The Role of Employee Silence and Organizational Learning between Toxic Leadership & Organizational Performance at Different Levels of Leader-Member Exchange Quality in Pakistani Banks

Abstract

Modern services organizations are competing in a complex, volatile, and fierce market environment. In such an environment, certain leadership behaviors may derail organizational performance into failures. One such behavior is toxic leadership. However, the literature identifies that the investigation related to toxic leadership and organizational performance is limited and inconclusive. The current study examined the impact of toxic leadership behaviors on organizational performance with the mediating role of employee silence and organizational learning. Furthermore, the study explained the model at different levels of LMXQ in the banking industry. The study is cross-sectional, and the multistage sampling technique was employed where five geographic clusters were developed, and data was collected from 1177 (58.8%) respondents. A total of 1108 questionnaires were utilized for analysis using the structural equation modelling (SEM) technique. The findings of the study revealed that toxic leadership harms organizational performance. Further, employee silence and organizational learning mediate the relationship between toxic leadership and organizational performance at parallel. Moreover, the results illustrate that employee silence has moderated mediation effect between toxic leadership and organizational performance at different levels of leader-member exchange quality. Whereas the moderated mediation effect of organizational learning between toxic leadership and organizational performance is not supported. Finally, moderated mediation effects of employee silence and organizational learning at the parallel between toxic leadership and organizational performance for different levels of leader-member exchange quality have revealed significant results for employee silence, whereas the mediation effect of organizational learning is not moderated. For instance, the study findings revealed that toxic leadership leads to employee silence and reduces organizational learning simultaneously that ultimately puts adverse effects on organizational performance specifically, at extreme levels of LMXQ. The study is unique as it investigated the employee silence and organizational learning at the parallel. Secondly, it adds rigor to the model by investigating the conditional indirect effects of toxic leadership on organizational performance at different levels of LMXQ. The study contributed to the theory of the toxic triangle, the theory of conservation of resources, the theory of LMX, and organizational learning. The study unfolds implications for practitioners to identify and manage toxic leadership and finally provides suggestions for banks to improve performance. Keywords: Toxic Leadership, Employee Silence, LMXQ, Moderated Mediation, Organizational Learning, Organizational Performance