Role of Employee Empowerment in the Relationship between Servant Leadership and Organizational Performance: An Empirical Study from the National Pharmaceutical Industry of Pakistan

Abstract

In the pharmaceutical industry of Pakistan, medical representatives work as the key contact person between pharmaceutical organizations and medical doctors. The performance of these individuals plays a crucial role in organizational performance through higher sales, customer satisfaction, and competitiveness of the organization. The aim of this study is to explore the effect of servant leadership on organizational performance and the mediating role of employee empowerment in the same context. A structured questionnaire was distributed among 527 medical representatives working in national pharmaceutical organizations of Pakistan to gather the data. Partial Least Squares Structural Equation Modeling (PLS-SEM) was proposed for testing the hypotheses. The results reveal that servant leadership positively affects organizational performance. Additionally, employee empowerment acts as a mediator in the relationship between servant leadership and organizational performance. It means that servant leadership increases organizational performance by giving the power to employees to decide, resolve issues and perform their duties effectively. The paper provides contributions to the literature related to leadership by extending Social Exchange Theory in the pharmaceutical industry of Pakistan. There are many practical implications of this research for managers to achieve organizational performance.