Building a Climate for Innovation Through Transformational Leadership and Organizational Culture

Research has called for organizations to be more flexible, adaptive, entrepreneurial, and innovative in meeting the changing demands of today's environment. Appropriate leadership to effect such change is required; however, there has been little empirical analysis of the theoretical relationships among the key components that make up such change strategy, including transformational leadership, organizational culture, and organizational innovation. This study examines these linkages in terms of their relationships with climate for organizational innovation in Australian private sector organizations. Structural equation modeling based on responses to a survey of 1,158 managers explores the relationship between transformational leadership and climate for organizational innovation and the extent to which a competitive, performance-oriented organizational culture mediates this relationship. Strategies for building innovative organizations are discussed.