Analyzing Behavioral Reactions to Innovation Driven Strategies for improving Project Performance: Mediating role of Innovative Work Behavior and Emotional Exhaustion

Abstract

In an era of hyper-competition, firms increasingly rely on innovation-driven strategies to enhance sustainability and project performance. Construction firms promote innovative work behavior (IWB) among team members to improve project performance. However, while innovation is critical for meeting industry demands, its implementation often leads to emotional exhaustion among project teams, which may undermine performance. Grounded in self-determination theory (SDT), this study investigates the intermediate mechanisms through which innovation strategies influence project performance, emphasizing the role of IWB as a key driver. Furthermore, the study reveals that emotional exhaustion mediates the relationship between IWB and project performance, offering critical insights into the psychological costs of innovation in high-pressure environments. These findings provide a nuanced understanding of how construction firms can leverage innovation for competitive advantage while mitigating the adverse effects of employee emotional exhaustion and burnout, thereby contributing to both theoretical and practical implications for construction industry.