Leadership

TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL INNOVATION: THE ROLES OF INTERNAL AND EXTERNAL SUPPORT FOR INNOVATION

LALE GUMUSLUOGLU Bilkent University Faculty of Business Administration Department of Management Bilkent, Ankara Turkey Tel: +90 (312) 290-2319 Fax: +90 (312) 266- 4958 e-mail: tomruk@bilkent.edu.tr

ARZU ILSEV Hacettepe University Faculty of Economics and Administrative Sciences Department of Business Administration Beytepe, Ankara Turkey Tel: +90 (312) 299-2064 Fax: +90 (312) 299-2055 e-mail: arzuilsev@gmail.com

Electronic copy available at: http://ssrn.com/abstract=1068142

ABSTRACT Leadership has been suggested to be an important factor affecting innovation. A number of studies have shown that transformational leadership positively influences organizational innovation. However, there is a lack of studies examining the contextual conditions under which this effect occurs or is augmented. Therefore, this study aimed to investigate the impact of transformational leadership on organizational innovation, and to determine whether internal and external support for innovation as contextual conditions influence this effect. Organizational innovation was conceptualized as the tendency of the organization to develop new or improved products or services and its success in bringing those products or services to the market. Transformational leadership was hypothesized to have a positive influence on organizational innovation. Furthermore, this effect was proposed to be moderated by internal support for innovation, which refers to an innovation supporting climate and adequate resources allocated to innovation. Support received from external organizations for the purposes of knowledge and resource acquisition was also proposed to moderate the relationship between transformational leadership and organizational innovation. In order to test these hypotheses data were collected from 163 R&D employees and managers of 43 micro- and small-sized Turkish...