Relationship between authentic leadership, Leader-Member Exchange (LMX) and employees’ Psychological Capital

Running head: POSITIVE LEADERSHIP
Relationship between authentic leadership, Leader-Member Exchange (LMX) and employees’
Psychological Capital
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POSITIVE LEADERSHIP
Contents
Introduction...........................................................................................................................................2
Literature review...................................................................................................................................2
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7
Introduction
In today’s dynamic business environment and socio economic context it is vital to interpret
the significance of stability in different organisations so as to ensure employees commitment
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POSITIVE LEADERSHIP
towards organisation and hence the role of psychological capital and its relations with
leadership helps to build and improve psychological climate. Hence to respond effectively to
dynamic business environment organisations look to explore the manner through which
productivity can be increased along with facilitating growth for organisation that is required
to stay competitive and sustainable on global scenario. As such to attain international
competitiveness the firms need to ensure that they execute workforce intervention approaches
that are meant to improve the psychological climate and extend the psychological capital.
Further to bring more effectiveness authentic leadership can be extended so that it can drive
to relevant influence over levels of psychological capital and climate thus potentially
stimulating the behaviour and attitude of employees and building their strong commitment for
organisation.
Literature review
Relationship between authentic leadership, LMX and PsyCap
Authentic leadership forms the base of positive organisational behaviour that is significant to
enhance psychological capital and helps to boost climate in organisation as it is determined as
a procedure of leader behaviour that drives and facilitates both positive psychological
abilities as well as positive ethical climate to promote larger self-awareness, greater internal
moral perspective and relational transparency on behalf of leaders who work with followers
which helps to develop self-improvement of both the leader and their followers. As such
authentic leadership helps to boost employees performance at both individual and group level
and even facilitates psychological capital so as to enhance trust levels which in turn impacts
employees behaviour (Munyaka et al. pg 42, 2017). Also psychological capital has significant
correlation with authenticity and transformational leadership as well as there exists a positive
association between authentic leadership and psychological capital which indicates that
employees psychological capital is correlated with their attitude as well as their strengths
which gives them direction to meet desirable objectives for efficacious functioning of human
resources in context of todays’ challenging environment.
Also psychological capital helps to build positive psychological state of development within
employees that helps them improve their self-efficacy thereby making them give needed
efforts to overcome and succeed challenges at work as well as encourages them to take risks
thus shaping optimistic behaviour in employees which helps them attain success, makes them
move towards goals and when they are faced with adversity the employees learn to sustain
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