The relationship of transformational leadership with employee creativity and organizational innovation a case study of commercial banks in ho chi minh city

Bộ GIÁO DỤC VÀ ĐÀO TẠO ĐẠI HỌC KINH TÉ THÀNH PHÓ HÓ CHÍ MINHBÁO CÁO TÓNG KÉT ĐÈ TÀI NGHIÊN cứu KHOA HỌC THAM GIA XÉT GIẢI THƯỞNG ‘’ NHÀ NGHIÊN CỨU TRẺ UEH ’’ NĂM 2024 ’ ’ THE RELATIONSHI

Bộ GIÁO DỤC VÀ ĐÀO TẠO ĐẠI HỌC KINH TÉ THÀNH PHÓ HÓ CHÍ MINH

BÁO CÁO TÓNG KÉT

ĐÈ TÀI NGHIÊN cứu KHOA HỌC THAM GIA XÉT GIẢI THƯỞNG

‘’ NHÀ NGHIÊN CỨU TRẺ UEH ’’ NĂM 2024 ’ ’

THE RELATIONSHIP OF TRANSFORMATIONAL LEADERSHIP WITH EMPLOYEE CREATIVITY AND ORGANIZATIONAL INNOVATION: A CASE STUDY OF COMMERCIAL BANKS IN HO CHI MINH CITY.

Thuộc nhóm chuyên ngành: Kinh tê - Quán trị kinh doanh

TP Hồ Chí Minh, tháng 1/2024

The topic discusses the relationship of transformational leadership withemployee creativity and organizational innovation at commercial banks in Ho Chi Minh City Researching and discussing this relationship, helps bank leaders correctlyrecognize transformational leadership and its great role in organizational innovation, thereby helping banks Commerce in particular and other organizations and businesses

in general have solutions to help leaders improve employee creativity and organizational innovation, contributing to promoting business development The proposed model includes 5 main hypotheses and 1 control relationship between educational level to creativity

The research was conducted in two stages: secondary data research and quantitative research

Research secondary data: systematize theories related to the topic and interview

5 lecturers and 15 leaders of commercial banks in Ho Chi Minh City to build, develop, and supplement measurement scales, thereby proposing a research model

Quantitative research: testing the scale and the appropriateness of the researchmodel Collect data using a survey questionnaire (n=300) Collected data were processed and analyzed using SPSS 20 software through descriptive statistics, testingthe appropriateness of the model and research hypotheses using regression to test the Cronbach's Alpha scale, and factor analysis EFA discovery factor In addition, theresearch team also conducted analysis using Smart PLS4 software to test and confirmthe relationship between the hypotheses as well as the con-elation level of the proposed model The research results show that all 5 hypotheses are accepted, however, the test results do not show any impact of the control variable of education level on the creativity of successful commercial bank employees Ho Chi Minh City

Keywords: transformational leadership, employee creativity, organizational

innovation

TABLE OF CONTENTS

2.3.1 The relationship between transformational leadership and employee creativity 18 2.3.2 The Influence of the physical work environment on the relationship between transformational

2.3.3 The relationship between transformational leadership and knowledge sharing 20 2.3.4 The relationship between knowledge sharing and employee creativity 21 2.3.5 The relationship of employee creativity with organizational innovation 22

2.3.6 The role of educational level control variables on employee creativity 23

3.2.1 "Transformational leadership" scale (adapted) 26 3.2.3 "Physical work environment" scale (adapted) 27

3.2.6 Organizational innovation scale (adjusted) 29

4.4 Results of structural model testing (SMART PLS4) 38

4.4.1 Check reliability and convergent validity' 38 4.4.2 Check collinearity through the VIF coefficient 39

4.5 Testing differences in employee creativity according to educational level 45

LIST OF TABLES

Table 1: Transformational Leadership Scale

Table 2: Physical Environment Scale

Table 3: Scale to measure employee creativity

Table 4: Knowledge sharing scale

Table 5: Organizational Innovation Scale

Table 6: Gender statistics of survey participants

Table 7: Statistics on the age of respondents participating in survey

Table 8: Statistics on the educational level of survey participants

Table 9: Statistics on seniority working at the bank of survey participants

Table 10: Statistics of work departments of survey participants

Table 11: Statistics of direct superiors of survey participants

Table 12: Income statistics of survey participants

Table 13: Testing scales using Cronbach's Alpha

Table 14: Results of analysis of CA, CR, and AVE

Table 15: Inner VIF Values

Table 16: Path coefficients between EC, KS, OI, PEW and TL

Table 17: Determination coefficient R Square (R2) and R Square Adjusted (R2Adj)Table 18: Impact coefficient f2

Table 19: Results of SRMR and NFI 35 analysis

Table 20: Checking homogeneity of variance

Table 21: ANOVA table by education

LIST OF FIGURES

Figure 1: Proposed model

Figure 2: Results of research model

1633

LIST OF ACRONYMS

EFA Exploratory Factor Analysis

CHAPTER 1 OVERVIEW

1.1 Reasons for choosing the topic

In the current context of globalization and unpredictable changes in the world, businesses are constantly trying to survive and develop In particular, innovationthrough creativity is an important factor in creating the success and competitive advantage of organizations (Woodman Ct al., 1993) as well as for a strong economy(Drucker, 1985) ) Organizations need to be more creative and innovative than before

to survive, compete, grow, and lead (Jung et al., 2003; Tierney et al., 1999) Therefore,stimulating individual creativity is a vital factor for businesses to be able to promote their strengths, implement strategic innovation, maintain competitiveness, and survive

in the market

In organizational development, leadership is considered one of the importantfactors affecting employees' creative behavior and organizational innovation Furthermore, leadership has been considered a key driver of organizational innovation Nowadays, many studies have shown interest in the influence of transformationalleadership style on creativity and innovation Transformational leadership style hasbeen proven to motivate, stimulate creativity, and enhance employee confidence, thereby positively affecting work results (Avolio, 1999); (Pillai & Williams, 2004)

Ho Chi Minh City is the nucleus of the southern key economic region, one of the country's three largest key economic regions Oriented to 2030, Ho Chi Minh City will

be the economic and financial center of Southeast Asia To achieve the above goal, the banking industry is increasingly demonstrating its important role in leading theeconomy, being the main capital channel to serve production and business, contributing

to promoting economic restructuring, building an independent and self-reliant economy, and improving people's lives Currently, Ho Chi Minh City is the largestfinancial and banking center in Vietnam, leading the country in the number of banksand financial and credit companies By the end of 2020, there were a total of 2,164credit institutions operating in Ho Chi Minh City, of which commercial banks were1,967 units, accounting for 90.9%, creating immense competitive pressure, same big.Therefore, to stand out among countless competitors requires commercial banks to

consider innovation as a key factor to help improve banks' operational efficiency in the current situation However, through the research process, the team realized that currently, only a few studies have considered the impact of transformational leadershipand its intermediary relationships on subordinates’ creativity and creativity,organizational innovation, especially in the volatile banking sector.

From those foundations, the group carried out the topic "The relationship oftransformational leadership with employee creativity and organizational innovation:Case study of commercial banks in Ho Chi Minh City" to Research the relationship oftransformational leadership with employee creativity and organizational innovation of commercial banks in Ho Chi Minh City From there, propose solutions for leaders at alllevels to enhance employee creativity and organizational innovation, contributing to the development of commercial banking organizations in particular as well as theVietnamese economy in general

1.2 Scope and objects of research

1.3 Research objectives and research questions

1.3.1 Research objectives

The main objective of the research is to determine and analyze the relationship oftransformational leadership with employee creativity and organizational innovation of commercial banks in Ho Chi Minh City

In addition, the study also examined the mediating effects of psychological empowerment and knowledge sharing; The moderating impact of work environment on the relationship between transformational leadership and employee creativity; At the same time, evaluated the controlling impact of age, education, and gender on employee creativity

From there, the research team proposed several directions that contribute toimproving employee creativity and effectively innovating the organization Thereby, contributing to the development of commercial banking organizations in particular and the Vietnamese economy in general

Qualitative research methods are used to study the theoretical basis and systematize theories of related scientific research topics Then the group discussed withinstructors and conducted qualitative interviews with 5 instructors with experience teaching leadership and innovation and 15 leaders of commercial banks in Ho Chi Minh City Minh to build, develop, and supplement measurement scales The interview content was prepared in advance and included open questions and statements related totransformational leadership and its direct and indirect impact on employee creativityand organizational innovation The statements were translated into Vietnamese and thecontent was adjusted to be accurate, easy to understand, and consistent with thecognitive context of the interview subjects Through the results of exchange and discussion along with the observed variables synthesized from the theoretical basis, the research team edited the terms used in the scale and adjusted the observed variablesappropriately, to measure research definition.

Quantitative research methods:

Quantitative research methods are used to test the built scale and measure therelationships and impact levels between factors The team used survey questionnaires

to collect data Questionnaires answered by employees working at commercial banks in

Ho Chi Minh City are a tool to collect quantitative data The questionnaire containsstatements, each statement is measured based on a 5-level Likert scale The sampling method in this study is a convenience sampling method After data collection, useful survey results will be processed and analyzed using SmartPLS 4 software

1.5 Research Significance

1.5.1 Theoretical meaning

The study provides a basis for conducting repeat research on the relationship between transformational leadership, employee creativity, and organizationalinnovation in organizations in fields other than commercial banking, and at the same time, is a useful reference for future research on transformational leadership and organizational innovation

1.5.2 Practical significance

The topic highlights the importance of the leadership team in stimulating the creative working ability of employees and contributing to organizational innovation tosurvive and develop sustainably in the full financial and banking market, fluctuations

At the same time, based on the research results, the group offers somerecommendations for commercial banks in Ho Chi Minh City to encouragetransformational leadership based on consideration and appropriate adjustments, working environment, age, and gender factors of employees, thereby maximizingemployee creativity and organizational innovation

1.6 Structure of research paper

The structure of the research paper includes 5 chapters:

Chapter 1: Overview of the research topic

Present the reason for choosing the topic, objectives, objects, and scope of the research, and briefly introduce the research method, research significance, and structure

of the research paper

Chapter 2: Theoretical basis and research model

Presents the theoretical basis of the factors: (1) Transformational leadership, (2)Psychological empowerment, (3) Knowledge sharing, (4) Employee creativity, (5)Innovation new organization, (6) Physical work environment Presenting relevantprevious research, from which there is a basis for proposing a research model and conceptual scale

Chapter 3: Research Methods

Presenting the research process and methods used to build and evaluate the scale, test the model and research hypotheses; reliability and feasibility of research tools

Chapter 4: Research results

Present and interpret the results of processing and analyzing research data and discussing research results

Chapter 5: Conclusions and Recommendations

Presents a synthesis of research results, from which conclusions and

implications for administrators are drawn as well as limitations of the research

to guide future research

CHAPTER 2: THEORETICAL BASIS

2.1 Theoretical basis

2.1.1 Transformational Leadership Theory

Transformational leadership theory was introduced by Burns (1978) in a study

of political leaders Over time, this theory was expanded by Bass and Avolio (1995) to study the behavior of leaders in the economic field The theory shows that transformational leadership is made up of four components: charismatic role modeling,individualized consideration, inspirational motivation, and motivation, intellectualstimulation The role model role refers to setting an example for the leader's followers Leaders use their charisma and charisma to evoke admiration, respect, loyalty, and consensus toward the collective mission (Gumusluoglu and Ilsev, 2009) Meanwhile, personal concern is a factor that shows a leader's open and liberal outlook whenreceiving ideas, especially new ideas They always listen and respect employees' views Leaders build direct relationships with employees, understanding the needs, abilities, competencies, and aspirations of each follower (Gumusluoglu and Ilsev, 2009) Whenconsidering inspirational motivation, it is the leader's role to chart a broad vision of thefuture, show how to achieve goals and express a strong belief that his or her employees will do For intellectual stimulation, leaders broaden thinking and evoke the interests ofmembers (Bass, 1990), calling and encouraging employees to find new ways ofworking, and ideas Be bold or constantly encourage employees to seek opportunitiesfor themselves Bass (1985) added that one of the manifestations of intellectualstimulation for employees is that leaders constantly motivate employees to think about old problems with new perspectives and perspectives

When considering the four components of transformational leadership theory intheir role in creativity, Elkins and Keller (2003) affirmed that transformationalleadership has a close relationship with innovation in organizations The components ofthis style of leadership serve as “creativity enhancers,” specifically: personal attention acts as a reward for followers by providing recognition and encouragement; Intellectual stimulation enhances the ability to explore thinking by providing support for innovation,

autonomy, and challenge and inspirational motivation encourages the idea generation process by encouraging Encourage subordinates to work toward the organization's vision (Bass and Avolio, 1995; Sosik, Kahai, and Avolio, 1998).

Besides, the Full-range leadership model of Avolio and Yammarino (2002) shows that within leadership levels, the leader's role in transformational leadership ismaximized and promoted The participation and engagement of employees with leaders

in this style also achieve the best indicators, helping them freely exchange information,share, and follow the leader's instructions Thus, transformational leadership theory is a solid theoretical basis for the research team to argue for the factors and relationships in this study

2.L2 Social Exchange Theory (SET)

Homans is considered one of the first sociologists to focus on interpersonalexchange (Cook et al., 2013; Lambe, Wittmann, and Spekman, 2001) ỉn 195 8, he proposed social exchange theory with the assertion that behavior and social interaction between individuals are the result of an exchange process More specifically, Homans(1961) defined social exchange as the exchange of activities, tangible or intangible elements, created by at least two participants The result of an exchange process can be

“profit” or “loss” (Homans, 1961; Nakonezny and Denton, 2008), calculated as the difference between the output benefit and the input investment (Wan and Antonucci,2017) For example, a person chooses to break up with his lover because he feels that his love and giving are too much while the other person is indifferent and indifferent,

in other words, it is an unhealthy relationship, equity (Wan and Antonucci, 2017)

Social exchange theory is fundamentally derived from economic exchange theory (Liao, 2008) The difference here is that economic exchange focuses more on economic benefits and costs based on transactions and regulations while socialexchange theory deals with intangible social costs and benefits ( e.g love, respect, andknowledge) (Liao, 2008) and an exchange does not guarantee that there will be a reciprocal outcome because there are no rules or agreements signed when conductinteraction (Chadwick-Jones, 1976; Gefen and Ridings, 2002) Therefore, socialexchange is founded on mutual trust, confidence, and commitment (Liao, 2008)

Yanet al (2016) argue that knowledge sharing is also a social exchange behavior Individuals exchange knowledge with each other for internal and external benefits.Internal benefits are often intangible and difficult to measure, including satisfaction andjoy when participating in conversation and sharing Meanwhile, external benefits caninclude rewards, promotions, etc (Yan et al., 2016) For example, a student participates

in giving speeches for the benefit of getting high grades in his studies and receiving joy when being praised by the teacher

2.1.3 The componential theory of creativity

The components theory of creativity was proposed by Amabile (1988) Amabile and Pratt (2016) identified this as the most classic model of innovation in organizations and the most widely cited theory to comprehensively describe both the individual creativity process and the innovation process, new organization, as well as how the two are linked through mutual influence The original theory points to three components ofcreativity In 2013, Amabile continued to develop his research and proposed one moreingredient Until now, the widely used component theory of creativity points out 4 components of creativity, including 3 individual components (internal component) and

1 environmental component, outside school

The group of internal components ofcreativity includes skills related to the field (knowledge, professional skills, technical skills, natural talent in a field/industry, ), processes/skills Creativity (including cognitive style, personal characteristics, ) and intrinsic work motivation - factors that promote creativity from the difficulty and challenge ofthe task, stemming from desire Conquering and solving problems is createdwithin people, not external motivations (eg rewards, reputation, ) (Amabile, 2013)

The external environment or work environment, by extension the socialenvironment, includes many factors that promote intrinsic motivation as well as factors that hinder creativity Factors that stimulate creativity from this group of factors include

a comfortable and pleasant physical working environment; attention and encouragement of different ideas from leaders; regulations or company culture that accept and facilitate the exchange, expansion, and development of ideas; Meanwhile,

factors that inhibit creativity come from harsh regulations, autocratic organizationalstructure, indifferent and conservative attitude of managers when receiving new ideas,

Amabile (2013) argues that creativity requires the synthesis of all components; Creativity will be most easily formed and promoted when an intrinsically motivated person with high domain expertise and creative thinking skills is working in an environment that highly supports creativity

2.2 Related studies

Innovation through creativity is a key factor in creating organizational successand competitive advantage (Woodman et al 1993) as well as for a strong economy.There is a growing body of research interested in the influence of transformational leadership on organizational creativity and innovation Previous research on the effects

of transformational leadership on employee creativity has had mixed results

Research by Liao el al., (2017) shows that leadership harms organizationalinnovation Meanwhile, research by Kim & Lee (2011); Ma & Giang (2018); Si & Wei (2012) found that transformational leadership has a positive but insignificant impact on employee creativity

Contrary to the above statements, the study by Gumusluoglu, Laie, and Arzu Ilsev (2009) is the first study to investigate the influence of transformational leadershipstyle on activities related to creativity at many levels, in the organization The findings suggest that transformational leadership has important impacts on both individuals and organizations For individuals, transformational leadership is positively related tosubordinate creativity and for organizations, transformational leadership is positively related to organizational innovation In the same vein, other studies have found that transformational leadership has a positive and significant impact on organizationalinnovation (Alheet et al., 2021; Alshamsi el al., 2021; Alshamsi et al el al., 2020;Kartono et al., 2021) Research by Chaubey et al., (2019); Fuadiputra (2020); (2019); and Shafi el al (2020) found that transformational leadership style has a positive and significant impact on employee creativity Organizational innovation can be realized not only through the role of leadership in directing subordinates, but also requiresemployee creativity because innovation is a form of creative application Ideas are

owned by employees This is consistent with the findings of the Chaubey et al study (2019); Ranjbar et al (2019) and Shafi et al., (2020) that transformational leadershipelevates the values, needs, and capabilities of followers to a higher level Employee creativity can encourage increased organizational innovation Thus, these studies have provided support for the notion that transformational leadership promotes employeecreativity and organizational innovation.

2.3 Hypothesis and research model

2.3.1 The relationship between transformational leadership and employee creativity

Leadership is the process by which a leader inspires individuals to accomplishcommon goals (Kreitner & Kinicki, 1989) According to Kellerman (2010), although there are many different definitions, in general leadership includes the following threeaspects: (1) leadership is a process that takes place between leaders and subordinates,(2) leadership is a process that takes place between leaders and subordinates Leadership occurs at many levels within an organization and (3) leadership focuses on accomplishing goals

Ojokuku et al (2012) define leadership style as a leader's combination of skills, characteristics, attitudes, and knowledge when interacting with his or her employees Today, the transformational leadership style is gradually becoming a new trend

Research on the influence of leadership in stimulating creativity and innovation

in individuals has been conducted by many scholars (Jaussi and Dionne, 2003; Jung et al., 2003; Shin and Zhou, 2003) In particular, scholars have focused on understandingthe relationship between transformational leadership and creativity (Avolio, 1999) Gumusluoglu and Ilsev (2009) found that transformational leadership behaviors act as

“creativity-enhancing forces.’* Conger et al (1999) defined creativity as the generation

of new and useful ideas that improve the overall efficiency of organizational processes

A study of employees of an information technology company in China found that transformational leadership promoted employee creativity (Zhang and Bartol, 2010).Jung (2001) found that transformational leadership orients employees to achieve excellence through creativity Similarly, another study by Henker et al (2015) found

that transformational leadership promotes employee creativity Through his influence,

a leader encourages appreciation, respect, and loyalty, and gets employees workingtoward the mission A clear leader creates an achievable vision for employees motivatesthem and instills confidence in them to do it

However, contradictions exist in the relationship between transformational leaders and employee creativity Jaussi and Dionne (2003) reported that transformational leadership was not related to the creativity of participating students This contrasts with the findings of Shin and Zhou (2003), who investigated the impact

of transformational leadership on employees' individual-level creativity in real business settings by using a sample of 260 R&D employees and theừ managers from 46 companies; They found that Korean employees showed more creativity undertransformational leadership

This inconsistency could easily be traced to the different designs of the two studies (experimental vs real workplace), the different contexts in which they were conducted (US vs Korea ), and the different samples used (students vs staff) Therefore, Mumford and Licuanan (2004) suggest that more research is needed toinvestigate in real-world contexts whether transformational leadership positively influences follower creativity

From the above analysis, the authors propose hypothesis H:

Hl: Transformational leadership has a positive relationship with

subordinates ' creativity

2.3.2 The Influence of the physical work environment on the relationship between

transformational leadership and employee creativity

Dul and Ceylan (2011) classify work environments into social workenvironments and physical work environments The physical work environment plays

an important role in organizational performance (Lee and Brand, 2005) While studying the concept of the physical work environment, McCoy (2005) identified five maincomponents of the physical work environment including spatial layout, architecture,scenery, surrounding equipment, facilities, and tools According to him, these five key components contribute significantly to creative results

The potential role of the physical work environment as a stimulus for creativityhas been identified by many researchers (McCoy and Evans, 2002; Martens, 2011;Horng et al., 2016) Diversity and flexibility of space, aesthetic features such as colorand light, beautiful buildings, and pleasant spaces stimulate creative motivation (Bagheri and Nouri, 2016).

Additionally, leadership is of vital importance in enhancing the effectiveness ofthe physical work environment, and previous studies have suggested thattransformational leaders help to initiate and build the environment, physical good and quality through motivating employees to express their opinions and wishes for the working environment (Carmeli et al., 2011) Leaders listen attentively to employees’creative ideas and support and motivate them to be confident in their creative skills andintellectual abilities

While defining the creative workplace, Martens (2011) calls it a space that encourages individuals to carry out their creative efforts McCoy (2005) argues that,although there is little evidence of a direct relationship between the physical workenvironment with creative performance, indirect and moderating effects cannot be ruled out Baron and Kenny (1986) defined "a moderator variable that changes the impact of the independent variable on the dependent variable or intermediate variable (a variable that changes the relationship between two other variables)” There is a need toinvestigate the role of moderating variables in understanding creativity (Herrmann and Felfe, 2013) The increasing impact of transformational leadership on employee creativity can be accounted for in the presence of other factors On that basis, the research team proposed the following hypothesis:

H2: The physical work environment moderates the relationship between

transformational leadership and employee creativity or the better the physical work environment, the stronger this relationship.

2.3.3 The relationship between transformational leadership and knowledge sharing

Knowledge sharing refers to the process of exchanging information, knowledge,and ideas, (Birasnav, 2014) The main advantage of sharing knowledge among team members is to expand and enrich the store of information, knowledge, and ideas

Furthermore, knowledge sharing not only helps groups increase the amount ofinformation, knowledge, and ideas but also improves the quality and diversity of knowledge to stimulate and inspire individuals to propose solutions More creative solutions than available solutions.

Innovation is one of the most knowledge-intensive activities (Overall, 2015).Knowledge management is a prerequisite for creating, sharing, and storing innovative ideas Effective leadership plays a key role in fostering a supportive environment for incorporating knowledge into organizational innovation (Uddin, et al., 2017) Both knowledge sharing and knowledge application are known to facilitate the generation ofnew/ ideas and processes that can improve organizational performance The role ofleadership in the knowledge management process w/as researched by Singh in 2008 More specifically, research by Jung et al in 2003 and by Han in 2016 also showed a positive relationship with transformational leadership, and share knowledge

Based on the above research, the authors propose the following development Hypothesis hypothesis H3 is as follows:

H3: Transformational leadership has a positive impact on employees'

knowledge sharing.

2.3.4 The relationship between knowledge sharing and employee creativity

Employee creativity is important for organizational survival and effectiveness (Dong el al 2016) Along with the constant movement and change of society, creativitybecomes the top priority of organizations in innovating products, processes, and procedures (Amabile, 1996; Shalley, Zhou, and Oldham, 2004) Creativity originatesfrom many factors inside and outside the subject (Amabile, 2013) Woodman andcolleagues (1993) found that in addition to cognitive abilities and personal personality,know/ledge is important for creativity Studies by Dong et al (2016), Admed et al.(2016, Sternberg and Lubart (1999) all show that know/ledge sharing is a good foundation to help promote creativity Knowledge sharing is a social process in which employees continuously give and receive information from others (Admed et al., 2016).The information shared can be work experience, technical skills, technology, (Lin,2007) The exchange ofknow/ledge among employees in the organization through open

communication channels promotes the creativity of members (Amabile, 1988) Research by Dong et al (2016) shows that information sharing is formed based on exchanging and filling knowledge gaps Sheremata (2000) identifies that individuals' knowledge pools are synthesized and expanded, and at the same time, thinking Their different thinking is activated and motivated by shared conversations with others Whenexchanging knowledge, members are approached with views from many perspectives,thereby inspiring them in their work, create new ideas (Hirst, Van Knippenberg, andZhou, 2009; Homan et al., 2007; Gong et al 2013) Dong and colleagues (2016) alsoagree that sharing helps people collect valuable and useful information, provoking newand different thoughts While individuals' existing skills and knowledge are the basis for their creativity, sharing with other members helps individuals better apply theircurrent knowledge (Zhou et al., 2009 ) Knowledge sharing in an organizationalenvironment is especially important for the R&D department because there, employees need high-quality information to solve complex problems and research and developproducts, new products and services full of novelty and creativity (Zhou et al., 2009).

On that basis, the research team proposed the following hypothesis:

H4: Knowledge sharing has a positive relationship with employee creativity.

2.3.5 The relationship of employee creativity with organizational innovation

Each individual is the basis of any new idea (Redmond et al., 1993) and createsthe foundation for organizational innovation (Shalley and Gilson, 2004) Therefore,theoretically, employee creativity is essential for organizational innovation (Oldham and Cummings, 1996) Creative employees are those who can find new uses for existing methods or equipment, or generate new but actionable ideas related to the job Thesepeople are not only more likely to come up with creative solutions to problems andchampion the ideas of others, but also to develop adequate plans to implement those new ideas As Shalley and Gilson (2004) suggest, employee creativity helps proposenovel and useful ideas about the organization Additionally, these people can create a ripple effect by serving as role models for the rest of the organization Shaley et al (2004) stated that employees create new ideas that can be transferred to other employees

in the organization for their use and development

Sharing the same view on this issue, Khurosani (2018) acknowledges that creativity is the foundation of innovation, a factor that affects the development of anorganization, helping to develop ideas, products, processes, orprocedures New practiceand innovation is a process through which ideas are formed, shared, developed, revised, clarified, and implemented Thus, creativity at the individual level, through thegeneration and implementation of ideas, has the potential to lead to the development ofinnovative products at the organizational level Positive employee creativity influencesorganizational innovation.

Therefore, the research team proposed the following hypothesis:

H5: Employee creativity has a positive impact on organizational innovation

2.3.6 The role of educational level control variables on employee creativity

Research results by Farmer, Tierney, and Kung-Mcintyre (2003) show that education level controls employee creativity The higher their level of education, the more confidence and ability they have to solve difficult problems that require creativity(Tierney and Farmer, 2011) The higher the level of education, the easier it is for employees to access new sources of knowledge and thinking, which are a source of inspiration for creativity In particular, the banking sector has high-quality intellectualhuman resources, so it is easy to upgrade to higher levels of education such as master’s

or doctorate, or they can access new theories and information, based on Accordingly, the research team found that employee creativity may vary with educational level The higher the level of education, the more creative initiatives employees have, thereby contributing to organizational innovation

Therefore, the team proposes a research model:

Figure 1: Proposed model

CHAPTER 3: RESEARCH METHODS

3.1 Research design

3.1.1 Research process

Step I: Choose a topic and issues related to the topic

Choose a topic, determine goals, and research problems

Step 2: Qualitative research

- Research secondary data:

+ Research documents and research articles related to the topic

+ Analyze, compare, and synthesize secondary data to determine research modelsand research hypotheses

+ Design a questionnaire and build a scale for those questions

- Group interviews to calibrate the scale to suit the survey subjects

Step 3: Quantitative research

- Use quantitative research methods in official research to test the measurement scaleand the appropriateness of the research model

- Quantitative research on 300 samples

- Test the scale and conclude the hypothesis

-Present research results

3.1.2 Data collection methods

The group used a convenience sampling method by sending questionnaires via the Google Forms platform to employees working at commercial banks in Ho Chi Minh City After receiving the raw data, it will be cleaned by eliminating blank or unqualified

answer sheets The final data will be processed through specialized software SPSS 20 and SmartPLS 4 to verify the model.

3.2 Building a measurement scale

After conducting qualitative interviews with 5 lecturers with experience teaching leadership and innovation and 15 leaders of commercial banks in Ho Chi Minh City,the research team effectively adjusted the scales as follows

3.2.1 “ Transformational leadership”scale (adapted)

In this study, the authors used the scale of Bronkhorst and colleagues (2013) with

4 observed variables to measure the factor "transformational leadership" The questions are inherited, adjusted, and labeled from TL1 to TL4 as shown in Table 1

Table 1: Transformational leadership scale

My supervisor communicates a clear

and positive vision of the future

My supervisor communicates a clear and positive vision of the future

TLl

My supervisor gives encouragement

and recognition to staff

My supervisor encourages and recognizes employees' efforts and achievements

TL2

My supervisor fosters trust,

involvement, and cooperation among

team members

My supervisor promotes trust, participation, and cooperation among team members

TL3

My supervisor encourages thinking

about problems in new ways and

questions assumptions

My supervisor encourages thinking about problems in newways

TL4

3.2.3 “ Physical work environment" scale (adapted)

In this study, the authors used scales from the research of Anasi (2020), Sageer (2012), and Sheykhan & Saghaee (2011) Thereby, the authors inherited and adjusted 9 observed variables to measure the factor "physical working environment" and denotedPEW1 to PEW5 as shown in Table 2

Table 2: Physical environment scale

The arrangement of furniture Furniture and fixtures in the office

are arranged attractively and neatly

PEWl

The availability of natural flowers

The availability of some paintings

and pictures hanging around

My company has fresh flower decorations, ornamental plants, andwall paintings

PEW2

Well-ventilated with good light fans

and air-conditioning

A good air-conditioning facility

A working environment with

PEW3

Neat and clean office place, rest

area, and washrooms

The workplace, rest areas, and restrooms are neat and clean

PEW4

There are adequate and clean toilet

facilities in my office

Overall, my work environment is

hygienic and healthy

Recreational facilities are provided

in my office

The working environment providesfull entertainment facilities (billiards, gym, movie room, )

PEW5

3.2.4 Employee creativity scale (adjustable)

In this study, the authors used the scale of Jaiswal & Dhar (2015) with 4 observedvariables to measure the factor "employee creativity" The questions are inherited, adjusted, and labeled from ECI to EC4 as shown in Table 3

Table 3: Scale to measure employee creativity

This subordinate seeks new ideas

and ways to solve problems

I look for new ideas and solutions toproblems

ECI

This subordinate generates novel,

but operable work-related ideas

I generate novel but feasible related ideas

work-EC2

This subordinate demonstrates

originality in his/her work

I demonstrate originality in my work

EC3

3.2.5 Knowledge sharing scale (adjusted)

In this study, the authors used the scale of Zheng, Wu, & Xie, (2017) with 4 observed variables to measure the factor "organizational innovation" The questions areinherited, adjusted, and labeled from KS1 to KS4 as shown in Table 4

Table 4: Knowledge sharing scale

The members of project-based

organizations are capable of sharing

their expertise to bring new

initiatives to fruition

I feel like everyone in the organization can share theirexpertise to bring new initiatives to fruition

KSl

We feel that we have learned from

each other by sharing information or

ideas

I feel that we can learn from eachother by sharing information orideas

KS2

We are willing to share information

or ideas with the other members of

project-based organizations

I feel that people are always willing

to share information and ideas withother members of the organization

KS3

In the project, we are willing to

exchange and combine ideas to find

solutions to problems

I feel that al work, we are alwaysready to discuss problems andcombine each other’s opinions tofind solutions to problems

KS4

3.2.6 Organizational innovation scale (adjusted)

In this study, the authors used Noruzy et al.'s (2012) scale with 3 observedvariables to measure the factor "organizational innovation" The questions arc inherited, adjusted, and labeled from oil to 013 as shown in Table 5

Table 5: Organizational Innovation Scale

The rate of introduction of new The rate of introduction of new on

3.3 Research sample

products or services into the

organization has grown rapidly

products or services into banking hasincreased rapidly

The rate of introduction of new

methods of production or delivery

of services into the organization

has grown rapidly

The rate of application of newservice delivery or service delivery methods in banking has increased rapidly

OI2

In comparison with its

competitors, the organization has

become much more innovative

Compared to its competitors, bankshave become much more innovative

OI3

Sampling method: The research team selected the sample using the convenience(non-probability) sampling method, to make it easier to select the survey subjects that this study is aimed at

Sampling unit: employees who have worked at a commercial bank (from the timethey started working until the time of the survey) for six months or more

Sample scope: employees who have worked for six months or more (from the time they started working until the time of the survey) at commercial banks in the city

Ho Chi Minh

Sample size: In this study, the authors used exploratory factor analysis (EFA)and linear structural modeling (SEM) To use EFA the ratio of observations tomeasured variables is 5:1, preferably 10:1 The expected research model includes 19 measured variables, so the minimum number of samples must be: 95(19x5) However,

to run the SEM model, the minimum sample size to ensure is 300 for topics with several factor groups of 7 or less and low communicalities (below 0.45) (Hair et al., 2010).Therefore, the author issued 350 questionnaires with the hope of collecting at least 300 satisfactory responses for data analysis

CHAPTER 4: RESEARCH RESULTS

4.1 Description of the research sample

4.1.1 Gender

Data for quantitative analysis were collected through a survey of 300 employees working for at least 6 months at commercial banks in Ho Chi Minh City Statisticalresults show that the gender ratio of respondents is relatively equal with men (59%) and women (41%)

Table 6: Gender statistics of survey participants

Table 7: Statistics on the age of respondents participating in the survey

Frequency Frequency (%) Cumulative percentage

(%)

Table 8: Statistics on the educational level of survey participants

Frequency Frequency (%) Cumulative percentage

Table 9: Statistics on seniority working at the bank of survey participants

Frequency

—

Frequency (%)

— Cumulative percentage

(%)

From 1 - less than 5 years 189 63.00% 77.00%

Table 10: Statistics of survey participants' working departments

Frequenc

y

Frequency (%)

Cumulative

percentage (%)

Risk management department

(appraisal, debt collection) 41 13.67% 58.67%

Information technology room 25 8.33% 95.33%

Table 11: Statistics of direct superiors of survey participants

Frequency Frequency (%) Cumulative percentage

4.1.7 Income

Under 10 million VND/month is the income of the majority of bank employees

in Ho Chi Minh City participating in the survey, accounting for about 50.67% There 36.67% of people achieve an income of 10 million to less than 30 million per month.The survey data set shows 21 people earning 30 to less than 50 million/month Notably, the ideal income level of over 50 million/month accounts for 5.67% of the totalrespondents

Table 12: Income statistics of survey participants

Frequency Frequency (%) Cumulative percentage

4.2 Test the scale using Cronbach ’ s Alpha

The scale is considered reliable when it reaches Cronbach’s Alpha coefficient > 0.6 and variable-total correlation coefficient > 0.3 The results of Cronbach's Alpha

analysis show that all scales have very high reliability (all scales used have Cronbach’s

Alpha > 0.7) Therefore, the scales are retained to continue exploring the EFA factor

Table 13: Testing scales using Cronbach ’ s Alpha

type

Ad j usted total variable correlation

4.3 Results of EFA exploratory factor analysis

Exploratory factor analysis EFA is a quantitative analysis method used to reduce

a set of k observed variables into a set F (with F<k) of factors so that they are more

meaningful but still contain most of the content of the original variable set (Hair et al.,

2019) The special feature of the research team's proposed model is that 4 variables (I

independent variable, 2 intermediate variables, and 1 dependent variable) will be

analyzed by EFA 4 separate times Because there is one factor to be extracted, there will

be no rotated matrix, instead, there is an unrotated matrix in the results of EFA

exploratory factor analysis

EFA analysis for the independent variable Transformational Leadership: KMO =

0.823 > 0.5; sig = 0.000 < 0.05; Eigenvalue coefficient = 2.022 > 1 and the extracted

variance is 68.5 89% > 50%, proving that the extracted factor explains 68.589% of the variability of the data Evaluating factor loading factors (Factor Loading), all observed variables have loading factors > 0.5 Thus, the independent variable test results met the requirements and were retained to perform further statistical analysis.

EFA analysis for the intermediate variable Knowledge sharing: KMO index = 0.799 and sig = 0.000 < 0.05 proves that factor analysis is appropriate Eigenvalue = 2,649 > 1, variance extracted 66,741% > 50% satisfactory All observed variables have factor loadings greater than 0.5 Therefore, the results of the EFA factor analysis of theintermediate variable Knowledge sharing are satisfactory

EFA analysis for the intermediate variable Employee creativity: KMO = 0.775 > 0.5; sig = 0.000 < 0.05; Eigenvalue coefficient = 2.339 > 1 and extracted variance equal

to 79.305% > 50% The unrotated matrix results show that the loading factors of allobserved variables are greater than 0.5 Therefore, all three observed variables aregrouped into one factor

EFA analysis for the dependent variable Organizational innovation: KMOcoefficient = 0.806 > 0.5 with significance level sig = 0.000 < 0.05 proves that EFAanalysis is appropriate Eigenvalue = 2,812 > 1 and total variance extracted = 70,005% > 50% satisfactory The factor loading coefficients of the observed variables are allgreater than 0.5, so no observed variables are eliminated

In summary, through EFA factor analysis, 4 factors were extracted in turn, all meeting the requừements

4.4 Results of structural model testing (SMART PLS4)

4.4.1 Check reliability and convergent validity

Fừst, the research team evaluated the reliability of the scale through two typical indices, which are Cronbach's Alpha index (CA) and composite reliability (Composite Reliability - CR) Next, the assessment of the convergent validity of the latent variables

is based on the outer loading factor and the average variance extracted from AVE

Table 14: Results of analysis of CA, CR, and AVE