Business Growth : A study of the Impact of Transformational Leadership, Innovation and Competence Management

University essay from Blekinge Tekniska Högskola/Sektionen för management; Blekinge Tekniska Högskola/Sektionen för management


For every firm, company or business organisation, growth and progress is the major focus. In fact for every facet of living organism, growth is an essential factor which if not in place, stagnation is inevitable. Growth in this sense could be in terms of the market performance, sales, number of employees to mention a few. There have been researches carried out on different factors which could enhance or have positive influence on business growth, one of them is Innovation. Leadership of an organisation has also been concluded to have an effect on its performance especially the transformational ones. Nowadays, a word like talent management and management of employees’ competence is cropping up in many organisations. It has been highlighted that a firm has to know how to manage the skills of its employees and also attract the best of talents to stay on top. However, there have been little or no researches so far that looked at these three factors together in order to measure growth in business. This research is focused on finding out if Transformational Leadership, Innovation and Competence Management affect growth of business especially in terms of its market performance and other related factors. For this research a total of anonymous 62 employees both managers and non-managers working in firms in the telecoms and IT sectors were surveyed using questionnaire to find out if the leaders in these companies are transformational in nature, if there is an innovation culture and if skills are adequately developed, utilised or channelised and subsequently if there has been growth in their firm’s market performance and if the number of employees has increased. It was discovered after the analysis that transformational leadership, innovation and competence management are confirmed have effect on growth of business especially in their market performance with the transformational leadership and competence management having a higher effect while innovation’s contribution has the least effect or significance on the growth of the business. However, when the three factors are all considered together as predictors of growth, transformational leadership is the only statistically significant factor. This point to the fact that companies that would experience growth in their business especially in these days of serious and tough competition being innovative is not just enough but having a visionary leadership which is charismatic and can push change, making sure the skills of the employees are optimized to bring the innovative ideas to reality. Even though this research was carried out mainly in the IT and Telecoms sector which are one of the fastest growing firms these factors would be of immense benefit to firms or businesses in other industries or sectors too.

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