Authentic Leadership and Socially Responsible Behavior: Sequential Mediation of Psychological Empowerment and Psychological Capital and Moderating Effect of Perceived Corporate Social Responsibility

Abstract

The aim of the study is to explore the relationship between authentic leadership and socially responsible behavior among employees in Saudi Arabia’s service sector, which aligns with Saudi Vision 2030. Utilizing social cognitive theory as the theoretical framework, the research proposes that authentic leadership indirectly influences socially responsible behavior through psychological empowerment and psychological capital as parallel and serial mediators. Additionally, the study examines the moderating effect of CSR perceptions on these relationships. A cross-sectional survey was conducted with 349 professionals from the service sector. The results, analyzed using partial least squares structural equation modeling (PLS-SEM), revealed that authentic leadership does not directly impact SRB. Instead, the relationship is fully mediated by psychological empowerment and psychological capital. Moreover, CSR perceptions significantly moderate the relationship between authentic leadership and psychological empowerment and have an indirect effect of authentic leadership on SRB through psychological empowerment and psychological capital. The findings highlight the importance of fostering an authentic leadership style and the way the psychological resources of empowerment and psychological capital carry forward this effect to promote SRB in the service sector. Additionally, the study underscores the role of CSR perceptions in strengthening the impact of authentic leadership on employee outcomes. The research contributes to the literature on leadership, CSR, and employee behavior and also offers practical implications for organizations aiming to enhance their social responsibility initiatives.

1. Introduction

A long haul of research in corporate social responsibility (CSR) has given rise to a general opinion that an organization, as a collective, is solely responsible towards society, environmental sustainability, and philanthropic endeavors. The social responsibility of an individual employee has received scant attention despite evidence indicating that employees play an important role in social responsibility (CSR) initiatives, with their perceptions and attitudes significantly impacting the success of these programs [1,2]. Socially responsible behavior (SRB) is the voluntary choice and behavior of employees to improve social well-being (do good) or to prevent social harm (do no harm) [3]. This concept encompasses both in-role discretionary activities, like helping a colleague, and extra-role voluntary activities, such as environmental initiatives or volunteering for a charitable event [4].

Studying employee SRB alongside CSR is imperative for organizations aiming to enhance their CSR initiatives, thereby exerting a substantial influence on societal well-being. Socially responsible behavior is important for organizations to achieve sustainability and legitimacy in the current business environment, where stakeholders demand more accountability and responsibility from firms [5]. In addition, employee participation in socially responsible actions can enhance organizational reputation, employee satisfaction, and stakeholder trust, and it emphasizes the importance of integrating employees’ CSR behaviors into the broader corporate CSR strategy [6]. By fostering socially responsible behaviors among employees, organizations do not just align with their internal CSR goals but also substantially contribute to the overarching aims of global sustainability and well-being [7], which is emphasized in the United Nations Sustainable Development Goals (SDGs). The SDGs provide a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030 [8]. By fostering SRB, organizations can contribute to several SDGs, including decent work and economic growth (Goal 8), reduced inequalities (Goal 10), and responsible consumption and production (Goal 12).

The purpose of this research is to explore how leadership influences employee’s tendencies to indulge in socially responsible behaviors. The growing trend of self-centered leadership, which prioritizes personal benefits over the long-term well-being of society and individuals, has highlighted the importance of leadership approaches that emphasize sustainable performance, quality products, and equitable returns to stakeholders in a lasting manner [9]. This shift in focus has catalyzed a burgeoning interest within organizational studies toward the concept of leaders who are caring, authentic, and trustworthy [10]. Developed within the framework of positive psychology, authentic leadership (AL) promotes positive psychological attributes, pro-social behavior, and an ethical climate among followers [11]. Authentic leaders not only exhibit these characteristics themselves but also encourage their followers to develop them, thereby creating an environment where positive organizational behaviors can thrive. These leaders support their team’s growth by demonstrating genuine values, providing honest feedback, and prioritizing the team’s needs [12].

Previous literature shows that AL can enhance various positive workplace outcomes, including but not limited to job performance [13,14], subjective well-being [15], and citizenship behavior [16]. A recent comprehensive meta-analytic study by Zhang, Guo, Zhang, Xu, Liu, and Newman [9] confirmed a strong positive influence of AL on a myriad of positive outcomes, i.e., job attitudes (job satisfaction, organizational commitment, job engagement, psychological empowerment, psychological safety, workplace trust) and job behaviors (organizational citizenship behavior, job performance, employee creativity, leader-member exchange, and team performance). The meta-analytic study also highlighted its negative correlation with emotional exhaustion and counterproductive work behavior. However, it is still unclear how leader authenticity influences employees’ propensity for SRB.

Furthermore, this study seeks to elucidate the cognitive mechanisms that underlie the relationship between AL and SRB. Previous research has consistently shown that positive cognitive resources of psychological empowerment (PsyEmp) and psychological capital (PsyCap) mediate the effects of authentic leadership on various behavioral outcomes [17,18,19,20]. PsyEmp is a concept that centers around an individual’s sense of control, motivation, and self-efficacy within their work context. It is defined as “an individual’s experience of intrinsic motivation that is based on cognitions about themselves and their work role” [21]. PsyCap, a positive psychological state, represents a core set of four fundamental psychological resources: hope, optimism, self-efficacy, and resilience [22]. Both PsyEmp and PsyCap are malleable and developable positive psychological resources that represent an individual’s strengths and cognitive capabilities [23]. Drawing from social cognitive theory (SCT), which posits a reciprocal interaction between individual cognition, behavior, and environmental factors [24], this study proposes that AL serves as a contextual antecedent to SRB, indirectly influencing it through psychological empowerment and PsyCap

Additionally, this research responds to calls for more nuanced explorations of the role that situational factors play in ethical and prosocial organizational behavior [25,26]. There is a positive relationship between employees’ appraisal of their company’s commitment to social responsibility and their own SRB [27]. Therefore, under the principles of SCT, it is plausible that CSR practices would interact with AL as environmental factors that shape an individual’s cognition (PsyEmp and PsyCap) and behavior (SRB). He et al. [28] also found a positive interactive effect of community-based CSR and ethical leadership on employee green behavior and societal SRB. Therefore, the current research proposes that employees’ perceptions of their organizational CSR activities have a moderating influence on how AL relates to psychological resources and SRB. In essence, this research addresses the following research questions:

RQ1: What is the relationship between authentic leadership and SRB?

RQ2: How do the cognitive resources of PsyEmp and PsyCap mediate the relationship between authentic leadership and SRB?

RQ3: What is the moderating effect of perceived corporate social responsibility?

Study Context

The study population comprised service sector professional employees in Saudi Arabia. The service sector plays a pivotal role in Saudi Arabia’s economy, contributing significantly to its diversification and growth [29]. As the country embarks on its ambitious Vision 2030 plan, the service sector is expected to become even more crucial in driving economic development and reducing dependency on oil revenues [30]. The sector consists of a wide range of industries, including finance, healthcare, education, tourism, and retail, each of which is undergoing substantial transformation as part of the national development strategy. Moreover, social responsibility is also integrated within Saudi Vision 2030, with the government introducing various initiatives in different sectors, such as CSR programs, community engagement programs, and sustainable development goal (SDG) alignment [31]. Similarly, in Saudi Arabia, where Islamic principles are deeply ingrained in both personal and professional life, leaders embodying traits of authenticity like honesty, justice, and ethical behaviors are likely to be more respected and trusted by their followers [32].

2. Literature and Hypothesis

2.1. Socially Responsible Behavior

Research in SRB is scant and there are limited yet divergent perspectives adopted in the existing literature. Veetikazhi [4] is of the view that SRB encompasses a broad spectrum of actions, ranging from in-role discretionary activity to an extra role in voluntary activity. Ref. [33] extends the macro-level CSR pyramid framework by Carroll [34], which categorizes corporate responsibilities into economic, legal, ethical, and philanthropic layers to individual employees. They argue that employees can adopt these layers as part of their job roles, enhancing SREB. Further, they advocate for the application of the seven CSR principles outlined by the International Standard Organization (ISO) in 2010—accountability, transparency, ethical behavior, respect for stakeholder interests, adherence to law, international norms, and human rights—to individual employees as well.

SRB is also seen as ethical and responsible conduct towards stakeholders, including the community [1]. De Roeck and Farooq [35] suggest that voluntary and green behaviors outside the workplace also constitute SREB. Stahl and Sully de Luque [25] differentiate socially responsible leadership behaviors into two categories: prescriptive morality, which includes actions like community service and eco-friendly practices, and proscriptive morality, aimed at avoiding harm through actions, such as preventing harassment or environmental degradation.

This study adopts Veetikazhi’s [4] comprehensive SRB framework, which is composed of four dimensions: concern orientation, norm adherence, sociocentric orientation, and perseverance. Concern orientation involves active citizenship and a commitment to ethical conduct. Norm adherence reflects a dedication to legal and moral standards, including those specified by ISO 26000:2010. Sociocentric orientation prioritizes actions beneficial for societal welfare over individual gains, while perseverance represents the resolve to enact ethical principles into action despite challenges. This streamlined conceptualization integrates both in-role and extra-role behaviors under the umbrella of SREB, providing a cohesive perspective on employee’s contributions to social responsibility.

2.2. Authentic Leadership and Socially Responsible Behavior

AL represents a leadership approach that prioritizes openness, ethical conduct, and the welfare of employees. Luthans and Avolio [36] initially defined it as a leadership style that combines positive thinking with a well-organized work environment. This helps leaders and team members become more aware of themselves and encourages positive actions, leading to personal growth. According to Walumbwa et al. [37], AL is a leader’s pattern of behavior using positive psychology and promoting a positive ethical climate. They operationalized AL with four dimensions, which involve leaders understanding their strengths and weaknesses (self-awareness), presenting their true selves to followers (relational transparency), aligning behaviors with internal moral standards (internalized moral perspective), and objectively analyzing information before making decisions (balanced processing).

Although scant research investigates a relationship between leaders’ authenticity and SRB, existing research suggests that AL significantly influences behaviors akin to SRB, such as pro-social and citizenship behaviors. For instance, Zhang et al. [38] discovered that supervisor AL led to increased caring behaviors among nurses in China. Similarly, Ribeiro, Duarte, Filipe, and David [16] identified a positive influence of AL on citizenship behavior. Further, a study by Hannah et al. [39] on soldiers found that AL fosters moral courage and self-awareness, which, in turn, encourage pro-social behavior. Additionally, Teng and O-Yang [40] demonstrated that AL positively affects pro-social behavior through the mediation of job fit.

Drawing from social cognitive theory [24], it is argued that authentic leaders, by virtue of their transparency, self-awareness, and ethical behavior, serve as role models, encouraging the emulation of pro-social behaviors by their followers. Hannah, Avolio, and Walumbwa [39] suggests that a leader’s pro-social behavior can motivate followers to engage in pro-social behavior. Therefore, it is plausible that AL would be more socially responsible and directly influence followers to do the same [41]. Leaders who are authentic are known for their strong ethical values and their transparent communication [37]. This creates a conducive environment that nurtures moral standards within employees, guiding them towards pro-social decisions. Therefore, we present our first hypothesis as follows:

H1: 

AL is positively related to SRB.

2.3. Psychological Empowerment as a Mediator

PsyEmp is a psychological state characterized by an individual’s confidence in their capability to influence their surroundings and experience a harmony between their own values and those of the organization they are part of [42]. It reflects an employee’s belief in their ability to influence their work environment and outcomes [21]. According to Spreitzer [42], PsyEmp comprises four key dimensions: (1) Meaning, the perception that one’s work has significance and aligns with personal values. (2) Competence, confidence in one’s skills and abilities to perform tasks effectively. (3) Self-determination, having a sense of autonomy and the freedom to make work-related choices. (4) Impact, the belief that one’s actions can create meaningful change within the organization.

AL, known for fostering trust, positive emotions, and honesty, significantly contributes to strengthening employees’ PsyEmp. A plethora of studies have highlighted the close connection between AL and PsyEmp. It shows how authentic leaders, by granting autonomy and encouraging decision-making, equip employees with the necessary resources to feel more empowered [17,38,43]. By offering cognitive, emotional, and work-related support, such as autonomy and decision-making authority, authentic leaders empower employees to gather additional resources, thereby enhancing their sense of empowerment [44]. From the perspective of SCT [24], it is evident that the supportive environment created by AL positively influences employees’ beliefs in their efficacy and value, thereby fostering a sense of empowerment [45]. This perspective also aligns with the resource gain perspective from Hobfoll et al. [46], according to which one resource leads to the gain of another resource.

Increased empowerment under the guidance of authentic leaders not only motivates employees towards ethical and responsible behavior but also encourages their active participation in CSR initiatives [47]. Such participation is inherently driven by a deeper alignment with the organization’s ethical climate and a stronger bond with the company [48]. Tao et al. [49] found that employees granted greater autonomy in engaging with CSR activities tend to exhibit higher levels of pro-social behavior. Through the perspective of social cognitive theory, this dynamic indicates that AL can amplify socially responsible behavior among employees by nurturing their PsyEmp. This discussion culminates in the formulation of the following hypotheses:

H2a: 

AL positively relates to employee’s PsyEmp.

H2b: 

PsyEmp positively relates to SRB.

H2c: 

The effect of AL on SRB is mediated by PsyEmp.

2.4. Psychological Capital as a Mediator

Psychological Capital, or PsyCap, encapsulates the synergistic blend of hope, resilience, self-efficacy, and optimism—collectively known as HERO—within an individual [50]. Unlike dispositional traits, the four underlying psychological resources that formulate PsyCap are state-like and malleable, which means they can be influenced and developed with interventions and situational variables. AL is deeply intertwined with PsyCap, as it embodies a state of positive psychology characterized by optimal self-esteem and well-being [11]. From the perspective of social learning within social cognitive theory [24], authentic leaders impart their positive internalized values and dispositions to members during interactions who, in turn, internalize these values through positive role modeling, thereby enriching their PsyCap [51]. In addition, authentic leaders showing care towards their subordinates and creating an overall ethical climate within the organization would also cultivate followers of PsyCap [44,52].

Moreover, people with higher PsyCap are more psychologically resourceful, more compassionate, and have an intrinsic motivation to help other people, leading to higher SRB [53]. For instance, in a very recent study, Su and Hahn [54] found that among construction workers, those higher in PsyCap have greater motivation for pro-social activities, which leads to enhanced OCB. In another longitudinal study, Zhang et al. [55] found that PsyCap mediates the link between meaning in life and the pro-social behavior of university students. Experimental evidence suggests that individuals with a futuristic perspective who possess greater hope and optimism rather than dwelling on the past tend to have higher pro-social intentions [56]. A systematic literature review found that individuals high in hope engage more in behaviors that benefit others [57]. In a nutshell and in accordance with the tenets of reciprocal determinism, observational learning, self-regulation, and self-efficacy within the social cognitive theory, AL enhances the cognitive resource PsyCap of subordinates, which would transcend into an enhanced tendency for SRB. For instance, Sri Ramalu and Janadari [58] reported that PsyCap mediated the relationship between AL and organizational citizenship behavior. This leads to the following hypotheses:

H3a: 

AL positively relates to employee’s PsyCap.

H3b: 

PsyCap positively relates to SRB.

H3c: 

PsyCap mediates the relationship between AL and SRB.

2.5. Serial Mediation

Although we propose that both PsyEmp and PsyCap serve as parallel mediators in the link between AL and socially responsible employee behavior (SRB), emerging insights suggest the potential for a serial mediation pathway as well. Notably, research by Shah et al. [59] indicates a positive relationship between PsyEmp and PsyCap, hinting at how the elements of PsyEmp might foster the development of PsyCap’s components within the framework of positive psychology and social cognitive theory.

For example, employees who perceive that their work is meaningful—a core aspect of PsyEmp—may experience an enhanced sense of autonomy. This, in turn, can cultivate a stronger sense of self-efficacy as the feelings of competence and autonomy contribute to an individual’s confidence in their abilities. Moreover, the perception of one’s work having a significant impact and the value assigned to this work can bolster hope. Likewise, the empowerment dimensions of self-determination and perceived impact are critical in reinforcing resilience as they equip employees to navigate challenges and recover from setbacks [45,59].

Given the established connection between AL and enhanced PsyEmp, and the link between higher levels of PsyCap and increased SRB, the positive relationship between PsyEmp and PsyCap suggests a sequential influence. Specifically, AL may first boost PsyEmp, which in turn elevates PsyCap and ultimately leads to greater SRB. This sequential mediation underscores a more nuanced understanding of how AL can indirectly foster SRB by sequentially enhancing PsyEmp and PsyCap.

H4: 

PsyEmp and PsyCap serially mediate the positive influence of AL on SRB.

2.6. CSR Perception as a Moderator

Employee CSR perception is defined as ‘the degree to which employee perceives a company supports for the activities related to a social cause’ [60]. Evidence from a meta-analytic study illustrates that positive CSR perceptions are linked to beneficial job attitudes and organizational behaviors [61]. According to Stahl and Sully de Luque [25], organizational characteristics, such as corporate culture and ethical climate, play a crucial role in either encouraging or hindering employees’ engagement in socially responsible behaviors. CSR initiatives, especially those aimed at benefiting individuals outside the organization, foster an ethical work environment by signaling the organization’s commitment to broader societal well-being [62]. Haski-Leventhal et al. [63] emphasized alignment between employees and organizational CSR efforts, suggesting that congruence in CSR identity and behavior enhances employee participation in CSR activities and improves person–organization fit.

Drawing from E. Rupp’s [62] framework for CSR perceptions, it is proposed that employees continuously evaluate their environment, using observable cues, including CSR initiatives, to gauge the authenticity of their leaders. Thus, positive CSR perceptions can amplify the effects of AL on employee SRB by bolstering the credibility and perceived genuineness of leaders in their commitment to social causes [64]. Therefore, when employees evaluate an organization’s CSR efforts positively, they are more likely to view their authentic leaders as credible and genuinely committed to the cause. This perception strengthens the influence of AL on employee SRB.

Furthermore, it is posited that employees’ CSR perceptions not only enhance the relationship between AL and SRB but also strengthen the links between AL and PsyEmp, as well as between AL and PsyCap. Such perceptions, underpinned by social cognitive theory, suggest that when employees view their organization as committed to societal well-being, they are more likely to feel empowered and utilize their psychological resources for societal benefits, mirroring their organization’s commitment [24]. Therefore, the hypotheses are as follows:

H5a: 

The effect of AL on SRB is moderated by CSR perceptions.

H5b: 

The effect of AL on PsyEmp is moderated by CSR perceptions.

H5c: 

The effect of AL on PsyCap is moderated by CSR perceptions.

Figure 1 summarizes the hypotheses in a theoretical framework.

3. Research Methodology

3.1. Participants and Procedure

A quantitative cross-sectional survey based on a non-contrived research design was adopted for this study. A questionnaire was designed using Google Forms. The questionnaire was translated using the back-to-back translation approach. Content validity of the translated questionnaire was established by sending it to three business management academic faculty members of five universities across Saudi Arabia who were Arabic speakers holding doctorate degrees in Business Management. The survey questionnaire had a total of 70 questions, with 8 for demographic information and 62 related to the study variables.

To conduct a survey among professionals in the service sector, one of the authors dispatched emails containing an introduction to the research and a link to the Google Forms survey to alumni of the business school currently employed in service sector companies within Saudi Arabia. Additional emails were sent to contacts from a professional network related to service-based companies. In total, 550 emails were dispatched in the first week of January 2024, followed by two reminder emails sent at 15-day intervals. The cut-off date for responses was two months after the initial emails were sent. By the cut-off date, a total of 382 responses were received. Of these, 25 questionnaires were excluded because the respondents were not relevant to the service sector. Furthermore, an additional 8 responses were removed due to inconsistent responses and missing values exceeding 20 percent. Consequently, 349 questionnaires were retained for analysis.

The demographics analysis of the data (

Table 1. Demographic profile of the respondents.

Variables	Category	Frequency	Percentage (%)
Gender	Females	42	12.0
	Males	307	88.0
Age (years)	less than 30	76	21.8
	31–40	120	34.4
	41–50	122	35.0
	51–60	26	7.4
	greater than 60	5	1.4
Marital Status	Married	277	79.4
	Unmarried	72	20.6
Educational Level	High School	26	7.4
	Diploma	14	4.0
	Bachelors	166	47.6
	Masters	109	31.2
	Post Graduate	34	9.7
Years of Experience	less than 5	70	20.1
	6 to 10	46	13.2
	11 to 15	78	22.3
	16 to 20	60	17.2
	21 to 25	57	16.3
	more than 25	38	10.9
Current Job Tenure	less than 5	105	30.1
	6 to 10	51	14.6
	11 to 15	64	18.3
	16 to 20	55	15.8
	21 to 25	39	11.2
	more than 25	35	10.0
Organizational Size	less than 50	60	17.2
	51–100	61	17.5
	101–250	59	16.9
	251–500	49	14.0
	more than 500	120	34.4
Industry	Information Technology	92	26.4
	Hotel and Tourism	86	24.6
	Financial Services	75	21.5
	Education	46	13.2
	Others	50	14.3

) revealed that a predominantly large number of respondents were males (88%) while 12% were females. The age distribution showed 21.8% were under 30 years, 34.4% were between 31–40 years, 35% were between 41–50 years, 7.4% were between 51–60 years, and 1.4% were over 60 years. Regarding marital status, 79.4% of the respondents were married and 20.6% were unmarried. The educational levels varied, with 7.4% having a high school education, 4% holding a diploma, 47.6% with a bachelor’s degree, 31.2% with a master’s degree, and 9.7% with postgraduate qualifications. In terms of work experience, 20.1% had less than 5 years, 13.2% had 6–10 years, 22.3% had 11–15 years, 17.2% had 16–20 years, 16.3% had 21–25 years, and 10.9% had more than 25 years. The current job tenure distribution was as follows: 30.1% had less than 5 years, 14.6% had 6–10 years, 18.3% had 11–15 years, 15.8% had 16–20 years, 11.2% had 21–25 years, and 10% had more than 25 years. In terms of organizational size, 17.2% worked in organizations with fewer than 50 employees, 17.5% in organizations with 51–100 employees, 16.9% in organizations with 101–250 employees, 14% in organizations with 251–500 employees, and 34.4% in organizations with more than 500 employees. The industries represented were Information Technology (26.4%), Hotel and Tourism (24.6%), Financial Services (21.5%), Education (13.2%), and Others (14.3%).

3.2. Measures

Socially responsible employee behavior (SRB) was measured with a 15-item scale by Veetikazhi [4]. The scale has four sub-divisions concerning orientation, perseverance, sociocentric orientation, and norms adherence orientation. A sample item for the concern orientation dimension is, “I am involved in social and volunteer work that benefits my community”. AL was assessed with a 16-item scale by Walumbwa, Avolio, Gardner, Wernsing, and Peterson [37]. The respondents responded that their managers exhibit the following behaviors: self-awareness, internalized moral perspective, relational transparency, and balance processing. A sample item for the self-awareness dimension is “My manager seeks feedback to improve interaction with others”. For PsyCap, the 12-item Psychological Capital Questionnaire (PCQ-12) [65] was utilized. This scale comprises four subscales, each measuring a specific dimension of PsyCap: hope, efficacy, resilience, and optimism. The Twelve-item Psychological Empowerment Scale by Spreitzer [42] was employed to assess PsyEmp. The construct of PsyEmp is conceptualized with the following four dimensions: meaning, competence, self-determination, and impact. The operationalization of employee perception of CSR involves measuring the extent to which employees perceive the company’s support for social causes. To measure CSR perception, we adopted six questions from Papacharalampous and Papadimitriou [66]. A sample item is “My company encourages its employees to participate in voluntary activities”. Except for AL, all scales gauged responses on a 5-point Likert scale (1 = Strongly disagree to 5 = Strongly agree). AL was measured on a 5-point frequency scale (1—Never to 5—Often).

3.3. Analysis Strategy

Preliminary steps included data screening and demographic analysis, which were conducted using the JAMOVI software version 2.3.28 [67]. For the analysis of the research model, partial least squares estimation of structural equation modeling (PLS-SEM) was chosen. PLS-SEM is a suitable statistical approach to test predictive relationships in complex models with mediations and moderation, while normality is not an assumption as it is a non-parametric technique [68]. Our testing of the research model followed a two-step approach [69]. First, we checked the adequacy of the measurement model for reliability, validity, and common method bias. Second, we evaluated the structural model for the significance of paths (direct, indirect, and moderation), explanatory power (R² and F²), and predictive relevance (PLS Predict). To establish the significance of path coefficients, bootstrapping with 10,000 resamples was used to generate confidence intervals [16]. The analysis was conducted using SMART-PLS version 4 [70].

4. Results

4.1. Measurement Model

All the latent variables were reflective in nature. The internal consistency (reliability) of our constructs was assessed through Cronbach’s alpha (α) and composite reliability (CR). As depicted in Table 1, the α values were in the range of 0.9 to 0.98, and CR values ranged from 0.93 to 0.98, indicating high reliability of the constructs, as they were greater than 0.7 [68]. Except for three indicators, all of the factor loadings were greater than the recommended value of 0.7. The remaining factor loadings were greater than 0.6, which is higher than the minimum allowed factor loadings of 0.4 (Appendix A). An average variance extracted (AVE) greater than 0.5 depicts convergent validity [68,71]. For all the latent constructs, the AVEs ranged from 0.59 to 0.75. Adequate convergent validity was established for our constructs.

Discriminant validity was examined using two approaches. First, we applied the Fornell–Larcker criterion, which requires that the square root of the AVE for each construct (bolded on the diagonal in

Table 2. Assessment of measurement model: reliability, validity, correlation, and bias indices.

	α	CR	AVE	AL	CSR_P	PE	PsyCap	SRB
AL	0.98	0.98	0.73	0.86	0.8	0.48 (2.86)	0.37 (3.08)	0.4 (3.14)
CSR_P	0.9	0.93	0.68	0.85	0.82	0.46 (2.89)	0.3 (3)	0.38 (3.03)
PsyEmp	0.94	0.95	0.59	0.5	0.49	0.77	0.78 (1.53)	0.74 (3.04)
PsyCap	0.97	0.97	0.75	0.37	0.32	0.81	0.87	0.72 (2.57)
SRB	0.95	0.96	0.6	0.41	0.4	0.78	0.75	0.77

Note: AL = authentic leadership; CSR_P = corporate social responsibility perceptions; PsyEmp = psychological empowerment; PsyCap = psychological capital; SRB = socially responsible behavior; CR = composite reliability; AVE = average variance extracted. The bold values on the diagonal represent square root of AVE. Values above diagonal represent correlations among latent constructs for Fornell–Larcker criteria, and values in brackets represent VIF (variance inflation factors). Values below the diagonal are HTMT values.

) should be greater than its highest correlation with any other construct [71]. This was the case in our data, as correlation values in the upper diagonal were all less than their respective square roots of AVES. Additionally, we used the more accurate heterotrait–monotrait ratio (HTMT) and found all values below the conservative threshold of 0.85, suggesting distinct constructs as per the guidelines by Henseler et al. [72].

We also found that our constructs have sufficient nomological validity. The nomological validity indicates that study constructs are related to each other in the pattern, as depicted in the theory [68]. The correlations between all the variables, as depicted in the upper diagonal of Table 2, were positive and varied from moderate to high, which is in line with our theoretical framework, thereby supporting the nomological validity of our constructs.

The potential presence of common method variance in our data was determined using the full collinearity test [73]. The VIF values, as indicated in Table 2 within the bracket in the upper diagonal, ranged from 1.53 to 3.14, which were all below the threshold values of 3.3. Therefore, it can be concluded that common method bias is not a concern in this data.

4.2. Structural Model

After measurement model analysis, we shifted our focus to the structural model analysis. To improve the accuracy of the results and reduce the bias, we also included the control variables and established their relationship with the endogenous variables of SRB, PsyEmp, and PsyCap. The results for coefficients and their significance for direct paths, indirect paths, moderation, and mediated moderation are depicted in

Table 3. Summary of PLS bootstrapping results for direct, indirect, moderated, and moderated mediation paths.

	Direct Paths	β	p-Values	95% CI	Effect Size
H1	AL → SRB	0.01	0.46	[−0.11;0.14]	0
H2a	AL → PsyEmp	0.39	0	[0.22;0.55]	0.08
H2b	PsyEmp → SRB	0.38	0	[0.27;0.50]	0.12
H3a	AL → PsyCap	0.13	0.08	[−0.01;0.28]	0.01
H3b	PsyCap → SRB	0.43	0	[0.29;0.53]	0.17
	PsyEmp → PsyCap	0.76	0	[0.68;0.84]	1.02
	Gender → PsyEmp	−0.44	0	[−0.68;−0.24]	0
	Gender → SRB	0.22	0.02	[0.05;0.50]	0.01
	Indirect Paths
	AL → PsyEmp → PsyCap	0.29	0	[0.17;0.42]
H2c	AL → PsyEmp → SRB	0.14	0	[0.08;0.23]
H3c	AL → PsyCap → SRB	0.05	0.08	[0;0.12]
	PsyEmp → PsyCap → SRB	0.33	0	[0.22;0.42]
H4	AL → PsyEmp → PsyCap → SRB	0.13	0	[0.06;0.19]
	Moderation
H5a	CSR_P ×AL → SRB	0.03	0.13	[−0.01;0.08]	0
H5b	CSR_P × AL → PsyEmp	0.25	0	[0.16;0.33]	0.16
H5c	CSR_P × AL → PsyCap	0.03	0.21	[−0.02;0.010]	0.01
	Moderated Mediations
	CSR_P × AL → PsyEmp → PsyCap	0.19	0	[0.13;0.25]
	CSR_P × AL → PsyEmp → SRB	0.09	0	[0.06;0.14]
	CSR_P × AL → PsyCap → SRB	0.01	0.2	[−0.01;0.04]
	CSR_P × AL →PsyEmp → PsyCap→ SRB	0.08	0	[0.05;0.11]

Note: AL = authentic leadership; CSR_P = corporate social responsibility perceptions; PsyEmp = psychological empowerment; PsyCap = psychological capital; SRB = socially responsible behavior. For control variables, only significant relationships are shown.

. Among the control variables, gender significantly and negatively predicted PsyEmp. This means that males have a higher perception of PsyEmp, as compared to females in our sample, β = −0.44, p < 0.01. On the contrary, we found a positive relationship of gender with SRB, β = 0.22, p = 0.02, which reveals that females in our sample are more socially responsible than males.

In the direct path analysis, we found that AL is not significantly related to SRB, which indicates that H1 was not accepted. However, AL was found to have a significant direct effect on PsyEmp (H2a), β = 0.39, p < 0.001, with a small effect size of 0.08. Additionally, PsyEmp significantly predicted SRB (H2b), β = 0.38, p < 0.001, and had a robust effect size of 0.12, suggesting that PsyEmp has a strong positive association with SRB compared to other predictors in the model. Therefore, H2a and H2b were supported. The direct effect of AL on PsyCap (H3a) was not significant, β = 0.13, p = 0.08. PsyCap significantly predicted SRB (H3b), p < 0.001, with a strong effect size of 0.17, demonstrating that PsyCap is an important factor in SRB. Moreover, the path from PsyEmp to PsyCap was highly significant, β = 0.76, p < 0.01, with a large effect size of F² = 1.02, highlighting a substantial association between these constructs.

For the indirect paths, we found several mediations to be significant. AL had a significant effect on SRB through PsyEmp (H2c), β = 0.29, p < 0.001. On the contrary, the indirect path from AL to SRB through PsyCap (H3c) was not significant, β = 0.05, p = 0.08. Additionally, the results also showed that PsyEmp mediated the effect of AL on PsyCap, β = 0.05, p = 0.08, and PsyCap mediated the effect of PsyEmp on SRB. These two mediations were integrated in Hypothesis 4 (H4), which showed that the effect of AL on SRB is sequentially mediated by PsyEmp and PsyCap, β = 0.13, p < 0.05.

We had three moderation hypotheses as well. The interaction effect of CSR perceptions and AL on SRB (H5a) was not significant, β = 0.03, p = 0.13. However, the moderating effect of CSR perceptions on the relationship between AL and PsyEmp was significant, β = 0.25, p < 0.001, with an effect size of 0.16, which is considered large for moderation effects [74]. This moderation effect is depicted in Figure 2 at three levels of CSR perceptions. The graph clearly indicates that as the level of CSR perception increases, so does the effect of AL on PsyEmp become more profound. No significant moderation effect of CSR perception was detected for the AL and PsyCap relationship, β = 0.03, p = 0.21.

Finally, we also found evidence for moderated mediation with the interaction of CSR perceptions and AL on the indirect paths to SRB through PsyEmp, β = 0.19, p < 0.05, and through the serial mediation of PsyEmp and PsyCap, β = 0.08, p < 0.05. This indicates that just like the direct effect of AL on SRB is fully mediated, the interactive effect of CSR and AL is fully mediated by PsyEmp and serial mediators of PsyEmp.

The predictive relevance assessment was conducted using Q² and MAE values generated by the PLS prediction algorithm [68]. A Q² value larger than zero implies that the model has predictive relevance for the particular construct (

Table 4. Q² predict and R²_adj values.

Endogenous Variables	Q2 Predict	R2adj
PsyEmp	0.3	0.36
PsyCap	0.19	0.63
SRB	0.19	0.61

Note: PsyEmp = psychological empowerment, PsyCap = psychological capital, SRB = socially responsible behavior.

). As a naïve benchmark, we can suggest that the model has predictive power for all three endogenous variables of PsyEmp (Q² = 0.30), PsyCap (Q² = 0.19), and SRB (Q² = 0.19). However, the more accurate procedure is to contrast the RMSE (or MAE) values between the PLS-SEM model and a linear model [29]. Lower values of PLS-SEM values for each indicator indicate more predictive power. Since the prediction error distribution for RMSE values was highly non-symmetric, we used MAE values for prediction statistics. The results show that for PsyEmp, PsyCap, and SRB, the MAE values for PLS-SEM were lower than LM values (Appendix A). This indicates that the model has a high predictive power with respect to the three endogenous variables. Similarly, the R²_adj values for PsyEmp (R² = 0.36) indicate moderate explanatory power, which means that the control variables, AL and CSR perception, and their interaction explain 36% of the variance. For PsyCap (R² = 0.66), the explanatory power is strong. Control variables, AL, CSR perception, their interaction, and PsyEmp, explain 66% of the variance in PsyCap. Finally, for SRB (R² = 0.61), all of the predictors explained 61% of the variance, which is indicative of strong explanatory power.

5. Discussion

Our research adds to the expanding field of study concerning employee social responsibility within the leadership context of Saudi Arabia’s service sector. By exploring the mediating roles of PsyEmp and PsyCap, as well as CSR perceptions as a moderator, this research provides a nuanced understanding of how AL can foster socially responsible behavior among employees. By focusing on the service sector in Saudi Arabia, our research addresses a gap in the literature related to non-Western contexts. Most studies on AL and SRB have been conducted in Western countries, and our findings provide valuable insights into how these dynamics play out in different cultural and economic environments. On the practical side, this study suggests that organizations should focus on developing authentic leadership at all managerial levels and foster employees’ positive psychological resources to promote SRB. It is also important that organizations’ CSR practices resonate with employee’s social values [22,36,75].

5.1. Theoretical Implications

Our results provide several theoretical implications for comprehending the interaction among AL, PsyEmp, PsyCap, and SRB. Drawing upon social cognitive theory [24], we found that PsyEmp and PsyCap fully mediate the relationship between AL and SRB [19,37]. Additionally, CSR perceptions moderate the relationships emerging from AL [64]. There is a clear indication of how cognitive resources are important pathways that relate perceptions of external factors (leadership) with behavior (socially responsible). Similarly, the study also showed how organizational CSR plays a role in the relationship among leadership, employee level, and responsible behaviors.

The non-significant direct relationship between AL and SRB is coupled with the full mediation effect via PsyEmp as a single mediator. PsyEmp and PsyCap, as parallel mediators, suggest that authentic leaders influence their followers’ SRB indirectly by enhancing their cognitive resources [38]. This aligns with social cognitive theory, where leaders serve as role models, and their authentic behavior influences the psychological state of their followers [11]. The presence of PsyEmp as a mediator is in accordance with the research, which shows that employee participative decision-making in a company’s CSR activities leads to higher pro-social behavior among the employees [49].

Our study makes a significant contribution to the AL literature by demonstrating the crucial roles of PsyEmp and PsyCap as pathways through which AL influences socially responsible behavior (SRB). The influence of AL on SRB operates entirely through these psychological mechanisms. While our hypothesis regarding parallel mediation was partially supported—PsyCap was not a direct mediator—the evidence for serial mediation was compelling. To the best of our knowledge, the current study is the first to test both the parallel and serial mediation of PsyEmp and PsyCap. The effect size analysis indicated that AL has a modest impact on PsyEmp, which, in turn, has a slight effect on SRB. Interestingly, PsyCap has a more substantial influence on SRB than PsyEmp. Moreover, PsyEmp exerts a notably large effect on PsyCap. These results underscore the intricate nature of cognitive mechanisms on how one psychological resource gives rise to another psychological resource, leading to positive behavioral outcomes [76]. This mediating effect of cognitive resources resonates with a study in China, which demonstrates that AL promotes pro-social behavior and job performance by enhancing PsyCap [38]. Similarly, research in European contexts has shown that AL fosters positive citizenship behavior through enhanced psychological resources [16].

Another important contribution of the current study is to exhibit the moderation effect along with serial mediation. Our results revealed the moderating effect of CSR perception in the significant direct and indirect paths emerging from AL. The significant moderating effect of CSR perceptions on the direct relationship between AL and PsyEmp suggests that employees’ perceptions of their organization’s CSR efforts can amplify the impact of AL on their PsyEmp. Similarly, CSR perceptions can also influence the strength of indirect relationships between AL and SRB via PsyEmp and PsyCap as serial mediators. Previous studies, such as Lee, Park, and Lee [60], also found that positive CSR perception generates multiple positive outcomes, such as employee attachment and performance. This finding extends the understanding of the contextual factors that influence the effectiveness of AL in promoting positive employee outcomes. Similarly, the findings align with a meta-analytic study by Paruzel et al. [77], which suggests that the effectiveness of CSR initiatives is contingent on how employees perceive these efforts. Our study thus adds to the growing body of literature, emphasizing the need for organizations to foster a positive CSR climate to maximize the impact of leadership on employee outcomes.

5.2. Practical Implications

The findings of this research are particularly relevant in the context of Saudi Arabia’s Vision 2030, which places a strong focus on sustainable development and CSR. The Saudi government has introduced various initiatives to promote social responsibility among businesses, encouraging them to align their practices with the national goals of sustainability and social well-being [78]. The support offered by the Saudi government to encourage SRB among organizations underscores the importance of developing leadership practices that align with these national priorities. Enhancing authentic leadership by fostering psychological empowerment and psychological capital can significantly contribute to achieving the social and environmental goals outlined in Vision 2030. This research thus adds weight to the argument that investing in authentic leadership development is not only beneficial for organizational performance but also crucial for the broader societal and economic transformation envisioned in Vision 2030 [31].

There are various practical implications that emerge from this study. Foremost, organizations should invest in developing authentic leaders who can inspire and empower their employees. Training programs focusing on self-awareness, ethical decision-making, and transparent communication can help cultivate AL qualities [37]. Authentic leadership theory describes that these authentic leaders further lead by example and create a workplace environment of trust and encouragement [38]. By exhibiting transparency, integrity, and commitment to social responsibility, leaders can inspire their teams to follow suit and engage in SRB.

In addition, our research also found a significant role of employee empowerment in carrying out the effect of AL on SRB. Organizations should prioritize fostering a psychologically empowering work environment. This can be achieved by providing employees with meaningful work, autonomy, and opportunities for personal and professional growth. Encouraging participation in decision-making and recognizing employees’ contributions can also enhance their sense of empowerment [42]. Leaders and managers’ encouraging participation in decision-making and recognizing employees’ contributions further strengthen their empowerment [52]. Employees who feel empowered are more likely to engage in behaviors that benefit the organizations, such as SRB.

Furthermore, our findings highlight the interconnectedness between PsyEmp and PsyCap. PsyEmp, characterized by a sense of meaning, competence, self-determination, and impact, lays the foundation for the development of PsyCap, which includes hope, efficacy, resilience, and optimism [65]. This relationship is crucial, as PsyCap is not only a critical mediator in the path leading to SRB but also an essential cognitive resource that enhances employees’ capacity to engage in socially responsible behaviors. Therefore, if leaders are fostering a psychologically empowering environment, organizations can indirectly bolster SRB through the sequential mediation of PsyEmp and PsyCap. In addition, previous research has shown that a leader’s positive behavior and authenticity can directly enhance an employee’s psychological capital through the contagion effect [44,79,80,81]. Since PsyCap is a domain-specific cognitive resource, HR practitioners and managers can also directly enhance employees’ PsyCap through training programs, which are tailor-made to enhance socially responsible psychological capital among employees [82]. The benefits of enhancing employees’ PsyCap extend beyond social responsibility and sustainability, as research has also shown that employees who are high in PsyCap are more likely to exhibit a myriad of positive work behaviors [79].

Subsequently, organizations should actively engage in CSR activities and communicate their efforts to employees. Positive CSR perceptions can strengthen the impact of AL on employees’ PsyEmp, PsyCap, and SRB. Therefore, transparent and consistent communication about CSR initiatives is crucial [6]. To maximize the impact of CSR initiatives, it is crucial for managers to ensure that these initiatives resonate with employees’ personal values and interests. Moreover, CSR activities that involve employees can directly foster a sense of ownership and pride, further enhancing their commitment to socially responsible behavior [83]. By aligning CSR initiatives with employees’ values and interests, organizations can create a more meaningful and engaging CSR experience, leading to stronger identification with the organization and its social mission [84]. For instance, an organization that is not working in the public interest or conducting practices that are harmful to the environment or well-being of the public should not expect their employees to act socially responsible, no matter how authentic the leadership may be. On the contrary, people get inspiration from their leaders and their employers, which indicates that an organization’s CSR practices spill over to individual SR practices.

5.3. Limitations and Future Research Directions

Limitations are part and parcel of every study, which should be considered while interpreting the results to set future research directions for the advancement of knowledge. Firstly, the cross-sectional design limits the ability to infer causality. Future researchers can focus on longitudinal studies to establish causal relationships. Secondly, the study’s focus on the service sector in Saudi Arabia may limit the generalizability of the findings to other sectors or cultural contexts. Although the service sector in Saudi Arabia is growing rapidly and the kingdom is gradually lowering its dependence on the oil sector, we recommend future researchers expand this research to other sectors, such as the oil industry and manufacturing. Although the sampling method employed was non-probability sampling, the authors engaged multiple industries to increase the generalizability of the results. An additional apparent limitation is the underrepresentation of female respondents in our sample. However, this reflects the broader labor force division in Saudi Arabia, where women’s participation is relatively lower [29]. Future research could explore gender differences in the impact of AL on SRB and other outcomes.

Future research could also explore the impact of other emerging and established leadership styles, such as transformational leadership, ambidextrous leadership, and despotic leadership, on SRB. Future researchers are also invited to examine additional mediators, such as workplace attitudes and moderators, e.g., organizational culture, work ethics, and socially responsible human resource practices, in the relationship between leadership and employee socially responsible behavior. Investigating the long-term effects of AL on pro-social outcomes and exploring the role of cultural factors in shaping the effectiveness of leadership styles are also promising avenues for further research.

6. Conclusions

This study contributes to the expanding field of employee social responsibility by exploring the mediating roles of PsyEmp and PsyCap in the relationship between AL and socially responsible behavior (SRB) within the service sector of Saudi Arabia. Our findings indicate that AL does not directly influence SRB. Instead, the relationship is fully mediated by PsyEmp and PsyCap, emphasizing the importance of these psychological resources. Additionally, the significant moderating role of CSR perceptions reveals that aligning organizational CSR practices with employees’ values can amplify positive outcomes. Organizations should invest in leadership development programs that emphasize authenticity, ethical decision-making, and transparent communication. Furthermore, involving employees in CSR activities and communicating these efforts effectively can strengthen their commitment to SRB. Future research should explore other leadership styles and consider longitudinal studies to better understand these relationships. In essence, this study highlights the critical role of leadership and psychological resources in promoting socially responsible behavior, contributing to the broader goals of sustainability and social well-being.