10.59263/gmjacs.14.001.2024.

387 GMJACS, Spring 2024, Volume 14(1)

Global Management Journal for Academic & Corporate Studies (GMJACS)

Spring 2024, Vol.14, No.01, PP. 24-44
(Electronic) Copyright 2024- –Global Management Journal for Academic & Corporate Studies
Published by Bahria Business School, Bahria University Karachi Campus

Transformational Leadership Style and Team Innovation: The Moderating

Role of Leaders’ Emotional Intelligence
Iqra Saeed1*, Aleena Shuja2, Farhat Munir3

Abstract

Organizations around the world continuously confront a wide range of challenges, risks and
obstructions occurring in dynamic and complex business environment. These vulnerabilities keep on
menacing their sustainability and appropriate functioning. Given such uncertain external pressures, the
capabilities of employees working in teams within these organizations have become crucial and by time
evolving as their viable assets. Business leaders are often tested for their agility in response, resource base
sufficiency and innovative outcomes through unpredicted crises. Leading in tough times is itself a toughest
challenge in face of unparalleled environmental pressures. It is therefore important to understand and
explore what entails a successful leadership role for teams to remain innovative given any drastic change
occurs. The objective of intended research was to address gaps in the understanding and comprehension
of team innovation through leadership and leaders’ emotional intelligence in order to identify how leaders
derive their teams in uncertain business environments. This study determined the influence of
transformational leadership on team innovation with emotional intelligence of leaders as a moderating
variable. The results showed that a relationship exists between transformational leadership and innovation
in teams in an uncertain environment. Transformational leadership boosted employee innovation in teams.
Accordingly, emotional intelligence has been seen as ability of leaders to make a set of norms that
recognize employees in teams; yet, unpredicted effect of emotional intelligence on the relationship between
transformational leadership and team innovation has been witnessed in this research.

Keywords: Emotional Intelligence, Online Businesses, Team Innovation, Transformational Leadership,

Uncertain Business Environment.

1 Lecturer, School of Media and Communication Studies, University of Management and Technology, Lahore. *Corresponding author. Email: iqra.saeed@umt.edu.pk
2 Lecturer, Dr. Hasan School of Management, University of Management and Technology, Lahore. Email: aleena.shuja@umt.edu.pk
3 Assistant Professor, School of Social Sciences and Humanities, University of Management and Technology, Lahore. Email: farhat.munir@umt.edu.pk

1. INTRODUCTION changing and complex business environment.

These vulnerabilities keep on menacing their
Organizations around the world
sustainability and appropriate functioning. Given
continuously confront a wide range of challenges,
such uncertain external pressures and
risks and obstructions occurring in an ever
circumstances, the capabilities of employees
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working in teams within these organizations have and threatening risks. Leading in tough times is
become crucial and by time evolving as their itself a toughest challenge in face of drastic
viable assets (Paltzer, 2020). changes and unparalleled environmental
pressures. It is therefore important to understand
Unprecedented changes occurring in the
and explore what entails a successful leadership
environment bring distress for the organizations,
role for teams to remain competitive and
leaders, and employees due to not being
innovative given any drastic change occurs. Real
proactively prepared enough to develop an
time past scenarios and success stories of
effective response to such pressures and
fortune organizations have shown that adaptive
traumas. Leadership role in an organization
and transformational leaders have not only
includes confronting and dealing with
survived but also prospered in circumstances of
unnumbered challenges in a fluid and turbulent
collapse and stressing change. The idea of the
environment. These challenges might comprise
transformational leadership positively impact on
of various factors such as economic and financial
the innovation. For example, transformers
turmoil, internal organizational politics,
leaders act as role model of innovation (Jun and
stakeholder management, regulatory changes,
Lee, 2023). It is also found transformational
resource scarcity and rivalry, technological
leadership and innovation has seen into practice
advancement, competitive rivalry, data and
(Evered, Hartel and Neale, 2001).
information security, acquisition and retention of
experienced and qualified employees, natural 1.1 Pakistan and challenges
disasters, and pandemic caused business
Innovation and creativeness are considered vital
disruptions among many others. For example,
to the development, navigation and progression
organizational innovation has driven by pandemic
of any nation as we have obvious instances of the
COVID-19 and digital transformation to adapt for
developed economies in the world. According to
environmental change (Gabryelczyk, 2020). In
the report of the Global Innovation Index (GII)
the organization, many scholars proposed that
2016, Pakistan ranked 119th among 128 nations.
individual’ innovation is depended on social
The ranking was based on the score obtained on
circumstances a leadership is one of the essential
83 different parameters for innovation. This
contextual factor of the team innovation (Lim, and
indicates that Pakistan lags in keeping pace with
Moon, 2022). Furthermore, it has been noticed
developed as well as emergent developing
that innovative behavior in the team influenced by
nations, and because of the lack of investment
transformational leadership. Similarly, growing
and exploitation in innovation, we are still
literature found a significant association between
combating against same old problems. If we have
transformational leadership and innovation
to make Pakistan a leading country in the world,
(Jung, Chow and Wu, 2021).
we have to promote creativity and innovation
Business leaders are often tested for their (Nayspak, 2017). Pakistan’s flourishing online
agility in response, resource base sufficiency and business scene has merely contributed to digital
innovative outcomes through unpredicted crises innovation. New businesses are inadequate of
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the capable human resources with skillful innovation in their organizations by building and
expertise and monetary investment to capitalize capitalizing upon proactive teams (Yang, 2020).
upon their firms’ innovation. SME sectors are
Team innovation is hardly derived as
slow to exert maximum efforts and pool-in
organizational leaders fail to develop tough teams
resources, resulting in the uneven monetary
having the least capacity to think beyond the box
progression of our Country. Our organizations
and create operational excellence with
majorly lack in terms of institutionalizing
innovation. Our organizational leadership reflects
transformative management and legitimate
defensive behaviors, policies, practices that
governance for motivating teams to bring
prevent its teams from making errors and learning
improvements and inventiveness in existing and
from them, at the same time, prevents them from
new products. Substantial levels of innovation are
discovering the causes of the threats and
restrained in entrepreneurial firms in designing
mistakes being made (Paltzer, 2020).
innovative products due to the lack of self-
Organizational leaders have consciously or
regulatory and positive coping functions
unconsciously induced defensive behaviors
demonstrated by their teams. Organizational
among our teams and made them risk-avoidant,
leaders lack proactive personalities that are a
which is killing for the innovation outcomes. But
significant predictor of team innovative behaviors
to avoid the pitfall of risk-avoidance, leaders have
and outcomes, thus unable to seek and seize the
to mobilize much psychological effort to
opportunities hidden in the external
continuously monitor ‘weak signals’ conducive to
environmental turbulence during hard times
‘big problems’ by capitalizing upon team spirit and
(Nayspak, 2017).
its ability to develop an adaptive response
Pakistan's thin exports’ market shows that almost capacity (Ahmad, 2018).
all entrepreneurial firms, be they big or small, are
1.2 Research gap
engaging their total efforts in previously
discovered marketplaces and products, and Despite its importance, fewer research studies
therefore playing in the same antique rivalry. have been earlier conducted with regard to
Consequently, team innovation also fails in leadership and innovation. Specifically, additional
Pakistan due to not meeting end users’ needs. research calls for investigating the impression of
This is because successful team innovation also a leadership role for the team as well as
requires stimulating triggers, precisely a radical organizational performance (Carmeli et al.,
shift in the market shift or advancement in 2013). Few research studies focusing on the
technology. This requires organizations to leadership roles and their teams in driving a
acquire and capitalize upon innovative and agile company’s innovation have been done despite
teams that bounce forward the adversaries of the rising importance of the issue (Paulsen et al.,
unprecedented crises events. It is hence, 2013). Consequently, it calls for new research
necessary for the persistently struggling seeing the uncertainties, changes and
companies’ leaders to establish a culture of team advancement occurring at a fast pace in the
current business environment. It’s critical to look
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into the dimensions of leadership roles carried by and Umrani, 2019). Extra-effort, effectiveness
the leaders in influencing and sustaining and satisfaction professed by the employees in
innovation in their teams (Hunt & Conger, 1999; public and private organizations reflect a
Avolio and Yammarino, 2002). Simultaneously, significant and positive relationship between
little has been investigated how and really do emotional intelligence and transformational
teams innovate under certain leadership support leadership outcomes of these both variables
in times of large scale turbulence and uncertainty proposed for future research directions. (Biswas
occurrence? Conversely, most of the previous and Rahman, 2017).Prior research found there
researches are centered on transformational has direct impact of transformational leadership
leadership, largely they lack in distinguishing style on the team innovation (Jun and Lee, 2023).
between team creativity and team innovation In sum, transformational leaders also act as
(Hughes et al., 2018). This limits our attention to effective appeal for the team and setting down the
gain knowledge and insights on what traits and best expectations (Aminah et al., 2022).
behaviors are required by the leaders in
The objective of our intended research is to
stimulating innovation and creativity outcomes in
address the identified gaps on the understanding
their teams, hence numerous research gaps
and comprehension of team innovation through
identified in this regard call for further information
leadership and leaders’ emotional intelligence in
instigation over this topic (Anderson, Potocˇnik, &
order to identify how leaders derive their teams in
Zhou, 2014; Mascareño, Rietzschel & Wisse,
uncertain and changing business environments.
2020).Existing researches root their attention
The present study will determine the influence of
towards identifying the most suitable behaviors
transformational leadership on team innovation
and traits constituting effective transformational
with emotional intelligence of leaders as a
leadership role in uplifting their followers’
moderating variable. This research contributes to
innovation, yet integrating it with the emotional
the evolving conceptualization and abstraction of
intelligence of leaders, an emergent idea with its
the relationship established between
strong base for increasing employee satisfaction
transformational leadership and team innovation
and commitment to the job is under researched
in online business organizations sustained by the
(Palmer et al., 2001; Antoniou, 2005; Kumar,
emotional acumen of the leaders in supporting
2014). Moreover, in view of the scarce literature,
their followers for innovative work behaviors
it also imperative to take into account the
(Kumar, 2014). Moreover, transformational style
empirical assessment of the fundamental
of the leaders motivate to team and are positive
mechanism of a team focused transformational
associated with innovative behavior (Bednall et
leadership style for innovation behavior
al., 2018).
outcomes of the teams (Jiang and Wang, 2015;
Afsar and Umrani, 2019). It is recommended to Additionally, this study explains how
examine what is the underlying mechanism that organizational senior management on leadership
links the transformational headship role with position can promote innovation in their working
innovative work performance of the teams (Afsar teams to bring improvements and inventiveness
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in their objectives, processes, products and employees collectively (Rosete and Ciarrochi,
services. Likewise, linking contingent support of 2005). Transformational leadership is one of the
leaders’ emotional intellect in leading their team most studied approaches in current times. From
members for successfully embracing changes in the last three decades it’s the most researched
face of substantial turbulence occurring in the topic in academia and management practitioners
external business environment is also one of the because of its practicality in organizations
salient contributions of this study. In fact, (Northouse, 2010, Ergeneli et al., 2007). In
transformational leadership subsequently regard, Chollathanrattanapong (2022) found that
positively associated with innovative transformational style among the leaders highly
performance of the team (Rampa and Agogue, affected on team innovation behavior and indirect
2020). This research will serve as an eye opener impact on the job characteristics.
and guide for the newly emerging and established
2.1 Transformational leadership and team
entrepreneurial and corporate leaders as well as
innovation
their teams in online business to stay abreast of
the ongoing uncertainties and advancements. In The theory pertaining to Transformational
line with the objective of the study, our research Leadership posits its noteworthy role for leaders
tends to probe the answer to the following to play in stimulating personal development of
question: their followers and teams as well as encouraging
organizational change.
RQ: How do transformational leaders influence
innovation in teams using their emotional This theory endorses the support of the leaders
intelligence within online business organizations? in supporting their teams toward meeting and
exceeding the performance expectations (Avolio,
2. LITERATURE REVIEW
2005). Innovative and R&D intensive
The leadership concept is the assertion organizations rigorously uphold the leader team
of Lord and Freiberg, (1999) who have relationships, where team leaders influence and
researched this area with the basic aim of moving capitalize upon the innovative work performance
away from accepting leaders as individuals who of their employees working in interdependency by
have specific characteristics. They suggested sharing specialized and diverse knowledge and
that the lessons derived from transactional and competencies to maximize innovation outcomes
transformational approaches might end up (Gillespie and Mann, 2004; Su et al., 2020). For
having a greater impact on the ongoing dynamics teams to be innovative, it is important for leaders
of the employees’ demands as well as the to provide them with the opportunities that uplift
organizational demands. Managers need to be in their intellectual and creative capabilities (Hunt,
tune with the employees’ demands, perceptions, 2005; Garcia-Morales et al., 2008; Sauermann
and expectations. However, employees, on the and Cohen, 2008; Herzog, 2008).
other hand, should function as a team rather than Transformational leaders inspire, influence and
just an aggregate of individuals, whereby their challenge their team followers to contest their
managers can represent the general interest of prevailing mindset and for granted assumptions
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by articulating a strong and clear visionary Mahmood et al. (2019) found that
direction, and stimulating their intellectual transformational leadership holds a significantly
capacity to bring change within the organization positive impact on involving teams in creative
(Bass and Riggio, 2006; Eisenbeiss et al., 2008). processes and innovative work designs.
Transformational leaders thus gain a
Team innovation is also incited when
substantially positive impact of team innovation,
transformational leaders present a symbolic
by inspiring a learning motivation in their
picture by exhibiting creative and eccentric
employees and boosting their inventive work
behaviors and action (Bass and Riggio, 2006).
behaviors (Ayob and Zainal, 2011; Wang et al.,
Moreover, for team innovation to be encouraged
2015; Al-Zu’bi at al., 2017; Afsar and Umrani,
within the organizations, transformational
2019) under complex circumstances where they
leadership can play chief role through
feel strong affinity with their task and execute
personalized mentoring and individualized
innovative task actions and behaviors (Li et al.,
attention towards the needs of each team
2019). Leaders especially in retail service stores
member (Bass, 1985). Previous studies
where customer interface is higher, provide
conducted on R&D teams of the organizations
autonomy to their team members in contributing
found a supportive relationship between
to the knowledge they gain while (Jiang and
transformational leadership and revolution
Chen, 2018) interacting with and addressing
actions (Eisenbeiss et al., 2008).
customers’ demands and preferences (Ye et al.,
Transformational leadership helps directly as well
2012; Tho et al., 2020) thus come up with
as indirectly increase innovation in teams through
innovative ideas and ultimately overall team
instilling an atmosphere supportive of novelty and
innovation increases (Mascareño et al., 2020).
advancement (Jung et al., 2003; Pei, 2017).
Moreover, transformational leadership indirect
Transformational champions embed within the
impact on the innovative behavior of the
organization’s creative values among the
employee (Michaelis, Stegmaier and Sonntag,
members of the teams, help them explore new
2009). Similarly innovative behavior has reported
ways of solving problems and provide them a
positive associated with charismatic leadership
healthy creative atmosphere where innovative
style (Jun and Lee, 2023). Results of Khan, Khan
outcomes are highly treasured (Mumford &
and Ahmed (2021), transformational leadership
Gustafson, 1988/; Amabile, 1998). As advocated
found significant association with innovative work
by Mahmood at al. (2019), that creative process
behavior among employee. This leads us to
commitment and involvement of the teams are
propose the following hypothesis:
improved through strongly contributive role
played by their transformational leaders. They H1: Transformational leaders play a substantial
offer flexible and autonomous work environment role in enhancing the innovation in teams
conducive to their creative and innovative
2.2 Emotional leadership as moderator -
outcomes (Li et al., 2016). Under the increased
transformational leadership and team
complexity of the task and innovation support,
innovation
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Kim (2017) studied that leaders who managers with the mediating role of emotional
underestimate emotional intelligence are likely to intelligence (Lam and O’Higgins, 2012). Being a
fail due to their incompetence to motivate leader’s trait, emotional intelligence has a high
followers. Carmeli (2002) acknowledged that significance among leaders as compared to non-
senior managers are successful in the workplace leading individuals employed by multinational
because managerial skills, especially emotional companies in Europe. Meanwhile, Trait EI is
intelligence improves their work attitude. positively associated with tenure and negatively
Managers’ work attitude will, in turn, influence the correlated with gender. Accordingly, the cognitive
performance of employees. Similarly, Emotional ability of mangers is negatively correlated with
Intelligence is often used regarding the ability to age and gender. Afterward, the average tenure
perceive, understand, and manage the emotions was high observed than non-leaders with no
of both the self and others to accomplish personal differences among age and cognitive ability
and collective goals (Goleman, 1999). Emotional (Siegling et al., 2014).
Intelligence can be conceptualized as either
Pervez and Sabir (2019) supposed four gears of
ability (Ciarrochi et al., 1999), a personality trait
transformational leadership including
(Schutte et al., 2010), or a competency that is
inspirational motivation, intellectual stimulation,
required to expand positive attitudes toward work,
admired influence, and individualized
and drive positive practices and better
considerations having been assembled with
performance (Mayer et al., 2000). Emotional
emotional intelligence scores by moderating the
intelligence is considered as an effective attribute
role of gender and age among mangers of public
of leaders and provides support for the growth of
sector banks in Pakistan. Subsequently, age and
an effective leader. Transformational leadership
gender come upon insignificant while
enhances employee commitment with the
transformational leadership and emotional
organization. Manager’s transformational
intelligence are found positively associated with
leadership style and moderating role of emotional
each other. The behavior of transformational
intelligence support employee retention.
leaders is directly associated with emotional
Employees’ effective and efficient performance
intelligence (Sivanathan and Fekken, 2002). The
outcomes show that transformational leadership
organizational structure is the fundamental
and emotional intelligence positively affects
constituent that empowers innovation. Likewise,
employee behavior (Wang and Tao, 2018).
effective leadership helps evolve work
Research studies have advocated that Emotional productivity among nursing staff. As regards,
intelligence moderates the relationship between there has been found a relationship between
transformational leadership and the outcomes of innovative works behaviors with emotional
the employees of large organizations in China. intelligence with statistical measurements that
Job satisfaction is considered the only indicator show that head nurses who have high innovative
to measure the relationship of the work behavior possess higher emotional
transformational leadership style among intelligence (Aladhyani, et al., 2020). Managers’
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interpersonal emotional competencies and regulates the relationship between

transformational leadership style in services transformational leadership and team
industry are positively associated with each other performance and innovation among employees
and enhance supervisors’ focus on human working at MNCs in Malaysia (Kee et al., 2020).
resource development (Vasilago et al., 2018). Organizational Climate has also been assumed
as an effective factor in the practices of innovative
Innovative behavior overlaps with other different
behavior within the organizations. In such a
ideas like innovativeness in the professional
manner, organizational climate depends on
environment, innovative work behavior,
leader and employer impacting and empowering
entrepreneurship, individual activity, and
innovative activities among their teams.
employee-driven innovation. Emotional
Consequently, leadership styles have affected
intelligence is positively correlated with the
innovation within the organizations (Jung and
intelligence of leaders, team psychological
Lee, 2016). Exploratory and exploitative learning
safety, and leader-member exchange on team
of the team has immediate and positive impact on
innovative performance. In order of this, team
team innovation across the role of ambidextrous
innovation performance has comparatively
leadership style among retail services in two
mediated the relations among emotional
cities of Vietnam. By referring Tho et al. (2020),
intelligence of leaders and team innovative
team exploratory learning positively affects by
performance. Simultaneously, leader-member
opening leadership behavior; besides, closing
exchange positively influences team
leadership behavior has a constructive impact on
psychological safety (Wang et al., 2019).
exploitative learning. Managers have to attain
Similarly, emotional leadership helps build up a
emotional intelligence skills for using their
positive workplace and constructively anticipate
leadership role in capitalizing upon innovation
employee performance (Shahong, 2015).
among their employees. A substantial and
Transformational leadership is significantly
positive effect of EI on all the dimensions of TL
associated with innovative work behavior likewise
significantly emphasizes that just managers’
it increases trust on the leader and posts a
professional competencies do not transform their
positive impact on the employee’s work
subordinates but their emotional intelligence
engagement as evidenced among 281 China’s
plays a key role in it. EI has a positive moderating
multinational organizations. Moreover, a
impact on transformational leadership and team
significant sequential mediation among
performance. One of the most important
transformational leadership, trust in leader, work
recommendations indicated that managers have
engagement, and innovative work behavior
to be trained to acquire emotional intelligence
among employees has been perceived (Li et al.,
skills (Hunitie, 2016). Furthermore, sustainable
2019).
leadership can uphold innovation when it
Furthermore, transformational leadership is balances and builds up the referenced
positively associated with team performance and intelligence and related abilities. It is associated
team innovation. Emotional intellect of leaders with cognitive and emotional intelligence due to
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reflecting sustainable leadership, particularly reduced to 4 and hence the reliability index of the
while being innovative, will be introduced (Schüz, TL construct (Mean = 3.8370; SD = .77369) was
2016). The existing literature showing emotional recorded to be 0.743. 6 items of Team innovation
intelligence has direct effect on transformational adapted from Axtell et al. (2000) (designed by
leadership with mediating role of psychological Borrill et al., 1998) based on five points Likert
empowerment of leader (Khan, Khan and Ahmed, scale 1 = ‘Never’ and 5 =‘A Great Deal’. The items
2022). Similarly, leaders with high emotional with lower loadings and insufficient adequacy of
intelligence impact positively on innovative the data were reduced to 5 and hence the Alpha
behavior of the team (Scott and Bruce, 2020). reliability index of the TI (Mean = 3.7478; SD =
Alotaibi (2020) checked the role of .66067) was verified to be 0.645. A 26 items’
transformational leadership and emotional scale of Emotional intelligence was adapted from
intelligence in increasing employee innovative Palmer et al. (2001) and it utilized a five Likert
behavior at work space. Resultantly, following scale (5) Strongly Agree to (1) Strongly Disagree
research hypothesis can be established in view measure on 5 major dimensions consisting of
of the literature support. ‘self-awareness’, ‘empathy’, ‘social skills’,
‘motivation’, and ‘self-regulation’. The items with
H2: The support of transformational leaders for
lower loadings and insufficient adequacy of the
improving innovation in teams is conditional to
data were reduced to 11 and hence the
their emotional intelligence.
Cronbach’s reliability value for the construct EI
3. METHODOLOGY (Mean = 3.4523; SD = .50627) was proved to be
0.666. Garson (2008) recommended a rule of 10.
3.1 Measures, descriptive statistics and
There should be 10 respondents for each
reliability
question used in the research instrument
This research carried out the (Garson, 2008; p.166; cited by Zhao, 2010).
explanatory design by conducting a convenience Thus, the sample comprised 207 respondents
sampling technique endeavoring the relationship with a 38% response rate. The reliability values
between Transformational Leadership (TL) and can be seen as depicted in Table 2 given below.
Team Innovation (TI), keeping Emotional
4. ANALYSIS AND FINDINGS
Intelligence (EI) of mangers as the moderator in
the uncertain business environment. 4.1. Demographics

Moreover, the adapted instrument was divided Table 1 shows the demographic
into four parts, first taken demographics characteristics of the respondents in the chosen
information. The Transformational Leadership sample. Focusing on the greater percentage of
scale was adapted from Carless et al. (2000) with the demographic traits, it can be found that out of
7 items based on a five-point Likert scale 1 as 207 respondents, 51.7% were males, with 55.6%
‘Rarely or Never’ and 5 as ‘Very Frequently’. falling within the age group of 35 to 44 years.
Seeing the items with lower loadings and Almost 84.5% of the respondents were employed
insufficient adequacy of the data, the items were in the private sectors. Concerning the sectoral
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split of the employees working in online service- merely 16% respondents were from other
based businesses, the results showed that industrial sectors. Around 52% of employees
almost 31% of employees represented the were MS/MPhil qualified and having a majority of
education sector, 20% IT firms, 32% banks and working experience of up to 5 years i.e. 43%.

Table 1: Demographic Details of the Sample

Frequency (N = 207) Percentage
Gender
Male 100 48.3%
Female 107 71.7%
Age Group
24-34 91 44.0%
35-44 115 55.6%
45-54 1 0.5%
Type of Employer Organization
Private 175 84.5%
Government 32 15.5%
Industrial Sector
Education 64 30.9%
IT 42 20.3%
Banking 67 32.4%
Other 34 16.4%

Firm’s Age Range

Less than 10 Years 90 43.5%
Less than 20 Years 111 53.6%
Less than 40 Years 6 2.9%
Total 207 100%
Note: Author’s own work

4.2. Correlations significantly and affirmatively correlated (35%, p

< 0.01) with their transformational individualities.
Analyzing the correlations through determining
Conversely, it could be gathered that there was
the association among the variables showed that
marked no evidence on the presence of a
there occurred a significant correlation of nearly
significant relationship between Emotional
28% between Transformational Leadership and
Intelligence of senior managers performing
the Team Innovation (p - value < 0.01), confirming
leadership roles and Team Innovation with an
that for increasing the innovation and incentives
insignificant correlation value of 1.7% (p value >
within teams working in online business, a true
0.01). A compact and summarized view of the
transforming, and inspiration role was executed
correlations, means and SD values along with
and considered important for them. Certainly, the
internal reliability indexes is exhibited below in
Emotional Intelligence of firms’ leaders also was
Table 2.
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Table 2: Descriptive Statistics and Correlation Analysis

Constructs SA EMP SS MOT DR TL TI

SA -
EMP 0.177* -
SS 0.009 0.266** -
MOT -0.120 0.384** -
SR 0.001 -0.094 0.263** 0.452** -
TL 0.152* 0.225** 0.043 0.072 -0.035 -
TI 0.248** 0.031 0.068 -0.082 -0.065 0.288** -
-0.141*
Mean 3.452 3.387 3.748
Std. 0.506 0.775 0.661
Deviation
Reliability 0.666 0.743 0.645
Note: Author’s own work; * Significance level 0.01 level (2-tailed).** Significance at 0.05 level (2-tailed). In Table 2,
TL is Transformational Leadership, TI is Team Innovation, five dimensions of Emotional Intelligence (EI) i.e. SA is
self-awareness, EMP is empathy, SS is social skills, MOT is motivation, and SR is self-regulation.

4.3 Moderation -Hayes Process Approach

The given below Table 3 shows an associated role. Results showed that transformational
illustration of hierarchical moderation regression leadership sustained a significantly positive effect
analysis conducted for organizations dealing in on team innovation in the organizations
online businesses in terms of a basic and an exercising online businesses with β coefficient
interaction model. In order for analyzing the direct equal to 0.288 having significance value sinking
effect of Transformational Leadership on the below 0.05 (β = .288, p = 0.001). This predicts the
Team Innovation, and s well as an significance of the theoretical model and explains
interaction/moderation effect of Transformational that an increase in the value of transformational
Leadership yet again on the Team Innovation in leadership by single unit value brings an increase
online business organizations, a ‘hierarchical in team innovation in a positive direction by
moderation regression analysis’ was conducted. almost 29%.
This helped in assessing both ‘Base Model’ and
Considering the context of organization doing
the ‘Interaction Model’. On successfully satisfying
their businesses online, the results of the analysis
assumptions of regression analysis, moderation
show that for Base Model 1, the predictor variable
regression was directed and established using
i.e. Transformational Leadership has a significant
the Process method.
direct effect on the criterion variable i.e. Team
Before proceeding any further, primarily the Innovation (β = 0.288, p-value = 0.001 < 0.05).
research involved validation and confirmation of This study involves interaction of five moderating
regression’s assumptions followed by variables to determine the contingent impact of
‘Regression Analysis’ that involved determining TL on TI. Similarly, the moderating or regulating
the deviation observed in the level of innovation variable Self-Awareness also shows a direct and
among the teams by their leaders through significantly positive effect on Team Innovation (β
exercising a transformational or change driven = 0.418, p-value = 0.000 < 0.05) showing clear
10.59263/gmjacs.14.001.2024.387 GMJACS, Spring 2024, Volume 14(1)

evidence for the existence of strong support of stimulus of self-awareness among

controlling moderator, Self-Awareness. transformational leaders, which ultimately leads
Contrarily, the controlling variables Empathy, to higher level of innovation in business teams
Social Skills, Motivation and Self-Regulation working in online business during uncertain
exhibit completely insignificant effects on Team times. The statistical results have been exhibited
Innovation having Beta coefficients and p-values in Table 3 shared below. On the other hand, the
as β(EMP) = 0.057, p-value = 0.329 > 0.05; β(SS) results depict that there are completely
= -.195, p-value = .115; β(MOT) = -.146, p-value insignificant interaction based moderating effects
= .325; and β(SR) = -.109, p-value = .349 of Empathy, Social Skills, Motivation, & Self-
respectively. These coefficients contradict the Regulation and Transformational Leadership on
significance of the moderation to create and Team Innovation of the managers such that their
impact and show a true indication for the absence coefficients and significance p-values are 1)
of any support of these four moderators i.e. ‘Interaction Term 1’: β(EMPxTL) = -0.092, p-value
Empathy, Social Skills, Motivation, and Self- = 0.531 > 0.05; 2) ‘Interaction Term 2’:β(SSxTL)
Regulation. = 0.617, p-value = 0.197 > 0.05); 3) ‘Interaction
Term 3’:β(MOTxTL) = 0.156, p-value = 0.803 >
Furthermore, allowing for application of
0.05; and 4) ‘Interaction Term 4’:β(SRxTL) = -
Interaction Model with the product or interaction
0.127, p-value = 0.745 > 0.05) This can be
term between an independent (x) and the
established that in online business organizations,
moderating variables (z1, …, z5) such that the
taking existence of the transformational role of
interaction based relationship between
leaders escorted by their higher levels of social
Transformational Leadership and the five
skills, empathy, motivation and even self-
moderators i.e. Self-Awareness, Empathy, Social
regulation, the innovation with teams remains
Skills, Motivation and Self-Regulation, the results
unaffected. The decline in the value of R2 change
depict that there is a significantly positive
for insignificant moderating variables i.e.
interaction based moderating effect of Self-
∆R2(EMP) = 0.001, p-value = 0.587; ∆R2(SS) =
Awareness and Transformational Leadership on
0.016, p-value = 0.068; ∆R2(MOT) = 0.006, p-
Team Innovation of the managers (β = 0.346, p-
value = 0.272 ; and ∆R2(SR) = 0.005, p-value =
value = 0.000 < 0.05). This can be decided that in
0.325 grounded in moderation effects proves the
online business organizations, taking existence
absence of any influence of social skills,
of the transformational role of leaders escorted by
empathy, motivation and self-regulation among
their higher levels of self-awareness, the
the transformational leaders, which ultimately
innovation with teams substantially increases.
leads to lack of increase in innovation among the
The rise in the value of R2 change i.e. ∆R2 =
business teams working in online business during
0.065, p-value = 0.000 grounded in moderation
uncertain times. The statistical results have been
effect authorizes the existence of a strong
exhibited in Table 3 shared below.
10.59263/gmjacs.14.001.2024.387 GMJACS, Spring 2024, Volume 14(1)

Table 3: Direct and Interaction Effects

Independent Variable Base Model Interaction Model
B t B t
Constant 4.625 7.608* 4.923 8.279*
TL 0.288 5.126* 0.355 5.2106*
SA 0.418 6.2101* 0.320 3.763*
EMP 0.057 0.9788 0.053 0.544
SS -0.195 -1.5844 -0.150 -1.835
MOT -0.146 -0.9858 -0.097 -1.102
SR -0.1094 -0.9389 -0.073 -0.986
TL*SA 0.346 6.3925*
TL*EMP -0.092 -0.6270
TL*SS 0.617 1.2948
TL*MOT 0.156 0.2501
TL*SR -0.127 -0.3258
Adjusted R2 0.113(TL) 0.057*(SA)
-0.007(EMP)
0.008(SS)
-0.002(MOT)
-0.003(SR)
∆R2 0.065*(SA)
0.001(EMP)
0.016(SS)
0.006(MOT)
0.005(SR)
Note: Author’s own work; *p-value < 0.05. In Table 3, Team Innovation is the dependent variable and TL is
Transformational Leadership, five dimensions of Emotional Intelligence (EI) i.e. SA is self-awareness, EMP is empathy,
SS is social skills, MOT is motivation, and SR is self-regulation.

5. DISCUSSION 2011; Prentice and King, 2011; O’Boyle et al.,

2011; Shamsuddin and Rahman, 2014). Results
Drawing upon the Magic Balancing
were deployed on the survey data accumulated
Formula, this study aims to inquire the role of
from 207 employees according to a rule of 10 with
Transformational Leadership (TL) in the Team
a 38% response rate from different sectors from
Innovation (TI) along with the moderating role of
Pakistan.
Emotional Intelligence (EI) of the Leaders during
the uncertain environment. There is a relationship The effort to improve team creativity and team
endured between Transformational Leadership innovation has appeared as an ongoing debate
and Team Performance along with moderating between practitioners, researchers, and
effects on Team Innovation in respect of policymakers. The role of Transformational
knowledge on entrepreneurship (Kee et al., Leadership of a manager is capable of
2020). Previous studies evinced Emotional determining Team Innovation. In particular,
Intelligence relationships with Team according to the H1 hypothesis, Transformational
Performance, which have perceived a significant Leadership was found to have a significantly
positive relationship between emotional positive correlation with Team Innovation. Thus,
intelligence and team performance (Pearmen, transformational leadership has a confined
10.59263/gmjacs.14.001.2024.387 GMJACS, Spring 2024, Volume 14(1)

positive impact on the innovative work design and understand the relationship between leadership
creative process of the team (Mahmood et.al, and innovation (Gunduz et al., 2016). Therefore,
2019) by inspiring a learning motivation of the James et al. (2010) argued at the point when
employees and incentive work behavior (Afsar employees can comprehend and manage their
and Umrani, 2019). On the other hand, own emotions, relationships with others become
Transformational Leadership has observed stronger, and performance increases.
significant and affirmative relationships with
Particularly, emotional intelligence supposed as
Emotional Intelligence. Transformational
an effective attribute of the leaders while
behavior of the managers linked with the
transformational leadership enhanced the
Emotional Intelligence (Sivanathan and Fekken,
commitment of the employees with the
2002) while Jin et al., (2008) also found a liaison
moderating effects of emotional intelligence that
between transformational leadership and
encourages employee retention (Wang and Tao,
emotional intelligence. Hence, regression
2018). Table 4 showed the contingent effect of
analysis involved determining the degree of
emotional intelligence on the relationship
innovation among the team by exercising the
between the transformational leadership and
transformational driven having significance value.
team innovation, the reflected results showed the
Transformational leaders may help employees
significance of two models in which model fit’s
regarding enhanced motivation and intellectual
statistical significance rises (p < 0.05) with an
stimulation meanwhile to share a convincing
increase in R2 value. Oppositely, for Model 2, the
vision to work effectively toward accomplishing a
interaction effect comes out to be insignificant (p
shared goal (Zheng et al., 2016). Beside by
> 0.05). Hence, the value of R2 that the variation
analyzing the idea of Tung (2016) that
and the acute difference instigated in Model 1 is
transformational leaders guide team members to
visibly higher than that of insignificance
be innovative and creative in terms to enhance
established in Model 2. In sum, innovation moves
team performance. Furthermore, there has a
in their teams indicated no variance in a
significant positive impact of transformational
dependent variable then the transformational
leadership on team performance with the
leadership and emotional intelligence alone
mediated effects of Team Innovation on the
impacting team innovation with the ‘R2 Change’
relationship between transformational leadership
= .012 (p = .094). The higher the emotional
and team performance (Kee et al., 2020).
intelligence of the leader, the better they can get
Likewise, looking at the H2 hypothesis entailing themselves as well as others, make positive
that transformational leadership improves team things in the work environment, have an effective
innovation in condition to the existence of relationship with their colleagues, peers, and
emotional intelligence of the leaders. proficiency to improve performance (Jafri et al.,
Subsequently, innovation is viewed as significant 2016). Hunitie (2016) argued that emotional
at the organizational level in manufacturing and intelligence has a moderating impact on
business associations, it is similarly essential to transformational leadership and team
10.59263/gmjacs.14.001.2024.387 GMJACS, Spring 2024, Volume 14(1)

performance. It is associated with cognitive and behavior has moderating effects on the
emotional intelligence (Schüz, 2016). This relationship between transformational leadership
literature driven relationship does not support our and manager performance (Supriyanto et.al,
study’s results for moderating the role of 2018). Although, emotional intelligence appeared
emotional intelligence of transformational leaders as a moderator among the relationship of the
for innovation in their teams. Five-Factor Model (FFM) with employee
creativity (Jafri, 2020) but did not upkeep with our
The results derived from the “Process (Hayes
results.
Process)” technique and overall model
(complete/total effect) reflected that significant 6. CONCLUSION
impact of transformational leadership role on
Encouraging team innovation is
innovation in the teams F (2, 204) = 14.664, p <
progressively a significant leadership function by
0.05 while the complete moderation interaction
referring to the empirical studies, the role of
effect shows a considerable insignificant impact
transformational leadership in inciting team
on team innovation with p-value = 0.738 i.e. p
innovation. Kee et al. (2020) proved that the
greater than 0.05. The following indications from
leadership approach may impact on employee
the analysis showed that the H1 hypothesis
tendency to innovate. This study explored the role
supported which transformational leaders played
of transformational leadership in enhancing
a substantial role in enhancing the innovation in
innovation in teams. A relationship exists
teams. Some facts are behind for supporting the
between the transformational leadership and
relationship among transformational leadership
innovation in teams in an uncertain environment.
and innovative work behavior instilled with
Authors mutually argued that transformational
persuasive inspirations, self-confidence,
leadership among managerial level may boost
direction, vision, and goal. This leadership
employee innovation in the team (Tung 2016).
inspired intellectual stimulation, intrinsic
Accordingly, emotional intelligence has been
motivation, and upheld innovation.
seen as ability in the leaders to make a set of
While the H2 hypothesis was not supported norms that recognize the employee among the
because of the insignificance of the moderating team (Lee, 2019); yet, unpredicted effect of
impact of leaders’ emotional intelligence in the emotional intelligence on the relationship
relationship between their transformational roles between transformational leadership and team
and improvement in and introduction of new innovation has been witnessed in this research.
products and services in online businesses. It The insignificant moderating effects of leaders’
evidently indicates an unsupportive role of H2 as emotional intelligence on the transformational
it does not support the theoretical basis as shown role and innovativeness toward new products and
in Table 4. From here on emotional intelligence services in online business have been inferred
has direct effects on the performance of the from the results of this study.
managers. At the same time, innovative work
 10.59263/gmjacs.14.001.2024.387 GMJACS, Spring 2024, Volume 14(1)

6.1 Future recommendations and transformational leadership to enhance team

Contribution innovativeness. Further research may
investigate the resilience of the transformational
This study showed that the role of the
leadership among professionals with the
transformation leadership style of the leaders in
moderating effects of teams’ emotional
online business might boost the innovativeness of
intelligence. Certain control variables such as
the team. Meanwhile, emotional intelligence is
gender, age group or type of industrial sector can
supposed to moderate the relationship between
be considered on account of future research to
transformational leadership of the leaders and
empirically analyze if emotional intelligence of
team innovation. These following results
leaders causes impact on boosting innovation.
indicated in terms of transformational leadership
Although studies have proved that the emotional
and emotional intelligence ought to be used as
intelligence of the leaders has been associated
maximally to obtain innovation in teams. This
with organizational outcomes/creativity. Future
study showed in the order of transformational
research may explore the direct effects of
leadership has positively impacted on the team
emotional intelligence on team innovation with
innovation. Therefore, different private and public
the intervening effects of the transformational and
sectors should be advised mangers to use
transactional leadership style of the leaders.

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