Abstract

Organizations capitalize on proactive and innovative employee behaviors in today's competitive market to secure a sustainable competitive advantage. Employees with high self-efficacy are central to this advantage, believing in one's ability to complete tasks. This study investigates the impact of aesthetic leadership on subordinates' self-efficacy and examines the roles of job-capabilities matching and the Pygmalion effect as mediators in this relationship. Using a cross-sectional design, data were collected from employees at hotels and restaurants in Lahore, Punjab. Of the 500 distributed questionnaires, 303 were returned, representing a 61% response rate. Analysis was conducted using SPSS. The findings indicate that aesthetic leadership positively influences employee self-efficacy. Additionally, job-capabilities matching and the Pygmalion effect were identified as significant mediators in the relationship between aesthetic leadership and self-efficacy. The study highlights practical implications, explores uncharted areas, and proposes directions for future research.