Transformational Leadership and Organizational Innovation: A Study of MNCs in Malaysia

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Date
2009
Authors
Ooi, Hui Ying
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Abstract
The fast paced global changing environment and competition among companies to obtain competitive advantage warrant better leadership qualities and innovation effort. The purpose of this research was to examine the relationship between transformational leadership and organizational innovation. The study also examined the mediator role played by team cohesiveness on the relationship of transformational leadership and organizational innovation. The results of this study showed that the impact of transformational leadership was partially positive and significant on organizational innovation. However, individualized consideration and intellectual stimulation dimension of transformational leadership demonstrated a greater impact on organizational innovation. There was a partially positive and significant relationship between transformational leadership and team cohesiveness. In addition to that, organizational innovation was predicted by team cohesiveness. The mediation test suggested that team cohesiveness did playa mediating role in the relationship. The relationship between rationalized optimism and mutual understanding and expectations was partially mediated by team cohesiveness, while individualized consideration and intellectual stimulation and support for innovation and task orientation was fully mediated by team cohesiveness. Lastly, this research provided several implications to aspiring managers and leaders as organizations are moving towards innovation.
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Keywords
Leadership Transformation , Organizational Innovation
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