Leadership Development Practices and Organizational Innovation: A Mediation Analysis of Readymade Garments Industry Volume 3 - Issue 4

Farheen Shafi* and Kamran Yousaf Sandhu

• Department of Business Studies, National College of Business Administration and Economics, Pakistan

Received: February 18, 2021   Published: February 26, 2021

*Corresponding author: Farheen Shafi, Department of Business Studies, National College of Business Administration and Economics, Lahore, Pakistan

DOI: 10.32474/LTTFD.2021.03.000170

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Abstract

Purpose: This exploratory research was intended to examine the mediating role of the intellectual capital (IC) dimensions, i.e., human capital (HC), structural capital (SC) and relational capital (RC) in RMG industry Lahore, Pakistan.

Design/Methodology: Based on convenience sampling technique 250 questionnaires, including 22 items, were distributed among the industry experts. Data was collected from 200 respondents. Smart PLS 3 software was used for conducting analysis such as regression, internal consistency and mediation tests. Reliability and validity were checked and verified.

Findings: Two out of the three hypotheses showed significant results. HC and SC positively mediated the relationship between leadership development practices (LDPs) and organizational Innovation (OI) while RC does not. Structural capital more strongly mediates this effect on (OI) as compared to (HC).

Implications: This study will aid RMG industry in comprehending the antecedents of innovation for competitive advantage. The industry is in dire need of identifying the IC component which greatly leverages the influence of LDPs on (OI). The RMG industry now need to focus on (SC) and (HC) and must design relevant practices for the development of leaders which congruently affects structures, process and technological infrastructures.

Originality/Value: Extant literature focuses on leadership development practices with innovation outcomes at individual and organizational level. However, which component of intellectual capital better mediates the relationship in RMG industry of Lahore, Pakistan, has rarely been explored. This novel research model examines the effect of specific leadership development practices on individual dimensions of intellectual capital and organization level innovation. The importance of leadership development practices for innovation cannot be over-emphasized as these practices not only build interpersonal and intrapersonal skills of leaders but economically enable the individual firms and industry in achieving competitive advantage in the international markets.

Keywords: Leadership development practices; training and development; human capital; structural capital; relational capital; organizational innovation

Abstract| Introduction| Objectives| Literature Review and Hypotheses| Analysis and Results| Discussion and Conclusion| References|