Modeling the Effects of Innovative Leadership on Productivity and Profitability

Abstract

The purpose of this paper is to analyse the effects of innovative leadership on organisational productivity and profitability. A deterministic mathematical model using Runge-Kutta integration was utilised to analyse the effect of innovative leadership. A numerical simulation of the model differential equations disclosed how innovation leadership enables a company to change and adapt to its external environment and by implication enhance its performance. The study revealed that without innovative leadership, the production efforts remain stagnant with low productivity and profitability. Due to a change in the production efforts introduced by innovative leadership, an increase in the level of productivity and profitability is observed. The findings further emphasise that productivity increases with time under the innovative leadership. The proposed mathematical model can be broadly used to analyse the effect of innovative leadership on profitability and productivity within different organisations.