COMPLETION REPORT
Leadership and innovative behavior: A moderated mediation model of innovative self-efficacy, resilienceand innovative climate
Dr.Jane Lai Yee Terpstra Tong (+1)
Associate Professor
Department of Management
Monash University Malaysia, Malaysia

The study on innovative behaviour of Japanese information technology and communications (ICT)companies professionals has so far yielded two reports: The first, a 5,000-word report “Fostering
Innovative Performance in Japan: A Preliminary Project Report to Participating Companies”, and thesecond, a 6,000-word academic report, “Psychological capital, transformational leadership andemployee innovative behaviour: A study of Japanese IT and communications professionals”. The firstreport, together with an executive summary translated into Japanese, has been submitted to the fivecompanies we interviewed for reference; and the second academic report will be submitted to the next
Academy of International Business conference, which has a deadline of November 15, 2016. The firstreport was written using the interview data collected in our first visit to Tokyo. The key findings are:
1. Effective communication (downward with employees, upward with bosses, lateralwith peers; within team, between teams, with other stakeholders and acrosstechnology fields) is a common concern across all companies.
2. Continuous innovation requires continuous learning and stimulation. To this end,
open and free knowledge sharing among co-workers and outside professionals is
critical. Improvement in English skills is essential to further learning.
3. ICT Professionals are motivated not only by team rewards and other team-based
extrinsic factors, but also by individualized rewards and recognition.
4. A dynamic, pro-innovation, and pro-diversity corporate culture is the environment
which professionals find stimulating. It also serves as a firm’s competitive advantage
to recruit talent.
5. Transformational leaders are effective in promoting innovation. They provide visionand support to their members, secure the needed resources, and encourage risk taking.
The second report was compiled with the survey data collected from subordinates of a varietyof ICT companies based in Tokyo. In that study, we hypothezised that (1) Psychological capital(PsyCap) positively influences innovative behavior; (2) Transformational leadership positively
influences innovative behavior; (3) PsyCap mediates the relationship between transformational
leadership and innovative behavior. Our analysis supports Hypotheses 1 and 3 but not 2.

[Type here][Type here][Type here]As predicted, PsyCap did a play positive role in employee innovative behavior, both as anindependent variable and as a mediator. The interesting finding in this study is related totransformational leadership. As discussed in the literature review in the report, the relationship between
transformational leadership and innovative behavior has not been conclusive. Our study adds to theinconclusiveness. Our findings indicate that there was no direct effect but only a significant indirect (i.e.
mediating via PsyCap) effect between transformational leadership and innovation behavior.
Furthermore, these two variables were not significantly correlated.
The absence of a direct effect in the presence of an indirect effect could mean there are negative
indirect effects left out from the model. The negative indirect effects left out could have offset thepositive indirect effect, resulting a non-significant correlation between transformational leadership andinnovative behavior. As discussed in the literature review, transformational leadership could create
dependency among followers, disabling them from taking innovative initiatives. Therefore, dependency
could be the mediator that brings about negative mediation. We recommend future studies look into thenegative indirect effect of dependency of transformational leadership on employee innovative behavior.
Given the above findings, it is clear that PsyCap is an important psychological resource that
employees can draw upon to produce innovative performance. Knowing this, leaders could aim atdeveloping subordinates’ PsyCap through their transformational leadership behavior. This is ofparticular importance to Japanese who, relative to Americans or Chinese, have higher fear of failure, anduncertainty avoidance. Removing subordinates from worrying of failure and enhancing their confidence
will likely help them overcome their innate fear and thereby strengthening individual innovativeperformance.

Publication of the Results of Research Project:
Verbal Presentation (Date, Venue, Name of Conference, Title of Presentation, Presenter, etc.)
My collaborator and I intend to submit the academic report to the Academy of International BusinessAnnual Meeting (the top academic conference in international business and management) which has a deadline
in mid-November, 2016. The conference will be held in late June, 2017, and the results for acceptance of paper
will be announced sometime in March/April. We will submit the second report by 30 April, 2017.
Thesis (Name of Journal and its Date, Title and Author of Thesis, etc.)
My collaborator and I intend to submit the finalized academic paper to an academic journal forpublication. As the reviewing process lasts long, we will be able to provide an update on this by 30 September,
2017.
Book (Publisher and Date of the Book, Title and Author of the Book, etc.)
We do not intend to write a book on our findings.

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