Transformational Leadership and Organizational Innovation

Many researchers have studied the relationship between transformational leadership influence and organizational innovation; however, they have only shown inconclusive results. With task-oriented synergistic cooperation goal-oriented synergistic interaction as a mediating variable, the goal objective of this study was to fill the research gap between transformational leadership influence and organizational innovation. Data was collected through online electronic questionnaires using Likert Scales. This study used a census method, where the sample was all general insurance companies in Indonesia; hence, it can represent the general insurance industry. It involved 72 respondents, representing 72 general insurance companies that were actively operating in Indonesia in 2021. This research results offered crucial implications about the organizational interaction in the emerging market of the insurance industry, such as Indonesia. The survey responses were analyzed using Structural Equation Modelling (PLS-SEM) in Partial Least Square. This study found that transformational leadership positively influences organizational innovation. Then, the goal-oriented synergistic interaction has positively mediated transformational leadership influence and organizational innovation. Finally, goal-oriented synergistic interaction has a positive effect on organizational innovation. This study proposes an interaction among employees under influence of transformational leaders to achieve both explorative and exploitative innovation. Hence, leader practitioners can use the findings of this study to create synergistic interaction among followers to attain organizational innovation.