An exploratory analysis for the influence of leadership style on psychological contracts and organisational value

Abstract

The study investigates leadership style and behavior the impact on the psychological contracts of employees and their sense of values committed to the organization in India. Initially, the study sought to identify the effect of leadership styles on psychological contracts, then to determine the connection between leadership behaviours and employees' value commitment, and finally, to establish how leadership affects trust and value in the organization. Descriptive and exploratory designs along with a mixed methods approach were implemented. In the study, the questionnaires were administered to a total of 200 executives and senior managers who were randomly selected. The SPSS software was used for the data analysis, and regression models were employed for hypothesis testing. The findings reveal the relationships between leadership styles and psychological contracts to be significant (β = .175, p = .013), while leadership behaviors are the main drivers of employees’ commitment to organizational values (β = .495, p = .000). In addition, leadership activities were identified as a source of organizational trust, thus, leading to value over time. The results of the study highlight the role of transformational and moral leadership in the 'task of employee commitment and, subsequently, organizational success.'