Authentic leadership, individual performance and leadership outcomes in Serbia: the mediating role of psychological empowerment

Purpose The study's purpose is to determine the relationship between authentic leadership dimensions such as self-awareness, balanced processing, internalized moral perspective, and relational transparency on one side and individual employee performance and leadership outcomes on the other side, together with psychological empowerment serving as a mediating factor in the business context of Serbia. Design/methodology/approach The questionnaire was sent to employees in various companies operating in the territory of Serbia, and the final sample consists of 351 respondents. Data was processed using the structural modeling method (PLS-SEM) in the Smart PLS software. Findings The results of the study indicate that there is a statistically significant positive relationship between authentic leadership and both leadership outcomes and individual performance. Furthermore, psychological empowerment was identified as a significant mediator in these relationships. Research limitations/implications The study's limitation is that it was only conducted once regarding the organizations in the Republic of Serbia, which means that results cannot be compared to one another. However, this does not preclude further research on the same topic being carried out in the future to evaluate the current state of affairs after a certain amount of time has passed. Practical implications Based on results of this study, suggestion is that authentic leadership fosters psychological empowerment among employees, leading to significant and measurable enhancements in employee performance and leadership outcomes. The authors recommend that organizations improve these outcomes by selecting managers who exhibit authentic leadership qualities and by implementing comprehensive training and development programs aimed at cultivating an authentic leadership style among existing managers. Originality/value The paper makes a significant contribution by presenting a combination of constructs within a research model and analyzing it in the context of business environments in developing countries, where the topic is seen as situational phenomenon.