How a Leader Transforms Employees’ Psychological Empowerment Into Innovative Work Behavior

Businesses, especially those in urban areas, rely on innovation as the crucible of growth. Businesses must adapt to current and future conditions of their markets, consumers, and the demands of globalization. Therefore, innovation is central to a business’ success. We argue that psychological empowerment indirectly influences the relationship between transformational leadership and innovative work behavior. A transformational leader spurs their employees’ capability and efficacy. As a result, employees feel valued by the company, which encourages them to be innovative in the workplace. Thus, the employee can be innovative, without fearing the reprimand of superiors. This research surveyed 292 employees from different organization types (e.g., private sector, public sector, and nongovernmental organizations) in urban areas. The results of the study’s mediation analysis demonstrate that innovative work behavior is the outcome of the psychological empowerment from transformational leadership. Therefore, we argue that a transformational leader tends to empower their employees psychologically, which may improve employees’ ability to be more innovative at work. There are some limitations of this research (e.g., research design, adaptation of measuring instruments, and statistical remedies that have not been optimally implemented). The researchers provide suggestions regarding countermeasures for common method bias, which are outlined in the Discussion section