In the service industry, servant leadership (SL) has considered as a key leadership style for boosting innovation, encouraging creative behavior, and propelling management innovation (Karatepe et al., 2020). Servant leaders foster innovative environments by putting employees' needs first and encouraging their growth. Karatepe et al. (2020) stated that the SL has a positive impact on the developing creative climate, which in turn fosters innovative behavior and management innovation in the service organizations. Researches showed that the creative and innovative climate mostly mediates between the SL and innovative work behavior and management innovation. The connection between SL and innovative work behavior (IWB) is supported by Musenze et al. (2024) showed how the innovation climate mediates the relationship between SL and IWB emphasizing the part servant leaders play in fostering an atmosphere that encourages employee creativity. The explained concept of servant leaders, Innovation and creativity had theoretical foundation with the theory of innovative work behavior (De Jong & Den Hartog, 2010). The theory stressed on the ways of contributing innovation by the employees in four stages as idea exploration, generation, championing, and implementation. Additionally, it emphasizes that innovative behavior is greatly influenced by the organizational context mostly by employees. Thus the employee’s creativity and innovation interchangeably impact between servant leadership and innovation behavior and management innovation (Saleem et al., 2024).

As skilled employee’s exhibit innovative behavior, influence customer satisfaction and loyalty levels, and contribute to the company's increased profit margins and competitive advantage (Lombardi, 2019; Tajeddini, Martin, & Altinay, 2020). Employees' innovative behavior determine their intention of creating novel ideas and processes them (Yuan & Woodman, 2010). Subsequently, the management commitment and leadership behaviors can significantly affect management innovation (Hassi, 2019; Vaccaro et al., 2012) which is influences by the innovative behavior of leaders shaped by knowledge and cognitive ability of leaders and employees.  The output of management innovation is stated for competitive advantage (Khosravi et al., 2019).

In the hotel industry landscape, fostering innovation has become a crucial aspect of organizational success. The leadership and innovation enhance the creative behavior of employees (Tajeddini, Martin, & Ali, 2020). Effective leadership styles are pivotal in shaping the innovative culture and to maintain a competitive edge achieving success in an environment of rapid change.  The servant leadership is one of the leadership styles having significant role to demonstrate the serving culture in organizational settings and resulted for fostering employee’s creativity (Liden et al., 2014). The SL also act for promoting individual relational identification and collective proto-typicality with leaders. However, creativity and innovation are different constructs that arise as the result of distinct processes and lead to different outcomes (Hughes et al., 2018).

Although such findings still have a positive light on them, there has been poor research on the behind-the-scene mental procedures through which servant leadership elicits an innovative behavior amongst employees (Eva et al., 2019). The other managerial and financial methods to maintain the organizations prevail over the innovation and encouraging creativity in Nepalese context in terms of its cognitive and operant impact. Innovation has a significant purpose within the context of the current business environment and a contemporary mode of doing business whereby it helps organizations to maintain their long-term success, become and remain competitive and outsmart their competitors. Hence, the ability to innovate dictates the success of a firm to a large extent (Mirabito et al., 2016).  In an ever-changing and dynamic environment, the hotel industry market demands offering an innovative commitment should be a dedicated practice to retain the competitive status within the market. Leadership styles can contribute to the development of the innovative culture of the organization, and servant leadership is one of such constructs, as it is known to deliver positive effects on employee wellness and organizational performance (Hassi, 2019).  The present research examines the possible mediating role of climate to creativity in the correlation between servant leadership and management innovation in the hotel enterprises. It examines the influence of servant leadership behaviors in shaping a critical environment that will drive the innovation among employees and contribute to the success of an organization in the hotel sector.

This paper examines the effects of servant leadership on management innovation as well as innovation behavior by employees, and assesses the mediating effects of creative behavior between servant leadership, management innovation and innovative behaviour in five-star hotels in Kathmandu in Nepal.

According to servant leadership (SEL) theory, servant leaders promote innovation among managers and employees (Van Dierendonck & Rook, 2010). Effective adoption of servant leadership generates management practices, processes, and organizational structures that closely support corporate objectives. By championing servant leadership, organizations become more receptive to implementing these new methods and frameworks. Two main reasons underpin this premise. Servant leaders emphasize the importance of communication in setting expectations for staff (Liden et al., 2014). This is crucial when employee tasks and responsibilities change. Second, SEL promotes innovative solutions to existing issues (Van Dierendonck, 2011). This is required when management introduces and deploys new systems. Although SEL plays a vital role in driving management innovation, there is little evidence linking the two notions. Similarly, to create an environment conducive to innovation promotes inventive behavior which fosters a creative environment and managerial innovation in hospitality industry (Hassi, 2019).

Based on the concept of Greenleaf (2013) 'reaching beyond one's self-interest' is one of the important aspect of servant leadership. Similar concept has been stressed by van Dierendonck and Sousa (2016), leaders who prioritize the well-being of their followers use their position to serve them, making the terms "servant" and "leader" almost interchangeable. A servant leader prioritizes servicing followers and recognizing their intrinsic value, as opposed to focusing solely on the organization's success (Greenleaf, 2013). The follower-oriented mentality fosters psychological safety, trust, and justice among employees. Meeting employees' psychological expectations improves their connections with bosses. These favorable effects predict employees’ constructive feedback to servant leaders and, consequently, cultivate employees’ creative work involvement (Carmeli et al., 2013). An employee's initiative to share information with coworkers is a key factor in driving innovation. When employees share their ideas in the workplace, they might develop new knowledge through the sharing spiral of both tacit and explicit information. The socializing, externalizing, combining, and internalizing knowledge enhances individuals' ability to be creative and to adopt the innovative behavior (Bani-Melhem et al., 2018).

According to development theory of Pieterse (2010), employees feel more accountable for their work and seek innovative ideas to improve their performance. Liden et al. (2014) suggest that employees can share their knowledge and job experience with coworkers. Similar argument is offered by Sharples et al. (2016) stated that the individuals who work collaboratively, express themselves authentically, and listen to other opinions are more likely to find acceptable solutions. Creating a varied and open community encourages employees to share information and produce new ideas. Based on these all theoretical and empirical evidences, it can be hypothesized that:

H1: Servant Leadership positively relates to Management Innovation in Nepalese 5-star hotels in Kathmandu.

Organizations are constantly seeking new ways to innovate and stay competitive in a rapidly changing business environment. Innovation is crucial for achieving organizational success and gaining an edge over competitors (Shin et al., 2017). To foster innovation, employers strive to develop employees' potential since they are the ones who create and implement innovative projects (Pieterse, 2010). One emerging trend in this area is the increasing interest in servant leadership, a leadership style that focuses on the needs and growth of employees (Nguyen et al., 2023). Encouraging followers to accept responsibility for their work is a fundamental aspect of being a servant leader, and it is also crucial for managing creativity. Employees are more likely to come up with creative solutions when they are allowed to experiment, explore ideas, and take measured risks. Based on empirical studies (Ekmekcioglu & Öner, 2024; Khan et al., 2022; Kül & Sönmez, 2021), it can be hypothesised that:

H₂: Servant Leadership relates positively to Innovative Behavior in Nepalese 5-star hotels in Kathmandu.

Through cultivating a nurturing climate that encourages risk-taking and transparent dialogue, servant leadership enhances employees’ creative capabilities. According to research by Iqbal et al. (2023), servant leaders foster a creative environment, which serves as a bridge between their leadership style and the creative behaviors of their followers. Kim and Williams (2020) state that psychological safety and employee well-being are critical factors in this setting. Servant leadership not only offers the resources for innovation but also fosters an environment in which people feel comfortable sharing their ideas. Based on these evidences it can be hypothesized that:

H3: Servant leadership positively relates to Creativity in Nepalese 5-star hotels in Kathmandu

Creativity is essential for work performance (Wu, 2019) and organizational competitiveness (Andrei, 2019). Numerous studies have focused on the factors that contribute to creativity. Researchers have used several viewpoints, including information exchange and psychological safety, in addition to job design and mood considerations. Choi et al. (2016) believe that management should encourage followers to produce innovative solutions and take chances without fear of prejudice. Similarly, Kim and Yoon (2015) identified resources for innovation, flexibility, reward systems, and acknowledgment as key characteristics of a creative environment.

H5: Creativity positively relates to innovative behavior in Nepalese 5-star hotels in Kathmandu

H4: Creativity positively relates to Management Innovation in Nepalese 5-star hotels in Kathmandu

Management innovation is the application of novel management techniques, procedures, or structures to improve organizational performance and competitiveness (Birkinshaw et al., 2008). It involves changes in organizational management, such as new tactics for increasing efficiency and effectiveness. Innovative behavior refers to employees' motivation and aptitude to produce and execute new ideas, procedures, or products in the workplace. This behavior is critical for firms that want to react to changing market conditions and client expectations. Recent empirical investigations show a link between managerial innovation and inventive behavior. For example, Karatepe et al. (2019) discovered that a culture of creativity buffers the influence of servant leadership on both managerial innovation and inventive behavior among hotel employees. The findings indicate that when firms establish a supportive environment that supports creativity, workers are more likely to participate in innovative activities that lead to management innovation.

H6: Management Innovation positively relates to Innovative Behavior in Nepalese

5-star hotels in Kathmandu

The function of creativity as a mediator in the link between Servant Leadership (SEL) and management innovation is critical for understanding how effective leadership may promote creative behaviors in the hospitality industry. According to recent study by (Akhtar et al., 2024), servant leadership generates a creative environment, which favorably impacts both management innovation and inventive behavior among employees. Servant leaders foster an environment that supports open conversation, experimentation, and idea exchange, all of which are necessary for nurturing creativity. Employees who perceive a conducive environment for creativity are more likely to engage in creative behaviors that help to create and execute new management practices and procedures (Fadila & Sawitri, 2023). This link emphasizes the significance of engaging in servant leadership methods to spark creativity among teams, resulting in improved management innovation and a competitive edge in the hospitality industry. This encouraging environment empowers individuals to develop new ideas, which improves overall company performance. Based on these literatures, it can be hypothesized:

H7: The mediating role in the relationship between Servant Leadership and Innovative Behavior is played by Creativity in Nepalese 5-star hotels in Kathmandu.

Figure: 1

Research Framework

A structured questionnaire survey within a quantitative causal‑comparative framework was used to investigate how servant leadership, creativity, management innovation, and employees’ innovative behavior interrelate in the hospitality industry. The causal-comparative design investigates cause-and-effect relationships through group comparison was employed to examine the potential influence of servant leadership and creativity on management innovation and innovative behavior, without direct control over independent variables (Fraenkel et al., 2012; Nassaji, 2015). A total of 250 staff members from chosen five‑star hotels in Kathmandu, Nepal, were surveyed using structured, self‑administered questionnaires, employing purposive and convenience sampling to target those with pertinent expertise and experience.

The instrument included validated measurement scales adapted from previous studies servant leadership (Zhu & Zhang, 2020), management innovation (Campo et al., 2014), and innovative behavior and creativity (Karatepe et al., 2020) and used a 5-point Likert scale to quantify perceptions. A pilot test with 20 respondents helped refine the questionnaire for clarity and reliability. Primary data were gathered electronically using google sheet and analyzed using SPSS, applying inferential techniques (correlation, regression, and mediation analysis) to test hypotheses and uncover the dynamics between variables (Hair Jr et al., 2020). This methodological approach enabled robust examination of causal patterns and associations within a high-context service environment, supporting both theoretical insight and practical implications for innovation management in hospitality.

Respondent’s Profile

Table: 1 Demographic details of respondents

The 250 respondents' demographic distribution shows that young, educated, single people make up the majority of the workforce. There was a notable gender imbalance in Kathmandu's hotel industry, as the vast majority (60.4%) were men. Over half (54.8%) of the respondents are between the ages of 20 and 29, indicating a trend of early career engagement in the hospitality industry just 2.8% of respondents were over 50 years, indicating the industry’s dynamic and potential high turnover. Interestingly, 61.6% of participants were unmarried, which fits with the youth-dominant profile and might suggest more options for employment or location. With no responders stating only a high school education, a startling 98 percent of respondents had at least a bachelor's degree, indicating that new hires in the hospitality industry are becoming more academically qualified. The highest gross income was distributed in a fairly balanced manner.

Correlation Analysis

These values help researchers identify how closely two variables are connected. The correlation between servant leadership and innovative behavior is (r=0.442) implies that there is positive and moderate association. But the association between climate for creativity and innovation behavior seem positive low correlation (r= 0.268). Correlation between management innovation and innovation behavior is positive and comparatively high correlation with significant association (r=0.486) suggesting that as management innovation increases, innovation behavior also rises.

Regression and ANOVA of Servant Leadership, Creativity, Innovative Behavior on Management Innovation

Table: 2 Regression Coefficients of management innovation, servant leadership, creativity, and innovative behavior

The regression analysis in Table 2 reveals that both servant leadership (SL) and innovative behavior (IB) significantly and positively predict management innovation (MI) among hotel employees, while creativity (C) shows a weaker and statistically marginal effect. Innovative behavior emerges as the most influential predictor (β = 0.325, p < 0.001), highlighting that employees who demonstrate proactive, experimental, and risk-taking behaviors are key drivers of innovation in hotel management. Servant leadership also has a substantial and significant impact (β = 0.297, p < 0.001), suggesting that leadership characterized by support, empowerment, and ethical concern enhances an organizational climate conducive to innovation. In contrast, while creativity contributes positively (β = 0.100), its effect is not statistically significant (p = 0.081), indicating it may not independently predict MI but could function as a mediator or enabler when combined with other variables. These findings collectively underscore the critical roles of leadership and employee behavior in fostering innovation within the hospitality sector.

Table: 3 ANOVA of Servant Leadership, Creativity, Innovative Behavior on Management Innovation

1. Dependent Variable: MI
2. Predictors: (Constant), IB, C, SL

Table 3 displays the ANOVA results for the regression analysis assessing how servant leadership (SL), creativity (C), and innovative behavior (IB) predict management innovation (MI). The model produces an F‑value of 39.256 (p < 0.001), demonstrating that the inclusion of these three variables significantly enhances the model’s explanatory power compared to an intercept‑only model. In other words, SL, C, and IB jointly make a meaningful contribution to explaining variations in management innovation within the hotel sector.

Table 4 Regression Coefficients of servant leadership, creativity, and innovative behavior

Table 4 summarizes the regression analysis of servant leadership (SL) and creativity (C) on innovative behavior (IB). Servant leadership emerges as a robust, highly significant predictor of innovative behavior (B = 0.291, β = 0.392, t = 6.378, p < 0.001), indicating that greater levels of SL correspond to marked increases in IB. Creativity also contributes positively albeit to a lesser extent (B = 0.109, β = 0.124, t = 2.020, p = 0.044), implying it plays a supportive but smaller role in enhancing innovative behavior. These results highlight that in the hotel industry, leadership practices that emphasize service and support are more influential than creativity alone in promoting employee innovation.

Table 5 ANOVA of Servant Leadership, Creativity on Innovative Behavior

1. Dependent Variable: IB
2. Predictors: (Constant), C, SL

Table 5 displays the ANOVA outcomes for the regression examining how servant leadership (SL) and creativity (C) jointly predict innovative behavior (IB). The model produces an F-statistic of 31.329 (p < 0.001), demonstrating that the predictors, as a set, account for a significant share of the variance in IB. These findings confirm that SL and C together serve as meaningful contributors to employees’ innovative behavior in the hotel industry.

Table: 6 Direct effect of variables

The mediation model tested the effects of servant leadership (SL) and creativity (C) on both management innovation (MI) and innovative behavior (IB). The direct effect of servant leadership on both outcomes was positive and statistically significant, with SL showing a stronger influence than creativity, particularly on management innovation (effect = 0.3430, p < .001) and innovative behavior (effect = 0.2915, p < .001). Creativity had a significant direct impact on innovative behavior (p = .0445), though its effect size was modest (0.1090). However, its direct effect on management innovation was not statistically significant, as the confidence interval included zero.

Table 7 Indirect effect of variables

Concerning the indirect effects, the novelty was sampled as an intervening variable between servant leadership and outcomes of innovation. The indirect effect through creativity (0.0339) was not significant, where the bootstrapped confidence interval was crossed by zero (BootLLCI = -0.0105; BootULCI = 0.0777). This implies that creativeness though adding a positive influence on its own has no significant mediating role to play in the connection that exists between servant leadership and innovative behavior or management innovation, as set out in the context of the study.

This study explored the effects of servant leadership and a creative work environment on management innovation and employees’ innovative behavior in Nepal’s hotel industry. The findings show that servant leadership significantly fosters an empowering, supportive climate that substantially boosts both innovative behavior and management innovation. These findings are consistent with earlier research that emphasizes servant leadership's ability to foster employee autonomy, trust, and motivation all of which are critical for long-term innovation (Eva et al., 2019; Liden et al., 2014). By putting their teams' growth and well-being first, servant leaders foster psychological safety and experimentation readiness, which encourage innovation on both a managerial and individual level.

Creativity has been observed to exert a considerable direct influence on innovative behavior, yet it did not demonstrate a substantial effect on management innovation. The result is contradict with Auernhammer and Hall (2014) which may implies that the creativity  may serve as a driving force for innovation at the individual level, its effective translation into innovation at the organizational level may necessitate supplementary structural or cultural facilitators. This observation aligns with the proposition that creativity constitutes a prerequisite but insufficient condition for achieving more expansive innovation outcomes, unless it is underpinned by favorable leadership and strategic coherence (Anderson et al., 2014; Zhou & Hoever, 2014). Additionally, it indicates that in rapidly evolving service environments such as hospitality, creativity must be effectively harnessed through competent leadership in order to realize scalable innovation. The mediating function of creativity in the nexus between servant leadership and innovation was not statistically significant, which is similar with the study of Mahendri et al. (2022) suggesting that servant leadership predominantly affects innovation through direct pathways rather than being mediated solely by employee creativity.

This stands in contrast to certain extant research that underscores creativity as an essential mediating variable(Amabile & Pratt, 2016); however, it corroborates an expanding corpus of scholarship that posits that leadership behaviors can directly cultivate innovation by establishing a pro-innovation environment and alleviating obstacles to transformation (Hunter et al., 2011).

Collectively, these results enhance the theoretical framework regarding the interplay between leadership and individual competencies in influencing innovation within service-oriented sectors. They underscore the necessity of integrating leadership development into innovation frameworks and indicate that merely promoting creativity may prove inadequate in the absence of conducive leadership structures. From a pragmatic standpoint, hotel managers and executives ought to prioritize servant leadership paradigms to bolster both individual employee innovation and overarching organizational innovation dynamics.

In Nepal’s five‑star hotel sector, this research examined how servant leadership relates to management innovation and employees’ innovative behavior, with creativity climate serving as a mediator. The analysis revealed that servant leadership is strongly and positively associated with both creativity and management innovation, suggesting that this leadership style cultivates an environment conducive to innovation. Moreover, the results indicate that servant leadership directly enhances management innovation and innovative behavior, implying that leaders who embrace servant leadership principles can substantially elevate their organization’s innovative capacity.

Particularly, it was discovered that creativity mediated the association between servant leadership and innovative behavior of employees, supporting the theoretical claim that human-centered leadership approaches improve organizational innovation capacity by fostering an environment that is both creative and positive organizational behavior. These findings highlight how important servant leadership is strategically in fostering innovative cultures in the hospitality industry. Servant leaders make a significant contribution to improving management techniques and environments for innovation by emphasizing staff development and encouraging innovative environments.

Practitioners should prioritize servant leadership training to cultivate empathy-driven management and foster a creative climate that supports innovation. Organizational barriers to adopting such leadership styles must be identified and addressed to enable effective management innovation. For academics, future research should explore the longitudinal and contextual dynamics of the servant leadership–creativity–innovation relationship to deepen theoretical understanding and guide evidence-based leadership practices.

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