Causal Factors of Transformational Leadership on Innovation Capabilities of Small and Medium Enterprises (SMEs) in Thailand
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Abstract
This research aimed to 1) develop a model of factors influencing innovation capability of small and medium-sized enterprises (SMEs) in Thailand, 2) analyze the direct positive influence of knowledge management and organizational agility on innovation capability, and 3) analyze the indirect influence of transformational leadership on innovation capability through mediating variables, namely knowledge management and organizational agility. This research was quantitative. The samples used in the study were SME entrepreneurs in 5 Gross Province Product (GPP) center provinces in each region: Bangkok, Chiang Mai, Khon Kaen, Phuket, and Chonburi.
Multi-stage sampling was used, and the sample size was 20 times the number of observed variables. A total of 409 respondents were used. A questionnaire was used to collect data. The data were analyzed using structural equation modeling. The results of the research found that 1) The causal relationship model influencing innovation capability is consistent with empirical data, explaining 82% of the covariance of the developed model. 2) Knowledge management has a statistically significant positive influence on innovation capability, and organizational agility has a statistically significant positive influence on innovation capability. 3) Transformational leadership has an indirect influence on innovation capability through the mediating variable organizational agility, indicating that transformational leadership promotes innovation capability, with two leading indicators: organizational agility and knowledge management, which are essential for promoting the enhancement of innovation capability of SMEs in Thailand.
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