Given the existence of an exogenous

Given the existence of an exogenous latent variable (transformational leadership [ξ1]), a first-grade endogenous latent variable
(organizational learning [η1]) and second-grade endogenous latent
variables (organizational innovation [η2] and organizational performance [η3]), the study analyzes the data using structural equations
modeling (LISREL 8.30 program) to establish causal relationships
between these variables. This procedure translates the theoretical
construction into mathematical models in order subsequently to
estimate and evaluate them empirically (Jöreskog and Sörbom, 1996).
Fig. 1 presents the theoretical model. The findings give the
hypotheses concrete form. The study uses a recursive non-saturated
model. Structural equation modeling takes into account errors in
measurement, variables with multiple indicators and multiple-group
comparisons (Koufteros et al., 2009).