Transformational leadership, creativity, and organizational innovation

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Abstract

This study proposes a model of the impact of transformational leadership both on followers' creativity at the individual level and on innovation at the organizational level. The model is tested on 163 R&D personnel and managers at 43 micro- and small-sized Turkish software development companies. The results suggest that transformational leadership has important effects on creativity at both the individual and organizational levels. At the individual level, the results of hierarchical linear modeling show that there is a positive relationship between transformational leadership and employees' creativity. In addition, transformational leadership influences employees' creativity through psychological empowerment. At the organizational level, the results of regression analysis reveal that transformational leadership positively associates with organizational innovation, which is measured with a market-oriented criterion developed specifically for developing countries and newly developing industries. The implications of the findings along with some potential practical applications are discussed.

Section snippets

Transformational leadership and individual creativity

Burns (1978) introduces the transformational leadership theory. Bass and Avolio (1995) further developed the theory. According to them, transformational leadership has four components; charismatic role modeling, individualized consideration, inspirational motivation, and intellectual stimulation. Using charisma, the leader inspires admiration, respect, and loyalty, and emphasizes the importance of having a collective sense of mission. By individualized consideration, the leader builds a

Sample

A total of 163 employees and their leaders in 43 Turkish entrepreneurial software development companies participated in this research. Of the 90 micro- and small-sized information technology companies most of which were located in techno parks, 49 satisfied the two criteria of this study: minimum firm age of 3 years and in-house software development. The leaders of 43 entrepreneurial companies agreed to participate in the study. They were both the owner–managers and immediate supervisors of the

Descriptive statistics

Table 1 includes means, standard deviations, alpha coefficients, and correlations among all individual-level variables. Intercorrelations show that creativity significantly and positively correlates with transformational leadership (r = 0.17, p < 0.05), intrinsic motivation (r = 0.24, p < 0.01), and psychological empowerment (r = 0.24, p < 0.01), but not with perception of support for innovation (r = 0.10, n.s.). Transformational leadership has significant positive correlations with intrinsic motivation (r = 

Discussion

This paper has both theoretical and methodological contributions to the literature. This study is the first to investigate the effects of transformational leadership on creativity-related outcomes at multiple levels within organizations. The findings suggest that transformational leadership has important effects at both individual and organizational levels. At the individual level, transformational leadership positively relates to followers' creativity. This finding is valuable for two reasons.

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