European Online Journal of Natural and Social Sciences 2016; www.european-science.com Vol.5, No.4 pp. 951-965 ISSN 1805-3602 Openly accessible at http://www.european-science.com 951 Determining the Role of Transformational Leadership on Firm Performance through Organizational Innovation and Technological Innovation Capabilities Rizwan Ali Khadim*, Muhammad Asghar, Rafia Khan, Omer Farooq, Mehwish Afzal University of Lahore, Lahore *E-mail: rizwankhadim86@yahoo.com Received for publication: 13 May 2016. Accepted for publication: 15 September 2016. Abstract This study aims to address the influential role of TL on FP through organizational innovation and technological capabilities innovation. The unit of analysis in study is individual employees working in software industry of Pakistan. The proposed research method for this study is Quantitative method. Research design of this study is administrative survey method. The current study is performed in the software marketplace which is incredibly energetic industry in Pakistan. Moreover, respondents are chosen randomly from different software companies for avoiding any kind of biasness. A total of 395 survey questionnaire were collected from the software houses in Pakistan and 370 responses were completed. This study also uses statistically techniques such as reliability and structural equation model techniques for data analysis through AMOS and SPSS software. The empirical results show positive and significant influence of TL on FP. In addition, the findings of this study will help the firms to improve their business performance and improvements of new technological capabilities as well. Keywords: Transformational Leadership (TL), Organizational Innovation (OI), Technological Innovation (TI) Capabilities, Firm Performance (FP), Introduction Curiosity is going upward on innovation and firm performance in the influence of transformational leadership. TL plays a fundamental role to boost the potential performance of their followers and supporters Bass (1995). Today, mostly organizations and institutes are facing energetic situation illustrated by globalization and quick technological change. Innovation is a key factor in the competitive advantage and achievement of organization as well (Woodman, Sawyer, & Griffin, 1993). TL develops the whisperer and spreader of innovative traditions to looking for the best probable FP (García-Morales, Jiménez-Barrionuevo, & Gutiérrez-Gutiérrez, 2012). Technological innovation (TI) capabilities are main key sources for organizational regeneration and accomplishment. Innovation facilitates organizations to more competent of looking for novel prospects and utilizing existing ones additional proficiently protect themselves from unstable scenarios and highly uncertain.. Today, Product innovation is the lifeblood of firms competing in dynamic environments (Slater, Mohr, & Sengupta, 2014) . A firm which has a speedy and superior capability to restructure information in the innovation race over competitors, other than will improve more FP (Martín-de Castro et al., 2011). In addition, a Boston Consulting Group Senior Executive conducted a innovation survey in 2010 and stated that product innovation is the main strategic priorities among top three firms for 71% of companies (Andrew, Manget, Michael, Taylor, & Zablit, 2013). Furthermore, they found that 70% of firms were supposed new-to-the-world products as “important” or “very important” to the company’s future.