Psychological Safety as the Imperceptible Foundation of Transformational Leadership in Organisations

This paper explores the importance of psychological safety as an intangible underpinning for the formation of transformational leadership in the corporate setting. It aims to demonstrate how a Psychological safe environment enhances and stimulates transformational leadership behaviours, and additionally, how this context supports the teams in producing outcomes, such as innovation, collaboration and flexibility. Researchers followed a systematic qualitative literature review based on the PRISMA pattern. Scopus, Web of Science and PsycINFO databases from 2000 to 2024. Psychological safety seemed to be a condition for transformational leadership to operate. Yet it is a mediator regarding how TFL affects team performance, being about open communication, risk-taking, and learnings. Therefore, there is a reciprocal relationship here where the transformational leaders create psychological safety, and psychological safety enhances the effectiveness of leadership by encouraging feedback and trust. The relationship is also influenced by some context factors: cultural diversity and remote workspace. Researchers are unique in our contribution by positing psychological safety as a central, rather than terminal, construct of transformational leadership, and the discussion of its mediating and bidirectional nature. It fills a void in our current understanding on how more abstract psychosocial climates, the influence of which are not readily observed, impact tangible leadership outcome. Limitations include the use of the western culture and lack of longitudinal data. Cross-cultural differences, virtual milieu, and leadership styles need to be studied in the future. The findings suggest that it is important for organizations to focus on psychological safety in leadership development programs. Managers should build trust, inclusivity, and open-mindedness to fully tap team potential, particularly in a diverse or remote context. Recognizing the strategic mandate of psychological safety can contribute to innovation, resilience, and success over the long term.