Effect of Inspirational and Motivational Leadership on Creativity and Innovation in SMEs

The purpose of this study is to identify the effects of inspirational and motivational leadership on creativity and innovation in South African Small and Medium Enterprises (SMEs) within the manufacturing engineering sector. The leadership issues have been of major concern since the inception of democracy in 1994. Recent years, the spirit of creativity and innovation is suppressed and innovation culture is greatly affected among SMEs. It is critical for leaders to inspire and motivate employees to contribute new ideas and become more productive. A survey research was conducted from a group of employees (n(1)=366) and leaders (n(2)=57) within 50 SMEs in the Western Cape. A hypothetical model with the emphasis on inspirational and motivational leadership characteristics is developed. The findings indicated that the leaders did not fully show their inspirational and motivational capabilities and they disagreed with employees on empowerment, rewards for creativity, and support mechanism.