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The purpose of this paper is to extend the boundaries of positive organizational behavior (Luthans, 2002a, b) to North Africa and the Middle East. Specifically, the relevance of Psychological Capital (PsyCap et al., 2007), composed of the positive psychological resources of hope, efficacy, resilience and optimism, is conceptualized and tested in Egypt in relation to job satisfaction.

A contextualized theoretical model is derived, in which PsyCap can lead to job satisfaction through a set of positive mechanisms. Structural equation modeling is used to test the hypothesized relationships on a sample of 451 Egyptian employees in 11 organizations representing some of Egypt’s most important industries in terms of GDP, employment and world economy integration.

Hope, efficacy, resilience and optimism, individually and when integrated into the higher-order multidimensional construct, PsyCap, are positively related to the job satisfaction of Egyptian employees.

This paper supports the external validity of hope, efficacy, resilience and optimism, individually and when integrated into the higher-order multidimensional construct, PsyCap, in the African and Egyptian context.

Egyptian organizations, as well as global companies that conduct business operations in Africa, may find PsyCap to be a new potential source of human-based competitive advantage. PsyCap is state-like and thus open to development through workplace interventions.

This study provides evidence for the first time for the external and construct validity of PsyCap in North Africa. Zoogah (2008) found a dearth of articles that focus on North Africa, specifically the Arabian heritage. This paper begins to fill this gap. A context-bound approach is used to refine and integrate PsyCap theory with the cognitive, affective and behavioral processes of the African and Egyptian context.