Purpose

The purpose of the study is to explore the impact of company leadership and organizational culture in the development of organizational innovation.

Design/methodology/approach

The qualitative approach is applied via 12 interviews from six different organizations, encompassing both service providers and product manufacturers, in the countries of Sweden and Sri Lanka.

Findings

Leadership and organizational culture together influence the development of innovation. The findings suggest that process- and job-oriented culture, as well as transactional leadership, have both positive and negative impacts in developing innovation. Result-oriented, employee-oriented, pragmatic culture and an open system, together with transformational leadership, are found to be more effective.

Research limitations/implications

This study was limited to six organizations, specific industries and national cultures. Researchers could explore in depth to identify which factors particularly lead to the failure or success of innovativeness in a particular industry, through comparing national cultures.

Practical implications

This study helps managers decide how to serve best within the organizational and national culture, while learning about the influential result of the culture and leadership on innovation. With the aid of this study, organizations will be able to identify factors that may help them to be innovative and competitive in the market.

Originality

This study highlights the importance of leadership and organizational cultures effect on an organization's innovation, as well as showing how it improves the companies ability to both meet consumer expectations and contribute to their national economy.