The Influence Of Transformational Leadership And Competence On Small Enterprise Success In Malaysia: The Mediating Effect Of Innovativeness
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Date
2016-04
Authors
Ng, Hee Song
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
This study predominantly focused the impact of transformational leadership, entrepreneurial opportunity competence, entrepreneurial drive competence, and technical competence on small enterprise success in Malaysia under the mediating effect of innovativeness in product, process and behaviour. Drawing mainly on both the resource-based view and the dynamic capabilities perspective, this study developed a conceptual model to support the relationships. This study also investigated the extent of the mediating effect of product, process and behavioural innovativeness on the four aforementioned relationships. Data was gathered through structured questionnaire from the sampling plan of small enterprise database using purposive sampling method, generating a dataset of 178 respondents as small enterprise owner-managers in Malaysia. Data collected were analysed using both SPSS and SmartPLS. The empirical findings partially confirmed the research model and supported fifteen out of eighteen direct hypotheses. They are : a) transformational leadership was positively related to product innovativeness and behavioural innovativeness respectively; b) entrepreneurial opportunity competence was positively related to product innovativeness and behavioural innovativeness respectively; c) entrepreneurial drive competence was positively related to product innovativeness and process innovativeness respectively; and d) technical competence was positively related to product innovativeness, process innovativeness, and behavioural innovativeness respectively; e) product innovativeness, process innovativeness, and behavioural innovativeness were positively related to financial performance and non-financial performance respectively. In analysis of mediation, the empirical results supported significantly five out of twenty-four hypotheses of the mediated relationships. They are a) behavioural innovativeness mediated the relationship between transformational leadership and financial performance and non-financial performance respectively; b) product innovativeness mediated the relationship between technical competence and financial performance; and c) process innovativeness mediated the relationships between technical competence and financial performance and non-financial performance respectively. This study partially supported the theoretical framework and made both theoretical and practical contributions especially in identifying the significant role of transformational leadership, entrepreneurial opportunity competence, entrepreneurial drive competence, and technical competence on small enterprise success under the mediating effect of innovativeness in product, process and behaviour, which is partially in congruent with the extant literature. The implication is that small enterprises have to leverage on those five distinctive competences for a sustained competitive advantage in the New Economic Model landscape of Malaysia. In summary, this study provides a key pointer towards the development of the five key metrics as a management core in achieving higher success for small enterprises in Malaysia.
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Keywords
Transformational leadership