" Impact of transformational leadership style on employee creativity in Finnish manufacturing industry "

Abstract

This thesis examines the impact of transformational leadership (TL), rooted in Bass's (1985) transformational leadership theory, on employee creativity in the Finnish manu facturing sector, a critical industry for Finland's global competitiveness. Transforma tional leadership theory emphasises four core dimensions of transformational leader ship—Idealised Influence, Inspirational Motivation, Intellectual Stimulation, and Individ ualised Consideration—that collectively inspire employees to exceed expectations and foster innovation. By exploring these dimensions, the study investigates how leadership fosters creativity and engagement among employees. Grounded in a positivist paradigm, the research employs a quantitative design, collecting survey data from manufacturing professionals. Regression analysis is used to evaluate the relationship between leader ship dimensions and employee creativity. The findings reveal that all four dimensions significantly enhance creativity, with Intellectual Stimulation being the strongest predic tor. Idealised Influence builds trust, Inspirational Motivation fosters shared goals, and Individualised Consideration addresses employees' unique needs. These results offer theoretical insights by advancing understanding of how transformational leadership shapes creativity in specific cultural and industrial contexts. Practically, they offer Finn ish manufacturing leaders’ actionable strategies to drive innovation, such as challenging conventional thinking and providing tailored support. While limitations, such as reliance on self-reported data and a single-industry focus, are acknowledged, the study provides a foundation for further exploration across diverse contexts. This research underscores the strategic importance of transformational leadership in cultivating innovation within dynamic industrial environments.