This study investigates the predictors of novelty of product ideas. Conceptual approach based on the theory has been applied to provide better understanding of the relationship between transformational leadership and two knowledge creation modes (internalization, externalization), as well as the relationship between transformational leadership and novelty of product ideas. We conducted a systematic review of literature regarding the transformational leadership and novelty of product ideas and

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... owledge creation modes. In the previous literature authors explored the link between transformational lidership and knowledge creation without detailed focus on knowledge creation modes. Therefore, the main contribution of this research is that it is one of the first studies to explore link between transformational leadership and novelty of product ideas, having two important knowledge creation modes as mediators. The main finding of this paper is theoretical model which should be validated by future research in order to be confirmed. Considering nature of the model, it is recommended for future research to conduct validation of the model using structural equation modelling method as the one which will provide reliable conclusions. According to proposed model based on the literature, it is expected that internalization and externalization will be mediators of the relationship between transformational leadership and novelty of product ideas.