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 necessitates academic leadership to encourage creativity as one of the core competencies in order to meet the indicators of performance standards. 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 were the faculties of economics from two Islamic state universities in Indonesia and Malaysia. The sample of the study was 248 academic faculty members. Data were collected by questionnaires and analyzed using the Partial Least Square (PLS). The results showed that behavioral leadership directly affects organizational innovation (beta =.38; p =.00); individual creativity affects organizational innovation (beta =.35; p =.02); and intrinsic motivation mediates the effect of behavioral leadership on individual creativity (beta =.39; p =.00). However, individual creativity was not found to mediate the effect of behavioral leadership on organizational innovation (beta =.14; p =.23). 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, and creating a favorable work environment.