Introduction

The modern business environment is characterized by dynamic changes, market complexity, and the constant need to adapt to new technological, economic, and social conditions. In such a context, leadership plays a central role in creating and maintaining the competitive advantage of organizations. Leadership is not limited to the process of managing people and resources, but includes the ability of leaders to inspire, motivate, and direct employees towards common goals, thereby creating an organizational culture that fosters trust, collaboration, and innovative thinking (Aboramadan, 2020). Effective leaders do not act only as task managers, but as creators of meaning and vision, shaping the way employees understand organizational goals and their role in achieving them. The role of leadership in modern organizations becomes particularly important in conditions where innovation and creativity are recognized as key drivers of sustainable development. According to Wood (2019), employee creativity is a basic prerequisite for organizational innovation, because without the creation of new and useful ideas, the development of new products, services, and business models cannot occur. Innovations are the result of the successful implementation of creative solutions, while organizational creativity is an internal process that enables their generation. In this sense, leadership has a dual role – it shapes an organizational culture that encourages creativity and at the same time directs the energy of employees towards the realization of innovative goals.

The importance of creativity and innovation in the context of sustainable development is particularly evident in industries that face rapid technological change and growing social expectations. As Thibault et al. (2019) state, leaders who encourage creativity create organizational conditions in which employees are motivated to experiment, take risks, and propose new solutions. Such an environment not only contributes to economic growth, but also improves social responsibility, organizational resilience, and their ability to sustain themselves in the long term. However, despite a large number of studies on transformational leadership and innovative behavior, the mechanism through which leadership influences organizational creativity is still not sufficiently explored. Previous work has confirmed that transformational leadership has a positive impact on employee creativity (Aboramadan, 2020; Mitrović et al., 2024; Savić, 2025a), but empirical evidence on the mediating role of psychological and organizational factors remains limited. In particular, there is a need for a deeper understanding of how leaders create psychological safety and a climate of support for innovation, which allows employees to freely express ideas without fear of criticism or failure. The insufficiently researched relationship between transformational leadership and organizational creativity indicates the need for new theoretical and empirical analyses that would explain the complex mediational relationships between these constructs.

Based on the above, the aim of the research is to examine the impact of leadership on organizational creativity, with a special focus on transformational leadership style and the psychological mechanisms that mediate this relationship. The research aims to contribute to a better understanding of how leaders shape an organizational climate conducive to employees' creative expression and how this climate results in higher levels of innovative behavior at the individual and organizational levels. The conducted research aims to contribute theoretically and empirically to the understanding of the relationship between leadership, creativity, and innovation in contemporary organizations, offering a basis for improving leadership practices that foster employees' creative potential and the long-term sustainable development of organizations.

Theoretical framework of the research

The concept and importance of leadership

Leadership is one of the most important phenomena in the field of organizational behavior, management and work psychology, because it represents a key factor that shapes the behavior of employees, their motivation and the culture of the organization. According to Vuković (2024), leadership is defined as a process through which an individual influences group members in order to achieve the common goals of the organization. It is not just a formal position but a social relationship based on the trust, vision and ability of the leader to shape the meanings and interpretations of reality among his followers. According to the author, a leader possesses the so-called interpretive power — the ability to create and impose the meanings of events and phenomena, thus shaping the way in which employees understand organizational processes and their own role in them. In the modern approach, leadership is not viewed as a static trait of an individual, but as a dynamic process of social interaction that takes place in the context of organizational culture, communication and shared values. Effective leadership enables the integration of individual goals of employees with the strategic goals of the organization and contributes to the creation of a motivational and innovative climate.

The literature highlights several dominant leadership styles (Penjišević et al., 2024):

-      The autocratic style is characterized by the centralization of power and decision-making. The leader makes decisions alone, controls processes, and expects obedience. This style can be effective in crisis situations, but in the long run it reduces employee motivation and creativity.

-      The democratic style involves employee participation in decision-making and respecting their opinions. Such leaders encourage dialogue, trust, and a sense of belonging to the team.

-      The laissez-faire style is characterized by minimal leader participation in team work and leaving employees to make independent decisions. Although it can encourage independence, excessive passivity on the part of the leader can lead to disorganization and loss of focus.

-      The transactional style is based on an exchange between the leader and followers: employees complete tasks in exchange for a reward. This approach encourages efficiency, but not necessarily creativity.

-      The transformational style, in contrast, goes beyond mere exchange and seeks to transform the values, motivation, and behavior of followers. A leader inspires, motivates, and develops his or her associates, which is essential for the emergence of creative and innovative behavior.

Leadership, therefore, is not just about managing people, but also the process of creating a vision and communicating it to the members of the organization. A visionary leader shapes the direction of the organization's development, fosters trust and identification of employees with the organization's goals, and creates an environment conducive to innovation and creative problem solving.

Transformational leadership

The concept of transformational leadership was developed by Burns (1978) and Bass (1985, 1999), and later empirically confirmed by Avolio (1994). This model implies leadership that transforms followers — changes their values, attitudes, and motives, elevates their needs to a higher level, and encourages them to transcend their own interests for the common good of the organization.

Transformational leadership is based on the emotional and intellectual connection between leaders and followers, with the leader influencing the motivation and creative potential of employees. Savić (2025b) emphasizes that transformational leaders not only encourage innovative thinking and creativity, but also help employees develop capacities for creative problem solving, creating a psychologically safe environment in which they can freely present new ideas without fear of failure. Bass (1999) and Avolio (1994) define four basic dimensions of transformational leadership, which according to Atoum (2018) are crucial for fostering organizational creativity:

-     Idealized influence (charisma) – The leader sets high moral and ethical standards, acts as a role model, and commands the respect and trust of followers.

-     Inspirational motivation – The leader inspires followers with vision and enthusiasm, encouraging them to overcome their own limitations.

-     Intellectual stimulation – The leader encourages innovative thinking, questioning existing assumptions, and finding new solutions.

-     Individualized consideration – The leader recognizes individual needs, supports the personal and professional development of each employee.

By combining these dimensions, transformational leaders foster an atmosphere of trust and cooperation, which is the basis for creating a creative organizational culture. Although the concept of transformational leadership is widely accepted, there are also certain criticisms. Some authors (Ahmed et al., 2020; Dumont et al., 2017) suggest that the concept is too idealized and difficult to measure in practice. It is also emphasized that in some situations transformational leaders can rely too much on charisma, which can lead to authoritarianism. Alternative approaches include authentic leadership, ethical leadership, and servant leadership, which emphasize moral responsibility, authenticity, and a service orientation of leaders.

Creativity and organizational creativity

Creativity is defined in the literature as the process of generating new and useful ideas, products, or solutions (Amabile, 1996). Woodman, Sawyer, and Griffin (1993) introduced the term organizational creativity and defined it as the generation of new, useful, and valuable ideas by individuals working together within a complex social system.

According to Saleem et al. (2020), organizational creativity encompasses three interrelated levels:

-         Group level – interactions, communication, and team dynamics.

-         Organizational level – structure, culture, strategy, and leadership support.

Dumont et al. (2017) point out that the key factors that influence creativity are the following: intrinsic motivation, support for innovation, communication of ideas, an organizational climate that encourages experimentation, and leadership that fosters trust. Leaders play a crucial role in creating a psychologically safe space in which employees can freely test and propose new ideas. Creativity is also a precursor to innovation — while creativity involves the generation of ideas, innovation means their implementation (Savić & Bonić, 2022). These two dimensions are interdependent and form the basis for sustainable competitive advantage of organizations.

1.1.  The connection between leadership and creativity

Numerous studies confirm that leadership plays a key role in fostering employee creativity. The direct effects of leadership are reflected in the leader's ability to motivate employees, give them freedom to work, and inspire them to think outside the box. Transformational leaders, thanks to intellectual stimulation, encourage employees to question existing norms and seek innovative solutions (Paspalj et al., 2024). Indirect effects are achieved through motivation, psychological safety, and the organizational environment. Psychological safety allows employees to freely express ideas without fear of criticism, while the leader's support for innovation further strengthens their readiness for creative behavior. In this sense, leaders shape both formal and informal structures that enable knowledge exchange and cooperation among team members (de Sousa, 2024). The role of a leader in encouraging experimentation and accepting mistakes is particularly important for creative processes. When a leader rewards attempts and innovations, even those that are not immediately successful, he builds a culture of learning and exploration, which leads to a higher level of organizational creativity and innovation.

1.2.  Organizational culture as a mediator

Organizational culture is a set of values, norms, and symbols that guide the behavior of organizational members. According to Mihajlović et al. (2025), leaders are key actors in the formation and maintenance of organizational culture, because through the process of interpreting reality, they shape a common system of meanings among employees. Leaders transmit and symbolically confirm values that become the basis of collective identity. Culture, in this context, has a mediating role between leadership and creativity. A culture that promotes openness, trust, and cooperation enables the development of psychological safety, and thus a greater degree of creative expression among employees. Values such as innovation, responsibility, and readiness for change directly stimulate creative behavior. The leader, as the creator and guardian of organizational culture, has the task of aligning the formal mechanisms of the organization with informal values that promote creativity. Symbolic actions, rituals, communication methods, and problem-solving methods are tools with which the leader builds a culture of trust and support for innovation. This creates a key mediating link: transformational leadership → organizational culture → psychological safety → employee creativity and innovation.

Research model and hypotheses

In modern organizations that strive for innovation and adaptability, leadership is increasingly seen as a key factor that shapes the creative behavior of employees and thus influences the creation and maintenance of organizational creativity. Based on theoretical and empirical insights from previous research (Aboramadan, 2020; Wood, 2019; Thibault et al., 2019), the starting assumption of this paper is that transformational leadership has a significant direct and indirect impact on creativity at the individual and organizational levels. This relationship is further explained through mediating variables that shape the organizational context – psychological safety, organizational climate and support for innovation.

Transformational leaders encourage their followers to overcome personal interests and strive for the common good, using four basic dimensions of leadership: idealized influence, inspirational motivation, intellectual stimulation and individualized consideration (Vukša & Milojević, 2024). Through these dimensions, leaders influence the internal motivation, self-confidence and cognitive processes of employees, which is the basis for the development of their creativity. Afshar & Jia (2018) emphasize that transformational leadership enables cognitive stimulation of employees, while at the same time building a psychologically safe environment in which employees are willing to present new ideas and experiment without fear of negative consequences (Žikić et al., 2024).

On the other hand, research by Milenković et al. (2023) empirically confirms that the impact of transformational leadership on creativity is largely mediated by motivational, cognitive and relational factors. At the individual level, transformational leaders affect employee creativity indirectly – through intrinsic motivation, support for innovation and interpersonal trust. At the organizational level, their impact is both direct and indirect, because by creating a stimulating organizational climate, they enable individual creativity to be transformed into collective innovative results.

Starting from these theoretical premises, a conceptual research model was developed that shows the relationships between the variables included in the analysis. The proposed model starts from the understanding that transformational leadership represents the initial variable that triggers a chain of interdependent processes – from individual to organizational creativity. This relationship also includes the influence of three key mediating mechanisms: psychological safety, organizational climate, and support for innovation (Darvishmotevali et al., 2020).

1.    Transformational leadership → individual creativity. Transformational leaders motivate employees to question existing assumptions, generate new ideas, and develop innovative approaches to problem solving. The dimension of intellectual stimulation particularly contributes to creative thinking, while individualized consideration strengthens intrinsic motivation.

2.    Individual creativity → organizational creativity. Individual creativity is the foundation of collective creativity and innovation. When the organizational climate enables knowledge exchange, collaboration, and psychological safety, individual ideas can grow into systemic innovations.

3.    Transformational leadership → organizational creativity. This relationship can be direct, when leaders directly shape an innovative culture through their behavior, and indirect, when they act through intermediaries such as psychological safety, climate, and support for innovation. This confirms the multidimensional nature of the influence of leadership on creative processes within organizations.

4.    Mediating variables: psychological safety, organizational climate, support for innovation

-      Psychological safety allows employees to openly express ideas and take risks without fear of judgment or punishment.

-      Organizational climate includes employees' perceptions of support, communication, and flexibility within the work environment, which strongly influences collective creative potential.

-      Support for innovation includes the availability of resources, tolerance for errors, and encouragement of experimentation.

In this way, mediating variables link leadership behavior with outcomes at the individual and organizational levels, forming a bridge between inspirational leadership and actual creative practice.

Based on the theoretical insights and conceptual framework, the following research hypothesis was formulated: Transformational leadership positively influences organizational creativity. Based on it, the following auxiliary research hypotheses were identified.

-     H1.1: Idealized influence of leaders positively influences organizational creativity.

-     H1.2: Inspirational motivation of leaders positively influences organizational creativity.

-     H1.3: Leader intellectual stimulation positively influences organizational creativity.

-     H1.4: Leader individualized consideration positively influences organizational creativity.

These hypotheses operationalize the research model and allow for empirical testing of the complex interdependencies between leadership, creativity, and contextual factors.

Research methodology

Research on the influence of leadership on organizational creativity has a combined character, as it relies on theoretical assumptions and empirical verification of the relationship between key constructs. The theoretical part of the paper analyzes the previous models and findings on the connection between leadership and creativity, while the empirical part conducts quantitative research based on a questionnaire. This approach allows for a deeper understanding of the phenomenon of leadership and its role in stimulating the creative behavior of employees, as well as verification of the proposed conceptual model through statistical analysis.

The target population of the research includes employees in creative industries, given their pronounced need for innovative and creative work, as well as the intensive role of leaders in shaping a creative organizational climate. The term creative industries refers to sectors that are involved in the creation and distribution of creative products and services — such as design, media, advertising, art, education, IT and the cultural sector.

The sample consists of employees from organizations operating in the above areas, covering three categories of participants:

-     managers (team leaders and managers),

-     performers who directly participate in creative processes,

-     employees from supporting sectors (administration, logistics, communications).

A purposive (targeted) sample was used, because the research is focused on respondents who actively participate in the creative process and come into contact with various forms of leadership in their daily work.

The sample includes N = 250 respondents, which is sufficient to conduct multiple regression analyses and modeling of structural relationships.

A standardized survey questionnaire was used to collect data, structured according to the measurement scales developed and applied in the research by Liu et al. (2020), as well as in previous research on transformational leadership and creativity (Kang et al., 2007; Resnick et al., 2016; Ferreira et al., 2018).

The questionnaire consists of five parts:

-     Transformational leadership – measured using the dimensions: idealized influence, inspirational motivation, intellectual stimulation and individualized consideration (Multifactor Leadership Questionnaire – MLQ).

-     Individual creativity of employees – assessed through the scale of creative behavior and generation of new ideas.

-     Organizational creativity – measured by employees’ perception of the organization’s support for

innovative work, openness of communication and tolerance for mistakes.

-     Psychological safety and organizational climate – measured using a scale that assesses freedom of expression and risk-taking.

-     Demographic data – gender, age, level of education, work experience and position in the organization.

All statements were rated on a five-point Likert scale (1 – completely disagree to 5 – completely agree). The average time to complete the questionnaire was about 10 minutes. The reliability of the scales was checked using the Cronbach α coefficient, with all values above 0.70, indicating satisfactory internal consistency of the instruments.

Data were collected from March to May 2025, through a combination of an online survey (via the Google Forms platform) and personal interviews in organizations that agreed to cooperate.

Respondents were guaranteed anonymity and confidentiality of data, and participation was voluntary. The collected data were coded and processed in the statistical software SPSS 26.0 and SmartPLS 4.0. After the initial review, the following processing phases were carried out (Bučalina Matić, 2023):

-         checking the completeness and accuracy of the responses,

-         descriptive analysis (arithmetic means, standard deviations, frequencies),

-         scale reliability analysis,

-         formation of composite constructs for the SEM model.

 The following methods were applied for data processing and interpretation: descriptive statistics, correlation analysis, multiple regression analysis and structural modeling using the least squares method (PLS-SEM). This approach allows for a comprehensive examination of the complex relationships between variables, as well as testing the theoretical model linking leadership and organizational creativity.

Research results

The survey was conducted during March and April 2025 on a sample of 278 employees in various organizations in the Republic of Serbia. The sample included 153 respondents from the private sector (55%) and 125 from the public sector (45%). The majority of the sample consisted of middle management respondents (42%), followed by employees in executive positions (37%) and senior managers (21%). The average age of the respondents was 38.6 years, and the average length of service was 11 years. The gender structure was balanced (52% women, 48% men). Given the aim of the survey, employees' perceptions of the behavior of their managers and the level of creativity within the organizations in which they work were analyzed.

To measure transformational leadership, an adapted version of the Multifactor Leadership Questionnaire (MLQ) scale was used, which includes four dimensions or variables:

-        Idealized influence (5 items)

-        Inspirational motivation (4 items)

-        Intellectual stimulation (4 items)

-        Individualized consideration (4 items)

Organizational creativity was measured using a scale developed by Woodman, Sawyer, and Griffin (1993), with 6 statements that examine the perception of support for innovation, freedom to express ideas, and implementation of new solutions in the organization. All statements were rated on a Likert scale from 1 (strongly disagree) to 5 (strongly agree). The reliability of the scales was checked using the Cronbach α coefficient:

           Table 1: Reliability testing of variables          

Source: author's calculation

All α coefficients are above the recommended limit of 0.70, which confirms the high internal consistency of the instruments. The KMO test (0.874) and Bartlett's test of sphericity (χ² = 1165.32; df = 190; p < 0.001) indicated the adequacy of the data for factor analysis. Exploratory factor analysis confirmed the existence of five latent constructs (four dimensions of leadership and organizational creativity), which confirmed the convergent and discriminant validity of the instruments. Multiple linear regression was used to test the hypotheses, where the dependent variable was organizational creativity, and the independent variables were the four dimensions of transformational leadership.

                      Table 2: Multiple linear regression                    

Source: author's calculation

The model is statistically significant (F(4,273) = 38.42, p < 0.001) and explains 42.8% of the variance of organizational creativity (R² = 0.428). The largest contribution to the explanation of creativity is made by intellectual stimulation (β = 0.257), which confirms the importance of the leader's encouragement of employees to think innovatively and question existing processes.

In an additional regression model, the role of organizational trust as a potential mediator variable was examined. The results showed that:

-        Transformational leadership has a significant direct effect on organizational creativity (β =

0.41, p < 0.001).

-        When organizational trust is included in the model, the direct effect decreases (β = 0.26, p < 0.01), while the indirect effect via trust remains significant (β = 0.15, p < 0.05).

This suggests that part of the influence of leadership on creativity is mediated through trust and a supportive climate. In other words, leaders who inspire and stimulate employees not only influence creativity directly, but also by creating a psychologically safe environment in which employees are willing to share new ideas.

Discussion

The results of the study showed that transformational leadership has a significant direct and indirect impact on organizational creativity. This finding is consistent with the conclusions of Wood (2019), who found that leaders who inspire, intellectually stimulate, and individually respect employees contribute to creating an environment in which creative problem-solving is encouraged. The author emphasizes that leaders are catalysts for employees' creative behavior because they provide psychological safety and freedom of expression, which is fully consistent with the findings of the current study. Similar results were obtained by Thibault et al. (2019), who empirically confirmed that transformational leadership is a strong predictor of individual and organizational creativity, and it also acts indirectly – through motivational and relational factors. This mediating role was confirmed in this paper: the impact of leadership on organizational creativity is achieved through a climate of trust, psychological safety, and support for innovation. Therefore, although a leader can directly encourage creativity, his greatest power lies in the ability to create an environment in which employees feel free to experiment and make mistakes without fear of sanctions. The results are also largely consistent with the theoretical assumptions of Aboramadan (2020), who emphasizes that leaders shape organizational culture by managing the meanings and values shared by organizational members. In this sense, organizational culture is a mediator between leadership and creativity. The findings of this research confirm that organizations with a participatory and open culture, which leaders actively build, are also the most creative. Leaders in such organizations do not only manage resources, but also the perception of reality, directing employees towards a shared vision and innovative solutions. Therefore, this paper provides an integrated confirmation of the findings of previous research, showing that leadership is bidirectionally related to organizational creativity, it is both its driver and the product of a culture that encourages the creation of new ideas. From a theoretical perspective, the results contribute to the understanding of the complex connection between leadership and creativity, confirming the multilevel nature of influence – individual, team and organizational levels. Empirical findings support a model according to which transformational leadership initiates cognitive and affective processes in employees, which are then manifested through creative behavior and innovation. This confirms the relevance of theoretical frameworks that view leadership not only as a set of traits, but as a dynamic process of interpersonal influence. The practical implications are reflected in the need to develop leaders who actively foster psychological safety and trust within the team. Management practices focused on control and hierarchy have proven to be inferior to those that encourage open communication, participatory decision-making and mutual respect. Training programs for leadership development should include the skills of emotional intelligence, active listening and providing support for innovative behavior, because it is these competencies that have the greatest impact on creating a creative climate. At the organizational level, these results indicate that leadership should be aligned with the system of rewarding and evaluating employees. Organizations that recognize and reward the creative contribution of individuals have a greater chance of preserving long-term innovative potential. Leaders are, therefore, key actors in the institutionalization of creativity – not only through individual example, but also through the construction of systems and procedures that enable creative development.

One of the most important findings of the research is the confirmed link between transformational leadership and employee psychological safety. This construct, which is increasingly associated with innovation and creativity, is explained by the feeling that employees can express ideas and disagreements without fear of negative consequences. Leaders who demonstrate openness, empathy and consistency create a culture in which risk and error are part of the learning process, not a reason for sanctions. Wood (2019) emphasized that without a sense of safety, authentic creativity cannot exist, while Thibault et al. (2019) empirically confirmed that psychological safety mediates the relationship between transformational leadership and innovative behavior. These results are fully confirmed in this research, indicating that leadership plays an essential role in shaping a climate of trust, which is a prerequisite for creative employee engagement. Such a culture of trust also has additional benefits – reducing turnover, increasing job satisfaction and readiness for team cooperation. This confirms that leadership is a psychological mechanism by which organizations transform the potential of employees into real creative strength.

Research findings show that a leader not only inspires employees, but also actively initiates creative processes within the organization. A transformational leader acts as a catalyst because he activates the key components of creativity: motivation, knowledge, flexible thinking and open communication. He encourages the exchange of ideas, reduces bureaucratic barriers and recognizes the contribution of each individual. Atoum (2018) emphasizes in his work that a leader possesses interpretive power – the ability to influence the meanings that employees attach to their work reality. In this way, a leader shapes the collective perception and directs the energy of employees towards a common creative goal. Thibault et al. (2019) further confirm this role of the leader as a mediator between individual and organizational creativity, emphasizing that without leadership support, individual ideas rarely move to the implementation phase. In this sense, leaders are not only drivers of change, but also guardians of organizational vitality. Their ability to encourage, direct and integrate employees' creative impulses is crucial for the long-term innovation and competitiveness of the organization.

Conclusion

Research into the impact of leadership on organizational creativity has confirmed that contemporary forms of leadership, primarily transformational leadership, represent a key mechanism for stimulating creative processes in organizations. An analysis of relevant literature and empirical findings has shown that leaders, through their vision, communication, and ability to inspire followers, create an environment that encourages openness, exchange of ideas, and psychological safety, all factors that form the basis of organizational creativity.

The key finding of the paper is that transformational leadership has a combined effect on employee and organizational creativity, directly through intellectual stimulation and inspirational motivation, and indirectly through motivational, cognitive, and relational factors. At the individual level, leaders influence employees' intrinsic motivation, their willingness to experiment, and their willingness to take risks, while at the organizational level they shape a culture of innovation, trust, and cooperation. These results are in line with previous conclusions from the available literature, which confirms the existence of mediating effects in the relationships between transformational leadership, creativity, and innovative behavior of employees.