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Purpose: Each predecessor generation should prepare for succession optimally for the family company to survive and grow. During the succession process, future generations must also have positive emotions such as motivation, self-confidence, and optimism to improve their psychological well-being and involvement in the family company. Therefore, this study aimed to determine the influence of empowering leadership on psychological well-being and job engagement mediated by psychological capital in the family business successors.
Design/Methodology/Approach: The respondents comprised 86 members on the Family Business Community Eighth Batch of Ciputra University determined using saturated or a non-probability sampling technique. The data collected were analyzed using Partial Least Square (PLS) analysis method.
Findings: The results indicated a significant relationship between empowering leadership, psychological well-being, job engagement, and psychological capital as a mediating variable. Psychological capital mediates the relationship between empowering leadership, psychological well-being, and job engagement.
Practical implication: The previous generation had high hopes that the successor could continue and maintain the family company. For this reason, communication between generations is needed so that the successor generation can continue the family company.
Originality value: Applying empowering leadership to successors creates better psychological well-being in the next generation. The impact is better when the next generation has positive emotions that increase confidence in the face of challenges. Achieving optimal engagement and well-being requires good communication between the predecessor and next generations. In addition, it is necessary to have refreshing and regular meetings between the predecessor and next generations to create a harmonious relationship and understanding of the family business.