Driving Innovation in the Automotive Components Sector: Leveraging Transformational Leadership and Organizational Ambidexterity for Competitive Advantage

This study investigates the role of innovation in achieving competitive advantage within Indonesia’s automotive components industry. Drawing on upper-echelon and resource-based theories, it examines how transformational leadership influences innovation performance, with organizational ambidexterity as a mediating factor. The research employed a quantitative approach, surveying top management from 100 Indonesian automotive component firms. Using PLS-SEM analysis of four hypotheses, the study found that while organizational ambidexterity significantly impacts innovation performance, transformational leadership does not directly affect it. However, transformational leadership indirectly influences innovation performance through organizational ambidexterity. These findings provide valuable insights for industry leaders, offering evidence-based strategies to enhance innovation capabilities. The research contributes to understanding leadership dynamics and innovation in emerging markets’ rapidly evolving automotive supply chains, paving the way for future investigations in this field. The study’s implications extend beyond the Indonesian context, offering potential applications in similar emerging markets and industries undergoing rapid technological changes.