Leadership and Innovation : The relationship between leadership in a company and the company’s ability to be innovative

Abstract: The purpose of this explanatory thesis is to study how leadership relates to innovation performance. The research findings aim to contribute to a deeper understanding of this relationship, and what actions management can take, in order to increase innovation performance. The thesis creates a model for the leadership stimulus influencing innovation performance. A survey was designed, based on the model, to assess the attitudes towards the studied parameters followed by the conclusive data processing, empirical findings, analysis, and conclusions. The stimulus used in the study was Visionary Leadership, Learning Organisation, Incentives and Resources spent on innovation.The originality and value that this paper adds, is to analyse the joint effects of different leadership dimensions with regards to innovation performance in one single study, and also make a compound correlation of these dimensions. The study validated the positive relationship between the compound leadership dimensions and innovation performance. Furthermore, the study shows that the strongest direct correlation was between visionary leadership and innovation performance as well as between learning organization and innovation performance. However, the research could not establish any clear relation either between incentives and innovation performance, nor resources spent on innovation, and innovation performance.