How transformational leadership and advanced technologies foster radical innovation : the role of advanced training, organisational learning, innovative climate and capabilities in large firms

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Radical innovation is a key enabler to sustained competitive advantage and long-term success of firms. Despite its importance, there is lack of understanding of what components of a firm are able to best promote this type of innovation in dynamic market environments. Drawing on the dynamic capability theory, this study investigates how transformational leadership as a ‘human factor’ and advanced technology as a ‘machinery factor’ can ‘in parallel’ encourage radical innovation. This study proposes a conceptual framework and empirically tests path-dependent influences of: transformational leadership, advanced technology, advanced training, organisational learning, innovative climate and innovation capability on radical innovation within the specific sphere of large Saudi firms. To fulfil the purpose of this study, a deductive approach was used, and the unit of analysis was at the individual level to examine the hypothesised relationships between factors. Focus group discussions and a pilot-test are applied to ensure content appropriateness and validity of the measurement items in the tested model. The sample for this study consists of seven large firms in four different sectors. The target population includes only employees working in innovative activities in large firms who have first-hand knowledge of organisational features that contribute to the innovation processes. Data were collected via an online survey from seven large Saudi firms in four different sectors, resulting in 237 usable responses for analysis. The hypotheses were examined by employing Structural Equation Modelling (SEM) with the statistical software program AMOS version 24. The conceptual framework of the study was affirmed and supported by empirical results. The results indicate that both transformational leadership and advanced technology are two significant determiners for successful radical innovation in large firms. The findings reveal that both transformational leadership and advanced technology enhance the positive effects of organisational learning and advanced training on innovative climate. An improved innovative climate then has a direct positive influence on innovation capability, which promotes radical innovation. This study contributes to the existing body of the innovation literature by explicating the parallel effect of transformational leadership and advanced technology on cultivation of the innovation capabilities necessary for radical innovation. It enriches the existing literature by explaining how transformational leadership and advanced technology influence organisational learning, advanced training, and innovative climate to create innovation capabilities respectively. Moreover, it contributes to the innovation literature by identifying and addressing that innovative climate is a significant mediating factor on the relationship between both of advanced training and organisational learning on innovation capability. The findings of this study offer a set of implications for practitioners and executives to assist them to support radical innovation outcomes through, for instance, recruiting for and/or developing a preferred leadership style, how technology might be deployed, and ways to configure these in order to produce a more innovative climate in the organisation. Finally, the current study provides a number of avenues for future research on similar topics, including the suggestion to replicate this study within different settings, including other Arabian Gulf and Middle Eastern countries.
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