How transformational leadership fuels employees' service innovation behavior

Although there is a consensus that transformational leadership (TFL) is critical to successful service innovation behavior, the relationship between the two remains inconclusive. This study adopts a dual perspective approach that considers both motivational and social-political perspectives to further elicit the influence of TFL on the service innovation behavior of frontline employees. Using multiphase and multisource data from 269 employees and 1396 customers of hair salons, the results show that the perceived organizational climate for innovation, creative self-efficacy, and expected image gains fully mediate the relationship between TFL and employees' service innovation behavior. TFL positively influences employees' perceived organizational climate for innovation, which in turn enhances the service innovation behavior of employees through both motivational (i.e. creative self-efficacy) and social-political (i.e. expected image gains) mediating mechanisms. Surprisingly, expected image risks are found to have a non-significant relationship with service innovation behavior. We discuss implications of these findings with respect to innovation literature and management practice, as well as offer suggestions for further research.