Leader Member Exchange, Nepotism, and Employee Loyalty as the Determinants of Organizational Sustainability in Small and Medium Enterprises in India

Abstract

The purpose of this study is to understand the role of leader-member exchange, nepotism, and employee loyalty in attaining organizational sustainability in Indian small and medium enterprises. The quantitative descriptive research design was adopted following purposive sampling in the present research study. The 652 employees from the top, middle and lower level of management in SMEs such as manufacturing and service sector from Northern region of India were examined. The data were collected through a survey questionnaire and analyzed by using structural equation modeling. The findings of the research study explain the significant direct impact of leader-member exchange on organizational sustainability in Indian SMEs. The indirect relationship shows significant partial mediation effect of nepotism and employee loyalty between leader-member exchange and organizational sustainability. The obtained findings will assist entrepreneurs, leaders, and managers of SMEs in recognizing the value of family members' contributions to the success of their business.