Transformational leadership, wasta and workforce localisation in Saudi Arabia: a sequential mediation model

Purpose: Drawing on the social exchange and social capital theories, this study examines the sequential mediating impact of structural empowerment and positive word-of-mouth on the relationship between transformational leadership and workforce localisation. It also explores the contingent role of “wasta” in positive word-of-mouth and workforce localisation relationships. Design/methodology/approach: A three-wave longitudinal study was conducted with 207 employees of multinational companies in Saudi Arabia, using a path-modelling approach, to confirm the proposed hypotheses. Findings: The empirical evidence supports the positive and significant effects of transformational leadership on workforce localisation. The findings support a sequential mediation model wherein leaders influence workforce location through structural empowerment and positive word-of-mouth. Additionally, the study predicts the positive moderating impact of wasta on the “word-of-mouth and workforce localisation” relationship. Originality/value: This study elaborates on the mechanisms by which transformational leaders influence workforce localisation, which have not been discussed earlier and which have implications for Saudisation and leadership training.