Influence of transformational leadership on organizational innovation and performance depending on the level of organizational learning in the pharmaceutical sector

Abstract

PurposeThis empirical study aims to examine the influence of transformational leadership (TL) on organizational innovation (OI) and performance (OP) depending on the level of organizational learning in technological firms.Design/methodology/approachThe research examined a sample of 164 pharmaceutical firms. A global model is formulated and the hypotheses are tested using structural equations.FindingsFirst, the study shows a positive relation between TL and OI, between TL and OP and between OI and OP. Second, the study verifies that these relationships are more strongly reinforced in organizations with high‐organizational learning than in organizations with low levels of organizational learning. Third, the study supports the theoretical arguments made but not demonstrated empirically in the prior literature.Practical implicationsOrganizational learning takes places in a technological community of interaction in which knowledge is created and expands in a constant dynamic between the tacit and the explicit with cognitive and behavioral change. Organizations with greater organizational learning generate a network of learning that will make it easier for them to learn what they need to know and to innovate, enabling the organization to maintain its competitive position as a technological center. This shows that organizational learning improves relations substantially between TL, OI and OP.Originality/valueThis study serves as a reference for fostering organizational learning in technological firms. Organizational learning improves relations among TL, OI and OP. Previous studies, although contributing to the understanding of the direct and indirect relations among leadership, innovation and performance, have not addressed the different effects depending on the level of organizational learning in these technological firms.

The Impact of Managerial and Adaptive Capabilities to Stimulate Organizational Innovation in SMEs: A Complementary PLS–SEM Approach

“…Leadership style and human resources both have a positive relationship with achieving organizational innovation [76,77]. Many other studies also argue that leadership is positively linked to organizational innovation [78][79][80].…”

Relationship between Innovation and Organizational Performance in Construction Industry in Malaysia

“…For example, in dynamic industries such as pharmaceuticals, electronics, biotechnology and IT, product innovation is essential which demands organizations for continuous product development in order to succeed in the intense competition and fast product evolution environment. These types of industries are considered as research intensive industries that adopt indicators such as Research and Development (R&D) expenditures and capital investments, publications and patents as the common measures for innovation [18].…”

“…Many scholars have endorsed the importance of innovation in determining the performance of an organization [8,18,44,47,48]. These studies were done across different economic sectors around the globe and relate innovation to industries' performance that further recognized the importance of innovation for an economy's success.…”

“…For instance, Bommer and Jalajas [47] claim that "organizations with greater innovation will achieve a better response from the environment, obtaining more easily the capabilities 92 Relationship Between Innovation and Organizational Performance in Construction Industry in Malaysia needed to increase organizational performance and consolidate a sustainable competitive advantage". Garcia-Morales et al [18] suggest that organizations "that concentrate on speed of innovation gain a greater market share which produces high income and high profitability". McMillan [49] denotes innovation brings efficiency and effectiveness -the two main criteria influencing success for long term survival.…”

Knowledge Management Enablers, Knowledge Creation Process and Innovation Performance: An Empirical Study in Tunisian Information and Communication Technologies Sector

“…The same idea was advocated by Wang and Wang (2012) who claimed that explicit and tacit knowledge sharing is positively linked to innovation speed and quality. Garcia-Morales et al (2008) suggested also that innovation is the result of combination of existing knowledge and generation of new knowledge. Cantner et al (2011) highlighted the importance of knowledge management in companies" innovative success.…”