Enhancing And Sustaining Organizational Innovative Performance Through Transformational Leadership

This paper reports the findings of a study examining the influence of leadership in enhancing and sustaining innovation performance among small and medium enterprises (SMEs) within Malaysia’s Multimedia Super Corridor (MSC). Data were collected from 87 respondents who are the top managers of the SMEs asking about their leadership styles, their firms’ strategic orientation and innovation performance. Partial Least Squares (PLS) Structural Equation Modelling (SEM) were utilized to test the research framework. Transformational leadership was found to have a significant influence on the firms’ innovation performance. Subsequently, whilst the study found that product innovation was able to further enhance the firms’ innovation performance, prospector strategic orientation was found not to have similar influence on the firms’ innovation performance. The findings from this study provide a valuable insights and lessons on the importance of leadership, particularly transformational leadership and the tangible aspect of product innovation, in driving the firms’ innovative performance. Hence, it is crucial for managers of an innovation intensive SME operating in dedicated corridor like MSC to be aware of their leadership style and its impact of their firms’ survival