THE INFLUENCE OF TRANSFORMATIONAL LEADERSHIP AND INNOVATION ON ORGANIZATIONAL AND INDIVIDUAL OUTCOMES: EVIDENCE FROM INDONESIA
Keywords:
Transformational Leadership, Innovation, Competitive Advantage, Employee Performance, Theory of contingency leadershipAbstract
In today’s dynamic business environment, companies seeking to maintain or improve their effectiveness are increasingly looking to innovate. In previous literature, the significant association among transformational leadership and innovation has proven by researchers. However, there is a lack of research which explains the role of transformational leadership and innovation in enhancing both, organizational and individual outcomes. Thus, the current study seeks to assess the impact of transformational leadership on employee performance and competitive advantage through innovation. In order to test the research hypotheses, the data is collected from 170 respondents using proportionate stratified random sampling. The collected data is then analyzed using the PLS-SEM technique with the help of SmartPLS 3.2.8 software. The findings of the study confirm the relationship between transformational leadership and innovation. Likewise, the direct effect of innovation on competitive advantage and employee performance is also found to be significant. Finally, the hypothesis of indirect effect of transformational leadership on competitive advantage and employee performance is also supported by the results of the analysis. The research implications, limitations and future research directions are explained in the concluding section of the paper.