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the key employees propose different product designs and the ways in which they do their jobs is different from the ways in which they did their jobs before, meaning that what they
do will be more valuable to the companies. The creativity which is shown by the key employees of the manufacturing UMKM can lead to innovative products, innovative
processes and innovative management which can strengthen the companies’ competitiveness.
In relation to the process innovation, the employees show innovation by improving the product making process using newer tools in order to produce the products which can
be accepted by the market. As far as the product innovation is concerned, the product design is modified, the main and supporting raw materials are used, the same as before. In
this product innovation, the uniqueness of the Balinese local culture is also shown; the main raw materials are modified and the supporting ones are too; the objective is to
produce innovative products. The result of the present study supports the study conducted by Alves et al. 2007
in which it was stated that creativity is part of innovation, and that innovation is the implementation of the outcome of creativity. It is also supported by the study conducted by
Wawan Dhewanto et al. 2014 in which it is stated that creativity and knowledge are highly important when implementing an innovation.
5.5 Impact of the Structural Empowerment on Innovation
This present study proves that the structural empowerment positively but insignificantly contributes to innovation, meaning that the better the structural
empowerment which covers authority delegated to subordinators, the better support given by the companies, and the better access to information, the more innovative the employees
will be. As presented in the description of variables, the structural empowerment undergone by the key employees of the manufacturing UMKM in Gianyar Regency can be
classified as good. That is indicated by the support given by the companies which appreciate the attempts made and the innovative ideas given by the key employees. In
addition, opportunities are also provided to them to improve their skills through internal training and easy access to information, making them more empowered to develop their
innovative ideas in their jobs. They are empowered to innovate the process, modify the products, and to innovate the management. The structural empowerment is also shown by
giving freedom to the key employees of the companies to develop their innovative ideas
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and to design the products. They are also trusted to make the innovative attempts in their jobs. This is supported by the result of the study conducted by Kahreh et al. 2011, in
which it was evidenced that the empowerment which is viewed from autonomy positively contributes to the competitiveness of the dimension of innovation.
5.6 Impact of the Psychological Empowerment on Innovation
The psychological empowerment turns out to positively and significantly contributes to innovation, meaning that the better the psychological empowerment of the
employees, the more innovative they will be in their jobs. In this present study, the psychological empowerment is conceptualized into four cognitions; they are meaning,
competence, self-determination, and impact. As presented in the description of variables, the psychological empowerment of the key employees of the manufacturing UMKM in
Gianyar Regency can be classified as good. This is indicated by the view that the jobs done by the employees are considered important and highly meaningful to their lives. They are
also confident that they have the ability and skill needed to do their jobs. Apart from that, the psychological empowerment is also indicated by self-determination, meaning that the
key employees are provided with freedom and opportunities to decide what to do in their jobs. As well, their existence also affects where they are supposed to work. In addition,
they can also control what happens in the divisions in which they work. Such a condition of the psychological empowerment turns out to significantly
affect the innovation of the manufacturing UMKM in Gianyar Regency. In this case, innovation includes the process innovation and the management innovation. The
innovation which is made to improve the process through which the products are produced using newer tools is intended to produce the products which are acceptable to the buyer.
Innovation also includes modifying the designs of the products, the raw and supporting materials. The uniqueness of the Balinese local culture is attached to the products, making
the market interested in the products. This is done to innovate the products. The management innovation is made by implementing the more modern system in the buying
and selling activities. Email, internet, e-banking are used as an attempt to follow the technological development. In addition, innovation is also made by implementing the
computer- based administrative system in the companies’ administrative activities.
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5.7 Impact of the Asta Brata Leadership on Innovation
