How transformational leadership promotes employee creativity within the context of environmental dynamism: a multilevel perspective

Purpose This study aims to explore how transformational leadership influences employees' creativity by considering the role of the environment and psychology. The study aims to provide insights into the impact of transformational leadership on team innovation climate, team reflexivity, psychological capital and employee creativity while also examining the moderating effect of environmental dynamism on these relationships. Design/methodology/approach This study employed a multi-source, multi-wave approach, utilizing data from 618 participants in 118 teams. It constructed a multilevel structural equation model and estimated the confidence intervals of the mediated and moderated effects using the Markov chain Monte Carlo method. Findings The results of the multilevel analyses indicated that transformational leadership positively influenced the team innovation climate, team reflexivity, psychological capital and employee creativity. Moreover, the study found that environmental dynamism positively moderates the relationships among transformational leadership, team reflexivity, psychological capital and employee creativity. Originality/value Drawing on social cognitive theory and the motivated information processing in groups model, this study offers new insights into the interplay between transformational leadership and creativity. It examines the moderating role of cross-level process linkages and environmental dynamism, thereby validating and extending relevant theories.