Doctoral thesis of philosophy creativity and innovation in hotels and resorts the role of leadership

193 Table 6.34 Regression model: innovation-enhancing leadership behaviours and employees’ creativity, Australian and Iranian hotels & resorts .... 195 Table 6.36 Multiple regression mod

INTRODUCTION

Background of the Research

The tourism industry has undergone continuous transformation driven by global competition, social and economic forces, rapid advancements in information technology, and the increasing popularity of emerging destinations, alongside rising customer expectations (Law, Leung & Cheung, 2012; Molina-Azorín et al., 2015; Orfila-Sintes, Crespí-Cladera & Martínez-Ros, 2005) Poon (1994) described a shift towards ‘new tourism,’ characterized by flexibility and authentic experiences, replacing the ‘old tourism’ of the 1950s to 1970s marked by mass, standardized holiday packages Industry practitioners must prioritize innovation to effectively respond to market challenges and maintain competitiveness in this evolving landscape (Fraj, Matute & Melero, 2015; Kattara & El-Said, 2013; Ottenbacher).

Innovation plays a crucial role in the hotel industry by driving financial performance, including increased sales growth and market value (Chang, Gong & Shum, 2011; Nicolau & Santa-Maria, 2013) It also enhances customer loyalty and satisfaction, which are vital for long-term success (Enz et al., 2010; Ottenbacher & Gnoth, 2005; Victorino et al., 2005) Furthermore, innovation helps hotels sustain a competitive advantage in a dynamic and competitive market (Fraj, Matute).

Organizational innovation is greatly driven by employees’ diverse skills, knowledge, and ability to generate new ideas, which are essential for fostering innovation (Jong & Hartog 2007; Slöttén, Svensson & Svöri 2011; Subramaniam & Youndt 2005) Literature consistently emphasizes that individual innovation significantly contributes to organizational success and effectiveness (Axtell et al 2000; Kattara & El-Said 2013; Tajeddini 2010).

Employees are central to change and differentiation in the hotel industry, serving as vital ambassadors for the organization (Ottenbacher, Gnoth, & Jones, 2006) Their creativity and innovation are widely recognized as essential drivers of organizational success and effectiveness, despite variations in research frameworks and findings (Hon, 2011; Nagy, 2014; Ottenbacher, 2007; Zhou & Shalley, 2003).

Employee creativity and innovation are vital for organizational success, prompting extensive research into their key determinants Creativity is a complex outcome resulting from the interaction between individual traits and situational factors within organizations Environmental variables such as leadership, organizational support, and workplace climate significantly influence both creativity and innovation, with leadership having the most substantial impact on the work environment In the hotel industry, leadership plays a crucial role in fostering employees’ creative achievements, especially amid the constant challenges posed by global competition Therefore, managers’ ability to promote innovation within their teams is essential for maintaining hotel competitiveness and ensuring organizational success.

While leadership is widely recognized as a key predictor of employees' creativity and innovation, there remains limited comprehensive research on how different leadership styles specifically influence creative outcomes Most studies over the past decade have primarily focused on quantitatively testing existing leadership theories and measurement tools, often neglecting in-depth exploration of the nuanced ways leadership can foster innovation This gap highlights the need for more qualitative and context-specific research to better understand the role of leadership in promoting creativity within organizations.

Research indicates that various leadership styles, such as transformational, empowering, and authentic leadership, have been studied as predictors of followers’ creativity and innovation However, findings on the relationship between leadership, creativity, and innovation are inconsistent, possibly due to narrow research scopes or overlooked influencing factors Experts like Hunter and Cushenbery emphasize that encouraging employee creativity and innovation is a complex, multi-factor process that requires more comprehensive investigation Scholars such as Mumford, Licuanan, Carmeli, Reiter-Palmon, and Ziv highlight the need for further research to better understand how leadership impacts creativity and innovation, acknowledging that no single leadership behavior solely fosters these qualities Incorporating SEO keywords: leadership styles, creativity, innovation, employee engagement, transformational leadership, empowering leadership, authentic leadership, leadership impact on innovation.

Recent studies emphasize the need for research on how leadership influences innovation within organizations, moving beyond traditional survey methods This thesis aims to identify key leadership qualities and characteristics that foster employee creativity and drive innovation specifically in the Hotels and Resorts industry Understanding these traits can help organizations enhance their innovative capacity and competitive advantage in the hospitality sector.

Research design significantly influences inconsistencies in findings related to leadership, creativity, and innovation Literature review indicates that these relationships have been explored through two main research settings: experimental studies with student participants and field research involving employees and supervisors For instance, Jaussi and Dionne's studies highlight the importance of context-specific research methods in understanding these dynamics.

Research from 2003 involving 364 students at a large U.S university found that transformational leadership has limited influence on individual creativity Similarly, Kahai, Sosik, and Avolio's laboratory experiment revealed weak leadership effects due to leaders lacking group membership and credibility This thesis explores how leadership impacts employee creativity and innovation in real-world workplace settings, emphasizing genuine leader-employee interactions over controlled experiments.

Research indicates that various individual and organizational factors, such as creative role identity and empowerment, mediate and moderate the relationship between leadership styles like transformational and servant leadership and employees’ creativity and innovation (Herrmann & Felfe, 2013; Wang et al., 2014; Michaelis, Stegmaier & Sonntag, 2009) A supportive organizational climate plays a crucial role in fostering innovation at the organizational level and personal initiative at the individual level, thereby strengthening the link between leadership and employees' creative output (West & Sacramento, 2012; Jung & Wu).

Research by Chen and Hou (2016) shows that ethical leadership positively influences employees’ creativity through voice behavior, especially in innovation-friendly climates Personal initiative is a key individual factor linked directly and indirectly to creativity and innovation (Binnewies, Ohly & Sonnentag, 2007; Ohly, Sonnentag & Pluntke, 2006) Employees who perceive their organization encourages initiative tend to respond more favorably to leadership behaviors that promote innovation (Michaelis, Stegmaier & Sonntag, 2009) This thesis aims to examine how leadership, a supportive organizational climate, and personal initiative collectively impact employees’ creativity and innovation, providing valuable insights for enhancing innovation strategies within the hotel and resort industry.

Research Objective and Questions

This thesis aims to provide a comprehensive understanding of the key elements influencing employees’ creativity and innovation by examining both individual and organizational factors It explores five critical factors: leadership, organizational climate, personal initiative, employees’ creativity, and employees’ innovation Understanding how these interconnected elements impact innovation can help organizations foster a more creative and innovative work environment.

The main research objective underpinning this study is:

 To examine the effects of leadership, an organisational climate supportive of innovation, and personal initiative on employees’ creativity and innovation in hotels and resorts in Australia and in Iran

The main research question that this thesis is addressing is:

 In what ways are leadership, organisational climate and personal initiative associated with employees’ creativity and innovation in hotels and resorts in Australia and in Iran?

Based on the main research question, seven research sub-questions will be addressed:

Research Question 1: What is the nature of the leadership qualities that stimulate employees’ creativity and innovation in the hotel and resort industry?

Research Question 2: In what ways, if any, do perceived leadership behaviours influence employees’ creativity in Australian and Iranian hotels and resorts?

Research Question 3: In what ways, if any, do perceived leadership behaviours influence employees’ innovation in Australian and Iranian hotels and resorts?

This study explores how employees’ perceptions of an organizational climate that supports innovation influence the link between perceived leadership behaviors and employee creativity in Australian and Iranian hotels and resorts The findings suggest that a supportive innovative climate enhances the positive impact of leadership on creativity, serving as a moderating factor In environments where employees view the organizational climate as encouraging innovation, leadership behaviors are more strongly associated with increased employee creativity Cross-cultural differences between Australian and Iranian hospitality industries highlight the importance of perceived organizational support in fostering creative outcomes through effective leadership These insights underscore the significance of cultivating an innovative climate to maximize leadership’s influence on employee creativity in diverse hotel and resort settings.

Research Question 5: In what ways, if any, do employees’ perceptions of an organisational climate supportive of innovation moderate the relationship between perceived leadership behaviours and employees’ innovation in Australian and Iranian hotels and resorts?

Research Question 6: In what ways, if any, does personal initiative moderate the relationship between perceived leadership behaviours and employees’ creativity in Australian and Iranian hotels and resorts?

Research Question 7 : In what ways, if any, does personal initiative moderate the relationship between perceived leadership behaviours and employees’ innovation in Australian and Iranian hotels and resorts?

Rationale

The rationale of this thesis is influenced by three critical dimensions: theoretical significance, methodological significance, and practical implications

The gap in the literature exploring leadership qualities associated with employees ’ creativity and innovation

Research shows that leadership significantly influences employees' work environment, yet studies linking leadership directly to employee innovation remain limited Existing research often examines leadership from a theory-based perspective, focusing on general characteristics and behaviors rather than those specifically fostering creativity and innovation Many models considered as predictors of innovation were originally designed for broader organizational outcomes like performance and effectiveness, leading to a gap in understanding their relevance to innovation This thesis aims to address this gap by using a mixed method approach—combining qualitative and quantitative data—to investigate how leadership impacts employee creativity and innovation within a specific industry A key contribution of this research will be the development of a comprehensive construct of innovation-enhancing leadership, offering new insights into the leadership qualities that drive innovation in the workplace.

Employees' skills and knowledge are vital to the success of the hospitality and hotel industry, emphasizing the importance of empowering, initiating, and inspiring staff to enhance organizational efficiency and deliver excellent customer service (Ottenbacher 2007; Ottenbacher, Gnoth & Jones 2006; Raub & Robert 2012; Sløtten, Svensson & Svori).

Research indicates that relying solely on traditional theory-based leadership models may overlook essential industry-specific characteristics, limiting their effectiveness in complex work environments Moving beyond traditional taxonomies to adopt more nuanced models that emphasize empowering, team-building, coaching, delegating, and resource provision can better foster organizational creativity and innovation While the transformational-transactional leadership model has historically been used to assess leadership impact on innovation, it often neglects these critical leadership qualities needed for fostering originality in hotel and resort industries Studies suggest that leadership styles influencing performance may not necessarily promote creative and innovative behaviors Therefore, a comprehensive, exploratory approach is vital to understand the specific leadership behaviors that effectively encourage employee creativity and innovation in the hospitality sector.

Lack of research on the concept of personal initiative

Creativity and innovation are influenced by various elements, as highlighted in existing literature (Amabile et al., 2004; Michaelis, Stegmaier & Sonntag, 2010; Rosing, Frese & Bausch, 2011; Wang & Rode, 2010) This thesis advances the understanding of these factors by incorporating a more comprehensive model that includes contextual influences By considering these additional variables, the study offers new insights into the key predictors of employees’ creativity and innovation, contributing valuable knowledge to the field.

Personal initiative, characterized by being self-starting, proactive, and persistent, plays a vital role in fostering innovation by enabling employees to overcome unexpected problems and setbacks Employees with high personal initiative actively pursue organizational goals with persistence, especially when exploring unfamiliar areas that involve high risks of failure Creativity and innovation result from the interaction of individual traits and environmental factors, with leadership practices significantly influencing this dynamic This article emphasizes the importance of employees’ personal initiative in strengthening the relationship between leadership and workplace creativity and innovation.

Despite its crucial role in fostering creativity and innovation, personal initiative remains underexplored in the context of hotels and resorts Frese and Fay (2001) highlight personal initiative as essential for thriving in challenging work environments of the 21st century, enabling employees to be proactive and engaged within their organizations While leadership significantly influences employee creativity and innovation, personal initiative as an individual attribute is particularly vital in the hospitality industry, where staff are responsible for delivering services and addressing customer needs.

The distinctive role of a climate supportive of innovation as an organisational factor

This thesis presents a comprehensive framework examining how organizational levels, including organizational climate and personal initiative, influence employee creativity and innovation It emphasizes that both individual factors and work environment conditions are essential for successful innovation, supported by social-psychological approaches (West & Sacramento, 2012) Organizational climate serves as a key moderator that fosters desired behaviors such as creativity and innovation among employees (Hunter, Bedell & Mumford, 2007; West & Sacramento, 2012) Recent research highlights that different conceptualizations of organizational climate significantly enhance leadership effectiveness and are directly linked to increased employee creativity and innovation (Michaelis, Stegmaier & Sonntag, 2010; Slōtten, Svensson & Svōri, 2011; Eisenbeis, van Knippenberg & Boerner, 2008; Jung, Wu & Chow, 2008) For instance, Michaelis et al (2010) found that a climate supportive of initiative mediates the impact of leadership on employees' innovation implementation, while Eisenbeiss et al (2008) demonstrated that organizational support for innovation and a climate promoting excellence strengthen the relationship between transformational leadership and team innovation.

A study by Einarsen and Mykletun (2012) involving 207 employees and leaders found that a creative work climate mediates the relationship between leadership and organizational creativity This research highlights the importance of organizational climate as a crucial environmental factor that influences how leadership affects employee creativity and innovation Creating a positive and supportive work environment can enhance the impact of leadership, ultimately fostering greater levels of creativity and innovation within organizations.

The importance of addressing the divergence between creativity and innovative behaviour

While innovation is widely recognized as crucial for organizational success, its conceptualization and measurement remain evolving areas of study (Dorenbosch, Engen & Verhagen, 2005; Jong & Hartog, 2010) Individual innovative behavior extends beyond generating novel and useful ideas to include the implementation and application of these ideas (Amabile, 1988; Axtell et al., 2000; Janssen, 2000; Scott & Bruce, 1994) Many researchers agree that the innovation process begins with creative ideas (Amabile et al., 1996; George & Zhou, 2001; Shalley & Gilson, 2004), but innovative behavior is often viewed as a multi-dimensional phenomenon, with the distinction between creativity and innovation remaining somewhat unclear in empirical studies (Oldhum & Cummings, 1996; Tierney, Farmer & Graen, 1999).

This thesis advances previous research by distinguishing between creativity—comprising idea exploration and generation—and innovation, which includes idea championing and implementation This separation helps identify specific factors associated with each behavior Supporting this approach, Krause (2004) and Dorenbosch, van Engen, and Verhagen (2005) demonstrate that innovative work behavior is a multi-dimensional construct Their studies confirm through factor analysis that the various dimensions of innovative work behavior can be distinctly identified, highlighting the complexity of these interrelated yet separate processes.

Several studies have explored the relationship between leadership and innovation, emphasizing the importance of theory-based leadership models (Ryan & Tipu, 2013; Wang, Tsai & Tsai, 2014) However, these studies often focus on limited aspects of leaders' characteristics or behaviors, highlighting the need for more comprehensive research There is a significant gap in the literature regarding how leadership influences followers' creativity and innovation, calling for exploratory studies that develop broader constructs of leadership encompassing these aspects (Gupta & Singh, 2013; Jong & Hartog, 2007; Mumford & Licuanan) Developing a deeper understanding of these dynamics is essential for fostering innovative organizational environments.

This thesis makes a significant contribution by employing a mixed-method research design, specifically a sequential exploratory approach, to investigate how leadership influences creative and innovative outcomes The research comprises two key studies: first, qualitative semi-structured interviews with managers and supervisors from Australian and Iranian hotels to identify leadership behaviors that impact employee creativity and innovation; second, a quantitative analysis examining the relationships between these leadership behaviors and employee creativity, innovation, perceptions of an organizational climate supportive of innovation, and personal initiative, with moderators in both Australian and Iranian hotel contexts.

The findings provide new insights into leadership behaviours that are crucial to promote and enhance employees’ creativity and innovation in hotels and resorts industry By drawing attention to organisational climates that are supportive of innovation, and to personal initiative, this thesis also provides better understandings of other factors influencing the association between leadership and employees’ creativity and innovation This investigation sheds light on how industry practitioners can motivate and enhance creativity and innovation in a challenging contemporary industry to obtain sustainable competitive advantage and success

The imperative role of efficient and skilled employees in providing excellent and unique service has been emphasised in the literature of the hospitality industry (Ottenbacher, Gnoth & Jones 2006) Training has been found to be an effective response to the market challenges in the hotel industry (Martínez-Ross & Orfila-Sintes 2012) Ottenbacher

In 2007, it was suggested that successful innovation in the hospitality industry depends on an organization’s emphasis on both general and individual training Identifying key leadership behaviors that influence employees’ creativity and innovation is crucial for developing effective leadership practices These insights help industry practitioners understand the environmental and individual factors that promote idea generation and the successful implementation of innovations, ultimately fostering a culture of continuous improvement and competitive advantage.

Research Context

1.4.1 Introduction to World Tourism Industry

The tourism industry is one of the most profitable sectors of the world economy It is considered a socioeconomic driver, creating new enterprises and new jobs (Omerzel

Tourism significantly contributes to international trade in both advanced and emerging economies, accounting for 6% of global exports and 30% of service exports worldwide (United Nations, 2015; UNWTO, 2014) According to the World Travel and Tourism Council (WTTC, 2012), tourism receipts represent a substantial portion of national service exports, playing a crucial role in generating foreign exchange and supporting financial stability, especially in emerging economies.

In 2014, the travel and tourism sector contributed 3.1% directly and 9.8% overall to GDP, underpinning significant economic impact The industry directly created 105 million jobs, representing 3.6% of total employment, with a total contribution of nearly 277 million jobs (9.4% of employment) Projected to grow faster than sectors like financial services, transportation, and manufacturing, tourism's employment footprint surpasses that of the automotive, chemical, mining, and financial industries—being seven times larger than automotive and twice that of global financial services According to Azizzadeh and Azizzadeh (2012), tourism remains one of the world's largest industries for generating income and employment.

Figure 1.1 Tourism in the world: key figures

Tourism achieved an historic milestone of one billion travellers in a single year in 2012, which was followed by a 4.4% growth in international tourism in 2013, or an additional

In 2014, global overnight visitors increased by 48 million, driven by strong growth in the Americas (+8%), Asia and the Pacific (+5%), and the Middle East (+5%), reaching 182 million, 263 million, and 50 million international tourist arrivals respectively This surge was accompanied by significant increases in international tourism receipts and earnings, highlighting the sector's economic impact Furthermore, UNWTO reported a 4.4% growth in international tourist arrivals in 2015, significantly contributing to global economic growth.

In 2014, leisure travel (both inbound and domestic) accounted for 76.6% of direct travel and tourism GDP, highlighting its dominant role in the industry In contrast, business travel contributed 23.4% to the sector's economic output According to the World Tourism Organization (2014), the primary motivations for travel are holidays, leisure, and recreation, which make up 52% of all trips This data underscores the significant impact of leisure travel on global tourism spending and economic growth.

The increasing number of international travelers across Europe, Asia & the Pacific, the Americas, the Middle East, and Africa underscores the importance of high-quality hotel services for foreign visitors The higher rate of leisure trips compared to business trips highlights the need for the hotel industry to prioritize exceptional customer experiences, which are vital in boosting and sustaining the tourism sector (Australian Government, Department of Resources, Energy and Tourism, 2011).

1.4.2 Tourism Industry in Australia and Iran

Tourism is a vital industry in both Australia and Iran, significantly impacting their economies In Iran, tourism contributed directly 2.3% to the GDP and a total impact of 6.3% in 2014, highlighting its economic importance Similarly, Australia’s travel and tourism sector directly accounted for 2.7% of the GDP, with a total contribution of 10.1% in 2014, demonstrating its role as a major economic driver in the country.

Figure 1.3 Travel and tourism in Australia and Iran

Source: World Travel And Tourism Council (2015)

In 2014 the contribution of travel and tourism to employment, visitor exports and investment in both Australia and Iran was substantial In Iran, travel and tourism generated 1.1% of total exports and 5.3% of total employment, while in Australia travel and tourism generated 6.4% of total exports and 12.2% of total employment Based on the industry’s contribution to GDP, Australia is ranked 11th and Iran 40th out of 184 countries (WTTC 2015)

1.4.3 Hotel Industry in Australia and Iran

Australian tourist accommodation is primarily categorized into hotels and resorts, motels, private hotels and guesthouses, and serviced apartments, all classified by a star rating system from one to five based on the type, number of rooms, and quality of services and facilities (ABS 2013) In Iran, tourist establishments mainly consist of hotels and guesthouses, which are also rated from one to five stars, with other accommodations classified on a one to three star scale, using criteria such as facilities, services offered, and hotel management quality (Iran’s Society of Hoteliers 2013) The star rating system serves as a universal indicator of accommodation quality, referencing physical features like amenities and facilities, as well as service features such as 24-hour availability, making it a widely recognized symbol for grading hospitality establishments (Cser and Ohuchi 2008).

This thesis examines 3-, 4-, and 5-star hotels and resorts, emphasizing the critical role of innovation in the hotel industry Despite its significance, innovation remains an underexplored area within hospitality research (Chen, 2011; Enz & Siguaw, 2003; Wong & Ladkin, 2008; Martínez-Ros & Orfila-Sintes, 2012; Ottenbacher), highlighting the need for further analysis of innovative practices in luxury and upscale accommodations.

This thesis addresses a notable research gap highlighted by Gnoth (2005) Literature indicates that higher-category hotels tend to be more innovative and foster a better environment for innovative practices (Orfila-Sintes, Crespí-Cladera, and Martínez-Ros, 2004; Hjalager, 2010) Additionally, the Australian Bureau of Statistics (2013) reports that hotels and resorts achieve higher room occupancy rates, guest nights, and revenue from accommodation compared to other types of tourist accommodations.

Takings from Accommodation Hotels & resorts 5,420,885 67.3% 8,402,379 1,008,187,423

Motels, private hotels & guest houses

Source: Australia Bureau of Statistics (2013)

Further, 3-, 4-, and 5-star hotels and resorts have higher guest arrivals, room occupancy rates, guest nights occupied, room nights occupied and takings from accommodation than other star ratings

Table 1.2 Hotels and Resorts, Australia (2013)

Source: Australian Bureau of Statistics (2013)

This article presents the distribution of 3-, 4-, and 5-star hotels and resorts in Australia and Iran, highlighting key trends with supporting data from Tables 1.3 and 1.4, and Figures 1.4 and 1.5 In Australia, the majority of hotels and resorts are 4-star establishments, totaling 308, followed by 3-star hotels with 265, and 5-star establishments with 74 Most of these hotels are concentrated in major regions such as New South Wales, with 160 properties, Victoria with 134, and Queensland also hosting 134 hotels, indicating significant hospitality industry presence in these states.

Table 1.3 Distributions of hotels and resorts in Australia (2013)

State Number of Establishments Persons Employed

3 stars 4 stars 5 stars 3 stars 4 stars 5 stars

Source: Australian Bureau of Statistics (2013)

Figure 1.4 Distribution of hotels and resorts by star rating (Australia)

Source: Australian Bureau of Statistics (2013)

3 Star Grading 4 Star Grading 5 Star Grading

Table 1.4 Distribution of hotels and resorts in Iran (2013)

Source: Iran’s Society of Hoteliers (2013)

Figure 1.5 Distribution of hotels and resorts based on star rating (Iran)

Source: Iran’s Society of Hoteliers (2013)

Iran has a significantly higher number of 3-star hotels and resorts (234) compared to 4-star (79) and 5-star (25) properties The majority of these hotels with 3-, 4-, or 5-star ratings are concentrated in Khorasan (66 hotels) and Tehran (42 hotels), highlighting regional tourism hubs When comparing hotel distribution by star rating between Iran and Australia, it is evident that 3- and 4-star accommodations dominate in both countries In Australia, 5-star hotels make up only 11% of the market, whereas in Iran, they represent about 8%, indicating a transition toward mid-range accommodations in both markets.

Iran is considered one of the top ten most attractive countries for tourism due to its rich potential attractions (Fatemi, Saleki & Fatemi, 2012) However, despite this potential, Iran ranks only 97th in the global travel and tourism economy out of 141 countries (World Economic Forum, 2015), indicating that its tourism industry is not operating at full capacity A significant challenge hindering Iran’s tourism growth is the lack of high-quality hotels and accommodations; service offerings and facilities in the industry need substantial improvements to meet international standards and boost competitiveness (Madani, Ghadami & Sarafizadeh).

A key challenge in the hospitality industry is the lack of adequate training and development for employees and managers to deliver high-quality services to guests According to Iran’s Society of Hoteliers (2013), improving the industry’s potential requires increasing staff knowledge and awareness, enhancing skills in resolving guest issues, and implementing comprehensive training programs for front-line employees Similarly, Australia's long-term tourism strategy emphasizes the importance of providing high-quality facilities, which depends on having a skilled workforce committed to exceptional service delivery.

This study explores the determinants of employees’ creativity and innovation, aiming to enhance training and development programs in Australian and Iranian hotels and resorts Providing a 3-star, 4-star, and 5-star graded labour force is essential to deliver internationally competitive services to travelers, as highlighted by the Australian Government’s Department of Resources, Energy, and Tourism (2011).

Structure of the Thesis

The upcoming chapters are structured to provide comprehensive insights, starting with Chapter 2, which offers a thorough review of existing literature on innovation within the tourism and hotel industry This chapter explores key theoretical debates surrounding leadership, employees’ creativity, and innovation, highlighting their significance for industry growth and competitive advantage.

This article explores how contextual factors like organisational climate and personal initiative influence the relationship between leadership and employees’ creativity and innovation It provides a comprehensive literature review on the connections between leadership, creativity, innovation, and a supportive organisational climate, highlighting the importance of personal initiative Based on these insights and identified research gaps, a development of the research framework is presented, along with specific questions examining the direct impact of leadership on creativity and innovation The study also investigates the moderating roles of employees’ perceptions of a supportive organisational climate and their personal initiative in strengthening the link between leadership and innovative outcomes.

Chapter 3 outlines the methodological approach used in the study, and addresses the rationale of the approach, sampling strategy, and analysis techniques employed It begins with a consideration of the research paradigm, and the reasons for using a mixed method research design This is followed by the data collection procedures, data analysis techniques, and ethical considerations

Chapter 4 discusses the findings of Study 1, the qualitative study The objective of this chapter is to capture insights from Australian and Iranian hotel managers and supervisors based on their perspectives and experience in this industry, to understand better the processes by which leaders may influence employees’ creativity and innovation In particular, this investigation explores leadership behaviours that are likely to enhance employees’ inclination to generate innovation ideas and to implement them It will show that the thematic analysis of the data obtained in exploratory interviews highlights seven categories of leadership behaviours related to employees’ innovative behaviour: empowering, participative, supportive, innovative-oriented, charismatic, consultative–advisory, and authoritative The interviews also serve to provide a better understanding of the categories of innovative practice in the hotel and resort sectors of Australia and Iran The qualitative thematic analysis will find four themes of innovation emerging: service offering, back-office, tangible facilities, and the use of information technology

This research aimed to develop a reliable and valid instrument for measuring innovation-enhancing leadership behaviors through interviews and analysis of key leadership traits Chapter 5 details the scale development process, including pre-tests and pilot studies, to ensure accuracy and effectiveness A significant contribution of this thesis is the creation of a new measurement tool that demonstrates strong reliability and validity across all research stages—pre-test, pilot study, and main study—ensuring it is a robust instrument for assessing innovation-focused leadership.

Chapter 6 focuses on the findings from Study 2, the quantitative study This chapter first presents the tests conducted to assess initial measures in terms of reliability and validity using exploratory factor analysis (EFA), and convergent and discriminant validity employing confirmatory factor analysis (CFA), for all measures of this research It also investigates the association between perceived innovation-enhancing leadership behaviours, employees’ creativity, and innovation The survey examines the possible moderating role of organisational climate and personal initiative on the influence of leadership on employees’ creativity and innovation The findings indicate a significant direct and indirect impact of perceived innovation-enhancing leadership, through employees’ perceptions of an organisational climate that is supportive of innovation and personal initiative

Chapter 7 discuses the findings derived from the integration of Study 1 (qualitative phase) and Study 2 (quantitative phase) This chapter presents an overview of the findings in relation to the seven broad research questions that are the focus of the thesis

It also highlights the significant contributions that this thesis makes to the literature of leadership, creativity and innovation, specifically in the context of hotels and resorts

Chapter 8 summarizes the key findings from the research framework and questions, highlighting the main conclusions It discusses the theoretical contributions, including new insights and advancements in the field, as well as methodological innovations that enhanced the study’s validity The chapter also explores practical implications, offering actionable recommendations for industry and practitioners Additionally, it addresses the study’s limitations and suggests important directions for future research to build upon these findings.

Chapter Summary

Leadership plays a crucial role in driving innovation within the hotel industry, as highlighted by numerous studies (Chen, 2011; Enz & Siguaw, 2003; Slotten, Svensson & Svori, 2011) Effective management of innovative practices is increasingly recognized as a key factor influencing the success of hospitality firms (Iorgulescu & Ravar) Developing strong leadership strategies can significantly enhance a hotel's ability to innovate and stay competitive in the evolving market.

This study explores the impact of perceived leadership behavior, personal initiative, and organizational climate on employee creativity and innovation in hotels and resorts in Australia and Iran While existing research highlights leadership as a key factor in promoting organizational innovation, identifying the specific leadership qualities that foster creativity within the hotel and resort industry remains an area for further investigation.

This chapter highlights the importance of the study by providing a concise overview, including a brief background and existing literature gaps that warrant further investigation It clearly states the research objectives and questions, guiding the study's direction The section also emphasizes the theoretical, methodological, and practical contributions of the research, demonstrating its significance An outline of the thesis structure is provided to help readers understand its organization The following chapter delves into the literature on leadership, organizational climate, personal initiative, and employees’ creativity and innovation, laying the foundation for the research.

Literature Review

Introduction

This literature review aims to explore the concepts of creativity, innovation, leadership, organizational climate, and personal initiative, highlighting their interconnections It demonstrates that these factors collectively influence employees’ innovative behavior, emphasizing the importance of understanding their combined impact on organizational success The review also identifies existing research gaps, suggesting areas for further investigation to deepen our understanding of how these elements drive innovation within organizations.

This chapter explores the scope of innovation within the hotel industry, reviewing empirical studies on the determinants of creativity and innovation It covers the existing literature on creativity and innovation, defines leadership both generally and for this thesis, and examines major leadership theories including trait, behavioral, situational, transformational, and recent approaches The relationship between leadership, creativity, and innovation is analyzed, highlighting gaps in existing research Additionally, the chapter reviews the organizational climate for innovation and personal initiative, proposing relationships among key factors and formulating research questions The theoretical framework is developed based on the literature review, defining all relevant factors and discussing the scope of the framework to guide the study.

Creativity and innovation are two interconnected but distinct dimensions of the innovation process, with creativity occurring in the initial stage through the generation of new ideas, and innovation taking place later through the implementation of these ideas within organizations (Amabile et al., 1996; Axtell et al., 2000) The full process has been described as innovative work behavior, which is multi-dimensional and encompasses several behavioral tasks associated with different phases of innovation (Farr & Ford, 1990; West & Farr, 1989; Dorenbosch et al., 2005; Janssen, 2000; Jong & Hartog, 2010; Krause, 2004; Scott & Bruce, 1994) This thesis considers all aspects of innovative behavior by treating creativity and innovation as separate aspects, aiming to understand how organizational and individual factors influence each phase of the process Specifically, creativity involves generating ideas to solve work-related problems, improve procedures, or develop new products and services to achieve organizational goals.

‘innovation’ is the next stage, which seeks to produce practical outcomes by applying the ideas and suggestions

Fraj, Matute, and Melero (2015) define innovativeness in the hotel industry as the ability to respond quickly and flexibly to environmental changes In today’s dynamic and competitive hotel sector, organizations must prioritize innovation and differentiation in their daily operations to stay ahead (Nagy, 2014) This emphasis on continuous innovation is driven by emergent challenges faced by hotels, requiring agile and adaptive strategies (Chen, 2011; Ottenbacher, 2007; Sandvik, Duhan, & Sandvik).

2014) Innovation is recognised as a means to convert opportunities to new business ideas and increase an organisation’s profitability and competitiveness by offering differentiated products and services (Chen 2011; Ottenbacher 2007; Slồtten, Svensson

Innovation is a critical success factor for maintaining a competitive advantage in the hotel industry, as highlighted by numerous studies (Svørí, 2011; Sundbo, Orfila-Sintes & Sorenson, 2007; Chen, 2011; Ottenbacher, 2007; Tajeddini, 2011; Tsai et al., 2015; Wong & Pang, 2003a) Additionally, innovation serves as a predictor of hotel financial performance, influencing overall business success (Chang et al., 2011; Kattara & El-Said, 2013; Nicolau & Santa-Maria, 2013; Sandvik, Duhan & Sandvik).

Effective management of non-financial performance metrics, such as customer loyalty, is crucial for businesses aiming to meet the rising demands of customers Studies by Ottenbacher and Gnoth (2005), Enz et al (2010), Grisseman, Plank, and Brunner-Sperdin (2013), and Victorino et al (2005) highlight the importance of customer loyalty as a key indicator of overall business success Implementing strategies that enhance customer satisfaction and loyalty responds effectively to the increasing expectations of today's consumers, thereby strengthening competitive advantage.

A survey of 232 Spanish hotel managers, owners, and environmental directors revealed that organizational capabilities alone do not necessarily lead to competitive advantages Instead, hotel learning orientation and innovation significantly influence the development of proactive environmental strategies and competitiveness Recognizing the critical role of innovation in the hotel industry, research has shifted from identifying types and cases of innovation to investigating the predictors of successful innovation practices, highlighting the importance of fostering a culture of continuous improvement and strategic innovation for sustainable hotel performance.

Innovation in the hospitality sector is significantly driven by human resources, with employees’ creative ideas playing a crucial role in enhancing service quality and organizational practices (Chen 2011; Martínez-Ros & Orfila-Sintes 2012; Orfila-Sintes et al., 2005; Ottenbacher & Gnoth 2005; Wong & Ladkin 2008) While improving tangible facilities can boost innovation, the role of employees as brand ambassadors and service providers is vital in shaping customer perceptions and delivering exceptional experiences (Lopez-Fernandez et al., 2011; Slotten, 2011) Research highlights that individual and organizational environmental factors—such as leadership, organizational culture, employee empowerment, and commitment—are key determinants of successful innovation practices in the industry (Slotten, Svensson & Svori 2011; Tsai et al., 2015; Wong & Chan 2011; Wong & Pang 2003a).

Research shows that employees’ innovative behavior is influenced by interactions with colleagues and organizational environmental factors (Axtell et al., 2000; West & Sacramento, 2012; Zhou & Shalley, 2003) Leaders play a crucial role in fostering innovation by supporting subordinates’ innovative efforts, articulating a clear vision, clarifying roles and responsibilities, providing necessary resources, offering effective planning and feedback, and inspiring and motivating employees (Wong & Pang, 2003a; Jong & Hartog, 2007; Amabile et al., 2004; Politis, 2005; Gupta, 2014).

Research over the years has examined how different leadership styles influence innovation at both individual and organizational levels, employing quantitative, qualitative, and meta-analytical approaches Quantitative studies have measured leadership traits—particularly transformational, participative, empowering, charismatic, and authentic leadership—and their impact on employee creativity and innovation, though results have been inconsistent While transformational leadership is often linked to higher innovation, some studies show no relationship or even negative effects, highlighting variability across different contexts and samples The mixed findings suggest that diverse research methods and settings may contribute to these discrepancies Experts argue that traditional leadership theories, developed for routine settings, may not fully capture the unique characteristics of leading creative ventures, indicating a need for more exploratory research Furthermore, a comprehensive model of leadership that effectively fosters creativity and innovation remains a critical gap in the current literature.

A qualitative approach to studying leadership for creativity and innovation involves using interviews to explore leadership processes rather than relying on quantitative tests According to Mumford and Licuanan (2004), existing leadership theories focused on performance and effectiveness may not fully address innovation Researchers like Gupta and Singh (2013) and Jong and Hartog (2007) conducted in-depth interviews with managers and supervisors in R&D and knowledge-intensive firms to identify leadership behaviors that foster employee creativity and innovation This approach emphasizes understanding the nuanced leadership dynamics that drive innovative outcomes within organizations.

Recent research reviews highlight how leadership significantly impacts employee creativity and innovation, with studies by Mumford & Licuanan (2004), Basadur (2004), and Williams & Foti (2011) identifying key patterns in this relationship Hunter and Cushenbery (2011) developed a model demonstrating how leaders influence innovation both directly and indirectly across different organizational levels, including individual, team, and systemic innovation Additionally, Rosing, Frese, and Bausch (2011) conducted a meta-analysis, proposing an ambidextrous leadership model that incorporates opening and closing leadership behaviors, which facilitate followers’ exploration and exploitation activities critical for fostering innovation.

Research on leadership and innovation through qualitative and literature review methods highlights a diverse range of leadership behaviors that enhance followers’ creativity and innovation Multiple leadership characteristics have been identified as critical in fostering an innovative environment (Gupta & Singh, 2013; Jong & Hartog, 2007; Rosing, Frese & Bausch, 2011; Hunter & Cushenbery, 2011) The context-dependent nature of leadership may explain why quantitative studies often produce varied outcomes regarding leadership's influence on innovation (Mumford & Licuanan, 2004).

Research by Rosing et al (2011) highlights that culture is a significant contextual factor influencing leadership effectiveness Literature indicates that leadership may either be viewed as universal, applicable across all cultures (Steers, Sanchez-Runde & Nardon, 2012), or as culturally contingent, meaning its effectiveness varies depending on cultural context (House et al., 2004; Streets, Sanchez-Runde & Nardon, 2012) Studies suggest that generalising leadership across diverse cultures can produce vague or misleading results, as employees’ reactions to leadership practices differ based on cultural backgrounds (Lee, Scandura & Sharif, 2014; Si, 2013) This aligns with previous cultural research emphasizing the importance of considering cultural nuances in leadership studies (Hofstede, 2001; House et al., 2004; Pimpa & Moore).

Organizational and managerial procedures are significantly shaped by national culture, influencing individual norms and values Context plays a crucial role in determining the success and effectiveness of different leadership styles, as highlighted by Faris and Parry (2011) The mixed results of quantitative research may be due to the impact of cultural and contextual factors, underscoring the need to explore leadership qualities like creativity and innovation within specific settings This approach can lead to a deeper understanding than simply applying existing leadership models across different contexts, emphasizing the importance of exploratory methods to enhance frameworks for studying leadership and innovation.

The existing literature also suggests that contextual factors influence the effect of leadership on certain behavioural outcomes (Liao & Chuang 2007; Hofmann, Morgeson

Innovation in the Hotels and Resorts Context

Literature on the hotels and resorts industry emphasizes the crucial role of innovation and differentiation in helping organizations transform opportunities into competitive advantages (Chen 2011; Orfila-Sintes & Mattsson 2009; Tajeddini 2011) Developing new and unique experiences enables hoteliers to effectively respond to intense market competition driven by globalization, technological advancements, and rising tourist demands (Ottenbacher 2007; Wong & Ladkin 2008).

Wong and Ladkin (2008) observed that the hospitality industry traditionally focused on routine operations providing basic food and accommodation to travelers, but this approach is now inadequate to meet evolving market demands Today’s contemporary hotel sector is saturated with numerous similar and alternative service offerings (Enz & Siguaw), highlighting the need for innovation and differentiation to remain competitive.

Customers are increasingly seeking the best offers within their budgets, rather than exhibiting absolute brand loyalty, as rapid changes in information technology reshape the hospitality market (Olsen & Connolly 2000; Martínez-Ros & Orfila-Sintes 2012) The emergence of new market segments such as leisure, business, and sun-and-sand travelers has significantly transformed the hotel industry landscape, making innovation and creativity essential for maintaining competitiveness (Chen 2011; Ottenbacher 2007; Wong & Pang 2003a; Tsai et al 2015; Tajeddini 2011) Innovation enhances hotel performance by enabling differentiation, customization, and personalization of services, which increase customer satisfaction and foster loyalty (Enz et al 2010; Victorino et al 2005; Roy 2011) For example, Jumeirah Essex House in New York showcased its cultural and artistic commitment through innovative programs like art showcases in its lobby, aligning with its ‘stay different’ slogan (Enz et al 2010) Literature indicates that key elements such as innovation, customer orientation, and entrepreneurship positively impact hotel financial performance, competitive advantage, and customer loyalty (Kattara & El-Said 2013; Fraj, Matute & Melero 2015; Ottenbacher & Gnoth 2005) Studies using hotel manager surveys reveal that customer orientation enhances the positive effects of innovation on business outcomes such as reputation and customer retention (Grisseman, Plank & Brunner-Sperdin 2013) Different types of innovation—process, organizational, and product—drive sales growth, with process and marketing innovations boosting market value (Nicolau & Santa-Maria 2013) Additionally, innovativeness indirectly contributes to profitability by improving market advantage, sales, and capacity utilization, as evidenced in the Norwegian hotel sector (Sandvik, Duhan & Sandvik 2014) Customer preferences are also influenced by service and amenities innovation, with leisure travelers particularly impacted by hotel amenities, shaping their hotel selection decisions (Victorino et al 2005).

Innovation plays a crucial role in service industries, yet it has received more attention in manufacturing and technology sectors than in hospitality and tourism In the hotel industry, innovation spans various areas, including market-driven innovations, service customization, management processes, organizational structure, and tangible service offerings Notably, hotel innovation also involves the emergence of new hotel categories like boutique hotels, which emphasize design elements, information technology, and personalized guest experiences Understanding these diverse facets of innovation is essential for enhancing competitiveness and adapting to evolving customer needs in the hospitality sector.

Implementing new service designs in the hotel industry requires proactive involvement from customer-contact staff, as they possess in-depth knowledge of customer needs and demands (Orfila-Sintes & Mattsson, 2009) The success of innovative practices heavily relies on these employees’ skills and abilities, especially given the intangible nature of hotel services (Chang, Gong & Shum, 2011) Employees’ creative ideas play a crucial role in improving service quality and boosting organizational effectiveness (Kattara & El-Said, 2013; Tajeddini, 2010; Wong & Ladkin, 2010).

Training multi-skilled customer-contact employees fosters innovation and idea generation within the hotel industry, positively impacting both incremental and radical innovations (Chang, Gong & Shum, 2011; Ottenbacher & Mattsson, 2009) Despite these benefits, hotels face significant human resources management challenges, including skill shortages, high employee turnover, and managerial competency gaps (Jeou-Shyan et al., 2011) Specifically, high turnover rates and low employee motivation have been identified as major barriers to fostering creativity and innovation, particularly in Egyptian 5-star hotels (Kattara & El-Said, 2013).

Research indicates that creativity and innovation are vital in the hospitality sector, with organizational factors such as strategic human resources, leadership, and organizational culture playing critical roles in driving successful innovation practices (Chen, 2011; Slotten, Svensson & Svorí, 2011) Employee commitment and alignment with market demands further contribute to innovation success (Ottenbacher & Gnoth, 2005) Studies highlight that leadership support, open organizational policies, autonomy, shared decision-making, and reward systems foster a motivating environment for employee innovation, especially in hotel settings like Hong Kong (Wong & Pang, 2003a) Moreover, organizational service culture and management’s openness to change significantly influence innovation activities (Chen, 2011; Martínez-Ros & Orfila-Sintes, 2012) Leadership qualities such as professionalism, industry knowledge, cultural sensitivity, and customer orientation have been proven to predict creativity among hotel employees, exemplified by research on international hotels in China (Wong & Chan, 2010) Additionally, a supportive work environment enhances employee creativity across various tourism and hospitality organizations, including hotels in Taiwan (Tsai et al., 2015).

Effective leadership is essential in the hotel industry’s dynamic and labor-intensive environment, as it significantly influences employee performance and workplace atmosphere (Wong & Chan, 2010; Clark, Hartline & Jones, 2008; Deery & Jago, 2001) Positive interactions between managers and employees can enhance service quality and overall employee productivity (Ispas, 2012) Additionally, empowering leadership styles have been shown to foster employee creativity and innovation, contributing to improved hotel operations (Sløtten, Svensson & Svør, 2011).

Recent research indicates that job autonomy significantly enhances employee engagement in hospitality organizations, which in turn fosters innovative behavior Conversely, authoritarian leadership styles that emphasize personal power, centralized decision-making, and strict routines can hinder creativity and initiative among hospitality staff Studies such as Sløtten and Mehmetoglu (2011) demonstrate the link between autonomy and innovation, while Wang, Tsai, and Tsai (2014) highlight that transformational leadership positively influences employees’ self-efficacy and creativity in hotel settings Promoting transformational leadership and empowering employees through autonomy are crucial strategies for boosting innovation in the hospitality industry.

Innovation is crucial for enhancing competitiveness in the hotel and resort industry, as highlighted by various studies (Ottenbacher, 2007; Nagy, 2014) The success of innovation largely depends on employees’ skills and their ability to generate new ideas (Chang, Gong & Shum, 2011) This research aims to explore effective ways to encourage and boost employee creativity and innovation within the hotel sector in Australia and Iran.

Creativity and Innovation

Creativity and innovation are often mistakenly used as synonyms; however, innovation theorists distinguish them as two related but distinct stages in the innovation process According to Axtell et al (2000), creativity involves generating new ideas, while innovation encompasses a process that includes the adoption, implementation, and integration of these ideas within an organization Amabile et al (1996) further clarify that creativity is the production of novel and useful ideas, whereas innovation is the successful execution of those creative ideas Creativity is considered the foundational or initial stage, serving as the building blocks for innovation, which focuses on applying and implementing ideas (Slotten, Svensson & Svor, 2011; King & Anderson, 2002) Research indicates that creativity is typically linked to individuals generating new ideas, whereas innovation is associated with groups or organizations that apply these ideas in practice (Oldham & Cummings, 1996) Scott and Bruce (1994) highlight that innovative work behavior involves various tasks, with individuals capable of participating at any stage or phase of the innovation process.

Following the model of Scott and Bruce (1994) and Janssen (2000) that conceptualised innovative behaviour as a multi-stage process, Dorenbosch, van Engen and Verhagen

(2005) and Jong and Hartog (2010) developed four sets of behavioural activities known as problem recognition/idea exploration and idea generation, representing the creativity- related behaviour At this stage individuals engage with understanding of work-related problems followed by the formulation of new ideas and suggestions (Dorenbosch, van Engen & Verhagen 2005) According to Jong and Hartog (2010), the beginning of an innovation process has an element of chance based on the exploration of opportunities or threats, which motivates individuals to search for alternatives or options for improving the current situation Idea promotion/championing, and idea realisation/implementation refer to implementation-oriented behaviours that build a supportive coalition of the right people, developing and producing new products, services or processes (Dorenbosch, van Engen & Verhagen 2005; Janssen 2000; Jong & Hartog 2010; Scott & Bruce 1994)

To formulate distinguishable components of innovative behaviour in empirical designs as well as in conceptual models, Krause (2004), Dorenbosch, van Engen & Verhagen

Research by Krause (2004) with 399 German middle managers revealed that innovative behavior is two-dimensional, with suggestion and implementation explaining 61% of the variance, confirming Axtell et al.’s (2000) distinction between conceptualizing and measuring these two aspects Dorenbosch, van Engen, & Verhagen (2005) conceptualized innovative work behavior (IWB) as comprising creativity-oriented (problem recognition and idea generation) and implementation-oriented (idea promotion and application) factors; despite high correlation observed between these dimensions, they advocated measuring creativity and innovation separately due to their distinct actiology, aligning with Axtell et al.’s (2000) findings.

This thesis identifies two main factors shaping innovative behavior: creativity and innovation Creativity involves generating new ideas to solve work-related problems, improve processes, or develop new products and services, ultimately helping organizations achieve their goals It encompasses two key activities: idea exploration and idea generation, which are critical for fostering innovation and driving organizational success.

Innovation involves transforming ideas and suggestions into practical outcomes through two key behaviors: idea championing and idea generation While creativity and innovation are both vital components of this process, recent research has predominantly studied either one phase, often neglecting their interconnection (Amabile et al., 2004; Jaussi & Dionne, 2003; Michaelis et al., 2009; Volmer et al., 2012; Zhang et al., 2011) This article emphasizes that creativity and innovation are integral to innovative work behavior and essential for developing new, useful organizational practices Building on Mumford and Licuanan’s (2004) distinction, the study treats creativity and innovation as separate constructs, both conceptually and empirically, to better understand their individual roles in the innovation process.

As one of the objectives of this thesis is to explore and examine predictors of employees’ creativity and innovation, this section reviews how literature has evolved around this topic Early studies of creativity and innovation have taken two common approaches, macro-level and individual psychology (West & Sacramento 2012) Macro- level approaches addressed organisational and contextual factors and disregarded the role of individuals (Aiken & Hage 1971), while individual psychology studies highlighted personality characteristics, individual cognitive skills and intelligence (Barron & Harrington 1981) Aiken and Hage (1971) developed a panel study of 16 public and private health and welfare organisations, focusing on the characteristics of organic organisations that are likely to be related to innovation High professionalism and high intensity of scheduled and unscheduled communications within and between departments were found to be linked to innovation Personality approach, another phase of research to identify determinants of creativity, was very popular from the 1950s to 1970s (Amabile et al 1996) As part of this approach scholarly studies such as Barron and Harrington’s (1981) addressed individual-centred elements predictors of creativity: intelligence, personality, age and gender differences Amabile (1997, p 42) criticised approaches that attempted to distinguish creative people from normal people based on personality traits and backgrounds as ‘both limiting and limited’ The approach was unable to provide a comprehensive overview of how creativity and innovation can be enhanced in an organisation as it overlooked the impact of social environment (Amabile et al 1996; Amabile 1977; West & Sacramento 2012; West et al 2003) Amabile et al

Research by (1996) emphasizes that creativity stems from specific behaviors and ideas rather than from personality or intelligence alone, with the social environment playing a crucial role in shaping creative behavior Studies like those by Raja and Johns (2010), Baer and Oldham (2006), and George and Zhou (2001) demonstrate that big five personality traits influence creativity through job scope, highlighting the importance of contextual variables in moderating this relationship Overall, efforts to develop a personality inventory for creative achievement in organizations have been as unsuccessful as trait-based studies on leadership effectiveness, indicating the complexity of measuring creativity through personality alone.

The social-psychological approach to creativity and innovation offers a comprehensive framework by integrating both social and individual factors, bridging the gap between macro- and micro-level studies Central to this approach are two models: Amabile’s (1988) componential model and Woodman, Sawyer, and Griffin’s (1993) interactionist model Amabile’s (1988) theory posits that all individuals with normal capabilities can produce at least moderately creative work, with creative outcomes determined by expertise, creative thinking skills, and intrinsic task motivation.

The 1988 componential model highlights how the organizational work environment influences individual creativity by impacting all three personal components Building on this, Woodman, Sawyer, and Griffin (1993) introduced a multilevel interactionist model emphasizing that organizational creativity results from complex social system interactions within the organization This model suggests that organizational characteristics create contextual influences that shape creativity at both the individual and group levels Furthermore, studies by Amabile (1983, 1988), Perry-Smith and Shalley (2003), and Unsworth and Parker (2003) consistently underscore the critical role of context and social processes in understanding and fostering individual creativity and innovation.

Such conceptualisations of employees’ creativity and the determinants of innovation have inspired scholarly studies in different domains from then to the present Studies have linked different dimensions of employees’ work environment, such as organisational climate, structure, leadership, and peer support, along with individual attributes (e.g problem-solving skills, personal characteristics, task- and person-based conflict, self-efficacy) to explain individual creativity and innovation (Gong et al 2012; Hellstrom & Hellstrom 2002; Hon 2011; Oldham & Cummings 1996; Scott & Bruce 1994; Somech & Drach-Zahavy 2011) Additionally, different organisational contextual factors shaping employees’ work environment have been hypothesised to directly impact on employees’ innovative behaviour Organisational climate and culture, by defining organisational values and norms, shape individual performance (Amabile et al 1996; Ismail 2005; Shalley, Zhou & Oldham 2004) and have been found to predict employees’ creativity and innovativeness (State & Iorgulescu 2014; Tajeddini & Trueman 2012; West & Sacramento 2012) Lin and Liu (2012), employing the assessing climate for creativity (KEYS) developed by Amabile et al (1996), examined organisational climate for creativity in different industrial sectors (high-tech, manufacturing, and services) in Taiwan and found organisational encouragement, supervisory encouragement, supportive work group and sufficient resources were related to perceived innovation, directly and through work motivation at the individual level

Research indicates that supervisory behaviors and characteristics significantly influence employee creativity and innovation Factors such as supervisory support and motivation (Wong & Pang, 2003a), expectations for employee creative involvement (Carmeli & Schaubro, 2007), abusive supervision (Lee, Scandura & Sharif, 2014), and supervisory benevolence (Wang & Cheng, 2010) play crucial roles in fostering innovation Beyond organizational culture, climate, and leadership, peer support also emerges as a vital element in the work environment; a study of 417 employees in Norway’s largest energy companies revealed that colleague support is often more influential than managerial support in motivating idea generation when managers are absent (Foss, Woll & Moilanen, 2013).

Employees’ creativity is a vital driver of innovation within organizations, helping to effectively address work-related challenges (Gumusluoglu & Ilsev, 2009) Current research is increasingly focused on exploring how individual and organizational factors interact to foster employee creativity and promote innovative outcomes Understanding these dynamics through various research frameworks is essential for developing strategies that enhance innovation at the organizational level.

Definition of Leadership

A review of the leadership literature reveals a wide range of definitions and theoretical approaches Bass (1990) identified more then 3,500 definitions of leadership Yukl

(2010, p 20) noted, ‘researchers usually define leadership according to their individual perspectives and aspects of the phenomenon of most interest to them’ Stogdill (1974, p

259) and Bass (1990, p 11) stated that there are as many definitions of leadership as there are scholars who have tried to define this concept

However, there are common factors in definitions of leadership: ‘process’, ‘influence’,

Leadership is fundamentally about influencing followers and achieving goals (Northouse, 2007) It is defined as a behavioral process where a leader influences individuals or groups to attain common objectives (Barrow, 1977; Northouse, 2007) Leadership involves an interactive relationship between leaders and followers that affects both parties, emphasizing its influential nature (Northouse, 2007; Jong and Hartog, 2007) Ultimately, effective leadership is the process of guiding others toward desired outcomes, highlighting its role in goal achievement and interpersonal influence.

To effectively study leadership, it is essential to establish a clear definition that outlines its scope According to Northouse (2007), leadership is the process of influencing, stimulating, and encouraging employees to work collaboratively toward common goals and objectives This definition emphasizes the importance of influence and collective effort in leadership, providing a solid foundation for understanding its role within organizations Clearly defining leadership helps guide research and practice, ensuring a focused approach to developing effective leaders.

This thesis explores leadership as the process of influencing, stimulating, and encouraging creativity and innovation within hotels and resorts It emphasizes the importance of leadership qualities in leaders, supervisors, and managers that foster a culture of innovation The study aims to identify how effective leadership can enhance employees’ creativity and drive organizational success in the hospitality industry.

Leadership Approaches

Leadership has been based on major approaches such as trait (Kirkpatrick & Locke

1991), behaviour (e.g Blake & Mouton 1982), situational (e.g Hersey & Blanchard

Early leadership research primarily focused on trait and contingency theories, emphasizing leaders' attributes, personality characteristics, and skills (Yukl, 2010) Over time, interest shifted toward understanding the influence of vision, charismatic leadership, authentic leadership, and value-based theories, reflecting the evolving nature of leadership concepts (Chen & Hou, 2016; Chen & Li, 2013; Erkutlu & Chafra, 2015) A comprehensive review of these changing approaches is essential to develop a solid foundation for current leadership studies.

The personality era of leadership, one of the earliest theories including the Great Man and Trait approaches, emphasized that true leaders are characterized by inherited qualities and traits Thomas Carlyle's Great Man theory posited that effective leadership qualities are innate and passed down, yet diverse influential leaders like Hitler and Gandhi demonstrate that personality alone does not determine leadership success Moreover, even when certain personality traits are linked to effective leadership, they are often difficult to imitate The trait approach further focused on personality characteristics, motives, skills, values, and attributes as key factors in leadership effectiveness.

Despite extensive research on leadership traits, studies have failed to identify definitive qualities that guarantee effective and successful leadership (Stogdill, 1974; Van Seters & Field, 1990; Yukl, 1989) A review of 124 studies revealed that outcomes regarding trait theory remain inconclusive and unconvincing, with only traits like intelligence showing some correlation to effective leadership (Schriesheim & Neider, 1989) It is limiting to assume that leadership qualities are solely inherited, without acknowledging the significant roles of training and experience in developing effective leaders.

Unsatisfactory and implausible results from the trait approach led to a shift to a behavioural approach to leadership The behavioural approach introduced a new direction to defining and conceptualising an effective model of leadership It emphasised what leaders do in their job, not what personality characteristics they are born with (Yukl 1989) In contrast to trait theory, behavioural studies were concerned with leadership styles and behaviours that could be taught and honed (Van Seters & Field 1990; Aronson 2001, Daft 2008)

The Ohio State studies, the University of Michigan studies and Blake and Mouton’s managerial leadership grid are three major approaches that address leadership effectiveness from the leadership behaviour or style perspective (Northouse 2007) Consideration and initiating leadership or task-oriented and people-oriented leadership, emerged as two major concepts, based on the Ohio State studies (Bryman 1992; Northouse 2007; Van Seters & Field 1990) Task-oriented behaviour (addressing task accomplishment and organisational goal achievement) and relationship-oriented behaviour (promoting interpersonal relationships and concern for individuals) influenced several subsequent theories such as path–goal, high-high theory and leader substitute theory (Yukl 1999) Task- and relation-oriented leadership behaviours were used by scholars as the foundation of a more comprehensive theory of effective leadership, but this two-factor model was not broad enough to capture effective leadership behaviours in different contexts (Yukl 1999) Yukl, Gordon and Taber

(2002), by integrating task-oriented, people-oriented, and change-oriented leadership, attempted to conceptualise an integrative taxonomy of leadership Similarly, Gupta and Singh (2013) extended the two-model conceptualisation of leadership behaviours by adding three categories: empowering, team-building, and leading by example Participative leadership, empowerment and self-managed leadership have also been studied under the umbrella of behavioural aspects to address leadership effectiveness (Cotton et al 1988; Manz & Sims 1987)

In the late 1960s, a significant shift occurred in leadership theory with the emergence of the situational or contingency approach, recognizing that style alone cannot fully explain effective leadership This approach emphasizes the importance of the situation in shaping leadership effectiveness, addressing the limitations of earlier models that overlooked contextual factors (Aronson, 2001; Schriesheim & Neider, 1989).

The situational approach addresses gaps in behavioral studies by emphasizing the influence of context on leadership effectiveness It posits that the most effective leadership style depends on three key factors: the leader, the situation, and the followers (Northouse, 2007) Notable theories in this field include Fiedler’s contingency model (1967), the path–goal theory (House & Mitchell, 1974), Hersey and Blanchard’s situational leadership theory (1969, 1988), leadership substitute theory (Kerr & Jermier, 1978), the normative theory (Vroom & Yetton, 1973), and leader–member exchange theory (Graen).

Although the situational contingency approach has contributed to leadership development, it has raised some criticism Northouse (2007) criticised this approach, specially the path–goal theory of perceiving employees as dependent to their leader in accomplishing their tasks, and the poor quality of the measurement model; Yukl (1999) criticised its complexity and dubious validity However, Avery and Ryan (2002) argued that regardless of academic criticism and narrow scholarly publications, situational leadership is valuable, and popular in practice Their study, based on interviews with middle and senior managers from government and private organisations in Australia, found that interviewees perceived situational leadership as a valuable managerial tool with a relevant, intuitive and simple framework for managing people

A new phase in leadership literature emerged with the development of charismatic leadership by House (1977), emphasizing the importance of leaders effectively communicating a clear vision to inspire organizational change Charismatic leadership enhances organizational transformation by fostering strong connections between leaders and followers, as highlighted by Ilies, Judge, and Wagner (2006) This leadership style is closely related to transformational and transactional leadership theories originally developed by political sociologist Burns, which focus on motivating and guiding followers through vision and influence.

(1978) to address political leadership Although the terms ‘transformational’ and

Charismatic leadership has been linked in organizational literature, with distinctions made by Bass (1995) who identified charisma as a component of transformational leadership, which focuses on followers' outcomes rather than perceived leader behaviors (Conger & Kanungo, 1994) Bass (1985) expanded on Burns’ (1978) work by introducing the laissez-faire construct, creating the full range leadership theory that encompasses transformational, transactional, and laissez-faire styles Transformational leaders inspire increased awareness and confidence among followers, promoting growth and achievement, whereas transactional leaders maintain organizational stability through social and economic exchanges (Bass & Avolio, 1990) Laissez-faire, characterized by a lack of active leadership, is regarded as the least effective leadership style within this model because it is not positively associated with key organizational outcomes (Bass, 1985; Judge & Piccolo, 2004).

Transformational leadership has gained widespread attention in both research and practice, with studies demonstrating its effectiveness in enhancing followers’ development and engagement (Luthans & Avolio, 2003; Zhu, Avolio & Walumbwa, 2009) Additionally, it fosters increased creativity (Qu, Janssen & Shi, 2015) and drives innovation within organizations (Cheung & Wong).

2011), motivation (Ilies, Judge & Wagner 2006), organisational innovation (Sarros, Cooper & Santora 2008), and organisational change (Eisenbach, Watson & Pillai 1999)

Authentic leadership is a recent advancement in leadership theories, emphasizing that true leaders possess a deep understanding of themselves, their beliefs, morals, and values, which influence their interactions with others (Avolio et al., 2004; Walumbwa et al., 2008) This leadership style is grounded in various conceptual foundations, including authenticity/self-identity, affective processes, social perception, neo-charismatic leadership, positive psychology, and wellbeing (Gardner et al., 2005) Given the critical role of leadership in organizational success, authentic leadership offers a genuine approach that fosters trust and effective relationships within organizations.

Authentic leadership is defined by various scholars, with Henderson and Hoy (1983) being among the first to establish formal definitions, distinguishing authentic leaders from inauthentic ones They emphasized that authentic leaders accept organizational and personal responsibility for their actions, outcomes, and mistakes Additionally, authentic leaders are characterized by their non-manipulative approach toward subordinates, fostering trust and integrity within the organization.

‘demonstrating a salience of self over role’ Later, Luthans and Avolio (2003) defined authentic leadership through the interactions of positive organisational behaviour, full- range leadership theory and ethical perspectives Although this definition guided several approaches to constructing authentic leadership in subsequent years (Avolio et al 2004; Gardner et al 2005; Walumbwa et al 2008), it has been criticised because of its multi- dimensionality in considering various domains, its multi-level functions (e.g individual, team and organisational levels), and measurement and validity issues arising from the conceptual ambiguity of the dimensions and sub-dimensions posited in the concept (Cooper, Scandura & Schriesheim 2005) Shamir & Eilam (2005), Gardner et al (2005) and Ilies, Morgeson and Nahrgang (2005) attempted to develop a more focused, narrower conceptualisation of authentic leadership Avolio, Walumbwa and Weber

Leadership and Innovation

Research shows that employees' innovative behavior is heavily influenced by their interactions with colleagues and the organizational environment, highlighting the importance of social and contextual factors (Axtell et al., 2000; West & Sacramento, 2012; Zhou & Shalley, 2003) While creativity and innovation are also shaped by individual skills and knowledge, fostering a collaborative and supportive workplace environment is essential for enhancing employee innovation.

Socio-psychological approaches to creativity highlight the significance of the interaction between individuals and their environment, emphasizing the impact of organizational climate, culture, reward systems, resources, and leadership Leadership is considered a crucial factor in fostering both organizational and individual effectiveness and innovation, playing a key role among the various contextual influences on employees’ work environment.

Ford 2013; Mumford, Connelly & Gaddis 2003; Wang et al 2013; Yukl 2008) Basadur

Effective leadership plays a crucial role in influencing creative problem-solving within organizations, as different individuals, teams, and organizations exhibit unique styles that impact performance (2004, p 103) Leaders who adeptly manage these diverse styles can significantly enhance organizational outcomes Additionally, Mumford and Licuanan (2004) emphasized that leadership fosters innovation by shaping the work environment and guiding employees in the generation and application of new ideas, thereby driving organizational growth and success.

Scholarly research over the years has explored how leadership influences innovation through various approaches, primarily focusing on quantitative studies of established leadership theories such as transformational leadership, leader–member exchange, empowering leadership, and authentic leadership Among these, transformational leadership has been extensively studied as a key driver of creativity and innovation, characterized by challenging the status quo and shaping followers' beliefs, values, and attitudes (Cheung & Wong, 2011; Jaffer, 2013; Lee, 2008; Qu, Janssen & Shi, 2015; Sun et al., 2012; To, Tse & Ashkanasy, 2015; Wang & Zhu, 2011; Eisenbeiss, van Knippenberg & Boerner, 2008; Podsakoff et al.).

Effective leadership behaviors from 1990 onwards include increasing followers’ intrinsic motivation (Jung, Chow & Wu, 2003), strengthening their creative self-concept (Wang & Zhu, 2011), and conveying a new vision (Lee, 2008) These strategies are essential for stimulating creativity and innovation at the individual, group, and organizational levels, ultimately fostering a culture of continuous improvement and competitive advantage (Eisenbeis, van Knippenberg & Boerner, 2008; Jung, Wu & Chow, 2008; Michaelis, Stegmaier & Sonntag, 2009).

Leader–member exchange (LMX) theory emphasizes the quality of social exchange relationships between leaders and followers, highlighting a mutual connection that influences organizational dynamics (Bauer & Green, 1996; Liden & Maslyn, 1998) Unlike other leadership theories that primarily focus on how leaders impact followers, LMX recognizes the two-way nature of these relationships, emphasizing trust, respect, and mutual influence (Howell & Shamir) Understanding the quality of leader–member exchanges is crucial for fostering effective leadership, enhancing employee satisfaction, and improving overall organizational performance.

Research on leader–member exchange (LMX) highlights its crucial role in fostering positive employee outcomes, including increased energy, organizational commitment, and job performance High-quality leader–member relationships provide greater interpersonal support, recognition, decision-making autonomy, and appreciation within organizations Additionally, strong LMX relations significantly predict followers’ innovative behavior and creativity, as evidenced by studies in sectors such as R&D in the chemical industry, where higher LMX quality correlates with increased employee innovation and performance.

Participative leadership, which emphasizes consultation and shared decision-making with employees (Yukl, Gordon & Taber, 2002; Jong & Hartog, 2007), is strongly linked to enhanced creativity and innovation (Krause, 2004; Krause, Gebet & Kearney, 2007; Somech, 2006) Research shows that a participative leadership style fosters team reflection and innovation, as evidenced by Somech’s (2006) study of primary care teams Similarly, empowering leadership—focused on granting employees autonomy, sharing power, and reducing bureaucratic barriers—has been found to positively impact individual and organizational outcomes, including higher performance and satisfaction (Ahearne, Mathieu & Rapp, 2005; Vecchio, Justin & Pearce, 2010) Empowering leadership influences employees’ cognitive processes and self-determination, promoting innovative behavior and creativity across various sectors, such as the hotel industry (Sløtten, Svensson & Svori, 2011) and the technology and service sector in Istanbul (Çezarall, 2015) Overall, leadership behaviors that support autonomy and participation significantly foster creativity and innovation within teams.

154 teams working in Chinese and Indonesian firms, also found that servant leadership fosters employees’ creativity and team innovation by encouraging identification with the leader

Authentic leadership, a recent leadership theory rooted in self-awareness, high ethical standards, and positive psychological capacities (Luthans & Avolio, 2003; Walumbwa et al., 2008), significantly influences employee creativity and innovation Research shows that authentic leaders promote ethical behavior (Valentine et al., 2011) and foster psychological safety, enabling employees to freely express new ideas without fear (Rego et al., 2012) A survey by Rego et al (2012) found a strong positive relationship between authentic leadership and creativity among employees in both manufacturing and service industries.

Research on the relationship between leadership styles and creativity or innovation has yielded mixed results, with some studies failing to find positive links For example, several studies (Jaffer 2013; Jaussi & Dionne 2003; Kahai, Sosik & Avolio 2003) did not demonstrate a clear positive relationship between transformational leadership and team or individual creativity Osborn and Marion (2009) found that transformational leadership was surprisingly associated with lower innovation in American and Japanese research sectors Similarly, research on leader–member exchange theory presents inconsistent findings; Clegg et al (2002) found no link between leader–member exchange and idea sharing, while Lee (2008) concluded that most dimensions of leader–member exchange did not significantly influence employees' innovative behavior, except for loyalty Jaffer (2013) also reported a negative correlation between leader–member exchange leadership and individual innovation, highlighting the complexity of these relationships.

The mixed outcomes of the quantitative studies may be the result of limited research into the specific leadership qualities that motivate creativity and innovation (Gupta & Singh 2013; Jong & Hartog 2007; Mumford & Licuanan 2004) Carmeli, Reiter-Palmon and Ziv (2010) argued that the understanding of particular leadership behaviours leading to creative performance is limited in the literature, and that further research is needed to comprehensively study the multiple mechanism of how leadership enhances employees’ creativity Similarly, in a review on the available literature of leading for innovation, Mumford and Licuanan (2004) concluded that leadership models conceptualised to influence organisational performance and effectiveness are not generalisable to creativity and innovation Another reason behind the mixed outcomes of quantitative studies is discussed by Hunter and Cushenbery (2011), who noted that there is no one single characteristic of leadership encouraging individual innovative behaviour, and so the existing frameworks for studying leadership should be expanded by implementing more exploratory research settings By reviewing the existing research, they proposed a model comprising different leadership behaviours that directly (e.g decision-making, resource allocation, vision and strategy) and indirectly (e.g role-modelling, rewards and recognition, hiring and team composition) influence individual and team creativity and organisational innovation Rosing, Frese and Bausch

(2011) integrated the existing literature on leadership and innovation and came up with an ambidextrous model of leadership including various opening and closing leadership behaviours related to followers’ exploration and exploitation activities Reviewing this literature confirms that there is wide range of leadership practices influencing individual innovative behaviour (Gupta & Singh 2013; Hunter & Cushenbery 2011; Jong & Hartog 2007)

To address the gap in the literature of leadership and creativity and innovation, scholars have considered qualitative approaches Jong and Hartog (2007) and Gupta and Singh

(2013) designed exploratory approaches to study leadership for creativity and innovation in small knowledge-intensive and R&D contexts respectively Both studies integrated Yukl’s‘managerial practices’ taxonomy (2002) and used qualitative in-depth interviews with industry people in order to identify which leaders’ behaviours are likely to stimulate employees’ creativity and innovativeness Jong and Hartog (2007) conducted 12 in-depth interviews with managers and entrepreneurs (business owners) from small Dutch knowledge-intensive firms The analysis, a process moving between Yukl’s (2002) taxonomy and the interview data, produced a list of 13 leaders’ behaviours Of these, innovative role-modelling, providing vision, consulting, delegating, supporting innovation, recognition, and monitoring were found to relate to both creativity and innovation (Jong & Hartog 2007) Intellectual stimulation, stimulating knowledge diffusion and task assignment were found to link to creativity (idea generation) and reward Providing resources and organising feedback were found to associate with innovation (the application of ideas) The study, by distinguishing the notions of creativity and innovation, achieved a better understanding of those leadership behaviours effective at the different stages of innovative ventures Similar research was designed by Gupta and Singh (2013) in the context of R&D labs in India They conducted 25 in-depth interviews with scientists from five R&D labs The integration of interview data and Yukl’s managerial practices survey (et al 1990) resulted in the development of 13 leaders’ behaviours, categorised into four main groups, task-oriented behaviour, relation-oriented behaviour, team-building, and leading by example The identified categories of leadership behaviour were viewed as likely to have a high potential to influence employees’ creativity in the context of R&D in India Following this work, Gupta, Singh and Khatri (2013) developed a new instrument based on the outcomes of qualitative study to measure leaders behaviours relating to creativity in the context of R&D laboratories

Cross-cultural leadership studies confirm that effective leadership is highly context-dependent For instance, Karakitapoglu-Aygün and Gumusluoglu (2013) emphasized the importance of considering cultural context and desired outcomes, finding that transformational leadership in Turkey encompasses both traditional dimensions and context-specific traits like benevolent paternalism and proactive behavior Conversely, Ryan and Tipu (2013) discovered that in Pakistan, leadership theory is better explained by a simpler two-factor model—active and passive-avoidant leadership—highlighting regional differences in leadership conceptualization Additionally, Mostafa (2005) revealed that Egyptian culture favors a consultative management style that actively encourages employee participation to foster creativity These studies underscore the need for tailored leadership approaches sensitive to cultural nuances across different regions.

Research indicates that context and culture significantly influence leadership effectiveness, with cultural values shaping preferred leadership styles (Cheng et al., 2004; Pimpa & Moore, 2012; Shamir & Howell, 1999) Cultural studies (Hofstede, 2001; House et al., 2004) emphasize that leadership approaches must be adapted to local social norms, as assuming universal applicability may lead to misleading conclusions (Lee, Scandura, & Sharif, 2014) Pimpa and Moore’s (2012) study revealed that goal-oriented leadership is effective in Thailand’s public education sector, whereas leadership promoting equality and participation works better in Australia Additionally, Lee, Scandura, and Sharif (2014) found that cultural differences, such as power distance, influence how leader–member exchanges affect organizational commitment in the US and Korea, demonstrating the importance of cultural context in leadership studies.

Organisational Climate Supportive of Innovation

Climate, at the individual level, is defined as psychological climate, which encompasses employees' cognitive interpretations of organizational expectations regarding specific behaviors and outcomes (Scott & Bruce, 1994) It also includes employees' perceptions of the psychological impact of their work environment (James et al., 2008) According to West and Sacramento (2012), understanding psychological climate is essential for assessing how organizational factors influence employee well-being and performance.

Organizational climate refers to the collective perception of the work environment shared by members, often described as psychological climate at an individual level When these perceptions are sufficiently shared across a group or organization, they form the basis of group or organizational climate Therefore, organizational climate can be understood as a shared psychological climate or an aggregation of individual psychological perceptions, highlighting its importance for fostering a positive work environment and enhancing organizational effectiveness (Isaksen et al., 2001; James et al., 2008).

The literature shows that organisational climate has been conceptualised in different ways One approach considers it the perception of individuals about organisational norms and characteristics; for example, Schneider (1990, p 384) defined organisational climate as ‘employees’ perceptions of the events, practices, and procedures and the kinds of behaviour that are rewarded, supported, and expected in a setting’ On the other hand, Ekvall (1996, p 105) suggested that organisational climate is an objective property of the organisation, ‘an attribute of the organisation which characterises life in the organisation and exists independently of the perceptions and understandings of the members of the organisation’ This thesis follows Scott and Bruce (1994) in considering organisational climate to be employees’ perceptions of organisational norms, procedures, practices and expectations

To study organisational climate, it is necessary to clarify the distinction between climate and culture as different components of the work environment, although they are often described as identical phenomena in the literature (Payne & Pugh 1976) James et al

Climate and culture are distinguished by their levels of measurement, with climate reflecting individual properties and culture representing system-level characteristics that operate at deeper organizational levels (James et al., 2008; Isaksen et al., 2001) Climate is considered a manifestation of culture, which exists at a higher level of abstraction, allowing for a comprehensive understanding of an organization's underlying values and norms (Baer & Frese, 2003).

Organizational climate is influenced by its impact on processes such as problem-solving, decision-making, communication, and psychological aspects like commitment, creativity, and motivation (Ekvall & Ryhammer, 1999) Scholars have shifted focus from a broad conceptualization of climate to examining specific types, including climates for safety, service, initiative, and innovation, each serving different organizational purposes (Flin et al., 2000; Jong, Ruyter & Lemmink, 2004; Baer & Frese, 2003; Ekvall, 1996; Hunter, Bedell & Mumford, 2007; Scott & Bruce, 1994) Organizations can exhibit multiple climates tailored to their priorities, such as a service climate in customer service divisions and an innovation climate in R&D departments, alongside a shared overall organizational climate (Schneider, Gunnarson & Niles-Jolly, 1996) To better understand these dynamics, various taxonomies have been developed to assess different dimensions of climate that promote creativity and innovation (Amabile et al., 1996; Isaksen et al., 2001; Siegel & Kaemmerer, 1978) Recently, Hunter, Bedell, and Mumford (2007) reviewed 45 creative climate taxonomies created between 1973 and 2004, culminating in a comprehensive 14-dimensional multi-level taxonomy that incorporates interpersonal and task-related factors from the individual to the organizational level, such as freedom, positive peer groups, and management support.

Research indicates a strong link between organizational climate and the promotion of creativity and innovation, with a supportive climate encouraging new product and service development by signaling that organizational norms favor initiative and idea generation (McMurray et al., 2013; Ren & Zhang, 2015; Isaksen et al., 2001; West et al., 2003) Employees tend to demonstrate higher innovative behaviors when they perceive their organizational environment as fostering creativity and supporting innovative efforts (Charbonnier-Voirin, Akremi & Vandenberghe, 2010; Gumusluoglu & Ilsev, 2009; Tsai & Kao, 2004) An environment that values and promotes new ideas enhances individual and group creativity and innovation (Jaiswal & Dhar, 2015; Wang et al., 2013) Specifically, a participative organizational climate—characterized by encouraging involvement, resource access, and information sharing—positively influences employees’ innovative behaviors, particularly in small and medium enterprises (Tatan, 2013) For this research, organizational climate for innovation refers to employees' perceptions of their environment’s supportiveness toward innovation (Scott & Bruce, 1994).

Personal Initiative

Personal initiative is a key aspect of proactivity, which Unsworth and Parker (2003) define as self-starting, action-oriented behaviors aimed at enhancing personal or organizational effectiveness Crant (2000) emphasizes that proactivity involves taking the initiative to improve current situations or create new opportunities, challenging the status quo rather than passively accepting conditions Theoretical frameworks link proactive behaviors to concepts such as taking charge (Morrison & Phelps, 1999), task revision (Staw & Boettger, 1990), voice (Van Dyne & LePine, 1998), and personal initiative (Frese et al., 1996, 1997), highlighting their importance in fostering proactive action in the workplace.

Frese et al (1996, p 140) defined personal initiative as ‘an individual level behaviour syndrome (a set of co-occurring behaviours) resulting in an individual’s taking an active and self-starting approach to work and going beyond what is formally required in a given job’ In contrast with traditional non-active performance views that are concerned with employee–job matching, defining tasks, and assessing employees’ performance against goals developed by the organisation (Frese & Fay 2001), employees with high personal initiative go beyond their job description and adopt a self-starting manner in line with organisational missions and aims (Redfern et al 2010; Stroppa & Spieb 2011) Personal initiative was first characterised based on five facets by Frese et al (1996, p.38): ‘persistent with organisational missions, long-term orientation, goal-directed and action oriented, consistent in the face of barriers and problems, proactive and self- starting’ Later, Frese and Fay (2001) described personal initiative based on three principal aspects: being self-starting, proactive, and persistent Self-starting implies that employees set goals that go beyond their role requirements; proactive refers to having a long-term focus in anticipating upcoming opportunities and problems; and persistence refers to assiduously following goals in the face of problems

Employees with high personal initiative are active and have a persistent approach rather than being passive and conformist toward organisational objectives (Baer & Frese 2003;

Hakanen, Perhoniemi & Toppinen-Tanner 2008; Stroppa & Spieb 2010; Thomas, Whitman, & Viswesvaran 2010), employees’ social job satisfaction (Gamboa et al

Research by Stroppa and Spieb (2011) employing a mixed-method approach, including interviews and online surveys of expatriates in China, Thailand, and Japan, reveals that personal initiative positively impacts expatriates' job satisfaction and performance while reducing job stress Their findings highlight that personal initiative is especially beneficial in challenging, ambiguous, and uncertain working environments Additionally, studies have linked personal initiative to well-being in areas such as psychological health and overall life satisfaction (Wang & Li, 2015; 2009).

The concepts of personal initiative and innovation seem to be related (Unsworth & Parker 2003), and several authors have suggested that personal initiative influences creativity and innovation practices (Binnewies, Ohly & Sonnentag 2007; Hakanen, Perhoniemi, & Toppinen-Tanner 2008; Miron, Erez & Naveh 2004; Ohly, Sonnentag & Pluntke 2006; Unsworth & Parker 2003), and change orientation (Frese & Fay 2001) Binnewies, Ohly and Sonnentag (2007) tested the influence of personal initiative on Amabile’s (1988) creativity model including four stages: problem identification, preparation, idea generation and idea validation Using both interview and survey data collection with a sample of 52 nurses, this study demonstrated that personal initiative acts as a ‘motivational promoter’ and moderates the relationship between problem identification and the preparation stage, and directly influences creativity Personal initiative was also found to be related to the implementation of new ideas Miron, Erez

Naveh (2004) found that while creativity is essential, it alone does not guarantee successful innovation outcomes; instead, taking the initiative to transform new ideas into practical applications is crucial for achieving innovation in organizations developing and manufacturing advanced technologies.

According to componential theory and the interactionist model, creativity and innovation result from person-situation interactions, emphasizing the importance of personal characteristics and organizational factors Environmental elements like leadership play a crucial role, but in service industries such as hospitality, personal initiative is particularly vital for frontline employees Characteristics of extra-role behavior, including proactive attitude and flexibility, influence service quality, customer satisfaction, and the ability to respond effectively to customer demands A study of 321 employees in Portuguese 4-star hotels highlighted that personal initiative significantly impacts service quality and organizational commitment, suggesting that personal initiative can enhance the effect of leadership on employee creativity and innovation.

Proposed Relationships between Factors of the Study

Literature on creativity and innovation suggests that both individual and organisational contextual factors can encourage and enhance employees’ creativity and innovation (Scott & Bruce 1994; Zhou & George 2003) This thesis considers the influence of environmental factors (leadership, employees’ perceptions of organisational climate for innovation) and individual factors (personal initiative) on employees’ creativity and innovation

2.9.1 Leadership and Employees’ Creativity and Innovation

Leadership significantly impacts the work environment by enhancing employees’ problem-solving skills and idea generation Transformational leadership, in particular, has been shown to directly boost individual creativity and indirectly foster creative identities through leader support Empirical studies, such as Gumusluoglu and Ilsev (2009), demonstrate a positive relationship between transformational leadership and subordinate creative behavior across Turkish software companies Similarly, research by Cheung & Wong (2011) across various service organizations confirms that transformational leadership positively influences employee creativity Additionally, Zhang, Tsui, and Wang (2011) found that transformational leadership is positively linked to group creativity and inversely related to authoritarian leadership in Chinese organizations Overall, effective leadership, especially transformational styles, plays a crucial role in fostering a creative work environment.

A higher level of leader–member exchange is reported to influence employees’ creative work involvement by providing higher interpersonal support and job autonomy (Volmer, Spurk & Niessen 2012), and by encouraging employees’ perceptions of an organisational climate supporting creativity (Scott & Bruce 1994) Further, authentic leadership stimulating ethical standards and values predicts employees’ creativity (Cerne, Jaklic & Skerlavaj 2013; Rego et al 2012) and authentic leaders have been found to provide psychological safety, which encourages employees’ sense of freedom to generate new ideas and suggestions (Rego et al 2012)

Several scholars have explored leader behaviors that significantly impact employees’ creativity through qualitative research Key leadership behaviors identified include clarifying roles and objectives, consulting team members, and monitoring progress, which foster a supportive environment for innovation Additionally, specific leader actions directly influence employees’ idea generation, highlighting the importance of leadership in enhancing creativity within organizations (Amabile et al., 2004; Gupta & Singh, 2013; Jong) These insights underscore the critical role of everyday leadership practices in cultivating a creative workforce.

& Hartog 2007) Other leadership styles such as empowering, delegating and role- modelling have also been reported as relevant to subordinates’ creativity (Jong & Hartog 2007)

In the Hong Kong hotel industry, research by Wong and Pang (2003a) highlights that support and motivation from top managers, along with effective communication between managers and employees, are key drivers of employee creativity Additionally, leaders’ empowering behaviors—such as consulting staff, supporting autonomy, and encouraging shared decision-making—significantly enhance employees’ creative performance in the hotel sector (Sløtten, Svensson & Svori, 2011; Sløtten & Mehmetoglu, 2011).

(2014), in a study of Romanian 3- and 4-stars spa hotels, concluded that a lack of creativity and initiative among employees is the result of authoritarian leadership enforcing discipline and routines, and not involving employees in innovation-related discussions or decision-making Similarly, Wong and Pang (2003b) discovered that setting rules and regulations to follow, a conservative management style and corporate bureaucracy were job-related barriers to creativity in the context of the Hong Kong hotel industry Taken together, these suggest that leadership plays a pivotal role in employees’ creativity However, as discussed earlier, the literature on leadership and innovation has not yet provided sufficient exploratory studies to explore precisely which leadership qualities are more likely to have an impact on employees’ creativity The association between leadership and employee creativity, especially in the context of Australian and Iranian hotels and resorts, has not been investigated from an empirical viewpoint To explore and clarify this, this thesis has developed the following research questions:

Research Question 1: What is the nature of the leadership qualities that stimulate employees’ creativity and innovation in the hotel and resort industry?

Research Question 2: In what ways, if any, do perceived leadership behaviours influence employees’ creativity in Australian and Iranian hotels and resorts?

Research indicates that leadership plays a crucial role in both employee innovation and creativity Effective leaders provide essential resources, support, and guidance during the implementation of new ideas, transforming innovation into tangible products, services, or procedures (Dorenbosch, van Engen & Verhagen 2005; Jong & Hartog 2010) Supportive leadership fosters employees’ willingness to generate and apply ideas by creating a positive work environment where mistakes are tolerated, and employees feel respected and heard (Jong & Hartog 2007; Hulsheger, Anderson & Salgado 2009; Slوظten 2011) Leaders who encourage participation and engagement are linked to higher levels of innovative behavior, with participative leadership positively influencing team reflection and innovation within organizations (Somech 2006; Krause, Gebert & Kearney 2007).

Leadership behaviours that grant freedom and autonomy in decision-making influence employees’ perceptions of a change-oriented organisation, which acts to enhance their innovation and implementation behaviour (Krause 2004) Job autonomy has been acknowledged as a factor that affects employees’ innovative behaviour by increasing their engagement (Slồtten, Svensson & Svổri 2011), and charismatic leadership also has been reported to enhance employees’ innovation by supporting individual self-efficacy and motivation (Tierney & Farmer 2002) Paulsen et al (2009) surveyed 178 science professionals from large public R&D organisations and found that the charismatic characteristics of transformational leadership positively influence team innovation by offering a vision and purpose, and promoting a sense of team identity and commitment The study by Michaelis, Stegmaier and Sonntag (2009) confirmed the positive effect of transformational leadership on followers’ innovation, and specifically of their innovation implementation behaviour The literature has also suggested a positive relationship between transformational leadership and innovative in an organisation (Lee

2008) Gumusluoglu and Ilsev (2009) identified a positive association between transformational leadership and innovation at individual and organisational levels In addition, the literature has indicated that leader–member exchange and employees’ innovative behaviour are related (Scott & Bruce 1994; Wang et al 2015) Using a survey of 388 manufacturing employees in China, Zhou et al (2014) found authentic leadership is significantly related to employees’ innovative behaviour

The literature on hotels and resorts in Australia and Iran as yet lacks sufficient empirical investigation of leadership qualities that encourage and motivate employees’ innovation To address this gap, the following research question was formulated:

Research Question 3: In what ways, if any, do perceived leadership behaviours influence employees’ innovation in Australian and Iranian hotels and resorts?

2.9.2 Leadership, an Organisational Climate Supportive of Innovation and

An organisational climate supportive of change promotes consideration of new ways to work, provides employees with signals that encourage them to take initiatives, and supports the development of new ideas and suggestions (Isaksen et al 2001; West et al

Climate plays a crucial role in shaping employees' perceptions of organizational expectations, behaviors, and desired outcomes Empirical studies confirm that the work environment's conditions and characteristics significantly influence individuals’ creative efforts and overall performance A positive and supportive climate can foster innovation and drive organizational success.

& Sacramento 2012) The innovative climate has been highlighted in the literature because of its critical role in defining employees’ creativity (Jaiswal & Dhar 2015) Using a survey of 983 Hong Kong hotel industry employees, Wong and Ladkin (2008) concluded that establishing a creative working environment acts as a job-related motivator, which enhances employees’ creativity According to their findings, setting encouraging policies and procedures, providing training and development programs for employees to be creative, supporting change and risk taking, and appreciating good ideas all influenced creative behaviour among the employees, who perceived their work environment as promoting change and creativity Denti and Hemlin (2012) have similarly proposed that organisational support encourages individuals to engage in creative practices

Research indicates that organisational climate and other contextual factors significantly influence the relationship between leadership and behavioral outcomes (Liao & Chuang, 2007; Michaelis, Stegmaier & Sonntag, 2009; Porter & McLaughlin, 2006; Wong & Ladkin, 2008) House and Javidan (2004) emphasized that leadership effectiveness depends on both leadership behaviors and the organizational context Similarly, Shamir and Howell (1999) highlighted the importance of considering situational factors within organisations, as they can shape leadership’s impact For example, Wang and Rode demonstrated how organisational environment plays a crucial role in moderating leadership influence.

(2010) study, using a survey of 283 supervisor–subordinates dyads from a wide range of organisations located in southern USA, found that the 3-way interaction of transformational leadership, identification with the leader and a climate for innovation was associated with employee creativity

Development of Research Theoretical Framework

Research by Amabile (1997), Amabile et al (1996), and Woodman, Sawyer, and Griffin (1993) emphasizes the critical role of work environment and context in fostering creativity and innovation The interactionist model (Woodman, Sawyer & Griffin, 1993) highlights the importance of the dynamic interplay between individual traits and situational factors, as well as the influence of organizational levels on creative performance Literature reviews reveal that individual differences such as knowledge, skills, and behaviors, alongside social contextual factors like culture, leadership, organizational climate, and network diversity, are key predictors of creativity and innovation across various domains (Gong et al., 2012; Oldham & Cummings, 1996; Perry-Smith & Shalley, 2003; Somech & Drach-Zahavy, 2011; Unsworth & Parker, 2003) Additionally, Scott and Bruce (1994) contributed a comprehensive framework integrating individual attributes (problem-solving style), work group dynamics (quality of team-member exchange), and leadership factors (leader–member exchange and leader role expectations) that influence individual innovative behavior, underscoring the multifaceted nature of fostering creativity in organizational settings.

Leadership is an important organisational contextual factor shaping social and work environment, found to predict individual, group and organisational creativity and innovation in different contexts (Amabile et al 2004; Mumford & Licuanan 2004; Rosing et al 2011) The literature has demonstrated that leaders influence creativity and innovation in different ways, by enhancing follower’s intrinsic motivation (Jung, Chow

& Wu 2003), articulating an inspiring vision (Gupta & Singh 2013; Jong & Hartog

Research indicates that effective leadership involves providing support, developing trusting relationships, empowering employees, sharing decision-making, delegating responsibilities, and promoting high ethical standards (Cheung & Wong 2011; Volmer, Spurk & Niessen 2012; Krause 2004; Valentine et al 2011) Although leaders play a crucial role in motivating individual innovation, there is limited research on the specific leadership qualities that foster creativity and innovation Most existing studies focus on leadership models aimed at organizational performance rather than innovation (Jong & Hartog 2007; Mumford & Licuanan 2004) This gap in the literature motivated an exploratory mixed-method study to investigate leadership qualities that influence employee innovation, particularly within the context of hotels and resorts in Australia and Iran, emphasizing the importance of a context-based approach to understanding leadership for innovation (Mumford & Licuanan 2004).

This thesis examines how organizational climate and individual initiative influence employees' creativity and innovation, emphasizing that a supportive organizational climate—defined by established norms and procedures—encourages innovative behaviors (Amabile et al., 1996; Scott & Bruce, 1994; Charbonnier-Voirin et al., 2010) Employees’ perception of a creativity-promoting climate positively affects their engagement in innovative activities and their responsiveness to leadership practices that foster innovation (Jaiswal & Dhar, 2015; Lin & Liu, 2012) Additionally, personal initiative—a key individual behavioral trait involved in problem recognition, idea generation, and implementation—serves as a motivational driver that enhances creative idea development and innovative behavior (Binnewies et al., 2007; Miron et al., 2004; Ohly et al., 2006) Individuals with high personal initiative demonstrate greater engagement, proactively address organizational challenges, and respond well to leadership that encourages creativity and innovation (Hakanen et al., 2008; Michaelis et al., 2009).

This thesis emphasizes the importance of differentiating employees' creativity and innovation within its conceptual framework Innovative behavior is understood as a multi-dimensional process, involving distinct activities such as idea generation (creativity) and idea implementation (innovation) While scholars like Dorenbosch et al (2005), Janssen (2000), Jong & Hartog (2010), and Scott & Bruce (1994) highlight these two main phases, many empirical studies tend to focus on only one aspect—either creativity or innovation implementation—limiting the comprehensive understanding of innovative behavior (Amabile et al., 2004; Volmer et al., 2012; Zhang, Tsui & Wang) Incorporating both phases provides a more holistic view of how employees contribute to organizational innovation.

2011) Considering that creativity is an input and foundation of innovative performance (Amabile et al 1996; Slồtten, Svensson & Svổri 2011), examining the predictors of innovative behaviour in only one phase of this process limits our knowledge For example, Jong and Hartog (2007), in an exploratory study using in-depth interviews with managers and entrepreneurs in knowledge-intensive service firms to identify different leadership behaviours that influenced employees’ creativity and innovation, found that aggregating creativity and innovation or focusing only on one element would not allow the researchers to characterise the particular leadership behaviours that were beneficial at each stage It is better to keep creativity and innovation separate to understand more fully the differences in regard to leader behaviours encouraging creativity and innovation (Jong & Hartog 2007; Mumford & Licuanan 2004) This thesis follows Axtell et al (2000), who argued that the two aspects of innovative behaviour, suggestion and implementation, should be distinguished in conceptualisation as well as in the measurement model This approach assists the investigation of the influence of the proposed conceptual framework on each phase of innovative behaviour and allows a broader understanding of how employees’ creativity and innovation may be enhanced The outcome of this thesis will be beneficial for the literature and for the measurement of innovative behaviour

The literature review presented earlier in this chapter provided the background from which to develop the thesis research framework, considering the conceptualisation of different factors and their relationship with employees’ creativity and innovation in the organisation Figure 2.1 presents the research framework of this thesis

Figure 2.1 Proposed research conceptual framework

This research framework examines five key factors: leadership, an organizational climate supportive of innovation, personal initiative, employees’ creativity, and employees’ innovation Leadership is identified as an independent variable that influences employees’ creativity and innovation, which are dependent variables, within Australian and Iranian hotels and resorts Additionally, an organizational climate supportive of innovation and personal initiative serve as moderators, enhancing the effect of leadership on employees’ creativity and innovation in these hospitality contexts This model highlights the importance of leadership and supportive environments in fostering creativity and innovation among hotel employees across different cultural settings.

This thesis explores the influence of leadership on employees’ creativity and innovation, highlighting the moderating roles of organizational climate and personal initiative While previous research has identified various factors affecting innovative behavior, this framework uniquely applies to Australian and Iranian hotels and resorts The study focuses on five key factors that shape the relationship between leadership and employee innovation within these contexts.

Leadership is the process of influencing individuals to achieve shared goals and objectives, as defined by Jong & Hartog (2007) and Northouse (2007) This thesis emphasizes that effective leadership involves crucial leader–subordinate interactions and highlights how a leader’s qualities can motivate and guide subordinates toward desired outcomes, demonstrating the importance of strong leadership in organizational success.

Leadership involves the process of influencing, stimulating and encouraging subordinates to work collectively toward obtaining shared goals, objectives, or desired outcomes

This thesis takes an exploratory approach to identify leadership qualities that stimulate employee creativity and innovation within Australian and Iranian hotels and resorts By examining these factors, the study enhances existing literature by illuminating key leadership dimensions that foster creativity and innovation in the hospitality industry.

Organisational climate is the cognitive perception employees have of their workplace, reflecting the organisation's expectations for certain behaviors and outcomes (Scott & Bruce, 1994) A positive organisational climate encourages desired behaviors and influences overall organizational performance Specifically, the concept of a climate for innovation, developed by Scott and Bruce, highlights how an organization's environment can foster creativity and innovative thinking among employees, driving competitive advantage Understanding and shaping the organisational climate is essential for promoting a culture of innovation and achieving organizational success.

Support for innovation and resource supply are crucial factors influencing organizational effectiveness Support for innovation pertains to employees' perception that the organization fosters idea generation, encourages change, and values diversity among its members Meanwhile, resource supply relates to the perception that the organization provides adequate resources, including human talent, financial support, and time, to enable members to achieve their goals effectively.

Personal initiative Personal initiative has been defined as a multi-factor individual- level behaviour resulting in an individual taking a self-initiated, active approach to work beyond the job description (Frese et al 1996) Personal initiative is characterised by three main aspects: it is self-starting, proactive and persistent Self-starting refers to individuals developing extra goals beyond their prescribed and normal job Proactivity refers to employees having a long-term focus, anticipating future opportunities and problems: they respond to the problems effectively and seize the opportunities Persistent refers to employees’ persistence in following goals in occurrence of problems, setbacks and barriers;

Creativity in employees is defined as the generation and production of new and useful ideas, encompassing two key dimensions: idea exploration and idea generation Idea exploration, also known as problem recognition, occurs at the initial stage of the creative process, where individuals identify problems or opportunities to improve existing situations Understanding these dimensions is essential for fostering innovation and enhancing organizational performance.

2010) Idea generation refers to the formulation of new ideas or suggestions to enhance the existing products or services or procedures, or to introduce absolutely new business developments (Jong & Hartog 2010)

Chapter Summary

This chapter provides a comprehensive review of the literature on innovation within the hotel industry, emphasizing the crucial role of employees' creativity and innovation It defines leadership and offers an overview of historical approaches to studying it, highlighting the evolution of research around leadership and innovation while identifying existing gaps The chapter underscores the significance of organizational factors, such as a supportive innovation climate, and individual factors, like personal initiative, in fostering workplace creativity and innovation The thesis aims to integrate these concepts to explore their relationships and impacts on employee creativity in hotels and resorts across Australia and Iran To address the literature gaps, seven research questions have been formulated, guiding the study’s investigation into these interconnected constructs.

Based on the literature and in response to the research questions, a research framework was developed It includes five factors: leadership (an independent variable), an organisational climate supportive of innovation (a moderator), personal initiative (a moderator), employees’ creativity (a dependent variable) and employees’ innovation (a dependent variable) Relevant innovation theories were presented and discussed prior to the development of the conceptual framework.

Research Methodology

Study 1: Qualitative Findings

Instrument Development

Study 2: Quantitative Analysis

Discussion

Conclusion, Implications and Future Research