Be a people-centered leader and foster organizational citizenship behavior: the sequential mediation of leader-member exchange and employee satisfaction in a transitioning economy

Purpose This study examined the sequential relationship between people-centered leadership (PCL), leader-member exchange (LMX), employee satisfaction (ES), and organizational citizenship behavior (OCB) in a public organization established to guide 10 public enterprises through economic transition. It also investigated how relational transparency (RT) moderates the effect of people-centered leadership on organizational citizenship behavior. Design/methodology/approach This study surveyed 122 employees of a public organization in Ethiopia, a country undergoing a broad transition from a state-controlled to a market-based economy, posing a risk to public enterprises of losing their brightest talent to domestic and foreign private companies offering higher incentives. Hypotheses were tested using the PROCESS macro (Models 4, 6, and 1). Findings The findings demonstrate a positive and significant relationship between people-centered leadership and organizational citizenship behavior. Leader-member exchange and employee satisfaction sequentially strengthen this effect of PCL on OCB, while relational transparency significantly moderates the relationship between PCL and OCB. Practical implications The findings suggest that people-centered leadership drives organizational citizenship behavior through leader-member exchange and employee satisfaction. This highlights that public-sector leadership should prioritize empathy, support, and employee well-being to strengthen leader–employee relationships and employee overall satisfaction, ultimately fostering employees' discretionary behaviors beyond contractual obligations. Originality/value The study advances the sequential relationship of people-centered leadership, leader-member exchange, employee satisfaction, and organizational citizenship behavior into an under-researched context undergoing economic transition. It also contributes to solidifying the literature considering the independent role of relational transparency.