Frugal innovation embedded in business and political ties: transformational versus sustainable leadership

There is on ongoing debate as to whether managerial ties trigger or impede frugal innovation. By integrating social networking with the situational leadership theory, this article hypothesizes and tests whether the relationship between managerial (business and political) ties and frugal innovation is moderated by the perceived leadership style (sustainable vs. transformational). Surveying 256 representatives of SMEs in Pakistan, the findings indicate that both types of managerial ties are positively associated with frugal innovation. Transformational leadership did not affect the relationships between independent variables (both types of managerial ties) and independent (frugal innovation) variable. However, the conditional impact of sustainable leadership as compared to transformational leadership was significant and positive. From both the theoretical and practical perspectives, our study offers important implications for relationship management in fostering frugal innovation.