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Transformational Leadership Facilitates Innovation Capability: The Mediating Roles of Interpersonal Trust

Author

Listed:
  • Lei Hui
  • Sengphet Phouvong
  • Le Ba Phong

Abstract

Innovation capability is widely accepted as an important means to attain sustain competitive advantage for firms before the rapidly changing of business environment and increasingly competitive pressure. The main goal of this study is to explore an effective way to successfully improving innovation capability for firms based on examining the relationship between transformational leadership style, interpersonal trust, and innovation capability of Vietnamese firms. The authors apply Structural Equations Modeling (SEM) to test the impacts of transformational leadership, interpersonal trust on innovation capability by using data collected from 195 participants in Vietnamese firms. The result revealed that transformational leadership and interpersonal trust significantly affect innovation capability. In addition, interpersonal trust mediates the relationship between transformational leadership and innovation capability. The findings highlights the need of practicing transformational leadership to foster employee trust and finally to enhance innovation capability for firms. The findings of this study contribute to filling the theoretical gaps which call for research on antecedent factors of innovation capability.

Suggested Citation

  • Lei Hui & Sengphet Phouvong & Le Ba Phong, 2018. "Transformational Leadership Facilitates Innovation Capability: The Mediating Roles of Interpersonal Trust," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 9(3), pages 1-9, May.
    • Handle: RePEc:jfr:ijba11:v:9:y:2018:i:3:p:1-9
    DOI: 10.5430/ijba.v9n3p1
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    References listed on IDEAS

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    1. Nguyen, Thi Thu & Mia, Lokman & Winata, Lanita & Chong, Vincent K., 2017. "Effect of transformational-leadership style and management control system on managerial performance," Journal of Business Research, Elsevier, vol. 70(C), pages 202-213.
    2. Michelle C. Bligh, 2017. "Leadership and Trust," Springer Texts in Business and Economics, in: Joan Marques & Satinder Dhiman (ed.), Leadership Today, chapter 2, pages 21-42, Springer.
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    Cited by:

    1. AlNuaimi, Bader K. & Singh, Sanjay Kumar & Harney, Brian, 2021. "Unpacking the role of innovation capability: Exploring the impact of leadership style on green procurement via a natural resource-based perspective," Journal of Business Research, Elsevier, vol. 134(C), pages 78-88.
    2. Mahmood Rehmani & Nazia Farheen & Munnawar Naz Khokhar & Afia Khalid & Ali F. Dalain & Huda Irshad, 2023. "How Does Transformational Leadership Stimulate Employee Innovative Behavior? A Moderated Mediation Analysis," SAGE Open, , vol. 13(3), pages 21582440231, September.
    3. Samuel Afriyie & Jianguo Du & Abdul-Aziz Ibn Musah, 2019. "Innovation And Knowledge Sharing Of Sme In An Emerging Economy; The Moderating Effect Of Transformational Leadership Style," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 1-26, June.

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