The role of transformational leadership in innovation performance of Malaysian SMEs

This study examines the relationship between transformational leadership (TL; idealisedinfluence, inspirational motivation, intellectual stimulation, and individualised consideration)and innovation performance (IP) and investigates whether perceived organisational support(POS) moderates the relationship between TL and the IP of small- and medium-sizedenterprises (SMEs) in Malaysia. Data on TL, POS, and IP were collected through a surveyof Malaysian SMEs. The results show that idealised influence, intellectual stimulation, andindividualised consideration had significant positive effects on IP. In addition, POSmoderated the relationship between TL and IP in terms of idealised influence andinspirational motivation. The results are expected to encourage managers of MalaysianSMEs to stimulate their followers through their motivational and charismatic style. No studyof TL and IP has considered SMEs in Malaysia, and therefore, this study contributes to theliterature by providing empirical evidence of the relationship between TL and innovation aswell as between TL and performance in the Malaysian SME context. In addition, althoughPOS has been highlighted as an important variable, no study has identified POS as amoderator of the relationship between TL and IP in the context of Malaysia.