THE MEDIATING EFFECT OF ORGANIZATIONAL TRUST IN THE RELATIONSHIP BETWEEN LEADER MEMBER EXCHANGE AND ORGANIZATIONAL INNOVATIVENESS

Abstract

The paper focuses on the mediating effect of organizational trust and its cognitive and affective components on the impact of leadership relationship on different forms of organizational innovativeness such as product, market, behaviour, process and strategy. The empirical data was collected in a public organization (n=757) in Lithuania in 2013. A series of regression analysis suggest that organizational trust has partially mediating effect on the studied relationship. Leadership relationship and organizational trust have the strongest explanative power for behaviour innovativeness. In particular, the affective component of organizational trust influences the effect of leadership relationship on this form of innovativeness. Besides, affective trust plays a more significant role than cognitive trust in increasing processes innovativeness. However, cognitive trust is more powerful in accounting for development of product innovativeness. The authors discuss managerial implications to the studied sector organizations and suggest some directions for further research.

DOI: http://dx.doi.org/10.5755/j01.em.19.2.8356