Preparing for the fourth industrial revolution: Investigating the relationship between leadership 4.0, innovative management practices and organisational performance capabilities

Master Thesis


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Background It is believed that the fourth industrial revolution (4IR) will bring about unprecedented change to the world, ultimately having such a deep impact that some argue it may change human life at its core. It is believed that many organisations will not survive the radical disruption that will ensue. On the contrary, some authors have argued that the 4IR will bring about many benefits and opportunities for organisations, as with previous revolutions, provided it is managed effectively by business leaders. Rationale for the research study There is a growing consensus that existing leadership styles and management practices may not be suitable for organisational performance for the 4IR. It has, therefore, been suggested that different theories, models or approaches to leadership will be required if organisations are to remain competitive and sustainably successful in a business context that will look very different to what leaders have been accustomed to. It is argued here that Leadership 4.0 and innovative management practices, may have merit in this context. Aim of the study This present study was an exploratory attempt to investigate the relationship between Leadership 4.0, innovative management practices and organisational performance capabilities for the 4IR. For the purposes of this study, 1) a range of leadership theories/models/approaches/styles, including Transactional Leadership, Transformational Leadership and Leadership 4.0; 2) innovative management practices, including human resource management, organising and information sharing, risk management and stakeholder management as they compare to the old and new economy; and 3) organisational performance capabilities, including human capital, digital risk management and business model value creation were investigated. Research Design, Sampling and realised sample An exploratory research design was followed, utilising a mixed method approach. A crosssectional approach was taken to data collection, with a composite questionnaire designed for the purpose of this study utilised to collect data. A realised sample of n=61 respondents, mainly 4 from local, privately owned, knowledge-intensive organisations was obtained using a convenience sampling approach. Statistical analyses Pearson correlation and hierarchical multiple regression were utilised to estimate the relationships among the abovementioned constructs. Mediation analyses utilising the PROCESS macro was employed to test whether the relationship between Leadership 4.0 and organisational performance capabilities was mediated through innovative management practices. Results Statistically significant positive relationships were found between Leadership 4.0, Innovative Management Practices and Organisational Performance Capabilities. A regression model indicated that Leadership styles statistically significantly predicted the most variance in Organisational Performance Capabilities. Results further determined that Transactional Leadership explained a unique variance in risk management and digital risk management. Lastly, the test for mediation indicated that innovative management practices partially mediated the relationship between Leadership 4.0 and organisational performance capabilities. Findings: Findings from the results supported various discussions and studies in the literature and in practice that leadership, specifically Leadership 4.0, is an important element to navigating the uncertainties and challenges presented by the 4IR. Further evidence was also found in support of contingent leadership theories. Managerial Implications The findings of the present research study holds a practical implication for organisations in that the findings support the literature suggesting that leadership is a key element in organisational performance capabilities, specifically for survival and sustainability for the 4IR. The findings further contributes to a growing body of knowledge surrounding the 4IR, leadership, innovative management practices and organisational performance fields of research.