Abstract
Organizations in the current competitive and challenging situation considered organizational process innovation to sustain themselves with competitive advantage and provisioning of high value products to consumers. The current study investigates the role of transformational leadership traits and knowledge management practices on predicting the process innovation in FMCG companies. Data has been collected from the 10 FMCG companies located in major two cities i.e. Lahore and Karachi, Pakistan. Sample of 200 top line managers have been selected by convenience sampling method and adapted itemized questionnaire has been presented to the top management after a brief session of face to face interviews. Response of 170 top line employees has been registered and statistical testing has been done on SPSS 22. Results indicated that the transformational leadership traits has significantly positive impact on process innovation which effectively expedites the production efficiency of manufacturing units. The knowledge management practices such as acquisition, transfer and application has strong and positively significant association with process innovation. The knowledge management practices positively mediates with transformational leadership traits and resultantly lays foundation for continuous process improvement to survive in market. This conceptual model practically helps the production and manufacturing companies to nurture positive change management attitudes, decreasing production time, expanding products range, development of skills needed to advocate and adopt change, employee involvement, commitment and benefits of large scale economy. This study is limited to FMCGs in major cities and can be expanded to services industry and test the conceptual model.