Does Leadership matter in Innovation and NewBusiness Venturing? Testing the Mediating Effect

of Absorptive CapacityLoo-See Beh

Faculty of Economics & Administration, University of Malaya, Kuala Lumpur, MalaysiaEmail: lucybeh@um.edu.my

lmran ShafiqueFaculty of Economics & Administration, University of Malaya

Email: shafiqueimran@hotmail.com

Abstract- This study aims to investigate whetherleadership matters in promoting innovation and newbusiness venturing. Using survey questionnaire, data iscollected from the manufacturing SMEs of Pakistan.Structural equation modeling (SEM) technique is used foranalysis. The results demonstrate that transformationalleadership has positive influence on innovation, newbusiness venturing and corporate entrepreneurshipAbsorptive capacity also has a mediating effect betweentransformational leadership with innovation and newbusiness venturing.

Index Terms-transformational leadership, absorptivecapacity, innovation, new business venturing, corporateentrepreneurship

l. INTRODUCTION

Firms constantly face the continuously changingbusiness environment and strong competition in aglobalized era [1] often leading to economic progress [2]and enhancing decentralization [3). Some of the externalenvironment sources of influence include technology,competition, economics, resources, customers, andlegal/political situations along with the internalenvironment and management of the firm.

Given the ever-changing strategic shifts, old businessstructures are not sufficient for firms to compete inemerging competitive environment, strong rivalry, andvolatility [4]. Firms cannot survive without adapting tochanges and adjustments [5]. Environmental changes andintensive competitions are compelling firms to bringtransformation inside firms. One of the importanttransformations is that firms are adopting corporateentrepreneurship [5]. Corporate entrepreneurship includestwo elements: (J) creation of new business unit within anestablished firm and (2) firm transformation via strategicrenewal [6]. In fact, corporate entrepreneurship denotes asustainable strategic option for leaders to stay competitive.This contention raises the question of leadership andmanagement style to sustain business performance [7].

Following [6], corporate entrepreneurship refers to thecombination of innovation and new business venturing.Accorclingly, transformational leadership is mostappropriate to promote corporate entrepreneurship [8).Several empirical studies also found that transformationalleadership positively affects corporate entrepreneurship.Most studies have been conducted in western anddeveloped countries such as [9] in Netherlands, [10] inAustralia, [11] in Spain, and [12] in USA. However,limited studies were conducted in developing andemerging countries such as [13] in Malaysia, [14] inBahrain, [IS] in Turkey but none so far in Pakistan.

Small and medium enterprises (SMEs) play vital rolefor the growth of any national economy. SMEs inPakistan considered as backbone of its economy andcurrently facing survivability issues [16). As studies arelimited in the context of Pakistan, general literatureadvocates that most businesses fail due to inappropriateleadership style [17]. Keeping in view both scenarios, thisstudy aims to investigate the role of transformationalleadership to promote corporate entrepreneurship directlyand through absorptive capacity in the manufacturingSMEs of Pakistan. Fig. 1 explains the hypothesizedrelationship between transformational leadership andcorporate entrepreneurship. This relationship is mediatedby absorptive capacity while transformational leadershipalso affects the dimensions of corporate entrepreneurship:innovation and new business venturing directly andthrough absorptive capacity.

146

Figure J: Conceptual Frameworc

II. LITERATURE REIVEW

A. Transformnlionnl LeadershipThe concept of transformational leadership was

initially coined by Bums [18] as ..transforming leadershipas leaders and followers raise one another to higher levelsof morality and motivation". Transformational leadersinfluence followers and connect their goals withorganizational objectives as well as changing their self-esteem and beliefs by inspiring their respect and loyaltyfor the leaders [19]. Later, Bass [20] from a psychologicalpoint of view named it "transformational leadership'because he was interested to know leaders' efficacy inaffi:cting followers or employees to transform theirconcepts, values, aspirations, perceptions, andexpectations.

Bass and Avolio [21] introduced five elements oftransformational leadership: idealized influence(attributed), idealized influence (behavior), inspirationalmotivation, intellectual stimulation, and individualizedconsideration. Idealized influence (attributed) defines thesense of loyalty, admiration, trust, and respect whichfollowers attribute to these leaders. Idealized influence(behavior) explains the character and behavior of theleaders. Intellectual stimulation relates to the aptitude ofleaders to develop an environment which is suitable furcreativity and innovation, and also authorize followers oremployees to solve difficult issues. Finally,individualized consideration denotes that these leaderspay attention to the needs and requirements of individualfollowers or employees, and assist them fur their self-actualization and growth [20].

The extent to which leaders practice these elementshas been demonstrated to be linked to a range oforganizational and individual results such as augmentedsatisfaction, effort, and performance of subordinates [22],and increased effectiveness of work unit and teamfunctioning [23]. Transfurmational leadership works onorganizational level to bring improvements andsimultaneously stimulate individual employees to assistchange at individual level [24]. According to Ozaralli[23], transformational leadership has considerable effectson organizational culture and values.

B. Corporate EnJrepreneurship

Corporate entrepreneurship is a commonly used conceptto explain entrepreneurial behavior of a firm [25]. Itsmain flurpose is to attain a viable competitiveness bypromoting innovation within all stages of the firm. In1980s various researchers thought it was rare forentrepreneurship to occur in small and medium firms [26].

There is generally no accepted or agreed definition oncorporate entrepreneurship. Different authors attacheddifferent meaning to it with minor modification. Itcomprised three elements: (I) establishment of new firmor business unit within an existing firm; (2) growth andapplication of entrepreneurial strategic thrusts; and (3)appearance of novel thoughts from different stages in th~firm [27]. Furthermore, it is defined as "activities aimedat creating new businesses in established companies" [28].This definition is extended by Guth and Ginsburg [6] as..transformation of organization through strategicrenewal." Zahra et al. [29] proposed numerous aspects toentrepreneurship at the level of firm revealing variouscontent mixtures, causes and applications ofentrepreneurship. Keeping in view above definitions ofcorporate entrepreneurship, basically it is a combinationof two elements: innovation and new business venturing.Vesper [27], Nielsen et al., [30] and Bierwerth et al., (3 J)also consider corporate entrepreneurship as combinationof innovation and new business venturing. Detailedexplanations of these elements are as follows.

C InnovationVarious scholars explained innovation in different

ways. Innovation is the process to bring newness inproducts or services with special focus on technologicaldevelopment [32]. It is also defined as the commitment ofa firm to produce novel products or services, process ofproduction or manufacturing, and a system oforganization with technological development focus [33].In this study innovation refers to the development of newproducts, improvement in the existing products, anddevelopment of new production process, introduce newproduct in existing market, or introduce existing productin new market The primary focus is to what degree theproducts or activities of a firm are new, di tinct, andunique.

D. New Business Venturingew business venturing is a vital dimension of

corporate entrepreneurship because it creates newbusiness within already an established firm [34], throughtransfurming the products of a firm [35], and throughintroducing the new markets to business [28]. It refers tothe establishment of new businesses associated with thealready established markets or products [36]. Antoncicand Hisrich, [37] defined it as establishing new businesswithin an already established firm. Thus this studydefines new business venturing as the creation orestablishment of new business in existing establishedfirms by transforming the firm's products fur existingmarkets or creating new markets for existing products.E. Absorptive Capacity

147

Cohen and Levinthal [38] defined absorptive capacityas capability of firms to identify, assimilate, process andexploit the novel knowledge achieved from outside firmsources. The knowledge-based theory proposes that withthis capability it can considerably enhance the ability toidentify and discover novel opportunities by developingnew abilities and decreasing cognitive inflexibility amongtop management of firm [39]. Building- and sustainingabsorptive capacity is essential fur success and long termsurvival of firm as it could strengthen, refucus, or balancethe knowledge base of firm.

III. HYPOTHESES DEVELOPME T ANDRESEARCH FRAMEWORK

A. TransjornraJi01ud Leadership and CorporateEfJlrepreneurship

Transfurmational leaders are role models to theirfollowers (employees) by demonstrating idealizedinfluence (behavior), also known as charisma Throughidealized influence (attributed), leaders being models tofollowers effectively communicate consistent and distinctunderstandings of future goals and beliefs and realize theimportance of collective goals to followers, In response,they are motivated to imitate their belief and standards.Through inspirational motivation, leaders displayparticular behaviors to express a shared vision, inspireand stimulate followers to achieve targeted objectives. Byemploying intellectual stimulation, leaders question theestablished beliefs and standards [40], use logic topromote critical thinking and stimulate fullowers torethink basic assumptions and restructure problems.When employees are stimulated to seek fresh approachesin solving existing problems it leads to creativity thusindividual creativity is enhanced through appreciatingindividuals' creative ideas resulting in fum-levelinnovation. Leaders through individualized considerationestablish relationships at individual level with fullowerswhere leaders identify needs and values at both individualand firm-level. Transfurmational leaders shapeindividuals' development using mentoring, feedback, andeffective communication [4Q] to target new businessopportunities.

Eyal and Karle [41] proposed that transformationalleadership has positive association with corporateentrepreneurship. As stated by [42] and [43]transfurmational leadership is necessary fur topmanagement to move successfully towards new businesventuring. Iorrlsene and Oberman [17] argued on thefindings of [44) that transformational leadership affectsmore positively in entrepreneurial firms than bigorganization. Ensley et al., [45] found in their study thattransformational leadership positively affectsperfurmance of new venture under the conditions ofdynamic environmenL Yang [46] also fuund positiveassociation of transfurmational leadership with corporateentrepreneurship. Consistent with the findings of [46],positive relation hip of transformational leadership withcorporate entrepreneurship is also fuund [47]. Thus,

consistent with above literature, we propose, HI:Transformational Leadership has positive relationshipwith Corporate Entrepreneurship

B. Transformational Leadership and InnovationA number of studies have identified several factors

which can contribute to stimulate innovation and moststudies identified leadership as one of the most importantelement to promote innovation [48). Managementresearchers particularly emphasized on the adaptiveperspective ofthe transformational style ofleadership anddeemed it a prospective facilitator to augment innovation[49], [50]. Oncer [47) and Yang [46] also found positiverelationship between transformational leadership and. •innovation. Therefore, consistent with extant literature,we propose, Hl: Transformational leadership positivelyaffects innovauon

C Transformational Leadership and New BusinessVenturing

ew business venturing refers to establishment ofnew venture or business in existing markets or withexisting products irrespective of size or level ofautonomy [28]. Entrepreneurial firms are those involvedin creating new businesses within the existing firm [51].As stated by [42] and [43], transformational style ofleadership is necessary fur top management to movesuccessfully toward new business venturing. Morrisetteand Oberman [17) argued on the findings of [44] thattransformational leadership affects more positively inentrepreneurial firms than big organizations. Ensley et al.,[45) found in their study that transformational leadershippositively affects the performance of new venture underthe conditions of dynamic environment So, in line withabove literature we propose, H3: Transformationalleadership positively affects new business venturing

D. Mediation of.Absorptive CapacityAccording to resource-based view, competitrve

advantage in this continually changing businessenvironment is essential fur successful survival of anyfirm. Therefore. firms continuously obtain, develop, andimprove their capabilities and resources if they want toremain competitive. The major issue firms are facing is indiscovering the basis of capabilities and resources whichincrease the competitive advantage of a firm. A numberof scholars argued that leaders of the organizations playvital role to enhance capabilities of firm [52]. In thisbackdrop, leadership ability augments firm's absorptivecapacity to nurture corporate entrepreneurship [53]. So,we propose, Hs: Absorptive capacity mediates tirerelauonship oj transformational leadership andcorporate entrepreneurship

Hsa: Absorptive capacity mediates tire relationship ojtransfonnationalleadershipand innovation

Hsb: Absorptive capacity mediates the relationship ojtransformaiional leadership and new business venturing:

IV. METHODOLOGY

148

A. Population and SampleSix industries are selected due to their significant

contribution to GDP where 56% of total SMEs and sevenclusters out of ten are located in province of Punjab.Following the cluster sampling technique as adopted byBhutta et al., [54], SMEs were selected from each clusteraccording to their percentage in total population. Table Ishows the industries and number of SMEs taken fromeach industry fur this study.

A total of 950 Questionnaires (Urdu translation wasparallel to English) were distributed in SMEs of six majorcities of the province to get a sufficient response ratewhich are registered at Small and Medium EnterprisesDevelopment Authority (SMEDA). A total of 433responses were finally collected with the response rate ofalmost 460/0. However, only 4-00 responses were used furfurther analysis.

TABLE I: SAMPLE DISTRIBUTIONSr. No. IndustrY '% Finns Responses CollectedI Textile 21 199 1172 I.eatherlFoolwear '4 134 713 Sports 12 114 994 Food&;Be~ 19 180 655 Mel1IJ 8 76 246 Wood &; Furniture 10 95 287 Others 16 152 19Total tOO 950 43~useable-4(0)

B.Meosurements o/VariablesThree different variables are used in this study. Each

variable is measured according to the appropriateinstrument Further details of variables are presented asfullows. Multifuctor Leadership Questionnaire (MLQForm ,X-short) is employed to measure transfurmationalleadership. MLQ developed and refined by [21] whichranging from "I=Not at all" to '"5=frequent".Transfurmational leadership is measured by 20-itemsscale. MLQ (Form 5X-short) is multi-cultural instrument.In other words, it is reliable and can be used in thecontext of Pakistan as used by [55], [56], [57] and [58].Corporate entrepreneurship i measured by CorporateEntrepreneurship scale. Corporate entrepreneurship scaleincludes innovation and new business venturing which isdeveloped and refined by [59] and tested by [60] and (51].Each innovation and new business venturing aremeasured by five items ranging from "I=lncreasedSignificantly" to "5=Decreased Significantly".Absorptive capacity is measured by 14 items scale whichis developed by [61), further refined by {62]. This scale isused by [63] and assured its reliability. Furthermore, thisscale is validated in the context of Pakistan [64]. Thisscale has also range from "I=Strongly Disagree" to"5=Strongly Agree".

C. Analytical TechniqueStructural Equation Modeling (SEM) is used to test theconceptual model and applied in two stages [65]. Thefirst step is to evaluate SEM measurement properties, uni-dimensionality of each latent variables, modification or

re-specification of model and assessment of reliabilityand validity of measurement properties. The second step

. provides the path association in causal theoretical latentmeasures. When a good fit of structural model isrecognized, the structural model is then used for testingthe hypotheses.

v. RESULTS AND DISCUSSION

The values of mean, standard deviations, and correlationsvariables are presented in Table II. The low and mediumlevels of correlation coefficients show that variables donot have high eollinearity with each other.

TABLE II: DESCRIPTIVE STATISTICS

Means SD 2 3 4LlL 4.1795 0.697172. INN 4.0369 0.80649 0.350·

3.NBV 3.9588 0.88207 0.342· 0.0654.AC 4.1046 0.76039 0.361* 0.000 -0.114"

5.CE 3.8721 0.59509 0.506* 0.115·· -0.057 0.704**and.* represent significance level at 1% and 5% respectively

Reliability and validity of every construct is measured[66]. Reliability is measured by average varianceextracted (A VE). construct reliability (CR), andCronbach's alpha. Likewise, validity is measured byconvergent validity. AVE and CR are computedemploying confirmatory factor analysis (CFA) on thebases of formulas presented by [67] which confirm thereliability of the constructs. Results are presented inTable lIT. All constructs used in this study have CR above0.60 and AVE not less than 0.50 as suggested by [68],recommending the constructs' reliability. The values ofCronbach's alpha of all constructs are more than 0.70 [69]which also confirms the reliability.

TAB.LE III: lNSTRUMENT RELIABILITYVariables FL AVE CR Cronbach Alpha

lL 0.68 0.508 0.912 0.9122 0.723 0.704 0.675 0.706 0.709 0.6914 0.7615 0.7520 0.75

Innovation 21 0.68 0.562 0.773 0.77122 0.6823 0.7524 0.60

NBV 26 0.64 0.518 0.81 0.804.28 0.7329 0.7930 0.71

AC 33 0.68 0.525 0.885 0.88434 0.7037 0.7338 0.7740 0.8141 0.6842 0.69

Construct validity IS Important to test a theory [68].Therefore, con truet validity is assessed on the basis of

149

GFI [70] and discussed in Table [V. Convergent validityis assured on the basis of high factor loadings (>0.50) ofall factors [71]. Furthermore, AVE outputs give anadditional support to convergent validity.

This study uses two phase modeling; measurement andstructural model [72]. First, this technique is recognizedbroadly; second, correct value of items reliability forevery construct is carried out in two phases to keep awayfrom any relation of measurement and structural model.In Table lV, the results of measurement models depict thegoodness-of-fit of models along with the finalized items.The analysis of structural model is carried out in thisphase. Two structural models are analyzed to address thehypotheses. The results of both models are as shown inTable IV and V.

TABLE IV: GOODNESS-OF-FIT MODELS

Goodness-of-fitclii

CFI RMSEA sq/dfGFI

Transformational LeadershipFinalized Items;1,2,3,4,5,6,9,9,14,15,20 0.934 0.949 0.085 3.884

InnovationFinalized Items:21,22,23,24 0.982 0.994 0.055 2.194

New Business VenturingFinalized Items:26,28,29,30 0.995 0.998 0.033 1.433

Absorptive capacityFinalized Items:33,34,37,38,40,41,42 0.966 0.977 0.071 3.014

Structural Model I 0.92 0.903 0.068 2831

Structural Model 2 0.962 0.901 0.069 2.875

TABLE V: STANDARDIZED EFFECTSPaths Direct Indirect Total

TL7CE 0317* 0.245* 0.562*TL7AC 0.470* 0.470*AC7CE 0.523* 0.523*

* represtmllcw!l of sigmjiCOJU)<!tu !l.I%

The results show that transformational leadership hassignificant positive association with corporateentrepreneurship both direct and indirect throughabsorptive capacity (Table VI). The magnitude of directand indirect association is substantial as evident from itscoefficient value 0.317 and 0.245 respectively. Theseresults are consistent with previous literatures. Forexample, Ling et al, [44] and Moriano et al. [73] fuundpositive relationship between transfurmational leadershipand corporate entrepreneurship. Similarly,Garcia-Morales et al. [II] round that transformationalleadership positively influences the absorptive capacity.Furthermore, Zahra et al, [39] and Sakhdari et al. [53]also found that absorptive capacity positively affectscorporate entrepreneurship.

It is vital to examine the effects of transfurmationalleadership on the dimensions of corporate

entrepreneurship. The results in Table VI illustrate theaforesaid relationship.

TABLE VI: STANDARDIZED EFFECTSPaths Direct Indirect Total

TL7INN 0.165*TL7NBV 0.236*TL7AC 0.470*AC71NN 0.390*AC7NBV 0.286*

0.183*0.134*

0.348*0.370*0.470*0.390*0.286*

* represt!l'Ilieve/ ofs;gllijiccmce af 0.1%

Transfurmational leadership has direct influence on bothdimensions of corporate entrepreneurship (innovation &new business venturing). Garcia-Morales et al. [11] and-.Ryan and Tipu [58] also round positive associationbetween transformational leadership and innovation.Ensley et al, [45] found positive relationship betweentransformational leadership and new business venturing,but with moderating role of environmental dynamism.Absorptive capacity also positively mediates betweentransformational leadership and both elements ofcorporate entrepreneurship. The results are consistentwith theory and past studies [II], [39], [53]. Garcia-Morales et al. [II] and Ryan and Tipu [58] found positiverelationship between transformational leadership andinnovation. For instance, it is found that absorptivecapacity positively influenced the corporateentrepreneurship activities and innovation [39], [53].Ensley et al. [45] found positive relationship betweentransformational leadership and new business venturingbut with moderating role of environmental dynamism.The findings ofEyal and Kark [41] and Oncer [47] alsosupport the results of this study that transfurmationalleadership has significant direct effects on proactivity of afirm and performance [74].

From this study, it shows that leadership does matter ininnovation and new business venturing resulting incorporate entrepreneurship. SMEs owners and managersneed to understand the importance of corporateentrepreneurship for survival, growth, and profitability.Secondly, only shifting form management approach toleadership is insufficient, instead an appropriateleadership style is required to promote corporateentrepreneurship in firms. Furthermore, a leadership stylewhich links the firm with external sources is helpful topromote corporate entrepreneurship given that the resultsof this study and previous empirical studies found thattransformational leadership as an appropriate leadershipstyle which has significant direct and indirect (throughabsorptive capacity) influence on all the dimensions ofcorporate entrepreneurship. Thirdly, SMEs owners or topmanagement ought to recruit managers or directors withspecial attention of transformational leadership capability.Thus, in developing entrepreneurial culture (corporateentrepreneurship) research and development (R&D)capacity is encouraged for innovation and new businessventuring.

VI. CONCLUSIO AND IMPLICATlO S

150

The results illustrate that transformational leadership haspositive significant effects on corporate entrepreneurship •directly and indirectly through absorptive capacity.Nevertheless, SMEs survival cannot be ensured until andunless they promote corporate entrepreneurship throughmanagement approach. In improving transfurmationalleadership skills in industries, appropriate education andtraining of key personnel of SMEs are essential fortransfurmational leadership. The issue can be resolvedthrough hiring trained and qualified individuals withfocus on trainings and workshops on regular basis tomaintain the practices of transfurmational leadershipwithin the firms. SMEs can ,collaborate with specifictraining and educational institutions to enhance themanagerial skills of key management personnel. Forexample, textile firms have collaboration with NationalTextile University. Faisalabad and Textile Institute ofPakistan (TIP). Some specific institutions have beenestablished for leather industry to provide related trainingand education. With the collaboration of those institutionsor universities, required leadership skills can be achievedSuch type of measures can be taken fur all the majorindustries. This study is conducted in the limitedmanufacturing sectors (textile, leather/fuotwear, sports,food and beverages, metal, and wood and furniture) inone province of the Pakistan. Thus the results of the studyand the importance of transfurmational leadership can befurther improved by including other sectors. This studyrecommends future research to include data of othermanufacturing ectors such as surgical equipment,chemical, carpet, and electronic industries.

ACKNOWLEDGEMENTThe authors gntrefully acknowledge the funding from theUniversity of Malaya Grant RG289-14AFR.

REFERENCES

[I] David, F. R. (2007). Stnlle£ic Management Concepts andCases. Upp!!" Saddle River, NJ: Prentice Hall

(2] Sethi, S. P. (2009). Globalization and the goodcorporation. Joumal q( business ethi<."'i,87( I), 1-2.

£3] Monbiot, G. (.!OO l)_ New European: Against corporate power,fur free trade. hilropoon Busines.~R,mew. 13(5), XXIJ-XXIIl

(4) Scherw, P. S. (2003)_ M1magement turnarounds: Diagnosingbusiness ailments. Corporole {](JI'efft(llla..· The l1I1ema1ionallOurooi oflJUsiness in SOClc/y, 3(4), 52-62.

[5] Morris. M., Kuralko, D., & Covin, J. (2008). CMpOmIeMlrq1reJtelUShip & inno,'(l/lOn ~ eJ.). Mason, OH:Thompson.

(6) Guth, W. D., & Ginsberg, A. (1990). Guest Editors'Introduction: Corporate Entreprenewship. Slmt~'gicItIt1I'IllgCIfteNJoont<rl, 11(04), 05-15.

[7] Dess, G. G., & Lumpkin, G. T. (2003). SlrotcglC ManogemMl:Crwling ONnpetillve Am'clnlDgt!s (8th ed.)_ Boston: McGraw-Hill.

[8) Dess, G. G., & Lumpldn., G. T. (2003). Slrolegic Management:CrooJing ONf,pelllil,>e Adl1QJtIages(8th ed.). Boston: McGraw-Hill.

(9) Hamstra, M. R. W., Van Yperen, N. W., Wisse, 8., &Sassenberg, K (2014). Transformational and Transactionalleadership and Followers' Achievement Goals. Journal q(Business and PSJ,,:·ho/Dg)'. 19(03)., 413-425.

[IO)Westerlaken, K M., &Woods, P. R. (2013). The Relationshipbetween Psychopathy and the Full Range Leadership ModelJ'erwllobty and Indmdllal f)t{ferelk-e.v. 5-1(01),41-46.

[lI]Garcia-Morales, V. J, Jimenez-Barrionuevo, M. M., &Gutierrez-Gutierrez, L (2012). Transformational Leadership

• Influence on Organizational Performance throughOrganizanonal Learning and Innovation. Journal ifBusinessResearch; 65(07), 1040-1050.

[12]Valdiserri, G. A., & Wilson, I. L (2010). The Study ofleadership in Small Business Organizations: Impact onProfitability and Organizational Success. The EntrepreneurialExecuuve; J5(0 I),47-7L

[13]Balmr, M. S., & Mahmood, R. (2014). LinkingTransformational Leadership and Corporate Entrepreneurship10 Performance in the Public Higher Education Institutions inMalaysia Advances in Management and Applied Economics,-1(3), 109-122.

[14]Birnsnav, M (2014). Knowledge Management andOrganizational Performance in the Service Industry: The Roleof Transformational Leadership beyond the Effects , ofTransactional Leadership. Journal q( Business Research;67(08), 1622-1629.

[15]Gumusluoglu, L, & llsev, A. (2009). Transformationalleadership, creativity, and organi.zalional innovation. Journalof business research, 62(4), 461-473.

[16)Hussain., L, Si, S., Xie, X, & Wang, L (2010). ComparntiveStudy on Impact of Internal and External CFFs on SM&.Joumol oJ SmnJJ Business & Entrepreneurship. 23(04), 637-648.

[17)Morrisette, S., & Oberman, W. (2013). Shifting StrategicImperatives: A Stages of Leadership Perspective on theAdoption of Corporate Entrepreneurship. Journal oJ AppliedManagement and EntreprenelUShip, 18(02),59-82.

[18]Bums, J. M. (1978). Leadership (Ist ed.), New York Harper& Row.

[19]Kark. R., Shamir, R, & Cben, G. (2003). The two faces ofnansformenonal leadership: empowerment anddependency. Journal ~r applied psychology, 88(2), 246-255.

[20]Bass, R M. (1985). Leadership and petjQrmance beyondexpedaJions: Free Press; Collier Macmillan.

[21] Bass, B. M., & Avolio, B. 1. (2004). Mull/foelor LeadershipQuestlOflll(Jire: Manual and Sample Set (3rd ed.), RedwoodCity: Mind Garden Inc.

[22]Bryman, A. (1992). Charisma and loodership in orgoncxnions.London: Sage.

[23]OzaralJi, N. (2003). Effects of transformational leadership onempowerment and team effectiveness, Leadership &Organi:.aJion Developmem Joumnl, 24(6), 335-344.

[24]Yuld, G. A. (2002). Leadership in Organi::aJions (5th ed.),Upper Saddle River, N J: Prentice-Hall International.

[25]Sharma, P., & Chrisman, J. (1999). Toward a Recenciliationof tbe Definitional Issues in the Field of CorporateEntrepreneurship. Erurepreneurship Theory and Praaice;23(03), JI-27.

(26]Morse, M D. (1986}. Clusters of transition-metalatoms. Chemical Reviews, 86(6), 1049-1109.

[27]Vesper, K. H. (1984). Three Faces of CorpornteEntrepreneurship: A Pilot Study. In J. A. Hornaday, F.Tarpley, J. A. Timmons & K H. Vespet' (Eds.), FronJiers oJentrepreneurship resoo.n:h.Wellesley, MA Babson College.

(28]Zahrn, S. A. (1991). Predicturs and Financial Outcomes ofCorporate Entrepreneurship: An Exploratory Study. Journal~rBlisiness Venrllring. 06(04), 259-285.

[29]Zahra, S. A., Nielsen, A. P., & Bogner, W. C (1999).Corporate entrepreneurship, knowledge, and competencedevelopment EnJreprenelirship: Theory and Pradice,23(3)169-169. '

[JO)Nielsen., R. P., Peters, M P., & Hisrich, R D. (1985).Intraprenewship Strategy for Internal Marlcets-Corporate,on-Profit and Government Institution Cases. Stroleglc

management journal. 06(02), 181-189.[31]Bierwerth, M., Schwens, C, Isidor, R., & Kabst, R. (2015).

Corporate Entrepreneurship and Perfurmance: A Meta-Analysis. Small Bu<iness Economics. -15(2),255-278.

[32]Knight, G. A (1997). Cross-cultural Reliability and Validityof a Scale to Measure Firm Entrepreneurial Orientation.Journal ~rBllslJtess VentuTing. 12(03), 213-225.

(33)Lumpkin, G. T, & Dess, G. G. (1996). Clarifying theEntrepreneurial Orientation Construct and linktng it to

151

Performance. AcadcIIIJ' ofManagc- I'l!view, 11(01), 135-172.

[34]Stopfurd, J. M" & Baden-Fuller, C W. (1994). CreatingCorporate Entrepreneurship. StmJcgic management joumal,15(07), 521-536.

[35]Rule, E. G., & Irwin, D. \V. {I988). Fosteringlnttapreneurship; The New Competitive Edge, Joumal ofBusiness Strulegy. 09(03), 44-47,

[37]Antoncic, 8., & Hisnch, R D. (2001), InlIllpreoeulSbip.:Construct refinement and cross-culhmll Validation. Joltrnal ~Business VenilU'ing. 16(5),495-527.

[38]Cohen, W. M., & Levinthal, D. A (1990). AbsorptiveCapacity: A New Perspective on learning and Innovation.Administmlive science qlltl1tcrly. 35(01), 128-152,

[39)Zahm, S. A" Filatotchev, L, & Wrigbt, M, (2009), How DoThreshold Firms SUSIain Corporate Entrepreneurship? TheRole of Boards and Absorptive Capacity, JOIuooJ ~ BusinessVenturing,. 1-1(03),248-260,

[40)Bass, B. M., & Riggio, R. E. (2006). TronifortllationalLeadership (2nd ed.), Mahwah, New Jersey: LawrenceErlbaum Associates, Inc,

[41)EyaI, 0., & Kark, R (2004). How Do TransfunnationalLeaders Transform Organizatlons'! A Study of theRelatioru;bip Between LeadelSbip and Entrepreneurship,Loodership aud Policy in Schools, 3(3), 211-235.

[42)Covin, J. G" & Slevin, D. P. (2002). The EntrepreneurialImperatives of Strategic Leadership. In M. A. Hilt, R D.Ireland, S, M. Camp & D. L. Sexton (Eds.), Strolegicentrepl'ClJeluship: CrooJing a new lllind:set (pp. 309-327).Oxford; BlackweU Publishers.

[43)Gupta, V., MacMillan, L C, & Surie, G. (2004).Entrepreneurial Leadership: Developing and Measuring aCross-Culhmll Construct JoumaJ of Business Venilll'ing.19(02), 241-260.

[44]Ling, V"~Simsek., 1.., Lubalkin, M. It,& Veiga, J. F. (2ooS),Transfurmational LeadelSbip's Role in Promoting CorporateEntrepreneUrship: E>.'BIIrining the CEO-TMT Interfilce,Academy Q.(Management JOllrnal, 5/(03), 557-576.

[45)Ensley, M, 0" Hmieleski. K. M., & ~ C L (2006), TheImportance of Vertical and Shared Leadership within NewVenture Top Management Teams: Implications fur thePerformance of Startups. 1'1", Leadership QUlII1erly. /7(03),217-231.

[46]Yang, C-W. (008). The Relationships Among LeadershipStyles, Entrepreneurial Orientation, and Business Perfunnance,A·fanaging Global Tronsilions. 06(03), 257-275.

[47]Oncer, A 1.. (10 13). Investigation of The EffecIs ofTransactional and Transfunnational Leadership onEntrepreneurial Orientation. lntemalionai Joumal ~ BllSillCSSand Social Resmrch. 03(04), 153-166,

[4S)Mumfoni, M. D" Scott, G. M., Gaddis, 8., & Strange, J. M,(2002). Leading creative people: Orchestrating expertise andrelationships. ThdeadersllipqlllUferiy, 13(6),705-750.

[49]G8Idner, W. 1.., & Avolio, B. J. (1998). The cbarismaticrelationship: A dramaturgical perspective. AcadelflJ' ~managemeni review, 23(1), 32-5S.

[50)Crawfurd, C 8., & Strobltin:h, C. S, (2000), OIganUationaiinnovation: Understanding of agents of technologicalinfluence. £ll!dronic Joumal Q.(CommllnilYIfiOll, 10( I), 2.

[51]Antoncic, R (2007). Intrnpreneursbip: a comparativestructural equation modeling study, Industrial Alanagement &Data Systems, 107(3), 309-325,

[52)Hamel, G., & Prahalad, C IC (1990). The Core Competenceof the Corporation. Hl1FVt1ITi BllsiMSS ReI'iew, 68(03), 79-91.

[53]Sakhdari, K., Burgers, H., & Davidssoo, p, (2014). TheAloderollng Role Q.( Entrepreneunal Management /It theRelationship bchVecn Ahsorplll'" Capaaty and CotpQro1eEntn:preneluship: An AflenilOll-&1sed View. Paper presentedat the Austmlian Centre fur Entrepreneurship ResearcbExcbange Conference 20 14, Sydney, Australia.

[54)Bhutta, M. K. S" Khan, J, H" Omar, A, & Asad, U, (200S).An Exploratory Study of the Characteristics Affecting theSuccess of SMEs in Pakistan. IIIIemationai JOllmal Q.(t.ntreprmelll'S/upandSmalJ Busmcss. 7(1), 107-122,

[S5]Kban, R, Rehman, AU., & Fatima, A (2009),Transfurmational Leadership and Organizational Innovation:

Moderated by Organizational Size. African Journal Q.(Business MwrogemenJ, 03{ II), 678-684.

[56)Nawaz, M. M., & Bodla, M. A (2010). Comparative study ofFull Range Leadership Model Among Faculty Members inPublic and Private Sector Higher Education Institutes andUniversities. International Journal ~ Business andManagement. 05(04),208-214,

[57)Tipu, S, A. A, Ryan, 1 C, & Fantazy, K, A (2012).Transformational Leadership in Pakistan; An Examination ofthe Relationship of Transformational Leadership toOrganizational Culture and Innovation Propensity, Journal ofManagement & Organi.'.'Xllion,18(04),461480.

[5S]Ryan, J. C, & Tipu, S. A (2013), Leadership Effects onInnovation Propensity: A Two-Factor Full Range LeadershipModel, Joumal Q.(lJIISine..<sResearch; 66(10), 2116-2129,

[59)Zahra, S. A (1993). A Conceptual Model of Entrepreneurshipas Firm Behavior: A Critique and Extensiort >

Entrepreneur-ship theory and Practice. 17(24), 05-21.[(0)Zahra, S. A (1996). Governance, Ownership, and Corporate

Entrepreneurship: The Mnderating Impact of IndustryTechnological Opportunities. Academy Q.( MonagenrenJJoumaJ,39(06),1713-1735.

[61)Zabra, S, A, & George. G. (2002), Absorptive Capacity: AReview, Reconceptualization, and Extension. Academy Q.(Manl1getneni review. 27(02), 185-203,

[62)F1atten, T. C, Eogelen, A, Zahra, S, A, & Brettel, M. (2011),A Measure of Absorptive Capacity: Scale Development andValidation. EIII'Opem! Management Joumoi; 29(02), 98-116.

[63)Jimenez-Castillo, 0" & Sanchez-Perez, M (2013). NurturingEmployee Market Knowledge Absorptive Capacity ThroughUnified Internal Communication and Integrated InformationTechnology, l,yo,."aJion & Management. 50(02), 76-86.

[64]Umrani, W., Ahmed, U,& Memon, P. (2015). E.xamining theabsorptive capacity construct A validation study in thePakistani banking contextManagemeni Science LeIters, 5(12),1053-1058_

[65]Anderson, J, c., & Gerbing, D, w, (1988), Structural equationmodeling in practice: A review and recommended two-stepapproach. Psychological bulLetin, 103(3), 411-423.

[66]De Wulf, IC, Oderkerken-SchrOder, G., & Lacobucci, D.(200 I)_ Investment in Consumer Relationships: Across-CounlIy and Cross-Industry Exploration. JOllrnal ofMl1rl<eling. 65(04), 33-50. .

(67)Fomel.1, C, & Larcker, D. F. (1981), Evaluating StruchmIIEquation Models with Unobse!vabIe Variables andMeasurement Error. JOllmai of marla:fing research, /8(0 I},39-50.

[68)Bagozzi, R P., & Yi, Y. (1988), On The Evaluation ofStructural Equation Models. Journal of the academy ofmDrlreJingsdence. 16(1), 74-94.

[69)Nunnally, J, C (1978). Psychometric Theory (2nd eel), NewYork McGraw-Hilt

[70]Hsieb, Y,·C, & Hiang, S.-T. (2004), A Study of the Impactsof Service Quality on Relationship Quality in Search-Experience-Credence Services, QlIlllity lYJntroi and appliedstatistic.<,49(06),687-688_

[71)Holmes-Smith, p" Coote, L, & Cunningham, E. (2006).St11lClurol Equation "-Iodding: From the Fundamentals toAdmnced Topics, Melbourne: Sream and Statsline.

[72)Hair, J. E, Black, W. C., Babin, 8. J., & Anderson, R E.(2010). MII/tirariate Data Analysis: A Global Perspecfive (7tbeel). Upper Saddle River, NJ: Pearson Prentice Halt

[73) Moriano, J. A, Molero, F., Topa, G" & M~oin, J,-P. L.(1014). The influence of Transfurmational Leadership andOrganizational Identification on Jnlrapreneurship.International ElIlrepreneurship alld fI,{allagement JOIlI'fW/, 10(01), 103-119.

[74)Williams, H. M., Parker, S. IC, & Turner. N. (201O).Proactively ~orming Teams: The Role of Work Design,Transfonnahonal Leadef'Ship, and Team Composition.JOllmal Q.( Occupational and Organi::atwnal Psycholozy.83(02), 301-324.

152