Transformational Leadership and Innovation for Competitive Advantage in Large Firms and SMEs

Abstract

The aim of this study is to empirically investigate how transformational leadership (TL) practices encourage innovation for competitive advantage within the specific context of Saudi large firms and SMEs. Despite a profusion of studies noting that innovation strongly contributes to a firm’s performance, there is a dearth of studies about how TL practically encourages organizational innovativeness. Moreover, because many leadership studies are limited in their location to Western nations, further research in a range of different cultural contexts is warranted. This study will address these issues and suggest a conceptual framework that empirically tests the path-dependent influences of: TL, structural capital, relational capital, tacit knowledge sharing and training, on innovation outcomes. This study will employ a mixed methods approach to examine the hypothesized relationships between factors. The findings of this research may emphasize the importance of utilising TL style as a process, rather than through the study of leadership alone, in facilitating innovation.