Improving the Innovation Performance for Vietnamese Firm Based on Practices of Idealized Influence and Individualized Consideration: The Mediating Role of Knowledge Sharing

Abstract

Innovation performance is the fundamental factor for firms to survive and achieve competitive advantage in the context of increasing competitive pressure. The purpose of this paper is to investigate the impacts of two key components of transformational leadership (TL) namely idealized influence and individualized consideration on knowledge sharing (KS), as well as their influences on firm’s innovation performance. The paper used Structural Equations Modeling (SEM) to elaborate the relationship among these latent factors through using survey data gathered from 235 participants of 60 medium and small-sized firms in Vietnam. The findings reveal that KS activities of employees play a crucial role in improving firm’s innovation performance, and serve as a mediating role in the effects of TL on innovation performance. Moreover, the findings highlight the impact of individualized consideration on innovation performance in comparison with the impact of idealized influence on innovation performance. In general, the findings of this study have advanced the understanding and brought new initiatives for Vietnamese firms to follow and improve its innovation performance.