The last chapter contains the conclusions and recommendations for the study. The conclusion section includes the conclusion for the study. Also, the study provides recommendations for ICT companies in Taiwan and Bosnia & Herzegovina. Finally, recommendations for future research is provided.
Research Conclusions
The purpose of this comparative study was to explore empirically the relationships between transformational leadership, organizational trust, customer relationship management, innovation capabilities and business performance. This research study gathers employees who are working in ICT companies in Taiwan and Bosnia & Herzegovina. Total of 225 employees participated in this study (102 from Taiwan and 123 from Bosnia & Herzegovina). The results were analyzed using the PLS method. A TOKSIP model has been established to offer insights for the various variables and their relationships. The results showed that there is causal effect between independent and dependent variables. From this, some implications are concluded as follows.
First, transformational leadership has a positive and significant impact on organizational trust. This shows that all dimensions of transformational leadership are beneficial to build organizational trust. Within the four findings (pilot test, Taiwanese sample, Bosnian sample, and main study) they all indicated that transformational leadership has the highest path coefficient towards organizational trust among other paths. Transformational leadership is the main factor that affects organizational trust, customer relationship management, innovation capabilities and business performance. This implies that if the company has transformational leader, the revenue of the company will be higher as well as the trust between employees, relationship between customers and innovation.
According to the results obtained in this research study the most dominant dimension is idealized influence behavior. This suggests that employees care the most about the vision of their goal, achieving it, setting up high standards and showing confidence. Followers wish to become like their leaders in the near future.
Second, organizational trust has a positive and significant impact on customer relationship management. The results show that trust in the organization is very important and it will also influence the relationship between the company and customers. Findings also imply that concern for employees is the most dominant dimension for both Taiwan and Bosnia & Herzegovina. It implies that it is very important to understand the feelings of
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employees. Furthermore, it shows the interpersonal communication between employees working in the same workplace has a crucial importance.
Third, customer relationship management has a positive and significant impact on innovation capabilities. It implies that relationship between the organization and customers is very important for innovation the new products. Furthermore, it entails that companies care about customer’s opinion and feedback when they are producing new commodity.
The results of the main study show that production/service customization is the most dominant dimension. It means that employees in this study are trying to make the products that fit customer’s needs. The results for Taiwanese and Bosnian sample are different.
Employees in Taiwan value production/service customization the most while it is not the case for Bosnia & Herzegovina. In the European country employees value win-back management the most. It means that ICT companies in Bosnia & Herzegovina tries to stay in touch with the lost or inactive customers.
Fourth, innovation capabilities have positive and significant impacts on business performance. This study shows similar results as previous studies (Damanpour & Schneider, 2006; Damanpour, Szabat & Evan, 1989; Han, Kim & Srivastava, 1998; Khan &
Manopichetwattana, 1989; Zahra, De Belardino & Boxx, 1988). Previous studies pointed out innovation capabilities have even strong relationship on business performance in collectivist cultures (Rosenbusch, Brinckmann & Bausch, 2011).
The results from the main study proved that process innovation is the most dominant dimension in innovation capabilities. This implies that the method of doing things is very important and helps organizations to remain competitive but also to satisfy customer’s needs.
Lastly, the results showed that the most dominant dimension for business performance is financial performance. Financial performance represents a measurement of the company’s capability to use assets in order to generate revenues.
Research Recommendations
The contribution of the study lies in investigating the effect of transformational leadership on organizational trust, customer relationship management, innovation capabilities, and business performance. This comparative study shows the results of two countries, Taiwan and Bosnia & Herzegovina. Furthermore, these findings can help companies to form the best strategies in order to enhance their organizational trust, customer relationship management, innovation capabilities and business performance.
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In order to improve their organizational trust, companies should have transformational leader. Furthermore, leaders should emphasize idealized influence behavior and intellectual stimulation in the company. It means that the leader should provide a vision to the followers, explain to them how to achieve goals but also to question the ways of solving problems and encourage them to find new methods to solve problems. Additionally, companies should improve intellectual consideration and idealized influence attribute.
Second, in terms of organizational trust and customer relationship management companies should emphasize concern for employees in order to improve customer relationship management. Moreover, companies should improve openness and honesty in the workplace. Having sincere relationship between employees is very important in order to have high organizational trust in the organization.
The results showed that production/service customization is very important in the organization and it will have an impact on business performance. However, results also showed that companies should improve customer information management. In both countries, Taiwan and Bosnia & Herzegovina valued customer information management the least.
Finally, in regards to business performance this study confirms what previous studies found that innovation capabilities have positive effects on business performance. The results showed that employees value more financial performance in Taiwan and Bosnia &
Herzegovina. However, there is room for improvement especially in the market leadership.
The results showed that Taiwanese employees value the most idealized influence behavior, concern for employees, production/service customization, process innovation and market leadership. However, Taiwanese managers should improve on the following least dominant dimensions: idealized influence attributes, openness and honesty, customer information management, product innovation and financial performance. The employees in Bosnia & Herzegovina pointed out the following dimensions as the most dominant: idealized influence behavior, concern for employees, win-back management, process innovation and market leadership. Conversely, Bosnian managers should improve on the following dimensions: intellectual consideration, competence, customer information management, product innovation and financial performance.
Recommendations for Future Research
The following paragraphs will give some recommendations and insights for future studies. First, this study was conducted in two countries, Taiwan and Bosnia & Herzegovina.
Furthermore, the framework TOKSIP Model and the questionnaires can be used in some other
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industries in order to investigate the effect of transformational leadership on business performance. There is a possibility that employees working in other industries value some different characteristics more in the organization.
Future researchers should also take into consideration doing a comparative study not between different countries, but between different industries. It would be of a great importance to discover which dimensions employees from very different industries appreciate the most. The company as well as the leader can have a great impact on employees’
perception of important things in the organization.
The results have showed that the R2 of the business performance was just 33% in the main study of this research. The reason for this result may be that other variables apart from innovation capabilities can affect business performance. Future researchers should think of government policies, corporate social responsibility (CSR) and organizational culture. All these factors may affect the business performance.
Future studies should investigate the variables with the strongest indirect effect, such as transformational leadership on customer relationship management and organizational trust on innovation capabilities. Examining the relationship between these variables could have a different approach in understanding and enhancing business performance. Nowadays, business performance is the most investigated term and realizing factors that influence it would have a great contribution to society.
This research study used the quantitative approach with PLS statistical method to test the TOKSIP Model. In future studies, it is highly recommended to use the qualitative method.
It can definitely find new insights and investigate this topic more into depth. The main disadvantage of quantitative studies is that there are too many questions and respondents do not respond frankly on it. By implementing the qualitative method, the researcher will be able to find answers and will be able to observe it from different perspective. On the other hand, the employees will be more confident and eager to share their opinion.
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APPENDIX A PLS RESULTS
Pilot Test (N=33) Before Bootstrapping
After Bootstrapping
75 Main study (N=225)
Main study Bootstrap 30
76 Taiwan (N=102)
Taiwan Bootstrap 30
77 Bosnia & Herzegovina (N=123)
Bosnia & Herzegovina Bootstrap 30
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APPENDIX B TOKSIP MODEL II
Figure 5.4. TOKSIP model II, developed by Cheng-Ping Shih and Tatjana Tica
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Figure 5.5. PLS structural TOKSIP model II (Main Study, N=225)
80 Table 5.13.
Cronbach’s Alpha Results for All Dimensions (Main Study, N =225)
Constructs Number of Items Cronbach’s Alpha
TL 20 0.894
OT 29 0.858
CRM 8 0.806
IC 9 0.773
BP 10 0.801
Note. TL = Transformational Leadership, OT = Organizational Trust, CRM = Customer Relationship Management, IC= Innovation Capabilities, BP = Business Performance.
Table 5.14.
Measurement Model Results (Main Study, N =225) Constructs Number of Relationship Management, IC= Innovation Capabilities, BP = Business Performance.
Table 5.15.
PLS results for indirect effects between variables (Main Study, N=225)
Bosnia & Herzegovina Relationship Management, IC= Innovation Capabilities, BP = Business Performance.
81 Table 5.16.
PLS Loadings (Main Study N=225)
Note. TLIC = Intellectual Consideration, TLIIA = Idealized influence attributes, TLIIB
=Idealized influence behavior, TLIM = Intellectual Motivation TLIS = Intellectual Stimulation, OH = Openness/honesty, Cfe = Concern for employees, Comp = Competence, Iden = Identification, Reli = Reliability, WbM1 = Win – back management, PS = Product/Service customization, CIM = customer information management, PCI = Process Information, PI = Product Information, FP = Financial Performance, ML = Market Leadership.
Table 5.17.
PLS Path Analysis Results (Main Study N=225) Path Hypothesis β path Adj. Relationship Management,IC = Innovation Capabilities, BP = Business Performance.
Items Loadings Items Loadings Items Loadings Items Loadings
TLIC .805 OH .755 WbM1 .867 FP .910
TLIIA .799 Cfe .876 PS .878 ML .916
TLIIB .891 Comp .772 CIM .801
TLIM .826 Iden .798 PCI .914
TLIS .865 Reli .789 PI .891
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TOKSIP Model II (N=225)
New model before Bootstrapping
New model after Bootstrap 30
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APPENDIX C QUESTIONNAIRE (ENGLISH AND SERBIAN VERSION)
To whom it may concern,
I would like to thank you for the willingness to participate in this study. I am a graduate student in International Human Resource Development (IHRD) at the National Taiwan Normal University. The questionnaire will be used to evaluate the effects of transformational leadership on business performance in ICT companies in Bosnia &
Herzegovina and Taiwan.
In recent years, globalization and technology have exerted considerable influence on customer relationship management, product development, and business performance. The main goal of the study is to evaluate the effects of transformational leadership, organizational trust, customer relationship management, innovation capabilities and business performance.
It will take fifteen to twenty minutes of your time to fill in the questionnaire. All information obtained in this study will be used in research purposed and will be kept confidential. Your help will be highly appreciated.
The questionnaire is divided into six parts, including some basic information at the end of the questionnaire. All questions are closed – ended questions. If you have any questions please feel free to contact me via e-mail: mazalunic@hotmail.com. You can also contact my
The questionnaire is divided into six parts, including some basic information at the end of the questionnaire. All questions are closed – ended questions. If you have any questions please feel free to contact me via e-mail: mazalunic@hotmail.com. You can also contact my