Leadership styles and organisational innovation in Vietnam: does employee creativity matter?

Purpose This paper aims to look into the role of transformational leadership and transactional leadership as predictors of employee creativity and organisational innovation. Employee creativity is examined as a potential mediator in the leadership styles-organisational innovation relationships. Design/methodology/approach A cross-sectional, quantitative design was adopted and structural equation modelling (SEM) techniques were used to analyse data collected from 369 employees working in 39 public coffee enterprises in Vietnam. Findings Transformational leadership and transactional leadership were significant predictors of employee creativity and organisational innovation. Specifically, transformational leadership was instrumental to employee creativity and organisational innovation while transactional leadership was detrimental to these two variables. Additionally, employee creativity partially mediated the relationships between the two leadership styles and organisational innovation. Practical implications Results of this study benefit the management of organisations and policy makers by providing an insight of which leadership style will effectively suit public enterprises to promote employee creativity and foster organisational innovation. Originality/value While there is a lack of studies investigating organisational innovation in organisational methods and that the interrelationships between leadership styles, employee creativity and organisational innovation are not fully understood, this study pioneers in examining relationships between leadership styles and organisational innovation that is being mediated by employee creativity. Figuring out that organisational innovation is more likely to be fostered by the positive influence of leadership behaviours and the improvement of employee creativity, in particular, the significant role of employee creativity represents important contributions of the current study.