Transformational Leadership Effect on the Establishment of Innovation Program among Indonesian Private Higher Institution: A Structural Equation Modelling (SEM) Partial Least Square Approach

Abstract

Establishment of innovation program is a must on the dynamic and rapid competition among private higher institution in Indonesia. The innovation program ensures institutions to continue and survive in the rapid growth of the world market and creating the best updated products and services. The present study hypothesised a practice of transformational leadership among the top management of the university will bring a flying colour of the university performance specially on the innovation program. Bass and bass leadership theory configured detail foundation on the establishment of hypothesised model of innovation program among private higher institutions. The present study measured transformational leadership using four predictors such as charismatics, individual consideraton, intellectual stimulation and inspiration. Quantitative methodology using survey and data gathered among stakeholder and top management. Structural equation modelling (SEM) using partial least square approach was employed to established, examined and validate the hypothesised model. This study found an inspiration play a dominant role on the establishment of innovation program, and the re-specified model confirmed a significant effect of transformational leadership on the establishment of innovation program among private higher institution in Indonesia. A main guidance on the establishment of innovation program using transformational leadership as on of the success factors has contributed through a significant interaction of predictors and measurements in the structural model analysis.