Abstract
With the growing number of Small and Medium-sized Enterprises (SMEs) worldwide, competition among them has increased to create a niche for themselves in their respective industry. Creativity and innovation across these SMEs play a very important role in sustaining them across their target market and also help them develop an edge over their competitors. The overall aim of this study is to examine how creativity can be improved among the employees in the SMEs in Australia. Specifically, this study aims to understand how transformational leadership and cultural intelligence can influence employee creativity. The study examines the direct relationship between transformational leadership and employee creativity as well as the mediating effect of cultural intelligence. These research objectives were accomplished by collecting primary data using surveys involving the use of quantitative methodology. The study collected data using a survey questionnaire from 100 participants based on convenience sampling which are contacted as per the ease of accessibility and availability of participants. Several analysis techniques such as Pearson's correlation test, multi-variate regression analysis, mediation analysis, and one way ANOVA was conducted using SPSS to derive results. Results indicates that transformational leadership has a positive and significant level of impact on the employee creativity. Moreover, transformational leadership was found to positively influence cultural intelligence and cultural intelligence was also positively influence employee creativity. Results of the mediation analysis indicate that cultural intelligence does not mediate between transformational leadership and employee creativity. Further analysis also showed that demographic factors such as gender, age and experience level have no impact on the employee creativity across the SMEs in Australia. This study is important as it reveals the impact of transformational leadership on improving both cultural intelligence and creativity of employees in the SMEs in Australia. Based on the findings of the study, the thesis provides numerous practical implications and future research avenues.