Contingency approach to strategic management: a test of the mediating effect of leader member exchange on the relationship between psychological empowerment and job satisfaction in 21st century workplace

This study examined the mediating impact of leader-member exchange (LMX) on the relationship between dimensions of psychological empowerment and job satisfaction. 490 investment consultants, who work for non-bank financial intermediaries were used to test our hypotheses. We predicted that the role of LMX depends on the dimensions of psychological empowerment under investigation. Our results revealed that LMX fully mediated the relationship between competence dimension of psychological empowerment and job satisfaction, while LMX only partially mediated the relationships between meaning, choice, and impact dimensions of psychological empowerment and job satisfaction. These findings are important since previous research has not tested these variables together. Some suggestions for future research are offered.