2.1. Transformational Leadership (TL), Organization Citizenship Behavior (OCB), and Firm Innovativeness (OI)
Leadership is the ability to influence the competence and motivation of individuals and groups towards achieving specific goals [
15,
35]. Leadership is essential for the success and innovativeness of a firm [
15]. Leaders energize, sustain, and direct specific work-related behaviors in their followers to introduce new ideas, work creatively, and innovate [
35]. Trends suggests that leadership is the most determinant factor affecting the innovativeness of a firm. Leaders influence the innovativeness process through effecting organizational culture, structure, strategy, resources, or reward systems, or directly influence follower behaviors through motivation and a sense of shared identity [
36].
There are enormous theories of leadership; however, the most debated one is the TL theory. Burns [
37] defined transformational leaders as one who “can lift followers from their petty preoccupations and rally around a common purpose to achieve things never thought possible.” The behavioral components of TL are categorized into four main components, namely, idealized (charismatic) influence, inspirational motivation, intellectual stimulation, and individualized consideration [
38,
39].
Idealized influence denotes the charismatic power of leaders that attract followers towards him/her by showing respect and trust to followers [
40]. Besides, TL has high moral and ethical standards, and offers a vision, values, and wisdom to the followers, hence, engaging them on an emotional level. These sets of behaviors and actions make them a role model and deeply respected personalities for the followers. The idealized influence of transformational leadership motivates employees to develop confidence and pride for the organization [
41].
Inspirational motivation encourages followers to perform beyond the expected level. TL provides ambitious future vision, motivates followers to perform challenging and high standard tasks, and emphasizes common organizational goals [
42].
Intellectual stimulation means to inspire followers to think in an innovative way to solve the problems. Thus, in the presence of TL, employees become more creative, and take risks where it is required to solve organizational problems [
43]. The
individual consideration component of TL focuses on the individual needs of the followers, and listens to their concerns. Transformational leaders help their subordinates in career development and pay attention to the individual followers’ needs [
44]. Thus, transformational leadership is a process that transforms and changes followers’ behavior toward an organization in term of ownership, sense of belonging, thinking innovatively, taking risks to solve the problems, motivation to perform challenging tasks, and working as a team to achieve common goals. Besides, TL is concerned with assessing followers’ needs, motivation, satisfaction, and respect. These elements form an exceptional form of influence that encourages followers to accomplish tasks innovatively and perform more than what is expected from them [
43].
In the tourism and hospitality sector, the most valuable and precious assets of an organization are the employees who satisfy and retain customers [
45]. Tourists/guests assess the service quality of a tourism organization by evaluating their employees’ behavior. A delighted tourist/guest always expects employees to perform extra-role behavior besides the routine duties such as OCB. These are the behaviors that are not in the job description and rewarded by the formal organization system; however, it boosts the organization’s effectiveness and functioning [
46]. OCB is a set of multifaceted discretionary behaviors not related to job contents [
47]. OCB behaviors can be categorized as affiliative and challenging OCB [
48]. The affiliative dynamics of OCB promotes teamwork, group cohesion, sustaining the current working relationship, and engagements [
49]. Additionally, Choi [
50] suggests that affiliative OCB consists of helping behaviors, civic virtue, organizational loyalty, and sportsmanship spirit. However, challenging OCB includes all “voluntary act[s] of creativity and innovation designed to improve one’s task or the firm’s performance” [
47,
49]. The empirical findings suggest that affiliative OCB is related to organizational leadership, trust-building, and organizational justice [
51].
Research has identified various elements that affect OCB; however, leadership is found to be the most influential. The trends suggest that supportive leadership behavior directly and indirectly influence OCB. The spirit of transformational leadership is to encourage followers to move beyond the expected or set goals [
47]. TL has significant impacts on followers’ extra job performance and OCB [
49]. Inspirational motivation and individual consideration attributes of TL push the followers to achieve individual as well as organizational goals, keeping in mind the ethical and moral implications of their actions on the overall organization [
52]. Thus, the support and development dimensions of TL inject OCB in the followers’ behaviors. Transformational leaders support their followers in their work-related decisions, openness to experiment, new ideas, and creativity; also, the development behaviors include identification of suitable training and coaching for the followers to enhance their job-related abilities and skills to enrich their self-confidence in accepting challenging tasks [
34]. The research trends suggest that effective leadership strongly influences OCB [
53]. Humphrey [
54] indicates that organizational identification is a common factor between TL and OCBs. An accumulated amount of research provides support that TL positively affects employees’ work attitudes [
55], organization commitment [
56], and organizational citizenship behaviors [
57].
Tourism firms operate in a competitive world where innovativeness is a condition for firms’ survival [
1]. The tourism industry touches all the spheres of life within a country and is functioning in a global village, which is becoming borderless due to socioeconomic, political, technological, and informational progressions and developments [
58]. These megatrends have changed the nature of international tourism, and demand tourism firms for a new vision, innovativeness, and new attitudes that what can and must be done to remain competitive in the industry; also, to delight tourists and contribute to the society economically, socially, culturally, and environmentally [
59]. Thus, tourism firms’ competitiveness is contingent on their innovativeness in achieving high-quality products and services at lower costs to meet the demands of potential customers [
1].
Research trends reveal that transformational leadership plays a vital role in the innovativeness of a firm [
33]. Vaccaro, Jansen [
60] found that transformational leadership is the antecedent of firm innovativeness (OI). The intellectual stimulation component of TL focuses explicitly on employees’ creativity and innovativeness. Transformational leaders motivate followers to experiment, take risks, and think outside of the box continuously for performing tasks and innovations. Ford [
61] suggests that firm creativity and innovativeness depend on the leadership and argued that leaders who have concerns about the effectiveness of the present system promote consideration for instigating change, creativity, and dynamic capabilities. Transformational leadership attributes such as coaching, training, group cohesion, knowledge sharing, psychological empowerment, supportive behavior, and emphasis on extra-role performance all contribute to firm innovativeness.
All in all, TL is a determinant of creativity and innovativeness [
17]. Transformational leaders deliver a vision to the followers, support innovations, encourage and provide autonomy, value, and acknowledge employees’ efforts, and also motivate them to perform challenging tasks [
62]. Additionally, individualized considerations encourage the followers to perform extra-role behavior because the leader evaluates, rewards, coaches, and provides training according to the followers’ performance [
28,
29]. Research tendencies recommend that TL has a direct relationship with altruism [
63]. Miao and Kim [
64] empirically proved that TL has a direct positive association with three types of OCB, i.e., altruism, conscientiousness, and civic virtue. TL encourages followers to connect their personal goals with broad organizational goals; hence, they identify their success with values and norms [
41]. Thus, we posit the following hypotheses.
Hypothesis 1. TL positively influence OCB.
Hypothesis 2. TL positively influence OI.
2.2. Organization Citizenship Behavior (OCB) and Firm Innovativeness (OI)
OCB is getting more attention in the tourism and hospitality sector due to an encouraging impact on customer satisfaction. OCB in the tourism and hospitality sector is a prevalent and favorable performance that allows employees to assist coworkers in offering high-quality services, work for lengthy hours, meet tough goals, and be loyal with the organization [
65]. Employees’ prosocial behavior and delivery of excellent services make a customer delight. Thus, OCB is a key to increase revenues and a source of competitive advantage in tourism sectors, as the interaction between employees and customers lodged is high [
66].
Organ [
22] initially identified seven components of OCB construct, however, later combined them into five, i.e., altruism—can be defined as volunteer actions such as helping coworkers; courtesy—providing useful information and consulting colleagues before taking any action; conscientiousness—respect for norms and values; sportsmanship—not complaining about small problems and showing citizenship behavior; and civic virtue—constructive involvement in the matters that affect the organization. Podsakoff, MacKenzie [
47] developed seven dimensions of OCB, i.e., sportsmanship, helping behavior, civic virtue, organizational loyalty, self-development, corporate compliance, and individual initiative. The trends suggest that Organ [
22] five dimensions scale is dominant in the literature.
OI symbolizes organizational culture and climate that provide an environment and various supports for new ideas and product generation [
67]. However, innovation is the outcome of OI in terms of new ideas, designs, methods, and products [
68]. Lumpkin and Dess [
69] suggest that “Innovativeness reflects the firm’s tendency to engage in and support new ideas, novelty experimentation and creative processes that may result in new products, services or technological processes.” Baer and Frese [
70] suggest that OI consists of the organization’s activities that “produce visible and tangible innovative outcomes.” Wang and Ahmed [
71] identified five areas of firm innovativeness, i.e., product innovation, market innovation, process innovation, behavior innovation, and strategic innovation. Additionally, suggesting that innovativeness is “an organization’s overall innovative capability to produce innovative outcomes.” Ruvio, Shoham [
72] conceptualized firm innovativeness in five dimensions: Openness, risk-taking, creativity, future orientation, and proactiveness. The literature trends indicate that OI is a multidimensional construct that reflects an organizational culture and climate, which enables and facilitates idea generation, new product development, and promotes openness and creativity.
Chattalas, Koles [
73] found that OCB supports innovations through readiness to help others, creating a friendly work atmosphere, and altruism for the firm and its members. Zhang, Wan [
74] argued that OCB foster a high-quality organization and employee relationship. OCB motivates employees to dedicate themselves and contribute to the firm by introducing innovative ideas. Podsakoff and MacKenzie [
23] reveal that OCB theoretically and practically improves organization effectiveness, as a high degree of OCB proactively involves employees in creative performance. Yan and Yan [
75] indicate that the OCB “civic virtue” feature has a significant positive association with innovation in small businesses. Theoretical as well as empirical analyses suggest that OCB triggers a beneficial social climate that motivates employees to innovate [
74]. Podsakoff, Whiting [
76] claimed that OCB is positively associated with firm effectiveness, which supports the notion that OCB enhances firm innovativeness. Carmeli and Spreitzer [
77] point out that OCB characteristics of altruism (helping others), courtesy (sharing knowledge), and civic virtue (constructive involvement) promote innovation and innovative culture in the firm. Xerri and Brunetto [
78] believe that OCB, both at individual and firm level, leads to innovative behavior. Turnipseed and Turnipseed [
79] indicate that the participatory paradigm of citizenship behavior has a positive influence on innovative ideas. Podsakoff, Whiting [
76] argued that support for innovation is an antecedent of OCB.
The research on the relationship between OCB and OI is rare; however, OCB is a combination of such behaviors that help in the firm innovativeness. It can be derived from the literature that OCB boosts teamwork and encourages cooperation; besides, the civic virtue feature motivates employees to think constructively and innovatively. Hence, new ideas and information are shared within the organization to reduce costs and enhance the existing products and services to achieve organizational goals. Scholars believe that OCB improves team level innovations [
80]. In tourism organizations, employees are in direct contact with customers/guests; he knows better how to solve the problems in due time with politeness. OCB represents the informal structure of an organization that shows its virtue of flexibility and openness, and Naqshbandi and Kaur [
81] found that informal organization structure favors innovations. Organ [
82] redefined OCB as “performance that supports the social and psychological environment in which task performance takes place.” Yu and Song [
83] suggest that OCB, directly and indirectly, support innovations. Trends indicate the OI and OCB share common values such as openness of an organization to new ideas and change, which require individuals to be tolerant and respect other views and opinions. Thus, OCB, as a part of organization culture, develops a sense of pride in the organization members, and creates enthusiasm about what they are capable of doing to protect the organizational interest. OCB and OI both result in a positive organizational outcome [
84].
Followers of transformational leaders feel a supportive climate for innovativeness and creative ideas. The individual consideration of TL provides encouragement and recognition to the followers, which serves as a reward for innovativeness [
85]. Inspirational motivation encourages followers to generate new ideas and challenge the old method of work. The intellectual stimulation of TL enhances exploratory thinking and develops self-efficacy, which lead to higher creative performance [
86]. TL increases psychological empowerment, which builds followers’ self-confidence and strengthens personal development [
17]. TL followers are more likely to cooperate for a high contribution to the firm by supporting colleagues (altruism), provide creative ideas (civic virtue), obey firm rule regulations (conscientiousness), avoid corrupt practices (courtesy), and show tolerance to firm problems [
87,
88]. In addition, employees’ extra-role behavior is closely associated with firm effectiveness and efficiency [
26,
27]. Vigoda and Golembiewski [
89] argued that OCB is necessary for the improvement of service quality and the creation of a healthy work environment. Hence, we posit the following hypotheses:
Hypothesis 3. OCB positively influences OI.
Hypothesis 4. OCB mediates between TL and OI.
2.3. The Moderating Role of Firm Size and Age
Literature trends suggest that the level of innovativeness is proportional to the firm size in the manufacturing industry [
90]. Messeni Petruzzelli, Ardito [
91] suggest that large firms have high capabilities to develop more valuable innovative solutions by using their experience and knowledge, whereas, the small firms can also innovate when their innovation is based on expertise and moderated by maturity. Research fosters that CEO TL has a direct impact on firm performance and innovativeness [
92]; however, firm size indirectly contributes to the innovations [
93]. Firm size has a significant positive influence on OI [
94]. Hipp, Tether [
95] analyzed empirical data of German service firms and found that the firm’s innovativeness increases with firm size. Jacob, Tintoré [
96] examined the data of the tourism sector of the Balearic Islands, Spain, and found that large firms tend to innovate more than small companies. Their research suggests a massive difference between the number of innovations between small, medium, and large firms. Hipp, Tether [
95] indicate that large firms have more lines of activity, finances, and human resources to innovate in a broader area. Cha, Kim [
97] established a significant relationship between transformational leadership and inter-team collaboration and found that team size moderates the relationship.
The convincible moderating effect of firm size is drawn from the literature, indicating that firm size can act as a moderator in innovation research [
98,
99]. Khan, Rehman [
93] found that firm size moderates the relationship between TL and OI, and argued that larger firms with sufficient resources could become more innovative than small firms. Little of the scholarship provides contradictory results and suggests that small firms are more engaged in innovation for survival [
100]. To the best of our knowledge, the literature is silent about the moderating role of firm size between TL and OCB. However, based on the relationship between TL, OCB, and OI, it is assumed that firm size and age might moderate between TL and OCB. Concerning sub-sectors in tourism, Jacob, Tintoré [
96] suggest that the accommodation and lodging sector is more innovative than leisure, recreation, and auxiliary services sectors. [
90] found that Balearic hotel chain establishments in Mexico and the Dominican Republic indicate that hotels tend to be more innovative as the size increases. The trends advocate that large tourism firms’ economies of scale influence innovativeness probability. Sirilli and Evangelista [
101] studied the relationship between a firm’s innovativeness and its size, both in the manufacturing and services sectors, and found that firm innovativeness behavior changes with size. Forés and Camisón [
102] suggest that firm size indirectly influences innovation performance because it is associated with internal knowledge creation competences and absorptive capabilities. Orfila-Sintes and Mattsson [
9] suggested that physical capacity, the number of beds, and room of the accommodation and hotel sector can prompt economies of scale, which guide the firms’ innovation decisions and its implementation. Thus, in tourism, facility size is a relevant variable in assessing the level of innovativeness of a firm. Chung and Kalnins [
103] found that hotel size is positively related to the level of services and quality provided.
In addition to firm size, age is also a relevant structural factor at the firm level that influences the innovativeness of a firm Messeni Petruzzelli, Ardito [
91]. Jacob and Groizard [
90] found that new hotels are less innovative than older hotels. They established that the tendency to innovate per room increased as the age of the establishment increases. Hence, their results meet the theoretical expectation that “old is gold.” Firm age is an intangible asset as the firm gets old; it gets more experience and accumulates ownership advantages. Besides, the firm’s age influences the learning speed capabilities [
91], recognization of knowledge value [
104], and the capacity to take advantage of external knowledge resources [
105].
The research on the relationship between a firm’s age and innovativeness is in a difference between scholars, as Chiaroni, Chiesa [
106] suggest that older firms as compared to younger ones frequently fail to manage innovative activities due to change in the organization structure or technology. The economic perspective suggests that old firms are reluctant to accept new innovations for keeping the market stable; however, new firms always try to challenge the status quo by developing high impact innovations to draw new horizons in the market [
107]. The organization’s inertia (organizational routines and organizational filters) perspective suggests that old firms are at a disadvantage as compared to the younger firms when they need to develop innovations based on new knowledge [
91]. Whereas, organizational routines direct older firms to trust on established practices [
108], and filters form a cognitive membrane that seizes corporate members to embrace innovative opportunities beyond the existing knowledge [
7].
However, it is also a fact that older firms are more experienced, and their knowledge capabilities are much more mature than younger firms, hence, they develop more innovative services and products [
109]. Older firms have more experienced human resources and long-lasting corporate memory that enhance their ability to evaluate the new knowledge to innovate and reduce the chances of misapplication [
110]. The firm age and size are critical variables in organization studies, and an essential proxy to assess the organization process, knowledge management, innovativeness that change over time [
105]. Thus, we considered firm size and age as a moderator for this study and posited the following hypothesis. Based on our hypotheses, we developed a conceptual model of this study, as given in
Figure 1.
Hypothesis 5. Firm size moderates the relationship between TL and OI.
Hypothesis 6. Firm age moderates the relationship between TL and OI.
Hypothesis 7. Firm size moderates the relationship between TL and OCB.
Hypothesis 8. Firm age moderates the relationship between TL and OCB.