The Role of Entrepreneurial Leadership in Business Innovation and Organizational Performance
Keywords:
Entrepreneurial Leadership, Business Innovation, Organizational PerformanceAbstract
Entrepreneurial leadership has emerged as a critical driver of business innovation and organizational performance in today's dynamic and competitive business environment. This study investigates the relationship between entrepreneurial leadership, business innovation, and organizational performance in Indonesian small and medium enterprises (SMEs). Using a quantitative research approach, data were collected from 320 managers and executives of SMEs in Riau Province, Indonesia, through structured questionnaires. Structural Equation Modeling (SEM) using SmartPLS 4.0 was employed to analyze the hypothesized relationships. The findings reveal that entrepreneurial leadership has a significant positive effect on both business innovation (β = 0.623, p < 0.001) and organizational performance (β = 0.541, p < 0.001). Business innovation was also found to significantly mediate the relationship between entrepreneurial leadership and organizational performance (indirect effect = 0.312, p < 0.001). The results underscore the importance of cultivating entrepreneurial leadership competencies within organizations to foster a culture of innovation and achieve superior performance outcomes. This study contributes to the entrepreneurship and strategic management literature by providing empirical evidence from an emerging market context and offers practical implications for business leaders, human resource managers, and policymakers.
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