THE ROLE OF TRANSFORMATIONAL LEADERSHIP IN FOSTERING INNOVATION CULTURE WITHIN OMAN’S PRIVATE SECTOR

Abstract

Oman, guided by its strategic blueprint Oman Vision 2040, is undergoing a profound economic transformation aimed at transitioning from a resource-dependent model to a diversified, knowledge-based economy, and the success of this national ambition hinges on the private sector’s ability to innovate. Cultivating a robust innovation culture within organizations is therefore not merely a corporate objective but a strategic national imperative. This study empirically examines the extent to which transformational leadership, conceptualized through its four dimensions—Idealized Influence (II), Inspirational Motivation (IM), Intellectual Stimulation (IS), and Individualized Consideration (IC)—fosters an innovation culture within Omani private sector firms. A quantitative, cross-sectional survey design was employed, drawing on responses from 231 employees across six key industries. Transformational leadership was measured using the Multifactor Leadership Questionnaire (MLQ), while innovation culture was assessed with an adapted scale based on established climate inventories, and the hypothesized relationships were tested using Structural Equation Modeling (SEM). The measurement model demonstrated excellent psychometric properties, with Cronbach’s alpha values exceeding 0.85 for all constructs and strong evidence of convergent and discriminant validity. The structural model revealed that transformational leadership is a powerful predictor of innovation culture, explaining approximately 62% of its variance (R2 ≈ 0.62), with all four leadership dimensions emerging as significant positive predictors and Idealized Influence exerting the strongest effect. The model also showed substantial predictive relevance (Q2 ≈ 0.37). These findings provide compelling evidence that transformational leadership is a critical lever for cultivating the innovation culture necessary to realize the aspirations of Oman Vision 2040, offering practical guidance for organizations to design leadership development programs that embed behaviors proven to enhance innovative capacity and contribute directly to the nation’s innovation agenda.