Exploring the role of transformational leadership in human capital effectiveness: Empirical evidence from the Malaysian healthcare sector

Abstract

Purpose

Malaysia has set year 2020 as a targeted year to become the most developed nation and to transform the economy into knowledge based. Issue is to become developed nation, but without human capital development (HCD) process, the achievement of this vision would be difficult. Numerous studies articulated the direct impact of human capital on the country economic growth. Human capital is a significant factor to get competitive advantage, which is the need of the day for all countries as well as for organizations to survive in today’s tough competitive environment. Major objective of this research was to find the role of transformational leadership (TL) in human capital effectiveness with the effect of knowledge management (KM) strategies. The paper aims to discuss these issues.

Design/methodology/approach

A mixed research method is deployed in this study. Data are collected with the help of self-administrated questionnaire and a semi-structured interview. The structural equation modeling technique is used in the data; data are analyzed with the help of AMOS and Nvivo software.

Findings

The results revealed that transformation has a positive effect on KM strategies. Further, this study also identified that knowledge codification strategy and personalization strategy have a positive impact on human capital effectiveness.

Research limitations/implications

The results revealed that KM strategies play a vital role in human capital effectiveness. Therefore, the Malaysian healthcare industry should introduce KM strategies in order to enhance employees’ knowledge skills and ability. This study is only conducted in Malaysia; the future researcher can use a different method to test the current research model.

Practical implications

Knowledge codification and knowledge personalization strategy can contribute to the HCD process. This study can be generalized in the Malaysian healthcare industry. This kind of effort will add value into human capital. Hence, organization can get a competitive advantage with the help of human capital. TL style is the most appropriate style in the current era; this leadership has the ability to transform the system, which is the need of the day. Due to rapid changes in technology, a leader who believes in change can meet the challenges of twenty-first century.

Originality/value

KM strategies and their use have been a research issue for some time. Companies have also adopted knowledge management strategies tools to support and stimulate knowledge sharing in their organizations and to help employees to find the expertise they are looking for. But no research has been performed on the importance of KM strategies. This paper describes a unique and new framework that the authors devised to help companies to do just that.

Citation

Khan, M.S., Sentosa, I. and Salman, F. (2018), "Exploring the role of transformational leadership in human capital effectiveness: Empirical evidence from the Malaysian healthcare sector", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 14 No. 2, pp. 191-204. https://doi.org/10.1108/WJEMSD-10-2017-0075