THE CAUSAL STRUCTURAL RELATIONSHIP OF THE FACTORS AFFECTING THE INNOVATIVE PERFORMANCE
OF PERSONNEL IN DEPARTMENT LEVEL GOVERNMENT AGENCIES
Waraporn Sribun
A Dissertation Submitted in Partial
Fulfillment of the Requirements for the Degree of Doctor of Public Administration
School of Public Administration
National Institute of Development Administration 2021
THE CAUSAL STRUCTURAL RELATIONSHIP OF THE FACTORS AFFECTING THE INNOVATIVE PERFORMANCE
OF PERSONNEL IN DEPARTMENT LEVEL GOVERNMENT AGENCIES
Waraporn Sribun
School of Public Administration
Major Advisor (Associate Professor Chindalak Vadhanasindhu, Ph.D.)
The Examining Committee Approved This Dissertation Submitted in Partial Fulfillment of Requirements for the Degree of Doctor of Public Administration.
Committee Chairperson (Associate Professor Pongsatean Luengalongkot, Ph.D.)
Committee (Associate Professor Chindalak Vadhanasindhu, Ph.D.)
Committee (Associate Professor Kasemsarn Chotchakornpant, Ph.D.)
Dean (Associate Professor Ploy Suebvises, Ph.D.)
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ABSTRACT
ABSTRACT
Title of Dissertation THE CAUSAL STRUCTURAL RELATIONSHIP OF THE FACTORS AFFECTING THE INNOVATIVE PERFORMANCE OF PERSONNEL IN
DEPARTMENT LEVEL GOVERNMENT AGENCIES
Author Waraporn Sribun
Degree Doctor of Public Administration
Year 2021
The study of the causal structural relationship of the factors affecting the innovative performance of personnel in department-level government agencies in Thailand aimed at the following: 1) to make create a causal structural relationship model of the factors affecting the innovative performance of personnel in department- level government agencies; 2) to make conduct a comparison study of the size and direction of the direct influence and indirect influence of the factors affecting the innovative performance of personnel in department-level government agencies; 3) to examine the consistency of the innovative performance model of personnel in department-level government agencies. The study was conducted using a quantitative research design. The sample (participants) in the study was 130 department-level government agencies of equivalent. The key informants were 130 deputy directors of academic affairs and deputy directors responsible for innovative management.
Descriptive and inferential statistics were used in the study. Structural equation modelling (SEM) was used to measure the causal relationships by means of factor analysis, path analysis, and estimation of parameters in the regression analysis.
The findings from the study showed the following. First, that 1) the developed model consists of knowledge management, transformational leadership, and human capital. The innovative capability was the mediator variable in innovative performance.
The model was in harmony with the empirical data and passed the criteria; namely, Chi Squared = 66.38, Df = 51, probability = 0.073, CMIN/DF= 1.30 , CFI = 0.99 , GFI = 0.92, NFI = 0.96, RMSEA = 0.05. Second, the, 2) factors affecting innovative performance were the following: 2.1 ) the innovative capability had the highest level of
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positive direct influence with significance in terms of innovative performance; 2.2) knowledge management had the second level of influence on innovative performance, namely, it had both a direct and indirect influence—a; negative direct influence with significance and a positive indirect influence. The innovation capability variables were the mediator variables, where, 2.3) transformational leadership significantly had a significantly positive indirect influence on innovative performance and 2.4) human capital had a positive indirect influence on innovative performance without significance. Third, 3) the model of innovative performance was consistent with the empirical data. The model was in harmony with the empirical data, wit a Chi-Square of 0.57, Df =2, probability = 0.75, and it passed the criteria, i.e. innovative performance, knowledge management, transformational leadership, human capital, and innovation capability (probability) = 0.75, CMIN/DF= 0.29, CFI = 1.00, GFI = 1.00, NFI = 1.00, and RMSEA = 0.00
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ACKNOWLEDGEM ENT S
ACKNOWLEDGEMENTS
This dissertation was accomplished very well with the support and assistance from Associate Professor. Dr. Chindalak Vadhnasindhu, advisors Assoc Professor Dr.
Kasemsarn Chotchakornpan committee, Associate professor Dr. Boon-Anan Phinaitrupt committee, Assistant Professor Dr. Sawat Wannarat instructors guide data analysis, and Associate Professor Dr. Pongsatean Luengalongkot.
I would like to thank all the experts for their assistance, reviewing questionnaires, providing helpful comments, and a sample group that provided support to answer the questionnaire.
Thank you, parents, for supporting the scholarship this time. The value and benefits of the research dissertation offer an appreciation upon parents and all patrons and teachers.
Waraporn Sribun November 2021
TABLE OF CONTENTS
Page
ABSTRACT ... iii
ACKNOWLEDGEMENTS ... v
TABLE OF CONTENTS ... vi
LIST OF TABLE ... xi
LIST OF FIGURE ... xv
CHAPTER 1 INTRODUCTION... 1
1.1Background and Significance of the Problem ... 1
1.2 Research Questions ... 6
1.3 Objectives of the Study ... 6
1.4 Expected Benefits ... 6
1.4.1 Academic Benefits ... 6
1.4.2 Operational Benefits ... 7
1.5 Research Scope ... 7
1.6 Terminology Definitions ... 7
CHAPTER 2 LITERATURE REVIEW ... 10
2.1. Resource-Based Theory ... 10
2.2. Theory of Human Capital... 11
2.2.1 Characteristics of Human Capital ... 12
2.2.2 The Human Capital Paradigm ... 12
2.3. Knowledge-Based Theory and Knowledge Management Perspectives ... 13
2.3.1 Elements of Knowledge ... 14
2.3.2 Knowledge Management ... 15
2.3.2.1 Elements of knowledge management ... 16
2.3.2.2 Knowledge management model ... 16
2.3.2.3 Knowledge Management in Innovation ... 17
2.4.1 Elements of Transformational Leadership ... 19
2.5 Innovation Management Theory ... 22
2.5.1 Paradigm of Innovation Management Theory ... 22
2.5.2 Characteristics of the Innovation System ... 23
2.5.3Models of Innovative Systems ... 24
2.5.4 Evaluation of the Innovation System ... 25
2.5.5 Innovation Capabilities ... 27
2.5.5.1 Innovation capability dimension ... 29
2.6. Relevant Research Results ... 32
2.7 Research Conceptual Framework ... 34
2.7.1 Research Conceptual Framework ... 34
2.8 Relationship among Variables ... 44
2.9 Variables in the Study ... 54
2.10 Research Hypotheses ... 57
CHAPTER 3 RESEARCH METHODOLOGY ... 58
3.1 Population... 58
3.1.1 Determination of Sample Size ... 58
3.1.2 Determination of Key Informants ... 64
3.2 Measuring the Value of the Variables and Calculating Answer Scores ... 72
3.2.1 Measuring the Value of the Variables Based on Demographic ... 72
Characteristics ... 72
3.3.2 Measuring the Value of the Variables in the Study ... 72
3.3 Research Instrument ... 79
3.3.1 Research Tool ... 79
3.4 How to Collect Data ... 80
3.5 Examining the Quality of the Instrument ... 80
3.6Data Analysis ... 89
CHAPTER 4
RESULTS ... 103
4.1.1 General information ... 103
4.2 Descriptive analysis of the variables in the study... 106
4.2.1. Knowledge Creation Component Variables ... 106
4.2.2. Knowledge Sharing Component Variables ... 108
4.2.3. Knowledge Utilization Component Variables... 110
4.2.4. Inspiration Motivation Component Variables ... 112
4.2.5. Intellectual Stimulation Component Variables ... 114
4.2.6. Idealized Influence of Component Variables ... 115
4.2.7. Individualized Consideration Component Variables ... 117
4.2.8. Knowledge Component Variables ... 118
4.2.9. Capability Component Variables ... 120
4.2.10. External Collaboration Component Variables... 122
4.2.11. Research and Development Component Variables ... 124
4.2.12. Effectiveness of the Component Variables ... 126
4.2.13. Adaptation Component Variables ... 127
4.3 Exploratory Factor Analysis ... 130
4.3.1. Quantity of Innovation Created ... 130
4.3.2. Quantity of Innovation Utilized ... 130
4.3.3. Analysis of the Variable Factor, and Quantitative Factor Variables .... 131
4.4 The First Order Confirmatory Factor Analysis ... 132
4.4.1 Knowledge Management Variable ... 132
4.4.4.1 Knowledge Creation Component Variables ... 132
4.4.4.2 Knowledge Sharing Component Variables ... 135
4.4.4.3 Knowledge Utilization Component Variables ... 137
4.4.2 Transformational Leadership Variables ... 140
4.4.2.1 Inspirational Motivation Component Variables... 140
4.4.2.2 Intellectual Stimulation ... 143
4.4.2.3 Idealized influence of component variables ... 145
4.4.3. The Human Capital Variable ... 149
4.4.3.1 Knowledge Component Variable. ... 149
4.4.3.2 Capability Component Variable. ... 152
4.4.4. Innovation Capability Variables ... 153
4.4.4.1 External Cooperation Component Variable. ... 153
4.4.4.2 Research and Development Component Variable. ... 156
4.4.5. Innovation Performance Variables ... 159
4.4.5.1 Effectiveness Component Variable. ... 159
4.4.5.2 Adaptive Component Variables ... 161
4.5 Second Order Confirmative Component Analysis ... 163
4.5.1 Knowledge Management Variables ... 163
4.5.2. Transformational Leadership Variables ... 167
4.5.3. The Human Capital Variables. ... 172
4.5.4. Innovation Capability Variables ... 175
4.5.5. Innovation Performance Variables ... 179
4.5.5.1. Quality Component Variables ... 179
4.6 The Third Order Confirmation Component Analysis ... 187
4.6.1. Innovation Performance Variables ... 187
4.7 The Results of the Causal Structure Relationship Analysis of the ... 191
Factors Influencing Innovation Performance ... 191
CHAPTER 5 Summary, Discussion of Results, and Recommendations ... 206
5.1 Summary ... 206
5.2Results ... 207
5.3 Discussion of the Results ... 209
5.4 Recommendations... 221
APPENDIX 1 QUESTIONNAIRS ... 223
APPENDIX 2 SYMBOL ... 234
APPENDIX 3 INDEX OF ITEM-OBJECTIVE ... 241
APPENDIX 5 DOCUMENTS REQUESTING COURTESY COLLECT
INFORMATION ... 248 BIBLIOGRAPHY ... 250 BIOGRAPHY ... 261
Table 1.1 Summarized the Ranking of Innovation ... 2
Table 2.1 Innovation Capability Dimensions ... 29
Table 2.2 Quantitative Indicators ... 38
Table 2.3 Qualitative Indicators ... 40
Table 2.4 Summary of the Variables in the Study ... 55
Table 3.1 Population ... 59
Table 3.2 Data Provider ... 65
Table 3.3 Questionnairs Test ... 81
Table 3.4 Determination of Discrimination ... 84
Table 3.5 Reliability Test ... 87
Table 3.6 Test of the Relationship Among the Independent Variables ... 88
Table 3.7 Comparison Criteria for Goodness of Fit of the Model ... 90
Table 3.8 Table of Operations ... 91
Table 4.1 General Information ... 103
Table 4.2 Innovation in Organizations ... 104
Table 4.3 Percentages, Number and Mean of Knowledge Creation Component .... 106
Table 4.4 Percentages,Number and Mean of Knowledge Sharing Component ... 108
Table 4.5 Percentages, Number and Mean of Knowledge Utilization Component . 110 Table 4.6 Percentages, Number and Mean of Inspiration Motivation Component . 112 Table 4.7 Percentage Number and Mean of Intellectual Stimulation Component .. 114
Table 4.8 Percentages, Number and Mean of Idealized Influence of Component .. 115
Table 4.9 Percentages, Number and Mean of the Individualized Consideration .... 117
Table 4.10 Percentages, Number and Mean of the Knowledge Component Variables. ... 118
Table 4.11 Percentages, Number and Mean of Capability Component Variables. . 120
Table 4.12 Percentages, Number and Mean of External Collaboration Component122
Table 4.13 Percentages, Number and Mean of Research and Development ... 124
Table 4.14 Percentages, Number and Mean of the Effectiveness Component ... 126
Table 4.15 Percentages, Number and Mean of the Adaptation Component Variables ... 128
Table 4.16 Quantity of Innovation Created ... 130
Table 4.17 Factor Loading for Each Variable, and Number of Innovations Created. ... 130
Table 4.18 Quantity of Innovation Utilized ... 130
Table 4.19 Factor Loading for Each Variable, and Number of Innovations Utilized. ... 131
Table 4.20 Quantitative Factors Variables. ... 131
Table 4.21 Factor Loading for Each Variable, and the Quantitative Factor Variables. ... 132
Table 4.22 Factor Loading of the Knowledge Creation Component Variables ... 134
Table 4.23 Index of Item-Objective Congruence of the Model Measuring the ... 134
Table 4.24 Factor Loading for Each Knowledge Sharing Component Variable... 136
Table 4.25 Index of Item-Objective Congruence of the Model Measuring the ... 137
Table 4.26 Factor Loading of Individual Knowledge Utilization ... 139
Table 4.27 Index of Item-Objective Congruence of the Model Measuring the ... 139
Table 4.28 Factor Loading for Each Inspiration Motivation Component Variable 142 Table 4.29 Index of Item-Objective Congruence of the Model Measuring the ... 142
Table 4.30 Factor Loading for Each Intellectual Stimulation Component Variable 144 Table 4.31 Index of Item-Objective Congruence of the Model Measuring the ... 144
Table 4.32 Factor Loading for Each Idealized Influence of the Component Variable ... 145
Table 4.33 Index of Item-Objective Congruence of the Model Measuring the ... 146
Table 4.34 Factor Loading Individual Consideration of the Component Variables 148 Table 4.35 Conformity Index of the Individual Consideration of the Component . 149 Table 4.36 Factor Loading Knowledge Component Variable Weighting ... 151
Table 4.37 Conformity Index of the Knowledge Component Variable Model ... 151
Table 4.38 Factor Loading Capability Component Variables ... 152
Table 4.39 The Conformity Index Value of the Capability Component Variable .. 153
Table 4.40 Factor Loading for Each Component of External Cooperation ... 155
Table 4.41 The Conformity Index of the External Cooperation Component Variable ... 155
Table 4.42 Factor Loading of Research and Development ... 158
Table 4.43 The Conformity Index of the External Cooperation Component Variable ... 158
Table 4.44 Factor Loading Effectiveness Component Variable... 160
Table 4.45 The Conformity Index Value of the Effectiveness Component Variable ... 160
Table 4.46 Factor Loading for Each Adaptiveness Component Variable ... 162
Table 4.47 Consistency Index for the Adaptive Component Variables of the ... 162
Table 4.48 Factor Loading for Each Variable in Knowledge Management ... 166
Table 4.49 Conformity Index of the Knowledge Management Variables ... 166
Table 4.50 Factors Loading for Transformational Leadership Variables ... 171
Table 4.51 The Conformity Index of the Transformational Leadership Variable ... 172
Table 4.52 Factors Loading for Human Capital Variable ... 174
Table 4.53 Conformity Index of the Human Capital Variable Measurement Model. ... 174
Table 4.54 Factor Loading for Innovation Capability Variables... 178
Table 4.55 The Conformity Index of the Innovation Capability Variable ... 178
Table 4.56 Factors Loading for Each Quality Innovation Component Variable.... 182
Table 4.57 The Conformity Index of Quality Innovation Component Variable .. 182
Table 4.58 Factors Loading for Each Quantity Innovation Component Variable ... 186
Table 4.59 The Conformity Index of the Quantity Innovation Component Variable ... 186
Table 4.60 Factors Loading Innovation Performance Variables ... 190
Table 4.61 Conformity Index of Innovation Performance Variable Measurement . 191 Table 4.62 Factors Loading for of the Causal Structure Relationship Analysis of the ... 194
Table 4.63 The Conformity Index of the Causal Structure Relationship Analysis of ... 195 Table 4.64 Standard regression coefficients (B) between the hypothetical factors in ... 195 Table 4.65 Direct, Indirect, and Sum of Variables Affecting Innovation Capability ... 198 Table 4.66 Direct, Indirect Effect, and Sum of Variables Affecting Innovation .... 199 Table 4.67 Consistency Index Value of the Innovative Performance Component. 201 Table 4.68 Hypothesis Innovation Performance Model ... 202 Table 4.69 Summary Hypothesis Test Results ... 203
LIST OF FIGURE
Page
Figure 2.1 Research Conceptual Framework ... 41
Figure 2.2 Knowledge Management Affects Innovation Capability ... 45
Figure 2.3 Knowledge Management has an effect on Innovation Performance. ... 45
Figure 2.4 Transformational Leadership has an Effect on Innovation Capability. ... 47
Figure 2.5 Human Capital affects Innovation Capability. ... 48
Figure 2.6 Innovation Capability has an effect on Innovation Performance. ... 49
Figure 2.7 Knowledge Management has an effect on Innovation Performance, ... 51
Figure 2.8 Transformational Leadership has an effect on Innovation Performance . 52 Figure 2.9 Human Capital has an effect on Innovation Performance and Innovation ... 54
Figure 4.1 Knowledge Creation Component Variables. ... 133
Figure 4.2 Model Modification of Knowledge Creation Component Variables. .... 134
Figure 4.3 Knowledge Sharing Component Variables. ... 135
Figure 4.4 Model Modification of Knowledge Sharing... 136
Figure 4.5 Knowledge Utilization Component Variables. ... 138
Figure 4.6 Model Modification of Knowledge Utilization Component Variables. 139 Figure 4.7 Inspirational Motivation Component Variables. ... 141
Figure 4.8 Model Modification of Inspirational Motivation Component Variables. ... 142
Figure 4.9 Intellectual Stimulation Component Variables... 143
Figure 4.10 Idealized Influence Component Variables. ... 145
Figure 4.11 Individualized Consideration Component Variables. ... 147
Figure 4.12 Model Modification of Individual Consideration Component Variables. ... 148
Figure 4.13 Knowledge Component Variables. ... 150
Figure 4.14 Model Modification of Knowledge Component Variables. ... 151
Figure 4.15 Capability Component Variables. ... 152
Figure 4.16 External Cooperation Component Variables. ... 154
Figure 4.17 Model Modification External Cooperation Component Variables. ... 155
Figure 4.18 Research and Development Component Variables. ... 156
Figure 4.19 Model Modification Research and Development Component Variables. ... 157
Figure 4.20 Effectiveness Component Variables. ... 159
Figure 4.21 Model Modification Effectiveness Component Variables. ... 160
Figure 4.22 Adaptive Component Variables. ... 162
Figure 4.23 Knowledge Management Variables ... 164
Figure 4.24 Model Modification of Knowledge Management Variables. ... 165
Figure 4.25 Transformational Leadership Variables. ... 169
Figure 4.26 Model Modification of Transformational Leadership Variables. ... 171
Figure 4.27 Human Capital Variables. ... 173
Figure 4.28 Innovation Capability Variables. ... 176
Figure 4.29 Model Modification Innovation Capability Variables. ... 177
Figure 4.30 Quality Innovation Variables. ... 180
Figure 4.31 Model Modification of Quality Innovation Variables. ... 182
Figure 4.32 Quantity Component Variables ... 184
Figure 4.33 Model Modification of Quantity Component Variables. ... 186
Figure 4.34 Innovation Performance Variables. ... 188
Figure 4.35 Model Modification of Innovation Performance. ... 190
Figure 4.36 the Causal Structure Relationship Analysis of the Factors Influencing192 Figure 4.37 Model Modification of the Causal Structure Relationship Analysis of ... 194
Figure 4.38 Innovation Performance Model. ... 201
Figure 4.39 the Causal Relationships of the Factors Influencing Innovation ... 205
INTRODUCTION
1.1 Background and Significance of the Problem
Thailand’s administration has undergone several changes as a result of both domestic and international issues influenced by globalization. Therefore, the administration has faced various problems including 1) less added value regarding technological and innovational knowledge; 2) insufficient investment for research and development; 3) conducted research has not been used for valuable economic and social benefits; 4) less innovation development; 5) lack of research integration by public administration causing budget waste; and 6) lack of management continuity, efficiency, transparency, and responsibility.
Government innovation in Thailand began to be tangible in 2000 by establishing the Innovation Development Fund as the National Innovation Agency. In 2007, a survey was conducted to evaluate five areas of Thailand’s innovation capability, including product innovation, service innovation, process innovation, market innovation, and organizational innovation, where the results were found to be at a moderate level. In 2012, the Office of Innovation was encouraged to arrange an innovation contest by considering certain issues, including new business models and support for invention. In 2018, innovation was promoted by being defined in the 2018- 2025 National Strategy, stating that the strategy of government administration should be efficient with high performance using innovations to develop modern operating systems, including promoting personnel to be professional with high competency. The Secretariat of the house of representatives (2016)i mentioned that the government sector will become a digital government with coming trends as follows. 1) The internet network will be allocated the same as with spectrum allocations in the telecommunications business. Government sectors will be able to connect to the Internet everywhere. The destination data from government agencies will be connected and retrieved immediately, such as basic information from ID cards, house registration,
etc. 2) Government sectors use Cloud Computing because it is more efficient and economical. 3) Government spending or budgets on information technology will change for application development specifically. The procurement of hardware, software, and network equipment will be reduced. 4) More than 500 government- developed mobile applications will be available to citizens and become the mainstream applications in the market. The applications will be provided directly from the government and commercial development of private sector software developers. 6) Big Data management will be managed by government organizations. There will be data scientists in the government sector to enable the government administration to obtain important information, which will be used for further administration. Therefore, from such trends, innovation has begun to play a very important role in government operations.
However, in order to monitor innovation development, innovations have been ranked internationally. The results of Thailand’s innovation from the International Innovation Measurement Index can be summarized as follows.
Table 1.1 Summarized the Ranking of Innovation
Year 2018 Year 2017
Year 2016
Rank Score Rank Score Rank Score
52 44.49 65 30.8 52 36.5
Sources: Dutta (2018)
According to the ranking,Dutta (2018) considered that there are various related factors, including the political environment, the legal environment, the business environment, education, research and development, information and communication, general infrastructure, investment, knowledge, and knowledge learning. The results included knowledge building, knowledge impact, knowledge sharing, and the generation of creative online goods and services. The indicators included human and research capital, the marketing development level, the business development level,
knowledge and technology outcomes, and generation outcomes. As a result of International innovation rankings found the issue of human and research capital was scored at 30.8 points out of 100, with sub-issues in education at 40.6 points and research and development at 25.2 points. Additionally, the issue of knowledge and technology outcomes was scored at 29.8 points, with sub-issues in knowledge generation at 19.6 points, knowledge impact at 39.7 points, and knowledge sharing at 30.1 points. In 2018, there was a better level of improvement. Human and research capital was scored at 32.5 points, with sub-issues in education at 37.7 points and research and development at 25.7 points. The knowledge and technology was scored at 30.8 points, with sub-issues in knowledge generation at 30.8 points, knowledge impact at 44.1 points, and knowledge sharing at 29.2 points. The rankings had changed in better direction as there was development in human and knowledge capital. Therefore, it could be said that, for the development and promotion of innovation, human knowledge and knowledge management play a very important role.
However, in terms of problems in creating innovations in Thailand, a study by Sapprasert (2012) stated that Thailand’s innovation faces overall problems, including 1) lack of innovation capability in research and development in the private sector, and 2) a low level of international published research papers by universities. These form a relationship of both the user base and the manufacturer, causing weakness in the industrial sector. In addition, United nations (2015) mentioned that Thailand has insufficient budget and human resources for scientific and technological development to support broad growth and innovation capacity and to promote economic development. However, investment in research and development was provided by the government. The research and development from the government and universities have weaknesses in terms of access to information and technological communication, leading to problems in innovation. In the previous science and technology operations of the government, the government had no strategic policy to drive science and technology—the budget allocation for research and development was insufficient.
Further, the private sector was not involved in the strategic process.
Regarding government innovation operations, there has been innovative performance, for example innovation contests supported by the Ministry of finance (2018) . They can be divided into three levels as follows: 1) at the department level or
equivalent, there were contests in the fields of innovation, innovation development, outcomes of innovational development, and good governance promotion; 2) at the divisional level or equivalent, there were contests in the fields of outcomes of innovation and outcomes of innovational development 3) in terms of public groups, there have been contests in the fields of new product or service concepts, new work process concepts, and innovation for the future. Many of the works submitted to the Ministry of Finance from these contests can be used to increase efficiency and support the implementation of government policies, such as electronic donation systems, e- donation of the Revenue Department, etc.
Regarding problems in the implementation of government innovations, Vitayakru (2019) identified the problems and obstacles in the government sector, such as medical innovation, as follows. There have been obstacles in obtaining licenses from the Food and Drug Administration due to a lack of expertise in getting approval, which has delayed the registration of new innovations. There must be mechanisms and legislation to rectify these problems. The cooperation in medical innovation and public health has been limited, and therefore cooperation with other agencies should be expanded. In addition, there have been problems in personnel for digital government operations that have responded to innovative operations and national strategy. For example, the Office of the Civil Service Commission has summarized the problems of being a digital government from many factors, such as the unavailability of personnel, and lack of knowledge and skills in technology to apply in operations commission (2017)
It can be seen that government innovation has to face many limitations.
Meanwhile, for effective public administration, the adoption of technology in government management has encountered many challenges. In this study, the variables used include knowledge management, transformational leadership, human capital, and innovation capabilities that affect innovational performance. Each variable has an impact on innovational performance as follows. One, knowledge management impacts innovation. According to the number of innovations and knowledge management capabilities, knowledge management is about the use of knowledge, experience, and expertise in creating new talent, resulting in higher performance for innovation encouragement Cardinal (2001),Shani (2003) and Stanovcic (2015) where investment in knowledge management was a secret of an innovative environment. Knowledge
management required knowledge management policy and culture that supported knowledge sharing, which had a greater impact on green innovation than being defined as a knowledge management policy.
Two, transformational leadership of senior management has had a direct effect on product innovation performance among innovation culture, organizational learning, and new product development. The transformational leadership of senior management has had a profound effect on the organization's cultural and learning innovation.
Organizational learning has had a strong correlation with the process of developing new product innovations, with significant implications for product innovation performance by integrating the knowledge of leaders and operation management. The executives that focused on product innovation had to develop skills and behaviors of transformational leadership in order to foster an innovational culture and organizational learning, which would affect product innovation performance Sattayaraksa (2018) . Good transformational leadership and behaviors resulted in good role models for changing, motivating, and encouraging participation in encouraging followers to innovate successfully, which created morale and encouragement for followers to create innovations for the organization (Price, 2017).
Three, human capital has had a positive influence on innovation potential. Human capital with innovational capability in the organization would increase its competitiveness, making the operation more efficient and effective (Prawatcharoenwit (2020) . Four, Service Innovation Capability (SIC) is the use of multiple skills and knowledge to describe activities together. This allows the company to continually innovate new services with predictable results. It also enables the entity to respond and adapt to changes in its operating environment through the development or improvement of services in order to achieve service performance (Omar, 2016).
The variables used in a study affecting the performance, innovation or organization would increase the efficiency of performance in the organization.
Therefore, the researcher aimed to study the causal structure correlation model of the factors affecting innovation performance in order to identify the factors affecting innovation performance to be used as a guideline for solving and developing innovations to be more effective as an important part of further innovation progress and development.
1.2 Research Questions
1.2.1 What should the causal structure of the relationships among the factors affecting the innovation performance of government department-level personnel be?
1.2.2 What are the size and direction of the factors affecting innovation performance?
1.2.3 How is the causal structure relationship model of the factors affecting the innovation performance of government department-level personnel consistent with the empirical data?
1.3 Objectives of the Study
1.3.1 To create a causal structure relationship model of the factors affecting innovation performance of government department-level personnel
1.3.2 To study the comparison and direction of the direct and indirect influences of the factors affecting innovation performance of government department-level personnel
1.3.3 To examine the consistency of the innovation performance model of government department-level personnel
1.4 Expected Benefits
1.4.1 Academic Benefits
1.4.1.1 Obtaining a causal structure relationship model of the factors affecting the performance of innovations, including knowledge management, transformational leadership, human capital, and innovation capabilities, which can be applied in the management of government innovations more effectively
1.4.1.2 The research results reveal the size and direction of influences affecting innovation performance, which will be useful as a guideline for formulating strategies to manage innovations for greater success.
1.4.2 Operational Benefits
The research results reveal the factors affecting innovation performance by using influencing variables for further development to strengthen innovation operations. Meanwhile, variables with little or no influence can be adjusted to correct weaknesses and to support the innovation development of government agencies to be more effective.
1.5 Research Scope
1.5.1 The population is 130 departmental level government agencies.
1.5.2 The study content is the causal structure relationship model with the factors affecting innovation performance.
1.5.3 The study period was from August 2019 to June 2021.
1.6 Terminology Definitions
1.6.1 Innovation capability means the application of knowledge to innovate and improve products and services to be different from the original by applying new ideas and practices to improve operational efficiency with knowledge from inside and outside the organization.
1.6.2 Research and development means systematic and reliable study, research and invention with the goal to develop products, technologies, inventions, media, equipment, techniques, working models, and management to be efficient and effective.
1.6.3 Cooperation means two or more agencies interacting with each other and sharing missions to achieve the same goal or different goals by collaborating to formulate guidelines and practices for shared benefits for a broader impact of increasing resources, new and better methods, and diversification and reduction or joint investment with mutual agreement and cooperation.
1.6.4 Human capital means the value derived from the connection of knowledge, competence, experience, and the skills of personnel for the organization.
1.6.5 Knowledge means the accumulated elements obtained from learning, research, experience, thinking, and practice.
1.6.6 Capability means the knowledge and related attributes that have an impact on jobs and job positions. Knowledge, skills, and attributes related to the job's performance can be measured against standards and developed through training and development.
1.6.7 Knowledge management means the process of generating knowledge, and storing and sharing knowledge by bringing it into a system to generate new knowledge and systematic storage.
1.6.8 Knowledge creation means generating new ideas from hidden and explicit knowledge from within and outside the organization.
1.6.9 Knowledge sharing means the exchange of knowledge with each other, such as cross-functional teams, activities, work groups, and learning exchange platforms.
1.6.10 Knowledge utilization means applying knowledge for benefits, achievements, and expanding the knowledge results.
1.6.11 Knowledge acquisition means finding useful knowledge from within an individual, and within and outside the organization, which can affect and be used in the development of the organization's operations.
1.6.12 Transformational leadership means a leader that motivates and inspires people to work for the public to achieve goals, including leaders with intellectual and inspiring stimulation.
1.6.13 Intellectual stimulation means leaders using knowledge, skills, and abilities to stimulate change, and to recognize problems and find solutions. Leaders must have the intelligence and ability to think critically about problems, encourage followers to consider problems clearly, and to decide to find solution.
1.6.14 Inspirational motivation means leaders using words and actions to encourage and motivate followers’ enthusiasm and devotion, causing confidence and ideology to work towards achievement and goals.
1.6.15 Idealized influence means the behavior of executives that can build confidence in followers, such as having a clear vision, daring to think, daring to decide, daring are to take responsibility, and building trust and acceptance.
1.6.16 Individualized consideration means the behavior of a leader who interacts with individuals with care and accepts individual differences.
1.6.17 Innovation performance means the results of innovation capability related to research and development, and internal and external collaborations, in order to increase service efficiency, create new products, and to meet the needs of people and organizations. Performance can be considered from the point of view of innovation quantity and quality.
1.6.18 Quality innovation means the innovation outcomes from research and development and cooperation, which must be effective and valuable for the customer.
1.6.19 Quantity innovation means the amount of innovation implemented in accordance with standards that are accepted and that satisfy service recipients.
LITERATURE REVIEW
2.1. Resource-Based Theory
The resource-based theory of Barney (2009) stated that resources consist of assets, abilities, processes, organizational characteristics, and information and knowledge.
Resources must be valuable and irreplaceable, and used for knowledge management connecting the organization with management and knowledge for competitive advantages. The transfer of organizational technology, intelligence, and innovative approaches can help to create a competitive advantage in the resource-based concept.
This concept is important for the development of strategic human resource management concepts by creating unity and with human capital and techniques for marketing advantages and opportunities. It can also be used to manage threats affecting the organization by relying on the differences in the organization and the physical value and human resources from the knowledge and ability of team management. Thus, having a resource base is associated with building an advantage over resources, which supports competition. This is consistent with Grant (1996) and Eisenhardt (2000), who stated that there are two components of the resource-based theory, resources and capabilities, which will be applied for competitive advantages. In the same way, the research by Khawaja (2014) tested human resource management strategies and organizational effectiveness and found wide international competition that requires operating conditions and strategies from the organization to improve resources in the organization for competitive advantages. The resource-based concept will be a guideline for organizations to study the differences in the work operations that depend on resources with human resource management strategy as a measure in the organization.
2.2. Theory of Human Capital
According to Becker (1994), the theory of human capital from an economic perspective can be defined as an investment in the capabilities affecting the performance outcomes that are obtained from investments in human capital from training and education. Regarding the analysis of cost efficiency, the results obtained from additional investment depend on the investment.
According to Gratton (2003) intangible assets, such as human capital, include intellectual capital, social capital, and emotional capital. 1) Intellectual capital includes knowledge, the ability to learn, specialization, and skills and experience as the knowledge hidden in an individual. 2) Social capital includes networks and relationships, which lead to trust. 3) Emotional capital includes attributes such as self- perception, dignity, and flexibility. Meanwhile, R. Grant (1996) stated that it is the unity of resources with uniqueness and competence when being managed and maximized resource utilization and capacity, and implemented in the future. In accordance with Philips (2005), human capital represents the relationship between an organization's investments in personnel, which would be achieved after the investment. Additionally, Philip (2015) saw that human capital is the reverse effect of loyalty, creativity, effort, goal achievement, and productivity as an investment of human capital. All three of them focus on personnel with specific values. However, Dyer (1998) focused on the unique specialty of human capital as it is a valuable and irreplaceable resource, as it is mentioned that organizations have the ability to accumulate resources that are valuable and irreplaceable for competitive advantages and opportunities. This is consistent with Boxall (1996), who mentioned that human capital has the potential to create human talent by considering ambiguity, complexity, and other factors, such as learning, coordination, and innovation. Therefore, human capital must include skills, knowledge, and abilities. In addition, Huselid (1995) stated that human resources must generate a source of advantage that is consistent with the strategy. Practically, it is related to resignation from work and getting results as assets. A high level of performance is related to the recruiting and selection process and compensation, including training and employee participation, which help to develop knowledge, skills, and the ability to increase work performance and motivation.
2.2.1 Characteristics of Human Capital
Human capital should determine transferable skills and results, called the portfolio model of human capital, with the following characteristics. 1) General management human capital is the ability to manage general management as a system leading to practices in various fields, such as finance, techniques, human resource management, etc., which will have high transferability of both knowledge and experience. 2) Strategic human capital is human capital with potential and strategic ability or specific strategic skills, such as cost reduction strategies and marketing strategies. Strategic human capital can be transferred to other organizations in the same situation using strategies to drive operations. 3) Industrial human capital is human capital with the ability to learn and convey details in the industry, consisting of learning, creating or setting rules, and customer service. 4) Relationship human capital is to build relationships with the team or colleagues to achieve work success. 5) Company specific human capital has job-related knowledge, organizational structure, and corporate culture and operational processes. These are the characteristics of the organization.
Thus, this kind of human capital is least transferable to other organizations. In addition, human capital also has the following characteristics. 1) The value of a person is an intangible asset, including non-monetary assets, assets with no shape but that are concrete, assets used in production and services, such as copyrights, patents, organizational image, and personnel competency, such as knowledge, skills, expertise, and experiences gained from learning. 2) Human capital sees personnel as capital.
Knowledge and technology are important as intellectual capital that helps to create competitive advantages and innovation, consisting of human capital, social capital, and organizational capital. 3) Intellectual capital will be increased with investment through development to add value in knowledge, skills, attitudes, and experiences. Useful skills are learned and developed by adding value to various processes, including observing the surroundings, reasoning analysis, planning and development, and work utilization.
2.2.2 The Human Capital Paradigm
1) Traditional paradigm 1.1) Human capital is an expense paid by
organizations. 1.2) The human resource department plays a supporting role. 1.3) The human resource department establishes a human resource budget. 1.4) Human capital focuses on costs and activities. 1.5) The human resource department is solely responsible for creating and maintaining personnel 1.6) Human capital measurement emphasizes current information.
2) The current paradigm 2.1) Human capital expenditures generate value.
2.2) The role of the human resource department is that of a strategic partner. 2.3) Executives distribute budgets to human resources. 2.4) Human capital emphasizes outcomes. 2.5) Investment outcomes are tools of cause and effect relationships. 2.6) Human capital emphasizes the need for information. 2.7) Human resource projects connect to specific business needs before implementation.
Human capital is a valuable resource, so it is necessary for development, which requires investment in human capital, including money investment, for example, enrollment costs, equipment costs, fees, etc., and indirect costs, such as opportunity costs during study from income or wages. However, investment comes with return on investment to be considered, including direct returns, such as wages, compensation, and bonuses, and indirect returns, such as non-monetary returns, reputation, and better quality of life.
2.3. Knowledge-Based Theory and Knowledge Management Perspectives
Knowledge is an organizational resource that must be valued and developed as intellectual capital. Edvinsson (1997) and Sveiby (1998) stated that appropriate knowledge utility requires the organization’s strategy to use knowledge in the organization for development and to support a fit with the environment. The results of the organization can evaluate knowledge effectively. Knowledge-based theory increases the ability to differentiate among different areas of knowledge. Technology plays an important role, while the information system synthesizes and increases the ability of knowledge management within and among organizations. Knowledge is kept in the personnel. Learning and learning activities become organizational competence.
The organization absorbs knowledge from inside and outside the organization, and combines them with previous knowledge for more new knowledge that can be further
applied. Senge (1990) explained that knowledge leads to effective practices. In addition, Hide Yamazaki (cited in Boonyagit (2005) described knowledge in the form of a pyramid, consisting of the bottom part as data, information and knowledge, and the tip of the pyramid as wisdom, each of which is different as follows. 1) Data are facts, raw data, or numbers. 2) Information is the data that have undergone the synthesis and analysis process to be used in management and decision-making. 3) Knowledge is information that has undergone a comparative and connective thinking process with other knowledge, which is used to generate understanding and decision-making. 4) Wisdom is knowledge that is embedded in people to be applied for better understanding.
2.3.1 Elements of Knowledge
Polanyi (1962) and Nonaka (1995) began to classify knowledge into two types as follows. 1) Tacit knowledge is knowledge within individuals that arises from experience, learning or talent, which is difficult to communicate or transmit in the form of numbers or writing. This kind of knowledge can be shared. 2) Explicit knowledge can be collected and transmitted in various formats, such as books, manuals, documents, and reports, which are easy to understand. This is consistent with Snowden (2003), who divided knowledge into following types; 1) written knowledge in the form of a document; 2) skills or things required to able to work or succeed with achievements; 3) knowledge derived from learning, experience, or various reasons; 4) experience that is difficult to transfer or exchange because it is special to the individual;
5) talent that nature has given as knowledge that is deeply embedded and difficult to transfer. In addition, Empson (2001) divided the knowledge perspective into two dimensions, knowledge as an asset and knowledge as a process. 1) Knowledge as an asset defines the value of knowledge and improves the efficiency of knowledge management with an economic foundation by using a model of knowledge exchange between people that is controlled by marketing. 2) Knowledge as a process is understanding to create knowledge used in the organization by using a social perspective as a model for the organization’s interpersonal social interactions.
Furthermore, Jakubik (2007) divided knowledge into four aspects as follows. 1) The
ontology of knowledge is phenomena in a subjective perspective by looking at the minds of people. 2) Epistemology focuses on the science of the human being in an institution through the acquisition and sharing of knowledge. 3) The knowledge community is an unstable knowledge perspective, but it is a social interaction using individual interpretations and social contexts. 4) commodity is a managerial approach .the view of knowledge is refered producted centered approach, the content centered.
2.3.2 Knowledge Management
Ryoko Toyama (2002 cited in Boonyagit (2005) stated that knowledge management is management to facilitate new knowledge by using the existing knowledg and experience of people in the organization systematically in order for innovation development with competitive advantages. Meanwhile, Sveiby (1998) saw that knowledge management creates value from intangible assets with two aspects of knowledge management, news management and people management, by focusing on knowledge as an important strategy, which is a foundation for acquiring competence and knowledge management. Additionally, O’Dell (1998) stated that knowledge management is a strategy for providing needed knowledge to people in a timely manner, as well as exchanging and applying knowledge to enhance and improve the operations of the organization, leading to the exchange of knowledge between each other. This is consistent with the idea of Kucza (2001), who indicated that knowledge management is an activity related to the processes of knowledge generation, storage, and sharing. In addition, Thai academic, Phanit (2003), stated that knowledge management includes practices as follows: 1) collecting, organizing, storing, and accessing information to generate knowledge, information technology, and computing knowledge as tools to enhance knowledge management; 2) knowledge management involves the exchange of knowledge for behaviors within the organization regarding the dynamic culture and practices affecting knowledge exchange; 3) knowledge management requires knowledgeable people to interpret and apply knowledge, generating innovation and leadership in the organization; and 4) increasing organizational effectiveness can increase the organization’s success.
2.3.2.1 Elements of knowledge management
Wiig (1993) has divided the components of knowledge management into three groups, known as the pillars of knowledge management, which consist of activities to complete the knowledge cycle: creation, presentation, use, and transmission. The pillars have the following functions: 1) explore, classify knowledge, analyze knowledge and related activities, and compile and present knowledge; 2) assess the value of knowledge and other related activities; and 3) synthesize activities related to knowledge to easily manage, control, disseminate, and use knowledge.
2.3.2.2 Knowledge management model
Knowledge is an administrative resource because it is a resource that is difficult to imitate and has a complex knowledge base. Knowledge is stored in the person acquired through accumulation and implementation, and is transferred through culture, policies, daily work, documents, systems, and employees. Wernerfelt (1984) discussed sustainable competitiveness and indicated that the attributes are valuable, rare, difficult to replicate, and difficult to substitute as an advantage and as a barrier to imitation to create barriers to competitors; namely, alternative resources to build and optimize, machine manufacturing capabilities, loyalty, production experience, and technology leadership. Focusing on technology over products will create a competitive advantage. In addition, March (1991) divided knowledge into practical knowledge such as intellectual capital and a leap forward toward exploration of knowledge management. However, this knowledge remains certain, provides immediate feedback, and can be optimized by routine and implementing processes to reduce diversity. Takeuchi (2001) have a created the SECI MODEL model for knowledge management with relevant knowledge, both explicit and latent knowledge.
They stated that knowledge management consists of knowledge transfer, external acquisition, connection of knowledge within the organization to knowledge outside the organization, and the application of knowledge to practice. Laudon (2002) argued that knowledge management consists of creating knowledge, evaluating and coding knowledge, sharing knowledge, and disseminating knowledge. In addition, Sveiby (2003) indicated that knowledge is the development of knowledge to be utilized for the benefit of using knowledge management to develop innovations and new services as follows: 1) the external structure is the acquisition of information and knowledge and
the creation of new knowledge from outside; 2) the internal structure includes creating a culture of sharing knowledge and storing and disseminating knowledge within the organization. Marquardt (2002) indicated that knowledge management processes include knowledge acquisition, knowledge creation, knowledge storage, knowledge analysis and mining, knowledge transfer and dissemination, application, and data accuracy. This is consistent with Beesley (2008), who stated that knowledge management includes knowledge creation, knowledge acquisition, knowledge transfer, and knowledge application. Dararuang (2015) stated that the knowledge management process in each step had practice details as follows. 1) Knowledge acquisition is the search for existing knowledge for the benefit of the organization. Such knowledge can be knowledge that exists either within the person in the organization or knowledge outside the organization. 2) Knowledge creation is the creation of new knowledge of the staff or the organization to be applied in the organization. 3) Knowledge storage is a method of systematically storing knowledge with categories of body knowledge.
Knowledge can use information technology systems to facilitate personnel or organizations to search for information stored for application. 4) Knowledge dissemination is the transfer, dissemination, and sharing of knowledge to personnel or within an organization to be applied in practice. 5) Knowledge adoption is the application of knowledge in practice.
2.3.2.3 Knowledge Management in Innovation
Knowledge management innovation involves knowledge techniques, knowledge transfer, and learning to support management methods and to support technology management. Innovation management has to be clear regarding knowledge management, learning, and the context of traditional institutional development, trying to define the advancement of information technology and knowledge management. Knowledge management must consider social systems, knowledge-based techniques, and business policies and attitudes. There have been research studies on knowledge management and innovation, such as that of Ramirez (2012). It was found that learning management and organizational learning were closely related to the results of organizational innovation and organizational performance. In addition, knowledge generation and knowledge absorption has an effect on innovation outcomes, as researched by Su (2013a), who stated that knowledge-generating ability,
knowledge-absorbing ability, and product innovation have positive outcomes on knowledge-building ability and knowledge-absorbing ability, with combined results with product innovation. Individuals have a positive effect on their ability to build knowledge and coordinate outcomes.
2.4 Transformational Leadership Theory
Transformational leadership, according to Burns (1978), is the process of raising the morals and motivation of both leaders and followers. Leaders must be virtuous, ethical, and raise their consciousness through ideals and morals and ethical values, such as liberty, justice, equality, peace, and humanitarianism. Leadership is the process of the relationship between a leader and a follower. Leaders encourage motivational responses. Burns (1978) described transformational leadership as the relationship of leaders and followers in terms of power, motivation, and skills towards a common purpose that occurs in three ways. First is trade leadership, which is a reward-based interaction that motivates needs and shares operational achievements. Second is transformational leadership, which is where leaders influence followers by motivation.
Leaders are aware of their followers' needs and will encourage them to raise their awareness and their needs. Three, ethical leadership is when transformational leaders raise the moral behavior and desires of both leaders and followers and bring about change on both sides. The power of a leader arises from the leader causing the follower to shift to higher needs, which in turn aligns the needs of the leader and follower to higher goals.
In addition, B. M. Bass (1985) proposed the theory of transformational leadership based on the concept of Burns (1978). Here, leadership is reward based in exchange for performance. Transformational leaders rely on the exercise of trust, respect, and loyalty.
Bass proposed transformational leadership to motivate followers using the following methods: 1) to create the awareness of the importance of the work; 2) to convince followers to see the importance of public interest; 3) to inspire—leaders of change must have behaviors that include ideological influence, individualization, motivation, stimulation, and intelligence. Transformational leadership has the following attributes:
1) have a personal relationship with group members; 2) focus on vision, values, and
expectations; 3) use motivation with an emphasis on giving advice; 4) have values, emphasizing cooperation, unity, equality, fairness, and fairness, including efficiency and effectiveness; 5) Focus on results; 6) set directions by finding new methods and seeking new things using transformational and leading methods.
2.4.1 Elements of Transformational Leadership
B. M. Bass, &Avolio, B. J. (1993) proposed a transformational leadership model as follows. The elements of transformational leadership are, one, idealized influence. Leaders are role models for followers. Leaders need to be respected and trusted to build their followers' pride. Followers will behave like leaders. Leaders must have vision, transferability, ability to solve problems in crisis, morality, and intelligence. Two, inspiration is to stimulate the spirit of the follower to be active and positive. Leaders have clear goals, ensuring that their followers have common goals to achieve with a view of the common good. This is consistent with B. M. Bass (1985), who stated that the motivational behavior of a leader is as follows. 2.1) Action emphasis is placed on encouraging followers to demonstrate competence and responsibility.
Upon completion of the task, the followers will have pride and self-confidence, learn new things to solve problems for the organization, have open contact, and have trust and trust in each other. 2.2) Confidence building is when a follower is faced with a problem or stress, and the leader must build confidence to build morale and put effort into performance to achieve goals. 2.3) This is building beliefs in an ideological purpose to make the follower believe that the ideology is valid and worthy of sacrifice. 2.4) This is taking advantage of the likes of the leader, supporting and suggesting new projects to create operational challenges. Leaders encourage followers to volunteer and create a positive atmosphere for communication. Three, intellectual stimulation is the stimulation regarding the creation of new things, systematic thinking and problem solving, being creative, allowing followers to participate in expressing opinions and listening to their different opinions, and creating cooperation in solving problems and facing problems. R. E. Quinn, & Hall, R.H. (1983) instated the leaders use cognitive stimulation as follows. 3.1) Intellectual stimulation uses rationales, emphasizing successful motivation, emphasizing formality and rational decision-making with little information to make decisions, but with a focus on speed and effectiveness in problem
solving. 3.2) Emphasis on survival uses interactions with the environment and leaders use informal processes. 3.3) Using experience uses step-by-step information from one’s problem-solving experience and uses a large amount of data to get the best answer to ensure stability, safety, and persistence of the organization. 3.4) Leaders focus on progress, adaptability, learning diversity, creative thinking, flexible decision-making, and finding new solutions to problems. Four is individualized consideration with individual attention; leaders teach and mentor followers, open up new learning opportunities, and create a supportive atmosphere. B. M. Bass (1985) described individuality as follows. First is taking into account development; leaders assess their current followers' abilities and future responsibilities. Leaders are good role models for their followers and delegate tasks to develop competence and meet their followers' needs through mentoring, close observation, and recording of operational progress.Two is individual focus, two-way contact to acknowledge and resolve issues. Three is being a “lieutenant” where leaders use their knowledge and experience to help guide and train and teach with care. Gabbert (2005) also supported Bass by suggesting elements of transformational leadership. First is ideological influence. Leaders demonstrate vision, courage, and belief in values as part of the driving force, driving change, and being a moral practitioner. Second is taking into account individuality, developing the potential of the followers to their full potential, and having the determination to develop the followers and the team. Third is inspiration. Leaders are optimistic, proud, and set goals with a vision for success. Fourth is intellectual stimulation; here leaders encourage followers to analyze problems, view problems as challenges, and find new solutions to problems. Covey (2007) identified elements of transformational leadership as follows.
First is the creation of prestige or ideological influence; leaders are admired by their followers, impose penalties, and stick to truth and correctness. Second is inspiration;
leaders share their visions with followers. Leaders and followers inspire and communicate goals. Third is intellectual stimulation; leaders encourage followers to be creative and link the structure of goals, vision, and organizational goals. Fourth is intellectual stimulation; here leaders encourage followers to analyze problems, view problems as challenges, and find new solutions to problems. Covey (2007) identified elements of transformational leadership as follows. First is the creation of prestige or ideological influence; leaders are admired by their followers, impose penalties, and
stick to truth and correctness. Second is inspiration; leaders share their visions with followers. Leaders and followers inspire and communicate goals. Third is intellectual stimulation; leaders encourage followers to be creative and link the structure of goals, vision, and organizational goals. Fourth is individualized consideration, individual attention, enthusiastic team building, and operational method improvement. This is in line with McShane (2009), who have proposed the characteristics of transformational leaders as follows. 1) being able to create strategic visions to guide operations; 2) having the ability to communicate one’s vision by using internal communication to employees so that they can understand the vision; 3) being an example of employees by acting as an example and being able to follow the policies that have been set which, if followed, will build trust and trust among employees; 4) engaging the workers with the vision by transitioning from abstract to action, stimulating interest. Hacker (2003) argued that the elements of transformational leadership have eight characteristics: the creation of new visions, real-world analysis, creativity, administrative, communication builder agility, and empowerment.
Regarding the elements of transformational leadership, there has been research supporting transformative leadership styles influencing innovation, such as those by Berson (2005), which tested the relationships among leadership style, quality, and employee satisfaction in research and development in the management environment. It was found that transformational leadership and exchanging leadership were related to environmental quality in telecommunications research and development. Therefore, it can be said that leaders are very important to the organization in terms of working to achieve goals and generating profits or customer satisfaction. This is consistent with Hughes (2018), who found leadership is the primary determinant of the contextual factors influencing creativity and innovation, personality, intelligence, behavior, body language, and leadership styles, including exchanging leaders, transformational leaders, government officials, and true leaders. This is consistent with Xie (2018). The results of transformation influenced innovation in organization as follows: 1) transformational leadership supports building trust and individuality; 2) leadership of change creates an atmosphere of innovation; 3) leaders with leadership build trust and care with positive outcomes that contribute to an innovative climate; 4) trust and personal character will create an innovative atmosphere;
