Abstract
Orientation: Creativity and innovation are essential in coping with a complex business environment that becomes more complex and rapidly changing.
Research purpose: To investigate the impact of an authentic leadership style on employee creativity and innovation behaviour in the workplace, using motivating language as a moderator.
Motivation for the study: The study is carried out to fill the existing gaps on creativity and innovation by distinguishing both constructs, within the context of micro, small and medium enterprises (MSMEs) in Indonesia.
Research approach/design and method: This study employed a quantitative approach, surveying 350 employees from creative MSMEs in West Java and Central Java, Indonesia. Smart partial least squares (PLS) software analysis was used to analyse the data using a structural equation model for validating the proposed model.
Main findings: Authentic leadership positively influences employee creativity and innovative work behaviour in the workplace. In addition, innovative work behaviour is also positively influenced by employee creativity. These positive influences can be strengthened by motivating language from the leader.
Practical/managerial implications: Organisations wanting to increase the innovative work behaviour of their employees should select leaders with authentic traits and put them into practice. Interventions to develop leaders’ use of motivating language are required to enable them to encourage the use of their creative ideas.
Contribution/value-add: The present study considers how motivating language, which has rarely been examined within the field, can play a significant moderating role in innovative work behaviours.
Keywords: leadership styles; employee behaviour; organisational development; quantitative study; innovative work behaviour; creative MSMEs.
Introduction
Today’s business environment is becoming more complex and rapidly changing, creating significant challenges for organisations (Grošelj et al., 2020). Creativity is an invaluable resource for gaining a competitive advantage (Jaiswal & Dhar, 2017). With technological advances, organisations must find creative approaches to meet their goals (Mubarak & Noor, 2018). Leaders play a crucial role in encouraging employees to be creative and innovative in their work (Mubarak & Noor, 2018). Although a leader’s role may not be the core requirement in shaping employees’ innovative behaviour, it makes an important contribution to improving organisational performance (Černe et al., 2013; Grošelj et al., 2020; Oke et al., 2009). Research has explored various leadership styles, including authentic leadership, in relation to employee resistance to change (Zhu et al., 2023), work engagement (Başaran & Kiral, 2022; Maximo et al., 2019) and job satisfaction (Adil et al., 2023; Jang et al., 2023; Penger & Èerne, 2014). In addition, the importance of leadership style in fostering employee creativity has attracted much academic attention, especially in relation to increasing innovative behaviour (Gelaidan et al., 2022).
A systematic review by Hughes et al. (2018) highlighted the importance of examining the influence of leadership style on employee creativity and innovative work behaviour. To answer this call, this study examines the relationship between authentic leadership style and employee creativity and innovation, with motivating language as a moderating factor. In line with Amabile’s componential theory of creativity (1983), leadership in the current study represents the environmental component that can either facilitate or hinder creative performance in the workplace. This theory suggests that creativity results from a combination of environment, task motivation, creativity-relevant skills and domain-relevant expertise. In this regard, authentic leadership, which acts as the environmental factor, can thus play a crucial role in nurturing an environment that supports creativity.
Indonesian micro, small and medium enterprises (MSMEs) often operate in traditional and resource-constrained environments, limiting their ability to foster creativity and innovative behaviour of their employees (Fizzanty, 2024). Individuals in these enterprises tend to rely on established routines and may face a lack of access to training, technology and support for new ideas. Additionally, many MSMEs’ hierarchical and risk-averse nature can discourage employees from experimenting with novel approaches (Kilay et al., 2022). Given Indonesia’s diverse cultural landscape and the presence of numerous MSMEs (Fizzanty, 2024; Kilay et al., 2022), this study provides a unique context for examining how leadership can enhance creativity and innovation. According to Gelaidan et al. (2022), the role of leadership in motivating creativity and innovation becomes increasingly important.
This study responds to calls in the literature to distinguish creativity and innovation as separate constructs. In fact, creativity and innovation differ in their nature and scope (Amabile, 1983; Kessler, 2013). Hughes et al. (2018) stated that creativity is more associated with the generation or the process of developing ideas, while innovation results from the creativity process. This study makes a clear distinction between the two concepts by examining both employee creativity and employee innovative work behaviour. In addition to that, this study also introduces motivating language as a moderating variable within the context of MSMEs. Motivating language theory suggests that leaders’ use of encouraging and empathetic communication can enhance employees’ motivation and performance, and it potentially amplifies the effects of leadership on creativity and innovative work behaviour. By exploring these variables, the study aims to understand the mechanisms that drive creativity and innovative work behaviour in the workplace.
This study has made several contributions. Firstly, it distinguishes creativity and innovation as separate constructs. Secondly, it introduces motivating language as a moderating variable to explore how communication influences the development of creativity and innovation. Thirdly, it addresses the need for more empirical research on authentic leadership’s impact on individuals and organisations, as suggested by Gardner et al. (2021) and Uluturk et al. (2024). Fourthly, while most research on leadership style and innovation has been conducted in developed countries, the study focusses on Indonesia, a developing country which has a diverse culture and workforce landscape. Fifthly, it provides practical insights for leaders and policymakers on how leadership can help encourage creativity and innovative work behaviour in the work environment and emphasises the importance of motivating language. Finally, it contributes to understanding authentic leadership in a predominantly non-Western country.
Literature review and hypothesis development
In this study, we use the componential theory of creativity pioneered by Amabile (1983), which states that creativity is a solution that can address workplace problems and changes in the dynamic business environment. This theory identifies four key components for creativity: task motivation, domain-relevant skills, creativity-relevant processes and the social environment. These components interact to foster or hinder creative performance in the workplace. When faced with various challenges at work, an employee’s creativity becomes crucial as a solution, enhancing the organisation’s competitiveness (Bollinger, 2020; Grošelj et al., 2020). Mubarak and Noor (2018) stated that creativity is a unique way of doing work and generates new work-related ideas in response to opportunities. In the workplace, creativity refers to the process of generating new ideas for a specific problem (Amabile, 1983). In almost all occupations at various stages, creativity is valued in many professions and industries. By definition, creativity has two bases: novelty and the creation of original and constructive ideas about goods, services, processes, management practices, business models and competitive strategies (Zhou & Ren, 2012). In addition to the componential theory of creativity (Amabile, 1983; Kessler, 2013), this study also uses authentic leadership theory (Černe et al., 2013; May et al., 2003; Oke et al., 2009), which states that authentic leadership is the root concept and foundation for every form of positive leadership. According to Walumbwa et al. (2011), authentic leadership is embodied in four dimensions: self-awareness, transparency, balance and internalised morals.
Creativity and innovation: Conceptual distinctions
While creativity and innovation are often used interchangeably, they refer to distinct but related processes in the workplace. Creativity is generally understood as the generation of novel and useful ideas (Amabile, 1983). It represents the cognitive process by which employees produce original and valuable solutions in response to problems or opportunities. In this sense, creativity focusses on ideation and concept development. On the other hand, innovation, or innovative work behaviour, refers to the implementation of those creative ideas (Janssen, 2000). Innovation involves the execution of novel ideas into practical, usable outcomes that benefit the organisation. This could be in the form of new products, services, processes or even business strategies (Usmanova et al., 2020). These two concepts are interdependent, as creativity serves as the foundation for innovation, but without the successful implementation of ideas, creativity alone cannot drive change within an organisation (Zhou & Ren, 2012). Therefore, understanding the relationship between creativity and innovative work behaviour is essential for fostering an environment where both can thrive.
Authentic leadership and employee creativity
As alluded to above and supported by Gelaidan et al. (2023) and Shang et al. (2019), authentic leadership has gained attention in recent years. This leadership style is indispensable in organisations to help employees work well and enhance their creativity (Mubarak & Noor, 2018). For employees, authentic leadership can help them deal with new work environments, problems in the work environment and differences that cause conflict in the workplace. As stated by Peyton et al. (2023), authentic leadership refers to actions that are morally aligned, transparent, honest and impartial in decision-making. These components become very important when applied in the workplace. For example, when leaders are transparent in their relationships, it will help employees work well and enhance their creativity through the freedom of sharing information (Gelaidan et al., 2023). Černe et al. (2013) and Phuong and Takahashi (2021) argued that authentic leadership can build employees’ confidence and encourage them to experiment with new methods of doing work. The research results from Shang et al. (2019) emphasised the importance of authentic leadership among employees. According to the findings, authentic leadership positively influences team creativity and innovation. Thus, a positive relationship can be postulated between authentic leadership and employee creativity:
H1: Authentic leadership has a positive influence on employee creativity.
Authentic leadership and innovative work behaviour
As has been understood, innovative work behaviour refers to the intentional behaviour of employees to introduce and apply new ideas related to products, processes and procedures to improve organisational effectiveness (Amabile & Pratt, 2016). In addition, Grošelj et al. (2020) and Yang et al. (2017) argued that leadership is one of the most critical factors in fostering innovative work behaviour. The lack of effective leadership is often seen as a primary barrier to enhancing creativity and innovation. Among the leadership styles, authentic leadership stands out as a potential solution to promote employees’ positive achievements and confidence to improve their ideas in the workplace (Avolio & Gardner, 2005; Černe et al., 2013).
Although scholars such as Cooper et al. (2005) and Harvey et al. (2006) have questioned whether authentic leaders genuinely exhibit authenticity or are merely perceived as authentic by others, Černe et al. (2013) asserted that authenticity cannot be self-assessed. Instead, it must be recognised by those interacting with the leader, as it is demonstrated through consistent actions and transparent behaviours. Based on its inherent characteristics, such as self-awareness, relational transparency and balanced processing, authentic leadership is particularly suited for stimulating both creativity and innovation in the workplace (Walumbwa et al., 2011). Innovation, whether viewed as a process or the result of team efforts, often thrives under leadership that encourages open communication and the exchange of ideas (Agars et al., 2007; Černe et al., 2013; Grošelj et al., 2020). Therefore, it is expected that there is a positive relationship between authentic leadership and innovative work behaviour:
H2: Authentic leadership has a positive influence on innovative work behaviour.
Employee creativity and innovative work behaviour
According to Gelaidan et al. (2023), most employee innovative behaviours can be influenced by various factors, either directly or indirectly. Runco (2007) asserted that creativity research can provide insights into innovation while creativity and innovation are distinct. Thus, creativity can be the most important determinant of innovative behaviour (Kessler, 2013; Mubarak & Noor, 2018; Siswanti & Muafi, 2020). According to its definition, innovation involves creating and applying new ideas to provide commercial benefits to a group or organisation (Crossan & Apaydin, 2010; Mumford et al., 2008). In addition, innovation is critical for business survival, as it helps companies adapt by developing ideas, products, services, technology and even changing the nature or type of the business itself (Arifin & Narmaditya, 2024).
According to Amabile (1983), employee creativity is the process of generating ideas to address specific problems. The creative process is essential as it directly leads to innovative work behaviour. To drive innovation in the organisation, employees’ roles and behaviours are very important. Prior research has demonstrated that innovative work behaviour is one of the main drivers of organisational success, performance and sustainability (Ahmad et al., 2023; Johan et al., 2024; Sheehan et al., 2020). In addition, scholars have proven that employee creativity is a significant individual factor that stimulates innovative work behaviour in the workplace (Gelaidan et al., 2023; Volery & Tarabashkina, 2021). Likewise, El-Kassar et al. (2022) emphasised a strong link between employee creativity and innovative work behaviour. Thus, employee creativity is expected to positively influence innovative work behaviour:
H3: Employee creativity has a positive effect on innovative work behaviour.
Mediating role of employee creativity
Employee creativity plays a critical role in the relationship between leadership and innovation. Authentic leadership, which fosters trust, openness and confidence in employees, enhances employee creativity by encouraging an environment where new ideas can flourish (Walumbwa et al., 2011). In this study, employee creativity is viewed as the mechanism that connects authentic leadership to innovative work behaviour. Leaders who exhibit authenticity inspire employees to express themselves freely, take risks and engage in creative processes (Avolio & Gardner, 2005; Černe et al., 2013). This creative process is crucial because it often serves as the foundation for innovative work behaviour within organisations (El-Kassar et al., 2022; Volery & Tarabashkina, 2021).
Creativity acts as a mediator by enhancing the relationship between authentic leadership and innovative work behaviour. Employees who feel supported by their leaders are more likely to engage in creative thinking, which then leads to the development of innovative solutions and practices in the workplace (Gelaidan et al., 2023). By stimulating creativity, authentic leadership indirectly influences innovation, as the creative ideas generated by employees ultimately translate into innovative work behaviour (Kessler, 2013; Runco, 2007). This mediating role underscores the importance of fostering creativity to fully realise the potential of leadership in driving organisational innovation. Thus, employee creativity is expected to mediate the relationship between authentic leadership and innovative work behaviour:
H4: Employee creativity mediates the relationship between authentic leadership and innovative work behaviour.
Motivating language and employee creativity
Motivating language, which is characterised by supportive and encouraging communication from leaders, plays a pivotal role in enhancing employee positive outcomes, including creativity (Mayfield & Mayfield, 2017; Men et al., 2022). This type of language promotes psychological safety as it allows individuals to feel valued and respected, both of which are essential for taking risks and sharing new ideas openly (Usmanova et al., 2020). Motivating language can contribute to establishing a secure environment where employees are more inclined to engage in creative thinking. Leaders who use motivating language encourage their employees to express ideas freely and empower them to confidently explore ideas without hesitation.
Existing research also indicates that motivating language helps employees recognise the importance of creativity within their roles, as well as encouraging them to engage in creative problem-solving more readily (Mayfield & Mayfield, 2017; Mayfield et al., 2021). When leaders communicate their expectations clearly and encourage creative contributions, employees are more likely to view creativity as a natural and immediate part of their tasks. This consistent encouragement from leaders has been found to directly influence employees’ willingness to participate in creative activities (Men et al., 2022; Usmanova et al., 2020). The communicative approach of motivating language promotes an atmosphere of openness where employees feel supported in their creative efforts, making motivating language a key factor in fostering creativity at work:
H5: Motivating language has a significant positive effect on employee creativity.
Combined influence of authentic leadership, employee creativity and motivating language on innovative work behaviour
Innovative work behaviour thrives when multiple factors come together to foster an environment that promotes creativity and innovation. Authentic leadership emphasises transparency, moral values and balanced processing, creating a work culture where employees feel empowered to express creative ideas and experiment with new solutions (Walumbwa et al., 2011). When authentic leaders actively use motivating language, it strengthens communication by fostering clarity, encouragement and emotional support. Motivating language helps leaders effectively inspire employees to engage more fully in creative processes (Sullivan, 1988).
In parallel, employee creativity, which is essential for generating novel ideas (Amabile, 1983), complements the support provided by authentic leadership. Together, motivating language and creativity create a feedback loop where employees are encouraged to think creatively and feel motivated to transform their creative ideas into innovative behaviours (Gelaidan et al., 2023). By combining the support of authentic leadership, the creativity of employees and the motivating language leaders use to nurture and guide their teams, these factors collectively influence innovative work behaviour in the workplace. This synergy makes it more likely that employees will translate creative ideas into tangible innovations, ultimately benefiting the organisation (Uluturk et al., 2024):
H6: The combined effects of authentic leadership, employee creativity and motivating language have a significant positive impact on employees’ innovative work behaviour.
Motivating language as a moderating variable
Effective communication is key to building positive relationships within an organisation (Uluturk et al., 2024; Welch & Jackson, 2007). Leaders can foster a supportive and creative workplace culture by engaging employees through effective communication (LaGree et al., 2023). Authentic leadership, which is grounded in humanistic values, leverages communication as a key tool to build trust and influence employees. Leaders who communicate with motivating language are able to inspire creativity and innovation among their employees.
As defined by Mayfield and Mayfield (2007), motivating communication or language refers to a range of oral communication strategies that can foster employee motivation by providing clear direction, meaning and empathy. When authentic leaders effectively use motivating language, they create an environment conducive to creativity and encourage their employees to innovate and perform at their best. As highlighted by Aichhorn and Puck (2017), communication barriers can hinder innovation, making the leader’s communication style critical in linking strategic direction with employee innovative behaviour. Mayfield and Mayfield (2007) explained the strong foundation of how communication affects employees in the workplace. When a conversation employs appropriate language, it can positively influence the development of innovative behaviour. As stated by Gelaidan et al. (2023), innovation is the result of creativity, and to convey it, one must use language that employees can accept. Although the idea of creativity is very good, when communication does not provide motivation, innovation will be difficult to improve. Therefore, motivating language serves as an essential moderating factor as it strengthens the influence of authentic leadership and creativity on innovative work behaviour:
H7a: Motivating language positively moderates the relationship between authentic leadership and employee creativity, so that the relationship will be stronger when motivating language is high.
H7b: Motivating language positively moderates the relationship between authentic leadership and innovative work behaviour, so that the relationship will be stronger when motivating language is high.
H7c: Motivating language positively moderates the relationship between employee creativity and innovative work behaviour, so that the relationship will be stronger when motivating language is high.
Figure 1 presents the conceptual framework and proposed relationship in the study.
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FIGURE 1: Conceptual framework on the influence of authentic leadership on innovative work behaviour with employee creativity as mediator and motivating language as moderator. |
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Research method
Research paradigm and approach
This study adopts a quantitative explanatory approach (Schindler, 2019) to investigate the relationship between authentic leadership (AL), employee creativity (EC) and innovative work behaviour (IWB), with a focus on the moderating effect of motivating language (ML). The explanatory approach seeks to identify causal relationships between these variables and draw conclusions based on statistical evidence. The quantitative approach allows for objective measurements of variables using structured data collection instruments such as questionnaires, which enable the generalisation of findings.
Research design
The present study utilises a cross-sectional design (Creswell & Creswell, 2018), with data collected at a single point in time from employees working in the MSMEs sector in Indonesia’s two major cities (Bandung and Yogyakarta). A cross-sectional design is particularly useful for studies aiming to understand the relationships between variables as they exist in the present, without the need for long-term observation. Using online and offline data collection methods ensures a comprehensive sample of respondents.
Research participants
The population of this study consists of employees working in the creative MSME industry in Bandung and Yogyakarta. Purposive sampling was used to select 350 respondents based on the following criteria: (1) employees had to have worked for more than a year, and (2) employees had to have been involved in creative processes within their organisations. The criteria are used to ensure that they have had the opportunity to engage in innovative work behaviour and demonstrate creativity. The study ensures representativeness by targeting employees from creative MSMEs to provide a broad view of how leadership and communication affect creativity and innovation.
Measuring instrument
The following measurement instruments were used to measure the variables related to this study:
Authentic leadership: This variable was measured using a 14-item scale developed by Uluturk et al. (2024) and Neider and Schriesheim (2011), which has demonstrated robust internal consistency and construct validity in organisational studies (Neider & Schriesheim, 2011; Walumbwa et al., 2008). Sample items include, ‘My leader accurately describes how others perceive his or her abilities’ (self-awareness), ‘My leader seeks ideas that challenge his or her core beliefs’ (balanced processing), ‘My leader demonstrates consistency between his or her beliefs and actions’ (internalised moral perspective) and ‘My leader expresses his or her ideas and thoughts clearly to others’ (relational transparency).
Employee creativity: This variable was measured using a four-item scale adapted from Tierney and Farmer (2011) and Hughes et al. (2018). These items have been previously validated in organisational settings, with demonstrated reliability for assessing employee creativity through exploratory and confirmatory factor analyses (Tierney & Farmer, 2011). A sample item is ‘I identify opportunities for new products or processes’.
Motivating language: Measured by nine items adopted from Mayfield and Mayfield (2016) and Uluturk et al. (2024), this scale includes three dimensions (direction, empathy and meaning-making language). The scale has been shown to reliably assess the influence of motivating language on employee outcomes (Mayfield & Mayfield, 2017).
Innovative work behaviour is measured by eight items adopted from Janssen (2000) and Usmanova et al. (2020), both of which demonstrated reliability and validity for measuring innovation-related behaviours in workplace settings. Sample item: ‘I seek to implement new work methods that improve organisational processes’.
Each instrument was measured on a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). The psychometric properties of each instrument were assessed through discriminant validity using both the Fornell–Larcker criterion and the Heterotrait–Monotrait ratio (HTMT). The Fornell–Larcker criterion was applied to ensure that the square root of the AVE for each construct was greater than its correlations with other constructs, confirming discriminant validity. Heterotrait–Monotrait ratio values below 0.85 indicated sufficient discriminant validity between the constructs. In addition, factor loadings were examined, with values above 0.70 considered acceptable for each item. Variance inflation factor (VIF) values were also assessed to ensure there was no multicollinearity, with all VIF values below the recommended threshold of 5. All scales were measured using a Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree).
Research procedure
Data were collected via Google Forms for the online respondents and through direct distribution of paper questionnaires for the offline respondents. In both cases, participants were informed of the study’s purpose and assured of their anonymity and voluntary participation. Ethical clearance was obtained, and respondents provided informed consent before completing the survey.
Statistical analysis
This study employs structural equation modelling (SEM) using partial least squares (SmartPLS) for data analysis. SmartPLS was selected because of its suitability for handling complex models, and for its ability to perform predictive modelling in exploratory research (Hair et al., 2019). This technique allows the simultaneous testing of multiple relationships and provides a robust method (Hair et al., 2019) for examining the moderating role of motivating language in the leadership-creativity-innovation relationship.
Ethical considerations
This research adheres to strict ethical guidelines in accordance with the ethical standards set by Universitas Pembangunan Nasional ‘Veteran’ Yogyakarta and its institutional review board. Participants’ privacy was respected throughout the data collection process, and all data were anonymised before analysis. Informed consent was obtained, ensuring that participants were aware of the research objectives and that participation was voluntary. Ethical clearance to conduct this study was obtained from the Universitas Pembangunan Nasional ‘Veteran’ Yogyakarta Faculty of Economics and Business Institutional Review Board prior to data collection (reference no.: 273/UNG214/TU/2024).
Results
In this part, the findings of this study is presented, along with the sample characteristics and progressing through the analysis of the measurement and structural models, concluding with the results of the hypothesis testing and a detailed discussion.
Sample characteristics
The survey responses included a reasonably even distribution of men (52.3%) and women (47.7%), with participants from two major cities in Indonesia, namely Bandung and Yogyakarta. As shown in Table 1, most respondents were in the age groups of 20–30 years old and 41–50 years old, both representing 28% of the sample. Regarding work tenure, the largest proportion (38.9%) had been employed for 6–11 years, with the remainder distributed across tenure categories from 1 year to more than 11 years. In terms of income, most respondents (40%) have an income between Indonesian Rupiah (IDR) 3.5 and IDR 4.5 million per month (equivalent to approximately $227.50–$292.50 or South African Rand (ZAR) 4200.00–ZAR 5400.00).
Measurement model
The PLS method was used in this study because of its suitability for complex models and predictive modelling with relatively small sample sizes (Hair et al., 2011). Following a two-step process as recommended by Henseler et al. (2009), the measurement model (i.e. the outer model) was first examined.
The results of discriminant validity testing using the Fornell–Larcker criterion and HTMT ratio for four constructs, namely, authentic leadership (AL), employee creativity (EC), innovative work behaviour (IWB), and motivating language (ML) are shown in Table 2. The Fornell–Larcker criterion requires that the square root value of the average variance extracted (AVE) of each construct (shown on the diagonal of the table) must be greater than the correlation between that construct and other constructs (off-diagonal values) (Fornell & Larcker, 1981). All correlation values between constructs have a value lower than the square root value of AVE. From these results, it can be concluded that each construct has good discriminant validity because the square root of the AVE value of each construct is greater than the correlation of the construct with other constructs. Based on the analysis using the Fornell–Larcker criteria and HTMT, it can be concluded that all constructs in this study have sufficient discriminant validity, indicating that the constructs measure different concepts and do not overlap. In Table 2, all HTMT values are below 0.85, which fits the requirement (Voorhees et al., 2016), further confirming the discriminant validity of all constructs.
TABLE 2: Discriminant validity of Fornell–Larcker criterion and the Heterotrait–Monotrait ratio. |
Table 3 presents the results of the factor analysis and VIF. Authentic leadership with items (AL1–AL14): all items show high factor loadings, ranging from 0.713 to 0.828, indicating that they strongly correlate with the authentic leadership construct. Variance inflation factor values for all items ranged from 2.05 to 3.342. Employee creativity with items (EC1 – EC4): factor loadings ranged from 0.703 to 0.761, indicating a fairly strong relationship between these items and the employee creativity construct. The VIF value is between 1.472 and 1.913. Innovative work behaviour with items (IWB1–IWB9): factor loadings range from 0.76 to 0.848, indicating that these items are strongly correlated with the innovative work behaviour construct. The VIF values for these items varied from 1.472 to 4.827. Motivating language with Items (ML1–ML9): factor loadings ranged from 0.72 to 0.84, indicating a strong correlation between these items and the motivating language construct. Variance inflation factor values ranged from 1.462 to 2.607. Overall, all constructs showed high factor loadings, signalling strong convergent validity. The relatively low VIF values (below 5) suggest no issues with multicollinearity among the tested items.
TABLE 3: Factor loadings and variance inflation factor values. |
Structural model
In the second step, the inner model (bootstrapping) was used to test the hypotheses using a two-stage approach, which is more effective than the repeated indicator approach in dealing with constructs (Sarstedt et al., 2019). Path significance was analysed using path coefficients and p values calculated through a bootstrapping procedure with 5000 iterations. For hypotheses involving mediation effects, only significant indirect effects were considered to establish the presence of mediation (Zhao et al., 2010). Based on Table 4, all hypotheses were supported.
Figure 2 and Table 4 show the regression test results for the various hypotheses tested in the study. The interpretation of the results is based on the p-value threshold of 0.05 and the t-value cutoff of 1.9668. All moderation tests are indicated by the interaction symbol (x). First of all, the results of the analysis show that authentic leadership (AL) positively influences employee creativity (EC) with a significant effect (β = 0.435, t = 8.741, p = 0.000), supporting H1. Furthermore, authentic leadership (AL) also has a significant positive effect on innovative work behaviour (IWB). The results reveal a strong relationship between these variables (β = 0.396, t = 5.958, p = 0.000), thus H2 is supported. Moreover, employee creativity (EC) significantly influences innovative work behaviour (IWB), as hypothesised in H3. The results show a substantial positive effect (β = 0.612, t = 9.110, p = 0.000).
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FIGURE 2: Output of structural model evaluation. |
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For H4, the results indicate that motivating language (ML) significantly influences employee creativity (EC) (β = 0.45, t = 6.692, p = 0.000). This supports the hypothesised positive effect of motivating language on creativity, highlighting its importance in fostering an environment conducive to creative processes.
Hypothesis 5, which proposed that employee creativity mediates the relationship between authentic leadership and innovative work behaviour, is also supported. The mediation analysis indicates that authentic leadership indirectly influences innovative work behaviour through employee creativity, with a significant indirect effect (β = 0.249, t = 8.181, p < 0.001).
In terms of the moderating effects of motivating language, the following findings were made. The interaction between authentic leadership and motivating language (ALxML) significantly influences employee creativity (EC) (β = 0.511, t = 14.206, p = 0.000), supporting H7a. Similarly, the interaction between authentic leadership and motivating language (ALxML) significantly affects innovative work behaviour (IWB) (β = 0.432, t = 6.199, p = 0.000), thus H7b is supported. Finally, the interaction between employee creativity and motivating language (ECxML) also shows a significant effect on innovative work behaviour (IWB) (β = 0.159, t = 2.569, p = 0.0101), supporting H7c. Thus, ML strengthens the relationship between AL and EC (β = 0.511), AL and IWB (β = 0.432), and EC and IWB (β = 0.159), all significant.
Structural model (inner model)
Figure 2 shows the output of structural model evaluation using SmartPLS on the influence of authentic leadership on innovative work behaviour with employee creativity as mediator, and motivating language as moderator.
The simultaneous influence of authentic leadership, employee creativity and motivating language on innovative work behaviour can be seen in the R-squared value. The R-squared value obtained from the results is shown in Table 5.
From the results, it is known that employee creativity with an R2 value of 0.497 shows that 49.7% of the variance in employee creativity can be explained by authentic leadership and motivating language. This means that almost half of the changes in employee creativity can be explained by the model, indicating the influence of authentic leadership and motivating language is quite strong. Furthermore, for innovative work behaviour, the R2 value of 0.537 indicates that 53.7% of the variance in innovative work behaviour is explained by authentic leadership, employee creativity and motivating language. With more than half of the variance explained by this model, we can conclude that the relationship between the independent and dependent variables is moderate to strong. These results provide strong support for H5 by showing that the combined effects of authentic leadership, employee creativity and motivating language significantly contribute to explaining innovative work behaviour.
Moderation interaction
Figure 3 shows the moderation test results of the interaction between authentic leadership (AL) and motivating language (ML) on employee creativity (EC). At low motivating language levels (–1 standard deviation [SD]), the relationship between authentic leadership and employee creativity is weaker. At an average level of motivating language, the relationship between authentic leadership and employee creativity is stronger than the line (–1 SD). At high motivating language levels (+1 SD), the relationship between authentic leadership and employee creativity is the strongest. So, it can be seen that the higher the motivating language, the stronger the influence of authentic leadership on employee creativity.
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FIGURE 3: Moderation interaction of motivating language. |
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Furthermore, Figure 3 also illustrates the moderation test results of the interaction between authentic leadership (AL) and motivating language (ML) on innovative work behaviour (IWB). At low motivating language levels (–1 SD), the relationship between authentic leadership and innovative work behaviour is weaker. At an average level of motivating language, the relationship between authentic leadership and innovative work behaviour is stronger than the line (–1 SD). At high motivating language levels (+1 SD), the relationship between authentic leadership and innovative work behaviour is the strongest. So, it can be seen that the higher the motivating language, the stronger the influence of authentic leadership on innovative work behaviour.
The results of the moderation test examining the interaction between motivating language and employee creativity on innovative work behaviour are presented in Figure 3. At a low level of motivating language (–1 SD), the relationship between employee creativity and innovative work behaviour is almost flat. This suggests that employee creativity has little effect on innovative work behaviour at low levels of motivating language (1 SD below the mean). At the average level of motivating language, there is a slight increase in the relationship between employee creativity and innovative work behaviour. At this level, employee creativity begins to positively influence innovative work behaviour. At a high level of motivating language (+1 SD), the relationship between employee creativity and innovative work behaviour becomes stronger. Motivating language serves as a positive moderator as it enhances the relationship between employee creativity and innovative work behaviour.
The model found strong empirical support from the data. All hypothesised relationships are supported, indicating that authentic leadership and employee creativity are crucial for fostering innovative work behaviour, with motivating language as a significant enhancing moderating factor.
Discussion
The main objective of this study is to deepen our understanding of how authentic leadership influences employees’ innovative work behaviours. The findings demonstrate that authentic leadership significantly benefits organisations’ innovative work behaviour. This suggests that authentic leadership plays an important role in shaping employee behaviour to be creative in doing work. As stated in H1, the research results confirm authentic leadership’s positive and significant impact on employee creativity. As noted by Rego et al. (2014) and Mubarak and Noor (2018), employees will be more creative under authentic leadership because they feel more involved under the supervision of their leaders. Authentic leadership also correlates with innovative employee work behaviour. In addition to these findings, this study also identifies a direct positive and significant relationship between motivating language and employee creativity, as proposed in H4. The results indicate that leaders who use motivating language – supportive and encouraging communication that reinforces employees’ confidence – directly enhance employee creativity. This direct relationship emphasises the importance of leadership communication in fostering an environment where employees feel empowered to explore new ideas and solutions. This aligns with research by Mayfield and Mayfield (2017), who highlight the role of motivating language in increasing employees’ engagement in creative processes.
As stated by Gelaidan et al. (2023), a leader must be able to foster and motivate employee behaviour to be innovative in doing work. Likewise, Grošelj et al. (2020) stated that leadership is among the most important factors influencing employees’ innovative work behaviour. Based on its characteristics, authentic leadership must be appropriate to stimulate employee creativity and innovation in the workplace. The results of this study are also supported by Grošelj et al. (2020), who argue that innovation in the workplace is very important when facing globalisation and the era of knowledge-based society. Because authentic leadership focusses on positive achievements and increasing employee trust, based on its characteristics, authentic leadership should be able to stimulate employee behaviour to innovate.
In addition, this study also tested the hypothesis of employee creativity on innovative work behaviour. The results show that there is a positive and significant impact. This study’s results align with Sternberg’s research (2018), which states that creativity is the assumptions and practices of both oneself and others that support new ideas and practices, which can lead to innovative behaviour in the workplace. As stated by Gelaidan et al. (2023), employee creativity is the involvement of the process in generating ideas about the problems faced. Meanwhile, innovative work behaviour is the outcome of the creative process (Volery & Tarabashkina, 2021). The study reveals that the impact of employee creativity on innovative behaviour varies among individuals. However, the results of this study corroborate research (Batey, 2012) that shows that employee creativity can strengthen employees’ innovative work behaviour.
In addition to the direct influences, the findings also demonstrate that employee creativity plays a mediating role in the relationship between authentic leadership and innovative work behaviour. Authentic leadership fosters an environment where employees feel empowered to explore creative solutions, which, in turn, translates into more innovative practices. This mediation effect aligns with previous studies (e.g. Grošelj et al., 2020) that emphasise the importance of leadership in stimulating creativity, which is then actualised in innovative outcomes. Therefore, the simultaneous influence of leadership and creativity reinforces the notion that authentic leadership indirectly enhances innovation by first improving employee creativity.
The study also tested the moderating effect of motivating language. As stated by LaGree et al. (2023), moderator variables can allow one to better understand the conditions under which a variable has the strongest impact on the outcome variable. The findings of this study confirm that motivating language is an important mechanism that can strengthen or weaken employees’ creativity and innovation behaviours in the workplace. In line with the statement of Uluturk et al. (2024), motivating language is a technique that leaders can use to motivate their subordinates to achieve better performance. This finding is also in line with Sullivan’s (1988) motivational language theory, which states that the use of appropriate language by leaders will affect employee motivation and subsequently lead to higher levels of performance. The findings also found that the type of communication leaders have in the workplace can either reinforce or undermine employee behaviour when performing their jobs. Thus, using effective motivational language can moderate the influence of authentic leadership on employees’ innovative work behaviour.
Moreover, this study further revealed that motivating language not only moderates the relationship between authentic leadership and innovative work behaviour but also amplifies the mediating effect of employee creativity. The use of motivating language by leaders enhances the positive influence of creativity on innovation, providing a more comprehensive understanding of how leadership communication can simultaneously drive creativity and innovation. This reinforces the importance of effective communication in leadership, as highlighted by Mayfield and Mayfield (2007), and shows that leadership, creativity and language work together in fostering innovative behaviour.
Theoretical implication
Firstly, the theoretical implication of this study is to explore the factors that influence employees’ innovative behaviour in the workplace by looking at the role of authentic leadership, employee creativity and motivating language as moderators. This study implicitly assumes that positive leader-employee relationships can motivate employees to behave optimally in the workplace. Secondly, this study measured creativity and innovation as different constructs, and as Amabile (1983) stated, both have different outcomes. Creativity is associated with the creation of ideas, while innovation is the result of applying those ideas. The findings of this study indicate that creativity has a positive and significant impact on innovative work behaviour. Thirdly, this study also investigated the combined effects of authentic leadership, employee creativity and motivating language on employees’ innovative work behaviour in the workplace. The findings are expected to make an important contribution as authentic leadership tends to consider employees’ needs over its own, and this can be reflected in nurturing employees’ creative power and enhancing good work outcomes. Furthermore, this study makes a valuable contribution to the literature by exploring the mediating effect of employee creativity.
Managerial implication
This research contributes practices that can be useful for managers and organisations to know how to improve innovation behaviour through authentic leadership, employee creativity and motivating language. The findings indicate that leadership style can influence employee innovative behaviour. This suggests that a leader should know himself in terms of his strengths and weaknesses to understand the impact on his followers and subordinates. The findings also suggest that organisations that want to increase the innovative behaviour of their employees should focus on selecting leaders with authentic traits and putting them into practice. In addition, organisational leaders should also encourage and direct their employees by using motivating language so that employees can apply their creative ideas to support performance. Finally, organisations can leverage employee innovation behaviour in the workplace to generate ideas, products, services and processes, thereby achieving excellence in competition.
Limitation and future research direction
While this study offers valuable insights into fostering creative and innovative behaviour in the workplace, it is not without limitations. Firstly, the influence of authentic leadership in increasing creative and innovative behaviour of employees may vary across individual characteristics, such as gender. Future research can be studied by considering the moderating role of gender to understand how creativity and innovation can be built through external factors such as leadership style, work environment or directed motivation, and how it differs across male and female respondents. Secondly, as this research was conducted in the context of creative MSME employees, further research can be conducted on other sector employees to generalise the results with different samples. Finally, future research can be conducted dyadically to minimise social desirability bias, where employees assess authentic leadership while creativity and innovation are assessed by leaders or supervisors.
Conclusion
This study adds to the existing literature by exploring the connection between authentic leadership, employee creativity and innovative behaviour in the workplace, using motivating language as a moderating factor within the context of creative MSME employees in the provinces of West Java and Central Java. This study found a positive correlation between authentic leadership style and employee innovative behaviour in the workplace. Previous research supports this study’s results, asserting that authentic leadership fosters employee confidence and creative and innovative behaviour. This study also emphasises that it is important for organisations to adopt authentic leadership styles to build a culture of creativity and innovation when carrying out their work. In addition, the moderating role of motivating language also strengthens the relationship between authentic leadership and employee creativity and innovation. The better the communication, the better the impact on building employee behaviour. Therefore, leaders must use motivational language to inspire employees to behave creatively and innovatively.
Acknowledgements
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
Y.S. was responsible for conceptualisation, methodology, formal analysis, investigation, writing the original draft, project administration, software development and funding acquisition. M.M. is responsible for conceptualisation, visualisation, validation, data curation, resource management, writing (review and editing) and supervision.
Funding information
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data availability
The data that support the findings of this study are available upon reasonable request from the corresponding author, Y.S.
Disclaimer
The views and opinions expressed in this article are those of the authors and are the product of professional research. It does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this article’s results, findings and content.
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