Organizational adaptation, transformational leadership, continuous improvement, and firm sustainability: evidence from Thailand.

• Author: Ussahawanitchakit, Phapruke
• Position: Report - Survey

1. INTRODUCTION

   In a recent year, firms have implemented, exploited and utilized valuable business activities and strategies in order to provide organizational practices, promote business excellence, enhance competitive advantage, encourage corporate performance, achieve firm survival, and gain organizational sustainability in a competitive market and a business environment. These activities and strategies include transformational leadership competency, employee creativity focus, organizational innovation capability, market intelligence creation, customer orientation establishment, and so on. Here, transformational leadership is an important determinant of firm performance, survival and sustainability in uncertain and turbulent business conditions. It is an ability of leaders to motivate subordinates to achieve performance beyond expectations by transforming the subordinates' attitudes, beliefs and values as opposed to simply gaining compliance (Rafferty and Griffin, 2004). In addition, it includes charismatic role modeling, individualized consideration, inspirational motivation, and intellectual stimulation. Thus, transformational leadership plays a significant role in improving operational competencies and capabilities and developing organizational performances and outcomes.

   To successfully increase the contributions of transformational leadership, antecedents and consequences of transformational leadership are identified, explored and investigated explicitly. In this study, organizational adaptation is an antecedent of driving transformational leadership and firm sustainability is a consequence of practicing transformational leadership. Organizational innovation is an ability of firms to deal with organizational responses to environmental pressures and changes and a popular means for organizations to respond to threats and opportunities in their competitive markets and business environments (Key et al., 2005). Also, firm sustainability is an ability to meet the needs of a firm's stakeholders without compromising its ability to meet the needs of future stakeholders (Petrini and Pozzebon, 2009). In deed, it provides delivering economic, social and environmental benefits simultaneously. As a result, continuous improvement is proposed to become a moderator of the aforementioned relationships. It is a systematic effort to seek out and apply new ways of doing works by actively and repeatedly making process improvements (Anand et al., 2009). Moreover, it is an ability of firms to consistently improve current processes and learn new ones through integrating operational processes and enhancing their ability to make cohesive and quick process changes to improve performance. Accordingly, organizational adaptation has a potential influence on firm sustainability via a mediating effect of transformational leadership and a moderating impact of continuous improvement.

   In outstandingly enhancing firms' transformational leadership and firm sustainability, organizational adaptation becomes a key determinant of drinking and explaining them. Hence, the objective of this study is to examine the effects of organizational adaptation on firm sustainability of information technology businesses in Thailand via transformational leadership as being a mediator and continuous improvement as being a moderator. In this study, the key research questions are: (1) how organizational adaptation has an impact on transformational leadership, (2) how transformational leadership has an effect on firm sustainability, (3) whether continuous improvement is a moderator of the organizational adaptation-transformational leadership relationships, (4) whether continuous improvement is a moderator of the transformational leadership-firm sustainability relationships, (5) whether transformational leadership is a mediator of the organizational adaptation-firm sustainability relationships, and (6) whether the aforementioned relationships are positive.

   This study is outlined as follows. The first section reviews existing significant literature in the areas and streams of organizational adaptation, transformational leadership, continuous improvement, and firm sustainability, links between the concepts of the aforementioned variables, and develops the key research hypotheses of those relationships. The second explicitly details research methods, including data collection, measurements, and statistics. The third gives the results of the analysis and the corresponding discussion. The final summarizes the findings of the study and points both theoretical and managerial contributions, and presents suggestions for further research and the limitations of the study.

2. RELATIONSHIP MODEL AND HYPOTHESES DEVELOPMENT

   Here, organizational adaptation is hypothesized to have an association with transformational leadership and transformational leadership is hypothesized to have an influence on firm sustainability. Likewise, continuous improvement is proposed to become a moderator of the aforementioned relationships. The aforementioned relationships are systematically investigated. Thus, the conceptual, linkage, and research model presents the associations among organizational adaptation, transformational leadership, continuous improvement, and firm sustainability as shown in Figure 1.

   [FIGURE 1 OMITTED]

   2.1 Organizational Adaptation

   Organizational adaptation is an antecedent of driving and explaining transformational leadership and it refers to an ability of firms to deal with organizational responses to environmental pressures and changes (Key et al., 2005). It is a popular means for organizations to respond to threats and opportunities in their competitive markets and business environments. It influences the underlying organizational processes of recognition and interpretation of environmental changes. Thus, organizational adaptation is a central challenge of firms in being aware of environmental change and successfully responding to environmental demands (Goodstein, 1995). Firms with greater organizational adaptation tend to completely succeed in superior environmental change management activities and strategies and potentially achieve competitive advantage and performance. They definitely have a process and a reaction to dealing with the changes of competitive markets and business environments via minimizing their costs and maximizing their profits on the basis of their existing productive resources and capabilities. Then, organizational adaptation is the interdependence and interaction between strategic choice and environmental determination and it promotes firms to provide transformational leadership, achieve business competitiveness, enhance organizational performance, and gain firm sustainability.

   To outstandingly succeed in an environmental change, organizational adaptation becomes an important tool in helping firms respond to their business markets and achieve corporate success. It is defined as a change in a significant organizational attribute, such as basic business strategy or organizational structure in response to environmental change (Kraatz, 1998). It promotes, prevents and shapes organizations' attempts to transform themselves in response to environmental change. Likewise, organizational adaptation promotes firms to cope with changes in their external environments through a choice of an appropriate strategy and a design of a matching structure (Jennings and Seaman, 1994). It is a period of gradual, long-continued and incremental change in response to environmental conditions. Firms with high organizational...