The Effect of Transformational Leadership on Career Satisfaction: The Mediating Roles of Psychological Empowerment, Trust and Work Engagement and the Moderating Effect of Emotional Exhaustion
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Date
2025-06-30
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AAU
Abstract
This study explores the theoretical framework of Transformational Leadership (TL) and Career
Satisfaction (CS) in employees of fintech company in Addis Ababa, incorporating the mediating
effects of Psychological Empowerment (PE) and Work Engagement (WE) and how Emotional
Exhaustion (EE) moderates these processes. Employing a cross-sectional survey design, data
were gathered from 211 employees and analyzed through Partial Least Squares Structural
Equation Modeling (PLS-SEM) using SmartPLS 4. Model 1 tested the direct effects of TL
components (Idealized Influence, Inspirational Motivation, Intellectual Stimulation,
Individualized Consideration) on CS, revealing only Individualized Consideration as significant
with weak explanatory power . Model 2 examined TL as a higher-order construct, finding
significant indirect effects through PE and WE but not Trust, with moderate explanatory power.
The EE strongly moderated TL effects on PE and WE , diminishing these at high levels of EE.
Results confirm that TL influences CS through PE and WE, with EE moderating these effects,
thereby contributing to the theoretical understanding of leadership mechanisms and suggesting
practical strategies for improving CS through empowerment, engagement, and exhaustion
management.