Transformational leadership influence on organizational performance through organizational learning and innovation

Abstract

This study analyzes the influences of transformational leadership on organizational performance through the dynamic capabilities of organizational learning and innovation. Although these indirect interrelations are very important for improving organizational performance, previous research has not usually explored them. The study confirms these influences empirically, basing the analysis on a sample of 168 Spanish firms. The results reveal that (1) transformational leadership influences organizational performance positively through organizational learning and innovation; (2) organizational learning influences organizational performance positively, both directly and indirectly through organizational innovation; (3) organizational innovation influences organizational performance positively.

Exploring leadership styles for innovation: an exploratory factor analysis

“…Based on the views of respondents in the survey, transformational leadership explains 67.1 percent of the variance and appears as the strongest set of qualities that play a vital role for innovation. Although transformational leadership is accepted widely in the literature as a leadership style in facilitating employee creativity and organisational innovation (García-Morales et al, 2012;Shin & Zhou, 2003), consideration leadership is recognised to a lesser extent. In contrast, this study has identified consideration leadership, which explains proportions of the variance 10.5 percent, as being a complement to transformational leadership in supporting employee creativity and innovation.…”

“…Transformational leadership has generally been considered more effective than other leadership styles in facilitating employee creativity and organisational innovation (García-Morales et al, 2012;Shin & Zhou, 2003). Transformational leaders are those who inspire subordinates to perform and recognise organisational objectives and goals and have the capability to motivate followers beyond expected levels of work standards.…”

Improving organizational learning through leadership training

“…Organizational learning is a well-documented determinant of desirable organizational outcomes such as financial performance, innovation capacity, and customer value (Yukl, 2009, Davis and Daley, 2008, Ellinger et al, 2002, Ellinger et al, 2003, García-Morales et al, 2012, Jiménez-Jiménez and Sanz-Valle, 2011, Baker and Sinkula, 2002, Valencia et al, 2010, Santos-Vijande et al, 2012. The rationale for attempting to improve these outcomes via improving organizational learning is that the subsequent development of new knowledge can reduce the likelihood that a company's human capital will become outdated, thus enabling the skills and knowledge to remain dynamic, and improving organizational performance (García-Morales et al, 2012).…”

“…The rationale for attempting to improve these outcomes via improving organizational learning is that the subsequent development of new knowledge can reduce the likelihood that a company's human capital will become outdated, thus enabling the skills and knowledge to remain dynamic, and improving organizational performance (García-Morales et al, 2012).…”

“…Leadership is one of the most important organizational function that influences the conditions for collective learning (Yukl, 2009, Aragon-Correa et al, 2007, García-Morales et al, 2012, Vera and Crossan, 2004, Berson et al, 2006, Gomez and Ranft, 2003, Beattie, 2006, as it constitutes a process of facilitating individual and collective efforts to learn and accomplish shared goals in the organization (Berson et al, 2006). This influence has been suggested to be both direct and indirect, through leaders' direct actions and communication with employees, or though their role in creating favorable conditions for learning and implementing appropriate supporting activities and structures, respectively (Yukl, 2009, Yukl andLepsinger, 2004).…”