Frugal innovation as the bridge between leadership, knowledge, and sustainable performance: evidence from Omani SMEs

Abstract

Purpose This study aims to research delves into the relationships among sustainable leadership, frugal innovation (FRN) and sustainable performance (STP) in small and medium enterprises (SMEs) in Oman. It seeks to unveil the mechanics of how leadership enables innovative practices that eventually lead to better sustainability outcomes, using the resource-based view, knowledge-based view and transformational leadership theory as a theoretical foundation. Design/methodology/approach By means of a quantitative research design, data were gathered from a total of 414 employees who worked in SMEs in Oman. To validate the proposed relations among the variables, including the mediating function of FRN and the moderating influence of information credibility (IC) and knowledge sharing (KS), partial least squares structural equation modelling was used. Findings The findings corroborate the theory that sustainable leadership has a good impact on FRN and the latter, in turn, glorifies the STP of the company. Additionally, the influence of FRN on the relationship between leadership and performance outcomes was also detected. Moreover, the very IC and KS were the significant factors that moderated these relationships, thus increasing the advantages of sustainable leadership in encouraging both innovation and performance. These discoveries underline the important position of transformational leaders who have the ability to turn the organisation into an innovation-driven one relying on the unique resources and knowledge assets for value creation. Originality/value The research adds new insights to the discussion on leadership and innovation in resource-constrained environments by proposing a comprehensive model that connects sustainable leadership, FRN and STP. It also gives practical advice to policymakers and SME leaders in Oman and comparable places, stressing the importance of leadership and innovation strategies for their competitiveness and sustainability in the long run.