Transformational leadership and employee voice for product and process innovation in SMEs

Abstract

Purpose This study aims to investigate the impact of transformational leadership on the innovation of small and medium enterprises (SMEs) through employee voice behaviors. Drawing from the upper echelon theory, it is hypothesized that employee voice is the mediating mechanism through which transformational leadership affects the process and product innovation in SMEs. Design/methodology/approach Data was collected from 169 SMEs of Pakistan through an online self-administered questionnaire. The proposed hypotheses were tested using partial least squares structural equation modeling (PLS-SEM). Findings Findings confirm that transformational leadership positively affects both process and product innovation in SMEs and employee voice behavior mediates between these relationships. Originality/value This research contributes to both theoretical and practical domains by providing evidence that encouraging employees to raise their voice positively impacts product and process innovation and transformational leadership is a potential organizational factor to shape employee voice and process and product innovation. To the best knowledge, this is the first study that investigates the mediating role of employee voice between transformational leadership and process and product innovation in SMEs and developing country’s context.

The Mediating Effect of Innovation in Between Strategic Orientation and Enterprise Performance: Evidence From Malaysian Manufacturing Small-to-Medium-Sized Enterprises

“…It facilitates a firm’s capability to discern the appropriate resources for integration, thus initiating innovation. Rasheed et al (2020) established that SMEs’ top leadership entrepreneurial attitude effectively helps SMEs engage in the process level of innovation. Taking note of the above discussion, we would like to offer the following hypotheses:…”

“…Product innovation can further protect companies from market and competition turbulence and is one of the critical sources of superior market performance ( Nasir et al, 2017 ). Similarly, process-level innovation empowers SMEs to gain a productivity-based cost advantage that yields efficiency and competitiveness for the firm ( Rasheed et al, 2020 ). Process-level innovation helps SMEs achieve growth and business leadership positions.…”

“…In addition, innovation is a crucial element for any nation’s economic progression that creates competitiveness among industries and substantially influences the firm performance and broadly the economic growth of the nation ( Adedeji et al, 2017 ; Rasheed et al, 2020 ). Innovation leads to superior profitability and competitive advantage that can create new wealth directly and indirectly by altering and enhancing existing resources ( Tutar et al, 2015 ; Pulka et al, 2021 ).…”

“…However, innovation is very narrowly defined as adopting a new idea or program. Innovation can be segregated into a product, process, and business model or management level of innovation ( Rasheed et al, 2020 ). However, product innovation is known at the SMEs level, but scant literature is available on process innovation in SMEs.…”

Innovation, Alliances and Management of Halal Products as Strategies to Increase MSME Competitiveness in the Era of the Covid-19 Pandemic

“…Most of the authors focus on researching how marketing and promotion strategies can survive during a pandemic in general and theoretically without paying attention to aspects of halal values(eg,Rosmadi, 2021 ;) (Utomo et al, 2021). However, very little writing has been done to focus on researching reality and theory, especially product innovation and its halal (eg, Rasheed, Shahzad, & Nadeem, 2021)and alliances (eg, Sugiri, 2020).…”