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How transformational leadership facilitates innovation capability: the mediating role of employees' psychological capital

Hui Lei (School of Business Administration, Hunan University, Changsha, China)
Lathong Leaungkhamma (School of Business Administration, Hunan University, Changsha, China)
Phong Ba Le (School of Business Administration, Hunan University, Changsha, China) (Faculty of Business Management, Hanoi University of Industry, Hanoi, Vietnam)

Leadership & Organization Development Journal

ISSN: 0143-7739

Article publication date: 23 April 2020

Issue publication date: 30 May 2020

3801

Abstract

Purpose

This paper aims to investigate the effects of transformational leadership on individuals and organization’s innovation capability via the mediating role of employees' positive psychological capital (Psy-Cap) namely self-efficacy and optimism.

Design/methodology/approach

Structural equation modeling (SEM) is used to test proposal hypotheses through the empirical data collected from 330 participants at 90 firms in Vietnam.

Findings

The research findings revealed that self-efficacy and optimism significantly mediate the relationship between transformational leadership and innovation capabilities. In addition, self-efficacy has a greater impact on innovation capabilities compared with the effect of optimism.

Practical implications

The findings highlight the important role of practicing transformational leadership style to nurture and foster both employees' positive psychology sources and firms' innovation capability.

Originality/value

The paper has significantly advanced and deepened our understanding of how transformational leaders connect with employees to nurture and develop one of the most special aspects of human resource in contemporary working environment called employees' positive Psy-Cap for stimulating firm's innovation capabilities.

Keywords

Acknowledgements

The authors appreciate aids from the Ministry of Education foundation for humanities and social sciences under grant No.17YJA630041. This research is also funded by Vietnam National Foundation for Science and Technology Development (NAFOSTED) under grant number 502.02-2019.300.

Citation

Lei, H., Leaungkhamma, L. and Le, P.B. (2020), "How transformational leadership facilitates innovation capability: the mediating role of employees' psychological capital", Leadership & Organization Development Journal, Vol. 41 No. 4, pp. 481-499. https://doi.org/10.1108/LODJ-06-2019-0245

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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