Transformational Leadership, Organizational Innovation and Performance: The Role of CSR from Pakistani Perspective

Abstract

The study focuses and examines the relationship between transformational leadership and organizational innovation and organizational performance with the mediation analysis of CSR. We modified Khan et. al. (2017) model, by including different dimensions of CRS namely customers, employees, shareholders, and society. This study presents CSR and organizational innovation as potential mediators of affiliations between the key constructs of transformational leadership and organizational performance. Data was collected by means of a close-ended questionnaire, from 201 respondents from more than 50 different organizations comprising of top and middle management level positions, working in the banking sector, FMCGs, Consulting firms, Services Industry, operating in Karachi. The direct and mediation effects of predictors were tested using partial least squares structural equation modeling (PLS-SEM). The results illustrate the direct effect of transformational leadership is significant and positive for all elements of CRS. The mediation analysis showed that customers, shareholders, and society dimensions significantly mediate the Transformational Leadership (TL) and Organizational Innovation (OI) relationship. Moreover, shareholders' dimensions also mediate TL and performance. Lastly, (OI) effectively mediate society and performance nexus. This study discusses the findings and provides theoretical, managerial, and research implications.