Entrepreneurial leadership: the key to develop creativity in organizations

Purpose Entrepreneurial leadership has been developed from the existing leadership and entrepreneurship literature as a new leadership theory to meet the dynamic changes in the 21st century. Accordingly, the main purpose of this study is to investigate the effect of entrepreneurial leadership on employee creativity and the mediating influence of psychological empowerment and psychological safety, with the lens of social learning theory. Design/methodology/approach Data were collected from the manufacturing sector of Pakistan with a sample size of 280 dyads of managers and employees. A two-step analytical strategy was adopted through which the measurement model was validated by using confirmatory factor analysis and structural equation modeling to estimate the structural model to fit the data. The bootstrapping method was applied for testing the mediation analysis. Findings The current study found that entrepreneurial leadership positively related to employee creativity. Moreover, it was found that psychological empowerment and psychological safety mediated the relationships between entrepreneurial leadership and employee creativity. Research limitations/implications The findings of the current study provide guidance to managers and businessmen on how to develop the creative skills of employees by adopting entrepreneurial leadership behaviors. Besides, this study enriches the literature by exploring the performance mechanism of entrepreneurial leadership to develop employee creativity. Originality/value The current study is considered the first to examine the role of entrepreneurial leaders in stimulating employee creativity through psychological safety and psychological empowerment. As such, it enriches the creativity literature by exploring the employee creativity mechanism through entrepreneurial leadership and validating the importance of psychological factors in the development of creativity compared to previous studies, which have focused primarily on the concept or scale development of entrepreneurial leadership. Furthermore, it provides several theoretical and managerial implications along with future opportunities.