RIPHAH INTERNATIONAL UNIVERSITY

ISLAMABAD
ADVANCE RESEARCH METHOLOGY
RESEARCH ARTICLE
SUBMITTED TO : DR. KHURRAM SHAHZAD
SUBMITTED BY : ABID HASNAIN
CMS : 9250
DATED : Jana!" #$% 20#&
1
Effects of Transformational Leadership
On
Innovation in Pakistani Private Sector
Abid Hasnain
(abidhasnain2004@gmail.com)
M.S scholar at the Riphah International University Islamabad
Since past three decades the transformational leadership is intriguing management
scholars and organizational psychologists because the earlier work on leadership did not
take into account some outstanding qualities of leadership exhibited by great political and
business leaders of the world.
Transformational leadership also appeals to the interests of business leaders because of
significant revolutions in economy world over. It has challenged the orthodox concept of
reward for work!leadership". Transformational leadership is the need of new world
order business environment which is characterized by cut throat!competition#
uncertainties# instabilities and chaos. Transformational leaders inculcate trust# admiration#
loyalty and respect amongst their followers. $%arbuto# &''(# p. &)*.Transformational
leaders redefine the vision and mission of followers. The transforming approach creates
significant change in the life of people and organizations. $%urns# 1+,)*.Introducing
change often leads to innovation in business practices# technology# environment and
employee behaviors.
The leader transforms and motivates followers through his or her idealized influence#
intellectual stimulation and individual consideration. These leaders encourage followers
to come up with innovative ways to challenge the status quo and to alter the business
environment in order to achieve organizational goals. $%ass# 1+)(*.
Innovation is the successful implementation and execution of creative ideas within an
organization. $-mabile# 1+).# 1++)/ -mabile 0onti# 0oon# 1azenby# and 2erron
1++3*.Transformational leadership communicates to the high order intrinsic motivational
&
needs of the people# enhances their psychological empowerment through inspiration and
aligns their interests with those of the organization thereby giving way to innovation in
order to achieve organizational success.
%enefits of innovation can be reaped at individual as well as organizational level but this
articles aims at investigating the effects of transformational leadership style on
organizational innovation in 4akistani private sector firms. Since there are only a handful
research articles which give insight into the topic undertaken# it would be interesting to
know if transformational leadership exists in 4akistan and does it leave any impact on
individual and organizational potential to create and innovate/ thereby changing the
environment in order to complement the paradigm shift# the market economy and
consumerism has brought to us. The research undertaken is aimed at being beneficial for
leadership students# management scholars# business and political leaders and
organizational psychologists.
L'()!a(!) R)*')+
%urns $1+,)* claimed that 1eadership is one of the most observed and least
understood phenomena on earth". 5r6 and 7ozgat $&''+* defined leadership as the
complex process by which a person influences others# applying his8her leadership
attributes like belief# values# ethics# character# knowledge and skills to accomplish a
mission# task or ob9ective and directs the organization in a way that makes it more
cohesive and coherent." :very researcher defines leadership in his own way definitions.
These definitions changed and vary from time to time. It is very difficult for investigator
to make out one definition of leadership as correct one# everyone define it in his own
perspective $%ass ; -volio# 1++,*.
<esearches during the decade of eighties has proved that transformational leadership
gives rise to self efficacy which in turn ensues creativity among the follower. $=umford
; >ustafson#1++) ; %ass 1++' b*.?ung another researcher has also thrown light on
achieving organizational innovation through adoption of transformational leadership.
0reativity and intrinsic motivation are both linked with supportive supervision. $@ldham
; 0ummings#1++3*.-nother research $1. >umusluoglu ; -. Ilsev# &''+* also proves
.
that a relation exists between transformational leadership and innovation both at
individual and organizational level. - qualitative research studied the impact of three
dimensions of transformational leadershipA vision# individual consideration# and
intellectual stimulation on creativity and innovation of BetherlandsC teachers. $>ei9sel# D.#
%erg# <. van den and Sleegers# 4. 1+++*.
Innovation is defined as adoption of an internally generated or purchased device#
system# policy# program# process# product# or service that is new to the adopting
organization." $Eaft# 1+)&/ Eamanpour ; :van# 1+)F/ Galtman# Euncan# ; 2olbek#
1+,.*.
Transformational leadership brings positive change in organizations. Transformational
leader has a visionary power that builds trust# empower employees# inspire people and
motivate them for accomplishment of a common goal. Transformational leadership
established an inventive atmosphere $?ung et al.# &''.*. It leads to develop the features of
existing products are service or invent the new things or products having unique values
that attracts the customer which is a competitive edge. =any researchers have linked
transformational leadership# change processes and innovation such as creativeness
$ ?aussi and Eionne# &''./ ?ung# &''1/ Shin and Ghou# &''.*# -ccording to %ass and
-volio $1++F* transformational leadership has four facets# intellectual stimulation#
individualized consideration# inspirational motivation and 2ence transformational
leadership increased the level of innovation in an organization. Transformational
leadership has more connection with innovation. :specially# transformational leadership
has been exposed to maintain and encourage innovation# which results for long life of a
business $-ncona and 0aldwell# 1+),*.
There are many definitions of innovation. The word innovation" is derived form the
1atin word novus or new"# and is then again defined as a new idea# method or device"
or the process of introducing something new" $>opalakrishnan and Eamanpour# 1++F*.
Tushman and Badler $1+)3* define innovation as creation of a product# service or process
that is new for a particular business unit. >eneration of an idea and execution of that idea
in productive manner also refers to innovation. :very organization is spending millions to
F
win competition. <egardless of the type or size of organization# leadership is considered
to play an vital role in building teams which perform high.
@rganizations# those depends on technology# should have creativity and innovation for
their existence# competition# expansion and to leadership $?ung et al.# &''./ Tierney et al.#
1+++*. Through innovation# organizations can take a competitive edge over the rest of the
rivals.
T,)-!)('.a/ 0!a1)+-!2
Transformational 1eadership
A 3!-3-4)5 1-5)/ (- ()4( T!an40-!1a('-na/ L)a5)!4,'364 )00).( -n Inn-*a('-n
Individualized
0onsideration
Intellectual
Stimulation
Inspirational
=otivation
Innovation
Idealized
Influence
(
M)(,-5-/-7"
-fter the construction of theoretical framework of the research article# a closed ended
questionnaire is formed for the collection of data. The data is collected from the top level#
middle and lower level employees of the organizations.
Un'( -0 Ana/"4'4
:mployees of 4ublic Sector @rganizations in Islamabad are unit of -nalysis.
T"3) -0 S(5"
ItCs a cross sectional study.
Da(a C-//).('-n M)(,-5
Eata collection method is questionnaire that would be self administered.
Sa13/)
The sample is employees of private sector organizations in Islamabad which are chosen
on the base of 9udgment or purposive sampling
Da(a Ana/"4'4
Eata analysis is done through hypothesis testing
S(a('4('.a/ T--/4
The reliability of the instrument would be checked through S4SS 1,.''# Statistical
4ackage for Social Sciences through 0ronbach -lpha# while loading of the statements
would be checked through :D- analysis once the data has been put into it. The variable
to variable and item to item correlation would be checked and regression would also be
run. The strength of the relationship will be mainly checked through t!test statistics.
3
M)a4!)1)n( 8 S.a/)4
The scale used for estimation of Transformational 1eadership is a self report scale given
by# commonly known as =1DH. It has been tested by many researchers already and has
proved invariant in many studies on a five point likert scale for measuring four sub
factors of T1 the scale has originally had &' statements but this research has reduced it
to 13 statements of self report.
The scale employed for Innovation in this research has 1, statements. It been tested on a
five point likert scale.
H"3-(,)4)4
The above model leads to the following hypotheses.
H#: Individualized 0onsideration has a significant positive effect on innovation in
organizations.
H2:.Intellectual Stimulation has a significant positive effect on innovation in
organizations.
H&: Inspirational =otivation has a significant positive effect on innovation in
organizations.
P'/-( 4(5"
- pilot study was conducted on a sample of thirty bank employees to check the validity
of the instruments which encouraged a further study into the sub9ect.
Ma'n 4(5"
The 0ronbach -lpha reliability Test was conducted on the sample# the alpha value for
Sr.No. Variables/Facets N of Items Cronbach's Alpha
1 T!an40-!1a('-na/ L)a5)!4,'3 #$ 0.9&0
& Idealized Influence F '.F+.
. Inspirational =otivation F '.3.+
F Individualized 0onsideration F '.(F3
( Intellectual Stimulation F '.(+(
3 Inn-*a('-n #: 0.5:&
,
@verall Transformational 1eadership came around '.).' which is quite high# similarly
the overall 0ronbach alpha for Innovation has a value of '.(,. which comes to '.3 after
approximation. The constructs of T1 like idealized influence had a value of '.F+. while
Inspirational =otivation had a value of '.3.+. Individualized considerationIs alpha value
came around '.(F3 and intellectual stimulation value came around six after rounding off.
R)4/(4 8 D'4.44'-n
The participants of the study were 1&( employees of the different private companies in
Islamabad and <awalpindi. :qual employees from each organization was taken. The
employees were from &&!(' years in age. %oth male and female employees were taken.
The response rate was ++ percent because of self administered questionnaires. @nly 1&'
of the 1&( questionnaire were found to be usable in this research.
R)7!)44'-n Ana/"4'4
The regression analysis of T1 component Individualized 0onsideration with Innovation
is as follows.
Ta;/) 2
Regression analysis between Individualized Consideration & Innovation
b S.:. % t p
$0onstant*
Idividualized
0onsideration
F(.+(F &.,(, 13.33+ .'''
1..,3 .1(3 '.3.' ).).1F .'''
<
&
J '..+,
K<
&
J'..+&
The regression analysis of T1 component with Innovation is as follows
)
Ta;/) &
Regression analysis between Inspirational Motivation & Innovation
b S.:. % t p
$0onstant*
Inspirational
=otivation
F3.,+. &.F,+ 1).),3 .'''
1...( .1F1 '.3(, +.F,' .'''
<
&
J '.F.&
K<
&J
'.F&,
The regression analysis of T1 component Intellectual Stimulation with Innovation is as
underA
Ta;/) <
Regression between Intellectual Stimulation & Innovation
b S.:. % t p
$0onstant*
Intellectual
Stimulation
F3.&,) &.3FF 1,.(' .'''
1..(( .1F+ '.3F1 +.'3) .'''
<
&J
'.F11
K<
&J
'.F'3
Ta;/) 5
The regression analysis of T1 component Idealized Influence with Innovation is as
underA
+
Regression between Idealized Influence & Innovation
b S.:. % t p
$0onstant*
Idealized Influence
F1.,,+ ..3FF 11.F3F .'''
1.(3, '.&'1 '.(). ,.)'& .'''
<
&J
'..F'
K<
&J
'...(
It is evident from the results that all of the research hypotheses have been proved. in this
study. -ll of the p values were below '.'(# therefore the above said hypothesis can be
established that a relationship exists between T1 and Innovation.
C-n./4'-n
The results confirm that Transformational 1eadership Style of the Superiors in any
private sector organization in 4akistan can lead to Innovation ; creativity among
employees which ultimately ensues enterprise innovation.
L'1'(a('-n an5 !).-11)n5a('-n4
The results of the study are surprising. Transformational 1eadership has been found to be
significantly and positively related with organizational innovation. 2owever if the same
study is conducted in public sector# the research might turn out differently. -lso the
sample size remained to be a limitation. - larger sample size would also might vary the
results.
1'
R)0)!)n.)4
1. >umusluoglu# -. Ilsev# $&''+*# Transformational leadership# creativity# and
organizational innovation ?ournal of %usiness <esearch 3& F31LF,..
>ei9sel# D.# %erg# <. van den and Sleegers# 4. $1+++*# Transformational leadership and the
implementation of large!scale innovation# 4rograms ?ournal of :ducational
-dministration# Mol. ., Bo. F# pp. .'+!.&).
%erg# <. van den and Sleegers# 4. $1++3a*# NN%uilding innovative capacity and
leadershipOO# in 1eith wood# P.-. $:d.*# International 2andbook of :ducational
1eadership and -dministration# Pluwer# Eordrecht# pp. 3(.!,''.
Eaft# <. 1. 1+)&. %ureaucratic versus non!bureaucratic structure and the process of
innovation and change. In S. %. %acharach $:d.*# <esearch in the sociology of
organizations# vol. 1A 1&+!133. >reenwich# 0TA ?-I 4ress.
Eamanpour# D.# ; :van# Q. =. 1+)F. @rganizational innovation and performanceA The
problem of organizational lag. -dministrative Science Huarterly# &+A .+&!F'+.
Galtman# >.# Euncan# <.# ; 2olbek# ?. 1+,.. Innovations and organizations. Bew 7orkA
Qiley.
11
Appendix
TRANS=ORMATIONAL LEADERSHIP >ML=?@
INSTRUCTIONS
Dollowing statements are designed to assess the ways of your supervisor8immediate
senior adopts in work set!up. 4lease think of your immediate senior and encircle the
items that best match you# according to the following scale.
Bever J 1
Seldom J &
Sometimes J .
@ften J F
-lways J (
Sr.Bo. ST-T:=:BTS <-TIB>S
IDEALIZED IN=LUENCE
1 2e talks about the most important values and beliefs 1 & . F (
& 2e specifies the importance of having a strong sense
of purpose
1 & . F (
. 2e considers the moral and ethical consequences of
decisions
1 & . F (
F 2e emphasizes the importance of having a collective
sense of mission
1 & . F (
INSPERATIONAL MOTIVATION
( 2e talks optimistically about the future 1 & . F (
3 2e talks enthusiastically about what needs to be
accomplished
1 & . F (
, 2e articulates a compelling vision of the future 1 & . F (
) 2e expresses confidence that goals will be achieved 1 & . F (
INTELLECTUAL STIMULATION
+ 2e reexamines critical assumptions to question
whether they are appropriate
1 & . F (
1' 2e seeks differing perspectives when solving
problems
1 & . F (
11 2e gets others to look at problems from many
different angles
1 & . F (
1& 2e suggests new ways of looking at how to complete
assignment
1 & . F (
INDIVIDUALIZED CONSDERATION
1. 2e spends time in teaching and coaching 1 & . F (
1F. 2e treats others as individuals rather than 9ust the
member of the group
1 & . F (
1(. 2e considers the individuals as having different
needs# abilities and aspirations from others.
1 & . F (
13. 2e helps others to develop their strengths 1 & . F (
1&
Questionnaire of Innovation
SCALE:
S(!-n7/" D'4a7!)) D'4a7!)) N)(!a/ A7!)) S(!-n7/" A7!))
1 & . F (
P/)a4) ('.2 -n) -3('-n 0-! )a., A)4('-n +,'., ;)4( 5)4.!';) "-! 0))/'n74
B STATEMENTS # 2 & < 5
1. 7ou think optimistically about the future.
&. 7ou feel enthusiastically about what needs to be accomplished.
.. 7ou articulate a compelling vision of the future.
F. 7ou display a sense of power and confidence.
(. 7ou express confidence that goals will be achieved.
3. 7ou inspire pride in others for being associated with you.
,. 7ou posses the ability to take initiatives in your organization.
). 4ersonal charisma is important for innovation.
+. 4eople 0hallenge the status quo at work place.
1'
.
4eople are afraid to challenge the status quo at work.
11
.
There is a high degree of trust between management and staff.
1&
.
<elationships between =anagement and staff are tense.
1.
.
The working environment is dynamic and fast paced.
1F
.
4eople are encouraged to take risk in their work.
1(
.
=istakes are not tolerated at work place.
13 The organization encouraged innovation.
1, Innovation is not a key organizational goal.
.
1.