship between leadership and innovation in the Chinese business context is meaningful.

China’s private-owned enterprises, which comprise 95% of the total enterprises in China, have made an incredible contribution to innovation and will continue to be the significant force in driving national innovation in the future (Scott, 2020). The Chinese government provided many incentive policies to drive the SME’s innovation capabilities, such as the national “Little Giant “programme to stimulate the hidden champions’ growth. Under this national context, I selected a high-technology company as the case study that represents companies nominated as national “Little Giants “and treasured innovation capability as the company's key advantage.

Upon reviewing the literature and examining the challenges of the real business world, I’m aiming to study the phenomenon of creativity/innovation and the relationship between leadership and creativity/innovation to answer the questions of “What factors are important to creativity and innovation in a Chinese business context?” and “How do leadership behaviours influence creativity in a Chinese business context?” The unique phenomenon and conclusions from the in-depth study of the real business world will make academic and practical contributions.
Inductive research methodology was applied to address the research questions and objectives. Through 38 months of longitudinal ethnographic case study, triangulation data collection methods, including semi-structured interviews, ethnographic observation, and historical archived documents, have been utilised to avoid bias (Gioia, 2021; Yin, 2018). Case study company A was built in 1998 and listed as a national “Little Giant.” The main products are new green chemical materials applied in the construction industry, and they have started to enter the new green energy industry.

My research study can be divided into four phases describing the company’s transformational process: pre-change, preparing change, during change, and after change. There were 42 informants across multilevel (top leaders, functional and project managers, R&D engineers, and grassroots staff) in the organisation were interviewed. Meanwhile, I participated in major business activities, such as strategic discussions, annual reviews, regular business update meetings, and new project workshops. Besides semi-structured interview transcripts, I took around 100 field notes and 60 archived documents during the research period. The triangulation data collection process allowed me to understand the phenomenon more deeply and broadly. Furthermore, it improved the rigor and relevance of the research.

A thematic data analysis approach was applied to do the coding, determine the emerged themes, and frame the conceptual template. The data structure built through this iterative process was a critical bridge between the raw data and theory building. The interaction analysis between the leaders’ behaviours and contextual activities becomes the focal point.

My main findings are threefold. Firstly, innovative activities in real business are more complex and dynamic than those in the eyes of scholars, which is reflected in the new product development process and organisational transformation. Particularly for the companies who proceed with ambidextrous innovation of exploration and exploitation simultaneously, bringing more tensions and inertia in process, resources, decision-power, and working climate. Secondly, leadership was incredibly influential in making innovative activities achieve great results. Paternalistic leadership as the dominant leadership style has demonstrated either positive or negative impacts in different business contexts. Coping with the dynamic innovation process, the leadership gradually switched from paternalistic behaviours to ambidextrous types of opening and closing behaviours and were perceived to be more effective. Thirdly, the series of actions taken under the transformational business context stimulated the changes in leadership behaviours and other changes in market strategies, decision-making patterns, and working climates.
The business practices and leadership behaviours enacted in the four phases of the organisational transformation are unique and transferrable, particularly for SMEs seeking short-term survival and long-term sustainable growth simultaneously. Meanwhile, the multilevel analysis of the relationship between leadership and innovation contributed to leadership and innovation research domains.