Organizational leadership capability – a mechanism of knowledge coordination for inducing innovative behaviour

Purpose – The purpose of this paper is to explore how organizational leadership capability as a knowledge coordinating mechanism affects service organization activities towards different stakeholder groups. Design/methodology/approach – The subjects in the case study are four Estonian service companies from the banking and retail industry providing high- and low-skill services, respectively. The data for the study were collected using the Organizational Leadership Capability Questionnaire with a total of 375 employees as respondents, and the organizations’ web sites to analyse corporate social responsibility (CSR). Assessment and analysis of the data included: the measurement of organizational leadership capability; the measurement of CSR communication; and analysis of the results gained from studying issues pertaining to organizational leadership capability as a knowledge coordination mechanism and innovative behaviour in terms of CSR. Findings – Ultimately, the study reveals that organizations with higher intensity of knowledge use in high-skill service industries have greater ability to coordinate knowledge as expressed in terms of organizational leadership capability, which in turn, allows them to behave more innovatively in terms of CSR towards stakeholders. Research limitations/implications – This study suggests that innovative behaviour in organizations towards different groups of stakeholders depends on organizational leadership capability. However, the results of this study are only valid in the context of the Estonia service sector, and more precisely the retail and banking industry. Originality/value – This paper demonstrates the role of organizational leadership capability in the coordination of knowledge to generate innovative behaviour in terms of CSR in service organizations.