Abstract
Product innovation refers to new products development and improvement of existing products. The importance of product innovation proliferated as the market grows and becomes more diversified. Among SMEs, product innovation is one of the most critical determinants for their survival, growth, and competitiveness. Nonetheless, product innovation among SMEs is still low, owning to various issues and challenges. This study attempts to focus the effect of transformational leadership and organizational culture on product innovation among 36 SMEs in Johor. A SEM-PLS was used to validate the measurement model and develop the path modeling among variables studied. It is found that both transformational leadership and organizational culture are significantly related to product innovation. This finding substantiates previous findings and lends supports to the important roles of both constructs in SME’s development.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Abdullah NH, Shamsuddin, A, Wahab E, Abdul Hamid N (2012) Preliminary qualitative findings on technology adoption of Malaysian SMEs. In: 2012 I.E. colloquium on humanities, science & engineering research (CHUSER 2012), 3–4 Dec 2012, Kota Kinabalu (Unpublished)
Hilmi MF, Ramayah T, Mustapha Y, Pawanchik S (2010) Product and process innovativeness: evidence from Malaysian SMEs. Eur J Soc Sci 16(4):556–565
Sabai K, Ahmad NH, Ramayah T (2010) Product innovation among ICT technopreneurs in Malaysia. Bus Strateg Ser 11(6):397–406. doi:10.1108/17515631011093106
Lee VH, Ooi KB, Tan BI, Chong AYL (2010) A structural analysis of the relationship between TQM practices and product innovation. Asian J Technol Innov 18(1):73–96. doi:10.1080/19761597.2010.9668683
Lee C, Ging LC (2007) SME innovation in the Malaysian manufacturing sector. Econ Bull 12(30):1–12
Ilker Murat A (2012) The impact of green product innovation on firm performance and competitive capability: the moderating role of managerial environmental concern. Proc Soc Behav Sci 62:854–864
Bowen FE, Rostami M, Steel P (2010) Timing is everything: a meta-analysis of the relationships between organizational performance and innovation. J Bus Res 63(11):1179-Mm
Bagchi-Sen S (2001) Product innovation and competitive advantage in an area of industrial decline: the Niagara region of Canada. Technovation 21(1): 45–54, ISSN 0166-4972, http://dx.doi.org/10.1016/S0166-4972(00)00016-X
Damanpour F (1992) Organizational size and innovation. Organ Stud 13:375–402
McMillan C (2010) Five competitive forces of effective leadership and innovation. J Bus Strategy 31(1):11–22
Zafer Acar A, Acar P (2012) The effects of organizational culture and innovativeness on business performance in healthcare industry. Proc Soc Behav Sci 58:683–692
Velencia JCN, Valle RS, Jimenez DJ (2010) Organizational culture as determinant of product innovation. Eur J Innov Manag 13(4):446–480
Lee C (2004) The determinants of innovation in the Malaysian manufacturing sector: an econometric analysis at the firm level. In: Centre on Regulation and Competition (CRC) working papers 30670, University of Manchester, Institute for Development Policy and Management (IDPM)
Rasiah R (1996) Innovation and institutions. Ind Innov Taylor Francis J 3(2):79–102
OECD/Statistical Office of the European Communities, Luxembourg (2005) Oslo manual: guidelines for collecting and interpreting innovation data, 3rd edn. The Measurement of Scientific and Technological Activities. OECD Publishing, Paris
Wang CL, Ahmed PK (2004) The development and validation of the organisational innovativeness construct using confirmatory factor analysis’. Eur J Innov Manag 7(4):303–313
Reuvers M, Van Engen ML, Vinkenburg CJ, Wilson-Evered E (2008) Transformational leadership and innovative work behaviour: exploring the relevance of gender differences. Creat Innov Manag 17(3):227–244
Saad MSM, Mazzarol T (2010) The impact of leadership on organisational innovation performance among Malaysia’s Multimedia Super Corridor (MSC) SMEs, International Conference on Applied Business Research (ICABR)
Matzler K, Schwarz E, Deutinger N, Rainer H (2008) The relationship between transformational leadership, product innovation and performance in SMEs. J Small Bus Entrep 21(2):139–152
Samad S (2012) The influence of innovation and transformational leadership on organizational performance. Proc Soc Behav Sci 57(2012):486–493. doi:10.1016/j.sbspro.2012.09.1215
Gumusluoglu T, IIsev A (2009) Transformational leadership, creativity and organizational innovation. J Bus Res 62:461–473
Tajudin MM, Musa O, Musa NC (2012) Effects of organizational culture, market orientation, and innovativeness towards new product performance amongst Malaysian SMEs. Int J Innov Bus Strateg 1:24–48
Bass BM, Avolio BJ (1993) Transformational leadership: a response to critiques. In: Chemers MM, Ayman R (eds) Leadership theory and research: perspectives and directions. Academic, San Diego, pp 49–80
Schein E (2004) Organizational culture and leadership, 3rd edn. Jossey-Bass, San Francisco
Lory B (2003) The leadership-culture connection: an exploratory investigation. Leadersh Org Dev J 24(6):318–334. doi:10.1108/01437730310494293
Choi J, Sosa JP, Sagas M (2007) The impact of leadership on organizational culture in NCAA Division I and II institutions. J Contemp Athl 2:141–161
Lucas SE, Valentine JW (2002) Transformational leadership: principals, leadership teams, and school culture. Paper presented at the meeting of the American Educational Research Association, New Orleans
Ridgway KA (1998) The relationship of leadership practices and cultural values to organizational effectiveness in small organizations, Kent State University. Doctoral dissertation (Unpublished)
Roth PL, BeVier CA (1998) Response rates in HRM/OB survey research: norms and correlates, 1990–1994. J Manag 24(1):97–118
Fornell C, Larcker DF (1981) Evaluating structural equation models with unobservable variables and measurement error. J Mark Res 18(1):39–50
Nunnally JC (1978) Psychometric theory. McGraw-Hill, New York
Hair JF, Black WC, Babin BJ, Anderson RE (2010) Multivariate data analysis, 7th edn. Prentice Hall, Upper Saddle River
Compeau DR, Higgins CA, Huff S (1999) Social cognitive theory and individual reaction to computing technology: a longitudinal study. MIS Q 23(2):145–158
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer Science+Business Media Singapore
About this paper
Cite this paper
Abdullah, N.H., Hamid, N.A., Shamsuddin, A., Wahab, E. (2016). Exploring the Relationships Among Transformational Leadership, Organizational Culture, and Product Innovation Using PLS-SEM. In: Pyeman, J., Wan Rashid, W., Hanif, A., Syed Mohamad, S., Tan, P. (eds) Proceedings of the 1st AAGBS International Conference on Business Management 2014 (AiCoBM 2014). Springer, Singapore. https://doi.org/10.1007/978-981-287-426-9_13
Download citation
DOI: https://doi.org/10.1007/978-981-287-426-9_13
Publisher Name: Springer, Singapore
Print ISBN: 978-981-287-425-2
Online ISBN: 978-981-287-426-9
eBook Packages: Business and ManagementBusiness and Management (R0)