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Asian Journal of Technology Innovation

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Effects of transformational and

transactional leadership on employees'
creative behaviour: mediating effects
of work motivation and job satisfaction
a b
Joung-Gun Kim & Su-Yol Lee
a
Global Business Coaching Institute , #205 Poranze, Seongnae,
Gangdong, Seoul , South Korea
b
Chonnam National University , Yongbong 300, Buk, Gwangju ,
South Korea
Published online: 14 Feb 2012.

To cite this article: Joung-Gun Kim & Su-Yol Lee (2011) Effects of transformational and
transactional leadership on employees' creative behaviour: mediating effects of work
motivation and job satisfaction, Asian Journal of Technology Innovation, 19:2, 233-247, DOI:
10.1080/19761597.2011.632590

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 Asian Journal of Technology Innovation
Vol. 19, No. 2, December 2011, 233 –247

Effects of transformational and transactional leadership on employees’

creative behaviour: mediating effects of work motivation and job
satisfaction
Joung-Gun Kima and Su-Yol Leeb∗
Downloaded by [University of Wisconsin-Milwaukee] at 04:30 30 January 2015

a
Global Business Coaching Institute, #205 Poranze, Seongnae, Gangdong, Seoul, South Korea
b
Chonnam National University, Yongbong 300, Buk, Gwangju, South Korea

Innovation has emerged as an important business issue and facilitating employee creativity is
considered a necessity for any organization interested in achieving and maintaining a
competitive advantage in a world characterized by rapid technological change. This paper
examines the direct and indirect effects of transformational and transactional leadership on
employees’ creative behaviour in South Korea by considering work motivation and job
satisfaction as two mediating variables. The results of a cross-sectional survey and structural
equation modelling indicate that (a) transformational and transactional leadership had no
direct effects on employees’ creative behaviour (implying that the relationship between
leadership and employee creativity should not be seen as straightforwardly causal); (b)
transformational leadership worked through employees’ work motivation to ultimately
influence their creative behaviour; and (c) transformational and transactional leadership had
indirect positive effects on employees’ creative behaviour through job satisfaction. The
results have practical and meaningful implications for managers interested in fostering
employee creativity through leadership, work motivation, and job satisfaction.
Keywords: creative behaviour, leadership, mediating effects, structural equation modelling,
South Korea

1. Introduction
Given rapid technological advances, heightened competition, and turbulent operating environ-
ments, firms are increasingly recognizing that innovation and employee creativity are critical
factors in organizational performance and success (Amabile 1997; Bharadwaj and Menon
2000; Yang and Wang 2010). Managers increasingly realize the importance of fostering employee
creativity (Shalley and Gibson 2004) because creative employees facilitate and implement the
development of novel ideas, useful products, and effective procedures (Oldham and Cummings
1996). There is considerable evidence that employee creativity plays a critical role in organiz-
ational performance. For instance, firms belonging to Business Week’s ‘50 Most Innovative Com-
panies’ outperformed the S&P Global 1200 firms in terms of increased profitability from 1997 to
2006 (McGregor 2007).
Previous studies on creativity have examined creative behaviour by exploring what creativity
is, how creative potential can be enhanced, what conditions facilitate creativity, and how employ-
ees can be encouraged to suggest new ideas. Recent studies have suggested that the production of

∗
Corresponding author. Email: leesuyol@chonnam.ac.kr

ISSN 1976-1597 print/ISSN 2158-6721 online

# 2011 Korean Society for Innovation Management and Economics (KOSIME)
http://dx.doi.org/10.1080/19761597.2011.632590
http://www.tandfonline.com
 234 J.-G. Kim and S.-Y. Lee

creative ideas by employees depends on individual characteristics as well as on perceptions of

their work environment (Amabile, Conti, Coon, Lazenby and Herron 1996). One of the most
important factors that influences employees’ daily work experience is the leadership of supervi-
sors or managers. This is why recent studies on creativity have tended to focus on exploring the
relationship between leadership and the creative behaviour of followers (e.g. Shalley and Gibson
2004; Shin and Zhou 2007; Zhang and Bartol 2010; Yang and Wang 2010).
Researchers have started to investigate broader theories of leadership behaviour that includes
transformational, transactional, and empowering leadership. Theories of leadership suggest that
transformational leadership is particularly effective in enhancing creative behaviour, whereas
transactional leadership negatively influences the creative behaviour of employees. However, pre-
vious studies have provided mixed empirical evidence for this argument (Pieterse, Knippenberg,
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Schippers and Stam 2010; Zhang and Bartol 2010) to suggest that our understanding of the
relationships between transformational and transactional leadership and creative behaviour may
benefit from the identification of intervening variables that can provide a better understanding
of how these relationships can be positive or negative. In addition, few studies have examined
the effects of leadership on employees’ creative behaviour in the Asian context (e.g. Yang and
Wang 2010), that is previous studies of creativity have typically focused on Western countries.
This study builds and empirically tests a theory about the relationships between transforma-
tional and transactional leadership and employees’ creative behaviour in the Korean workplace
and considers the two important intervening variables of work motivation and job satisfaction.
We posited that these two mediating mechanisms would help explain the relationships between
transformational and transactional leadership and employees’ creative behaviour and explored
the indirect effects of transformational and transactional leadership on employees’ creative behav-
iour through work motivation and job satisfaction as well as their direct effects.
The rest of this paper is organized as follows: Section 2 provides a brief review of previous
research on creative behaviour and presents the research framework and hypotheses about the
relationships between leadership, work motivation, job satisfaction, and creative behaviour.
Section 3 describes the research method, and Section 4 presents the results of the empirical analy-
sis. Section 5 discusses this study’s implications and limitations and provides some interesting
avenues for future research.

2. Literature review and the research framework

2.1. Approaches to creative behaviour
Although creativity represents a highly complex and diffuse construct, such as intelligence (Stern-
berg 1985), it is generally understood as the product of creative efforts such as the generation of
novel and useful ideas (Mumford and Gustafson 1988; Woodman, Sawyer and Griffin 1993;
Amabile 1996). In line with the common definition of creativity, creative behaviour has recently
been defined as a ‘behaviour that results in identifying original and better ways to accomplish
some purpose’ (Shalley 1995, p. 483).
Previous studies have taken various approaches to identify the factors that foster creativity and
creative behaviour. These studies on creativity can be classified into at least three perspectives
(Woodman and Schoenfeldt 1990): individual attributes, social contexts, and interactive influ-
ence. First, the individual attribute perspective argues that creativity is determined by a fairly
stable set of personality traits that characterize creative individuals such as extraversion, broad
interests, autonomy, risk-taking attitudes, an achievement-oriented mindset, and an interest in
and openness to new experiences (e.g. Moukwa 1995; George and Zhou 2001). Second, the
social context perspective focuses on social or contextual factors that influence creative behaviour
 Asian Journal of Technology Innovation 235

(Shalley 1995). Contextual variables can influence creativity by structuring problem-solving

efforts as well as provide the support and resources necessary for the implementation of new
ideas (Mumford and Gustafson 1988; Zhou and George 2001). Finally, the interactive influence
perspective explains individuals’ creative behaviour by considering individual attributes and con-
textual factors simultaneously. Based on this perspective, several variables have been found to
have a considerable influence on creative behaviour, including leadership (e.g. Yang and Wang
2010; Zhang and Bartol 2010), job complexity (e.g. Shalley, Gilson and Blum 2009), and the
organizational climate (Wang and Rode 2010).
This study focuses on the interactive influence perspective but also considers individual attri-
butes and social contexts to explore the factors influencing employees’ creative behaviour. This
study examines transformational and transactional leadership as the main factors that influence
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employees’ creative behaviour based on the interactive influence perspective and considers
work motivation and job satisfaction as the mediating factors based on the individual attribute
and social context perspectives.

2.2. Direct effects of transformational and transactional leadership on creative behaviour

Recently, researchers have paid increased attention to leadership as one of the most critical factors
that influence employee creativity. A number of studies have stressed the increased importance of
the role of leaders in enhancing employees’ creative behaviour (e.g. Shin and Zhou 2007; Sung
and Choi 2009). However, such studies have typically focused on leader support (e.g. Amabile,
Schatzel, Moneta and Kramer 2004; Yang and Wang 2010) and leader – member exchange (e.g.
Tierney, Farmer and Green 1999). Researchers have started to investigate broader theories of lea-
dership styles, particularly theories of transformational and transactional leadership, but produced
mixed results (Tierney 2008; Zhang and Bartol 2010).
Transformational leadership has been defined as ‘the process of pursuing collective goals
through the mutual tapping of leaders’ and followers’ motive bases towards the achievement
of the intended change’ (Pawar and Eastman 1997, p. 83) and is composed of four attributes:
idealized influence, inspirational motivation, intellectual stimulation, and individual consider-
ation. According to this theory, transformational leadership may have a considerable influence
on creative behaviour. For example, intellectual stimulation can enhance subordinates’ creativity
by encouraging them to apply non-traditional thinking, individualized consideration can motivate
subordinates to suggest novel ideas by providing more psychological safety, and inspirational
motivation can be effective to enhance creativity by elevating individual inspiration and needs
(Shin and Zhou 2007; Wang and Rode 2010). A number of studies have provided evidence of
the positive effects of transformational leadership on employee creativity (e.g. Sosik, Kahai
and Avolio 1999; Jung, MacKenzie and Podsakoff 2003; Shin and Zhou 2003). In addition, pre-
vious studies have provided support for the positive effects of supportive and empowering leader-
ship on employee creativity (Amabile et al. 2004; Zhang and Bartol 2010). Strong
transformational leadership means that managers provide subordinates with the necessary
resources and information to facilitate task performance, help their subordinates to acquire
more ideas for innovation, consider their subordinates’ concerns, and show support and
concern for their subordinates’ feelings. Such behaviours of supervisors are expected to have
positive effects on subordinate creativity. In this regard, we propose the following hypothesis:

Hypothesis 1a: Transformational leadership encourages employees’ creative behaviour.

Transactional leadership is characterized as an exchange relationship in which expectations are

clarified and the immediate self-interests of leaders and followers are addressed (Bass 1999).
 236 J.-G. Kim and S.-Y. Lee

In addition, transactional leadership has the contingent reward and management-by-exception

(Avolio, Bass and Jung 1999; Pieterse et al. 2010) attributes. The contingent reward attribute is
based on active and positive transactions between leaders and followers (i.e. clarifying what
the follower should do to be rewarded). The management-by-exception attribute includes moni-
toring employee performance and taking corrective action when problems arise.
Limited studies have examined the effects of transactional leadership on creativity. Further,
previous studies have produced mixed results for the relationship between transactional leader-
ship and employees’ creative behaviour (e.g. Boerner, Eisenbeiss and Griesse 2007; Moss and
Ritossa 2007). However, transactional leadership may have negative effects on employees’ crea-
tive behaviour because it focuses more on facilitating employee performance and less on stimu-
lating innovation (Pieterse et al. 2010). Jung (2001) examined the effects of transformational and
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transactional leadership on brainstorming tasks and found that transformational leadership is more
likely to induce ideas than transactional leadership. Other studies have provided support for the
argument that transactional leaders are less likely to emphasize innovation than transformational
leaders (e.g. Church and Waclawski 1998). Because transactional leadership clarifies the leader’s
expectations, followers’ perceptions of their leaders’ preferences are likely to suppress the fol-
lowers’ motivation to engage in creative behaviour. In this regard, we propose the following
hypothesis:

Hypothesis 1b: Transactional leadership discourages employees’ creative behaviour.

2.3. Mediating effects of leadership on creative behaviour: work motivation and job
satisfaction
2.3.1. Leadership, work motivation, and creative behaviour
There is evidence that demonstrates a close relationship between leadership style and employee
motivation over the roles of transformational and transactional leadership that facilitate employ-
ees’ creative behaviour. Work motivation is defined as ‘a broad construct pertaining to the con-
ditions and processes that account for the arousal and direction, magnitude and maintenance of
effort in a person’s job’ (Katzel and Thompson 1990, p. 144); in addition, intrinsic motivation
refers to the extent to which an individual is interested in a task and engages in it for the sake
of the task itself (Utman 1997). Thomas and Velthouse (1990) argued that empowered employees
are more likely to be motivated. Others have addressed the positive relationship between trans-
formational leadership and work motivation, especially intrinsic motivation (e.g. Gagne,
Senecal and Koestner 1997).
By contrast, transactional leaders actively monitor employees’ deviance from standards, mis-
takes, and errors, and they sometimes wait passively for employees to make mistakes (Bass and
Avolio 1994). These leaders tend to influence subordinates through economic means, are unlikely
to individualize the needs of subordinates, and place no emphasis on employee development.
These attributes may reduce an employees’ work motivation, particularly for employees in
hi-tech industries. In this regard, we propose the following hypotheses:

Hypothesis 2a: Transformational leadership is positively related to (intrinsic) work motivation.

Hypothesis 2b: Transactional leadership is negatively related to (intrinsic) work motivation.

Numerous studies have indicated that creative behaviour requires a substantial amount of time
and effort on the part of the individual (Amabile 1983). For individuals to be creative, they
have to focus on pertinent issues and must be motivated to work hard to find novel and useful
 Asian Journal of Technology Innovation 237

solutions. Motivation is believed to play an important role in creativity in the context of emerging
problems through the emphasis of the identification of novel solutions. Thus, motivation has been
a topic of special interest in creativity research for explaining individual differences in creative
behaviour (Woodman and Schoenfeldt 1990; Shalley 1995; Amabile 1997). For instance, pre-
vious studies have found that R&D professionals emphasize work motivation for creativity
(Amabile and Gryskiewicz 1989). In this regard, we propose the following hypothesis:

Hypothesis 3: (Intrinsic) work motivation encourages creative behaviour.

2.3.2. Leadership, job satisfaction, and creative behaviour

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Numerous theoretical and empirical studies have demonstrated that the supervisor’s leadership
style has considerable influence on employees’ job satisfaction (e.g. Bass 1985; Nielsen, Yarker
and Randall 2009). Job satisfaction is defined as a pleasurable or positive emotional that results
from job appraisals and job experience (Locke 1976). Transformational leaders are likely to intrin-
sically foster job satisfaction because of the ability to motivate employees by instilling confidence
and elevating the value of work-related outcomes. In the process of motivating employees, a trans-
formational leader may help subordinates better understand their work and facilitate shared feelings
that may increase job satisfaction. Bass (2006) suggested that transformational leaders are inspira-
tional, committed to their organizations, challenge subordinates to think differently, show genuine
concern for their followers, and are likely to increase their followers’ job satisfaction; however,
taking the management-by-exception approach, transactional leaders are more likely to be per-
ceived as reactive than proactive (Bass 1985). Further, followers of these leaders, who typically
take a quid-pro-quo approach, are likely to be dissatisfied with reward system equity. These
leaders often consider one mistake to outweigh multiple contributions, thereby fostering dissatis-
faction among their followers. In this regard, we propose the following hypotheses:

Hypothesis 4a: Transformational leadership is positively related to employees’ job satisfaction.

Hypothesis 4b: Transactional leadership is negatively related to employees’ job satisfaction.

Few studies have examined the relationship between job satisfaction and employee creativity.
Kim, Hon and Crant (2009) examined the effects of employee creativity on career satisfaction
and found that employee creativity increases new employees’ career satisfaction. Although the
causal relationship between job satisfaction and creative behaviour in Kim et al. (2009) is
opposite to that in the present study, their study provided strong evidence of a positive
relationship between the two variables. Similarly, Seibert, Crant and Kraimer (1999)
showed that job satisfaction and career success are positively related to innovative behaviour.
When employees are satisfied with their job and work, they are more likely to have the motiv-
ation to generate new ideas, find new solutions, and work together to solve complex problems.
Thus, employees’ creative behaviour may be related to job satisfaction; therefore, we propose
the following hypothesis:

Hypothesis 5: Job satisfaction encourages employees’ creative behaviour.

Based on the literature review and the hypotheses, this study considers a research framework that
focuses on the relationships between transformational and transactional leadership and employ-
ees’ creative behaviour as well as on two important intervening variables: work motivation and
job satisfaction (Figure 1).
 238 J.-G. Kim and S.-Y. Lee
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Figure 1: Hypothesized model

3. Research design and methodology

3.1. Sample and data collection
An empirical survey was conducted at a major semiconductor company headquartered in South
Korea. This company was selected because the semiconductor industry is a turbulent and high-
tech industry and its employees are required to be creative in their innovation-oriented tasks.
The entire survey was translated from English into Korean and then back-translated into English
by two independent bilingual individuals to ensure correspondence in meaning (Brislin 1980).
The questionnaire and instructions were sent to the company’s human resources (HR)
manager, who distributed and collected the questionnaire. A total of 610 employees participating
in a company-wide training programme took part in this study. A total of 51 questionnaires were
excluded because of a large number of missing items, and there were 559 usable questionnaires
for the data analysis. In terms of these 559 participants, 88.9% (497) were male, and 58.7% were
26 to 35 years of age. In addition, 0.5% (3) had a doctoral degree, 5.4% (30) had a master’s
degree, 39.7% (221) had a bachelor’s degree, 46.5% (260) had a high school diploma, and
7.9% (44) did not indicate their education level.

3.2. Survey instruments and validation

All the variables were measured by the participants’ responses to items on a five-point Likert-type
scale from 1 (‘strongly disagree’) to 5 (‘strongly agree’). The specific measures are discussed
below.
Leadership. For transformational and transactional leadership, we used the Multifactor Lea-
dership Questionnaire (Bass and Avolio 1995). This 20-item measure has multi-item subscales
corresponding to the following four dimensions: idealized influence, inspirational motivation,
intellectual stimulation, and individual consideration (Cronbach’s a ¼ .73, .71, .74, and .72,
respectively). Transactional leadership was measured with eight-item scales for the following
two dimensions (four items each): management by exception and contingent rewards (Cronbach’s
a ¼ .86 and .65, respectively). A total of two items were excluded through the validation of their
reliability.
Work motivation. Employee (intrinsic) work motivation in the workplace was measured with
five items (Cronbach’s a ¼ .74) adapted from Amabile, Hill, Hennessey and Tighe (1994) and
Thierney et al. (1999).
Job satisfaction. For the level of job satisfaction, a six-item Likert-type scale (Cronbach’s a ¼
.75) was adapted from Mueller and McClosky (1990) and Warr, Cook and Toby (1979). These
items referred to various aspects of work or the work environment.
 Asian Journal of Technology Innovation 239

Creative behaviour. Creative behaviour, the dependent variable, was measured by using a
modified scale of creative performance. A four-item Likert-type scale (Cronbach’s a ¼ .82)
was adapted from Oldham and Cumming’s (1996) and Scott and Bruce’s (1994) measures of crea-
tive performance.
The measurement instruments of this study were tested for their reliability, validity, and uni-
dimensionality. In terms of their reliability, Cronbach’s a for all the constructs (except for the con-
tingent reward construct) exceeded the recommended value of .70 (Nunnally 1978). Cronbach’s a
for the contingent reward construct was .65; however, all of the indicators were retained because
previous studies have found this measurement to be reliable. A confirmatory factor analysis
(CFA) was conducted to evaluate the construct validity and unidimensionality. Table 1 presents
the standardized factor loading, Cronbach’s a, averaged variance extracted (AVE), and composite
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reliability for the measures. In general, the loading of each indicator should exceed .50 with a sig-
nificant t-value (t . 2.0) (Li, Humphreys, Yeung and Cheng 2007). In this study, all of the load-
ings exceeded .50 except for three items (.49, .45, and .43); however, all the indicators were
retained because they were reasonably close to .50.

3.3. Analysis
Structural equation modelling (SEM) with LISREL 8.30 (Joreskog and Sorborn 1996) was used
to simultaneously estimate the relationships between latent constructs. The SEM results indicate
that the hypothesized model provided a good fit to the data (Hu and Bentler 1999). Table 1 pro-
vides the descriptive statistics and correlations and Table 2 summarizes all the fit indices.

4. Results and discussion

4.1. Direct effects of leadership on creative behaviour
The results do not provide support for H1a, which predicted that transformational leadership would
have direct positive effects on employees’ creative behaviour. As shown from Figures 2 – 5, the path
coefficients for idealized influence, inspirational motivation, intellectual stimulation, and individ-
ual consideration were .04, .09, 2.01, and .08, respectively, which were not significantly different
from 0 (p . .10). This implies that although supervisors focused on idealized influence, inspira-
tional motivation, intellectual stimulation, and individual consideration, their subordinates did
not perceive that these transformational leadership attributes would directly induce creative
behaviour.
The results for the transactional leadership model in Figure 6 and Figure 7 do not provide
support for H1b, which predicted that transactional leadership would have negative effects on
employees’ creative behaviour. First, the path coefficient for management by exception was
2.02 (Figure 6), which was not significantly different from 0 and indicated that management
by exception had no influence on employees’ work motivation. Second, in contrast to the expec-
tation, the other attribute of transactional leadership (contingent rewards) was positively related to
employees’ creative behaviour. Its coefficient was .15 (Figure 7), which was significantly differ-
ent from 0 (p , .05). This indicates that employees’ creative behaviour was enhanced when
supervisors clarified performance targets and rewards and expressed satisfaction with the achieve-
ments of subordinates.
Most of the attributes of transformational and transactional leadership (except for contingent
rewards) did not have direct effects on employees’ creative behaviour. These findings suggest that
the identification of mediating variables that can help predict and explain these relationships can
 240 J.-G. Kim and S.-Y. Lee

Table 1: Constructs’ reliabilities and validity

Construct Code Loadings Cronbach’s a AVE Composite reliability
Transformational leadership
Idealized influence (IN) IN1 .66 .73 .50 .82
IN2 .49
IN3 .61
IN4 .78
Inspirational motivation (IM) IM1 .55 .61 .50 .74
IM2 .53
IM3 .67
Intellectual stimulation (IS) IS1 .63 .74 .59 .85
IS2 .65
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IS3 .67
IS4 .63
Individual consideration (IC) IC1 .76 .72 .52 .81
IC2 .65
IC3 .45
IC4 .61
Transactional leadership
Management-by-exception (MBEP) MBEP1 .67 .86 .68 .89
MBEP2 .78
MBEP3 .86
MBEP4 .75
Contingent reward (CRW) CRW1 .62 .65 .53 .77
CRW2 .54
CRW3 .70
Work motivation MOT1 .62 .74 .48 .82
MOT2 .61
MOT3 .71
MOT4 .43
MOT5 .66
Job satisfaction JSAT1 .65 .75 .51 .84
JSAT2 .57
JSAT3 .56
JSAT4 .68
JSAT5 .59
Creative behaviour (Self-reported) CB1 .78 .81 .67 .89
CB2 .82
CB3 .76
CB4 .55

provide a better understanding of the relationship between transformational leadership and

employees’ creative behaviour.

4.2. Indirect effects of leadership on creative behaviour through work motivation

H2a predicted that transformational leadership would operate through work motivation to ulti-
mately influence employees’ creative behaviour. As shown in Figures 2– 5, all the attributes of
transformational leadership except for idealized influence (inspirational motivation, intellectual
stimulation, and individual consideration) had significant effects on employees’ work motivation
(the path coefficients were .19, .14, and .13, respectively). These results are consistent with the
findings of previous studies that report that transformational leaders are likely to foster subordi-
nates’ intrinsic work motivation through the use of various strategies such as inspirational
 Asian Journal of Technology Innovation 241

Table 2: Correlation matrix

Mean SD 1 2 3 4 5 6 7 8 9
1. Idealized influence (IN) 3.14 .75 -
2. Inspirational motivation 3.13 .70 .73∗∗ -
(IM)
3. Intellectual stimulation 3.02 .75 .67∗∗ .62∗∗ -
(IS)
4. Individual consideration 2.81 .81 .65∗∗ .59∗∗ .73∗∗ -
(IC)
5. Management-by- 2.52 1.02 .01 .00 .12∗∗ .16∗∗ -
exception (MBEP)
6. Contingent reward (CRW) 3.05 .79 .65∗∗ .58∗∗ .67∗∗ .69∗∗ .27∗∗ -
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7. Work motivation 3.13 .64 .02 .13∗∗ .08+ .08+ -.02 -.01 -
8. Job satisfaction 3.30 .71 .33∗∗ .29∗∗ .31∗∗ .36∗∗ .08+ .32∗∗ .15∗∗ -
9. Creative behaviour 3.07 .71 .18∗∗ .21∗∗ .15∗∗ .22∗∗ .02 .20∗∗ .24∗∗ .32∗∗ -
Notes: +p-value , .10, ∗ p-value ,.05, ∗∗ p-value , .01.

motivation, intellectual stimulation, and individual consideration (e.g. Gange et al. 1997; Utman
1997). By contrast, the results for the transactional model in Figure 6 and Figure 7 do not provide
support for H2b, that is, management-by-exception and contingent reward (attributes of transfor-
mational leadership) had no influence on employees’ work motivation.
The results provide support for H3 that predicted that employees’ work motivation would be
positively related to creative behaviour. As shown from Figures 2 – 8, the path coefficients for the
relationship between work motivation and creative behaviour for all leadership attributes were
significantly different from 0 (p , .01). That is, employees were likely to be creative when
they were intrinsically motivated.
These results are consistent with the findings of previous studies that reported that the relation-
ship between transformational leadership and employee creativity is mediated by several impor-
tant intervening variables such as intrinsic motivation (e.g. Zhang and Bartol 2010). In addition,
transactional leadership had no relationship with employees’ innovative behaviour, as indicated in
some studies (e.g. Boerner et al. 2007; Moss and Ritossa 2007).

Figure 2: Idealized influence (transformational leadership) structural equation model

Note: Solid paths indicate significant results, where: (∗ ) indicates significance at p , .05, (∗∗ ) indicates sig-
nificance at p , .01; dashed paths indicate non-significant results
 242 J.-G. Kim and S.-Y. Lee
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Figure 3: Inspirational motivation (transformational leadership) structural equation model

Note: Solid paths indicate significant results, where: (∗ ) indicates significance at p , .05, (∗∗ ) indicates sig-
nificance at p , .01; dashed paths indicate non-significant results.

4.3. Indirect effects of leadership on creative behaviour through job satisfaction

The results from Figures 2 – 5 provide support for H4a, which predicted that transformational
leadership would influence employees’ creative behaviour in an indirect manner through job sat-
isfaction. All the attributes of transformational leadership (idealized influence, inspirational
motivation, intellectual stimulation, and individual consideration) had significant effects on
job satisfaction, as indicated by the coefficients (.44, .42, .43, and .50, respectively). This
result is consistent with the findings of previous studies that report that subordinates are
likely to be satisfied with work and job when supervisors are transformational leaders (e.g.
Bass 1985).
H4b predicted that transactional leadership, unlike transformational leadership, would have
negative effects on employee creativity because it would reduce employees’ job satisfaction;
however, the results in Figure 6 and Figure 7 illustrate that even transactional leadership had posi-
tive effects on employee satisfaction. The attributes of transactional leadership (management by
exception and contingent rewards) had significant positive effects on job satisfaction, as indicated
by the coefficients .12 (p , .5) and .48 (p , .01), respectively.
H5 predicted a positive relationship between job satisfaction and creative behaviour. The sig-
nificant path coefficients (p , .01) in Figures 2 – 7 provide strong support for H5: .35, .33, .36,

Figure 4: Intellectual stimulation (transformational leadership) structural equation model

Note: Solid paths indicate significant results, where: (∗ ) indicates significance at p , .05, (∗∗ ) indicates
significance at p , .01; dashed path indicates a non-significant result.
 Asian Journal of Technology Innovation 243
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Figure 5: Individual consideration (transformational leadership) structural equation model

Note: Solid paths indicate significant results, where: (∗ ) indicates significance at p , .05, (∗∗ ) indicates sig-
nificance at p , .01; dashed path indicates a non-significant result.

and .32 for idealized influence, inspirational motivation, intellectual stimulation, and individual
consideration (transformational leadership attributes), respectively, and .37 and .29 for manage-
ment by exception and contingent rewards (transactional leadership attributes), respectively.
The results for H4 and H5 indicate that both transformational leadership and transactional
leadership worked through job satisfaction to influence creative behaviour. Transformational
leadership has traditionally been considered to foster job satisfaction and creativity because
of its ability to provide a sense of purpose and intellectual stimulation and to encourage fol-
lowers to be more responsible and autonomous. However, previous studies have suggested that
transactional leadership can reduce job satisfaction by excessively emphasizing a quid-pro-quo
approach that in turn can limit the production of new ideas and products (Emery and Barker
2007). The results of the present study suggest that even transactional leadership may play an
important role in fostering job satisfaction and creative behaviour. Strong transactional leader-
ship in the form of contingent rewards may lead to situations in which deeper levels of trust
are formed, thereby facilitating job satisfaction and performance (Podsakoff, Todor, Grover
and Huber 1984).

Figure 6: Management-by-exception (transactional leadership) structural equation model

Note: Solid paths indicate significant results, where: (∗ ) indicates significance at p , .05, (∗∗ ) indicates sig-
nificance at p , .01; dashed paths indicate non-significant results.
 244 J.-G. Kim and S.-Y. Lee
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Figure 7: Contingent reward (transactional leadership) structural equation model

Note: Solid paths indicate significant results, where: (∗ ) indicates significance at p , .05, (∗∗ ) indicates sig-
nificance at p , .01; dashed paths indicate non-significant results.

5. Conclusion
5.1. Summary and implications
Understanding the direct and indirect effects of different leadership styles such as transforma-
tional and transactional leadership on employees’ creative behaviour is crucial for fostering the
potential for innovation and creativity. In this study, we developed and empirically examined a
theory on how leadership works through two important intervening variables (work motivation
and job satisfaction) that influence employees’ creative behaviour in the Korean workplace.
The results have important theoretical and managerial implications.
First, the results verify the mediated effects of transformational and transactional leadership
on employees’ creative behaviour, to demonstrate that the relationship between transformational
and transactional leadership and employees’ creative behaviour should not be seen as straightfor-
wardly causal. Leadership is believed to indirectly influence employees’ creative behaviour
through individual- and work-related mediating variables such as work motivation and job satis-
faction instead of influencing it directly. This explains why previous studies of the direct relation-
ship between leadership and employee creativity have produced mixed results.
Second, the results demonstrate the important mediating roles of work motivation and job sat-
isfaction on employee creativity. These provide strong support for the positive relationship
between them and suggests that work motivation and job satisfaction play crucial roles to encou-
rage employees’ creative behaviour. Work motivation and job satisfaction are influenced by leader-
ship as well as by diverse factors such as personality traits, team climate, and organizational
systems; therefore, managers should take a more comprehensive approach in consideration of
employees’ work motivation and job satisfaction when influencing their creative behaviour.
Third, the results suggest that transactional leadership plays an important role in employees’
creative behaviour. Previous studies have typically taken a negative view of transactional leader-
ship (e.g. Bass 1985); however, the results of this study illustrate that certain forms of transactions
(e.g. contingent rewards) between leaders and followers may have positive effects on job satisfac-
tion and performance. For example, employees whose leaders set clearly defined expectations and
agreed-upon levels of performance are more likely to achieve their goals; therefore, managers
should consider the positive side of transactional leadership that includes contingent rewards to
foster their followers’ job satisfaction and creativity.
The results provide support for the argument that a ‘one-size-fits-all approach’ should be
avoided when encouraging employees’ creative behaviour. For instance, the positive form of
 Asian Journal of Technology Innovation 245

autonomy to enhance employee creativity is evident in behaviour patterns of leaders whose sub-
ordinates perceive a high level of leader support and perform effectively, whereas the negative
form is evident in those of leaders whose subordinates perceive a low level of leader support
and perform ineffectively (Amabile et al. 2004). Transformational and transactional leadership
can have positive as well as negative attributes depending on employees’ capabilities, awareness,
and desires. Therefore, leaders wishing to foster employee creativity should consider diverse
aspects of the work atmosphere as well as the individual characteristics of subordinates.

5.2. Limitations and future research

This study has two limitations. First, we collected all the data from self-reports that may result in
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common method variance. Previous studies suggested that self-report bias cannot be avoided
because of social desirability and the respondent’s consistency motif (Podsakoff and Organ
1986). In this study, we verified that common method variance did not influence the data and
the data were reasonable. However, future research should enhance the generalizability of this
study’s findings by using more bias-free data (e.g. leader – member exchange data), employing
ratings by others, and observing employees in real work settings, among others.
Second, all the participants were employees at the same company in South Korea. We selected
these participants to control for confounding variables at the organizational level (e.g. Yang and
Wang 2010); however, this may have reduced external validity. In this regard, future research
should consider diverse organizational settings in various Asian countries to enhance the general-
izability of the findings to other types of employees, organizations, and industries.

Acknowledgement
The second author is grateful for the financial support provided by the Research Foundation of the College of
Business Administration, Chonnam National University, Republic of Korea, 2011.

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