A Multilevel-Analysis on How Transformational Leadership Enhances Team Creativity: Sequential Mediating Effect of Employee's Psychological Safety and Creativity

Abstract

As a business environment changes so fast and becomes extremely competitive, corporate innovation has been the subject of attention due to its critical role for sustainability of firms. Many scholars and practitioners have focused on transformation leadership and its impact on creativity because the two variables are very important to enhance innovation of firms. Although scholars have investigated the relationship, they have mainly focused on the individual employee's creativity with a single mediator, based on the single-level analysis. However, considering that organizations increasingly rely on 'teams' to enhance their innovation, we need to focus on team-level creativity by investigating intermediating mechanisms of the relationship. To respond these calls, this study seeks to elaborate underlying mechanisms which affect the association between transformational leadership and team-level creativity. Grounded on the context-attitude-behavior framework, we argue that transformational leadership improves team creativity through employee's psychological safety and subsequently facilitating his or her individual-level creativity. Multi-level structural equation modeling analysis with a survey of 196 employees of 50 teams in South Korea shows that individual employee's psychological safety and creativity sequentially mediate the transformational leadership-team creativity link. Theoretical and practical implications are discussed along with limitations and future research directions.