Effect of Psychological Empowerment and Transformational Leadership on Organizational Commitment

According to recent literature that relates to organizational leadership, transformational leadership consists of three important elements: idealized influence, individual consideration, and intellectual stimulation. Extant studies in this area highlighted that the ability of the leaders in implementing these transformational processes (to execute organizational functions) may have a significant impact on individual outcome especially organizational commitment. Although this relationship has been studied, the mediating role of psychological empowerment has taken a less prominent part in organizational leadership model. The purpose of this paper is to examine the influence of psychological empowerment in the relationship between transformational leadership and organizational commitment. A survey method was employed to gather data from employees who worked at a foreign manufacturing company in free trade zone, Malaysia. Results of SmartPLS path model analysis confirm that psychological empowerment does act as an important mediating variable in the relationship between transformational leadership and organizational commitment in the studied organizations. In the succeeding sections, discussion, implications and conclusion are elaborated.