The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior

Available online at www.rajournals.in International Journal of Management and Economics Invention ISSN: 2395-7220 DOI: 10.47191/ijmei/v11i12.03 Volume: 11 Issue: 12 December 2025 International Open Access Impact Factor: 8.518 (SJIF) Page no. 4869-4882 4869 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior Sabina Đonlagić Alibegović1, Adisa Delić2, Isada Mahmutović3 1,2,3Department of Management, Faculty of Economics, University of Tuzla, Tuzla, Bosnia and Herzegovina ARTICLE INFO ABSTRACT Published Online: 10 December 2025 Corresponding Author: Isada Mahmutović This study analyzes the relationship between leadership style and innovative work behavior of employees in companies in Bosnia and Herzegovina. The empirical research was conducted on a sample of 116 respondents employed in various sectors within the territory of the Federation of Bosnia and Herzegovina. Data were collected using a written survey technique through an adapted questionnaire based on the Multifactor Leadership Questionnaire (MLQ) and the scale for measuring innovative work behavior (De Jong & Den Hartog, 2010). Descriptive statistics, reliability analysis (Cronbach’s Alpha), and correlation analysis were applied for data processing. The results indicate that the transactional leadership style is more pronounced compared to the laissez-faire leadership style. The levels of innovative work behavior of employees showed the highest values in the dimensions of idea exploration and idea generation, while idea promotion and idea implementation were less represented. The correlation analysis revealed that there are statistically significant, but generally low to moderate positive relationships between leadership styles and innovative work behavior. The strongest interrelationships were observed among the different dimensions of innovative work behavior, confirming that innovative activities constitute an interconnected process. Based on the findings, it was confirmed that a high level of innovative work behavior is not present in companies in Bosnia and Herzegovina. The obtained results suggest the need for the development of more contemporary leadership styles and an organizational culture that encourages innovation. KEYWORDS: Transactional Leadership, Laissez-Faire Leadership, Innovative Work Behavior I. INTRODUCTION Innovations can be observed as individuals’ responses to the conditions in which they operate. The need for advancement, the removal of limitations, and the shaping of a new reality are deeply embedded in human nature. From the period of industrialization to technological digitalization, innovativeness has been the driving force of economic and social progress. Today, innovation is increasingly interpreted as a technical or market-related phenomenon, neglecting the fact that this represents only a fragment of a broader process involving both organizations and the people within them. New ideas and initiatives do not emerge in a vacuum, but rather through the interaction between employees and the environment created for them by their leaders. According to Lee et al. (2021, p. 1), innovation represents a source of sustainable competitiveness for an organization, and the role of leaders significantly contributes to enhancing employees’ innovative behavior. The authors point out that greater employee autonomy, as well as increased support and trust from leaders, contribute to the innovative behavior of employees within organizations. Kwon and Kim (2020) define employees’ innovative work behavior as intentional workplace behavior aimed at generating new ideas, developing new products/services, and establishing new processes and procedures within the organization. In order for employees to be able to generate and implement innovative ideas, it is essential that leaders ensure a positive working environment (Udin et al., 2022, p. 42). Previous studies analyzing the relationship between leadership styles and innovative work behavior indicate that leadership styles and innovative behavior do not always demonstrate the same type of association (Zheng et al., 2019; Hansen & Pihl-Thingvad, 2019; Gemeda & Lee, 2020; Novitasari et al., 2021; Agarwal & Gupta, 2021). For “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4870 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 this reason, the present study focuses on transactional and laissez-faire leadership, which represent two markedly different management styles. On the one hand, transactional leadership is based on clearly defined rules that may restrict employees in their innovativeness; on the other hand, laissez-faire leadership lacks clear guidelines and instructions, which often leaves employees without the necessary support to transform their ideas into action. Based on these two approaches, the aim of this study is to examine whether there is a relationship between the two leadership styles and the innovative work behavior of employees in Bosnian and Herzegovinian companies, as well as how this relationship contributes to employee innovativeness. II. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT Although the concept of leadership is neither new nor unexplored, it remains difficult to encompass all interpretations of leadership—everything that leadership represents, influences, and leads to—within a single definition. The very breadth of leadership as a concept reflects its multidimensional nature. Nevertheless, in the literature, leadership is commonly conceptualized and clarified through styles of managing people and processes. According to Wu and Lin (2018), leaders can stimulate employees’ innovative work behavior, but only if they ensure a working environment that supports such innovation; therefore, creating an appropriate innovationdriven work environment represents a primary task of leaders. Transactional leadership theory focuses on the processes of organizing, short-term planning, and control. This leadership style is more suitable for a stable and predictable business environment. The key assumptions of transactional leadership are that people are motivated through rewards and punishments, that subordinates are expected to follow the leader’s instructions, that a clear hierarchy of command exists, that subordinates are not self-motivated, and therefore require supervision (Nawaz & Khan, 2016; McCleskey, 2014; Sadeghi & Pihie, 2012; Armandi, 2003; Howell & Avolio, 1993). This leadership theory assumes that team members accept to follow the leader at the moment they accept the job. A transactional leader organizes work in such a way that subordinates clearly understand their duties and the rewards for successful performance. However, the leader also has the authority to punish subordinates if they fail to meet predetermined standards. It is considered that a leader will be more successful if subordinates assume greater responsibility and if objectives are clearly communicated to them (Khairy et al., 2023; Dong, 2023; Afsar, 2017; Jung, 2001). Moreover, this type of leadership leads to increased productivity since employees are evaluated based on their performance. This may have a motivating effect, as ambitious employees know precisely which rewards they will receive for better performance (Bass et al., 2003). Transactional leadership can be observed through two dimensions: contingent reward and active management by exception. Contingent reward is based on economic and emotional exchange, whereby clear standards and expectations are established along with corresponding rewards for meeting them. Rewards do not necessarily have to be financial; they may also take the form of various benefits such as additional days off or flexible working hours, as well as emotional rewards such as praise or recognition (Antonakis & House, 2013). With regard to management by exception, two forms can be distinguished: active and passive. In active management by exception, the leader participates in the controlling process and actively seeks potential deviations and problems within the organization. The leader reacts promptly to possible violations of predetermined standards and undertakes corrective actions. This negatively affects innovativeness and creativity within the organization, as employees often tend to conceal problems. In contrast, in passive management by exception, the leader allows a wide range of acceptable standards, is not actively involved in supervision, prefers maintaining the status quo, avoids change, and intervenes only when deviations and problems become more than obvious (Kirkbride, 2006). Although transactional leadership has traditionally been viewed through the lens of conventional leadership, numerous studies indicate that its influence on employees’ innovative work behavior is ambivalent. Afsar et al. (2017, p. 31) emphasize that contradictory findings can be explained by organizational culture, structure, and perceptions of individual psychological empowerment. Thus, in their study, Kim and Lee (2011, p. 233) highlight an indirect but positive effect of transactional leadership on employees’ innovative behavior, whereas Öncer (2013) claims that no relationship exists between transactional leadership and innovativeness. Cheng et al. (2014) argue that transactional leadership is positively related to the creativity of middle-level managers, while Afsar et al. (2016, p. 320) report a negative relationship between transactional leadership and employees’ innovative work behavior. The studies by Naqvi et al. (2017) and Škudienė et al. (2018) also identify a negative relationship between transactional leadership and innovative work behavior. According to Alheet et al. (2021, p. 243), the transactional leadership style is more focused on employee performance than on their development and orientation, which places transactional leadership in a negative relationship with innovative work behavior. However, Wahyuni et al. (2024, p. 416) obtained results indicating that transactional leadership affects innovative work behavior, which in turn significantly contributes to improved employee performance. Transactional leadership is often associated with routine tasks and the maintenance of established “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4871 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 performance, yet the authors remind us that it may also have a different dimension. When the rules and rewards within this style are adapted to the actual needs of employees and broader organizational goals, it ceases to be merely a ‘control mechanism’ and can become a driver of new ideas and creative solutions (Wahyuni et al., 2024, p. 416). Laissez-faire leadership implies very limited involvement of the leader in employees’ work (Harold & Holtz, 2015). The leader is passive, avoids decision-making, provides no support to employees, and abdicates all responsibility. Employees often find themselves in conflict over their roles and responsibilities, attempt to usurp the leadership position, or seek guidance elsewhere within the organization (Avolio et al., 1999; Bass, 1997; Govender et al., 2013). The absence of leader involvement in work processes, the conscious delegation of responsibility to others, and the failure to use formal authority may lead to employee insecurity. According to the authors, the deliberate withdrawal from the leadership process may jeopardize employees’ innovative behavior, as it depends on clear and precise instructions and support from leaders (Casida & Parker, 2011; Lundmark et al., 2022; Hu et al., 2023). However, laissez-faire leadership may also exert positive effects on employees’ innovative behavior. The freedom provided by leaders who apply the laissez-faire style may evoke a sense of independence and responsibility among employees due to the trust placed in them to make decisions and complete tasks in their own way, which explicitly affects employee proactiveness and innovativeness (Hobfoll et al., 2018; Wong & Giessner, 2018; Norris et al., 2021; Zheng & Lingli Li, 2024). Previous findings clearly indicate that the laissez-faire leadership style has a dual direction with respect to employees’ innovative behavior. The study conducted by Khan, Aslam, and Riaz (2012) reports a negative relationship between laissez-faire leadership and innovative behavior in the workplace, describing the laissez-faire style as less effective in fostering innovative work behavior. Alheet et al. (2021, p. 243) also argue that laissez-faire leadership negatively affects employees’ innovative work behavior, emphasizing that leaders who practice this style avoid involvement when problems arise, thereby discouraging followers from initiating any innovative activity. Conversely, Yang (2015) highlights the positive side of laissez-faire leadership, noting that leaders who apply this management style allow employees to independently decide how to use available resources, providing them with greater autonomy and flexibility. The sense of power and control through which laissez-faire leaders motivate employees helps them feel successful and encourages them to set new challenges and push the boundaries of their capabilities (Bakker & Van Woerkom, 2017; Wang & Shaheryar, 2020). The study by Ahmed et al. (2019, p. 875) also reports a significant positive correlation between laissez-faire leadership and innovative work behavior. Rassa and Emeagwali (2020, p. 1461) state that laissez-faire leadership has a positive effect on innovative work behavior and advise leaders to allow greater autonomy for their employees, as this enhances their innovativeness. Examining the dual nature of laissez-faire leadership, Zheng and Li (2024) conclude that laissez-faire leadership is associated with employees’ innovative work behavior and may have both positive and negative implications. The authors suggest fostering a supportive work environment, as they believe it substantially contributes to positive outcomes regarding employees’ innovative behavior (Zheng & Li, 2024, p. 14). Starting from the premise that the contemporary global environment is characterized by constant change, increasing market demands, and intensifying competition, it follows that long-term success can be achieved only by organizations that combine efficiency, effectiveness, and innovativeness in their operations. The introduction of innovations and the recognition of new opportunities for development have become vital for the survival and growth of companies in turbulent times. Since innovations are based on individuals’ creative ideas, it is necessary to consider the importance of their roles and personal characteristics in the process of creating and implementing innovative activities (Purc & Laguna, 2019). Kotter (1995) defines employees’ innovative work behavior as their ability to recognize opportunities for change and improvement within their organization and to take the initiative in developing and implementing new ideas and processes in order to exploit such opportunities. Hargadon and Bechky (2006) describe innovative behavior as a collaborative process involving the sharing and integration of diverse knowledge and perspectives. According to Janssen (2003, p. 348), innovative work behavior represents “the intentional generation, promotion, and realization of new ideas within a work role, work group, or organization, aimed at improving the performance of the role, the group, or the organization itself.” Based on this definition, innovative work behavior comprises three dimensions: idea generation, idea promotion, and idea realization. In the first phase (idea generation), employees use their creativity to develop new ideas. Once an idea is developed, its acceptance is required through the acquisition of support and the formation of a coalition of advocates—this phase is referred to as idea promotion. Finally, employees must proceed to the realization of the idea in order to truly be innovative, that is, to transform the idea into a procedure that can be practically implemented within the organization (Scott & Bruce, 1994; Janssen, 2000; Hansen & Pihl-Thingvad, 2019). Seven years later, De Jong and Den Hartog (2010, p. 24) expanded innovative work behavior into four dimensions: idea exploration, idea generation, idea promotion, and idea implementation. According to De Jong and Den Hartog (2010), idea exploration typically precedes idea generation and often occurs accidentally as a result of a problem or opportunity. Such situations motivate individuals to “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4872 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 respond. In the case of threats, the response is urgent in order to eliminate them as quickly as possible, whereas in the case of opportunities, the focus is on improvements and proactivity. In accordance with the above, the following hypotheses were formulated: H1: “Transactional leadership is associated with employees’ innovative behavior in companies in Bosnia and Herzegovina.” H2: “Laissez-faire leadership is associated with employees’ innovative behavior in companies in Bosnia and Herzegovina.” H3: “A high level of employees’ innovative behavior is not present in companies in Bosnia and Herzegovina.” III. METHODOLOGY The empirical study was conducted on a sample of 116 respondents. The research subjects were employees of companies in Bosnia and Herzegovina representing various industries across the entire territory of the Federation of Bosnia and Herzegovina. Within the framework of the primary research (field study), data were collected using the survey method, specifically through a written questionnaire technique. A customized survey questionnaire was employed as the data collection instrument. The questionnaire was developed in accordance with the substantive elements of the research topic. The questions were grouped into the following categories: (1) basic respondent information, (2) employees’ innovative work behavior, and (3) leadership style. The questionnaire included both nominal-scale questions and interval-level questions measured using a Likert scale. The collected data were processed using statistical techniques and methods of both inferential and descriptive statistics. Appropriate software support was used for data processing and analysis, namely Microsoft Excel and IBM SPSS Statistics. The independent variable in this study is leadership style, and the indicators used for its measurement were derived from the leadership style assessment scale, namely the MLQ instrument (Multifactor Leadership Questionnaire), whose indicators are presented in Table 1. Specifically, the Multifactor Leadership Questionnaire used in this research measures two leadership styles: • Transactional leadership, which includes two dimensions and six indicators: Contingent Reward (CR) and Active Management by Exception (AMBE); and • Laissez-faire leadership, which includes one dimension and three indicators (LF). Table 1. Indicators of the MLQ Measurement Instrument Variable Dimensions Code Statement/Indicator Transactional Leadership Contingent Reward (CR) CR1 Your supervisor tells others what they need to do if they want to be rewarded for their work. CR2 Your supervisor rewards or recognizes you when you achieve your goals. CR3 Your supervisor emphasizes what employees can gain for their accomplishments. Active Management by Exception (AMBE) AMBE1 Your supervisor is satisfied when others meet the defined standards. AMBE2 As long as things are functioning well, your supervisor does not change the way things are done. AMBE3 Your supervisor informs others about the standards required for task performance. Laissez-Faire Leadership LF1 Your supervisor is satisfied when employees are allowed to work in the same way at all times. LF2 For your supervisor, everything others want is acceptable. LF3 Your supervisor requires from everyone only what is absolutely necessary. Source: Author’s research The dependent variable of the study refers to employees’ innovative work behavior, which was measured using the adapted methodology developed by De Jong and Den Hartog (2010). Employees’ innovative work behavior was assessed using indicators related to innovative work behavior, encompassing the following dimensions: idea exploration (IE), idea generation (IG), idea promotion (IP), and idea implementation (II). In addition, the survey questionnaire included indicators related to the outcomes of innovative activities (OIA). An overview of these variable indicators is presented in Table 2. The definitions of the variables and indicators (i.e., questionnaire items) measure: “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4873 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 • Innovative work behavior through four dimensions (idea exploration, idea generation, idea promotion, and idea implementation); • Outcomes of innovative activities through five indicators. Table 2. Indicators of the Variables “Innovative Work Behavior” and “Outcomes of Innovative Activities” Variable Dimensions Code Statement/Indicator Innovative work behavior Idea exploration (IE)) IE1 I often pay attention to things that are not part of my formal job duties. IE2 I often look for opportunities to improve things. IE3 I often consider opportunities for innovation. IE4 I often think about how things can be improved. IE5 I often consider new products and services. Idea generation (IG) GI1 I often look for new working methods, techniques, and tools. GI2 I often propose original solutions to problems in the organization. GI3 I often create and present new ideas. GI4 I often explore new ways of performing tasks. Idea promotion (IP) IP1 I often seek support for new ideas. IP2 I often seek approval and recognition for innovative ideas. IP3 I make other members of the organization enthusiastic about innovative ideas. IP4 I try to convince other members of the organization to support innovative ideas. Idea implementation (II) II1 I often transform innovative ideas into usable applications. II2 I systematically introduce innovative ideas into work practices. II3 I try to contribute to the implementation of new ideas. II4 I invest effort in the development of new things. Outcomes of innovative activities OIA1 In my workplace, we often propose ways to improve current products and services. OIA2 In my workplace, we often develop ideas to improve work practices. OIA3 In my workplace, we actively adopt new knowledge. OIA4 In my workplace, we actively contribute to the development of new products and services. OIA5 In my workplace, we make suggestions to improve work organization. Source: Author’s research A total of 116 respondents participated in the study, of whom 62 (53.45%) were male and 54 (46.55%) were female. The largest proportion of respondents (37.93%) belonged to the age group of 25–35 years, followed by those aged 35–45 (27.59%). An equal share of respondents (16.38%) fell into the age groups of 45–55 and under 25, while the smallest proportion of respondents belonged to the age group over 55 (1.72%). Using ownership as a classification criterion, the companies were divided into four groups. According to the results, by far the largest share of companies in the sample—61.21%— were privately owned. State-owned enterprises accounted for 15.52% of the sample, public institutions for 13.79%, while 9.48% of the companies belonged to other forms of ownership. The representativeness of the sample and the validity of the obtained results are further supported by the structure of the companies in which the respondents are employed according to their sector of activity, as presented in Table 3. Table 3. Structure of Companies by Type of Activity Activity Number of Companies % of Companies Manufacturing industry 24 20,69 Service industry 33 28,45 “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4874 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 Banking sector 8 6,90 Insurance sector 3 2,59 Healthcare 7 6,03 Education 15 12,93 Culture 2 1,72 IT sector 13 11,21 Other 11 9,48 Total 116 100,00 Source: Author’s research Based on these data, it can be concluded that the largest proportion of respondents comes from the service and manufacturing sectors, accounting for 49.14%, whereas the smallest proportion of respondents comes from the cultural sector and the insurance sector, together amounting to 4.31%. IV. RESULTS As part of the results analysis, the reliability of the measurement scales was assessed using Cronbach’s alpha coefficient. The obtained values for all applied scales exceeded the threshold of 0.70, indicating a satisfactory level of internal consistency. These findings confirm that the measurement instruments are reliable and suitable for further statistical analysis, as coefficients above 0.70 suggest that the items within each scale are internally consistent and measure the same latent construct. Table 4. Reliability Statistics of the Measurement Scales Used in the Study Measurement scale Cronbach’s alpha coefficient Cronbach’s alpha coefficient based on standardized items Number of items transactional leadership 0,844 0,847 6 laissez-faire leadership 0,703 0,707 3 idea exploration 0,823 0,835 5 idea generation 0,849 0,849 4 idea promotion 0,862 0,862 4 idea implementation 0,889 0,892 4 innovative activity performance 0,912 0,912 5 Source: Author’s research 1) Descriptive Statistical Indicators of Transactional Leadership Style Given that the variables measured by the instrument used in this study were operationalized through indicators of an interval-level measurement scale of a closed type, that is, a five-point Likert scale, a descriptive statistical analysis was conducted. The results of this analysis are presented in Table 5. Table 5. Distribution of Respondents’ Answers for Leadership Indicators Indicator Code Never Rarely Sometimes Relatively often Often, if not always [1] % [1] % [1] % [1] % [1] % Your supervisor tells others what they need to do if they want to be rewarded for their work. CR1 15 12,93 12 10,34 24 20,69 32 27,59 33 28,45 Your supervisor rewards you or gives recognition when you achieve your goals. CR2 16 13,79 16 13,79 22 18,97 26 22,41 36 31,03 Your supervisor emphasizes what employees can gain for their achievements. CR3 15 12,93 19 16,38 21 18,10 33 28,45 28 24,14 Your supervisor is satisfied when others meet the defined standards. AMBE1 3 2,59 13 11,21 16 13,79 26 22,41 58 50,00 As long as things are functioning well, your supervisor does not change the way tasks are performed. AMBE2 11 9,48 16 13,79 23 19,83 30 25,86 36 31,03 “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4875 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 Your supervisor informs others about the standards required for task performance. AMBE3 10 8,62 12 10,34 24 20,69 47 40,52 23 19,83 Your supervisor is satisfied when employees are allowed to always work in the same manner. LF1 6 5,17 20 17,24 44 37,93 29 25,00 17 14,66 For your supervisor, everything others want is acceptable. LF2 25 21,55 26 22,41 35 30,17 17 14,66 13 11,21 Your supervisor requires from everyone only what is absolutely necessary. LF3 18 15,52 21 18,10 25 21,55 30 25,86 22 18,97 Source: Author’s research Following the frequency distribution, descriptive statistical indicators were also calculated for each individual indicator, and the results are presented in Table 6. The same table presents data on the leadership indicators in terms of the mean value (mean), mode, median, and standard deviation within each indicator. Table 6. Descriptive Statistical Indicators of Leadership Indicators Indicator Code Mean Median Mode Standard Deviation Your supervisor tells others what they need to do if they want to be rewarded for their work. CR1 2,48 3,00 4 1,348 Your supervisor rewards you or gives recognition when you achieve your goals. CR2 2,43 3,00 4 1,409 Your supervisor emphasizes what employees can gain for their achievements. CR3 2,34 3,00 3 1,352 Your supervisor is satisfied when others meet the defined standards. AMBE1 3,06 3,50 4 1,152 As long as things are functioning well, your supervisor does not change the way tasks are performed. AMBE2 2,55 3,00 4 1,314 Your supervisor informs others about the standards required for task performance. AMBE3 2,53 3,00 3 1,176 Your supervisor is satisfied when employees are allowed to always work in the same manner. LF1 2,27 2,00 2 1,074 For your supervisor, everything others want is acceptable. LF2 1,72 2,00 2 1,270 Your supervisor requires from everyone only what is absolutely necessary. LF3 2,15 2,00 3 1,347 Source: Author’s research The results of our analysis, presented in Table 6, indicate that the arithmetic means of the leadership indicators range from 1.72 to 3.06, which suggests a generally low level of leadership development across most measurement indicators. Based on the lowest mean values, it can be observed that among the analyzed indicators, the lowest average was recorded for the frequency of the supervisor’s agreement with everything employees want (1.72). For this indicator, the most frequent response given by the respondents, as well as the mode value, corresponded to the answer 2 – “sometimes.” On the other hand, the highest frequency was recorded for the assessment of the supervisor’s satisfaction when employees meet defined standards (3.06). The most frequent response for this indicator referred to frequent occurrence, if not a regular pattern, in supervisors’ behavior in such situations. With respect to data dispersion, it was observed that the lowest variability was recorded for the assessment of the frequency of the supervisor’s satisfaction when allowing employees to always work in the same manner (1.074), while the highest variability, with a value of 1.409, was recorded for the indicator related to providing recognition to employees when they achieve their goals. In order to generalize the analysis of leadership indicators, descriptive statistical measures were also calculated at the variable level. The value of each variable was operationalized as the average value of respondents’ answers across the corresponding indicators. More specifically, the value of transactional leadership was determined as the simple arithmetic mean of the indicators “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4876 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 of contingent reward (CR) and active management by exception (AMBE), while the value of laissez-faire leadership was calculated as the average value of the three corresponding indicators. The results are presented in Table 7. Table 7. Descriptive Indicators of Leadership Styles Variable Mean Median Mode Standard Deviation Transactional leadership 2,57 2,67 3,00 0,971 Laissez-faire leadership 2,04 2,00 2,00 0,978 Source: Author’s calculations Based on the presented results of the mean values, it can be concluded that transactional leadership is developed to a greater extent than laissez-faire leadership in companies in Bosnia and Herzegovina. In order to approach the analysis of employees’ innovative behavior in a more systematic manner, descriptive statistical indicators were also calculated at the level of the elements, that is, the dimensions through which this behavior was observed. For the purpose of ensuring comparability among them, the value of each element was examined through the simple arithmetic mean of its corresponding indicators. The obtained results are presented in Table 8. Table 8. Descriptive Indicators of the Elements of Employees’ Innovative Behavior and Their Outcomes Element / Outcome of Innovative Behavior Mean Median Mode Standard Deviation Idea exploration 3,95 4,20 4,20 0,766 Idea generation 3,81 4,00 3,50* 0,872 Idea promotion 3,42 3,50 4,00 0,967 Idea implementation 3,55 3,50 3,50 0,952 Outcomes of innovative behavior 3,78 4,00 5,00 0,991 Source: Author’s calculations By ranking the obtained mean values, it can be concluded that innovative activities of employees in companies in Bosnia and Herzegovina are predominantly based on idea exploration and idea generation, while activities aimed at their implementation and promotion are carried out with somewhat lower intensity. The overall outcome of conducting all these activities has been rated above average. A. Results of the Correlation Analysis The examination of the relationship between leadership style, employees’ innovative activities, and their respective outcomes was conducted using correlation analysis. Essentially, correlation as a statistical technique describes the direction and strength of the linear relationship between two variables. The strength and direction of the linear relationships among the variables in this study were tested using Pearson’s coefficient of linear correlation, as the most widely recognized measure of linear correlation between random variables. The results of the conducted correlation analysis are presented in Table 9. Table 9. Results of the Correlation Analysis Transactional leadership Laissezfaire leadership Idea exploration Idea generation Idea promotion Idea implementation Outcomes of innovative activities Transactional leadership 1 0,595** 0,315** 0,400** 0,360** 0,338** 0,433** Laissez-faire leadership 1 0,298** 0,203* 0,215* 0,246** 0,251** Idea exploration 1 0,725** 0,527** 0,695** 0,631** Idea generation 1 0,636** 0,715** 0,706** Idea promotion 1 0,665** 0,622** Idea implementation 1 0,718** “The Relationship Between Transactional and Laissez-Faire Leadership Styles and Employee Innovative Behavior” 4877 Sabina Đonlagić Alibegović1, IJMEI Volume 11 Issue 12 December 2025 Outcomes of innovative activities 1 **. Significant correlation at the 0.01 level (2-tailed). *. Significant correlation at the 0.05 level (2-tailed). Source: Author’s calculations The results of the linear correlation coefficients presented in Table 9 indicate that there is a direct, positive relationship between leadership style, employees’ innovative behavior, and the outcomes of innovative behavior, as well as among the interdependencies of their individual elements. In other words, the greater the intensity of one of these variables, the greater the intensity of all the others, and vice versa. For determining the strength of these relationships, the literature offers various interpretations. In order to provide a general orientation, the scale presented in Table 10 was used. Table 10. Interpretation of the Linear Correlation Coefficient Absolute value of the linear correlation coefficient Interpretation 0 Absence of correlation Up to 0,20 Negligible correlation – almost nonexistent 0,20-0,40 Low correlation – weak relationship 0,40-0,70 Moderate correlation 0,70-0,90 High correlation – strong relationship 0,90-1 Very high correlation 1 Complete (perfect) correlation Source: Fazlović, S., Applied Statistics, OFF SET, Tuzla, 2013, p. 353. Based on the obtained results of Pearson’s correlation coefficient and the adopted criteria for categorizing the strength of relationships, it can be concluded that: 1. At the 0.01 significance level, there exists a statistically significant: low positive relationship between transactional leadership and idea exploration (0.315), transactional leadership and idea promotion (0.360), transactional leadership and idea implementation (0.338), as well as between laissez-faire leadership and idea exploration (0.298), laissez-faire leadership and idea implementation (0.246), and laissezfaire leadership and the outcomes of innovative activities (0.251); moderate positive linear relationship between transactional leadership and laissez-faire leadership (0.595), transactional leadership and idea generation (0.400), transactional leadership and the outcomes of innovative activities (0.433), idea exploration and idea promotion (0.527), idea exploration and idea implementation (0.695), idea exploration and the outcomes of innovative activities (0.631), idea generation and idea promotion (0.636), idea promotion and idea implementation (0.665), and idea promotion and the outcomes of innovative activities (0.622); high positive correlation, that is, a strong relationship between idea exploration and idea generation (0.725), idea generation and idea implementation (0.715), idea generation and the outcomes of innovative activities (0.706), as well as between idea implementation and the outcomes of innovative activities (0.718). 2. At the 0.05 significance level, there exists a statistically significant: low positive linear relationship between laissez-faire leadership and idea generation (0.203), as well as between laissez-faire leadership and idea promotion (0.215). The reported results indicate that transactional leadership stimulates innovative processes to a certain extent, but that its influence is not strong, while laissez-faire leadership demonstrates a more passive approach when it comes to employees’ innovative behavior. However, through greater employee autonomy, it can also contribute to innovative behavior. The analysis of the interrelationships among innovative activities confirms that idea exploration, generation, promotion, and implementation are strongly interconnected, and that this relationship directly contributes to an increase in the overall outcomes of innovative activities. Based on the conducted analyses, the first and second hypotheses were confirmed: H1: There is a statistically significant relationship between transactional leadership and employees’ innovative behavior in companies in Bosnia and Herzegovina. H2: There is a statistically significant relationship between laissez-faire leadership and employees’ innovative behavior in companies in Bosnia and Herzegovina. B. Innovative Work Behavior of Employees As previously mentioned several times, employees’ innovative work behavior was examined through four elements: idea exploration, idea generation, idea promotion, and idea implementation. Each of these elements comprised a certain number of indicators that the respondents assessed using a five-point Likert response scale. In order to test the proposed research hypothesis, responses indicating the absence of employees’ innovative behavior were extracted from the collected data. These included responses reflecting either complete or partial disagreement