The Effect of Transformational Leadership on Innovation
Performance of Subordinates: Psychological Capital as Mediator
Jiang-lin Ke 1 Han-xi Zhang 2 Rui Sun 3 Hang Zhang 4
1 School of Management, Beijing Normal University, Beijing, P.R.China, 100875, kejianglin@126.com
2 School of Management, Beijing Normal University, Beijing, P.R.China, 100875, hopeinwinter@163.com
3 Chinese Academy of Personnel Science, Beijing, P.R.China, 100101, jinba869@163.com
4 Hainan Airlines Home Property Co.Ltd, Beijing, P.R.China, 100027, prefer_hang@yahoo.com.cn
Abstract - Transformational leadership is a hot-debated
research topic. However, the study about underlying
mechanism
for
understanding
the
impact
of
transformational leadership on performance outcomes from
the perspective of cognitive psychology is few. According to
this, the attention of this article is paid to the effect of
transformational leadership on subordinates’ innovation
performance using psychological capital as a mediator. We
examine the relationship among psychological capital,
transformational leadership and innovation performance of
subordinates and give some practical advices on how to
enhance the subordinates’ innovation performance. 1
psychological capital as a mediator variable, analyze the
relationship and underlying mechanism among them and
give some practical advices on how to enhance the
subordinates’ innovation performance.
II. LITERATURE REVIEW AND HYPOTHESIS
A. Transformational leadership
The concept of transformational leadership was first
proposed by Burns. According to the study of political
leadership, Burns (1978) divided the leadership into two
opposite ones: transformational leadership and
transactional Leadership. Bass (1985) introduced the
Burns’ concept into the business organization. He pointed
out that transformational leadership inspires the
subordinates’ higher need, establish the atmosphere of
mutual trust, make subordinates to sacrifice their own
rights for the organization’s rights and exceed the
expected outcome through making employees to realize
the magnificence of their taking the tasks.
Some researchers identified transformational
leadership’s effect on some employees’ behaviors. From
the aspect of positive working behavior, Li et al. (2006)
indicated that transformational leadership had positively
significant correlation to OCB (organizational citizenship
behavior). From the aspect of negative working behavior,
Brown et al. (2006) indicated that charisma or idealized
influence had negatively significant correlation to
interpersonal deviance and organizational deviance.
Key words - transformational leadership; psychological
capital; innovation performance
I .INTRODUCTION
Innovation is a nation’s inexhaustible strength. In
enterprises, leaders make a great effect on the
subordinates’ innovation performance. Burns and Bass
proposed the theory of transformational leadership in
1980s and therefore triggered the revolution of research
about leadership theory. Transformational leaders are
assumed to ‘motivate people to do their best’ and make
their followers perform beyond expectations by moving
them to transcend their own self-interest for a higher
purpose or vision. Bass and Avolio (1994) characterized
transformational leadership as comprising four
components: idealized influence, inspirational motivation,
intellectual stimulation, and individualized consideration.
The relationship between transformational leadership and
leader effectiveness is the key point of the overseas
transformational leadership study and most empirical
studies have indicated that transformational leadership is
highly related to the followers’ job performance and it
seems to be different from traditional leadership styles as
it is more about emphasizing change and envisioning
(Avolio, 1994)). Hence, transformational leadership
theory is regarded as a promising approach to foster
subordinates’ innovation (Waldman & Bass, 1991). In this
paper, we will study the effect of transformational
leadership on employees’ innovation performance with
B. Psychological Capital
Psychology campaign started by American’s
psychologist Seligman emphasizes that psychology
should focus on the study of human’s positive affection,
positive characteristic and positive state. Affected by this,
Fred Luthans, the famous organizational behaviorist and’
former president of Academy of American Management,
established POB (Positive Organizational Behavior) and
proposed the concept of psychological capital in 2004.
Psychological capital is an individual positive mental
strengths which can be measurable, developed and
managed to promote job performance. It consists of
efficacy, hope, optimism, and resilience and has positive
effect on job performance. In the Chinese organizations’
situation, employers’ psychological capital consists of
Funded by National Natural Science Foundation of China (No.71772109;
71102020)and the Ministry of education of Humanities and Social Sciences
Fund of China(No. 10YJC630107)
1
Task-orientated Psychological Capital and Guanxiorientated Psychological Capital, which were developed
by Ke, Sun, and Li (2009).
the employees will contribute to their mutual respect and
humility is a merit all Chinese share. Consequently, we
assume,
H2: Transformational leadership has positive effect
on the subordinates’ psychological capital.
H2a: Moral norm has positive effect on the
subordinates’ psychological capital.
H2b: Charisma or Idealized Influence has positive
effect on the subordinates’ psychological capital.
H2c: Vision inspiration has positive effect on the
subordinates’ psychological capital.
H2d: Individualized Consideration has positive
effect on the subordinates’ psychological capital.
C. Innovation Performance
There are different opinions about what is innovation
performance and whether it should be understood from
the perspective of innovation process or result is
inconsistent. Therefore, there are varieties of scales to
measure it. In this paper, Janssen (2001)’s scale will be
used because we want to survey the employee innovation
performance from process view. Janssen (2001)
conceived innovation as complex behavior consisting of a
set of three different behavioral tasks: idea generation,
idea promotion, and idea realization.
c. Psychological capital and innovation performance
Janssen (2000) divided employee innovation into
three stages---generation, promotion and implement. It’s
easy to see that the process of innovation has close
relationship with one’s own psychological capital. On one
hand, employees with characteristics like confidence,
optimism, enterprising and tenacity will be more likely to
propose their new ideas, promote them and implement
them. On the other hand, employees with merits like
tolerance, courtliness, humility and gratefulness will
easier to get others’ recognition and support. Therefore,
psychological capital has become important for one to
make innovation performance. Therefore,
H3: Subordinates’ psychological capital has positive
effect on innovation performance.
H3a: Subordinates’ task-oriented psychological
capital has positive effect on innovation performance.
H3b: Subordinates’ guanxi-oriented psychological
capital has positive effect on innovation performance.
D. Hypothesis
a. Transformational leadership and innovation
performance
Li and Shi (2005) established the structure of
transformational leadership catering to the Chinese
background using the inductive method. The research
results indicate that transformational leadership is a
four-dimension structure, which includes moral norm,
vision inspiration, charisma or idealized influence and
individualized consideration. Therefore, following
hypotheses can put forward.
H1: Transformational leadership has positive effect
on the subordinates’ innovation performance.
H1a: Moral norm has positive effect on the
subordinates’ innovation performance.
H1b: Charisma or Idealized Influence has positive
effect on the subordinates’ innovation performance.
H1c: Vision inspiration has positive effect on the
subordinates’ innovation performance.
H1d: Individualized Consideration has positive
effect on the subordinates’ innovation performance.
d. The mediating effect of psychological capital on the
relationship between transformational leadership and
innovation performance
Nowadays, there are plenty of researches about the
action mechanism of transformational leadership in the
field of leadership theory. However, no research has
focused on the relationship of transformational leadership
and subordinates’ innovation performance and its action
mechanism. The research about relationship of the
leadership and innovation performance from the aspect of
psychological recognition is even rarer. Therefore, we
intend to study transformational leadership’s effect on
subordinates’
innovation
performance
using
psychological capital as mediating variable. Therefore,
H4: Psychological capital has mediating effect on the
relationship between transformational leadership and
innovation performance.
H4a: Psychological capital has mediating effect on
the relationship between moral norm and innovation
performance.
b. Transformational leadership and psychological capital
Ke, Sun, and Li (2009), defined the Chinese
indigenous psychological capital as a measurable, open to
develop and positive attitude or psychological capacity in
the workplace under Chinese background. Their research
results indicated that the Chinese employees’
psychological capital can be divided into two dimensions:
task-oriented
ones
and
guanxi-oriented
ones.
Task-oriented psychological capital is the positive attitude
one takes when facing ‘‘tasks’’, including four
sub-dimensions Guanxi-oriented psychological capital is
the positive attitude one takes when facing ‘‘guanxi’’
Transformational leadership emphasizes the employees’
development, family and living and makes them feel the
care from the leaders and therefore make become grateful
and dedicatory. On the other hand, the affection between
H4b: Psychological capital has mediating effect on
the relationship between charisma or Idealized Influence
and H4c: Psychological capital has mediating effect on
the relationship between vision inspiration and innovation
performance.
H4d: Psychological capital has mediating effect on
the relationship between individualized consideration and
innovation performance.
2
Charisma or
idealized influence
Moral
Norm
Individualized
Consideration
accumulative total of variance of the 3 dimensions of
transformational leadership is 70.57% and the reliability
value, which is reasonable, can be seen in the tab.1.
(2) Psychological capital was measured using a
40-item scale developed by Ke, Sun,and Li (2009) based
on the Chinese cultural background and all items were
evaluated by Likert’s six categories, from “strongly
disagree” to “strongly agree”. Deleting 5 items, the
contribution rate of accumulative total of variance we get
is 62.45%. In general, the results of factor analysis are
acceptable. We carried on factor analysis on
guanxi-oriented psychological capital. Deleting 2 items,
the contribution rate of accumulative total of variance we
get is 60.55%. The reliability value can be seen in tab.1.
(3) Innovation performance was measured by scale
modified from the Janssen (2001) and all items were
evaluated by Likert’s six categories, from “strongly
disagree” to “strongly agree”. The scale was fulfilled by
the employees themselves. The factor analysis results
indicate that subordinates’ innovation performance is a
one-dimension structure and the contribution rate of
accumulative total of variance we get is 53.44%. The
reliability value can be seen in tab.1.
Vision
Inspiration
Transformational
Leadership
Guanxi-oriented
Psychological
Capital
Task-oriented
Psychological
Capital
Psychological
Capital
Innovation
Performance
Fig.1 The relationship among transformational leadership, psychological
capital and innovation performance
III. METHOD
A. Sample
This study has been conducted with a questionnaire
survey based upon convenience sampling. Sample comes
from 24 provinces or cities in China (including Beijing,
Tianjin, Shanghai and Sichuan province, etc.) and
involving a variety of industries including real estate,
finance and aviation etc. The survey lasted two months
since March, 2010. 306 samples were received out of 350,
representing a 87.43 % response rate. The amount of
valid sample is 250, accounting for 71.43%. The male
account for 52.4% and the female is 47.6%. 43.2% is
aging from 20 to 29, 39.6% is from 30-39, 12.4% is from
40 to 49 and 4.8% is older than 50. 63.6% is married and
36.4% is unmarried. People of degree lower or equal to
high school accounts for 11.6%, 34.8% is of college
degree, 36.8% is of bachelor’s degree and 16.8% is of
higher or equal to master’ degree. As to the working years,
59.6% is shorter than 10 years, 28% is from 10 to 20
years and 12.4% is longer than 20 years. 36% has a
position about management, 36% is about technique and
28% is about others.
IV. RESULTS
A. Descriptive statistics and Correlation analysis
Tab.1 shows the mean and the standard deviation of
each variable. The requirements for mediating effect of
regression model are as follows. (1) Transformational
leadership has significantly positive correlation with
task-oriented psychological capital, guanxi-oriented
psychological capital, total psychological capital and
innovation
performance.
The
coefficient
of
transformational
leadership
and
guanxi-oriented
psychological capital is lower than that of the former and
total psychological capital, but higher than that of the
former and the task-oriented psychological capital. The
coefficient
of
transformational
leadership
and
subordinates’ innovation performance is the lowest,
which is 0.367. (2) Task-oriented psychological capital
has high correlation with guanxi-oriented psychological
capital and innovation performance and has high-level
positive correlation with total psychological capital. The
coefficient of task-oriented psychological capital and
guanxi-oriented psychological capital is lower than that of
the former and total psychological capital, but higher than
that of the former and innovation performance. (3)
Guanxi-oriented psychological capital has the highest
correlation with total psychological capital, which is
0.947 and has significantly positive correlation with
innovation performance. (4) The total psychological
capital has
B. Measures
(1)Transformational leadership was measured using
a 26-item scale developed by Li and Shi (2005)and all
items were evaluated by Likert’s six categories, from
“strongly disagree” to “strongly agree”. After deleting 10
items, we get three aspects --- norm and charisma, vision
inspiration and individualized consideration. Moral norm
and charisma or idealized influence variable of former
transformational leadership theory can be combined as
one---norm and charisma. The contribution rate of
significantly positive correlation with innovation
performance.
3
Tab.1
Descriptive statistics and Correlation analysis（N=250）
Variable
Mean
Sd.
1
2
1Sex
1.48
.50
2Marriage
1.36
.48
-.050
3Education
2.61
.95
.204**
.021
4Working year
1.54
.77
-.029
-.477**
3
4
5
6
7
8
9
10
-.227**
5Position
1.91
.79
.085
.138*
-.029
-.080
6Transformational
4.69
.84
.028
.057
.007
-.038
-.099
(.95)
leadership
7Task-oriented
4.70
.62
-.032
-.050
-.069
.083
-.163*
.483**
(.87)
psychological
capital
8Guanxi-oriented
4.74
.63
.019
-.015
-.003
.068
-.122
.524**
.743**
psychological
capital
9Psychological
4.72
.58
-.004
-.033
-.035
.080
-.150*
.541**
.919**
capital
10Innovation
4.22
.80
.029
-.091
-.070
.101
-.154*
.367**
.628**
performance
Sex：Male=1, Female=2；
Marriage：Married=1, Unmarried=2；
Education：Lower or equal to high school=1, College=2, Bachelor=3, Master=4, Doctor=5；
Working year：Shorter than 10 years=1, 10-19 years=2, 20-29 years=3, 30-39 years=4, longer than 40 years=5；
Position：Management=1, Technique=2, Others=3; Reliability is shown in ( ).
** Correlation is significant at the 0.01 level (2-tailed).* Correlation is significant at the 0.05 level (2-tailed).
(.90)
.947**
(.93)
.472**
.580**
(.89)
VIFs are all lower than the critical value of 10, which
indicates the absence of the multi-colllinearity of the
models and that the results are acceptable. (3) Whether
mediating variable is correlated with dependent variable
is tested. There are 6 models respectively to test the effect
of task-oriented, guanxi-oriented and total psychological
capital on innovation performance and their VIFs are all
lower than the critical value of 10, which indicates the
absence of the multi-collinearity of the models and that
the results are acceptable. (4) When considering the
mediating variable, the effect of independent variable on
dependent variable will decline or even become
insignificant. And in the tab.3, we can see that the β
coefficient of the dimensions of transformational
leadership declined when task-oriented, guanxi-oriented
and total psychological capital are added to the models.
We get support for our hypothesis.
B. Mediating effect of psychological capital
When independent variable affects the dependent
variable and the internal cause, the relationship between
the two variables exists only with the absence of the third
one, then this third variable is mediator variable. There
are two methods to examine the mediator variable: (1)
Correlation and partial correlation analysis. (2) Structure
equation. At the article, we chose the method (1) and
designed models in which the effect of transformational
leadership on innovation performance has been removed
to examine the mediating effect of psychological
performance. There are four steps to reach it. (1) We
should examine the correlation between independent
variable and mediating variable. There are 6 models to
test the effect of transformational leadership and its
dimensions on innovation performance and their VIFs are
all lower than the critical value of 10, which indicates the
absence of the multi-collinearity of the models and that
the results are acceptable. (2) The correlation between
independent variable and dependent variable should be
studied. Also, we used 6 models to test the effect of
transformational leadership on subordinates’ task-oriented,
guanxi-oriented and total psychological capital and their
C. Analysis of results of hypothesis testing
Tab.2 illustrates the relation of variables in the
models and we got all support for our hypothesis.
Although transformational leadership dose not directly
affect innovation performance, it has mediating effect
though psychological capital.
Tab.2 Regression Analysis of Transformational Leadership and Psychological Capital’s effect on Innovation Performance ab
Variable
Control variable
1Sex
2Marriage
3Education
4Working year
5Position
Model 1
Model 2
Model 3
Model 4
Model 5
Model 14
Model 15
Model 16
Model 17
4.790***
3.408***
3.651***
3.443***
.3.122***
1.062*
1.086*
1.041*
1.034*
.064
-.080
-.110
.031
-.187**
.050
-.119
-.134*
.012
-.152*
.032
-.102
-.076
.039
-.157*
.057
-.077
-.080
.074
-.145*
.044
-.107
-.101
.041
-.141*
.045
-.101
-.093
-.007
-.093
.043
-.094
-.079
-.001
-.093
.047
-.088
-.077
.011
-.090
.044
-.097
-.084
.002
-.091
4
Independent variable
1Norm and charisma
2 vision inspiration
3Individualized
consideration
4Transformational
leadership
5Psychological capital
R2
Adjusted R2
F Test
R2
F Test
.369***
.108
.313***
.059
.354***
.104
.395***
.118
.556***
.393
.375
21.932***
.236
.534***
.399
.381
22.445***
.215
.519***
.400
.382
22.583***
.185
3.143**
39.385***
26.968***
35.529***
46.510***
80.567***
92.141***
a The regression coefficient in the scale is the standardized value.
b  R2 ‘s value of Model 2, 3, 4, 5 is based on model 1 and model 14, 15, 16 ,17 is based on model 2, 3, 4, 5.
* p <.05; **p<.01; ***p<.001
84.771***
73.109***
.062
.042
3.143**
.062
.195
.175
9.604***
.133
.157
.136
7.398***
.095
.184
.163
8.919***
.122
.215
.195
10.869***
.153
.529***
.399
.381
22.493***
.204
convenience sampling. Second is all data was collected at
the same time from the same respondent. Finally, we
studied transformational leadership’s effect on
subordinates’
innovation
performance
using
psychological capital as mediator, which extends the
theory of transformational leadership and innovation.
However, there is great potential space to study how
transformational
leadership
affects
innovation
performance. Some new theories can be expected to
research their relationship using other mediators or
moderators.
V. DISCUSSION
Our study results show that transformational
leadership has positive effect on subordinates’ innovation
performance (including 4 dimensions—moral norm,
Charisma or Idealized Influence, vision inspiration and
individualized consideration) as psychological capital
(including
both
task-oriented
ones
and
the
guanxi-oriented ones) mediator.
A. Contributions to Theory Building
REFERENCES
Though transformational leadership has been
researched widely, we also know a little about its impact
on innovation performance from the perspective of
cognitive psychology. In this paper, we used
psychological capital theory to explain the underlying
mechanism of the relationship between transformational
leadership and subordinates’ innovation performance. The
hypotheses testing results show that the established theory
is robust. Psychological capital theory provides us a new
way to understand innovation activity and leadership.
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subordinates
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