The Mediating Role of Organizational Leadership between the Intellectual Capital and Frugal Innovation

Abstract

Purpose – The purpose of this paper is to explore the effects of intellectual capital on frugal innovation and to examine the mediating role of organizational leadership. Methodology – This is an empirical research. Data were collected from 390 SMEs through questionnaire survey and applied SPSS to analyze the data. Findings – Findings exposed the significant effects of intellectual capital on frugal innovation. Data exposed that the mediation of organizational leadership strengthens the effects on frugal innovation. Environmental turbulence strengthened the effects of intellectual capital, surprisingly weakens the effects of intellectual capital on frugal innovation. Practical implications – Findings provide valuable and timely insights for the modern managers as well. Managers that operate in SMEs will have to understand that how intellectual capital can be gathered and utilized for producing frugal products. Originality/value – Sustainable and social issues emerge mainly due to scarcity of available resources. Firms seek to solve such pressing issues through improvisation in resources. However, frugal products assist firms to significantly contribute in society and sustainability. This investigation adds to frugal innovation, writing literature by looking at the missing connection between various scholarly capital and FI and how the mediation of organizational leadership strengthen/weaken this relationship. It is accepted that intellectual capital assists with grasping frugal innovation to empowering firms adding sustainable and social solution.