Transformational Leadership Impact on Employee Innovative Behavior in SMES: An Exploratory Factor Analysis

The present study investigates the pivotal function of transformational leadership in cultivating inventive conduct among employees in small and medium-sized firms (SMEs) in Pakistan. This study intends to examine the impact of transformational leadership on employee creativity, given that creative work behavior is a major factor in determining a business's ability to survive and gain a competitive edge. The fact that many SMEs fail despite having an excess of resources is a testament to the need for excellent leadership for organizational survival. This study examines the dimensions of transformational leadership, employee innovative behavior, and SME success using exploratory factor analysis (EFA) on data gathered from 103 respondents. The data were deemed suitable for factor analysis using Bartlett's test of sphericity and Kaiser-Meyer-Olkin (KMO) values exceeding the permissible level for each construct. The results of the investigation showed that innovative behavior on the part of employees is greatly impacted by transformational leadership, and this improves SME performance. The results show that transformational leadership is essential for fostering overall organizational performance in addition to having a direct impact on staff innovation.