Cultivating authentic leadership and its impact on employees’ psychological ownership and readiness for change relationship in family SMEs

Abstract

Background

Authentic leadership is crucial during the succession phase of a family business, as it helps employees adapt to change more effectively. Thus, developing a clear portrait of an authentic leader becomes essential to guide the business through this pivotal phase.

Objective

This study aims to explore authentic leadership in family SMEs using a resource-based approach, with inputs like leaders’ psychological capital, social intelligence, and family culture. It also examines how authentic leadership moderates the link between employees’ psychological ownership and readiness for organisational change.

Methods

A multilevel model was used, based on data collected from 107 leaders and 693 employees in Vietnamese family SMEs.

Results

The findings reveal that psychological capital, social intelligence, and family culture play a critical role in shaping authentic leadership. Moreover, by leveraging the potential for change, authentic leaders can amplify the positive aspects of psychological ownership, fostering greater employee readiness for organisational change.

Conclusions

This study portrays an authentic leader who aids family businesses in smooth generational transitions while also strengthening the link between psychological ownership and readiness for organisational change, which has been unclear in past research.