Transformational Leadership’s Impact on Organizational Innovation: The Mediating Role of Management Control System

Abstract

Contemporary organizations are made up of various tangible and intangible components. While several of these components have been subjected to a variety of scholarly studies, both individually and in relation to one another, a number of organizational components still require deeper investigation. The present study looks at the direct and indirect effects of transformational leadership (TL) on organizational innovation (OI) through management control system (MCS) as a mediating variable. This objective has been achieved through an exhaustive review of the literature on the impacts of TL and MCS on OI. The data were collected through questionnaire distribution among 400 high-level managers of seven universities in Saudi Arabia, within the period of May–July 2019. Subsequently, 264 surveys were acquired for the final analysis, indicating 66 per cent accuracy in the response rate. Furthermore, Partial least squares SmartPLS 3.0 used to assess the measurement model and the structural model. It is revealed that TL and MCS have a significant correlation with OI. However, the levels of influence of TL and MCS are quite different in terms of the influence on OI. Finally, our study proposes a few future studies for the research scholars and practitioners.