The Effect of Transformational Leadership on Market Orientation, Learning Orientation, Organization Innovation and Organization Performance (Study on Star-Rated Hotels in Central Java Province, Indonesia)

Abstract

The study is aimed at examining the Effect of Transformational Leadership on Market Orientation, Learning Orientation, Organization Innovation and Organization Performance of the Star-Rated Hotels in Central Java Province. The research samples cover 110 Marketing Managers of the Star-Rated Hotels in Central Java Province. Sample determination applies totals sampling or population sampling in which all members of the population are used as research samples and its Marketing Manager as the respondent represents every star-rated organization/hotel. In examining the established model relationship, the data are analyzed by using Structural Equation Modeling (SEM). The results reveal: Transformational Leadership does not give significant effect on Organization Performance; Transformational Leadership gives significant effect on Market Orientation; Transformational Leadership gives significant effect on Organization Innovation; Transformational Leadership gives significant effect on Learning Orientation; Market Orientation does not give significant effect on Organization Performance; Market Orientation gives significant effect on Organization Innovation; Market Orientation does not give significant effect on Learning Orientation; Learning Orientation gives significant effect on Organization Innovation; Learning Orientation does not give significant effect on Organization Performance; and Organization Innovation gives significant effect on Organization Performance. The findings of this study are in line with Resources Based approach and Organizational Learning Theory as well, meaning both approaches work synergistically in providing research model used in the star- rated hotels in Central Java Province. It is evident that learning orientation variables give direct significant effect on organization innovation and they give significant effect on organization performance through organization innovation variables as mediating variables. The indicators showing the most dominant contribution on research variables involve demonstrating acknowledgement towards Transformational Leadership, market survey on Market Orientation, self-correction by exchanging ideas and identifying environment on Learning Orientation, improving work practices for Organization Innovation and escalating market share for Organization Performance.