Entrepreneurial Orientation and Transformational Leadership for the Development of Innovation Capabilities
Abstract
Purpose: This paper aims to analyse the impact of entrepreneurial orientation (EO) through the relationship of transformational leadership (TL) for the development of dynamic capabilities (DC) for organisational innovation.
Methodology/Approach: Under a qualitative method, and a single case study strategy, data were obtained from interviews with 15 senior managers and leaders of innovation activities; the document review and data triangulation method was used to analyse causality relations proposed in the theoretical framework.
Findings: The empirical results confirm that the EO and TL have a positive relationship with the development of innovation capabilities. Findings indicate that risk-taking, proactiveness, assimilation, and exploitation of internal and external knowledge remain the main difficulties in improving innovation capabilities and adaptability in the technological environment.
Research Limitation/implication: The present paper gathered data from a specific organisation in the field of EO. The research allowed us to better understand the incidence of EO, TL, and DC regarding the relationship between variables, and it should be considered a potential source for enhancing innovation management capabilities.
Originality/Value of paper: This work is the first that integrates the concepts of EO with other related disciplines into a single case strategy, within a specific entrepreneurship and innovation ecosystem context in a large automotive industry.
References
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Bass, B. M., and Avolio, B. J., 1994. Transformational leadership and organisational culture. The International Journal of Public Administration, 17(3-4), 541-554.
Bedoya, M. A., and Arango, B., 2017. Entrepreneurial Orientation, Resources and Capabilities: A Review of its Conceptual Framework for Innovation. Spaces Magazine, 38(38).
Bedoya-Villa, M., Pérez-Sánchez, E., Baier-Fuentes, H., Zapata-Molina, C., and Román-Castaño, E., 2023. The Effects of Dynamic Absorptive Capacity on Innovation Strategy: Evidence from SMEs in a Technological Context. Mathematics, 11(10), 2366.
Burns J. M., 1978. Leadership. New York: Harper & Row.
Chen, Y., Tang, G., Jin, J., Xie, Q., and Li, J., 2014. CEOs' transformational leadership and product innovation performance: The roles of corporate entrepreneurship and technology orientation. Journal of Product Innovation Management, 31(S1), 2-17.
Cohen, W. M., and Levinthal, D. A., 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35, 128–152.
Cole, A. H., 1946. An approach to the study of entrepreneurship: A tribute to Edwin F. Gay. The Journal of Economic History, 6(S1), 1-15.
Collins, O. F., and Moore, D. G., 1970. The organisation makers: A behavioral study of independent entrepreneurs. Appleton-Century-Crofts.
Cooper, A. C., 1973. Technical Entrepreneurship: What do we know? Research and Development Management, 3, 59-64.
Covin, J. G., and Slevin, D. P., 1989. Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75-87.
Creswell, J. W., 2009. Research designs: Qualitative, quantitative, and mixed methods approaches. California: Sage.
Escobar, G. S., Fernández, M. A., and González, J. H. C., 2022. El liderazgo transformacional y su relación con la innovación organizacional y lo verde: Una revisión de literatura. Administración y Organizaciones, 25(48), 106-132.
Escobar-Sierra, M., and Bedoya-Villa, M. A., 2018. Impact of employees’ attitudes and leader’s role on the innovation management linked to social responsibility. Quality Innovation Prosperity, 22(2), 65-81. https://doi.org/10.12776/qip.v22i2.1121
Engelen, A., Gupta, V., Strenger, L., and Brettel, M., 2013. Entrepreneurial orientation, firm performance, and the moderating role of transformational leadership behaviors. Journal of Management, 41(4). https://doi.org/10.1177/0149206312455244
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Ge, J., and Li, L., 2023. Dual innovation of the business model: The regulatory role of entrepreneurial orientation in family firms. Journal of Business & Industrial Marketing, 38(7), 1587-1599. https://doi.org/10.1108/JBIM-03-2022-0157.
Gumusluog, L., and Ilsev, A., 2009. Transformational leadership and organisational innovation: The roles of internal and external support for innovation. Journal of Product Innovation Management, 26(3), 264-277. https://doi.org/10.1111/j.1540-5885.2009.00657.x
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Karnik, N., Bora, U., Bhadri, K., Kadambi, P., and Dhatrak, P., 2021. A comprehensive study on current and future trends towards the characteristics and enablers of Industry 4.0. Journal of Industrial Information Integration, 27. https://doi.org/10.1016/j.jii.2021.100294.
Kets, D.V.M., 1977. Crisis leadership and the paranoid potential: An organisational perspective. Bulletin of the Menninger Clinic, 41(4), 349-365.
Lewins, A., and Silver, C., 2009. Choosing a CAQDAS Package: A working paper. CAQDAS Networking Project. Retrieved from http://cue.berkeley.edu/qdaarticle.pdf.
Lumpkin, G. T., and Dess, G. G., 1996. Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135-172.
Maulidina, S. H., Harri, M., and Utomo, F. C. 2023. The Role of Dynamic Capabilities and Entrepreneurial Orientation Towards Innovation and its Implications for Creative Economy Performance in Indonesia.
Miller, D., and Friesen, P. H., 1978. Archetypes of strategy formulation. Management Science, 24(9), 921-933.
Miller, D., and Friesen, P. H., 1982. Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1-25.
Miller, D., 1983. The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770-791.
Miller, D., 2011. A reflection on EO research and some suggestions for the future. Entrepreneurship: Theory & Practice, 35(5), 873-894.
Mintzberg, G. H., 1973. Strategy-Making in Three Modes. California Management Review, 44-53.
Mir, M., Llach, J., and Casadesus, M., 2022. Degree of Standardization and Innovation Capability Dimensions as Driving Forces for Innovation Performance. Quality Innovation Prosperity, 26(2), 1-20. https://doi.org/10.12776/qip.v26i2.1687
Mohd Zin, M. L., Ibrahim, H., Aman-Ullah, A., and Ibrahim, N., 2023. Transformational leadership, job enrichment and recognition as predictors of job satisfaction in non-profit organisations. Nankai Business Review International, 14(2), 338-351. https://doi.org/10.1108/NBRI-01-2022-0010.
Muchiri, M., and McMurray, A., 2015. Entrepreneurial orientation within small firms: A critical review of why leadership and contextual factors matter. Small Enterprise 22(1). https://doi.org/10.1080/13215906.2015.1017076
O'Connor, J., Mumford, M. D., Clifton, T. C., Gessner, T. E., and Connelly, M. S., 1995. Charismatic leaders and destructiveness: A historiometric study. Leadership Quarterly, 6, 529-555.
Park, Y., Chung, Y., and Son, H., 2022. Configurational paths for SMEs' innovation: Focusing on information resources, absorptive capacity, and government support. Technology Analysis & Strategic Management, 1-14.
Rauch, A., Wiklund, J., Lumpkin, G. T., and Frese, M., 2009. Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship Theory & Practice, 33(3), 761-787.
Schumpeter, J., 1934. The Theory of Economic Development. Cambridge University Press, Cambridge.
Seibert, S. E., Wang, G., and Courtright, S. H., 2011. Antecedents, consequences of psychological, and team empowerment in organisations: A meta-analytic review. Journal of Applied Psychology, 96(5), 981.
Strauss, A., and Corbin, J., 2002. Bases of qualitative research. Techniques and procedures to develop the grounded theory. Medellín, Colombia: Editorial University of Antioquia.
Teece, D. J., Pisano, G., and Shuen, A., 1997. Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.
Wales, W. J., Monsen, E., and McKelvie, A., 2011. The organisational pervasiveness of entrepreneurial orientation. Entrepreneurship Theory & Practice, 35(5), 895-923.
Wales, W. J., 2015. Entrepreneurial orientation: A review and synthesis of promising research directions. International Small Business Journal, 1-13.
Wei, Z., Yang, D., Sun, B., and Gu, M., 2014. The fit between technological innovation and business model design for firm growth: Evidence from China. R&D Management, 44(3), 288-305.
Wijaya, N. S., and Rahmayanti, P. L. D., 2023. The role of innovation capability in mediation of COVID-19 risk perception and entrepreneurship orientation to business performance. Uncertain Supply Chain Management, 11(1), 227–236. https://doi.org/10.5267/j.uscm.2022.10.004.
Yin, R. K., 2009. Case Study Research: Design and Methods. SAGE Publications.
Yukl, G., 2002. Leadership in organisations. Upper Saddle River, NJ: Prentice-Hall.
Zahra, S. A., 1993. A conceptual model of entrepreneurship as firm behavior: A critique and extension. Entrepreneurship: Theory and Practice, 17(4), 5-21.
Zahra, S. A., and George, G., 2002. Absorptive capacity: A review, reconceptualisation, and extension. Academy of Management Review, 27(2), 185-203.
Apostolov, M., and Coco, N., 2021. Digitalisation-based innovation—a case study framework. International Journal of Innovation and Technology Management, 18(05), 2050025.
Barney, J., 1991. Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Bass, B. M., 1990. Bass and Stogdill's handbook of leadership: Theory, research, and management applications. New York: Free Press.
Bass, B. M., and Avolio, B. J., 1994. Transformational leadership and organisational culture. The International Journal of Public Administration, 17(3-4), 541-554.
Bedoya, M. A., and Arango, B., 2017. Entrepreneurial Orientation, Resources and Capabilities: A Review of its Conceptual Framework for Innovation. Spaces Magazine, 38(38).
Bedoya-Villa, M., Pérez-Sánchez, E., Baier-Fuentes, H., Zapata-Molina, C., and Román-Castaño, E., 2023. The Effects of Dynamic Absorptive Capacity on Innovation Strategy: Evidence from SMEs in a Technological Context. Mathematics, 11(10), 2366.
Burns J. M., 1978. Leadership. New York: Harper & Row.
Chen, Y., Tang, G., Jin, J., Xie, Q., and Li, J., 2014. CEOs' transformational leadership and product innovation performance: The roles of corporate entrepreneurship and technology orientation. Journal of Product Innovation Management, 31(S1), 2-17.
Cohen, W. M., and Levinthal, D. A., 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35, 128–152.
Cole, A. H., 1946. An approach to the study of entrepreneurship: A tribute to Edwin F. Gay. The Journal of Economic History, 6(S1), 1-15.
Collins, O. F., and Moore, D. G., 1970. The organisation makers: A behavioral study of independent entrepreneurs. Appleton-Century-Crofts.
Cooper, A. C., 1973. Technical Entrepreneurship: What do we know? Research and Development Management, 3, 59-64.
Covin, J. G., and Slevin, D. P., 1989. Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75-87.
Creswell, J. W., 2009. Research designs: Qualitative, quantitative, and mixed methods approaches. California: Sage.
Escobar, G. S., Fernández, M. A., and González, J. H. C., 2022. El liderazgo transformacional y su relación con la innovación organizacional y lo verde: Una revisión de literatura. Administración y Organizaciones, 25(48), 106-132.
Escobar-Sierra, M., and Bedoya-Villa, M. A., 2018. Impact of employees’ attitudes and leader’s role on the innovation management linked to social responsibility. Quality Innovation Prosperity, 22(2), 65-81. https://doi.org/10.12776/qip.v22i2.1121
Engelen, A., Gupta, V., Strenger, L., and Brettel, M., 2013. Entrepreneurial orientation, firm performance, and the moderating role of transformational leadership behaviors. Journal of Management, 41(4). https://doi.org/10.1177/0149206312455244
Frank, A. G., Mendes, G. H., Ayala, N. F., and Ghezzi, A., 2019. Servitization and Industry 4.0 convergence in the digital transformation of product firms: A business model innovation perspective. Technological Forecasting and Social Change (in press).
Ge, J., and Li, L., 2023. Dual innovation of the business model: The regulatory role of entrepreneurial orientation in family firms. Journal of Business & Industrial Marketing, 38(7), 1587-1599. https://doi.org/10.1108/JBIM-03-2022-0157.
Gumusluog, L., and Ilsev, A., 2009. Transformational leadership and organisational innovation: The roles of internal and external support for innovation. Journal of Product Innovation Management, 26(3), 264-277. https://doi.org/10.1111/j.1540-5885.2009.00657.x
Javaid, M., Haleem, A., Singh, R. P., Khan, S., and Suman, R., 2021. Blockchain technology applications for Industry 4.0: A literature-based review. Blockchain: Research and Applications, 2(4). https://doi.org/10.1016/j.bcra.2021.100027.
Jiao, M., Du, D., Shi, W., Hou, C., and Gui, Q., 2021. Dynamic absorptive capability and innovation performance: evidence from Chinese cities. Sustainability, 13(20), 11460. https://doi.org/10.3390/su132011460.
Karnik, N., Bora, U., Bhadri, K., Kadambi, P., and Dhatrak, P., 2021. A comprehensive study on current and future trends towards the characteristics and enablers of Industry 4.0. Journal of Industrial Information Integration, 27. https://doi.org/10.1016/j.jii.2021.100294.
Kets, D.V.M., 1977. Crisis leadership and the paranoid potential: An organisational perspective. Bulletin of the Menninger Clinic, 41(4), 349-365.
Lewins, A., and Silver, C., 2009. Choosing a CAQDAS Package: A working paper. CAQDAS Networking Project. Retrieved from http://cue.berkeley.edu/qdaarticle.pdf.
Lumpkin, G. T., and Dess, G. G., 1996. Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135-172.
Maulidina, S. H., Harri, M., and Utomo, F. C. 2023. The Role of Dynamic Capabilities and Entrepreneurial Orientation Towards Innovation and its Implications for Creative Economy Performance in Indonesia.
Miller, D., and Friesen, P. H., 1978. Archetypes of strategy formulation. Management Science, 24(9), 921-933.
Miller, D., and Friesen, P. H., 1982. Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1-25.
Miller, D., 1983. The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770-791.
Miller, D., 2011. A reflection on EO research and some suggestions for the future. Entrepreneurship: Theory & Practice, 35(5), 873-894.
Mintzberg, G. H., 1973. Strategy-Making in Three Modes. California Management Review, 44-53.
Mir, M., Llach, J., and Casadesus, M., 2022. Degree of Standardization and Innovation Capability Dimensions as Driving Forces for Innovation Performance. Quality Innovation Prosperity, 26(2), 1-20. https://doi.org/10.12776/qip.v26i2.1687
Mohd Zin, M. L., Ibrahim, H., Aman-Ullah, A., and Ibrahim, N., 2023. Transformational leadership, job enrichment and recognition as predictors of job satisfaction in non-profit organisations. Nankai Business Review International, 14(2), 338-351. https://doi.org/10.1108/NBRI-01-2022-0010.
Muchiri, M., and McMurray, A., 2015. Entrepreneurial orientation within small firms: A critical review of why leadership and contextual factors matter. Small Enterprise 22(1). https://doi.org/10.1080/13215906.2015.1017076
O'Connor, J., Mumford, M. D., Clifton, T. C., Gessner, T. E., and Connelly, M. S., 1995. Charismatic leaders and destructiveness: A historiometric study. Leadership Quarterly, 6, 529-555.
Park, Y., Chung, Y., and Son, H., 2022. Configurational paths for SMEs' innovation: Focusing on information resources, absorptive capacity, and government support. Technology Analysis & Strategic Management, 1-14.
Rauch, A., Wiklund, J., Lumpkin, G. T., and Frese, M., 2009. Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship Theory & Practice, 33(3), 761-787.
Schumpeter, J., 1934. The Theory of Economic Development. Cambridge University Press, Cambridge.
Seibert, S. E., Wang, G., and Courtright, S. H., 2011. Antecedents, consequences of psychological, and team empowerment in organisations: A meta-analytic review. Journal of Applied Psychology, 96(5), 981.
Strauss, A., and Corbin, J., 2002. Bases of qualitative research. Techniques and procedures to develop the grounded theory. Medellín, Colombia: Editorial University of Antioquia.
Teece, D. J., Pisano, G., and Shuen, A., 1997. Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.
Wales, W. J., Monsen, E., and McKelvie, A., 2011. The organisational pervasiveness of entrepreneurial orientation. Entrepreneurship Theory & Practice, 35(5), 895-923.
Wales, W. J., 2015. Entrepreneurial orientation: A review and synthesis of promising research directions. International Small Business Journal, 1-13.
Wei, Z., Yang, D., Sun, B., and Gu, M., 2014. The fit between technological innovation and business model design for firm growth: Evidence from China. R&D Management, 44(3), 288-305.
Wijaya, N. S., and Rahmayanti, P. L. D., 2023. The role of innovation capability in mediation of COVID-19 risk perception and entrepreneurship orientation to business performance. Uncertain Supply Chain Management, 11(1), 227–236. https://doi.org/10.5267/j.uscm.2022.10.004.
Yin, R. K., 2009. Case Study Research: Design and Methods. SAGE Publications.
Yukl, G., 2002. Leadership in organisations. Upper Saddle River, NJ: Prentice-Hall.
Zahra, S. A., 1993. A conceptual model of entrepreneurship as firm behavior: A critique and extension. Entrepreneurship: Theory and Practice, 17(4), 5-21.
Zahra, S. A., and George, G., 2002. Absorptive capacity: A review, reconceptualisation, and extension. Academy of Management Review, 27(2), 185-203.
Authors
Bedoya, M. A., Pérez-Sanchéz, E., Zapata, C., Baier-Fuentes, H., & Hernandez-Sanchez, B. . (2024). Entrepreneurial Orientation and Transformational Leadership for the Development of Innovation Capabilities. Quality Innovation Prosperity, 28(1), 174–192. https://doi.org/10.12776/qip.v28i1.1895
This work is licensed under a Creative Commons Attribution 4.0 International License.