Abstract
Purpose This paper aims to examine the mediating role of knowledge sharing (KS) on the relationship between the transformational leadership (TL) and innovation in banks. Design/methodology/approach Quantitative analysis was conducted by using the structural equations modeling with AMOS 24 to examine the influence of the mediating role of KS on the TL–innovation relationship. Data were collected from 310 employees at 27 banks in Lebanon. Findings The research highlights that leaders exhibiting transformational behavior were able to promote knowledge-sharing culture that enhances the generation of new ideas, products and processes. The findings confirmed that KS mediates the association of TL and innovation. Practical implications The findings point to how TL mobilizes employees to engage in innovative products and processes by encouraging a knowledge-sharing culture. Originality/value The research findings advance the understanding of how TL stimulates innovation and highlights the benefits gained by cultivating KS to generate more innovative outcomes.
Highlights
Today, the banking sector is facing challenges resulting from the rapidly changing business environment, threatening their survival and long-term success (Easa, 2019)
Leaders exhibiting an inspirational motivation (IM) create an environment that promotes the inspiration and ability of organizational members to be innovative, which, in turn, gives them direction for successfully developing new products and processes (Zheng et al, 2016). These findings are consistent with Jaussi and Dionne’s (2003) findings, which showed that intellectual stimulation (IS) leadership has a negative effect on innovation, and with Li et al.’s (2016) study, which revealed that IS did not generate a positive climate for individual innovation
The findings of this research confirm previous studies suggesting that leaders who practice the delegating, consulting and encouraging behavior are able to nurture the creation of ideas by employees (Jia et al, 2018; Mittal and Dhar, 2015)
Summary
The banking sector is facing challenges resulting from the rapidly changing business environment, threatening their survival and long-term success (Easa, 2019). Academics and practitioners alike realize the need to be innovative to face these challenges (Cheung and Wong, 2011). Researchers have been trying to identify the factors that stimulate and sustain innovation in organizations (Han et al, 2016). The most significant factor that affects innovation is transformational leadership (TL) (Mittal and Dhar, 2015). This style plays an essential role in developing the process, structure and climate for firms to become innovative (Chan et al, 2014).
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