Influence of transformational leadership and knowledge management on radical and incremental innovation: the moderating role of collaborative culture

Purpose The purpose of this study is to explore the influence of transformational leadership (TL) on a firm's radical and incremental innovation. It also deepens the understanding of appropriate mechanisms and conditions to improve specific aspects of innovation by examining the mediating role of knowledge management capability (KMC) and moderating mechanism of collaborative culture. Design/methodology/approach This study utilized structural equation modeling (SEM) and cross-sectional design to test hypotheses in the proposed research model using survey data collected from 365 participants in 86 manufacturing and service firms. Findings The findings indicate that TL induces greater effect on radical innovation compared to its effect on incremental innovation. The mediating role of KMC between TL and aspects of innovation capability is also supported. Especially, the influences of KMC on specific aspects of innovation capability are different and depend on the degree of collaborative culture in an organization. Research limitations/implications Future research should examine the mediating mechanisms of knowledge acquisition, knowledge sharing and knowledge application to provide deeper insight into specific roles of knowledge management's constituents in linking TL and innovation capability. Practical implications The paper significantly contributes to increasing the understanding of the link between TL and specific aspects of innovation capability by highlighting the important role of KMC and positive effects of collaborative climate in an organization. Originality/value The paper is unique in the attempts to provide a prospective solution for firms to pursue and improve innovation based on the meaningful insights into the mediating role of KMC and moderating effect of collaborative culture in the relationship between TL and specific dimensions of innovation capability.