Effect of Transformational Leadership and its Components on Organizational Innovation

Document Type : Research Paper


International Business School UTM International Campus, Kuala Lumpur Malaysia


This study tries to expand the understanding of the relationship between transformational leadership and organizational innovation at the organizational level. This research proposes a conceptual framework to explain the components of transformational leadership while focusing on the relationship between each component and organizational innovation. A sample of 219 managers from 63 companies in the top 100 Iranian companies participated in this research. The results of this study support the expected positive relationship between transformational leadership and organizational innovation. Further findings revealed that among five components of transformational leadership (i.e., idealized influence, attributive charisma, inspirational motivation, intellectual stimulation, and individualized consideration) not all but some of the components (including attributive charisma, inspirational motivation, and intellectual stimulation) are positively related to organizational innovation.


Main Subjects

Amabile, T. M. (1998). "How to kill creativity". Harvard Business Review, 76(9), 77-87.
Aragón-Correa, J. A.; García-Morales, V., J. & Cordón-Pozo, E. (2007). "Leadership and organizational learning's role on innovation and performance: Lessons from Spain". Industrial Marketing Management Science, 36(3), 349-359.
Bagozzi, R. P.; Yi, Y. & Phillips, L. W. (1991). "Assessing Construct Validity in Organizational Research". Administrative Science Quarterly, 36(3), 421-458.
Bass, B. (1985). Leadership and performance beyond expectations. New York: Free Press.
Bass, B. & Avolio, B. J. (1997). Revised manual for the Multifactor Leadership Questionnaire. Palo Alto, CA: Mind Garden.
Bass, B.; Avolio, B. J.; Jung, D. & Berson, Y. (2003). "Predicting unit performance by assessing transformational and transactional leadership". Journal of Applied Psychology Bulletin, 88(2), 207−218.
Bass, B. & Riggio, R. E. (2006). Transformational leadership. Mahwah, N.J.: L. Erlbaum Associates.
Brislin, R. W. (1986). "The wording and translation of research instruments". In W. J. Lonner & J. W. Berry (Eds.), Field methods in cross-cultural research. Thousand Oaks, CA, US: Sage Publications, Inc. 137-164.
Chin, W. (1998). "The partial least squares approach to structural equation modeling". In G. A. Marcoulides (Ed.), Modern methods for business researc. Mahwah, NJ: Erlbaum. 295−336.
Damanpour, F. (1991). "Organizational innovation: a meta-analysis of effects of determinants and moderators". Academy of Management Journal, 34(5), 55–90.
Fornell, C. & Larcker, D. (1981). "Evaluating structural equation models with unobservable variables and measurement error". Journal of Marketing Research, 18(1), 39−50.
García-Morales, V. J.; Matías-Reche, F. & Hurtado-Torres, N. (2008). "Influence of transformational leadership on organizational innovation and performance depending on the level of organizational learning in the pharmaceutical sector". Journal of Organizational Change Management, 21(2).
Gardner, W. L. & Avolio, B. A. (1998). "The charismatic relationship: A dramaturgical perspective". Academy of Management Review, 23(1), 32-58.
Götz, O.; Liehr-Gobbers, K. & Krafft, M. (2010). "Evaluation of Structural
Equation Models Using the Partial Least Squares (PLS) Approach Handbook of Partial Least Squares". In V. Esposito Vinzi, W. W. Chin, J. Henseler & H. Wang (Eds.), Springer Berlin Heidelberg. 691-711.
Gumusluoglu, L. & Ilsev, A. (2009a). "Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation". ournal of product innovation management, 26, 264–277.
Gumusluoglu, L. & Ilsev, A. (2009b). "Transformational leadership, creativity, and organizational innovation". Journal of Business Research, 62(4), 461-473.
Hage, J. T. (1998). Organizational innovation: Ashgate.
Henseler, J.; Fassott, G.; Dijkstra, T. K. & Wilson, B. (2012). "Analysing quadratic effects of formative constructs by means of variance-based structural equation modellingw". European Journal of Information Systems, 21, 99–112.
Howell, J. M.; Neufeld, D. & Avolio, B. (2005). "Examining the relationship of leadership and physical distance with business unit performance". The Leadership Quarterly, 16(2), 273−285.
Hsiao, H.-C.; Chang, J.-C. & Tu, Y. (2009). "The influence of transformational leadership and support for innovation on organizational innovation: from the vocational high school teachers' perspective". Paper presented at the 2009 IEEE International Conference on Industrial Engineering and Engineering Management.
Imran, R. & Anis-ul-Haque, M. (2011). "Mediating Effect of Organizational Climate between Transformational Leadership and Innovative Work Behaviour". Pakistan Journal of Psychological Research, 26(2), 183-199.
Jandaghi, G.; Zareei Matin, H. & Farjami, A. (2009). "Comparing transformational leadership in successful and unsuccessful companies". The Journal of International Social Research, 2(6), 356-372.
Javidan, M. & Dastmalchian, A. (2003). "Culture and Leadership in Iran: The Land of Individual Achievers, Strong Family Ties, and Powerful Elite". Building Effective Networks, 17(4), 127-142.
Jong, J. P. J. d. & Hartog, D. N. D. (2007). "How leaders influence employees' innovative behaviour". European Journal of Innovation Management, 10(1), 41-64.
Jung, D.; Chow, C. & Wu, A. (2003). "The role of transformational leadership in enhancing organizational innovation: Hypotheses and some preliminary findings". The Leadership Quarterly, 14(4-5), 525-544. J
Jung, D.; Chow, C. & Wu, A. (2008). "Towards understanding the direct and indirect effects of CEOs' transformational leadership on firm innovation". The Leadership Quarterly, 19(5), 582-594.
Kelley, D. J.; Singer, S. & Herrington, M. (2012). The Global Entrepreneurship Monitor 2011 Global Report: GEM.
Makri, M., & Scandura, T. A. (2010). "Exploring the effects of creative CEO leadership on innovation in high-technology firms". The Leadership Quarterly, 21(1), 75-88.
Muenjohn, N., & Armstrong, A. (2008). "Evaluating the Structural Validity of the Multifactor Leadership Questionnaire (MLQ), Capturing the Leadership Factors of Transformational-Transactional Leadership". Contemporary Management Research, 4(1), 3-14.
Mumford, M. D. (2002). "Leading creative people: Orchestrating expertise and relationships". The Leadership Quarterly, 13(6), 705-750.
Obenchain, A. M. (2002). Organization culture and organizational innovation in not-for-profit, private and public institutions of higher education. D.B.A. 3039605, Nova Southeastern University, United States -- Florida.
Oke, A.; Munshi, N. & Walumbwa, F. (2009). "The Influence of Leadership on Innovation Processes and Activities". Organizational Dynamics, 38(1), 64-72.
Oldham, G. R. & Cummings, A. (1996). "Employee creativity: Personal and contextual factors at work". Academy of Management Journal, 39(3), 607-655.
Read, A. (2000). "Determinants of Successful Organisational Innovation: A Review of Current Research". Journal of Management Practice, 3(1), 95-119.
Reinartz, W.; Haenlein, M. & Henseler, J. (2009). "An empirical comparison of the efficacy of covariance-based and variance-based SEM". International Journal of Research in Marketing, 26(4), 332-344.
Rogers, E. (2005). Diffusion of Innovations. New York, NY: The Free Press.
Sarros, J. C.; Cooper, B. K. & Santora, J. C. (2008). "Building a Climate for Innovation Through Transformational Leadership and Organizational Culture. Journal of Leadership & Organizational Studies, 15(2), 145-158.
Shin, J. (1996). The Effects of Executive Leadership on Organizational Innovation in Nonprofit, Human Service Organizations (HSOs). University of Pittsburgh.
Slappendel, C. (1996). "Perspectives on Innovation in Organizations". Organization Studies, 17(1), 107-129.
Vandenberghe, C. (1999). "Organizational culture, person-culture fit, and
turnover: a replication in the health care industry". Journal of Organizational Behavior, 20, 175-184.
Wold, H. (1975). "Path models with latent variables: The NIPALS approach". In H. M. Blalock, A. Aganbegian, F. M. Borodkin, R. Boudon & V. Capecchi (Eds.), Quantitative sociology: International perspectives on mathematical and statistical modeling. NewYork: Academic Press, 307–357.
Woodman, R. W.; Sawyer, J. E. & Griffin, R. W. (1993). "Toward a Theory of Organizational Creativity". Academy of Management Review, 18(2), 293–321.