The Relationship between Transformational Leadership, Product Innovation and Performancein SMEs

Kurt Matzler; Erich Schwarz; Natasa Deutinger; Rainer Harms

doi:10.1080/08276331.2008.10593418

The Relationship between Transformational Leadership, Product Innovation and Performancein SMEs

Kurt Matzler^*, Erich Schwarz, Natasa Deutinger, Rainer Harms

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

126 Citations (Scopus)

Abstract

In small and medium sized enterprises (SMEs), the leadership style of the top management can have a strong impact on the innovativeness and the performance of the firm. The purpose of this study is to analyze the impact of a particular leadership style, transformational leadership, on innovations, growth, and profitability. Drawing on a sample of 300 innovative SMEs from Carinthia (Austria), we analyzed a structural equation model (SEM), in which these constructs are linked (n=97). The results indicate that transformational leadership has a positive direct impact on innovation, growth and profitability. In addition to that, innovation positively impacts on growth and profitability. Our results indicate that transformational leadership might be an appropriate approach for the management of SMEs.

Original language	English
Pages (from-to)	139-151
Number of pages	13
Journal	Journal of small business and entrepreneurship
Volume	21
Issue number	2
DOIs	https://doi.org/10.1080/08276331.2008.10593418
Publication status	Published - 1 Mar 2008
Externally published	Yes

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10.1080/08276331.2008.10593418

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abstract = "In small and medium sized enterprises (SMEs), the leadership style of the top management can have a strong impact on the innovativeness and the performance of the firm. The purpose of this study is to analyze the impact of a particular leadership style, transformational leadership, on innovations, growth, and profitability. Drawing on a sample of 300 innovative SMEs from Carinthia (Austria), we analyzed a structural equation model (SEM), in which these constructs are linked (n=97). The results indicate that transformational leadership has a positive direct impact on innovation, growth and profitability. In addition to that, innovation positively impacts on growth and profitability. Our results indicate that transformational leadership might be an appropriate approach for the management of SMEs.",

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AU - Harms, Rainer

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AB - In small and medium sized enterprises (SMEs), the leadership style of the top management can have a strong impact on the innovativeness and the performance of the firm. The purpose of this study is to analyze the impact of a particular leadership style, transformational leadership, on innovations, growth, and profitability. Drawing on a sample of 300 innovative SMEs from Carinthia (Austria), we analyzed a structural equation model (SEM), in which these constructs are linked (n=97). The results indicate that transformational leadership has a positive direct impact on innovation, growth and profitability. In addition to that, innovation positively impacts on growth and profitability. Our results indicate that transformational leadership might be an appropriate approach for the management of SMEs.

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The Relationship between Transformational Leadership, Product Innovation and Performancein SMEs

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