From Command to Care: Exploring the Mediating Role of Organizational Ambidexterity between Leadership Styles and Psychological Wellbeing

Abstract

Nowadays, maintaining the psychological wellbeing (PWB) of employees is one of the most significant challenges for organizations. Hence, the leadership role is critical in managing PWB when organizational dynamics are changing, particularly in terms of the exploration and exploitation of emerging technologies and innovation. Therefore, this study examines the influence of transformational (TFL) and transactional (TSL) leadership styles on PWB with the mediating role of organizational ambidexterity (OA). A deductive approach was adopted to test the developed hypothesis. At the same time, data were gathered from 253 employees working in pharmaceutical companies using a questionnaire, and the collected data were analyzed using SmartPLS. Results indicate that TFL has a significant impact on PWB while TSL has no impact. Furthermore, OA mediates the relationship between TFL, TFL, and PWB. Hence, the organization needs to develop strategies for the improvement of the PWB of employees, utilising leadership styles in the presence of OA. Additionally, this study offers policy implications and future directions for researchers.

Keywords: Transformational Leadership, Transactional Leadership, Organizational Ambidexterity, Psychological Wellbeing