Determinants of radical and incremental innovation: the influence of transformational leadership, knowledge sharing and knowledge-centered culture

Abstract

The purpose of this study is to clarify the effects of transformational leadership (TL) on radical and incremental innovation through the mediating roles of knowledge sharing (KS) behaviors. This study also attempts to bring deeper insight of the correlation among the latent factors by examining how knowledge-centered culture (KCC) moderates the effects of TL on KS behaviors and innovation capability. This study conducts a questionnaire survey and Structural Equation Modeling to test the proposal research model based on a sample of 321 participants in 85 service and manufacturing firms. The results revealed that KS behaviors significantly mediate the relationship between TL and two types of innovation. Specifically, knowledge collecting has more significant effect on incremental innovation compared with influence of knowledge donating. By contrast, knowledge donating has a greater effect on radical innovation compared with effect of knowledge collecting. The paper also highlights the important role of KCC in enhancing the effects of TL on KS activities and innovation capabilities. The study has highlighted the important role of KCC as it positively moderates the influences of TL on KS and innovation capability. The study provides evidence that TL style is the main driving force of KS processes. Managers should prioritize practicing this leadership style to improve employees' KS behaviors and firm's innovation capability. The study significantly fills the gaps in the literature that emphasizes how KS behaviors induce different impacts on specific aspects of innovation capability. By exploring the moderator of KCC, the paper significantly contributes to advancing the understanding of how transformational leaders foster employees' KS behaviors for improving radical and incremental innovation.