The Impact of Transformational Leadership Climate on Business Sustainability and New Product Development Process: Moderating Influence of Strategic Flexibility

Abstract

Transformational leadership is believed to be crucial factor behind an organization’s success. Studies have been conducted on leaders’ transformational leadership style, but there has been limited research on transformational leadership climate (TLC) in an organization and its effect on new product development process (NPDP) and business sustainability (BS). This study fulfills this gap and it also contributes to the literature by testing the moderating role of strategic flexibility (SF) between TLC and NPDP & BS. The study draws its hypothesis on the basis of contingency theory, upper echelons theory and transformational leadership theory. The authors collected the data from the top managers of private educational institutes affiliated with BISE Multan and used SmartPLS for analyses of data. Based on the analyses of 145 questionnaires, we report that TLC enhances NPDP and BS whereas SF has a significant moderation impact on the relationship between TLC and BS. For the educational institutes, we suggest top management to acknowledge and implement TLC in their organizations for sustaining their performance and for successful launching of new programs/services. Additionally, the importance of resource and coordination flexibility is emphasized for sustainability.