The roles of CEO transformational leadership and organizational factors on product innovation performance

Abstract

Purpose The purpose of this paper is to examine the direct and indirect effects of CEO transformational leadership on product innovation performance. This research investigates the mechanism between CEO transformational leadership and product innovation performance, to understand the process through which transformational CEOs exert their influence. Design/methodology/approach This study is a quantitative research. Data were collected from 269 manufacturing firms in Thailand through a mail survey. This research applied a two-step structural equation modeling process. Findings The results indicate that CEO transformational leadership indirectly affects product innovation performance through an innovation culture, organizational learning, and the new product development (NPD) process. CEO transformational leadership has a strong effect on innovation culture and organizational learning. Organizational learning is strongly associated with the NPD process, which significantly leads to product innovation performance. By integrating the knowledge of leadership and operations management fields, this study helps extend the understanding of how leaders at the top of an organization influence the NPD process and product innovation outcomes. Practical implications For practical implications to be more effective, CEOs focusing on product innovation should develop their skills and behaviors of transformational leadership to foster innovation culture and organizational learning, which in turn will affect product innovation performance. Originality/value This study makes a contribution to the literature by filling the research gaps proposed by several prior studies and offering a theoretical framework of the relationship between CEO transformational leadership and product innovation performance.

Transformational Leadership: A Catalyst for Innovation Creation in the Workplace

“…It could thus be argued that transformational leadership has an impact on the foundations of innovation as the transformational leadership impacts the culture in organisation. In defining a clear vision for the organisation, transformational leadership including the CEO direction and vision for the organisation sets up the culture that eventually influences organisational direction including the culture and behaviour of the employees (Sattayaraksa & Boon-itt, 2017). This is an important factor as the culture in the organisation potentially leads employees to always think of innovation in their processes and activities thereby leading to increased innovation in the organisation (Sattayaraksa & Boon-itt, 2017).…”

“…In defining a clear vision for the organisation, transformational leadership including the CEO direction and vision for the organisation sets up the culture that eventually influences organisational direction including the culture and behaviour of the employees (Sattayaraksa & Boon-itt, 2017). This is an important factor as the culture in the organisation potentially leads employees to always think of innovation in their processes and activities thereby leading to increased innovation in the organisation (Sattayaraksa & Boon-itt, 2017). In addition, the culture of innovation has an impact on the approach of employees with an innovative thinking culture being a driver of the resulting innovation of the organisation (Sattayaraksa & Boon-itt, 2017).…”

“…This is an important factor as the culture in the organisation potentially leads employees to always think of innovation in their processes and activities thereby leading to increased innovation in the organisation (Sattayaraksa & Boon-itt, 2017). In addition, the culture of innovation has an impact on the approach of employees with an innovative thinking culture being a driver of the resulting innovation of the organisation (Sattayaraksa & Boon-itt, 2017). In particular, the culture of innovation means that the organisation can develop an innovation climate in which innovation is a feature that is expected from the functions, teams and individuals thereby leading to an internal environment that expects innovation in the development of solutions for the organisation (Jaiswal & Dhar, 2015).…”

Enhancing Integrity to Strengthen Organizational Performance of Local Authorities in Malaysia

“…In this context, Lentz (1981) looked at a more comprehensive notion of organizational performance from multidisciplinary perspective notably (i)environment-performance linkage, (ii) environment and organization structure, (iii) structure of an organization as principal determinant of performance, (iv) strategy, organization structure and performance, (v) environment, strategy and performance (vi) administration and performance. Besides that, other dimension such as transformational leadership and product innovation performance (19) and intellectual capital-knowledge management (20) also had been discussed with regard to organizational performance. Nevertheless, effectiveness and efficiency remain as the focal point of all organizational theories (21).…”

The Effect of Transformational Leadership on Company Innovation Culture: Perspectives from the Service Sector of an Emerging Economy

“…This calls for a research into this; but more importantly, the study is premised on the fact that, investigations into the factors affecting innovation have been the concern of numerous empirical studies (e.g. Anderson, Potočnik & Zhou, 2014;Molina-Castillo& Manuera-Aleman, 2009) and there has been some researches which have established relationships between transformational leadership and innovation culture (Sattayaraksa & Boon-itt, 2018;Xeniko, 2017). Research has shown that under certain market conditions, firms are able to innovate and also learn new ways of doing things.…”