The role of transformational leadership and knowledge management processes on predicting product and process innovation: An empirical study developed in Kingdom of Bahrain

Organizational innovation has always been considered as a powerful tool to sustain competitive advantage and to provide high value to customers. The purpose of this study is to empirically investigate the role of transformational leadership and knowledge management process on predicting product and process innovation. Data collected from 119 service firms located in Kingdom of Bahrain were used to test a conceptual model encompassing the linkages among transformational leadership, knowledge management process, product innovation, and process innovation. Results of hierarchical regression analyses showed that transformational leadership has direct influence over product and process innovation, and employees’ day-to-day involvement in the knowledge management process such as acquiring, transferring, and applying knowledge have positive associations with product and process innovation. Findings also revealed that knowledge transfer and application partially mediated the relationship between transformational leadership and product innovation; knowledge acquisition and application completely mediated the relationship between transformational leadership and process innovation.