Transformational Leadership and Innovation: An Empirical Study of Direct and Indirect Effects in HR Consulting Companies

Abstract

This study aims to examine the influence of transformational leadership on organizational innovation through the mediating effect of organizational learning and knowledge management in Turkish HR consulting companies. Sample is selected from small, medium size and large HR consulting companies located in Istanbul. Structural equation modeling and bootstrapping is used for data analysis. The research findings indicated that transformational leadership did not directly affect organizational innovation; transformational leadership directly affected organizational learning and knowledge management, and organizational learning directly impacted knowledge management. Besides, knowledge management directly affected organizational innovation, yet organizational learning indirectly influenced organizational innovation. Finally, transformational leadership indirectly influenced organizational innovation through the intervening effect of organizational learning and knowledge management. The results indicated that if managers in Turkish HR consulting companies practice a transformational leadership style by taking into account organizational learning and knowledge management, the chance for successful organizational innovation will highly improve.