Leadership and Innovation on Firms’ Performance with the Moderation of Competitive Rivalry: A Study on Large Export Manufacturing Firms in Sri Lanka

Abstract

The purpose of this paper is to empirically investigate the effects of Leadership Management Style (LMS) and Innovation (INV) on Firms Performance (FP). Whist this study proposes to examine the mediating role of Innovation (INV) in the relationship between LMS and FP in large export manufacturing Firms in Sri Lanka. Further the study will examine the moderating effect on Competitive Rivalry (RVLRY) in the relationship between LMS and INV. Using a sample of 453 large export manufacturing companies in Sri Lanka and “C” level managers were chosen in and data collected through a questionnaire developed using google form and structural equation modeling was used using AMOS. The results reveal that LMS has a significant impact of Firms performance (FP) and the Innovation (INV). The results also indicate that RVLRY has a moderating impact of relationship between LMS and INV. Findings of this study reinforce the leadership on Innovation and improved firms’ performance both financial and non-financial aspects. In addition, leadership role plays a significant role in a competitive environment to innovate and perform. This is one of the earliest studies on Leadership Style on Innovation and Firms’ performance when there is a moderating impact of completive Rivalry in the large export manufacturing category of firms in Sri Lanka.