Mediating effect of innovative culture and organizational learning between leadership styles at third-order and organizational performance in Malaysian SMEs

Shafique Ur Rehman,Naveed Iqbal Chaudhry,Anam Bhatti

doi:10.1186/s40497-019-0159-1

Abstract

PurposeThe objective of this study is to see the mediating effect of innovative culture and organizational learning between leadership styles and organizational performance in Malaysian SMEs.Design/methodology/approachQuestionnaires were used to collect data from owners/managers and 950 questionnaires distributed by using postal and email strategy. Out of 950, only 409 questionnaires returned back, 25 questionnaires have missing values and eliminated from a sample, and only 384 questionnaires were used for final analysis.FindingsFindings reveal that leadership styles have a significant influence on organizational learning, innovative culture, and organizational performance. Innovative culture and organizational learning have a significant influence on organizational performance. Moreover, innovative culture and organizational learning significantly mediate between leadership styles and organizational performance.Practical implicationsIn practical term, the current study contributes for managers/owners in SMEs to focus leadership styles with innovative culture and organizational learning in their decision making if they want to enhance their organizational performance.Research originalityThis study is one of the pioneer studies that test leadership styles at third-order with the combination of two mediating variables innovative culture and organizational learning with organizational performance.

Highlights

Effective leadership plays an important role to determine the success or failure of any kind of organization (Tourish, 2014)
This study concludes that leadership styles have a significant influence on organizational learning, innovative culture, and organizational performance
Innovative culture and organizational learning have a significant influence on organizational performance

Summary

Introduction

Effective leadership plays an important role to determine the success or failure of any kind of organization (Tourish, 2014). Despite the wider quantity of studies on leadership, there has been scant research done on small and medium-size enterprises (SMEs) (Franco & Matos, 2015). Prior studies suggested that effective leadership can help to improve the organizational performance in that situation where organizations face a lot of new issues and challenges (Franco & Matos, 2015; McGrath, Mac Grath, & MacMillan, 2000). Leadership styles have an influence on both individual and organizational performance (Wang et al, 2010; Windsor, 2009). This study focuses on leadership styles to determine SMEs performance

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