The Impact of Leadership Styles and Leader-Member Exchange (LMX) on Organizational Commitment, Job Satisfaction, and Work Engagement: Evidence from Asset Management Companies
Author : Dr. Syed Mohammad Faisal, Ahmed Mohsen Ahmed Khormi and Dr. Ahmad Khalid Khan
Abstract :
This novel research is aimed to investigate the impression of leadership styles, mainly transformational and transactional leadership, on leadership effectiveness, organizational commitments, job satisfaction and work engagement within the context of asset management companies (AMCs) in India. Using a sample of 350 respondents, which was later refined to 312 after data screening. The study collected responses from employees at two leading asset management firms from New Delhi, India. The research applies Partial Least Squares Structural Equation Modelling (PLS-SEM) to assess the proposed relationships among leadership styles, leader-member exchange (LMX), leadership effectiveness, and key employee outcomes. Precisely, the study tests seven hypotheses suggesting that transformational and transactional leadership positively influence leadership effectiveness, while high-quality leader-member exchanges boost both organizational commitment and job satisfaction. Furthermore, the research explores the direct and mediating effects of leadership effectiveness, organizational commitment, and job satisfaction on work engagement. The results designate that transformational leadership meaningfully contributes to leadership effectiveness, while transactional leadership also plays a positive though less impactful, role. High-quality LMX relationships were found to expressively enhance both organizational commitment and job satisfaction. In turn, leadership effectiveness positively influenced job satisfaction, and both organizational commitment and job satisfaction were strong predictors of work engagement. This research provides valuable intuitions into how leadership practices shape employee attitudes and behaviours in the asset management sector. The study’s results suggest that adopting transformational leadership and improving leader-member exchanges can lead to more engaged, satisfied, and committed employees, which is critical for organizational success in competitive environments.
Keywords :
Leadership effectiveness, organizational success, job satisfaction, transformational leadership, transactional leadership, work engagement
