The Impact of CEOs Transformational Leadership [614434]

sustainability
Article
The Impact of CEOs’ Transformational Leadership
on Sustainable Organizational Innovation in SMEs:
A Three-Wave Mediating Role of Organizational
Learning and Psychological Empowerment
Saira Begum1,y, Enjun Xia1, Khalid Mehmood2,*,y, Yaser Iftikhar3and Yan Li1,*
1School of Management and Economics, Beijing Institute of Technology (BIT), Beijing 100081, China;
[anonimizat] (S.B.); [anonimizat] (E.X.)
2School of Economics and Management, Tongji University, Shanghai 200092, China
3Department of Business Administration, University of Sahiwal, Sahiwal 57000, Pakistan;
[anonimizat]
*Correspondence: [anonimizat] (K.M.); [anonimizat] (Y.L.)
yThese authors contributed equally.
Received: 23 September 2020; Accepted: 16 October 2020; Published: 18 October 2020
/gid00030/gid00035/gid00032/gid00030/gid00038/gid00001/gid00033/gid00042/gid00045 /gid00001
/gid00048/gid00043/gid00031/gid00028/gid00047/gid00032/gid00046
Abstract: The sustainable organizational innovation is of paramount importance for enhancing
productivity in firms and provides organizations with the strategic direction needed to allow them
to perform at an international level. The leadership styles play a key role in their firms’ potential
to consistently innovate. Using data from a time-lagged design with three waves, CEOs of Chinese
small and medium-sized enterprises (SMEs) participated in the study. The findings reveal that
psychological empowerment mediated the relationship between transformational leadership and
sustainable organizational innovation. Organizational learning was found to indirectly e ect the
relationship between transformational leadership and sustainable organizational innovation. It also
demonstrated that psychological empowerment had a positive impact on organizational learning.
The findings indicate the strategic significance of transformational leadership and its influence on
sustainable organizational innovation for SMEs. Theoretical contributions and practical implications
were also discussed.
Keywords: transformational leadership; small and medium-sized enterprises; psychological
empowerment; organizational learning; sustainable organizational innovation
1. Introduction
Small and medium-sized enterprises (SMEs) play a significant role in developing and developed
countries’ economic growth. SMEs are helping to achieve sustainable development goals by generating
job prospects, stimulating sustainable innovation, fostering sustainable industrial development and
reducing income inequalities in developing countries. SMEs are becoming one of the main instruments
that drive a country’s economic, political, financial and social growth and are the primary component
of reducing poverty in developing countries [1]. Sustainable organizational innovation (SOI) implies
new and useful products, mechanisms and organizational strategies that make innovation more
vital than ever [ 2]. Therefore, SMEs have a potential to compete with large corporations in order
to focus on sustainable innovation. While a large number of studies concentrate on innovation [ 3],
however, there is still room to keep exploring how small and medium-sized enterprises can enhance
sustainable development from organizational aspect. For this purpose, these organizations are
engaging in a sustained e ort to develop their strategies and other organizational aspects more
Sustainability 2020 ,12, 8620; doi:10.3390 /su12208620 www.mdpi.com /journal /sustainability

Sustainability 2020 ,12, 8620 2 of 16
broadly [ 4–7]. Because SOI supports a firm’s potential to remain competitive in today’s complex
business environment [ 8], it is now more than ever a determining factor in organizational success.
The study of management has demonstrated the important role played by innovation in creating,
structuring, and even re-invigorating a firm’s ability to compete at larger scales [ 9–11]. SOI is the
ability to create or improve products, processes, and services in a coherent way that enables a
firm’s success [ 9,12]. It is therefore a sine qua non condition for growth and survival [ 13]. Innovation
nevertheless requires an individual to develop a set of ideas [ 14], produce competency based on acquired
knowledge, and gain experience, as well as having innate or acquired abilities. Innovations must be
supported by specific actors that are capable of stimulating leaders’ e ort to produce innovative and
important results for the organization [ 15,16]. In this context, the study of transformational leadership
(TL) has attracted interest in recent years. According to TL, leaders have the ability to enhance
individuals’ orientation to serve their firms’ objectives instead of only their own interests [ 17–20].
It has been suggested that leaders with TL have an optimistic approach to the everyday challenges that
occur in their organization [ 9,21]. Indeed, they can both hold and di use the attitude that challenging
situations and even obstacles can be opportunities [22].
While more investigation is needed of the role played by TL in innovation in general, the specific
case of its impact on sustainable innovation in the Chinese context is even less documented. First,
the simple fact that China is relying on SMEs innovation to modernize its economic model makes this
line of research warranted [ 6], and the fact that Chinese leaders are more inclined to adopt persuasive or
authoritarian behaviors than to mobilize more inviting leadership attitudes underscores the need [ 23].
It is clear that leadership is a core factor for favorable organizational outcomes [ 15]. SOI, in relation to
the idea of levers in TL, is a key area that remains scarcely studied [ 24,25]. We respond to this need with
a study that empirically investigates an emerging economy. To support transformational leaders as they
pursue organizational goals and to support firms in their quest for benefit, an in-depth understanding
of psychological empowerment (PE) is key [ 26]. Spreitzer [ 27] defines PE as “a comprehensive
motivational mechanism that exhibits the psychological state of individuals having the ability and
determination to initiate and drive tasks to elicit desired goals whilst fully comprehending its meaning
and impact on the environment” (see p. 1444). PE acts at two levels: first, on the individual level, where
it allows a person to take initiative; then, on an interpersonal level, as taking initiative may inspire
others to follow suit. Ultimately, it can lead to a positive impact on individuals’ work experience [ 27].
PE is an asset in facing intensified competition in a context of uncertainty and growing change [ 28]
because it shifts the focus toward proactive behaviors [ 29] that may help mitigate work pressure.
Therefore, it is critical to investigate the relationship between PE and TL on SOI in SMEs, well known
to be highly dynamic environments. Responding to calls for future research in the above-mentioned
area [ 9], our contribution describes the mediating e ects of PE in terms of TL’s impact on SOI in SMEs.
The knowledge that SMEs have supports their innovation development [ 30]. One approach to
assessing such knowledge is to conduct empirical exploration of organizational learning (OL) [ 24,31,32].
Argote [ 33] defines OL as the “creation of knowledge and its utilization in the organization” (see p. 352) .
OL is a major driver of sustainable innovation [ 34]. The strategies developed through this learning
support the organizations’ e orts in response to competition [ 33,35,36]. In this context, it is worth
assessing whether TL may be responsible for innovation through the mediating influence of OL.
The model explicitly shows an association between PE and OL that this study empirically investigates.
In particular, the purpose of this paper is to analyze the impact of transformational leadership
on organizational learning and sustainable organizational innovation and highlights the relevance of
providing empirical findings that demonstrate these linkages. As shown in Figure 1, the conceptual
framework also claims to reveal the association between organizational learning and psychological
empowerment and among these dynamic capabilities and sustainable organizational innovation.
The limited attention paid in practice to these topics corresponds with their significance to practitioners.

Sustainability 2020 ,12, 8620 3 of 16
Sustainability 2020 , 12, x FOR PEER REVIEW 3 of 15
several ways. First, it represen ts the first step towards understanding the association between
transformational leadership and sustainable organizational innovation in small and medium-sized enterprises, thereby generalizing the research findings regarding the relationship between leadership
and innovation from manufacturing industries to small and medium-sized enterprises. As suggested
earlier, from the perspective of organizational practices, SMEs leaders play an important role in contributing to the successful completion of th e company’s missions and goals [32]. Second, we
examine the three-wave mediating role of psychological empowerment and organizational learning in the relationship between transformational leadership and sustainable organizational innovation. Therefore, our study offers a new perspective that enhances our understanding of how CEOs’
transformational leadership is related to sustainable organizational innovation.

Figure 1. The conceptual model of the study.
To achieve the objectives, the study develops as follows. The section on theoretical background
and hypothesis development proposes a series of hy potheses on the influence of CEOs’ TL on PE and
OL, the influence of PE and OL on SOI. The research methodology section presents the data collection procedure and the method used to analyze empiri cally the hypothesis developed in Chinese small
and medium-sized enterprises. The results section pr esents the findings. Finally, the discussion and
conclusion sections discuss the results and points out the limitations of the study.
2. Theoretical Background and Hypothesis Development
2.1. Influence of Transformational Leadersh ip on Sustainable Orga nizational Innovation
Transformational leaders have a specific approach to recognizing work obstacles and this
approach can be used by leaders to identify organizational goals while also actively striving for their completion [25]. Analyzed in relation to the spec trum of managerial practices, such leadership
supports a dynamic of change and purposeful transformation [37]. As Jung and Avolio [38] reported,
leaders of this style gather individuals arou nd common values and prompt them to emulate
innovative behaviors. Transformational leaders are involved in sensemaking by portraying organizationally oriented measures as necessary innovations that leading for the firm [19]. In addition, transformational leadership has a strong link to innovation [39,40], because this leadership style promotes and creates an environment where de bate makes sense of new areas and novel ideas.
TL behaviors create an atmosphere that enables intellectual stimulation and generates a cohesive
environment to foster initiatives, creativity, and i nnovation [26,41]. The TL approach builds on both
inspiration and motivation and encourages the flow of innovative ideas [42]. From a relational perspective, TL directs its effects to teamwork and collaborative relations among employees at all level in the organizational hierarchy [17]. At the individual level, TL strengthens self-esteem [37]. Moreover, it triggers in leader’s minds the ability to acquire the support that enables them to envision
opportunities for themselves, whet her prospects for career evolutio n or personal growth [43]. It
invigorates leaders’ willingness and engagement in working toward new opportunities for their
organization [9]. In thei r empirical study, Dvir and colleagues [43] showed that transformational
leaders enjoy a certain freedom and maneuverabilit y in their everyday working lives. They witness
their work advance and take responsibility for assignments [38]. TL in leaders is also positively
Figure 1. The conceptual model of the study.
In sum, the study contributes to the literature on CEOs’ transformational leadership, psychological
empowerment, organizational learning and sustainable organizational innovation in several ways.
First, it represents the first step towards understanding the association between transformational
leadership and sustainable organizational innovation in small and medium-sized enterprises, thereby
generalizing the research findings regarding the relationship between leadership and innovation from
manufacturing industries to small and medium-sized enterprises. As suggested earlier, from the
perspective of organizational practices, SMEs leaders play an important role in contributing to the
successful completion of the company’s missions and goals [ 32]. Second, we examine the three-wave
mediating role of psychological empowerment and organizational learning in the relationship between
transformational leadership and sustainable organizational innovation. Therefore, our study o ers a
new perspective that enhances our understanding of how CEOs’ transformational leadership is related
to sustainable organizational innovation.
To achieve the objectives, the study develops as follows. The section on theoretical background
and hypothesis development proposes a series of hypotheses on the influence of CEOs’ TL on PE and
OL, the influence of PE and OL on SOI. The research methodology section presents the data collection
procedure and the method used to analyze empirically the hypothesis developed in Chinese small
and medium-sized enterprises. The results section presents the findings. Finally, the discussion and
conclusion sections discuss the results and points out the limitations of the study.
2. Theoretical Background and Hypothesis Development
2.1. Influence of Transformational Leadership on Sustainable Organizational Innovation
Transformational leaders have a specific approach to recognizing work obstacles and this
approach can be used by leaders to identify organizational goals while also actively striving for
their completion [ 25]. Analyzed in relation to the spectrum of managerial practices, such leadership
supports a dynamic of change and purposeful transformation [ 37]. As Jung and Avolio [ 38] reported,
leaders of this style gather individuals around common values and prompt them to emulate innovative
behaviors. Transformational leaders are involved in sensemaking by portraying organizationally
oriented measures as necessary innovations that leading for the firm [ 19]. In addition, transformational
leadership has a strong link to innovation [ 39,40], because this leadership style promotes and creates
an environment where debate makes sense of new areas and novel ideas. TL behaviors create an
atmosphere that enables intellectual stimulation and generates a cohesive environment to foster
initiatives, creativity, and innovation [ 26,41]. The TL approach builds on both inspiration and
motivation and encourages the flow of innovative ideas [ 42]. From a relational perspective, TL directs
its eects to teamwork and collaborative relations among employees at all level in the organizational
hierarchy [ 17]. At the individual level, TL strengthens self-esteem [ 37]. Moreover, it triggers in
leader’s minds the ability to acquire the support that enables them to envision opportunities for
themselves, whether prospects for career evolution or personal growth [ 43]. It invigorates leaders’
willingness and engagement in working toward new opportunities for their organization [ 9]. In their

Sustainability 2020 ,12, 8620 4 of 16
empirical study, Dvir and colleagues [ 43] showed that transformational leaders enjoy a certain freedom
and maneuverability in their everyday working lives. They witness their work advance and take
responsibility for assignments [ 38]. TL in leaders is also positively associated with PE and sustainable
innovation [ 44]. Khan and colleagues [ 45] provided evidence to show that all sub-processes of TL,
namely, showing inspirational motivation, intellectual stimulation, exhilarating charisma, and showing
individualized consideration, are positively correlated with sustainable organizational innovation.
Thus, we postulate that
Hypothesis 1 (H1). The transformational leadership of a CEO has a positive impact on sustainable organizational
innovation .
2.2. Influence of Transformational Leadership on Psychological Empowerment
Several studies have shown the impact of transformational leadership upon the psychological
empowerment [ 26,46,47]. Theories of TL have long acknowledged the empowering impact of
transformational leaders [ 48], who go beyond merely providing the accurate and appropriate
information regarding the direction the organization is taking and sharing this information in a clear
and transparent communication environment where real responsibilities are openly communicated.
This allows feelings of empowerment to be nurtured in organizations [ 49]. This type of leadership allows
any reluctance toward change to be mitigated, it also moves beyond inertia and actively engages in
finding appropriate responses to the challenges faced by the organization [ 22]. That is, transformational
leaders are mentors, coaching individuals to achieving high performance and to improve their abilities
and proactivity [ 43]. As a result, psychologically empowered leaders proactively approach their
work and feel responsible for constructive progress and utilize extra e orts regarding organizational
goals [ 27]. Transformational leaders are optimistic, passionate and committed in expressing what needs
to be achieved [ 49], maximize productivity to view the firm’s vision as meaningful [ 50] and to perceive
their own work as leading to the accomplishment of the firm’s goals [29]. Hence, we propose that
Hypothesis 2 (H2). The transformational leadership of a CEO has a positive impact on psychological
empowerment .
2.3. Influence of Psychological Empowerment on Sustainable Organizational Innovation
SOI and e ectiveness can be considered the obvious outcomes of psychological empowerment [ 51].
Leaders are able to engage more easily in creative processes that allow them to provide innovative
solutions when they feel empowered [ 26]. Amabile [ 14] argues that individuals will show a greater
orientation toward e ciency if they experience satisfaction in their workplace. Empowered leaders
sense freedom in the opportunity they have to control their tasks and duties [ 44]. Because they are
not limited or constrained by other actors, they can focus more easily on developing more creative
responses to challenges [ 52]. Empowered leaders will therefore naturally generate new original ways
to meet expected organizational needs in relation to present problems [ 24]. This attitude, in turn,
supports innovation [ 47]. This discussion, we postulate that organizations that have empowered
leaders are more disposed to generate sustainable innovative initiatives. Therefore, we posit that
Hypothesis 3 (H3). The psychological empowerment has a positive impact on sustainable organizational
innovation .

Sustainability 2020 ,12, 8620 5 of 16
2.4. Mediating Role of Psychological Empowerment
PE has long been studied in the context of organizational behavior and in management studies
more broadly [ 46]. It remains a key theme in investigations of challenges that occur in the workplace.
According to Spreitzer, PE builds on four cognitions: meaning, or “the value of a work goal judged
in relation to an individual’s own ideals”; competence, or “feelings of self-e cacy: the ability to
perform a job well”; self-determination, or “the autonomy to commence and regulate actions at the
workplace”; and impact, “being able to influence organizational results” ([ 19], p. 1443). PE strengthens
the eects of TL’s influence [ 53] and it stimulates leaders’ engagement in pro-innovation attitudes and
behaviors more actively [ 44]; this is because it allows leaders to express and share their ideas more
openly, and acquire additional opportunities to bring their innovative ideas to the implementation
stage [ 54]. Transformational leaders appear as visionary and are able to act as catalysts for the
organization’s strategic vision, which they communicate to others with optimism so those can
engage consequently to a greater degree and, by investing their potential, become more part of the
organization’s achievements [ 38]. Transformational leaders naturally inspire co-workers and promote
trust [ 55]. For these co-workers, being in a psychologically empowered state allows them to feel part
of the inspirational flow that is induced by their transformational leaders’ appeal [44].
Numerous contributions have analyzed the intermediary e ects of PE in the relationship between
TL and organizational commitment [ 49]. Leader–member exchange and work outcomes have also been
studied [ 29,56]. Work has been done that questions the impact of TL on career satisfaction [ 53]. Studies
have investigated the e ects of TL on followers’ attitudes [ 48], satisfaction and commitment, and the
organization [ 57]. TL has also been studied in its impact on task performance and organizational
citizenship behavior [ 46]. However, there is to our knowledge no work that has investigated
empowerment as a mediator for TL’s e ects on sustainable innovation. To fill this gap, we posit that
Hypothesis 4 (H4). Psychological empowerment mediates the association between transformational leadership
of CEO and organizational innovation .
2.5. Influence of Transformational Leadership on Organizational Learning
TL positively a ects OL [ 31]. In the specific context of change, TL behaviors more easily
enhance the development of creative solutions by building upon learning [ 58]. The transformational
leader both promotes a shared vision and actively capitalizes on OL, following a sharing philosophy,
where experiences, ideas, and knowledge are discussed with everyone [ 59,60]. OL takes shape and
blossoms under active TL [ 24]. As a result, willingness to learn naturally grows within co-workers,
who perceive the learning process as making them part of the change and of the successful meeting of
organizational challenges [ 34]. From that perspective, creativity and innovative abilities are the core
outcomes of OL [ 24]. These in turn are utilized by the organization to reinforce both its competitive
advantage and to generate new ways of obtaining better performance [ 31]. A study conducted
in community clinics found that TL intensified learning culture, as it allowed one’s aspirations to
be enhanced within the organization, something that transactional leadership did not enable [ 61].
This e ect, in addition to the discussion above, allows us to suggest that TL influences OL. Hence,
we hypothesize that
Hypothesis 5 (H5). The transformational leadership of a CEO has a positive impact on organizational learning .
2.6. Influence of Organizational Learning on Sustainable Organizational Innovation
OL is an asset that enables greater flexibility in response to change and improved assertion of
a company’s position in a competitive environment [ 62,63]. Firms need to demonstrate their ability
to improve their services and products to ensure that they are doing more than simply meeting

Sustainability 2020 ,12, 8620 6 of 16
current needs [ 64]. From that point of view, developing improved learning capabilities is crucial for
bringing about a continuous process of innovation [ 65,66]. A well-known example of this is The Toyota
Way: a strategy developed to encourage workers to take part in a specific OL approach wherein the
problems to be solved are deliberately discussed [ 67]. OL follows a certain flow, where knowledge
acquired by individuals moves to the group level before reaching the organizational level, from where
it moves back again to the previous levels [ 30]. This dynamics of knowledge sharing supports a
meaningful interpretation of information that strengthens the e ciency of approaches adopted by the
organization [ 68]. Where knowledge originates from multiple external sources, the means to acquire it
falls to the organization’s own ability to process it [ 69,70]. This suggests that the assimilative capability
is a condition for the collection of new knowledge [ 65]. At the same time, the extent to which an
organization processes new knowledge depends on its own characteristics, including its policies and
structures [ 71]. The linkage between OL and sustainable innovation has been found to be positive in
the literature. Therefore, we suggest that
Hypothesis 6 (H6). The organizational learning has a positive impact on sustainable organizational innovation.
2.7. Mediating Role of Organizational Learning
TL’s influence on organizational performance is enhanced by OL [ 31]. Studies have also suggested
that with OL, organizational outcomes and e ectiveness can be strengthened through TL [ 15].
Organizations’ relationship to OL determine their potential to be open to additional opportunities in
the dynamic world of work, which is characterized by rapid change, and to better compete while better
positioning themselves in the market [ 72,73]. The greater the ability that the organization demonstrates
to engage in OL, the more it can develop its innovation potential [ 24,74]. This combination leads to
higher performance [ 75]. OL remains a voluntary choice and an important mediation for evaluating
and shaping the measures that can contribute to bringing about innovation [ 76]. Prior studies have
investigated the e ects of TL on innovation by suggesting mediations such as followers’ creativity [ 9],
trust and individual identification [ 77], and the identification of individuals and R&D teams [ 78,79].
Recent work has indicated the limits to the knowledge acquired so far in relation to the mediating
eects of OL for innovation through TL, specifically in emerging economies [ 80]. Further research is
needed to identify and better understand OL in its relationship with TL’s influence on SOI. Therefore,
we postulate that
Hypothesis 7 (H7). Organizational learning mediates the association between transformational leadership of
a CEO and sustainable organizational innovation .
2.8. Psychological Empowerment and Organizational Learning
PE is a powerful tool, as it naturally reinforces individuals’ commitment to OL, as it increases
engagement in organizational life and participation in its inherent challenges [ 81–83]. In fact,
PE motivates leaders at the same time that it enhances, among others features, their self-concept [ 50].
Leaders thus become more productive in their work and feel more inclined to learn, supporting the
development of their work e ciency [ 84]. When leaders are empowered and supported through
learning opportunities, their attachment to the organization is likely to grow [ 76]. The above reasoning
suggests that PE may predict OL. Hence, we propose that
Hypothesis 8 (H8). The psychological empowerment has a positive impact on organizational learning .

Sustainability 2020 ,12, 8620 7 of 16
3. Research Methodology
3.1. Sample and Procedure
To conduct the investigation, we collected the data from small and medium-sized enterprises
(SMEs) located in northern China. The respondents for the questionnaire survey were the CEOs of
the SMEs. The data were collected in three waves at three-week intervals to reduce the likelihood of
common methods variance [ 85]. The participants were briefed about the purpose of the study and the
procedures for collecting data during the regular working time. Each participant was assured that the
information provided in the questionnaire would remain confidential and anonymous and would be
used only for research.
We randomly distributed 500 questionnaires to our respondents in the SMEs in the first wave
(Time 1). We obtained 470 usable responses from the SMEs’ CEOs, for a response rate of 94%.
The participants provided their demographic information and reported their perceptions of TL in the
first wave (Time 1). In the second-wave survey (Time 2), 470 CEOs who had filled in first-wave (Time 1)
questionnaires were asked three weeks later to report their PE and OL during the past three weeks.
During this round, we obtained 440 usable responses from CEOs of the SMEs, with a response rate of
93.6%. In the third-wave survey (Time 3), which was conducted three weeks after the second-wave
survey (Time 2), the CEOs were asked to rate SOI. A total of 440 questionnaires were sent to CEOs;
we obtained 410 responses, for a response rate of 93.1%. Taken together, the final sample of this study
comprised 410 CEOs. The average age of the respondents was 31.22 years (SD =0.907). The 77.3% of
respondents were male and 22.7% were female.
3.2. Measures
All survey materials were presented in Chinese and the back-translation approach of Brislin’s [ 86]
was followed. The survey included a scale for each construct of interest (transformational leadership,
organizational learning, psychological empowerment, sustainable organizational innovation),
along with the demographic variables. All survey items were mainly derived and adapted from prior
literature with good reliability and validity.
3.2.1. Transformational Leadership
To assess the impact of TL, four items were used, drawn from [ 87]. The scale that ranged from “1
=strongly disagree to 5 =Strongly agree” was used to gauge TL. The sample item was “Emphasizes
the use of my intelligence.” Cronbach’s alpha value was 0.86.
3.2.2. Psychological Empowerment
The PE construct for our study, which contains 12 items, was adopted from [ 27], who referred to
leading by example, showing concern, informing, coaching, and participative decision-making. Items
were measured on a five-point Likert scale that ranged from “1 =strongly disagree to 5 =strongly
agree”. Cronbach’s alpha value was 0.88.
3.2.3. Organizational Learning
The four items used for OL were drawn from the seminal work of [ 31,88,89] and were assessed by
using a five-point Likert scale that ranged from “1 =strongly disagree to 5 =strongly agree.” Sample
items were “In the last three years, the firm has acquired and shared much new and relevant knowledge
that provided a competitive advantage in technologies” and “The firm is a learning organization.”
Cronbach’s alpha value was 0.87.

Sustainability 2020 ,12, 8620 8 of 16
3.2.4. Sustainable Organizational Innovation
The innovation construct was taken from [ 89]. It contained 10 items, assessed on a five-point
Likert scale that ranged from “1 =strongly disagree to 5 =strongly agree.” Sample items were “Firms
developing new products or services” and “Firms emphasis on sustainable innovation.” Cronbach’s
alpha value was 0.96.
3.3. Results
3.3.1. Descriptive Statistics
The means, standard deviations, correlation matrixes, and alpha values are given for all items
in Table 1. It can be seen that TL is positively correlated with SOI (r =0.322 **, p<0.01), and PE is
positively correlated with SOI (r =0.531 **, p<0.01). Further, OL is positively correlated with SOI
(r=0.234 **,p<0.01). All the values were significant at the 0.01 level. As suggested by [ 90] approach,
the sample adequacy indicator (Kaiser–Meyer–Olkin) was checked and the value is 0.903, which was
well above the KMO’s acceptable range. This result shows that the sample size was adequate. These
findings are compatible with our hypotheses and provide initial support for further analysis.
Table 1. Descriptive statistics and correlation.
Variables Mean SD A VE CR SOI TL PE OL
Sustainable organizational
innovation (SOI)3.98 0.96 0.81 0.96 (0.96)
Transformational leadership (TL) 4.26 0.54 0.61 0.86 0.32 ** (0.86)
Psychological empowerment (PE) 4.02 0.62 0.58 0.89 0.53 ** 0.23 ** (0.88)
Organizational learning (OL) 3.5 1.09 0.64 0.87 0.23 ** 0.13 ** 0.18 ** (0.87)
Note: N =410; * p<0.05; ** p<0.01. Cronbach values appear in parentheses on the diagonal; AVE: average
variance extracted, CR: composite reliabilities.
3.3.2. Confirmatory Factor Analyses (CFA)
We adopted the Hu and Bentler [ 91] cut-o approach with the following parameters: 2/df,
chi-square /degree of freedom less than 2; TLI, Tucker–Lewis index greater than 0.90; CFI, comparative
fit index is greater than 0.90; and RMSEA, root-mean-square error of approximation less than 0.05.
Using AMOS 24.0, we performed confirmatory factor analyses with the maximum likelihood technique,
to validate the discriminate validity of TL, OL, PE, and SOI. The fit index of the four-factor model was
compared to the fit index of single-factor models. As shown in Table 2, the hypothesized four-factor
model had a good fit, with all fit indices at the acceptable level ( 2=291.477, df =167,2/df=1.745,
TLI=0.980, CFI =0.984, RMSEA =0.043).
After comparison with other models, we concluded that the four-factor model had the best fit to
our data. In this study, as shown in Table 1, all the values for average variance extracted (AVE) were
greater than 0.5, and composite reliabilities (CRs) were greater than 0.80, meeting criteria recommended
by [91]. This proved the accuracy of convergent validity. Taken together, these results showed that the
measures in our study were valid and are appropriate for use in further hypothesis testing.

Sustainability 2020 ,12, 8620 9 of 16
Table 2. Results of confirmatory factor analyses (CFA).
Models 2df 2/df TLI CFI RMSEA
Four Factors Model 291.477 167 1.745 0.980 0.984 0.043
Three Factors Model-1 PE and SOI 659.561 188 3.508 0.933 0.940 0.078
Three Factors Model-2 TL and SOI 739.951 188 3.935 0.922 0.930 0.084
Three Factors Model-3 OL and SOI 761.396 188 4.049 0.919 0.927 0.086
Single-Factor Model 2939.07 189 15.550 0.612 0.650 0.189
Note: N =410; PE: psychological empowerment; SOI: sustainable organizational innovation; TL: transformational
leadership; OL: organizational learning; TLI: Tucker–Lewis index; CFI: comparative fit index; RMSEA:
root-mean-square error of approximation.
3.3.3. Multiple Meditation Analysis
All the analyses were performed using the bootstrapping sampling technique [ 92]. This study
analyzes the direct relationship among variables and, also examines the meditation role of psychological
empowerment and organizational learning in the relationship between transformational leadership and
sustainable organizational innovation. In this protocol, all demographics factors that were significantly
correlated with explanatory variables (gender, age, education, and tenure) were controlled. Likewise,
all variables were standardized to reduce any potential bias owing to wide variance. We generated
95% asymmetric confidence intervals (CIs) through the bias-corrected bootstrap method and set
10,000 reiterations.
3.3.4. Hypotheses Testing
As shown in Table 3, hierarchical regression analyses revealed significant and positive direct
eects of TL on SOI ( =0.34, SE =0.07, p<0.0001, 95% CI (0.2071, 0.4938)), supporting H1.
Table 3. Results of hierarchical regression analysis.
Relationships Among TL, PE, OL, and SOI in the Regression Model
Explained Variables
PE OL SOI
 SE  SE  SE
Constant 2.84 *** 0.29 1.41 ** 0.57 0.56 ** 0.26
PE 0.26 *** 0.08 0.46 *** 0.06
TL 0.26 *** 0.05 0.18 * 0.09 0.34 *** 0.07
OL 0.10 ** 0.04
age0.03 0.03 0.06 0.05 0.04 0.04
gender 0.07 0.07 0.02 0.12 0.03 0.09
education 0.01 0.04 0.04 0.07 0.09 0.05
tenure 0.01 0.01 0.01 0.02 0.05 0.01
R20.06 0.046 0.36
F 5.536 *** 3.798 *** 32.290 ***
Note: N =410; * p<0.05; ** p<0.01; *** p<0.001. =unstandardized coe cients; TL; transformational leadership;
PE: psychological empowerment; OL: organizational learning; SOI: sustainable organizational innovation.
Likewise, significant and positive direct e ects were found for TL on PE ( =0.26, SE =0.05,
p<0.0001 , 95% CI (0.1539, 0.3694)), supporting H2. Significant and positive direct e ects were also
found for PE on SOI ( =0.46, SE =0.06, p<0.0001, 95% CI (0.6003, 0.8555)), supporting H3. Analyses
showed significant and positive direct e ects for TL on OL ( =0.18, SE =0.09, p<0.05, 95% CI
(0.0011, 0.3956)), supporting H5 and OL on SOI ( =0.10, SE =0.03, p<0.01, 95% CI (0.0350, 0.1767)),
supporting H6. Finally, significant and positive direct e ects were shown for PE on OL ( =0.26,
SE=0.08, p<0.01, 95% CI (0.1109, 0.4595)), supporting H8.

Sustainability 2020 ,12, 8620 10 of 16
Similarly, Table 4 shows the results of mediating variables psychological empowerment and
organizational learning and their e ects between transformational leadership and sustainable
organizational innovation. The analyses showed significant and indirect e ects of TL on SOI via PE
(=0.12, SE =0.05, p<0.05, 95% CI (0.1017, 0.3004)), supporting H4. We also analyzed another
significant and indirect pathway from TL to SOI via OL ( =0.05, SE =0.02, p<0.05, 95% CI (0.0094,
0.1001)), supporting H7.
Table 4. Results of mediation through bootstrapping method.
IV MV DVEect of
IV on M
(a)Eect of
M on DV
(b)Indirect
Eect
(a*b)Total
Eects
(c’)Total
Eects
(c)95 % CI Supported
TL PE SOI 0.26 0.48 0.12 0.37 0.56(0.1017,
0.3004)Yes
TL OL SOI 0.27 0.17 0.05 0.52 0.56(0.0094,
0.1001)Yes
Note: IV =TL, DV =SOI, MV =PE, OL; TL =transformational leadership; PE =psychological
empowerment; OL=organizational learning; SOI =sustainable organizational innovation; IV =independent
variable; MV =mediating variable; DV =dependent variable.
The total e ect of TL on SOI was also significant ( =0.56, SE =0.08, p<0.0001, 95% CI (0.4061,
0.7317)). The overall model represented 36% of the total variance in SOI (F =32.29, p<0.0001). These
results supported H4 and H7, indicating that TL enhances both PE and OL, which are positively related
to SOI in small and medium-sized enterprises.
4. Discussion
In this study, we investigated the mechanisms PE and OL that could supplement the
influence of small and medium-sized enterprises CEOs’ TL on sustainable organizational innovation.
Transformational leadership and organizational learning capability are important indicators of the
internal conditions that firms require in order to innovate. Our findings confirm the theoretical
arguments o ered in prior literature about the existence of a positive association between organizational
learning and empowerment [ 84,93]. Additionally, our findings support the significance in generating
innovation. The finding is particularly appealing because it promotes the characterization of TL as
more related to collective decision-making, collective priorities and the generation of capability than
conventional leadership, which relies more on standardized practices and the production of products
and services. The readiness of a CEO to recognize risks and failures is certainly also one of the first
steps of the innovation. Transformational leaders are key drivers in the knowledge acquisition to
achieve the sustainable organizational innovation in SMEs. Our model empirically demonstrates that
TL directly predicts sustainable organizational innovation. Our findings are in line with the previous
studies [ 9,47], which suggest that TL support is relevant for encouraging innovation in SMEs. These
leaders motivate to adopt experimentation-oriented behaviors to construct ideas, bringing about the
innovative approaches needed by the organization to meet its strategic objectives, such as penetrating
new markets [18].
Our finding that PE is a mediating mechanism through which TL generates organizational
innovation is a contribution to the literature on sustainable innovation and leadership. The relationship
between TL and PE has high importance because it is significantly related to sustainable organizational
innovation [ 44]. We note, however, that previous findings [ 47] indicated a negative association between
PE and organizational innovation. Our findings do not support those results, as we observed a
significant and positive impact between the two variables. Instead, our study outcomes reinforce
work that has found that psychologically empowered individuals build on their self-confidence and
provide their organizations with creative and sustainable innovative solutions and take e cient

Sustainability 2020 ,12, 8620 11 of 16
initiatives [ 46,94]. Our work can be conceived to be preliminary to the prediction of the positive
(and significant) influence of TL upon sustainable organizational innovation through PE.
Third, remaining with the literature on leadership and sustainable innovation, we stressed OL as a
potential mediator through which TL stimulates sustainable organizational innovation. The association
between TL and OL is key, as OL is significantly connected to SOI. Our results indicate OL mediates
the influence of TL on SOI. Previous work has suggested that TL reshapes internal logic through
knowledge sharing that can encourage OL in firms [ 95]. As a result, it is seen that OL supports
innovation [96]. Knowledge gained through OL is the basis of innovation [62,97].
Finally, as theoretically predicted, the results of the study confirm the e ects of PE on OL in SMEs.
Our results are evidence that the PE of CEOs has a positive and significant impact on OL. PE provides
support for leaders as they acquire relevant knowledge and information and enables them to experience
and participate in their organization’s goals in a more meaningful way [ 50]. Most importantly,
organizational members internalize knowledge when they enjoy a certain autonomy [76].
5. Conclusions
This research has important implications for the competitive context of contemporary small
and medium-sized enterprises (SMEs). More specifically, this work invites us to rethink the role
played by leadership in supporting ambition in emerging economies to better drive sustainable
innovation development. Our work has implications for management that suggest that in SMEs,
leaders should adopt a leadership style that allows them to nurture the workplace with features
that will make it a place where sustainable innovation initiatives are generated. This study aims to
elucidate such sustainable innovation by showing the strategic role of OL and PE. First, the study
demonstrates a significant positive relation between transformational leadership, organizational
learning, psychological empowerment and innovation. This leadership modifies, analyses, and is
designed to transfer knowledge via the process of organizational learning [ 98]. Thus, TL is dedicated to
and promotes OL [ 99], making it possible to address the barriers that might impede this learning [ 15].
OL aims to create a path for professional development to acquire skills or aptitudes that give sustainable
benefits through innovation [ 63]. Empirically, the research shows a positive association between OL
and SOI. The innovative firm learns and understands how to become competent. Through learning,
the enterprise can change its actions, thus reinventing its technologies and production to prevent falling
into stagnation and allow SOI. Di erent firms will find themselves in distinct states of advancement in
learning. Thus, OL avoids stagnation and promoted continuous innovation [ 100]. First, we suggest
that SMEs build on this key element and design training to help them develop their TL style. In this
way, small and medium-sized enterprises can reinforce their propensity to rely on leaders to stimulate
individuals across key dimensions that will eventually bear fruit for firms as they seek opportunities
to innovate and prepare to face change. We propose that SMEs invest in supporting their personnel
with specifically targeted training. For instance, leaders could be trained to become more involved in
their transformational leadership to e ciently transfer the vision and objectives of the firm. Second,
because the mediating role of PE is vital for TL and innovation, leaders in SMEs should also seek to
make the work environment a place where encouraging and supportive interactions are experienced.
These factors can promote confidence-building. In this sense, TL can bring about a more cohesive
environment for leaders who will develop greater commitment to organizational goals.
Finally, the findings on OL direct us toward more practical implications for small and medium-sized
enterprises. When leaders are more concerned with knowledge acquisition, they acquire deeper
insight into skills that can eventually support their participation in meaningful decision making
that contributes to refining the firm’s business strategy. As a result of this, leaders in small and
medium-sized enterprises can become involved in targeting the best learning opportunities. More
precisely, we encourage leaders of SMEs to keep themselves informed about conferences and various
training options. For academics and researchers, our results can assist in enabling a clearer picture of
the role played by TL for sustainable organizational innovation in emerging economies.

Sustainability 2020 ,12, 8620 12 of 16
Our study was cross-sectional in nature; as this limits the extent to which our results can be
interpreted, we recommend for research to adopt a longitudinal approach to our study objects. Second,
we used PE and OL as mediators. We encourage researchers to investigate other potential mediators
or moderators to analyze the e ects of TL and sustainable organizational innovation. For instance,
employee innovative work behavior and organizational commitment in SMEs could be used as
potential mediators. Third, our work was conducted in a specific cultural context, and this limits the
generalizability of our findings. Further studies should be undertaken in other contexts.
Despite its limitations, this study provided insightful information on how TL behaviors in SMEs
leaders’ behaviors influence sustainable organizational innovation through PE and OL in modern
small and medium-sized enterprises.
Author Contributions: S.B. and K.M. are co-first author and contributed equally to writing—original draft
preparation and methodology; conceptualization, S.B. and E.X.; software, Y.I.; writing—review and editing,
K.M. and Y.L.; supervision, K.M. and E.X.; funding acquisition, Y.L. and K.M. All authors have read and agreed to
the published version of the manuscript.
Funding: This research was funded by China Postdoctoral Science Foundation, grant number 2020M671236 and
China Nature Science Fund, grant number 71371029. The opinions and arguments expressed in this paper are
those of the authors and do not represent views of the China Postdoctoral Science Foundation and China Nature
Science Fund.
Conflicts of Interest: The authors declare no conflict of interest.
References
1. Ajayi, O.M.; Odusanya, K.; Morton, S. Stimulating employee ambidexterity and employee engagement in
SMEs. Manag. Decis. 2017 ,55, 662–680. [CrossRef]
2. Urbano, D.; Aparicio, S.; Audretsch, D. Twenty-five years of research on institutions, entrepreneurship,
and economic growth: What has been learned? Small Bus. Econ. 2019 ,53, 21–49. [CrossRef]
3. Mohamad, A.A.; Ramayah, T.; Lo, M.C. Sustainable knowledge management and firm innovativeness:
The contingent role of innovative culture. Sustainability 2020 ,12, 6910. [CrossRef]
4. Hambrick, D.C. Guest editor’s introduction: Putting top managers back in the strategy picture.
Strateg. Manag. J. 1989 ,10, 5–15. [CrossRef]
5. Klingebiel, R.; Rammer, C. Resource allocation strategy for innovation portfolio management.
Strateg. Manag. J. 2014 ,35, 246–268. [CrossRef]
6. Qian, C.; Cao, Q.; Takeuchi, R. Top management team functional diversity and organizational innovation in
China: The moderating e ects of environment. Strateg. Manag. J. 2013 ,34, 110–120. [CrossRef]
7. Sun, Y.; Wang, T.; Gu, X. A sustainable development perspective on cooperative culture, knowledge flow,
and innovation network governance performance. Sustainability 2019 ,11, 6126. [CrossRef]
8. Pérez-Luño, A.; Gopalakrishnan, S.; Cabrera, R.V . Innovation and performance: The role of environmental
dynamism on the success of innovation choices. IEEE Trans. Eng. Manag. 2014 ,61, 499–510. [CrossRef]
9. Gumuslu ˇolu, L.; Ilsev, A. Transformational leadership and organizational innovation: The roles of internal
and external support for innovation. J. Prod. Innov. Manag. 2009 ,26, 264–277. [CrossRef]
10. Manuti, A.; Giancaspro, M.L. People make the di erence: An explorative study on the relationship between
organizational practices, employees’ resources, and organizational behavior enhancing the psychology of
sustainability and sustainable development. Sustainability 2019 ,11, 1499. [CrossRef]
11. Abrar, M.F.; Khan, M.S.; Ali, S.; Ali, U.; Majeed, M.F.; Ali, A.; Amin, B.; Rasheed, N. Motivators for
large-scale agile adoption from management perspective: A systematic literature review. IEEE Access 2019 ,7,
22660–22674. [CrossRef]
12. Dangelico, R.M.; Pujari, D.; Pontrandolfo, P . Green product innovation in manufacturing firms:
A sustainability-oriented dynamic capability perspective. Bus. Strateg. Environ. 2017 ,26, 490–506.
[CrossRef]
13. Santos-Vijande, M.L.; Álvarez-Gonz ález, L.I. Innovativeness and organizational innovation in total quality
oriented firms: The moderating role of market turbulence. Technovation 2007 ,27, 514–532. [CrossRef]
14. Amabile, T.M. A model of creativity and innovation in organizations. Res. Organ. Behav. 1988 ,10, 123–167.

Sustainability 2020 ,12, 8620 13 of 16
15. García-Morales, V .J.; Jim énez-Barrionuevo, M.M.; Guti érrez-Guti érrez, L. Transformational leadership
influence on organizational performance through organizational learning and innovation. J. Bus. Res. 2012 ,
65, 1040–1050. [CrossRef]
16. Mehmood, K.; Hussain, A. Knowledge-oriented leadership and innovation: A mediating role of knowledge
creation: A case of software industry. In Proceedings of the 2017 4th International Conference on Systems
and Informatics, Hangzhou, China, 11–13 November 2017; pp. 1647–1651.
17. Jiang, Y.; Chen, C.C. Integrating Knowledge Activities for Team Innovation: E ects of Transformational
Leadership. J. Manag. 2018 ,44, 1819–1847. [CrossRef]
18. Mumford, M.D.; Scott, G.M.; Gaddis, B.; Strange, J.M. Leading creative people: Orchestrating expertise and
relationships. Leadersh. Q. 2002 ,13, 705–750. [CrossRef]
19. Muralidharan, E.; Pathak, S. Sustainability, transformational leadership, and social entrepreneurship.
Sustainability 2018 ,10, 567. [CrossRef]
20. Mehmood, K.; Li, Y.; Jabeen, F.; Khan, A.N.; Chen, S.; Khalid, G.K. Influence of female managers’ emotional
display on frontline employees’ job satisfaction: A cross-level investigation in an emerging economy. Int. J.
Bank Mark. 2020 . [CrossRef]
21. Kim, B.J.; Kim, T.H.; Jung, S.Y. How to enhance sustainability through transformational leadership:
The important role of employees’ forgiveness. Sustainability 2018 ,10, 2682. [CrossRef]
22. Longshore, J.M. Leadership and Performance Beyond Expectations. Acad. Manag. Rev. 1987 ,12, 756–757.
[CrossRef]
23. Casimir, G.; Waldman, D.A. A cross cultural comparison of the importance of leadership traits for e ective
low-level and high-level leaders: Australia and China. Int. J. Cross Cult. Manag. 2007 ,7, 47–60. [CrossRef]
24. Hsiao, H.C.; Chang, J.C. The role of organizational learning in transformational leadership and organizational
innovation. Asia Pacific Educ. Rev. 2011 ,12, 621–631. [CrossRef]
25. Jung, D.D.; Wu, A.; Chow, C.W. Towards understanding the direct and indirect e ects of CEOs’
transformational leadership on firm innovation. Leadersh. Q. 2008 ,19, 582–594. [CrossRef]
26. Afsar, B.; Badir, Y.F.; Bin Saeed, B. Transformational leadership and innovative work behavior. Ind. Manag.
Data Syst. 2014 ,114, 1270–1300. [CrossRef]
27. Spreitzer, G.M. Psychological empowerment in the workplace: Dimensions, measurement, and validation.
Acad. Manag. J. 1995 ,38, 1442–1465.
28. Marnewick, A.L.; Marnewick, C. The ability of project managers to implement industry 4.0-related projects.
IEEE Access 2020 ,8, 314–324. [CrossRef]
29. Aryee, S.; Chen, Z.X. Leader-member exchange in a Chinese context: Antecedents, the mediating role of
psychological empowerment and outcomes. J. Bus. Res. 2006 ,59, 793–801. [CrossRef]
30. Crossan, M.M. The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of
Innovation. J. Int. Bus. Stud. 1996 ,27, 196–201. [CrossRef]
31. Aragón-Correa, J.A.; Garc ía-Morales, V .J.; Cord ón-Pozo, E. Leadership and organizational learning’s role on
innovation and performance: Lessons from Spain. Ind. Mark. Manag. 2007 ,36, 349–359. [CrossRef]
32. Barbalho, S.C.M.; De Toledo, J.C.; Silva, I.A. Da The e ect of stakeholders’ satisfaction and projectmanagement
performance on transitions in a project management o ce.IEEE Access 2019 ,7, 169385–169398. [CrossRef]
33. Argote, L. Organizational learning and strategic change. Res. Multi-Level Issues 2003 ,2, 351–359.
34. Zhao, J.; Li, Y.; Liu, Y. Organizational learning, managerial ties, and radical innovation: Evidence from an
emerging economy. IEEE Trans. Eng. Manag. 2016 ,63, 489–499. [CrossRef]
35. Bettis, R.A.; Hitt, M.A. The new competitive landscape. Strateg. Manag. J. 1995 ,16, 7–19. [CrossRef]
36. Shrivastava, P .; Grant, J.H. Empirically derived models of strategic decision-making processes.
Strateg. Manag. J. 1985 ,6, 97–113. [CrossRef]
37. Grant, A.M. Leading with meaning: Beneficiary contact, prosocial impact, and the performance e ects of
transformational leadership. Acad. Manag. J. 2012 ,55, 458–476. [CrossRef]
38. Jung, D.I.; Avolio, B.J. Opening the black box: An experimental investigation of the mediating e ects of trust
and value congruence on transformational and transactional leadership. J. Organ. Behav. 2000 ,21, 949–964.
[CrossRef]
39. Metcalf, L.; Benn, S. Leadership for sustainability: An evolution of leadership ability. J. Bus. Ethics 2013 ,112,
369–384. [CrossRef]

Sustainability 2020 ,12, 8620 14 of 16
40. Galpin, T.; Whittington, J.L. Sustainability leadership: From strategy to results. J. Bus. Strategy 2012 ,33,
40–48. [CrossRef]
41. Mehmood, K.; Hussain, S.T.; Ali, M. Impact of transformational leadership on organizational change:
The mediating role of knowledge sharing and the moderating role of willingness to participate. In Proceedings
of the Academy of Management Global Proceedings, Bled, Slovenia, 23–25 October 2019; p. 264.
42. Elkins, T.; Keller, R.T. Leadership in research and development organizations: A literature review and
conceptual framework. Leadersh. Q. 2003 ,14, 587–606. [CrossRef]
43. Dvir, T.; Eden, D.; Avolio, B.J.; Shamir, B. Impact of transformational leadership on follower development
and performance: A field experiment. Acad. Manag. J. 2002 ,45, 735–744.
44. Pieterse, A.N.; van Knippenberg, D.; Schippers, M.; Stam, D. Transformational and transactional leadership
and innovative behavior: The moderating role of psychological empowerment. J. Organ. Behav. 2010 ,31,
609–623. [CrossRef]
45. Khan, R.; Rehman, A.U.; Fatima, A. Transformational leadership and organizational innovation: Moderated
by organizational size. Afr. J. Bus. Manag. 2009 ,3, 678–684.
46. Dust, S.B.; Resick, C.J.; Mawritz, M.B. Transformational leadership, psychological empowerment, and the
moderating role of mechanistic-organic contexts. J. Organ. Behav. 2014 ,35, 413–433. [CrossRef]
47. Jung, D.I.; Chow, C.; Wu, A. The role of transformational leadership in enhancing organizational innovation:
Hypotheses and some preliminary findings. Leadersh. Q. 2003 ,14, 525–544. [CrossRef]
48. Barroso Castro, C.; Villegas Perinan, M.M.; Casillas Bueno, J.C. Transformational leadership and followers’
attitudes: The mediating role of psychological empowerment. Int. J. Hum. Resour. Manag. 2008 ,19,
1842–1863. [CrossRef]
49. Avolio, B.J.; Zhu, W.; Koh, W.; Bhatia, P . Transformational leadership and organizational commitment:
Mediating role of psychological empowerment and moderating role of structural distance. J. Organ. Behav.
2004 ,25, 951–968. [CrossRef]
50. Liden, R.C.; Wayne, S.J.; Sparrowe, R.T. An examination of the mediating role of psychological empowerment
on the relations between the job, interpersonal relationships, and work outcomes. J. Appl. Psychol. 2000 ,85,
407–416. [CrossRef] [PubMed]
51. Kizilos, P . Crazy about empowerment? Training 1990 ,27, 47–56.
52. Carreiro, H.; Oliveira, T. Impact of transformational leadership on the di usion of innovation in firms:
Application to mobile cloud computing. Comput. Ind. 2019 ,107, 104–113. [CrossRef]
53. Brian Joo, B.K.; Lim, T. Transformational leadership and career satisfaction: The mediating role of
psychological empowerment. J. Leadersh. Organ. Stud. 2013 ,20, 316–326.
54. Thomas, K.W.; Velthouse, B.A. Cognitive elements of empowerment: An “interpretive” model of intrinsic
task motivation. Acad. Manag. Rev. 1990 ,15, 666–681.
55. Le Bas, C.; Mothe, C.; Nguyen-Thi, T.U. The di erentiated impacts of organizational innovation practices on
technological innovation persistence. Eur. J. Innov. Manag. 2015 ,18, 110–127. [CrossRef]
56. AlHashmi, M.; Jabeen, F.; Papastathopoulos, A. Impact of leader–member exchange and perceived
organisational support on turnover intention: The mediating e ects of psychological stress. Polic. Int. J.
2019 ,42, 520–536. [CrossRef]
57. Chang, L.C.; Shih, C.H.; Lin, S.M. The mediating role of psychological empowerment on job satisfaction
and organizational commitment for school health nurses: A cross-sectional questionnaire survey. Int. J.
Nurs. Stud. 2010 ,47, 427–433. [CrossRef] [PubMed]
58. Vera, D.; Crossan, M. Strategic leadership and organizational learning. Acad. Manag. Rev. 2004 ,29, 222–240.
[CrossRef]
59. Kurland, H.; Peretz, H.; Hertz-Lazarowitz, R. Leadership style and organizational learning: The mediate
eect of school vision. J. Educ. Adm. 2010 ,48, 7–30. [CrossRef]
60. Al Dari, T.; Jabeen, F.; Papastathopoulos, A. Examining the role of leadership inspiration, rewards and its
relationship with contribution to knowledge sharing: Evidence from the UAE. J. Work. Learn. 2018 ,30,
488–512. [CrossRef]
61. Amitay, M.; Popper, M.; Lipshitz, R. Leadership styles and organizational learning in community clinics.
Learn. Organ. 2005 ,12, 57–70. [CrossRef]
62. Lei, D.; Slocum, J.W.; Pitts, R.A. Designing organizations for competitive advantage: The power of unlearning
and learning. Organ. Dyn. 1999 ,27, 24–38. [CrossRef]

Sustainability 2020 ,12, 8620 15 of 16
63. Argote, L.; Miron-Spektor, E. Organizational learning: From experience to knowledge. Organ. Sci. 2011 ,22,
1123–1137. [CrossRef]
64. Cui, A.S.; Chan, K.; Calantone, R.J. The learning zone in new product development. IEEE Trans. Eng. Manag.
2014 ,61, 690–701. [CrossRef]
65. Pisano, G.P . Knowledge, Integration, and the Locus of Learning: An Empirical Analysis of Process
Development. Strateg. Manag. J. 1994 ,15, 85–100. [CrossRef]
66. Akgün, A.E.; Lynn, G.S.; Byrne, J.C. Organizational learning: A socio-cognitive framework. Hum. Relat.
2003 ,56, 839–868. [CrossRef]
67. Liker, J.K. The heart of the Toyota Production System: Eliminating waste. In The Toyota Way: 14 Management
Principles from the World’s Greatest Manufacturer ; McGraw-Hill: New York, NY, USA, 2004.
68. Crossan, M.M.; Lane, H.W.; White, R.E. An organizational learning framework: From intuition to institution.
Acad. Manag. Rev. 1999 ,24, 522–537. [CrossRef]
69. Fischer, T.; Henkel, J. Capturing value from innovation-diverging views of R&D and marketing managers.
IEEE Trans. Eng. Manag. 2012 ,59, 572–584.
70. Vera, D.; Crossan, M.; Apaydin, M. A framework for integrating organizational learning, knowledge,
capabilities, and absorptive capacity. Handb. Organ. Learn. Knowl. Manag. 2015 ,2, 153–180.
71. Lane, P .J.; Lubatkin, M. Relative absorptive capacity and interorganizational learning. Strateg. Manag. J.
1998 ,19, 461–477. [CrossRef]
72. Hitt, M.A.; Ireland, R.D.; Camp, S.M.; Sexton, D.L. Strategic entrepreneurship: Entrepreneurial strategies for
wealth creation. Strateg. Manag. J. 2001 ,22, 479–491. [CrossRef]
73. Dzhengiz, T. A literature review of inter-organizational sustainability learning. Sustainability 2020 ,12, 4876.
[CrossRef]
74. Dzhengiz, T. The relationship of organisational value frames with the configuration of alliance portfolios:
Cases from electricity utilities in Great Britain. Sustainability 2018 ,10, 4455. [CrossRef]
75. Weerawardena, J.; O’Cass, A.; Julian, C. Does industry matter? Examining the role of industry structure and
organizational learning in innovation and brand performance. J. Bus. Res. 2006 ,59, 37–45. [CrossRef]
76. Joo, B.-K.; Shim, J.H. Psychological empowerment and organizational commitment: The moderating e ect of
organizational learning culture. Hum. Resour. Dev. Int. 2010 ,13, 425–441. [CrossRef]
77. Zhang, Y.; Xie, Y.H. Authoritarian leadership and extra-role behaviors: A role-perception perspective.
Manag. Organ. Rev. 2017 ,13, 147–166. [CrossRef]
78. Paulsen, N.; Callan, V .J.; Ayoko, O.; Saunders, D. Transformational leadership and innovation in an R&D
organization experiencing major change. J. Organ. Chang. Manag. 2013 ,26, 595–610.
79. Joglekar, N.R.; L évesque, M. Marketing, R&D, and startup valuation. IEEE Trans. Eng. Manag. 2009 ,56,
229–242.
80. Al-Husseini, S.; El Beltagi, I.; Moizer, J. Transformational leadership and innovation: The mediating role of
knowledge sharing amongst higher education faculty. Int. J. Leadersh. Educ. 2019 . [CrossRef]
81. Safari, K.; Rastegar, A.; Jahromi, R.G. The relationship between psychological empowerment and
entrapreneurship among clerks of Fars Payame Noor University. Procedia-Soc. Behav. Sci. 2010 ,5,
798–802. [CrossRef]
82. Lee, C.Y.; Wu, H.L.; Liu, C.Y. Contextual determinants of ambidextrous learning: Evidence from industrial
firms in four industrialized countries. IEEE Trans. Eng. Manag. 2013 ,60, 529–540. [CrossRef]
83. Dzhengiz, T.; Niesten, E. Competences for environmental sustainability: A systematic review on the impact
of absorptive capacity and capabilities. J. Bus. Ethics 2020 ,162, 881–906. [CrossRef]
84. Safari, K.; Haghighi, A.S.; Rastegar, A.; Jamshidi, A. The relationship between psychological empowerment
and organizational learning. Procedia-Soc. Behav. Sci. 2011 ,30, 1147–1152. [CrossRef]
85. Podsako , P .M.; MacKenzie, S.B.; Lee, J.-Y.; Podsako , N.P . Common method biases in behavioral research:
A critical review of the literature and recommended remedies. J. Appl. Psychol. 2003 ,88, 879–903. [CrossRef]
[PubMed]
86. Brislin, R.W. Translation and content analysis of oral and written materials. Methodology 1980 ,2, 389–444.
87. McColl-Kennedy, J.R.; Anderson, R.D. Impact of leadership style and emotions on subordinate performance.
Leadersh. Q. 2002 ,13, 545–559. [CrossRef]

Sustainability 2020 ,12, 8620 16 of 16
88. García-Morales, V .J.; Llorens-Montes, F.J.; Verd ú-Jover, A.J. Antecedents and consequences of organizational
innovation and organizational learning in entrepreneurship. Ind. Manag. Data Syst. 2006 ,106, 21–42.
[CrossRef]
89. Antoncic, B.; Hisrich, R.D. Intrapreneurship: Construct refinement and cross-cultural validation.
J. Bus. Ventur. 2001 ,16, 495–527. [CrossRef]
90. Hair, J.F.; Black, W.C.; Babin, B.J.; Anderson, R.E. Multivariate Data Analysis: A Global Perspective ; Prentice Hall:
Upper Saddle River, NJ, USA, 2010.
91. Hu, L.-T.; Bentler, P .M. Cuto criteria for fit indexes in covariance structure analysis: Conventional criteria
versus new alternatives. Struct. Equ. Model. 1999 ,6, 1–55. [CrossRef]
92. Preacher, K.J.; Hayes, A.F. SPSS and SAS procedures for estimating indirect e ects in simple mediation
models. Behav. Res. Methods Instrum. Comput. 2004 ,36, 717–731. [CrossRef]
93. Dishman, P .; Pearson, T. Assessing intelligence as learning within an industrial marketing group: A pilot
study. Ind. Mark. Manag. 2003 ,32, 615–620. [CrossRef]
94. Damanpour, F. Organizational innovation: A meta-analysis of e ects of determinants and moderators. Acad.
Manag. J. 1991 ,34, 555–590.
95. Senge, P .M. The Fifth Discipline. The Art and Practice of the Learning Organization ; Dell Publishing Group:
New York, NY, USA; Bantam Doubleday: New York, NY, USA, 1994.
96. Argyris, C.; Schon, D.A. Organizational Learning II: Theory, Method, and Practice ; Addison-Wesley: Reading,
MA, USA, 1996.
97. Calantone, R.; Garcia, R.; Dröge, C. The e ects of environmental turbulence on new product development
strategy planning. J. Prod. Innov. Manag. 2003 ,20, 90–103. [CrossRef]
98. Montes, F.J.L.; Ruiz Moreno, A.; Garc ía Morales, V . Influence of support leadership and teamwork cohesion
on organizational learning, innovation and performance: An empirical examination. Technovation 2005 ,25,
1159–1172. [CrossRef]
99. Leal Filho, W.; Raath, S.; Lazzarini, B.; Vargas, V .R.; de Souza, L.; Anholon, R.; Quelhas, O.L.G.; Haddad, R.;
Klavins, M.; Orlovic, V .L. The role of transformation in learning and education for sustainability. J. Clean. Prod.
2018 ,199, 286–295. [CrossRef]
100. Papa, A.; Santoro, G.; Tirabeni, L.; Monge, F. Social media as tool for facilitating knowledge creation and
innovation in small and medium enterprises. Balt. J. Manag. 2018 ,13, 329–344. [CrossRef]
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional
aliations.
©2020 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access
article distributed under the terms and conditions of the Creative Commons Attribution
(CC BY) license (http: //creativecommons.org /licenses /by/4.0/).