The Effect of Servant Leadership on Perceived Organizational Sustainability in Addis Ababa Small and Medium Enterprises (SMEs) Development Bureau: Mediating Roles of Employee Creativity and Psychological Resilience

Abstract Book of the 12th International Conference on Business, Management and Economics

Year: 2026

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The Effect of Servant Leadership on Perceived Organizational Sustainability in Addis Ababa Small and Medium Enterprises (SMEs) Development Bureau: Mediating Roles of Employee Creativity and Psychological Resilience

Flagot Abrham Sinke

ABSTRACT:

In light of social exchange theory (SET) and institutional theory, this study explains how servant leadership impacts perceived organizational sustainability in Addis Ababa small and medium enterprise (SME) development agency. This survey-based study relied on explanatory design and considered 123 employees of the agency its target population. Results of the structural equation model (SEM) reveal that Servant leadership has a significant and positive impact on organizational sustainability (β=0.572, t=11.513, p<0.001), psychological resilience (β=0.687, t=15.237, p<0.001), and employee creativity (β=0.635, t=12.969, p<0.001). Moreover, psychological resilience has a significant and positive impact on organizational sustainability (β=0.190, t=2.501, p<0.005) and employees creativity has a significant and positive impact on organizational sustainability (β=0.198, t=3.059, p<0.001). Both employee creativity (β=0.126, t=2.866, p<0.001) and psychological resilience (β=0.131, t=2.636, p<0.001) mediated the effect on perceived organizational sustainability. This study contributes to leadership and sustainability by amalgamating SET and institutional theory in a public sector scenario and offers practical implications for strengthening organizational sustainablity via servant leadership.

Keywords: Servant Leadership, Organizational Sustainability, Employee Creativity, Psychological Resilience, And Public Sector