UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bao Nghi INNOVATIVE WORK BEHAVIOR: THE ROLE OF PARTICIPATIVE LEADERSHIP, EXTERNAL WORK CONTACTS AND SELF-LEADERSHIP SKILLS IN INFORMATION TECHNOLOGY SERVICE INDUSTRY IN VIETNAM MASTER OF BUSINESS (HONORS) SUPERVISOR: Dr. TRAN PHUONG THAO Ho Chi Minh City Year 2017 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Acknowledgement I would like to explicit my sincere acknowledge to my supervisor, Dr. Tran Phuong Thao for the insightful guidelines, valuable recommendations, and feedbacks during my research time. This research could not be possible without her evaluation in each stage which I spent.
My next appreciation also sends to participants of the survey. They are colleagues, friends in many information technology companies in HCM city. They shared their time to assist me to answer the questionnaire. All their contributions have helped me to have the successful study.
2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Abstract The thesis investigates the correlation of participative leadership, external work contacts and self-leadership skills on employee innovative work behavior (IWB) in information technology service industry in Vietnam. Using a sample of 369 employees from 15 IT service companies in Vietnam, the results showed that participative leadership, external work contacts and self-leadership skills effects IWB positively. The empirical results also suggested that participative leadership, external work contacts and self-leadership skills are powerful motivational tools that may help employees to depict IWB. Key words Innovative work behavior, self-leadership skills, participative leadership, external work contacts, information technology service industry, Vietnam.
3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES 1. LITERATURE REVIEW AND HYPOTHESIS .1 The effect of Participative leadership on IWB.2 The effect of External Work contacts on IWB .3 The effect of self-leadership skills on IWB.1 Procedure and Sample. DATA ANALYSIS AND RESULT .2 Confirmatory Factory Analysis (CFA). Implications for managers.
Limitations and directions for future research. 35 APPENDIX A 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com APPENDIX B REFERENCES 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Introduction Innovation is one of vital factors leading the organization to success in business in the long term. Indeed, it is a factor which brings competitive advantages for organizations to survive and success in today business market through the development and implementation of new ideas disclosed to products, processes and services (Anderson, Potocnik, & Zhou, 2014; Lin & Liu, 2012).
IWB is the purpose establishment, debut, and applicant new concept for improving productive processes, and product designs in organization (West & Farr, 1989). Hence, IWB show a vital part in any organizations for their further development in our challenging business environment. Innovation is a vital source for organization for surviving in economy because of the change in technology, global competition and new regulations. Thus, there is a need for examining all factors which increase the IWB for employees (Argawal, 2014).
In the body of literature, there are different components, which aim to lead business organization in motivating their employees for best outcomes include participative leadership, external work contacts (Jong & Hartog, 2007), and self- leadership skills (Manz, 1992). Firstly, participative leadership is the leadership style in which leaders give their employees the right to influence important decisions, design and guide their own tasks by implement decision-making process (Yukl, 2002). Similarly, participative leadership is found to enhance very positively IWB at working place (Krause, 2004). Secondly, external work contacts is the way of exchanging information for better, and more expertise knowledge with other people outside of their organization, such as customers, scientists, and professors.
Indeed, Kimberly and Evanisko (1981) believed 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com that more communicating with external contacts is the main source to lead more innovation at works for employees. So, there is a positive correlation between external work and IWB (Perry-Smith & Shalley, 2003). Thirdly, self-leadership skills are an important factor which influences IWB. Manz (1992) stated that self-leadership skills are a development in which staff members inspire and lead themselves in order to gain preferred manners and results.
Organizations need to improve self-leadership skills for their employees in order to bring back the best performance. In addition, self-leadership skills are positively effect on IWB (Carmeli & Weisberg, 2006). There were many prior studies examined the impact of different styles of leadership on IWB in a wide range of industries including information technology (IT) service industry. However, in the context of developing country like Vietnam, there is still a gap in research on leadership in a specific industry such as IT service industry.
Additionally, IT service industry is growing significantly in Vietnam with high productivity. Moreover, Vietnam has become one of the most attractive nations where foreign IT investors want to outsource their service, software render and solutions because of low paid salary with high quality workforce. Additionally, according to the report by the national workforce master plan (Vietnam lacks high-quality IT workforce, 2016), Vietnam needs to one million workers in IT industry by 2020 (Vietnam lacks high-quality IT workforce, 2016). The main decisive human resources of IT service industry are the programmers and IT engineers who make out software or new solutions in order to bring revenue to company.
Furthermore, the vast majority of IT workforce is weak in term of skills such as self-study skills, negotiation skills and English proficiency. In fact, the radical innovation requirements, quick adapting in advanced technology, and 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com dynamic environment are the main barriers, and real challenging for survival of IT services organizations (Akram, 2016). Hence, IWB in IT working environment could encourage their employees’ innovation for better performance in the market, where technological advancement and global competition are the key things to success in IT industry. As a result, innovation is a main task of organization.
Additionally, organization also can reduce employee’s turnover rate and saving budget for new employees training for long term business development (Popescu & Popa, 2012). Hence, the particular objective of the research is to address the correlation of self- leadership, participative leadership, and external work contacts on IWB in a context of an developing country. In other words, the overall purpose of this research is to examine some items affecting the IWB in IT service provider industry in Vietnam. Three specific research objectives are shown as follow: - Examine the effect of participative leadership on IWB in the IT service industry in Vietnam.
- Examine the effect of external worked contacts on IWB in IT service industry in Vietnam. - Examine the effect of self-leadership skills on IWB in IT service industry in Vietnam. In the study, target interviewees are employees who are working at IT service industry in Vietnam. The result of the research will contribute to fill the gap of the influences of different leadership on IWB within IT services industry in the context of Vietnam.
This empirical result also provide applicable source for managers used as preference for services outsourcing making decision and assists managers in knowing 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com well the important of IWB into driving business more successfully through choosing appropriated leadership style in Vietnam. Literature review and hypothesis The theory of individual innovation is to understand what innovative work behavior is and how leader understands the phenomenon within the individual (Jong & Hartog, 2010). Similarly, according to Yi (2006), individual innovativeness helps to distinguish passion employees towards particularly of subject or industry. Managers will identify who is the true innovative employees and put them in the right position or tasks based on their vision and future goals.
Indeed, the eagerness of a person is to try out new knowledge and material and the result of innovative motivation from managers to their employees (Moore, 2002). Therefore, in order to deeply understand the vital of the influences of leadership styles into IWB of employees within IT industry services, the three factors namely participative leadership, external work contacts, and self-leadership skills are examined. Jong and Hartog (2010) stated that participative leadership allows employees to get involved in making important decision with their supervisors. It means that participative leadership has a very strong relationship with IWB.
Secondly, external work contacts also have employees to increase their innovation at working place, because it allows employees to have a chance to communicate with the people outside the organization from different industries. Finally, self-leadership skills are the combination of behavioral and cognitive strategies which allow the employees to be rewarded for their well performance and self-motivation for innovation enhancement (Houghton & Neck, 2002). Therefore, the IWB has a very strong relationship with three different components such as participative leadership, external work contacts, and self-leadership skills. 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Innovative work behavior is the goal of almost employers from a variety of industries in various countries on over the world, as they realized how important to leadership styles in encouraging their employees' innovation as well as bringing the better development, and success of business.
Indeed, the concepts discussed within this literature part aim to figure out the relationship between IWB and its components as given in the Figure 1 below: Participative leadership H1 H2 External work contacts Innovative work behavior Behavior-focused strategies H3 Natural reward strategies Self-leadership skills Constructive thought patterns Figure 1: Conceptual model 2. The effect of Participative leadership on IWB According to Yukl (2002), the participative leadership is the process in which leaders responsible for guiding, controlling, and then allowing their employees to join making important decision with their leaders. When participate leadership is conducted by leaders, there is an increasing concern and participate of employees (Sax and Torp, 2015). Indeed, leaders play a vital and significant role in managing efficiently the working place environment, where the leaders might provide their employees with sufficient amount of valuable information and feedbacks (Durham, Knight and Locke.
10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Hence, the leader’s role is very important to motivate their employees for enhancing the quality outcomes of team members. However, the leaders also guide their employees their own task within certain limits. Moreover, Yukl (2002) also found that participative leadership can take in forms such as conference, delegation and cooperative determination making.
Axtell et al. (2000) found that participation relate positively on employees’ innovative behavior, and the level of the relationship is evaluated by self- ratings of employees’ proposal and implementation attempts. Indeed, as a result, employees will realize their valuable role in contributing for the development of the organization. Moreover, employees also know they are respected from leaders for their well performances.
Hence, one hypothesis is proposed as below: H1: IWB is being influenced positively by participative leadership. The effect of External work contacts on IWB The second component influencing IWB is external work contacts. Kimberly and Evanisko (1981) and Kasperson (1978) stated that external work contacts are the positive influences of external contacts on enhancing the motivation of employees. The external contacts may be individuals or groups such as customers, professors or scientists (Kimberly & Evanisko, 1981; Kasperson, 1978).
In fact, through communication with these external contacts, employees will receive more opportunities to motivate their innovation at working place. Through communicating with external contacts, the employees may interact with different point of views, and ideas from different people in variety of industries. Hence, the people from outside of their company may help them figure out the appropriate solution to enhance their innovation into working. In addition, there is a connection between IWB and social interaction (Perry-Smith & Shalley, 2003).
Thus, the second hypothesis is proposed as below: 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com H2: IWB is being influenced positively by external works contacts 2. The effect of self-leadership skills on IWB A process which motivates, leads, and guides employees to attain requisition behaviors, and achieving qualified results is self-leadership.