Wellbeing in the Digital Age: The Influence of Ethical Leadership and Organisational Culture via Work Engagement and Psychological Capital

In Pakistan, ethical leadership (EL) is rare in practice in organisations, although leadership style plays a crucial role in employee well-being (EWB) worldwide. In this context, the research hypothesizes that psychological capital mediates the relationship between ethical leadership and employee well-being. The significance and existence of employee well-being will be highlighted on the bases of Job Demand Resource (JD-R) Model to investigate the impact of organizational culture (OC) and ethical leadership on employee wellbeing via the mediating mechanism of work engagement (WE) and the moderating role of psychological capital (PC) in Pakistan. The research approaches the study by distributing structured questionnaires to 289 IT sector employees working in remote settings in Karachi, Pakistan. Hypothesis testing was carried out using Partial Least Squares-Structured Equation Modelling (PLS-SEM). The study finds that organizational culture has a significant impact on employee well-being and that work engagement mediates the relationship between organizational culture and employee well-being. Substantially, the research implicates that organizations should create an environment that fosters the overall employee wellbeing that will boost the performance on both individual and at organizational levels because a culture where employees are given freedom, it enhances their work engagement leading to a positive wellbeing that is crucial in remote workers especially due to fewer interactions with the colleagues and leadership.