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Purpose: This study aims to examine the relationship between empowerment leadership and organizational innovation. This analyzes the influence of empowerment leadership on organizational innovation, whether knowledge sharing mediates the effect of empowerment leadership on individual creativity, if individual creativity moderates the influence of empowerment leadership on organizational innovation, and how psychological empowerment mediates the effect of leadership on individual creativity. Theoretical framework: Empowerment leadership includes delegation of authority, participating in decision-making, informing employees about regulations, becoming a role model, showing concern, and interacting with the team members. Organizational innovation is the ability to generate and adopt new ideas or behaviors because it increases productivity and business performance. Knowledge sharing is a mechanism that fosters individual creative thinking and increases employees' creativity. Therefore, leaders tend to promote the practice of knowledge sharing by generating useful new ideas and thoughts. Design/methodology/approach: Respondents are lecturers at the Faculty of Economics and Business of Islamic Higher Education (IHE) in Java, Indonesia, who have been selected as participants. Data were analyzed using the PLS-SEM to test the modified results of several models. Findings: The results showed that empowerment leadership directly affects organizational innovation, knowledge sharing mediates the influence of empowerment leadership on Individual creativity howevet, it failed to mediate the effect of empowerment leadership on organizational innovation, while psychological empowerment failed to moderate the relationship between variables. Research, Practical & Social implications: This study added distinctive supports to the leadership literature by identifying key leadership behaviors that foster or impair individual creativity, knowledge sharing and organizational innovation through investigating their relationships with leadership styles in the same research model. Originality/value: This study indicates that empowerment leadership majorly affects organizational innovation. Furthermore, knowledge sharing plays an important role by mediating between variables for the development of organizational innovation.
Supriyanto et al. (Tue,) studied this question.
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