The last chapter will be divided in four parts. First, research conclusions were elaborated.
Second, limitations are presented. Third, recommendations for practitioners and Casa Pellas were proposed and finally recommendations for future research are provided.
The purpose of this study was to measure the effect of transformational leadership on Innovation and business performance, while analyzing other work environment variables such as empowerment and climate for innovation in an integrated model (TECIP Model). The selected company in which this research was conducted is called Casa Pellas. Casa Pellas participated in this research and 292 online questionnaires were received and analyzed by using Partial least square (PLS) technique.
Conclusion
The enhanced Model of transformational leadership, empowerment, climate for innovation, innovation performance and Performance (TECIP Model) by Cheng-Ping Shih, Ph.
D and Olga Peña Orochena, integrates the variables into one framework providing a coalition structure capable of representing the causal sequences and to measure the effect of transformational leadership, empowerment, climate for innovation and innovation have on business performance. Additionally, the high validity and reliability values of the instrument of this study suggested that TECIP model was an adequate framework to measure the variables under study.
The main advantage in the current study over earlier studies is that the researcher intended to present a more complete picture regarding the relationship of an effective leadership on empowerment and climate for innovation, likewise the relationship of these variables empowerment and climate for innovation on innovation, and finally the relationship of innovation on business performance, which it is the main purpose of every business enterprise to exceed the competition and deliver sustained and superior returns to the stakeholders.
The findings widen the validity of Bass (1985) and Jung, Chow and Wu (2003) model in three specific ways: (a) Transformational leadership directly and positively predicted empowerment. (b) Transformational leadership directly and positively predicted climate for innovation. (c) Climate for innovation directly and positively predicted Innovation. A brief ending is provided by each relationship presented as follow:
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First, results of the present study indicated that transformational leaders positively contributed to the achievement of innovation in the unit. Additionally, the highlight value in the idealized influence imply the importance for leaders to play a “role model”, namely, the greater variation regarding certain moral behaviors such as trust, integrity, honesty will produce larger changes in leadership.
Second, leaders who displayed transformational leadership behaviors can enhance perceptions of empowerment and climate for innovation. Although the researcher was unable to observe directly the relationship among leaders and subordinates in Casa Pellas, it was found that stimulation on the leader part help to make the subordinates think through issues and problems for themselves, encouraging them in turn, to think in different angles allowing them to be more creative. Also the results indicated that according respondent’s perceptions the business unit has been flexible and continually adapting to change. All of these factors have enabled a higher employee’s work efficiency, introduction of new services that have added value to the business unit.
Third, the more transformational behaviors are displayed, the more favorable the climate for innovation will be. Findings within climate for innovation placed supply for resources with the highest practical significance which implies that organization should focus its effort on improving the supply for resources resulting in enhancing to a higher degree of innovation performance within the business unit.
Fourth, the more empowered the employees are, the more innovation performance will be reached within the business unit. Findings within empowerment placed impact with the highest practical significance which implies that organizations may give employees certain degree of autonomy that allow them to impact on the innovation performance within the business unit.
Fifth, climate for innovation has a positive and significant relationship with perceived innovation. The more favorable the climate for innovation is, the more innovation performance will be reached within the business unit. Findings within innovation performance placed organizational innovation with the highest practical significance which implies that the creation of valuable and useful new services within an organizational context would be beneficial.
Sixth, perceived innovation has a positive and significant relationship with business performance. Additionally, we found that market share has the highest practical significance within business performance. This finding suggested that having a strong market share can
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enable organization to achieve a better business unit performance. In this sense, the researcher was able to find the measure of business performance by dividing it into five subcategories, namely: sales, market share, operating income, profit and return on assets.
Limitations
This study is subject to some limitations. First, this study is limited to a questionnaire been examined by only a senior HR specialist and a peer review. A larger panel of expert to ensure the content validity of the instrument would have been appropriate. Future research should use a larger panel of experts.
Second, to assure confidentiality and because the sensitivity of the topic, the researcher did not include position nor name into the online questionnaire, consequently the researcher were unable to follow up the non respondents, obtaining results limited to the respondents. Future research must ensure this information in order to be able to follow up the non respondents.
Third, although statistical tests indicated that common method variance does not appear to be a major problem in this study. The researcher was unable to observe leaders interacting with their subordinates and the data were gathered from a single source in each business unit.
Hence, this may lead to an inflate or deflate relationship and thus, common method variance may be present in the results. Future work should attempt to gather data from multiple sources or using experimental and longitudinal designs to provide a more accurate assessment of the relationship of the variables.
Four, by checking correlation Table 4.8 in this research, the transformational leadership dimensions, such as: intellectual stimulation, inspirational motivation, idealized influence attributes, idealized influence behaviors were greater than .75; therefore, multicollinearity can be assumed in the model. Therefore, future research could redesign the questionnaire in these dimensions.
Five, although in this study the validity and reliability of business performance was acceptable, it seems to be far fully operationalize the business performance construct. Therefore, attention should be devoted to expanding and refining measurement of the dependent variable, , future research may enhance this measure. It could be even tied to the specific business and corporate goals.
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In summary, the present study represents an attempt to assess Bass's (1985) and Jung, Chow and Wu (2003) model of transformational leadership behaviors, perceived empowerment, perceived climate for innovation and perceived innovation (in this research) and adding business performance as an outcome in a context where has been conducted very few studies. Finally, the evidence provided strongly suggests the construct validity of the TECIP model proposed by Bass and then enhanced by Jung, Chow and Wu.
Recommendations for Practitioners
As stated in the limitations the findings cannot be generalized to others companies, however in general as recommendations for practitioners, it would be beneficial for leaders to enhance their leadership behaviors, which according to these results may influence innovation performance, empowerment among their employees, climate for innovation within their business unit. All of these effects may influence business performance which in the context of this study it could be 20.5%.
Recommendations for Casa Pellas
The findings can help the organization to strengthen the strategies to enhance business performance by enhancing the transformational leadership behaviors among its leaders. In regards to transformational leadership, Casa Pellas and its leaders need to focus on strengthen each dimension of transformational leadership among its leaders, mainly, their idealized and influence behaviors, since, this behavior appeared more influential within transformational leadership in TECIP Model.
Development of a leadership program for managers and their subordinates could impact positively in enhancing this effective leadership and shows promise for increased business performance. As stated by Kirkbride (2006), transformational leadership can be taught by a development process which utilizes a combination of 360 degree feedback, structured workshops, and one-to-one coaching sessions. Likewise, according to Kelloway, Barling and Helleur (2000), training and feedback have effects on transformational leadership, and they specifically found that group based training represents a more cost effective means of intervention. Additionally, would be beneficial to Casa Pellas to staff managers who are transformational, as this would help them in stimulating intellectually their subordinates, resulting in more creative employees,
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obtaining better innovation performance which would translate in improved business performance.
In regards climate for innovation, Casa Pellas and its leaders may focus on enhancing even more the climate for innovation within its units. Many ways to improve climate for innovation can be used. Some suggestions are proposed as follows: supply adequate resources for innovation which allow employees to devote them to innovation, give employees free time to pursue creative ideas during the workday or establish a reward system which encourages the innovation.
Casa Pellas could annually conduct a similar study, with a longitudinal design, to establish more accurately causality between the variables. The innovation performance variable could be measured by using its internal innovation software to measure innovation. Additionally, the instrument to measure the dependent variable (business performance) could be measured more objectively, tied to individuals and corporate goals.
Recommendations for Future Research
Some recommendations are proposed for further studies in regards to this study. First, since this study only was conducted in one Nicaraguan company, the framework, TECIP model and the questionnaires can be replicated to another company, specific industry and also in another country or across countries.
Second, the result of this study shows R2 of the business performance variable was only 20.5%. The reason for this low number may be because there are other variables beside transformational leadership behaviors and innovation that affect business performance as whole, probably such as price advantages, product quality, effective promotion or skilled labor, etc.
Therefore, it is suggested for future studies to extend the model in order to improve the robustness of the model and obtain a better estimation of business performance.
Third, the current study use quantitative approach with PLS statistical method to test the framework. In the further study, it is encouraged to employ qualitative study as a further approach, in order to get in-depth information in regards of observing leaders interacting with their subordinates. If quantitative approach is chosen still, it is encouraged to try new statistical procedures by using different tool.
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