The Effects of Transformational Leadership on Organizational Performance through Knowledge and Innovation^*

Abstract

Today's information and knowledge society requires new leaders who can confront a reality based on knowledge and foster innovation to achieve improvements in organizational performance. However, organizations sometimes fail to achieve sustainable competitive advantage due to their limited understanding of the relationships between these strategic variables. To date, very little research has analysed the direct and indirect relationships between these variables. Our study seeks to fill this research gap by analysing theoretically and empirically how the leader's perceptions of different intermediate strategic variables related to knowledge (knowledge slack, absorptive capacity, tacitness, organizational learning) and innovation influence the relation between transformational leadership and organizational performance. Based on the literature, we develop a theoretical model that shows the interrelations between these variables. We then test the model using data from 408 Spanish organizations, discuss the findings and provide several implications for business practitioners.

How CEOs And TMTs Build Adaptive Capacity In Small Entrepreneurial Firms

“…TMT BI and SDC were shown to increase adaptability, which is crucial for the viability of small entrepreneurial firms. In so doing, we extend research that seeks to unravel TMT attributes and processes shaped and facilitated by transformational leaders in their pursuit of innovative, entrepreneurial and effective organizations (Garcia-Morales et al, 2008;Ling et al, 2008).…”

“…Thus, positive TMT dynamics and supporting processes need to be in place so that both the availability of information and the willingness to share and analyse it will allow for strategic capacities to emerge and develop. We posit that transformational leadership creates a work environment in which followers are motivated to cooperate with others (Shamir et al, 1993), a common mentality is shaped (Garcia-Morales et al, 2008), and communication networks for transfer of knowledge are strengthened (Senge, 1990;Slater and Naver, 1995). Specifically, CEO transformational leadership is exercised through TMT BI as an enabling mechanism and through SDC as a strategic decision process.…”

“…The Behavioral Theory of the Firm (Cyert and March, 1992) argues that while small firms may operate under the guidance of the entrepreneur, larger firms include coalitions of individuals or groups that participate in setting goals and making decisions. Nevertheless, the issue of how CEOs facilitate strategic decision-making processes in TMTs , influence organizational processes (Garcia-Morales et al, 2008) and help to build adaptability (Nadkarni and Herrmann, 2010) remains elusive. Hambrick (1994) noted that a focus on TMT behavioural integration (BI), which refers to the extent to which a TMT is engaged in a mutual and collaborative interaction (Hambrick, 1994), may explain adaptive and maladaptive organizational responses to changing environments (Hambrick, 1998), but this line of research still needs further theoretical development and empirical evidence (Hambrick, 2007;Simsek et al, 2005), particularly in the context of small entrepreneurial firms (Johnson et al, 2003;Lubatkin et al, 2006).…”

Supervisors’ Transformational Leadership: Personality and Management Practices as Antecedents

“…С трансформа-ционным лидерством связана эффектив-ность командной работы [Judge, Bono, 2000;Dionne et al, 2004]. Трансформационное лидерство усиливает «поглощающую спо-собность» (absorptive capacity), рыночную ориентацию и готовность к обучению, не-обходимые для осуществления инноваций и организационных изменений [Garcia-Morales, Llorens-Montes, Verdu-Jover, 2008;Kraft, Bausch, 2016]. Оно оказывается по-зитивно связанным и с социальной эффек-тивностью бизнеса, повышая общее каче-ство трудовой жизни работника [Arnold et al, 2007], оценку работниками своего ру-ководителя как этичного [Bass, Steidlmeier, 1999;Brandt, Laiho, 2013].…”

The Management of Leadership and Innovation

“…Not only this, such leadership also acts to guide and motivate members of said organization towards their common goal, hence a clear vision must be established. [9] By motivating workers to create and share knowledge, along with the implementation of innovative learning, these leaders are building and strengthening their company's leadership foundations [10]. Scott and Bruce (1994) found that leader's behavior did indeed predict climate for innovation within organizations through the Leader Member Exchange Theory (LMX).…”