Akhtar Rasheed (2302277) 

Impact of transformational leadership style on 
employee creativity in Finnish manufacturing 

industry 

 

 

 

 

 

 

 
  

Vaasa 2024 

School of Management 
Master’s thesis in Economics and Business Administration 

Master’s Degree Programme in International Business 
  



2 

Contents  

1. Introduction 5 

1.1 Background 5 

1.2 Context of the study: Finnish Manufacturing Industry 8 

1.3 Research Question 10 

1.4 Significance of Research 10 

1.4.1 Practical Implications of Research 11 

1.5 Definitions of key Concepts 11 

1.6 Thesis Outline 12 

2. Literature Review 14 

2.1 Contextual Factors in the Finnish Manufacturing Industry 14 

2.2 Key Theories on transformational leadership and creativity 15 

2.3 Transformational Leadership 17 

2.3.1 Transformational Leadership vs. Transactional Leadership 19 

2.4 Employee Creativity 20 

2.4.1 Definition and description 20 

2.4.2 Theoretical Perspective on employee creativity 20 

2.5 Theoretical Framework: Relationship between Transformational Leadership and 

Creativity 21 

2.5.1 Idealized influences and employee creativity 22 

2.5.2 Inspirational motivation and employee productivity 23 

2.5.3 Intellectual Stimulation and Employee Creativity 24 

2.5.4 Individualized consideration and employee creativity 25 

2.6 Empirical Evidence from other industries: Transformational Leadership and 

Employee Creativity 26 

2.6.1 Technology Sector 26 

2.6.2 Healthcare Sector 27 

2.7 Chapter Summary 27 

3. Research Methodology 29 

3.1 Research Philosophy 29 



3 

3.2 Research Method 30 

3.3 Data collection and sample description 32 

3.4 Research Strategy 35 

3.5 Sampling Technique and Sample 36 

3.6 Measures 37 

3.7 Data Analysis 37 

3.8 Ethical Consideration 40 

4. Results and Analysis 41 

4.1 Descriptive Statistics 41 

4.2 Correlation Analysis 42 

4.3 Regression Analysis: Hypotheses Testing 45 

4.3.1 Impact of idealized influences on employee creativity 45 

4.3.2 Impact of inspirational motivation on employee creativity 46 

4.3.3 Impact of intellectual stimulation on employee creativity 48 

4.3.4 Impact of individualized consideration on employee creativity 49 

4.4 Summary of hypotheses 51 

5. Discussion and Conclusions 52 

5.1 Interpretation of Findings 52 

5.2 Comparison with Existing Literature 54 

5.3 Implications for Finnish Manufacturing Industry 55 

5.4 Theoretical Contributions 57 

5.5 Suggestions for Future Research 58 

5.6 Conclusion 59 

References 60 

Appendices 72 

Appendix A: Finland: Share of economic sectors in the gross domestic product (GDP) 

from 2012 to 2022 72 

Appendix B: Questionnaire 73 

 
 



4 

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.  



5 

1. Introduction 

Transformational leadership has recently been considered for fostering employee crea-

tivity, particularly in the context of industries where being innovative is crucial for com-

petitiveness. The manufacturing industry is also, however, characterised by a turbulent 

and complex environment, and therefore the need to embrace leadership styles that 

encourage a climate of creativity and change is imperative. This chapter presents the 

purpose of the study and its objectives and justifies the exploration of the influence 

transformational leadership has on employee creativity in the Finnish manufacturing 

sector. This chapter, through an exhaustive consideration of the background and the 

problem articulated within this framework, works towards understanding the connec-

tion between practices in leadership and the development of the creativity of the em-

ployees in this key industry. Before moving further, let’s develop background for this re-

search in the next section. 

 

1.1 Background 

In Finland, manufacturing carries a lot of weight. It is a primary contributor to national 

income, growth, innovation, and employment opportunities (Pihlajamaa et al., 2023). 

Manufacturing in Finland covers a range of industries such as machinery, electronics, 

metalworking, and forestry, which combined made about 25.52% of the country’s GDP 

in 2022 (O’Neill, 2024). The sector has to stay competitive within the context of a global 

economy, which dominates technological development, complex precision engineering, 

and a highly skilled workforce. The scope of manufacturing in Finland includes design 

activities of building ships as well as electronics and robotics, which emphasizes the dy-

namic development of the country (Nuutila, 2019). 

 

Transformational leadership can be viewed as an approach where innovation and crea-

tivity are commonplace, and this is important for the Finnish manufacturing industry. 

Havrilesky (2022) states that transformational leaders are those who are able to moti-



6 

vate and animate employees through a common vision, break conventional thinking pat-

terns, and foster development within the team (Bass & Riggio, 2006). Such leaders foster 

a trust and empowerment culture, which is important in dealing with the turbulent chal-

lenges of the manufacturing space (Mandagi et al., 2023). In Finland, where the manu-

facturing sector keeps changing with technological improvements and market orienta-

tion, the transformational leadership enables the development of innovation and resili-

ence within the organization. 

 

Employee creativity is useful for innovation in the manufacturing sector, as this speaks 

to an employee’s ability to create new processes, products, and systems or improve on 

current ones in the organization (Amabile, 2018). Creativity in this perspective is not only 

an attribute but a product that is also, more so, shaped by the organizational culture and 

leadership. One of the functions of transformational leadership is to harness the creativ-

ity of their subordinates by creating conditions in which making mistakes is acceptable, 

experimentation is encouraged, and the employees are willing to go beyond carrying out 

their normal functions (Wang et al., 2011). The relationship between transformational 

leadership and creativity is of great relevance in manufacturing processes, as innovative 

approaches in addressing problems are essential in helping organizations remain opera-

tional and competitive (Harrikari et al., 2021). 

 

In addition, as brought out by Le Hoang and Ho (2022), the innovations have always been 

a core component in Finnish industries due to their long history of technological achieve-

ments. Employee creativity and transformational leadership, however, become im-

portant factors for the preservation of the development legacy. In manufacturing, where 

the focus and emphasis are on operational effectiveness and the need for constant en-

hancement of processes, it is a necessity for transformational leaders to elevate the in-

novation capability of their teams in order to adapt to the complexities posed by global-

ization, market evolution, or transformation of consumer needs (Reim et al., 2022). 

 



7 

Nasifoglu Elidemir et al. (2020) assessed that employee creativity is a way to drive or-

ganizational innovation and competitiveness. Creativity enables organizations to reach 

new solutions, improve existing processes, and align themselves effectively according to 

changing market dynamics. However, cultivating creative cultures within organizations 

requires suitable leadership to inspire, motivate, and empower employees to bring out 

their creativity to the fullest (Imam et al., 2020).  

 

Moreover, transformational management is considered to be one of the efficient lead-

ership styles when promoting creativity (Berkovich & Eyal, 2021). Knezović & Drkić (2021) 

demonstrated that by implementing inspiration, motivation, and empowerment into 

their staff, transformational leaders can develop a supportive working environment 

where their employees will likely to display innovation and creativity. Through the crea-

tion of compelling visions and challenging the status quo, and supporting staff in a tai-

lored manner, transformational leadership can unlock creative energies within teams 

and drive organizational success.  

 

Shafi et al. (2020) argued that transformational leadership is one of the ways of fostering 

an organization's creativity. It denotes that transformational managers find the ability to 

inspire, motivate, and empower workers to create a favourable environment that en-

courages taking risks, readiness to experiment, and generation of ideas (Gajdzik & 

Wolniak, 2022). However, despite the significant number of existing researches that 

clearly show the effect of transformational leadership on organizational performance 

and job satisfaction, one noticeable gap remains - to understand the implications of this 

kind of leadership practice on employee creativity in the context of Finnish manufactur-

ing research (Gajdzik & Wolniak, 2022). Most studies on transformational leadership and 

creativity have been conducted in different industries or cultural settings. This study fills 

the gap by examining these dynamics in the Finnish manufacturing sector.  

 



8 

1.2 Context of the study: Finnish Manufacturing Industry 

According to the work by Imam et al. (2020), the manufacturing sector has the potential 

of propelling the economy due to its multiple industrial activities both within and outside 

the borders of Finland. Finland’s manufacturing sector is made up of machine and elec-

tronics and paper products industries, which are known for their concentration on inter-

national markets (Reim et al., 2022). Key industries such as electronics and engineering 

have also contributed to the strength of Finland’s manufacturing sector through ade-

quate research and development as well as a strong infrastructure that has enabled its 

firms to integrate into global supply chains. 

 

However, the competitive edge initially held over the rest of the economy has now 

shifted to other areas, bringing about increased pressure on an organization to come up 

with new and innovative products and processes (Pihlajamaa et al., 2023). Gaining com-

petitive advantage now requires organizations to not only enhance their current pro-

cesses but also look for new ways of competing. In such fast-changing circumstances, 

however, management creativity has been identified as the main source of new ideas 

and change. Employees’ ability to think outside of the box is known to be beneficial to 

product concept development and business process design changes in relation to the 

market, which are crucial for success (Nasifoglu Elidemir et al., 2020). 

 

Fostering an environment for this creativity requires effective leadership. Transforma-

tional leadership, which actively urges employees to go beyond the ordinary, has proven 

especially efficacious in areas where innovation is paramount (Jun & Lee, 2023). With 

the help of transformational leaders who build a common goal and champion the cause 

of taking risks with their minds, organizations continue to be relevant even with the 

changing pace of the market. Finnish manufacturing companies are also now starting to 

consider such leadership as a prerequisite for being innovative, not just for adapting but 

for being a step ahead of the competition. 

 



9 

Sustainability in the country's manufacturing can, therefore, be seen to play a dual criti-

cal role as it serves to be the main environmental commitment as well as the main driver 

for innovation in the sector. As D’ Amato et al. (2020) proposed, the implementation of 

business practices related to sustainability and green technology can help companies not 

only achieve their ‘environmental mission’ but create a peculiar positioning in the global 

competitive market. It is within the broader strategic goals of Finland (Mandagi et al. in 

2023) to integrate advanced technology and promote sustainability to maintain a com-

petitive advantage. Important topics that give impetus to the sustained success of the 

manufacturing industry in Finland include the creativity and innovation, as well as the 

transformational leadership. These perspectives provide a framework for how the indus-

try can understand its potential role in guiding sustainable practices in a world grappling 

with globalization and technological change. 

 

While the potential benefits of transformational leadership have been shown in the lit-

erature, many studies have not been done to investigate its connection with employee 

creativity in the context of the manufacturing sector (Della Porta, 2023). The existing 

research into the manufacturing industry in Finland is limited, often focusing on broader 

regions or different sectors. Furthermore, most literature reviews generic technological 

and sustainability trends but do not offer insight into the unusual cultural and industrial 

dynamics of the Finnish context. Furthermore, the country's emphasis on integrating ad-

vanced technologies and being sustainable further highlights that in-depth research is 

necessary to understand how leadership styles interact with these factors to influence 

employee creativity (Ilgın & Karjalainen, 2023). This gap should thus be bridged, espe-

cially for organisations trying to enhance employee creativity using transformational 

leadership to become more competitive globally. Next section with summarise the who 

research work into a research question that this study has to answer at the end. 

 



10 

1.3 Research Question 

Sustainability aim of the current research is to examine the role of transformation lead-

ership in triggering and boosting creative in employees in manufacturing industry of Fin-

land where innovation is at the heart of country to produce goods with least negative 

impact on the environment. The research question of the present study is defined in the 

following manner: 

RQ. How does transformational leadership influence employees' creativity in 

the Finnish manufacturing sector? 

1.4 Significance of Research 

This research gives special focus to the unique characteristics of the Finish manufactur-

ing industry and examines whether transformational leadership influence employee cre-

ativity within this specific cultural and industrial context. The study draws on the estab-

lished theories linking transformational leadership and creativity by demonstrating how 

these two converge into the environment of the manufacturing sector. This study has 

targeted SMEs manufacturing companies within Finland. 

 

Lemmetty et al. (2020) states that there is an empirical need to examine the effect that 

may be caused by transformational leadership on the creativity of employees who work 

in the manufacturing sector of Finland. The spirited and innovative manufacturing in Fin-

land is among the main contributing factors to the country's economy, establishing and 

keeping competitive advantages in the global market (Azeem et al., 2021). With the most 

recent effects of globalization and advances in technology, organizations within the sec-

tor need to foster a culture of creativity and innovation that will put them ahead in the 

competitive environment (Pihlajamaa et al., 2023). 

 

For example, Le Hoang and Ho (2022) assessed that the studies, therefore, should seek 

to fill this gap by providing new empirical evidence and theoretical insights into the con-



11 

nection among employee creativity and transformational leadership in the Finnish man-

ufacturing industry. Understanding how leadership practices influence creativity within 

this context will be very important for organizations willing to leverage employee crea-

tivity into innovative activities that can keep them competitive in the changed market-

place. Besides this, technology integration is at the highest level in this sector in Finland 

and is characterized by its sustainability (Kivimaa & Rogge, 2022). It is, therefore, very 

necessary to understand how the leadership style further acts with these features to 

influence creativity with strategies that are going to be aligned with the unique charac-

teristics of this sector. 

  

1.4.1 Practical Implications of Research 

According to Harahap et al. (2023), from a practical perspective, role of transformational 

leadership in fostering creativity provides guidelines at the leadership and policy levels 

within the Finnish manufacturing organizations' sector on how to develop leadership is 

to create culture of creativity and innovation. Reim et al. (2022) described that organi-

zational strategies that provide the best leadership to enhance creativity will enable keys 

to design specially developed training programs and other leadership development plans 

to foster and establish employees capable of spurring innovation and withstanding 

global competition. 

  

1.5 Definitions of key Concepts 

Manufacturing Industry 

 

Manufacturing involves combining a number of raw materials, parts, or components and 

using labour, machinery systems, tools, as well as chemical and biological processes, in 

creating finished goods (Schwab, 2018; Kenton, 2022). This industry is essential to the 

world economy since it adds value to raw materials and generates products on a large 

scale for consumers as well as the industry itself (Lieder & Rashid, 2016; OECD, 2021). 

 



12 

Manufacturing is usually classified according to its type of production, and this may in-

clude discrete manufacturing industries such as automobiles, machinery, and electronics 

or process manufacturing, which produces chemicals, food, or pharmaceuticals (Infor, 

2024; Kanta, 2024). However, within these boundaries, the industries of the given sector 

are usually specified according to their productive efficiency, from simple handwork to 

fully automated manufacturing systems with the use of robotics and intelligent systems 

(Kenton, 2022). 

 

Transformational Leadership 

 

Ugochukwu (2024 defines transformational leadership as, “It is a leadership style where 

leaders inspire, motivate, and stimulate their followers intellectually to work towards a 

shared and valued goal.” Bernard Bass (1985) indicates that transformational leaders are 

regarded as outstanding and exceptional in that they inspire and encourage the followers 

to go beyond their own self-interest for the sake of the group or organisation so as to 

achieve performance that surpasses what would have been achieved by minding their 

welfare (NJOROGE, 2023). 

  

Employee Creativity 

According to Chen et al. (2021), employee creativity can be defined as “Generating novel 

and useful ideas, processes, or solutions by the employees at their workplace”. 

 

1.6 Thesis Outline 

This thesis is organized into five chapters, which collectively provide understanding of 

the effect of transformational leadership on employee creativity within the Finnish man-

ufacturing industry. Chapter 1 introduces the research, which gives a background of the 

study. It describes the outline of the described research with the rationale, purpose, aims, 

objectives, and questions.  Chapter 2 is a literature review where the existing research is 



13 

synthesized regarding transformational leadership, employee creativity, and their inter-

section within an organizational context.  Chapter 3 describes the research methodology, 

explains the employed qualitative approach, data collection methods, sampling strategy, 

and data analysis techniques. The chapter 4 discussed the results of the study and gave 

an insight into the connection among transformational leadership and employee crea-

tivity in mid- and large-sized manufacturing companies in Finland, based on empirical 

evidence. Finally, Chapter 5 concludes with the significant findings and recommenda-

tions for further research and practical implications for organizational leaders in the 

Finnish manufacturing industry. 



14 

2. Literature Review 

This literature review aims to critically examine the available body of knowledge con-

cerning transformational leadership and employee creativity. These constructs are im-

portant to understand because it is believed that transformational leaders have the char-

ismatic ability to enlighten and motivate employees. Hence, there is a need to create an 

organisational culture that is necessary for creativity and innovation (Nyakomitta, 2021). 

Taking into account a high degree of innovation and sustainability, the Finnish manufac-

turing industry offers a relevant setting in which to conduct the study of transformational 

leadership in connection with employee creativity. Moreover, this industry faces some 

challenges and enjoys unique opportunities in its operating environment due to the 

strongly demanding globalised market. In such a context, there is a need for continuous 

innovations to remain competitive. The review of literature is aimed at adding valuable 

insights that may inform leader practices and add to theoretical discourse regarding or-

ganisational behaviour and innovation management by exploring how transformational 

leadership enhances creativity among employees. The study starts with a brief overview 

of contextual factors relevant to Finish manufacturing industry. 

 

2.1 Contextual Factors in the Finnish Manufacturing Industry 

In the Finnish manufacturing sector, some contextual factors influence how transforma-

tional leadership relates to employee creativity. The manufacturing sector is one of the 

backbones of the economy of Finland. The industry is characterised by highly advanced 

technological capacity coupled with sustainable performance. This sector typified inno-

vation and efficiency maximisation to set up a niche within the competitive global mar-

ket (Bollmann, 2021). The organisational and cultural dynamics in Finnish SMEs, includ-

ing manufacturing firms, consist of large, flat structures with a great deal of autonomy 

for all employees (Saarinen, 2024). Therefore, it is difficult to encourage creativity and 

innovation (Pöllänen, 2021). 

 



15 

Due to the highly sophisticated technological level within this sector, adaptation and 

continuous learning are demanded from personnel a task challenging to leadership. The 

further integration of sustainability initiatives is another source of complexity because 

companies need to juggle economic performance and environmental responsibility. De-

spite, all these approaching challenges, there are also extensive opportunities for inno-

vation especially applying transformational leadership practices that would achieve a 

very good cultural fit given the collaborative and future-oriented nature of the industry. 

 

The integration of the use of technology and sustainable practices into Finnish manufac-

turing brings about a significant change in people's relationship towards leadership 

styles and creativity. In this case, transformational leaders are at the forefront of inte-

grating technological adoption and sustainable practices into the operation. For instance, 

green technologies implemented under transformational leadership are associated with 

achieving higher levels of innovation and creative problem-solving (Zhang, 2020). 

 

Case studies from Finnish manufacturing firms for instance, from the implementation of 

circular economy principles show that transformational leadership can facilitate issues 

of sustainability to be integrated with technological innovation. For example, transfor-

mational leadership in the Finnish company Valmet had strongly integrated advanced 

digital technologies with sustainability practices. These contextual factors highlight the 

importance of leadership styles, such as transformational leadership, which will be dis-

cussed next. 

 

2.2 Key Theories on transformational leadership and creativity 

The foundation for this study is firmly grounded in the transformational leadership the-

ory, which underscores the importance of leaders as motivators, mentors, and support-

ers of those (subordinates) placed under their charge. This conceptualisation has been 

given by Bass (1985), who was the first to introduce the term transformational leader-

ship, comprising four components. Transformational leadership has been extensively re-

searched, and several theories have been developed to understand the components and 



16 

the impact of transformational leadership. One of the cornerstone contributions to 

transformational leadership theory by Burns (1978), where he introduced the concept 

as part of his work on political leaders. Burns identified transformational leaders as those 

who engage with followers in a manner that lifts both the leader and followers to higher 

levels of motivation and morality. 

 

Transformational leadership style depicts the ability to instigate significant changes in 

the followers and their organisations by appealing to the best ideals and morals. Contin-

uing from the work of Burns, Bass (1985) developed the transformational leadership the-

ory further to provide a clearer perspective of what a transformational leader is and 

what effects can be expected (Siangchokyoo et al., 2020). Before developing a further 

theoretical foundation on transformational leadership, let’s have some view of theories 

on employee creativity. 

 

Frameworks for studying organizational creativity provide structured approaches toward 

the understanding and enhancement of this complex phenomenon. Probably one of the 

most influential theories in the area of organizational creativity is Amabile's Componen-

tial Theory of Creativity, which describes that creativity is the result of domain-relevant 

skills, creative processes relevant to the task, and intrinsic motivation toward the task 

(Kukkonen & Bolden, 2022). 

 

The second influential framework is the Interactionist Perspective of Creativity, which 

concentrates on dynamic interaction between the person and the environment (McKay 

et al., 2022). This perspective applied to organisational settings postulates that the con-

text employees operate within is easily alterable through organisational interventions, 

like line management development or cultural initiatives, and such changes then impact 

creativity. 

  

Moreover, the third influential theory explaining employee creativity is the Social Cogni-

tive Theory, which focuses on self-efficacy and outcome expectations (Afriyie et al., 



17 

2020). This theory suggests that individuals who believe in their creativity and also ex-

pect positive outcomes from creative efforts will be more likely to develop creative be-

haviours. Transformational leaders can facilitate raising creative self-efficacy through en-

couragement, resources, and opportunities to build skills. 

 

The theoretical perspectives on employee creativity uniquely underscore the interplay 

between individual characteristics and organisational factors. Organisational climate and 

leadership styles, certainly transformational leadership, are important in setting an ena-

bling environment that allows for creativity. Models such as Amabile’s Componential 

Theory and the Interactionist Perspective provide robust frameworks through which to 

understand and enhance creativity within organisational contexts. Tapping into these in-

sights, organisations would be better placed to create conditions that support and en-

hance employee creative capability to drive innovation and competitive advantage. After 

developing core theories on transformational leadership and employee creativity, let’s 

go back to transformational leadership, as it is one of the major constructs of this re-

search. 

 

2.3 Transformational Leadership 

Transformational leadership inspires employees to go beyond self-interest for organisa-

tional goals by offering a clear vision, intellectual stimulation, and personalised support. 

Unlike transactional leadership, it focuses on intrinsic motivation and creativity (Khan et 

al., 2022). There is a popular theory that is governing transformational leadership style, 

which is discussed next. As already discussed in the theory section (2.4) that Bass has 

further developed the transformational leadership theory and conceptualized four fun-

damental dimensions of transformational leadership, often known as the "Four I's". 

 

The first dimension is Idealized Influence, where transformational leaders become role 

models for their followers. They have a high level of ethical conduct, and are highly 

trusted, and respected; thus, followers tend to copy their behavior. Idealized influence 



18 

is also about expressing determination to achieve goals and having a vision that can be 

an inspiration for other people (Nyakomitta, 2021).  

 

The Second one, inspirational motivation, presents the ability of transformational lead-

ers to clearly articulate an inspiring vision of the future that serves as motivation for 

followers to be inspired (Khan et al., 2022). Transformational leaders instil in their fol-

lowers a sense of collective purpose and excitement, where each of the followers is in-

duced to work towards the goals with increased commitment and effort. This is the in-

spirational side of vision motivation toward common action that leads to the achieve-

ment of organizational objectives. 

 

The third component, Intellectual Stimulation, explains that transformational leadership 

creates an innovative and creative environment (Shafi et al., 2020). This is achieved by 

the leaders questioning existing assumptions, encouraging critical thinking, and inspiring 

followers to go above and beyond with their approaches to handling any issues. The el-

ement helps create a trend of improvement and change in a company since it instils a 

culture of learning and innovation. 

 

The fourth component of transformational leadership, Individualised Consideration, is 

the personal attention that a transformational leader accords to each follower: his/her 

development needs (Mlinarevic et al., 2022). In other words, individualised considera-

tion is the degree to which a leader takes care of the needs of each team member and 

acts as a guide, mentor, or coach for them (Muhammad Sharif, 2024). They act as a men-

tor and coach, providing necessary advice and feedback for the strengths and aspirations 

of the person. It is an individualised approach to building strong leader-follower relation-

ships and enhancing the growth and performance of followers by dealing with their 

unique needs and fostering a supportive and empowering environment. Some people 

mix the concept of transformational leadership with other leadership styles, especially 

transactional leadership; therefore, the difference between the two is discussed in the 

next section. 



19 

 

2.3.1 Transformational Leadership vs. Transactional Leadership 

For an understanding of the characteristics of transformational leadership, one might 

contrast it with transactional leadership, which is a much more traditional form of lead-

ership and, in many cases, has been used to stand in contrast to transformational lead-

ership. Transactional leadership pays attention to the transactions that occur between 

the leader and the follower: here, the leader rewards or punishes the followers based 

on their performance (Naeem & Nawaz, 2017). This leadership style follows a quid pro 

quo pattern, which is marked by clear structures, expectations, and rewards linked to 

performance. 

 

Transactional leadership is all about achieving tasks, controlling performance, and pro-

cedures to be followed. The primary elements of transactional leadership involve the 

following: Contingent Reward whereby leaders provide specified rewards or incentives 

in return for meeting pre-defined performance specifications or desired objectives 

(Raveendran, 2021). This component relies on setting clear expectations and recognising 

and rewarding followers for their compliance and achievements. This form of leadership 

is based on the passive management style. 

 

Active Management by exception in which leaders actively monitor followers' perfor-

mance and take corrective action when deviations from standards occur (Sekyere, 2020). 

This involves closely supervising work processes, identifying errors, and intervening 

promptly to address issues and ensure compliance with established procedures. Passive 

Management by exception is a kind where leaders intervene only when problems or fail-

ures are too evident (Otto et al., 2021). 

 

Both transformational and transactional styles of leadership have their virtues; using a 

transformational style of leadership is very beneficial in effectively instigating creativity, 

innovation, and long-term growth in organizations. The followers are inspired to work 

and create an environment characterised by constant improvement and adaptation, 



20 

which is, in fact, much needed for survival in the fast-moving and competitive world of 

contemporary business. After developing a theoretical foundation for transformational 

leadership, the next section will talk about employee creativity. 

 

2.4 Employee Creativity 

2.4.1 Definition and description 

Creativity in organizational behavior was defined by Ogbeibu et al. (2021) as the process 

through which individuals or groups come up with new and useful ideas within a work 

organization. Creativity, in other words, is defined as the act of generating relevant and 

novel ideas that support problem-solving and growth (Amabile, 2018). It means creative 

thinking that can result in new products, improved processes, or unique solutions to 

problems. Creativity thus turns into a very significant character of organizational innova-

tion, and it becomes quite necessary to gain a competitive advantage in today's dynamic 

global marketplace. Influencing factors include individual traits, cognitive style, intrinsic 

motivation, and organizational factors like culture and leadership style. 

 

2.4.2 Theoretical Perspective on employee creativity 

It is acknowledged that the creation of new ideas is not solely an attribute of individual 

beings; rather, it occurs at different levels—individuals, teams, and organisations (Jain & 

Jain, 2016). But at its best, creativity transcends a style or action and becomes a combi-

nation of thoughts, feelings, and situations (Runco & Jaeger, 2012). According to theo-

retical perspectives, it is not a simple innate quality but a developed phenomenon re-

sulting from the relationship between the person and the environment (Zhou & Hoever, 

2014). 

 

Creativity is also a function of the organizational culture defined as the work environ-

ment of employees shared within the organization and its members. However, it is criti-

cal to observe that managers lead this culture, and one key form of leadership in this 



21 

context is called transformational leadership. Transformational leaders foster trust, in-

tellectual stimulation, and individualized support within their groups, therefore encour-

aging employees to seek new approaches for problem resolution (Bass & Riggio, 2006; 

Gong et al., 2009). 

 

Creativity is conceptualised as a multi-dimensional phenomenon influenced jointly by 

factors associated with individuals and those of both organisations and the environment 

(Zhang, 2020). For example, some of the factors could be individual, such as personal 

motivation and cognitive abilities, while some of these factors could be organisational, 

such as leadership style, support, and resources. This can include environmental factors 

(broad spectrum of industry dynamics and cultural influence). The organisational climate, 

or the perceptions employees share about their work environment, is one primary or-

ganisational factor affecting creativity. After exploring theoretical constructs of transfor-

mational leadership and employee creativity, it is time to examine the existing literature 

on the impact of that leadership on employee creativity. 

 

2.5 Theoretical Framework: Relationship between Transformational 

Leadership and Creativity 

The study combines contemporary theories of leadership and creativity in order to in-

vestigate how four dimensions of transformational leadership directly affect the creativ-

ity of employees (Okręglicka et al., 2023). For example, employees’ efforts can be di-

rected towards organisational goals because idealised influence and inspirational moti-

vation are infused within them, and these ideals are from ethical consideration (Wang 

et al., 2022). Employees are encouraged to think creatively and take on unconventional 

tasks through intellectual stimulation, while individualised consideration caters to each 

employee’s needs, hence promoting an innovative environment (Jaiswal & Dhar, 2015). 

This model therefore suggests that in the current environments, where everything is rap-

idly changing, creativity becomes one of the most important factors for organisations, 

and transformational leaders are the ones who foster this creativity. 

  



22 

A supportive environment for the fostering of creativity should allow for risk-taking and 

experimentation. Such an association between transformational leadership and em-

ployee creativity has already been well documented (Ogbeibu et al., 2021). Assuming 

the perspective of Van Tuin et al. (2021), transformational leadership enhances intrinsic 

motivation by aligning values and goals with those of the organisation, thus creating an 

environment for creativity at the workplace. Other than this, transformational leaders 

also establish psychological safety, under whose umbrella employees could take a risk 

and give their novel idea articulations without the threat of negative consequence im-

positions (Tuin et al., 2021). Transformational leaders also empower their followers by 

providing intellectual stimulation and individualised consideration, thus motivating 

them to think autonomously and challenge the established system (Zhang, 2020). 

  

As earlier discussed, four dimensions of transformational leadership provide unique per-

spectives in enhancing employee creativity and performance through an environment 

characterised by innovation, critical thinking skills, and personal growth. The framework 

theorises that transformational leaders facilitate the enhancement of both the individual 

and the organisation by addressing intrinsic motivations and bridging them together 

with the organisational goals (Bass & Riggio, 2006). This can be said of the research Iqbal 

et al. (2021) in the Australian manufacturing industry, where transformational leadership 

was positively related to greater organizational innovation. Therefore, it is time to de-

velop a theoretical foundation for the relationship between these four dimensions and 

employee creativity in the next section. 

 

2.5.1 Idealized influences and employee creativity 

The Idealised influence makes it easier for leaders to be seen as role models and for 

them to have the trust and confidence of their subordinates. Leaders who possess this 

dimension focus on common values and ethical practices that help motivate employees 

to feel committed and passionate. This makes it easier for employees to take creative 

risks because the work environment is psychologically secure. Studies have shown em-



23 

ployees' trust in their leader is a strong predictor of their willingness to engage in inno-

vative activities since idealised influence offers the encouragement needed to seek 

change and be useful (Bass & Avolio, 1993; Sosik, 2015).  

 

In addition, it has also been presented earlier on that, these days, it is understood that 

transformational leaders who practice the required ethical standards and provide the 

desired organisational goals motivate their employees to work toward achieving the or-

ganisational goals in the long term. Such a synergy motivates not only individual creativ-

ity but also group creativity, and in an ever-changing industry like this, the importance 

of such adaptability cannot be overemphasised (Rosing, 2023). The focus on a loved vi-

sion that idealises influence provides a great platform for creativity and innovation to be 

harnessed in the workplace. Based on above discussion, it is hypothesized as: 

 

Hypothesis 1: A positive relationship exists between idealized influence and employee 

productivity 

 

2.5.2 Inspirational motivation and employee productivity 

In the context of the inspirational motivation dimension, it is focused on the ability of 

leaders in describing a hypothetical outcome in order to encourage employees to stra-

tegically work towards it. By adopting a motivational approach that nurtures a sense of 

purpose or enthusiasm, leaders challenge employees to look around and seek out crea-

tive ideas rather than performing basic tasks. This dimension has been found to enhance 

creativity since employees with increased motivation are more likely to resolve problems 

on their own (Jaiswal & Dhar, 2015).  

 

Inspirational motivation allows leaders to encourage their employees to emote and use 

their creative ideas to face challenges. New forms of research evidence workers tend to 

be more willing to innovate when they find their work reflects a greater purpose for the 

organisation (Hughes et al., 2018). This desire to go beyond the standard is reinforced by 



24 

the presence of the right context or environment, which helps achieve the desired crea-

tive output. Based on above literature review following hypothesis is formulated: 

 

Hypothesis 2: Inspirational motivation is positively contributing to employee creativity. 

 

2.5.3 Intellectual Stimulation and Employee Creativity  

The Empirical studies always indicate a positive relationship between transformational 

leadership and employee creativity across various industries. For instance, Shafi et al. 

(2020) pointed out that intellectual stimulation and supportive work environments are 

created through transformational leadership, which further enhances employee creativ-

ity. For example, transformational leadership was found by Hidayat-ur-Rehman & Al-

solamy (2023) to have a positive effect on innovation in that this approach had intellec-

tual stimulation and a motivating vision which encouraged employees to explore new 

ideas and ways.  

 

Intellectual stimulation compels employees to be reasonable outliers by questioning ac-

cepted practices and inventing new ones. This dimension promotes the use of critical 

thinking, new ideas, and creativity in problem-solving. Leaders who provide intellectual 

stimulation promote a culture where employees are encouraged to try new things and 

learn from mistakes, which increases their creative abilities (Bass & Riggio, 2006). From 

research by Marbell (2024) transformational leaders’ intellectual stimulation was stud-

ied in the introduction of sustainability programs in the Finnish manufacturing sector 

and found to lead to the creation of creative solutions to problems related to sustaina-

bility. The study revealed that leaders who motivate and encourage employees to incul-

cate practices good for the environment and think innovatively in approaching environ-

mental issues can consequently develop both innovation and sustainability in a business.  

 

Organisational studies point out that employees’ deliberate intellectual stimulation ap-

pears to be a significant predictor of their ability to innovate along any dimension, but 



25 

especially in industries where problems have to be constantly solved. Leaders who prac-

tice exposing subordinates to debates and disagreements stimulate people to go further, 

and in this case, innovations of both types are produced at the same time. For instance, 

organisations with intellectual stimulation in the workplace have been observed to have 

enhanced levels of idea exercise and implementation because employees have motiva-

tion to initiate change and be independent thinkers (Wang et al., 2023).  

 

The research has brought to light that leaders who foster intellectual stimulation and 

provide an inspiring vision for the future get the employees to focus on creative problem-

solving and continuous improvement. This leadership style was particularly effective in 

an environment where innovation constitutes a condition of competitiveness. More spe-

cifically, in the context of Finnish manufacturing, the study by Shafi et al. (2022) reported 

that transformational leadership has a significant positive impact on employees' creativ-

ity and performance. The study argued that due to flat organizational structures and the 

collaborative work culture of Finnish manufacturing firms, the tenets of transformational 

leadership fit well with those of Finnish manufacturing environments. Following hypoth-

esis is crafted from the above literature review: 

 

Hypothesis 3: Intellectual stimulation and employee creativity are positively related. 

 

2.5.4 Individualized consideration and employee creativity 

There are several principles associated with transformational leadership, and one of 

these is individualised consideration, as it focuses on the developmental needs of the 

employee. Giving specific feedback, mentoring, and showing employee support helps to 

boost the employee's motivation and confidence to suggest ideas or solutions in a stiff 

environment. This specific approach boosts creativity by enhancing sense of efficacy and 

motivation in the employees, as stated by Eisenbeiss et al. (2008). 

 

A study conducted last year emphasises the available literature on the impact of individ-

ualised consideration to explain the processes involved in the establishment of a culture 



26 

of growth and innovation. Such employees would consider exploring complex tasks and 

creative solutions to enhance innovation in the organization. Besides, the conducive en-

vironment fostered by such types of leaders’ styles encourages engagement and sharing 

of ideas, which improves the creative output in teams (Cai et al. 2023). This dimension 

brings home the importance of compassion and personal involvement as the main fac-

tors for releasing the imaginative capabilities of the workers. It is hypothesized that: 

 

Hypothesis 4: There is a positive association between individualized consideration and 

employee creativity. 

 

2.6 Empirical Evidence from other industries: Transformational Leader-

ship and Employee Creativity 

Research conducted by Asada et al. (2021) established that transformational leadership 

positively contributed to the employee's creative self-efficacy for great creative perfor-

mance. Similarly, transformational leadership is found to enhance significantly innova-

tion and creativity needed to maintain competitiveness in the framework of manufac-

turing. For example, Ghimire et al. (2021), conducted a study on the Australian manu-

facturing industry that proved that transformational leadership is characterized by 

higher organizational innovation due to the culture maintained for creative problem-

solving abilities and continuous change.  All these studies now create the implication 

that transformational leadership is an influential leadership concept in developing an 

enabling environment for creativity (Marbell, 2024). 

 

 

2.6.1 Technology Sector 

The technology sector is a good ground to consider the effects of transformational lead-

ership on creativity because this is a sector characterized by high innovation and change. 

The research identified that leaders who question the status quo and engage in risk-



27 

taking facilitate an environment likely to lead to creativity and innovation. Further, Ba-

tool et al. (2023) conducted research in a high-tech firm and revealed that transforma-

tional leadership strongly increased the employees' creative performance.  Additionally, 

transformational leadership enhances the creative self-efficacy of employees, which 

positively influences their creative performance.  

 

2.6.2 Healthcare Sector 

In healthcare, transformational leadership is among the important factors that encour-

age creativity in a sector that largely depends on problem-solving and creative practices 

for enhanced patient care and organizational performance. Research in this sector has 

also proven that transformational leadership generates better problem-solving and cre-

ative practices from health professionals. Stanescu et al. (2021) using a sample of nurses, 

established that there existed a positive relationship between innovative behavior and 

transformational leadership about being professionally active.  

 

Hussain and Khayat (2021) studied how transformational leadership impacted quality 

improvement initiatives in health. Transformational leadership of a vision through qual-

ity improvement realization and inclusion of employees in the decision-making process 

will enhance innovation abilities within the healthcare team. This kind of leadership is 

not only creative but also improves patient outcomes and organizational performance. 

In the healthcare sector, transformational leadership influences acceptance positively 

towards the practice of innovative practices by healthcare providers. 

 

2.7 Chapter Summary 

This study applies Amabile's Componential Theory and highlight creativity as a genuine 

result of individual skills, creative tactics, and intrinsic motivation. In the present study, 

Transformational Leadership Theory (Nyakomitta, 2021), is applied to understand 

whether idealized influence, inspirational motivation, intellectual stimulation, and indi-



28 

vidualized consideration as forms of leadership encourage employee creativity. The com-

bining of these theories positions transformational leadership as a means to inspire em-

ployees to be creative and contribute creatively. The empirical analysis that follows is 

based on this framework. 

 

Research on the impacts of transformational leadership on employee creativity shows 

that such leadership enhances creative thinking. For example, Ashfaq et al. (2021) and 

Stanescu et al. (2021) proved that transformational leaders enhance creativity by stimu-

lating intellectual thinking and psychological empowerment. Nevertheless, transplanting 

these findings onto the context of Finish manufacturing industry is still necessary. 

 

First of all, much of the existing research was conducted in different geographical and 

industrial contexts or sectors like technology and healthcare (Pihlajamaa et al., 2022). 

These studies may not take full account of the unique cultural and organisational dynam-

ics existing within Finnish manufacturing firms. Thus, how far findings can be transferred 

directly to the context of Finnish manufacturing firms remains open to question and 

would require further empirical investigation. 

 

On one hand, higher levels of innovation and creative ranks are attributed to transfor-

mational leadership. Still, how exactly transformative leadership and employee creativ-

ity interact in facilitating integrations related to sustainable practices and advanced tech-

nologies into manufacturing is relatively unexplored (Asada et al., 2021). A key gap in 

research is explaining how transformational leadership influences creativity in a Finnish 

manufacturing context. Pre-existing and generic models of creativity, such as the Com-

ponential Theory of Creativity by Amabile, therefore encompass all factors but likely fail 

to grasp specifically industry variables like green tech integration or the pressures of 

global competition (Kukkonen & Bolden, 2022).Conversely, whereas the Interactionist 

Perspective highlights the role of the environment, it does not give details about the 

cultural and organizational features of the Finnish firms, typified by their flat structures 

and high innovation expectations. 



29 

3. Research Methodology 

In this chapter, it will be discussed the methodology adopted to explore the impact of 

transformational leadership on employee creativity within the Finnish manufacturing in-

dustry. It is followed by an in-depth explanation of the philosophical underpinnings. Fur-

thermore, this chapter talks about the research strategy, sampling techniques used in 

the study, the data collection process, and the methods of data analysis. 

 

3.1 Research Philosophy 

Research philosophy explains the beliefs, values, and assumptions that lie behind the 

undertaking of research, including ontology (the nature of reality) and epistemology (the 

nature of knowledge) (Al-Ababneh, 2020). In this context, ontology is concerned with 

the questions that explore what the reality is. Whereas epistemology asks the questions 

that consider how the reality in the form of knowledge is gained and validated. For the 

purposes of this research, a quantitative approach has been employed, guided by a pos-

itivist research philosophy, which focuses on measurable and observable realities. 

 

To stand within the positivist paradigm means to support a viewpoint, postulated by Bry-

man, that knowledge has to come from known facts, which can be tested against a prior 

formulated statement (Bryman, 2016). In this context, transformational leadership and 

employees` creativity are the primary variables of interest. The emphasis is on investi-

gating the association between these two constructs, aligning directly with the primary 

objective of the dissertation: to examine how leadership behaviors impact creativity 

within the context of Finnish manufacturing industry. The current research seeks to iden-

tify generalizable patterns and tendencies in the relationship between transformational 

leadership and employee creativity by applying quantitative techniques, such as statisti-

cal analysis, to recognize measurable patterns and relationships, ensuring objectivity and 

reproducibility in the findings (Creswell & Creswell, 2018). 

 



30 

The ontology of this study assumes the existence of an objective reality in which leader-

ship behaviors and creativity are experienced and can be measured. Knowledge, in this 

case, is acquired through data collection and interpretation, which supports the applica-

tion of survey tools such as the Multifactor Leadership Questionnaire (MLQ) for measur-

ing transformational leadership (Avolio & Bass, 1995) and creativity scales (Amabile et 

al., 1996) to evaluate employee innovative behaviors. 

 

This research adheres strictly to the positivist paradigm, emphasizing measurable con-

structs and relying on quantitative data to establish statistical correlations and causal 

relationships (Saunders et al., 2019), this study offers conclusions about the connections 

between transformational leadership and creativity. 

 

3.2 Research Method 

According to Saunders and Tosey (2012), "there are approximately three types of re-

search methods: deduction, induction, and abduction." The deductive approach is asso-

ciated with quantitative research (this research’s concern), wherein the underlying the-

ory is checked by data gathering and its subsequent analysis. It moves from the general 

theories to specific observations (Saunders et al., 2019). This method is quite fitting in 

this case, as it investigates the impact of transformational leaders on the creativity of 

employees in the Finnish manufacturing industry, using extant models and tested meas-

urement techniques. 

 

The deductive approach provides for the possibility of generating further hypotheses 

from established theories; Bass and Riggio (2006), for instance, provide the transforma-

tional leadership model, while Amabile (2011) offers the componential theory of crea-

tivity. Such propositions are further subjected to structured surveys where it is possible 

to assess the effect of the dimensions of transformational leadership, such as idealized 

influence and intellectual stimulation, on real creativity measures. It's this methodology 

that guarantees that the research yields reliable and applicable findings in both theory 

and practice in the field of manufacturing. 



31 

 

Quantitative methods are most applicable in situations that call for the testing of rela-

tionships between variables through statistical means and structured data collection 

methods (Creswell & Creswell, 2018). This is consistent with the goals of the study, which 

seeks to, from the employees’ perspective, measure and test whether transformational 

leadership behaviors impact employee creativity. This study was conducted in a context 

of Finish manufacturing environment. 

 

Quantitative research is characterized by its generalizability, replicability, and ability to 

identify statistical relationships between variables, making it ideal for this study. In this 

light, this particular study, seek to explain employee creativity as an outcome of trans-

formational leadership. Furthermore, in line with previous studies (e.g., Cheung & Wong, 

2011), this method allows for an extensive investigation of how transformational lead-

ership influences employee creativity, allowing for deep investigation into the partici-

pants' experiences and in line with the Positivism philosophy. 

 

The use of standard instruments like the Multifactor Leadership Questionnaire (MLQ) 

and creativity assessment scales makes it possible to avoid various divergencies in re-

sponses interpretation (Avolio & Bass, 1995; Amabile et al., 1996). In this manner, this 

study explains how the tools used in this research allow for the collection of patterns 

and relationships that are based on numbers so that the study is able to see the effect 

of particular leadership styles on the creativity of employees in a defined manner. 

 

In addition to this, the focus of the deductive method on hypothesis testing also 

strengthens the study design in such a way that the conclusions drawn from the study 

advance the body of knowledge by either validating or refuting the prior defined empir-

ical findings. Such consideration of the requirements of the quantitative research makes 

the deductive method critical in the fulfillment of the study objectives. 

 

 



32 

3.3 Data collection and sample description 

In order to gather relevant and sufficient data, a survey questionnaire was administered 

to gather information from the respondents of the study. The purpose of the question-

naire was to investigate the respondents’ attitudes towards leadership styles and their 

contribution towards creativity by using tested tools such as Scholl’s four factors model 

(Avolio & Bass, 1995) and Amabile’s components for measuring creativity (Amabile, 

2018). The use of standardized scales ensures reliability and validity in measurement. 

 

This research, which is evaluated through qualitative elements, focused on collecting 

data by utilising a convenience sampling method, referring to those employees within 

the Finnish manufacturing sector who were approachable and willing to respond. The 

sample comprised junior to middle management executives under a supervisor (team 

leader) who was actively participating in the creative and innovative processes in the 

company. This methodology provided an effective way of collecting data whilst still being 

appropriate to the aims of the study. The structured self-administered questionnaires 

were constructed to provide in-depth information on how the different dimensions of 

transformational leadership relate to employee creativity. 

 

The author obtained responses from 100 manufacturing organisations’ employees 

whose were working in different departments in the manufacturing sector. The demo-

graphic analysis was conducted with the purpose that it gives detailed and valuable in-

sights on basic characteristics of the sample survey. The most important demographic 

variables are delineated in Table 1, and they are gender and age, qualification and posi-

tion in the organisation (role), number of years of experience, the department where 

the respondent works, as well as the number of employees working in the organisation. 

 

Table 1. Respondents’ demographic characteristics 

Characteristics Frequency Percent 

Gender 

Male 78 78.0 
Female 22 22.0 



33 

Total 100 100.0 

Age 

20-30yrs 38 38.0 
30-40yrs 48 48.0 
40-50yrs 11 11.0 
Above 50yrs 3 3.0 
Total 100 100.0 

Qualification 

Bachelor 33 33.0 
Masters 59 59.0 
M.Phil. 7 7.0 
PhD 1 1.0 
Total 100 100.0 

Job Role 

Intern/Trainee 25 25.0 
Assistant/Support Worker 24 24.0 
General Staff/Employee 51 51.0 
Total 100 100.0 

Years of experience 

1–3 years 32 32.0 
4–6 years 37 37.0 
7–10 years 19 19.0 
Above 10 years 12 12.0 
Total 100 100.0 

Working Department 

Production 33 33.0 
Sales & Marketing 34 34.0 
R&D 22 22.0 
HRM 11 11.0 
Total 100 100.0 

No of employees 

Less than 50 Employees 30 30.0 
50–249 Employees 32 32.0 
250–499 Employees 11 11.0 
500 or more Employees 27 27.0 
Total 100 100.0 

 

The sample consisted of 78% of respondents who were male and 22% of respondents 

who were female, which is typical for the gender structure of the Finnish manufacturing 

industry. The age of most participants was between 30 and 40 years old (48%), while the 

next major group was 20-30 years old (38%). Respondents aged between 40 and 50 years 

accounted for 11%, and those above 50 years accounted for only 3%. This distribution 



34 

indicates that it is the middle-aged professionals who occupy the largest share of the 

manufacturing industry, which is consistent with previous findings that this age group is 

most productive and active in leadership positions (OECD, 2021). 

 

Most of the respondents (59%) were master's degree holders, while 33% held bachelor's 

degrees. 7% and 1% of the respondents had such overwhelming scenarios as the M.Phil. 

and PhD, respectively. This observation emphasises more on the higher education in the 

sector and is in agreement with the proposition that advanced education results in 

higher levels of innovation in manufacturing (Gertler, 2017). Interns/trainees (25%), as-

sistants/support workers (24%), and general staff/employees (51%) comprised the re-

spondents. The considerable number of general staff emphasises the managerial nature 

of the industry, with many simple production processes taking up the labour structure 

of the industry. 

 

Participants’ work experience participation was classified as 32% ranging between 1-3 

years; 37% for 4-6 years; 19% for 7-10 years; and 12% for more than ten years. The dom-

inance of professionals with 4-6 years of experience is consistent with industry patterns, 

since a younger workforce is ascending to management positions (Ngoepe-Ntsoane, 

2024). The departments under consideration included production at 33%, sales and mar-

keting at 34%, research and development at 22%, and HRM at 11%. The distribution re-

veals that there is some emphasis on primary production processes while also focusing 

on marketing and growth strategies, an important factor of strategies in manufacturing 

industries (Porter, 1985). 

 

In terms of organisational size, the sample had some variation, with 30% of the respond-

ents from organisations with an employee base of less than 50, 32% from mid-size or-

ganisations with 50–249 employees, 11% from medium-large companies with an em-

ployee base of between 250–499, and 27% from large companies with over 500 employ-

ees. 

 



35 

The demographic outcomes offer a strong basis to better appreciate the interplay be-

tween transformational leadership behaviours and employee creativity tendencies cou-

pled with different professions in the Finnish manufacturing business. 

 

3.4 Research Strategy 

In order to answer the research question, the research strategy provides the direction 

that will be used to systematically tackle the question posed. Common research strate-

gies include experimental studies, surveys, case studies, and action research, each suited 

to specific purposes and aims Research approaches are multiple: experimental, survey, 

case studies, and action research all fit specific usages and aims (Saunders et al., 2019). 

Experimental research attempts to determine causality under certain controlled condi-

tions, while case study research aims to examine particular instances in the real world in 

greater detail. A survey is an alternative recommendation as a response to a research 

question that aims at testing hypotheses or exploring the existence of trends among a 

larger population (Bryman, 2016). 

 

In this study, the survey method is adopted, because of the nature of the study that 

focuses on the impact if transformational leadership on the creativity of employees. Sur-

veys are particularly useful for collecting quantitative data systematically, enabling the 

testing of hypotheses derived from the leadership and creativity framework (Bass & Rig-

gio, 2006). 

 

The use of standardized instruments in creativity practice, like the Multifactor Leader-

ship Questionnaire (MLQ) and the creativity assessment scales, ensures the collection of 

harmonized, repeatable data, regardless of participant mobility. This structured ap-

proach enables the study to ascertain statistical relationships between variables, provid-

ing robust insights into how leadership behaviors influence creativity at the organiza-

tional level (Hair et al., 2019a). 

 



36 

Surveys are chosen for their versatility, cost-effectiveness, and ability to cover large pop-

ulations, thereby improving the quality of results. The structured nature of this strategy 

also facilitates the comparability of responses, enabling efficient and reliable quantita-

tive analyses (Creswell & Creswell, 2018). Furthermore, this strategy is particularly ap-

propriate given that the research aims to examine quantifiable outcomes rather than 

exploring personal perspectives, aligning well with the principles of quantitative re-

search. 

 

3.5 Sampling Technique and Sample 

This study utilized convenience sampling to obtain the participants for the research. In 

statistics, convenience sampling is a non-probability sampling method where the sample 

is drawn from the part of the population that is easily accessible and willing to participate, 

making it feasible in gathering data in a relatively brief period of time (Etikan et al., 2016). 

While convenience sampling may pose challenges regarding the generalization, it re-

mains a popular method in quantitative studies when time or resource constraints make 

other sampling techniques impractical. 

 

The author distributed a Google Forms survey to more than 120 employees working in 

manufacturing sector in Finland. Out of the 120 surveys, 106 were completed, and after 

eliminating incomplete or incorrectly filled questionnaires, 100 responses were finalized 

for data analysis. The sample consists of employees from junior to mid-level positions 

working under a supervisor in various departments of a company, ensuring some level 

of diversity. For the purposes of this analysis, this sample size is adequate, as descriptive 

statistics, correlations, and regression can be conducted effectively with this dataset. Ac-

cording to Bell et al. (2019), a minimum of 100 participants is sufficient for basic quanti-

tative studies, enabling valid deductions and analysis of relationships between variables. 

 

In this study, the inclusion of employees from various departments in the manufacturing 

firms ensures diversity in opinions on leadership behaviors and creativity. While conven-

ience sampling is limited in terms of representativeness, the diversity of roles among 



37 

participants strengthens the reliability of data by offering broader insights aligned with 

the research objectives. Employees from manufacturing firms are appropriate respond-

ents as they are integral to innovation and restructuring processes, making them highly 

relevant for studying leadership and creativity interactions (Reim et al., 2022). 

 

3.6 Measures 

In this research, only validated instruments were adopted. The values of all items were 

measured using the 5-point response of the Likert scale, which ranges from 1 (Strongly 

Disagree) to 5 (Strongly Agree). A 20-item scale for measuring transformational leader-

ship designed by Avolio and Bass (1995) was used in the study. This scale is consisted of 

four transformational leadership dimensions. Furthermore, five items were set from 

each dimension. 

 

Employee creativity was assessed using the scale developed by Zhou and George (2001), 

consisting of 13 items. This scale focuses on behaviors and attributes associated with 

creativity in the workplace. To ensure contextual relevance to the Finnish manufacturing 

sector, certain scale items were slightly adjusted to reflect the specific organizational and 

cultural nuances of the study’s setting. The adaptations were carefully undertaken to 

preserve the validity and reliability of the scales while aligning them with the study’s 

objectives and the unique dynamics of the selected sector. 

 

3.7 Data Analysis 

In this research study, SPSS software was used for detailed analysis of the data. Descrip-

tive statistics, including measures such as mean scores, standard deviations, and fre-

quency distributions, were used to recognise general patterns and trends in the data. 

These metrics have given understandings into the prevalence, degree, and inconsistency 

of transformational leadership behaviors and employee creativity within the sample 



38 

population. By summarizing major features of the data, these measures supported elu-

cidate the degree and variances in leadership practices and creative activities among 

survey respondents (Field, 2018; Hair et al., 2019a). 

 

Analytical tasks assumed to assist in the estimation of the accuracy of the measurement 

tools are also known as the reliability analysis. The reliability of the scales was evaluated 

by a commonly used parameter Cronbach’s alpha (Taber, 2018). The recommended 

threshold of 0.7, as minimal acceptable reliability was applied. Furthermore, Cronbach’s 

alpha value of a variable/scale should be at least 0.7 and less than 1.0 to be accepted for 

the study. 

 

The reliability scores of four dimension of transformational leadership: idealized influ-

ence’s 0.906, inspirational motivation’s 0.855, intellectual stimulation’s 0.830 and indi-

vidualized consideration’s 0.878. Further, reliability as single construct secured reliability 

score of 0.949. The results showed that the survey items on transformational leadership 

and employee creativity measured the constructs consistently, which was important for 

further analysis (Pallant, 2020). 

 

In the course of this study, the author assessed the reliability of the scales measuring 

transformational leadership and employee creativity through the use of Cronbach’s al-

pha, one of the most commonly used measures of internal reliability (Field, 2018). The 

results are summarised in Table 2. 

 

Table 2. Reliability analysis of scale 

Scales No of items Alpha Value 

Idealized Influences 5 0.906 

Inspirational motivation 5 0.855 

Intellectual stimulation 5 0.830 

Individualized consideration 5 0.878 

Employee creativity 13 0.949 

 



39 

The scale measuring Idealised Influence, which had five items, received high endorse-

ment with an alpha value of 0.906, indicating that the concept tested had a lot of agree-

ment among respondents. This suggests a good level of consistency in defining the ability 

of leaders to become a reference point for employees, which is an important aspect of 

transformational leadership (Bass & Avolio, 1994). In the same way, the dimensions of 

the Inspirational Motivation scale (α = 0.855) showed great accuracy and convey an im-

portant dimension of leadership—others placed emphasis on its importance towards fa-

cilitating changes in team interrelations (Northouse, 2021). 

 

The Intellectual Stimulation scale, which asked if bosses promote creativity and problem-

solving, yielded a strong alpha coefficient of 0.83, which is in accordance with its con-

ceptual framework that seeks to encourage creativity among workers (Zhou & George, 

2001). Individualised consideration, which pertains to the overall concern of leaders for 

individual employees and their growth, was also reliable and had an alpha equal to 0.878. 

 

The Employee Creativity scale, which represented 13 items, obtained a high alpha of 

0.949. This significant value also enhances the validity of the instrument designed to 

measure creativity, which is also a broad and multifaceted concept (Amabile et al., 1996). 

Simply, the alpha scores are above the minimum recommended standard of 0.70, 

thereby enhancing the reliability of the scales (Hair et al., 2019b). These findings sub-

stantiate the validity of the measurement constructs that were used for seeking answers 

on the relationship between transformational leadership and employee creativity. 

 

In the next step, Pearson’s correlation technique was applied in order to establish rela-

tionships among the variables of interest. This enabled the investigation of the strength 

and nature of relationships that existed between the four aspects of transformational 

leadership (Hair et al., 2019b). 

 



40 

As a last step, regression analysis was performed in order to check the hypotheses of the 

study. The linear regression approach ventured to establish whether the transforma-

tional leadership dimensions affected employees’ creativity, where coefficients and lev-

els of significance were used to assess the strength of such relationships. Regression 

findings provided evidence on the scope and how some specific leadership behaviors, 

such as inspirational motivation, enhanced creativity among employees at Finnish man-

ufacturing boats (Field, 2018; Hair et al., 2019b). 

 

3.8 Ethical Consideration 

Ethics Ethics forms an integral concern in any research, especially when data collection 

involves human participants. Therefore, this study follows proper ethical guidelines that 

protect the rights and welfare of the participants in the course of this research. The first 

ethical issue is informed consent (Hutton et al., 2008). Informed consent is provided to 

the participants with all the information regarding the purpose of the study, the proce-

dures involved, and their rights as participants. Participants have the right to stop par-

ticipation in the study at any given moment and will not be penalised. 

 

Confidentiality and data protection are also important in the present research. Partici-

pants are anonymised using either pseudonyms or participant codes, which replace any 

identification that may be present in the data. Recordings, interview transcripts, and 

other data are stored on password-protected devices to which only the researcher has 

access. The element of this study follows the rules set out by the General Data Protection 

Regulation, and it hence shows that the processing of the data will be secure, with com-

plete protection of privacy for the respondents. In cases where a participant would opt 

to withdraw from the study, all data collected concerning that participant would be re-

moved from the study and destroyed. In bringing these ethical considerations into the 

light, this study conforms to the standards of integrity in research: protection of partici-

pants' rights while producing valid and reliable findings. 

 



41 

4. Results and Analysis 

 

4.1 Descriptive Statistics 

Statistics enlisted in the descriptive analysis give a snapshot of the study, which includes 

the primary distributions and variation. This research considered five constructs: Ideal-

ised Influence, Inspirational Motivation, Intellectual Stimulation, Individualised Consid-

eration, and Employee Creativity, each of which was examined using a five-point Likert 

scale. Table 3 is illustrating the outcomes of the analysis. 

 

Table 3. Descriptive Statistics 

  N Mean Std. Deviation 

Idealized Influences 100 3.7860 .94249 

Inspirational motivation 100 3.7440 .87251 

Intellectual stimulation 100 3.7620 .78506 

Individualized consideration 100 3.6680 .94205 

Employee creativity 100 3.7631 .83636 

 

The constructs of Idealised Influence had a mean of 3.786 (SD = 0.942). This suggests 

that employees in the manufacturing industry agree on the point that their leaders pos-

sess adequate ethical values and are also leading by example. This is consistent with the 

work of Bass and Riggio (2006), who argued that idealised influence is of great concern 

when it comes to smoothing the trust and respect in employees. For Inspirational Moti-

vation, the mean score was 3.744 (SD=0.872), indicating moderate agreement that the 

leaders were able to articulate a vision. The above findings conform to other studies that 

placed emphasis on the role of motivational leadership as an important factor towards 

an employee’s acceptance of the organisational vision (Northouse, 2021). 

 

Leaders were able to foster the dimension of intellectual stimulation, as evidenced by 

the mean of 3.762 (SD = 0.785), which implies employees had a moderately high level of 



42 

stimulation to think creatively. Such leadership practices are generally positively related 

to employees’ creativity and problem-solving at the workplace (Avolio et al., 1999). The 

mean for individualised consideration was slightly lower at 3.668 (SD = 0.942), suggest-

ing that the organisations should do more in trying to meet and address the individual 

employee needs. Still, this value does support a focus on mentorship and employee 

growth, which is a central theme in transformational leadership theories (Zhou & George, 

2001). 

 

Under Employee Creativity, a mean of 3.763 (SD = 0.836) indicates that a moderate de-

velopment of creativity was noticed by the respondents in the performance of the or-

ganisational roles. These results emphasise the role of transformational leadership in the 

development of innovative approaches as highlighted by other researchers like Amabile 

et al. (1996) and many other related studies (Shafi et al., 2020; Stanescu et al., 2021). 

The presence of moderate mean scores across these constructs is seen as the reason 

behind the balanced application of transformative leadership dimensions that enabled 

enhanced employee creativity. In addition, the standard deviations are reasonable, indi-

cating spread but not extreme outliers, which ensures that the data is strong (Field, 2018; 

Hair et al., 2019b). These descriptive results deliver a solid underpinning for further in-

ferential analysis. 

 

4.2 Correlation Analysis 

The analysis of correlation allows one to determine the degree and direction of the as-

sociation between the two variables. This helps in getting a perspective about the trans-

formational leadership dimensions with employee creativity. The results shown in Table 

4 highlight that all variables were noteworthily correlated with each other at the signifi-

cance level of 0.01, which points to their interrelation and harmony on the theoretical 

level. The significant correlations found in this study are consistent with theoretical ex-

pectations and past research (e.g., Shafi et al., 2020; Yang et al., 2021), which emphasise 

those leadership traits in nurturing creativity in organizations. These results support the 



43 

interconnectedness of the constructs and lay a good premise for the following regression 

analysis. 

 

Moreover, the analysis does not reveal any adulting high values of correlation coeffi-

cients (over 0.80), which points out multicollinearity problems. This guarantees that the 

variables are still often relevant within the dataset, and it enhances the methodological 

robustness of the study. Any leadership dimensions interrelatedness observed in this 

study may be expected in the context of transformational leadership that is composite 

in nature and has common traits that are interrelated. These results are quite critical in 

the understanding of the relationship between descriptive statistics and the advanced 

reliance method. They also reinforce the fact that the data structure is appropriate for 

the regression analysis and the objectives of the study are justifiable. 

 

Table 4. Correlation analysis 

  1 2 3 4 5 

Idealized Influences (1) Pearso
n

 C
o

rrelatio
n

 

1     

Inspirational motivation (2) .792** 1    

Intellectual stimulation (3) .700** .712** 1   

Individualized consideration (4) .713** .752** .734** 1  

Employee creativity (5) .717** .677** .750** .727** 1 

**. Correlation is significant at the 0.01 level (2-tailed). 

 

The correlation of idealised influence with employee creativity is also strong at 0.717, 

demonstrating the extent to which ethical leadership behaviours are able to facilitate 

the creative output of employees. High levels of integrity among transformational lead-

ers are expected to provoke followers to seek innovation, as pointed out by Amabile 

(2018) and Avolio (2011). This suggest that supervisors with a high score on idealised 

influence will boost the creativity abilities of employees working under their supervision. 



44 

The relationship between inspirational motivation and employee creativity was shown 

to significantly correlate at 0.677, which is sufficiently high to note the influence of hav-

ing a strong vision as being useful to the employees’ creative capabilities. This is owing 

to the fact that as prior studies have shown and theorised, visionary leaders are more 

able to push and deepen the phenomenology within their employees (Northouse, 2021). 

 

Intellectual stimulation registers the highest among all dimensions’ correlation with em-

ployee creativity at 0.750. And this justifies the need for the subordinates to think criti-

cally and even displace the norm. Employees engage in innovative behaviour when their 

leaders provide them with an environment that encourages intellectual stimulation 

(Zhou & George, 2001). 

 

Individualised consideration similarly affects employee creativity as well, with a figure of 

0.727, indicating the importance of individual approaches in the development processes 

of the employees. Such conclusions coincide with the cadences of transformational lead-

ership, where attention to the needs of subordinates encourages them to further grow 

personally and find innovative methods to solve challenges (Bass & Avolio, 1994). 

 

There is empirical evidence to support the theoretical foundations of transformational 

leadership in the context of this analysis. Leadership constructs and their impact on cre-

ativity have been shown to have consistent, strong positive correlations across the di-

mensions of leadership. It is emphasised in this analysis that leaders who combine ethi-

cal actions, motivation driven by vision and intellectual challenge, as well as providing 

personalised support, are the leaders who boost employees’ creativity. Hence, these 

leaders promote innovation and performance in the organisational context by encour-

aging and including the people in an environment that is both diverse and challenging. 

 

Fostering an inclusive and challenging environment is one of the key contributions of 

transformational leadership being provided by the leaders in this growing evidence base 



45 

in nurturing creativity in the manufacturing as well as complex dynamical sectors. Find-

ings suggest all respondents ranked the correlations reported as both strong and practi-

cal, which in turn can be used for leadership development. Organisations should focus 

on providing all-inclusive, comprehensive training programs focused on different aspects 

of transformational leadership in order to fully utilise the creative potential that is avail-

able. The outcome of such investments is enhancement in employees’ morale and crea-

tivity and strengthening of the competitiveness of the organisation in the longer term. 

 

4.3 Regression Analysis: Hypotheses Testing 

 

4.3.1 Impact of idealized influences on employee creativity 

Table 5. Testing hypothesis 1 

Hypothesis IV DV R2 Beta T F Sig. 

H1 TLII EC 0.514 0.717 10.179 103.622 p < 0.001 

 

The Hypothesis 1 regression analysis assesses the impact of Idealised Influences (II), 

which is one of the dimensions of transformational leaders, on Employee Creativity (EC). 

According to the results indicated in Table 5, however, this was very strong and highly 

significant—p < 0.001. The majority (51.4%) of the variance accounting for employees’ 

creativity (R² = 0.514) was high. The beta coefficient (β = 0.717), owing to the parameters 

T = 10.179 and a very low Sig value (Sig = p < 0.001), was notable as well. 

 

Hypothesis 1 is supported, and it can be claimed that employees under idealised influ-

ence—leaders who are in full command of unquestionable ethical practices and are seen 

as the role models—harness and build employees creativity. It is also consistent with 

other studies, e.g., Teymournejad and Elghaei (2017), that involvement with idealised 

leaders transforms the leader’s gallery to be creativity-focused. Creativity and the trust 

and commitment driven by courage and vision are intrinsic qualities of the leaders that 

stimulate employees to engage in novel and original ideas. 



46 

 

The model is said to be effective in comprehending the association as the F-statistic is 

significant (F = 103.622). The results coincided with what was provided by Shafi et al. 

(2020), who stated that idealised leadership behaviours not only encourage the employ-

ees but also help to build an atmosphere that encourages exploration and innovative-

ness. 

 

This study also supplements the work of Saad Alessa (2021), who advocated for idealised 

influence in enhancing an organisation’s overall creative capabilities, especially in times 

of high competition and change. Employees are more willing to go beyond the standard 

way of doing things and try to do things differently when there is a high perception of 

the leaders of the organisation being trustworthy and motivating. 

 

These practical outcomes are very important. Organisations that would like to enhance 

creativity must invest in training intended at promoting the idealised methods of lead-

ership. Creativity could be instilled in the leaders by being reliable, setting high ethical 

benchmarks, and matching what one advocates for personally to what is defined at the 

organisation. It also encourages leaders to be role models, which in turn increases the 

confidence of employees and fosters their creativity. 

 

4.3.2 Impact of inspirational motivation on employee creativity 

 

Table 6. Testing hypothesis 2 

Hypothesis IV DV R2 Beta T F Sig. 

H2 TLIM EC 0.458 0.677 9.094 82.698 p < 0.001 

In testing Hypothesis 2 through regression analysis, the author sought to find out the 

influence of Inspirational Motivation (IM), a characteristic feature of transformational 

leadership, on Employee Creativity (EC). The results, presented in Table 6, reveal a highly 



47 

significant —p < 0.001 — positive relation between the two variables. The model ac-

counted for 45.8% of the variance in employee creativity (R² = 0.458), and the beta co-

efficient indicated moderate to strong positive influence (β = 0.677). The relationship is 

highly significant as evidenced by the T value of 9.094 and p value of p < 0.001, which 

validates the strength of the model. 

 

Thus, these results considerably prove Hypothesis 2, for leaders seeking to motivate 

teams through a clear vision while putting in place shared values are more likely to gal-

vanise creativity in their employees. It can then be further maintained that inspirational 

motivation goes a long way to increase a person’s intrinsic motivation, imbue innova-

tiveness, and a mission in the workplace. This is consistent with Maladzhi and Yan (2014), 

who stressed that followers who receive a well-defined and motivating vision tend to 

increase their creativity and performance. A similar observation was made by Shafi et al. 

(2020), who noted that transformational leaders possessing inspirational motivation 

were able to create an environment appropriate for thinking creatively and problem-

solving. 

 

The existing findings are consistent with Nasir et al. (2022), who stated that inspirational 

motivation has a positive impact on the creative output of employees as it creates ex-

citement and engagement with their work. This view was also substantiated by Asada et 

al. (2021), who emphasised the role of leaders who articulate an appealing vision in en-

hancing the creativity of employees in fast and turbulent environments. By inspiring em-

ployees to overcome current hurdles and address underlying problems, these leaders 

aid in the development of creative solutions. 

 

The value of the F-statistic (82.698) has further affirmed the statistical validity of the 

model. These results proclaim the significance of inspirational leadership within the con-

text of enhancing organisational creativity. Inspiring and highly determined leaders’ one 

focus allows their subordinate team members to apply creativity in performing tasks. 



48 

These leaders’ attributes help employees overcome challenges and foster creative think-

ing and thereby support the establishment of a creative business climate. 

 

4.3.3 Impact of intellectual stimulation on employee creativity 

Table 7. Testing hypothesis 3 

Hypothesis IV DV R2 Beta T F Sig. 

H3 TLIS EC 0.562 0.75 11.222 125.926 p < 0.001 

 

The next step in the regression assessment, which is Hypothesis 3, looks at Intellectual 

Stimulation (IS) as one of the key elements of transformational leadership and its impact 

on Employee Creativity (EC). From the data, it is shown that IS and EC have a very high 

R² value of 0.562 and a statistically significant relationship —p < 0.001 — with about 

56.2% variance in creativity, which can be explained by the model developed in Table 7 

here. The beta coefficient of 0.75 explains the strong impact of the relationship, which 

is statistically significant: T-value = 11.222, p-value = p < 0.001. 

 

Further, findings have shown how those employees who boost intellectual stimulation, 

which encourages them to actively question concepts and develop new and unique con-

cepts, significantly contribute to improving EC levels and therefore must be encouraged 

within the organization. The norm of fostering intellectual stimulation on the part of the 

leaders and encouraging team members to transform norms and think creatively has an 

effect on the creative performance of the team. This is consistent with the findings of 

Shafi et al. (2020), as they also suggested that such leaders stimulate their employees 

improving their creativity and innovative capabilities. The researchers noted that it is the 

leaders who first direct the employees to think differently and then engage in the pro-

cess of creative problem-solving to the utmost satisfaction of generating new ideas. 

 

Mansoor et al. (2021) notice that intellectual stimulation is among the most reliable fac-

tors forecasting creativity in the organisational setting. Transformational leaders can 

raise the creative potential of their teams by evoking curiosity and creating a climate in 



49 

which it is alright for team members to voice peculiar views. The research further indi-

cates that intellectual stimulation promotes a sense of cognitive agility among the em-

ployees, encouraging them to tackle issues differently to come up with different solu-

tions. 

 

Supporting these conclusions, Cengiz Ucar et al. (2021) turn the attention to the fact that 

intellectual stimulation enhances employees’ versatility as it nurtures a warm climate in 

which multiple viewpoints are accepted. Through their empirical research, they estab-

lished that leaders who actively promote intellectual stimulation are much more likely 

to encourage their employees to their creative ways of thinking. The readiness to dispute 

the status quo and to promote exploration and learning in the organisation are direct 

contributors to an improved creative performance. 

 

The argument regarding the relevance of the model is reinforced as the F-statistic of 

125.926 shows, among other things, that intellectual stimulation is an important char-

acteristic towards creativity. Such leaders, who are able to ask interesting questions that 

stimulate their employees’ intellectual curiosity, are able to create a work context that 

allows for innovations and creative thinking. These results highlight the role of the leader 

in providing such intellectual stimulation along with the need for unleashing the creative 

talents of the employees. 

 

4.3.4 Impact of individualized consideration on employee creativity 

Table 8. Testing hypothesis 4 

Hypothesis IV DV R2 Beta T F Sig. 

H4 TLIC EC 0.529 0.727 10.486 109.958 p < 0.001 

 

The regression analysis of Hypothesis 4 examines the two-way relationship between In-

dividualised Consideration dimension of transformational leadership and Employee Cre-

ativity. According to Table 8, it is evident that there is a positive effect with highly signif-

icant —p < 0.001 — correlation values, with R² standing at 0.529, implying that employee 



50 

creativity accounts for 52.9% of the variation in the model. Moreover, with a beta coef-

ficient of 0.727, this explains the great effect individualised consideration has on crea-

tivity, and the relationship is supported by T 10.486 and significance value = p < 0.001.  

 

This leadership practice stems from the theory of individualised consideration and refers 

to the concept in which leaders consider the needs and growth of every individual in 

their teams. Transformational leaders who give individualised attention to every em-

ployee are able to stimulate creativity in them because such employees are encouraged 

to be innovative and take a different approach towards work. This practice does not just 

facilitate belongingness and a sense of worth but further enables the employees to be 

more creative than ever before (Shafi et al., 2020). 

 

Shafi et al. (2020) point out the importance of individualised consideration in relation to 

the creative work of employees as it enhances the feeling of being appreciated by the 

employees. They found out that leaders who care about their followers’ development 

and nurturing of their personal interests motivate the employees to be more creative 

and progressive in their problem solving. Leaders are able to promote higher creativity 

within teams by delivering on individual developmental requirements and offering 

his/her inspirational editorial remarks. 

 

The same goes for Yang et al. (2021), who state that consideration of an individual 

through individualised consideration is a significant factor in nurturing creativity among 

employees. In their research, they established that employees who perceived their lead-

ers as effective were more willing to perform creative activities and come up with origi-

nal solutions to the tasks given. This kind of attention increases creativity and employee 

happiness and motivation, which in turn fosters the culture of innovation. 

These findings are also consistent with Purwanto’s (2020) work, who found that individ-

ualised consideration improves organisational empowerment. However, employees’ 

chances of providing innovative solutions or taking chances when customary ways of 



51 

doing things are challenged increase when leaders provide specific assistance and direc-

tion. This is quite essential in volatile markets where many developments are taking 

place. 

 

The strength of the model is also improved with the F-statistic of 109.958, which asserts 

that individualised consideration is one of the strong predictors of employee creativity. 

Transformational leaders focus on the individual needs and potential of employees in 

addition to ensuring their satisfaction so as to engage in creative behaviour, which is 

critical for the growth of the organisation. 

 

4.4 Summary of hypotheses 

The results of the analysis in this research endeavour define and quantify transforma-

tional leadership as a phenomenon that affects employee creativity calculated in four 

dimensions. The regression results reveal that there are significant and positive associa-

tions between each component of leadership style and creativity; R² ranges from 0.458 

to 0.562, meaning that transformational leadership has the biggest contribution in ex-

plaining the variance in creativity. In particular, intellectual stimulation and individual-

ised consideration were found to be the most creative style predictors, in line with pre-

vious research (Shafi et al., 2020; Yang et al., 2021). These findings mean that leaders 

who stimulate their members to think about intellectual issu