The Impact of Adhocracy Organizational Culture, Empowering Leadership, and Organizational Creativity on Firm Performance in Chinese Internet Companies

Xuemei Sun

Authors

Xuemei Sun International College, National Institute of Development Administration, Thailand https://orcid.org/0000-0002-2138-7211

Keywords:

Organizational creativity, Adhocracy organizational culture, Empowering leadership, Higher-order construct, , PLS-SEM

Abstract

Organizational creativity is an important determinant of firm performance nowadays, particularly in Internet companies in China. However, there is a limited amount of research that has investigated the determinants of organizational creativity at the organizational level. This study, grounded in transformational leadership theory, deepens our understanding of the adhocracy organizational culture in China. It demonstrates how empowering leadership can foster organizational creativity, leading to improved firm performance, particularly in knowledge-intensive firms like Internet companies. In total, 138 managers from 41 Internet companies are listed in the top 100 Internet companies listed in the China Internet Enterprise Comprehensive Strength Index (2023) report. The findings of the PLS-SEM analysis showed that ad hoc organizational culture and empowering leadership significantly impact organizational creativity and, in turn, improve firm performance. Moreover, this study also found that empowering leadership can be implemented well as a higher-order construct by using the disjoint two-stage approach. This study fills in the research gaps in transformational leadership theory by particularly focusing on the role of empowering leadership within an organization. In addition, this study also offers recommendations for top management in high-tech industries, especially Internet companies, to invest in developing novel work procedures and operational protocols, encouraging employees with creative ideas and implementation, and solving problems with new approaches.

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