The Role of Transformational Leadership In Promoting Organizational Innovation: Focusing On Community Centers In South Korea

Background and Purpose: The purpose of this study is to empirically investigate whether transformational leadership affects innovation in human service organizations. Human service organizations are confronting the double pressure of increasing demand and decreasing resource with economic crisis. In this situation, “how to provide better and more services with same or reduced resource?” has become a big issue to social service organizations. Innovation can be an answer to this (Gummer, 2001). Innovation has been reported as the key to survive in fast changing world. Social service organizations are not an exception. Leadership has been considered as an important factor to influence innovation in that leaders can make decisions and inspire employees with innovation. This study hypothesizes that transformational leadership positively affects innovation because it pursues organizational change and development with long-term oriented perspective.

Methods: This study collected data out of all the 414 community centers in South Korea using constructive questionnaire. The questionnaires were mailed, requesting senior manager to answer as a representative of the organization because they are generally in charge of overall management as well as in close proximity to clients. 290 (70.00%) organizations responded and 258 (62.32%) cases were finally analyzed. Data analysis was completed by SEM (structural equation modeling) using AMOS. Transformational leadership was measured using MLQ-5X(Multifactor Leadership Questionnaire) by Bass & Avolio (1997). Both innovation and innovation outcome was reconstructed based on CIS(Community Innovation Survey) model(EU, 2004) and Complex systems innovation model(Kemp et al., 2003). Innovation is an objective indicator measuring the frequency of innovation activities for the last one year. Innovation outcome is a subjective indicator to measure the degree of innovation effect based on the respondents' perception.

Results: SEM analysis showed that transformational leadership has significant and positive impact on both innovation (ã=0.262, p=0.000) and innovation outcome (ã=0.444, p=0.000). The effect of innovation, which means the frequency of innovation activities, on innovation outcome was significant (ã=0.209, p=0.005). Specifically, the effect of ‘inspirational motivation' out of 4 sub-dimensions of transformational leadership was significant on both innovation (ã=0.347, p=0.032) and innovation outcome (ã=0.297, p=0.000).

Conclusions and Implications: The results of this study showed that the higher transformational leadership the top-leaders have, the more the organizations try innovative activities and the higher innovation outcome they show. This implies leaders to have more transformational leadership characteristics can promote innovation and eventually lead successful innovation outcome. Additionally, innovation positively affects innovation outcome. It means the more they try innovation, the better results they have. REFERENCES Bass, B. M. & Avolio, B. J. (1997). Revised manual for the Multifactor Leadership Questionnaire. Palo Alto. CA: Mind Garden. Gummer, B. (2001). Notes from the Management Literature: Innovate or Die: The Necessity for Change in Contemporary Organizations. Administration in Social Work. 25(3). pp.65-85. Kempt, R. G. M., Folkeringa, M., De Jong J. P. J. & Wubben E. F. M. (2003). Innovation and firm performance. SCALES(Scientific analysis of enterpreneurship and SMEs). research Report H200207. http://www.oecd.org/dataoecd/37/39/37489901.pdf