The influence of learning organization and transformational leadership towards innovation in maintaining firm performance: A case study in banking

Abstract

This study aims to examine the influence of learning organizations and transformational leadership on product innovation and company performance in the banking sector. In addition, the study also explores the mediating role of product innovation in these relationships. Using a quantitative approach and causality design, data were collected through saturated sampling techniques from 49 employees of Banks in Indonesia. The study's population consisted of 49 employees of Banks in Indonesia. Since there are less than 100 people in the population, saturated samples are used to determine the sample in this study. According to the saturated sample calculation, there were 49 respondents in this survey. The results show that learning organizations have a positive and significant influence on product innovation, but their direct influence on company performance is not significant. Transformational leadership shows a positive but not significant influence on innovation or performance. In particular, product innovation has proven to be a significant mediator between the learning organization and the company's performance, but it is not as significant a mediator between transformational leadership and performance. This study indicates that learning culture supports the creation of innovations that can improve organizational outcomes. However, leadership influence requires structural support to have a real impact. Practically, banks need to build a strong innovation infrastructure in order to maximize the potential for learning and leadership for continuous performance improvement.