The Effects of Leadership Styles on Organizational Innovation in Universities in Indonesia and Malaysia

One of the important factors for higher education institutions is to achieve global university rankings, and creativity in academic faculty could contribute towards achieving this. This requires academic leadership to encourage creativity to acquire core competencies in order to meet performance indicator standards and promote organizational innovation by stimulating intrinsic motivation and influencing creativity in lecturers to provide a favorable work environment. This research aimed to analyze the effect of behavioral leadership, intrinsic motivation on individual creativity. It also examined the effect of leadership style and individual creativity on organizational innovation. The target population was the faculty of economics from two Islamic state universities in Indonesia and Malaysia. The sample of the study was 248 lecturers. Data were collected by questionnaires and analyzed using the Partial Least Square (PLS). The results showed that behavioral leadership directly affects organizational innovation (β = .38; p = .00), intrinsic motivation mediates the effect of behavioral leadership on individual creativity (β = .39; p = .00), and individual creativity affects organizational innovation (β = .35; p = .02). In contrast, individual creativity is not a mediator of the effect of behavioral leadership on organizational innovation (β = .14; p = .23). In addition, intrinsic motivation as a mediator between behavioral leadership and individual creativity. The findings from this research could be applied to enhance organizational innovation by developing intrinsic motivation, and individual creativity among faculty members in higher education.