Absorptive capacity, creative leadership, knowledge sharing, small crafts industry

The absorptive capacity of the craftsmen in Small Crafts Industry (SCI) to identify new value, and then assimilate and apply it for commercial purposes and win the competition is very necessary to study. This is based on observation that the absorptive capacity of the SCI is relatively low, which leads to lower competitiveness. Around 21 (twenty one) SCI in Gianyar, Bali Province, change their business into other businesses due to being unable to compete in the crafts industry and their absorptive capacity to assimilate and apply new values and new technologies is considered low.

This research aims to (1) develop the proposition concept of the influence of creative leadership towards absorptive capacity; (2) attest to the influence of the knowledge-sharing on the absorptive capacity; (3) attest to the influence of creative leadership towards knowledge sharing, and; (4) develop the concept of mediating role of knowledge sharing over the influence of creative leadership against absorptive capacity. The study was done in Gianyar Regency, with a sample of 90 Small Industry Craftsmen (SCI) in 7 (seven) subdistricts. The analysis tool used was the Partial Least Square (PLS). This research identified that the proposition which states that creative leadership influences absorptive capacity is proven positive and significant. Knowledge sharing gives a positive and significant effect on the absorptive capacity. Creative leadership significantly and positively affects knowledge sharing; furthermore, knowledge sharing has been found having partial mediating role over the influence of creative leadership on absorptive capacity.