Authentic Leadership and Employee Engagement in the Sri Lankan Apparel Industry: The Moderating Role of Power Distance and the Mediating Role of Leader-Member Exchange.

Abstract

Employee work engagement is commonly known to play a significant role in the effectiveness and sustainability of the organisation, especially in labour-intensive industries like the Sri Lankan apparel industry. Based on the social exchange theory, this study examines the impact of authentic leadership on employee work engagement, the mediating role of leader-member exchange, and the moderating role of power distance orientation. A structured questionnaire was used to gather data from 209 employees in apparel manufacturing organisations in Sri Lanka using convenience sampling. The gathered data were analyzed using SPSS, which included reliability, correlation, and regression-based mediation and moderation tests. These findings suggest that authentic leadership is significantly and positively related to employee work engagement (β = 0.41, p < 0.001). As well, authentic leadership was found to be a significant predictor of leader-member exchange (β = 0.52, p < 0.001), and leader-member exchange demonstrated a positive and significant relationship to employee work engagement (β = 0.36, p < 0.001), which revealed the mediation associated with leader-member exchange between authentic leadership and work engagement. Moreover, the interaction effect between authentic leadership and power distance orientation was significant (β = 0.18, p < 0.01), indicating that power distance orientation strengthens the indirect association between authentic leadership and work engagement through leader-member exchange. These results indicate that employees of high-power distance orientation are more likely to react positively to authentic leadership practices in organisational contexts. This work adds to the literature on leadership and employee engagement by offering empirical data from the Sri Lankan apparel industry and underlining the role of leadership authenticity and the quality of the leader-subordinate relationships within the framework of improving employee work engagement. The results have also provided practical implications for managers working in labour-intensive companies to embrace genuine leadership practices and enhance the leader-employee relationships to enhance work engagement.