The effect of transformational leadership and employee creativity on organizational innovation: Focusing on the moderated effect of intrinsic motivation

Scholars have increasingly called for studies on how to increase organizational innovation. This study analyzes the positive effects of transformational leadership and employee creativity on organizational innovation. We also test the indirect effects of intrinsic motivation. Data were collected from 419 Korean employees working in small and medium-sized companies in South Korea via an online or offline survey. The survey responses were evaluated using partial least squares structural equation modeling (PLS-SEM) with the SmartPLS 4.0 program. Based on the data analysis, all proposed hypotheses were confirmed. The main findings indicated that transformational leadership is significantly and positively related to organizational innovation, and this relationship was mediated by employee creativity. The results also indicated that the indirect effect of transformational leadership on organizational innovation through employee creativity was moderated by intrinsic motivation. This study offers new insights into the effects of transformational leadership, intrinsic motivation, and employee creativity on organizational innovation in Korean organizations. Implications for leaders, managers, and other HR management specialist are discussed. The findings can help leaders of small and medium-sized companies enhance their leadership by improving intrinsic motivation and employee creativity, thereby fostering organizational innovation.