Entrepreneurial leadership and innovation in the public sector: The role of causal- and effectual-logic processes

Abstract

Entrepreneurial leadership in the public sector has attracted the interest of both scholars and policymakers, as it is seen as a key determinant of innovation. This study adopts a contingency view of leadership and examines the entrepreneurial leadership–innovation relationship while also considering the moderating effects of the causal- and effectual-logic processes employed. Based on multisource data across 105 municipal departments in Greece, the findings suggest that entrepreneurial leadership exerts a positive effect on exploratory innovation; this effect is further reinforced by formalization. In contrast, entrepreneurial leadership's influence on exploitative innovation depends on collaboration and conditions of working with limited means, in such a way that the impact is positive only at high levels of these effectual-logic processes; at low levels, it is negative. Practical implications are discussed for public organizations seeking to translate entrepreneurial leadership into innovation.