The Impact of Management Styles on Innovation Capabilities in Companies in Latvia

Abstract

The competitiveness of a country and, consequently, economic growth is not possible without innovation. According to the World Economic Forum [13], the methodology for determining competitiveness includes 12 factors determining the competitiveness of a country, which are respectively grouped into four categories, one of which is the innovation ecosystem, which includes business dynamics and innovation capabilities. The management style of a company is of great importance for the development of these capabilities, which can both promote and hinder the aforementioned development. The aim of the study is to investigate the impact of the management styles of company managers on the innovation capabilities of a company. To achieve the aim of the study, a document analysis was conducted on the types of management styles and their relationship with the innovation capabilities of companies, as well as an online survey (CAWI) of Latvian entrepreneurs was conducted in cooperation with the research company Norstat Latvia within a panel of entrepreneurs and business managers. The main results of the study show that the expansion of management functions often occurs together with the creation of new positions and changes in the organizational structure, and also confirm that people who have received education in the management sector more often continue to expand their knowledge in this area, but representatives of other sectors do so less often, especially if they have not chosen to continue their education at higher educational levels. In addition, it is observed that the democratic management style promotes the introduction of digital solutions, while liberal management managers use digital solutions more. The introduction and use of digital solutions is one of the factors characterizing innovation capacity, therefore the results of the study can be interpreted as significant for studying the impact of management styles on the innovation capacity of a company.

Keywords: Management Style, Innovation, Innovation Capabilities

DOI: 10.54941/ahfe1007613