The Effect of Transformational Leadership and Organizational Culture Towards Employees’ Innovative Behaviour and Performance

Abstract

This study aims to analyse the effect of Transformational Leadership and Organizational Culture towards Innovative Behaviour and Employee Performance in PT Bank Danamon Indonesia. Data was collected from a sample of 100 employees of PT Bank Danamon Indonesia. We analysed the questionnaire result using structural equation modelling (SEM). The conclusions are that transformational leadership has a significant effect on organization culture; transformational leadership does not influence innovation behaviour. However, a company’s culture is significantly affected by innovation behaviour and innovation behaviour also has a significant effect on employee performance in PT Bank Danamon Indonesia. Transformational leadership is concerned with shared interests among employees by explaining the importance of the company's goals so that employees are willing to put aside their personal interests and work for the common good.