Leadership and Creativity

Contemporary, innovative organizations are seeking ways to stimulate employee and team creativity. Recent studies suggest that through their leadership style, managers can either encourage or inhibit employee and team creativity. It is therefore important to understand the influences of different leadership styles on creativity. The majority of prior research has focused on examining how traditional leadership styles relate to creativity. However, how managers lead in current organizations is changing, resulting in the emergence of more entrepreneurial leadership styles exerting an influence on creativity. In this paper, we add to the limited understanding of the entrepreneurial leadership-creativity relationship by studying how entrepreneurial leadership influences employee and team creativity in organizations.

An entrepreneurial leadership style integrating leadership and entrepreneurship received considerable attention in the management literature. A definition of entrepreneurial leadership that emerged, and is adopted in this study, is as follows: "influencing and directing the performance of group members toward the achievement of organizational goals that involve recognizing and exploiting entrepreneurial opportunities". In line with this, organizations that aspire for innovation and creativity need entrepreneurial leaders who support their co-workers in creatively recognizing and exploiting new opportunities for the benefit of the organization. Based on this, it can also be argued that entrepreneurial leadership mobilizes co-workers to have confidence in their creative potential and display creative performance.

While several studies have touched upon the entrepreneurial leadership-creativity link, these studies seem to target macro-level creativity and have not sufficiently demonstrated the distinctiveness and effectiveness of entrepreneurial leadership in relation to follower creativity. To further examine the relationship between entrepreneurial leadership and workplace creativity in organizations, we follow the compatibility principle. That is, we can propose that when the attitudes and behaviours of subordinates are directed toward the same targets as their entrepreneurial leaders who are natural creators, employees' sense of compatibility with their supervisors (i.e. initiating changes, taking risks and being open to new ventures) may lead to an increased willingness to contribute creatively to opportunity-driven goals and outcomes.

Renko et al. note that entrepreneurial leaders "enhance followers' beliefs in their own entrepreneurial skills and abilities and ignite passion for innovation and creativity". To explore these beliefs, we draw on Bandura's social cognitive theory (SCT), which suggests that creative efficacy beliefs enable the development of workplace to flourish creative ideas. We argue that there are parallel motivational processes at both the individual and the team levels. That is, entrepreneurial leadership fosters employees' creative self-efficacy to perform creatively, as well as team creative efficacy toward team creativity. Furthermore, since team creative efficacy directs employees towards creative activities, we propose that team creative efficacy exerts a cross-level mediating influence on the relation between entrepreneurial leadership and employee creativity. Figure 1 depicts our hypothesized model.

Fig 1

A theoretical model of the multilevel effects of entrepreneurial leadership on efficacy beliefs and creativity. Shaded box = team-level construct; white box = individual-level construct

Answering the research question of why and how entrepreneurial leadership contributes to employee and team creativity, our paper makes several contributions. First, by broadening our understanding of the relationship between entrepreneurial leadership and creativity, we highlight the significance of entrepreneurial leadership as a distinctive leadership style in creativity research from a compatibility perspective. In doing so, we empirically extend the conceptualization and operationalization of Renko et al. to explore the influence of entrepreneurial leadership on both employee and team creativity in organizations. Second, by examining how entrepreneurial leadership relates to creative efficacy beliefs towards workplace creativity, we respond to calls to identify level-specific mechanisms in the leadership-creativity relation by identifying a similar pathway at multiple levels. Moreover, we extend the cross-level influences to enrich the growing research on the generalization of the effects of team variables regarding employee creativity by showing that both self- and team efficacies support employee creativity.

Theory and Hypotheses

Creativity: the Role of Entrepreneurial Leader

Creativity has been a topic of interest for both scholars and practitioners for more than 35 years. Considerable research has approached the study of creativity at different levels (e.g. employee level and team or group level). Specifically, employee creativity refers to the generation of novel and useful ideas, products and processes by individual employees, while team creativity refers to team members' joint development and production of novel and useful ideas, products and processes. Both employee and team creativity significantly facilitate organizations toward innovation and success; therefore, organizations seek ways to augment workplace creativity.

Given the critical role of workplace creativity for organizational survival and competence, scholars have investigated the influence of leaders on creative outcomes in organizations. However, research to date has focused primarily on these well-researched leadership approaches developed in the 1980s and 1990s, such as transformational and/or charismatic leadership, which do not provide detailed explanations of employee creativity for opportunity recognition and exploitation. The mixed findings of the effects of these leadership styles on creativity suggest a more specific and effective leadership style to support creativity that serves opportunity recognition and exploitation in the current business environment.

Entrepreneurial leadership is a concept arising at the intersection between entrepreneurship and leadership. It specifically reflects that the evolution of leadership styles is context specific (i.e. in the current entrepreneurial setting). That is, organizational and entrepreneurial success relies primarily on leaders who have strong entrepreneurial indications and influence followers to think and act in a creative and innovative manner. Specifically, in the turbulent business context of innovation, an entrepreneurial leader, unlike other types of leaders, specifically emphasizes opportunity recognition and utilization as important organizational goals. With regard to opportunity-driven behaviour, an entrepreneurial leader concentrates on creating opportunities and/or identifying opportunities to develop new businesses through innovation. By means of enacting the (entrepreneurial) leadership style in his/her daily managerial practices, he/she aims to mobilize people towards creative outcomes to explore and exploit these opportunities.

Previous research has often primarily emphasized the entrepreneurial traits of leaders (e.g. entrepreneurial passion) with regard to fulfilling their leadership role. These studies overlook the distinctive opportunity-related conceptualization of entrepreneurial leadership within the leadership research field. Primarily, an entrepreneurial leader concentrates on exploring, specifying and exploiting the opportunities to create new products, services and business processes. A main distinctive characteristic of an entrepreneurial leader is that (s)he motivates co-workers to follow and join the opportunity-driven process by becoming and being creative and creatively committed to the identification and exploitation of opportunities for new businesses by creating new products, services and business processes. Particularly, (s)he stimulates creativity-oriented behaviour among co-workers and aims to leverage followers creative potential, such as building their confidence in and shaping their responsibilities and obligations toward creative endeavours. In this way, the goal of entrepreneurial leadership is to influence and inspire followers' creative attitudes and behaviours with regard to exploring and exploiting opportunities for their organizations.

Recently, scholars have consistently proposed the treatment of entrepreneurial leadership as a specific leadership style in order to recognize its significant role in management research. Thus, entrepreneurial leaders can be seen as directing and assisting followers in achieving organizational goals by recognizing and exploiting opportunities via their creative contribution. The opportunity-utilizing focus enables followers to initiate such innovative endeavours as creating new options, situations, propositions and benefits, i.e. by creatively developing innovative practices for the benefit of the firm. This line of entrepreneurial leadership conceptualization clearly reflects the creative-oriented leadership style described in creativity studies. Given the above, we expect that entrepreneurial leadership motivates and challenges employees to engage in creative behaviour and outcomes. In a similar vein, past research, acknowledging the influence of transformational leadership on motivating workforce creativity, also indicates that transformational leadership can have a stimulating influence on follower creativity. However, there are distinct differences between the concepts of transformational and entrepreneurial leadership. Transformational leadership aims to stimulate and reward the creative behaviour of individuals in the organization, while entrepreneurial leadership goes several steps further and stimulates like-minded people to dynamically produce something new by taking advantage of fleeting opportunities. Moreover, entrepreneurial leadership not only creates acceptable goals to lead employees toward creative goal realization but also promotes a sense of taking risks and taking advantage of opportunities for value creation. Such behaviours match workplace creative endeavours to generate positive effects for entrepreneurial leaders pursuing innovation to trigger creativity.

Entrepreneurial Leadership and Employee and Team Creativity

Entrepreneurial leaders who pursue innovation and creativity meet the challenges of creating a vision and influence employees to foster its realization. Specifically, entrepreneurial leaders serve as role models for employees. They motivate employees to internalize the willingness to engage in creative endeavours. By targeting value creation, entrepreneurial leaders motivate employees to contribute to creative activities. Moreover, during the process of creating value, entrepreneurial leaders provide necessary support with regard to creativity, for instance, by designing and adjusting achievable goals to stimulate employee perseverance and by working with employees to generate different perspectives and to resolve uncertainties, problems and challenges. Based on the above, we propose the following hypothesis:

• Hypothesis 1. Entrepreneurial leadership is positively related to employee creativity.

Research suggests that teams are a key source of new ventures, and Gupta et al.  show that entrepreneurial leaders focus on motivating employees working together toward collective creativity. Specifically, by realizing the growth potential of creative team capacity, entrepreneurial leaders may inspire employees to work together, which may lead to collaboration toward creative results. During the process mentioned above, in order to achieve entrepreneurial goals in a dynamic business environment, entrepreneurial leaders can stimulate higher creativity in teams and emphasize the importance of teams working toward challenges. Team members may then realize that working together can generate more energy and can in turn facilitate opportunity exploration and risk taking towards creativity. Entrepreneurial leaders may also encourage team members' creative initiatives for their team's benefit. The team's creative achievements will thus be greater when leaders display an entrepreneurial leadership style. Based on this reasoning, we propose the following hypothesis:

• Hypothesis 2. Entrepreneurial leadership is positively related to team creativity.

Creative Efficacy Beliefs as Mediators

SCT proposes that efficacy belief has an important role as a key psychological driver of desirable outcomes, as it relates to confidence in an individual's abilities, which may internally motivate them to approach goals, tasks and challenges. With regard to enhancing creativity, efficacy tends to increase the level of individual effort and persistence that is crucial for successfully generating creativity. Tierney and Farmer apply creativity-oriented constructs of efficacy to offer a better understanding of the specific effects of efficacy in predicting creative outcomes. As such, in our study, we follow the prior research and expect that both creative self-efficacy (individual level) and creative team efficacy (team level) mediate the relationship between entrepreneurial leadership and creativity.

Creative self-efficacy, namely, the degree to which employees believe that they are capable of being creative, is likely to increase employees' confidence in their capacity to exhibit creativity. People with a high sense of creative self-efficacy are expected to choose creative goals and to then mobilize their potential to realize these goals. Similarly, creative team efficacy, which refers to team members' shared belief regarding their team's ability to produce creative outcomes, may facilitate both team and employee creativity. At the team level, creative team efficacy emphasizes collective interactions to build a team's confidence in generating creative actions and performance. At the individual level, researchers have shown the top-down influence of creative team efficacy in terms of motivating individuals' creative engagements. Additionally, prior research indicates that leadership predicts both individuals' appraisals of themselves (self-efficacy) and their team members (team efficacy). Thus, consistent with previous research, we examine whether entrepreneurial leadership instils a sense of creative capabilities (i.e. creative team efficacy and creative self-efficacy) and fosters creativity.

Creative Self-efficacy

Creative self-efficacy is affected by contextual variables since employees seek information from their working contexts to develop self-efficacy regarding their creativity. Existing research shows that supervisors nurture the development of employees' creative self-efficacy by displaying positive behaviours (e.g. providing assistance and encouragement and acting as role models for engagement). For example, leadership can significantly enhance employees' creative self-efficacy, as supervisors' desired behaviours can raise expectations in regard to creativity and effectively stimulate employee motivation and belief in their ability to solve problems in a creative way.

In line with existing studies on the relationship between leadership and creative self-efficacy, we theoretically explain how entrepreneurial leadership increases employees' creative self-efficacy. Specifically, entrepreneurial leaders are often more creative in taking risks. They guide subordinates in behaving creatively; thus, they serve as a role model in creative engagement. Second, as entrepreneurial leaders communicate with employees to accomplish creative achievements, they have the power to convince subordinates that the latter are capable of being creative. Moreover, entrepreneurial leaders foster their employees' involvement in creative problem-solving and innovative behaviours by providing support and encouragement. Therefore, employees are likely to feel confident generating new ideas. Finally, to realize achievements, entrepreneurial leaders help subordinates in their personal development to facilitate the success of their subordinates. Consequently, employees may experience personal attainment and view themselves as being skilful in displaying creativity. Thus, we propose the following hypothesis:

• Hypothesis 3. Entrepreneurial leadership is positively related to creative self-efficacy.

Existing conceptual and empirical studies have found a positive relation between creative self-efficacy and employee creativity. Specifically, individuals are motivated through the establishment of high goals to attain creative outcomes. Their creative expectations, which are influenced by their creative self-efficacy, are likely to motivate them to devote effort to generating creative ideas. Additionally, creativity requires individuals to take risks, and therefore, they need to gain confidence in addressing difficulties and problems. Creative self-efficacy provides internal and sustaining support to inspire efforts toward creative activities.

Given the hypothesized positive relationship between entrepreneurial leadership and employee creativity, we propose that when leaders display entrepreneurial behaviours, they can effectively foster subordinates' creative self-efficacy, which in turn positively mediates the relation between entrepreneurial leadership and employee creative performance. A higher level of entrepreneurial leadership may enable employees to feel more motivated to fulfil and put more effort into accomplishing innovative goals, which in turn increases their creative performance. Based on this reasoning, we propose the following hypothesis:

• Hypothesis 4. Creative self-efficacy mediates the relationship between entrepreneurial leadership and employee creativity.

Team Creative Efficacy

Research has suggested that leader behaviours may motivate teams to increase their efficacy. According to entrepreneurial leadership theory, entrepreneurial leaders are effective at building teams to accomplish innovative goals. Such research emphasizes the benefits of entrepreneurial leadership on team-level attributes with regard to desired performance. To effectively build teams, it can be argued that entrepreneurial leaders reinforce the connections between individuals' and the group's ideas. Through dynamic interactions, team members' connections strengthen the sense that their collaborations will encourage other team members' creative contributions toward the big picture. Therefore, they become more confident regarding the capabilities of teams as a whole Moreover, since team members are all consistently supervised by the same entrepreneurial leader, a collective view of their joint efficacy to generate creative outcomes emerges. Thus, we propose the following hypothesis:

• Hypothesis 5. Entrepreneurial leadership is positively related to team creative efficacy.

Building on the top-down influence of team-level creativity on employee performance, we expect a potential positive influence of team-level factors (i.e. creative team efficacy) on individual creativity. Specifically, team efficacy increases employee motivation with regard to creativity. Indeed, the perception of team creative efficacy sets expectations for creative achievements that encourage individuals to engage in creative endeavours. That is, team members with strong beliefs regarding their team's creative capability are effectively motivated to make breakthroughs in terms of improvements and to persist when they face difficulties since they know that their endeavours will not be wasted.

Furthermore, from the perspective of individual interactions, employees with strong beliefs regarding their team's creative capability (i.e. creative team efficacy) may initiate creative activities as they are more confident and willing to engage in sustained creative endeavours and are more willing to share and exchange information and ideas to generate creativity. Thus, we propose the following hypothesis:

• Hypothesis 6. Team creative efficacy is positively related to employee creativity.

The abovementioned arguments indicate that entrepreneurial leadership is positively related to team creative efficacy and that team creative efficacy is positively related to employee creativity. Therefore, we expect team creative efficacy to serve as a mediator of the entrepreneurial leadership-employee creativity relationship, as entrepreneurial leaders exert a positive influence on team members' efforts to generate creativity by developing the efficacious belief that the team can produce creative outcomes. Thus, we propose the following hypothesis:

• Hypothesis 7. Team creative efficacy mediates the relationship between entrepreneurial leadership and employee creativity.

Team creative efficacy relates to team creativity because it motivates team members and develops team creative processes. Members in a team with a high level of efficacy are more likely to be motivated and to gain confidence and, therefore, to generate creative ideas. A growing number of studies have found a significant positive relationship between team efficacy and team creativity. For example, empirical work by Shin and Eom  shows that teams with high creative efficacy are more likely to achieve higher levels of team creativity.

Given that we hypothesize that entrepreneurial leadership influences team creative efficacy (Hypothesis 5) and that there is an established positive association between team creative efficacy and team creativity, we expect that entrepreneurial leadership is positively related to team creative efficacy and thus increases team creativity. Therefore, we propose the following as our last hypothesis:

• Hypothesis 8. Team creative efficacy mediates the relationship between entrepreneurial leadership and team creativity.