The Influence of Transformational Leadership Style on Innovation Mediated by Organizational Culture

Abstract

PT. Bakrie Telecom, Tbk is the only private company in the telecommunication industry as the main competitor of PT. Telekomunikasi Indonesia, Tbk which sees innovation as having a vital role to boost performance and competitiveness. Meanwhile, the leadership style is highlighted as one of the most important influences on organizational innovation, as well as organizational culture that is essentially used as a variable in creating and implementing organizational innovation. Therefore, this study aims to analyze the extent to which innovation has been applied to PT. Bakrie Telecom, Tbk and the effect of transformational leadership and the organizational culture to innovation. The data have been collected by using questionnaires with the samples of 83 employees who work in the Marketing Department at PT Bakrie Telecom, Tbk (Northern Region of Sumatera). Then, the data were analyzed using the Path Analysis model, Sobel Test and Bootstrapping. The results show that transformational leadership contributed 43.3% in explaining the organizational culture, while the transformational leadership insignificantly affected the innovation. Moreover, the transformational leadership had a direct effect to the organizational culture. Finally this study reconfirms that organizational culture mediates the relationship between transformational leadership and innovation.