Journal of Applied Structural Equation Modeling, Volume 1 Issue 1 – Published online: 10 June 2017

THE IMPACT OF LEADERSHIP ON TURNOVER INTENTION: THE MEDIATING ROLE OF ORGANIZATIONAL COMMITMENT AND JOB SATISFACTION
Alicia Jia Ping Lim, SEGi College Penang, Malaysia | [email protected]
Joshua Teck Khun Loo, Butterworth, Penang Malaysia | [email protected]
Pey Huey Lee, TAR University College, Pulau Pinang, Malaysia | [email protected]
Corresponding Author: Joshua Teck Khun Loo | Email: [email protected]
ABSTRACT
High undesirable employee turnover is a prevalent issue in today’s contemporary business organisations which has resulted in both direct and indirect costs for organisations. This research was carried out in the Finance Shared Service Center (SSC) of Company XYZ where the employee turnover rate is increasing at an alarming rate over the past three years. This study was conducted to investigate the relationship between transformational leadership, job satisfaction, organisational commitment and turnover intention. In particular, this study focuses on the mediating effect of job satisfaction and organisational commitment on the relationship between transformational leadership and turnover intention. A total of 100 useable responses were collected from the total population in the Finance SSC of Company XYZ using survey method. The data collected were analysed by using SPSS version 22 and SMART PLS 3.0. Partial Least Squares Structural Equation Modelling (PLS-SEM) approach was deployed to validate the research model and the research hypotheses. Result reveals an insignificant negative relationship between transformational leadership and turnover intention. However,  job satisfaction is demonstrated to fully mediate the relationship between transformational leadership and turnover intention. Transformational leadership indirectly influences turnover intention through  job satisfaction. This study provides both theoretical contribution and managerial recommendations. Limitation of this study relates to cross sectional design and small sample size. Hence, it is recommended that future research should consider longitudinal study and to conduct similar research for the entire industry or in other organisational contexts.
Keywords: turnover intention, transformational leadership, organisational commitment, job satisfaction
Citation:  Lim, Loo and Lee (2017), The Impact of Leadership and the Mediating Role of Organizational Commitment and Job Satisfaction on Turnover Intention, Journal of Applied Structural Equation Modeling. 1(1), 27-43.

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