In this paper, we study the impact of leadership style among middle level managers of Iran Khodro, the biggest Iranian automaker, to promote innovation among regular workers. The proposed study designed a questionnaire and distributed it among middle level managers of this auto-maker. The study uses t-student test to examine the relationship between leadership behavior components and innovation and Freedman test is employed to rank the effects. The results of t-student values indicate that all leadership behavior of middle level have positive influence on innovation and Freedman test implied that stimulating knowledge diffusion was number one priority followed by intellectual stimulation and innovative role-modeling. We have also performed multi-regression analysis and the results have indicated that there were some positive relationship between leadership components and innovation.

Leadership is one of the most important components of management in any business unit. An organization with good leadership tends to have a better chance to survive in todays’ competitive environment. This paper considers the effects of leadership style on innovation in one of the biggest automakers in Iran named Iran Khodro. The proposed study of this paper designs a questionnaire and distributes it among a sample of 278 regular employees and 61 middle level managers of this firm. The results of the survey indicate that there is a meaningful difference between leadership style and standard leadership style among middle level managers when the level of significance is five percent. In addition, there is a meaningful difference between innovation and its components with standards among regular employees. Finally, leadership has positive and meaningful impact on employees’ innovation.