Strategic Innovation as a Mediator of the Relationship Between Ethical Leadership Practices and Organizational Performance in Health-Sector Non-Profit Organizations in Nairobi County, Kenya

Abstract

Purpose: The study examined whether strategic innovation mediates the relationship between ethical leadership practices and organizational performance among health-sector non-profit organizations in Nairobi County, Kenya. Ethical leadership practices comprised leadership integrity, leadership fairness, and leadership assurance. Methodology: The study was guided by a positivist research underpinning, which used descriptive and explanatory cross-sectional designs. The sampling frame was 394 active registered organizations with 682 eligible senior managers. With the use of Yamane’s formula at a 3% margin of error, 423 respondents were determined. However, after data collection, only 366 respondents provided valid questionnaires for data analysis. Findings: Hierarchical regression results provided evidence that strategic innovation moderately mediated the relationship between ethical leadership and organizational performance. The study concluded that strategic innovation has a statistically significant partial mediating effect on the relationship between ethical leadership and organizational performance. Recommendation: Drawing on the Innovation Diffusion Theory that was used as a foundation of this study, the mediation result suggests that the Theory should distinguish willingness to adopt innovation from institutional capacity for implementation. The trend emerging from this analysis shows that favorable attitudes toward innovation do not instantly produce organizational capability.