Role of Leadership Styles in Enhancing Employee Innovation

Abstract

Innovation is a key driver of organizational success in an increasingly competitive and dynamic business environment. Leadership styles significantly influence employees’ creativity, psychological empowerment, and willingness to engage in innovative behaviors. This extended research paper examines how transformational, transactional, and servant leadership styles affect employee innovation. A systematic review of literature published between 2000–2024 was conducted using Scopus-indexed sources. The study integrates Social Exchange Theory, Componential Theory of Creativity, and Intrinsic Motivation Theory to explore mediating and moderating variables. A conceptual model is proposed illustrating the leadership–innovation relationship. Findings indicate transformational leadership has the strongest positive influence on innovative work behavior, servant leadership enhances psychological safety and knowledge sharing, and transactional leadership provides conditional support depending on reward structures and autonomy. Implications for theory and practice are discussed, along with recommendations for future empirical research.