The Interaction of Empowering Leadership, Self-Efficacy, and Psychological Empowerment as Moderating Variables in Predicting Employee Creativity: Evidence from Indonesia

Abstract

This study investigates the effects of empowering leadership and employee self-efficacy on creativity in a manufacturing context, with psychological empowerment as a mediator. While prior research has linked these factors to creativity, their interplay is not well understood, especially in non-Western settings. A survey of 127 employees of an Indonesian manufacturing firm was conducted. Results from partial least squares structural equation modeling (PLS-SEM) analyses revealed that empowering leadership positively influenced both creativity and psychological empowerment, while self-efficacy had no significant direct effect on creativity. Psychological empowerment mediated the effects of empowering leadership and self-efficacy on creativity. These findings highlight the role of leadership in fostering a sense of empowerment, which in turn enables employee creativity. However, self-efficacy may be a necessary but not sufficient condition for creativity in manufacturing jobs. The study extends the cross-cultural literature on employee creativity, suggesting that empowering leadership is important in a collectivistic society like Indonesia. Managers should develop empowering leadership behaviors and create conditions for psychological empowerment to enhance creativity. Future research should examine moderators of the observed relationships and test the model in other cultural contexts.