Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 Transformational Leadership and Follower Creativity: Mediating Role of Follower Intrinsic Motivation Radha Ravikumar* and Venkat R Krishnan In the current business scenario, organizations are facing a lot of problems to compete in the market. To even maintain their positions in the market, they are forced to concentrate on product and service innovation. Creativity is an important ingredient in problem solving and in developing new ideas. Organizational creativity involves a new process, product, person, or situation. Organizations are trying to foster creativity among their employees to bring in innovation and gain competitive advantage. Creativity is a process by which individuals or groups develop unique ideas or novel solutions to emerging problems. Creativity involves developing new ways of thinking about existing and emerging challenges. To be creative, employees should be sufficiently interested in a certain problem or outcome. Researchers link creativity to a variety of factors, like conceptual skill, behavior, ability, technology, empowerment, process of experience, and external influences. Generating new ideas or creativity in problem solving can be best increased through intrinsic motivation. Motivational orientation towards a task is an important requirement to do it with creativity. People who approach a task with intrinsic motivation will be consistently more creative than people who are extrinsically motivated. Intrinsically motivated employees explore new pathways and take greater risks. Therefore, a person’s level of creativity will depend on his or her level of intrinsic motivation. Intrinsic motivation of employees can be best enhanced by transformational leadership. Transformational leadership refers to the process whereby an individual engages with others and creates a connection that raises the level of motivation and morality in both the leader and the follower. Transformational leadership differs from transactional leadership (i) by elevating degree of needs of the followers, and (ii) by developing followers into leaders. Transformation can be achieved by raising the awareness and consciousness about the importance of designated outcomes. It can also be achieved by transcending one’s own selfinterest for the sake of team, group, or organization. Transformational leader attempts and succeeds in elevating followers from a lower level to a higher level of need according to Maslow’s hierarchy of needs. When the highest need of self-actualization is activated, the lower needs will no longer drive that human being. Creative contributions will be highest in an organization when the members feel themselves to be self-actualizing. Enhancing employee creativity depends on enhancing their intrinsic motivation. Providing a work environment that will allow them to retain their intrinsic motivational focus, will support them to explore new ideas. By fostering transformational leadership, organizations can promote intrinsic motivation among employees, so that employees can become more creative. Intrinsically motivated employees are more likely to find many alternatives to solve a problem. Intrinsically motivated individual will exhibit high level of creativity. Transformational leaders by their individualized consideration will focus on follower’s need, and development. Because of this focus, followers are likely to be interested in the task itself instead of external fears. This enhanced interest in the task itself will arouse employees’ intrinsic motivation. We propose that follower intrinsic motivation will fully mediate the relationship between transformational leadership and follower creativity. Field of Research: Management ___________________________________________________ *Assistant General Manager – Kotler-Srinivasan Center for Research in Marketing, Great Lakes Institute of Management, Chennai, India, Email: radha.ravikumar711@gmail.com Director, Center for Oneness and Transforming Leadership, Chennai, India. Email: rkvenkat@temple.edu