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Linking Transformational Leadership, Absorptive Capacity, and Corporate Entrepreneurship

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  • Imran Shafique

    (Department of Management Sciences, COMSATS Institute of Information Technology, Lahore 54000, Pakistan)

  • Masood Nawaz Kalyar

    (Lyallpur Business School, Government College University Faisalabad, Faisalabad 38000, Pakistan)

Abstract

This study aims to analyze the nexus between transformational leadership and corporate entrepreneurship through an integration of dispersed scholarly work on transformational leadership, absorptive capacity, and corporate entrepreneurship under one framework. A survey method was employed for the collection of data from small and medium-sized enterprises (SMEs) of Pakistan. The data were analyzed using structural equation modeling (SEM) technique to empirically test the hypotheses. The results demonstrate that transformational leadership positively affects corporate entrepreneurship and its dimensions—namely, innovation, new business venturing, self-renewal, proactivity, and risk-taking—both directly and through absorptive capacity. The potential of transformational leadership to influence corporate entrepreneurship via absorptive capacity added additional interesting substitutes. Future studies may produce novel insights by examining different leadership styles, settings, or utilizing qualitative technique. Firms should invest to initiate transformational leadership training programs for their managers. Additionally, if these firms are aiming to promote corporate entrepreneurship, they should focus on hiring managers that have attributes of transformational leadership. Furthermore, they should also invest in absorptive capacity to utilize outside knowledge for the enhancement of entrepreneurial activities. This study exploits research work on the relationship between transformational leadership and corporate entrepreneurship in a novel way; it investigates the dimensions of entrepreneurship individually, as well as unidimensionally, and includes the mediating role of absorptive capacity and tests several other hypotheses that previously have been ignored. This study, compared to the existing research, contributes to the impact of transformational leadership on corporate entrepreneurship and absorptive capacity, especially in Pakistan’s business settings.

Suggested Citation

  • Imran Shafique & Masood Nawaz Kalyar, 2018. "Linking Transformational Leadership, Absorptive Capacity, and Corporate Entrepreneurship," Administrative Sciences, MDPI, vol. 8(2), pages 1-17, March.
    • Handle: RePEc:gam:jadmsc:v:8:y:2018:i:2:p:9-:d:138196
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    2. Jerry Selvaseelan, 2018. "Development and Introduction of the Risk-Sentience Auxiliary Framework (RSAF) as an Enabler to the ISO 31000 and ISO 31010 for High-Risk Environments," Administrative Sciences, MDPI, vol. 8(2), pages 1-22, June.
    3. Águeda Gil-López & Unai Arzubiaga & Elena San Román & Alfredo Massis, 2022. "The Visible Hand of corporate entrepreneurship in state-owned enterprises: a longitudinal study of the Spanish National Postal Operator," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1033-1071, September.
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    6. Xie, Xuemei & Wu, Yonghui & Devece, Carlos, 2022. "Is collaborative innovation a double-edged sword for firms? The contingent role of ambidextrous learning and TMT shared vision," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
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    8. Imran Shafique & Masood Nawaz Kalyar & Nadia Mehwish, 2021. "Organizational ambidexterity, green entrepreneurial orientation, and environmental performance in SMEs context: Examining the moderating role of perceived CSR," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 446-456, January.

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