Inclusive leaders for innovation in the founder stage and sibling partnership of family enterprises

Abstract

Background: The current challenges faced by local family businesses related to innovation involve adapting to changing market conditions while maintaining their unique identity and traditions. Innovation is the foundation of every organisation, and the leadership style of business leaders heavily influences employee innovation.

Aim: This study investigates the impact of inclusive leadership, an underexplored type of leadership, on innovative behaviour, with affective commitment and learning culture as mediating variables.

Setting: The research was conducted in four family-owned companies in the founder and sibling partnership stage, spanning the manufacturing and service industries.

Methods: A quantitative approach was used to survey employees in family enterprises in North Sumatra, Indonesia. Partial Least Squares Structural Equation Modeling analysis was utilised to test the relationships between variables, while Importance-Performance Map Analysis and Multi-Group Analysis were implemented to provide deeper insights into the variables.

Results: The results revealed that inclusive leadership positively influenced innovative behaviour in the sibling partnership stage and service companies, with affective commitment acting as the mediator. However, learning culture did not influence innovative behaviour and could not serve as a mediator.

Conclusion: The findings emphasise the importance of adopting inclusive leadership, especially during the sibling partnership stage, and fostering affective commitment to enhancing innovation in family businesses.

Contribution: This study offers valuable insights for leaders of family businesses seeking to improve innovativeness, resilience and sustainability. The findings enrich the existing literature on family business management.