A moderated-mediation approach to LMX-outcome relationship in M&A

Abstract

How employees think and relate to their jobs is a significant area of interest to scholars and practitioners in the organizational change management domain. The current study examines the role of leader–member exchange (LMX) quality on individual resistance to change (RTC) in the context of mergers and acquisitions. Specifically, we put forward a moderated-mediation model wherein LMX quality predicts RTC through possible mediation of organizational dissent under the boundary setting conditions of employee’s perception of politics. Results drawn from a sample of 260 employees from the banking sector in India support our hypotheses. Theoretical and practical implications are discussed.

Keywords

LMX quality organizational dissent perception of politics resistance to change

Introduction

The adaptation to the complex and ever-changing business environment requires modern-day organizations to inculcate and navigate the change process efficiently. However, more often than not, many change initiatives are met with resistance by employees (Erwin and Garman, 2010). Organization development practitioners therefore view resistance as pathological, something the change agents need to overcome while implementing change within the organization (Dalal and Carpenter, 2017). From a change perspective, organizations today are more concerned with counterproductive and unethical workplace conduct as better predictors of overall work performance than some of the measures like citizenship behavior and performance (Babalola et al., 2018). In the same line, the notion of leadership and its purported link with organizational change outcomes have been closely linked and frequently discussed in tandem. According to Harris et al. (2014), leadership outcomes are sometimes a function of the quality of leader–member exchanges (LMXs) in the organization. Interestingly, most researches depict the positive outcomes of LMX in the organizational setting. However, studies indicating harmful and counterproductive workplace conduct due to LMX quality remains far-fetched (Thompson et al., 2020). Also, the currently available literature on LMX, barring a few exceptions, is yet to explore the role of LMX quality on employee outcomes that reflect the cognitive, affective, and behavioral components of an individual (Henson and Beehr, 2018). The current study labels individual resistance to change (RTC) as a counterproductive employee outcome that emanates from employee’s perception of LMX quality and one that violates organizational interests and affirmative employee action.

LMX scholars identify effective communication as the key to managing change in the organization. Leaders and change implementers can facilitate better adoption of change initiatives by employees through an effective communication process that fosters a better understanding of content and rationale of change (Kassing, 2011). To that end, employee dissent has been identified as a form of communication that sheds light on employee’s perception toward change initiated in the organization. Past researchers relate dissent expression to broader notions of misbehavior that run contrary to accepted norms of behavioral expectations and organizationally sanctioned managerial norms (Garner, 2016). The current study posits that employees express dissent as a manifestation of individual resistance in the organizations. Therefore, understanding the scope of employee dissent on the contours of the shifting nature of the leader–follower relationship will help leaders manage change more effectively.

From the organizational change perspective, resistance, conflict, and dissent expressions are a pervasive feature of organizational life. Buchanan and Badham (1999) identify such deviant triggers to what he terms as “the political variant,” one that essentially emanates from incongruence among goals, values, and inappropriate solutions to organizational problems. Employee’s perception of organizational politics in that sense determines an individual’s action related to the trade-off between self-gain and for balancing organizational objectives (Petrou et al., 2018). Past studies on organizational politics point out to mixed outcomes of employee’s perception of politics (POP) within a firm. Additionally, theoretical underpinnings fall short when it comes to the understanding of POP-outcome relations, especially within the change management context (Kimura, 2013). The current study posits that assessing employee’s POP may reveal nuances related to an individual’s dissenting behavior, including other moral and psychological issues that foster counterproductive workplace outcomes. In sum, the objective of the current study is to examine the influence of LMX quality on individual RTC through possible mediation of organizational dissent (OD). The study further explores the boundary setting condition of employee’s perception of organizational politics on LMX and employee RTC mediated through OD by employees.

This study’s findings contribute to both researchers and practitioners in several ways. First, the article extends and adds to a limited stream of research on LMX studies that address the role of communication in the form of OD as an antecedent of RTC rather than as a consequential variable. Second, despite the clear overlap in goals, politics studies, and communication literature have developed separately, and there is a need to integrate both the domain simultaneously for assessing complex workplace situations. The study answers this call and relates the boundary setting conditions of employee’s perception of organizational politics as a possible moderator of LMX quality and individual RTC mediated by OD of employees. The remainder of the article is structured as follows. In the next section, the theoretical background for basing the hypotheses are presented. Then, the method is discussed, followed by the presentation of findings. The article concludes with a discussion on research implications while future directions for research are presented at the end of the article.

Conceptual framework and hypotheses development

The current study posits OD as a mediator between LMX quality and individual RTC. Figure 1 presents the conceptual framework guiding the research endeavor. Also, it is proposed that employee’s POP in the organization will determine the level and nature of OD by employees for alleviating individual RTC at the organization workplace.

Figure 1.

Conceptual model.

Resistance to change

Managing change within an organization entails efforts by managers for exerting appropriate behavioral changes within employees that benefit the organization (Marstand et al., 2017). Organization development scholars, to that end, emphasize on value congruence and complementary fit in the leadership process as a prerequisite for desired organizational outcomes (Burnes, 2015). Individuals lie at the heart of any change process, and regardless of the reason and size of the change, it’s successful adoption and assimilation is dependent on how employees perceive the entire change process (Oreg and Goldenberg, 2015). A review of change literature suggests that reactions to organizational change have been mostly viewed through a macro lens and from a systems perspective. In that sense, Shimoni (2017) suggested that literature on organizational change lacks theoretical underpinning vis-à-vis our understanding of sociocultural and psychological processes associated with organizational change.

RTC of employees is traditionally viewed as an inherently negative and misguided form of employee expression (Courpasson and Vallas, 2016). However, contemporary researches suggest otherwise and relate to positive outcomes of employee RTC. From the organizational perspective, individual-level resistance arises due to uncertainty avoidance tendency, selective perception, cognitive rigidity among employees, and, at times out of habit (Gagnon and Collinson, 2017). Similarly, change management scholars insist that employees resist when individual expectations are not met or sometimes as a manifestation of employee–agency conflict embodied in dissent and political activity within the organization (Loretto et al., 2010). According to Vos and Rupert (2018), resistance by employees precipitate deviant workplace behavior and therefore need to be managed and contained appropriately. Organization development scholars therefore advocate emotional connection between supervisor and follower, trust, communication, and management support as possible tools for mitigating individual resistance within the organization (Coch and French, 1948). In general, the literature on RTC is especially vast when it comes to an understanding of the antecedents of RTC. However, most research accounts for the direct relationship of independent variables with RTC, and there is a need to study and examine the indirect effects of antecedent variables on RTC (Rockstuhl et al., 2012). The current study focuses on underexplored and contemporary linkages related to individual RTC. Specifically, the study highlights the employee’s resistance dynamics with factors related to dissent expression, LMX relations, and employee’s perception of organizational politics within the organization.

LMX and job-related outcomes

Employee’s attitude and follower’s work-related actions are a manifestation of the leadership process and the quality of the dyadic relationship between supervisor and subordinate (Dulebohn et al., 2012). The LMX theory highlights the differentiated relationship between a supervisor and the follower in an organization (Yu and Liang, 2004). The rationale behind the application of LMX theory is that it allows scholars to understand how differentiated relationships affect organizational and individual performance outcomes (Thompson et al., 2020). Findings from previous literature suggest that managers, at times, form in-cliques and treat members of in-group differentially from members of the out-group. According to Carnevale et al. (2019), leader–subordinate relationships are asymmetric; wherein the leader has greater power, influence, and information over resources and followers. Contemporary LMX scholars maintain this notion but also argue that followers contribute significantly to the differentiated relationship wherein reciprocity and social exchange are at the core of LMX relations (Park and Nawakitphaitoon, 2018). Based on the tenets of social exchange theory, LMX qualities are based on a perception of fair exchanges and expectations. However, these are generally assessed on a continuum of low to high social exchanges. Beneficiaries of high LMX (in-group) relations tend to be better motivated and are more likely to exert effort beyond the stated job description (Wang and Hollenbeck, 2019).

Haslam and Pennington (2010) advanced the critical role of leadership for buffering the adverse effects associated with organizational change. According to Krügel and Traub (2018), resistance serves as a critical impediment while implementing change within an organization. Consequently, how a follower perceived the quality of LMXs may play an essential role in framing an employee’s perception of change. Consistent with attribution theory, employee’s reaction to managerial stimuli is a reflection of the quality of the interpersonal relationship between leader and follower (Furst and Cable, 2008) wherein employees may selectively interpret managerial actions that reinforce the perception of LMX. Perhaps, this logic acknowledges the attitudinal and behavioral intent in employees on why some choose to support or ignore any change initiative within an organization. Similarly, theoretical underpinnings of LMX literature fall short in the organization behavior domain as little is known about the potential mediators of LMX and firm performance (Ilies et al., 2007). In addition, meta-analyses focused on outcomes of LMX suggest mixed results that warrant a detailed study of LMX and its influence on various contextual issues related to organizational outcomes (Cheung and Wu, 2012). The current study shares this expectation and specifies the following hypothesis.

H1: LMX quality is negatively related to individual RTC in the organization.

Organizational dissent

Graham (1986) defined employee dissent as “expression of employee’s disagreement or contradictory opinion about workplace policies and practices to various audiences.” Dissent behavior is often viewed as counterproductive for organizational outcomes as it is assumed to challenge set procedures and norms. Early studies distinguished employee dissent between personal-advantage dissent from principled dissent (Garner, 2016). The former relies on dissent for personal gain while the latter is connected to ethics and moral concerns. According to Kassing (1997, 1998), employees resort to either of three strategies for expressing dissent within an organization. These include articulated dissent, which is directed toward supervisor/manager, antagonistic dissent characterized by the aggressive reaction of those undergoing frustration towards the ineffective audience, and lastly, displaced dissent, which is often translated outside the organizational workplace. For the desired organizational outcomes, managers must respond to employee communication or voice appropriately in case organizations want to realize the benefits accruing from the organizational citizenship behavior of its employees.

Employee’s perception of risk of management retaliation, participation in the decision-making process and employee involvement and assimilation all contribute to variation in dissent expression of employees (Croucher et al., 2019; Goldman and Myers, 2015). In particular, Turnage and Goodboy (2016) conceptualized dissent as an interaction process from the point of view of “perception” of all the parties (i.e. dissenter, manager, coworker) in response to a triggering event. LMX scholars suggest communication and dissent strategy within organizations as a function of the in-group and out-group position of employees within the LMX relations (Donaghey et al., 2011). Thus, understanding and studying a variety of contextual factors wherein employee silence or dissent is recognized and assessed by managers may help leaders alleviate the chances of missed opportunities and timely action (Kacmar and Carlson, 1997). Intuitively, the present study suggests that the outcomes of dissent expression by employees can be assessed by analyzing the dissenter’s ultimate behavior in the form of employee’s RTC tactics and thus proposes the following hypothesis.

H2: OD mediates the influence of LMX quality on individual RTC in the organization.

Organization politics

Politics refer to a social influencing process that relies on the idea of maximizing short-term benefits and long-term self-interest such as pay, compensation, and “go along to get ahead” tactics (Ferris et al., 2017; Kacmar and Carlson, 1997). Anecdotal evidence suggests organizational politics as an over encompassing element that exists in most organizations (Schein, 1977). Past researches support this notion and relate politics to a self-serving and organizationally nonsanctioned form of employee–workplace behavior that may manifest into conflict situations at work (Crawford et al., 2019). When employees perceive a high level of politics within the organization, they resort to negative organizational tactics as a tool for balancing employer–employee relations (Ferris et al., 2017). Thus, highly political organizations are characterized by coalitions that advance self-interest and are often carried out to expand the power and status of individuals or groups within the organization (Atinc et al., 2010).

Intuitive logic suggests employees’ POP is associated with many dysfunctional outcomes in the organizational context (Eisenhardt and Bourgeois, 1988). Supporting this notion, Saleem (2015) noted that negative outcomes outnumber the positive attributes associated with organizational politics. For example, politics creates a communication barrier (Kacmar et al., 1999) and has the potential to create disruptions and inefficiency within an organization (Timming and Johnstone, 2015). In addition, political activities and behavior that seemingly arrest dissent behavior of employees may result in loss of information transfer translating into poor organizational decision-making (Mohamad and Jais, 2016). From a change perspective, organizations rely heavily on leaders to envisage and execute a smooth transition process (Ferris et al., 2017). In that vein, Poon (2003) states that leaders who use high-quality LMXs engage followers with clear values, direction, and agendas that guide employee action. When employees perceive organization decisions as determined by objectivity and not through politicking, they are less likely to perceive the workplace as a political arena. Putting this notion into action, the study proposes that employees are less likely to engage in counterproductive workplace conduct such as those related to resistance activities in cases where employees perceive higher trust, a scope for dissent, and less politicking within the organizational workplace. The current study shares this expectation and thus proposes the following hypothesis.

H3: Employee’s POP moderates the relationship between LMX quality and individual RTC mediated by OD within an organization such that the mediated relationship is stronger under low (POP) than under high (POP).

Research context

Mergers and acquisitions (M&A) serve as a prominent strategy for companies aiming for faster growth, efficiency, and consolidation in the industry. Such deals, although prized and highly valued, do not boast of a high success (Mendenhall, 2005). According to Bansal (2017), strategic orientation and financial considerations have received higher importance during M&A transactions. Contemporary scholars think otherwise and suggest a need to look at human resource integration during the course of M&A. The banking sector in India is currently undergoing sectoral consolidation, and based on directives issued by the central government and the reserve bank of India, weak public and private sector banks are advised to merge with larger financial entities in the industry. However, despite several initiatives by the government and management of the merging entities, employees continue to oppose the proposed change. Our context of research underscores this newfound challenge of forced mergers in the banking industry for addressing our research question.

Method

Participants and procedures

Pilot study

Two independent qualified researchers and two industry expert in the banking sector reviewed the survey instrument, where in minor changes to the instrument items were incorporated. This was further verified by the researchers themselves for avoiding any inconsistencies in the survey. The approved measures were then administered using a pilot survey on 35 employees in the banking sector. The pilot study asked the participants to read and evaluate the survey items and indicate if any were unclear or confusing. Based on the results of the pilot study, minor changes where further made to the survey items.

Final study

Questionnaire was posted via the Web/Email delivery system to 780 employees of three public sectors and one private sector bank in India. All the banks have been put under the corrective action plan by the reserve bank of India and are proposed for forced mergers with other large public sector banking units. In all, the questionnaire evoked 260 responses resulting in a response rate of 33.3%. Occupational demographics, that is, respondents from public/government sector organizations compared to private sector organization, stood at 63% and 34%, respectively. Further, male and female percent in our sample stood at 62% and 35%, respectively, while 3% of respondents did not wish to disclose their gender.

The current study assesses individual perceptions and dispositional attributes related to employees. Spector (1994) suggested that measures of cognitive and affective reactions at work indicate people’s emotions and feelings that reflect perceptions and views of people at work. Thus, cross-sectional self-reporting methodology is generally appropriate and useful while depicting how employees feel and relate to their job. In particular, Conway and Lance (2010) have proved in their study that self-reported trait factor correlations are unbiased estimators of true correlation and do not undermine the construct validity of either self-reports or other reports, mainly where people’s view and perception is being studied.

Measurement of the constructs

RTC at individual level was assessed using the 12-item scale developed by Oreg (2003). All the four behavioral components of RTC (routine seeking, emotional reaction, short term focus, cognitive rigidity) was operationalized through multiple items. All the items were rated on a 6-point scale with 1 = Strongly disagree and 6 = Strongly agree.

LMX quality was assessed using the 7-item scale developed by Graen and Uhl-Bien (1995). All the components of LMX were operationalized through multiple items. A sample item measuring LMX was “How well does your leader understand your job problems and needs?”

To ascertain the effect of OD on LMX quality and individual RTC, we have adopted the 20-item scale of OD (articulated, displaced, antagonistic) proposed by Kassing (1998). All the items were rated on a 5-point scale with 1 = Strongly disagree and 5 = Strongly agree.

Employee’s POP was assessed using 12 items taken from Kacmar and Carlson (1997). A sample item measuring general political behavior was “People in this organization attempt to build themselves up by tearing others down.” All the items were rated on a 5-point scale with 1 = Strongly disagree and 5 = Strongly agree.

Control variables

Past researchers have identified demographic variables such as the age of employees, organizational tenure, gender, and education as potential influencers for employee behavioral outcomes (Mumford et al., 2002). In the present study, we have controlled for gender, employee experience, and type of organization (public/private sector) to minimize any biasness in the result. Gender is known to affect emotions, conflict, and job satisfaction (Brody and Hall, 2008). Similarly, prior studies have documented employee experience as a potential influencer of participant’s propensity to interact with one another, which is relevant to conflict expressions in the organization. Lastly, type of organization (private/public) has also been used as a control variable as both public and private sector banks in India are known to vary considerably in terms of occupational demographics and contrasting management principles.

Data analysis

Data analysis (n = 260) was carried out using confirmatory factor analysis (CFA) in the AMOS application followed by the hypotheses testing. All the hypotheses were tested in three phases. In the first phase, direct effect of LMX quality on individual RTC was ascertained followed by the mediation test of OD on RTC and LMX. Finally, the moderation effect of employee’s POP on LMX and individual RTC mediated by OD (moderated-mediation) was tested for determining adequate fit in the proposed model. Conditionality test (moderated-mediation) was carried out using SPSS PROCESS macros provided by Preacher and Hayes (2008). The application facilitates the estimation of indirect effects with a bootstrap approach to obtain a 95% confidence interval (CI) while minimizing for type-1 error.

Results

The Kaiser–Meyer–Olkin (KMO) test was conducted to assess the sampling adequacy in the current study. The study’s test returned a value of 0.83, which is above the recommended level of 0.70 (Nunnally, 1978). Bartlett’s test of sphericity was found significant (p < 0.000) reflecting favorable factor analysis. During factor analysis, any item that loaded below 0.40 was eliminated from further analysis (Tabachnick and Fidell, 2001). The current study choose two criteria for deciding upon which item to be retained or removed from the final scale and also for determining the scale’s psychometric properties. First, composite reliability for each of the construct should be above the cut-off limit of 0.70 (Fornell and Larcker, 1981). Secondly, the average variance extracted (AVE) also known as convergent validity should exceed the cut-off limit of 0.50 (Koufteros et al., 2009). According to Fornell and Larcker (1981), constructs with AVE less than 0.50 but greater than or equal to 0.40 can also be accepted under conditions of adequate composite reliability of the stated scale, that is, above 0.70.

Tables 1 and 2 summarize the coefficient of internal consistency, AVE, maximum shared variance (MSV), and composite reliability (CR) based on which items were retained. It should be noted that AVE of the employee’s POP did not meet the cut-off score of 0.50. However, the factor was still retained, considering the exploratory nature of the scale as well as the presence of adequate composite reliability and coefficient of internal consistency, that is, Cronbach α above 0.70 (Fornell and Larcker, 1981). Once the psychometric properties of the scale were established through adequate reliability and convergent validity, the next step involved analyzing the discriminant validity of the stated measure. According to Koufteros et al. (2009), convergent and discriminant validity are generally assessed simultaneously for model fit criterion; however, in the case of second-order constructs, issues of discriminant validity are of less significance as the facets posited as first-order construct act as building blocks for the second-order construct. In the current study, we found support for discriminant validity (refer Table 2) as MSV was found to be less than AVE for all our constructs.

Table 1.

Coefficient of internal consistency (Cronbach α).

Construct name	Cronbach α
Resistance to change	0.82
Perception of politics	0.74
Organizational dissent	0.75
Leader–member exchange	0.91

Table 2.

Reliability and validity.

Construct name	CR	AVE (Convergent validity)	MSV
Organizational dissent	0.84	0.50	0.31
Leader–member exchange	0.91	0.60	0.32
Perception of politics	0.78	0.41	0.32
Resistance to change	0.78	0.64	0.31

Note: CR: composite reliability; AVE: average variance explained; MSV: maximum shared variance.

Measurement model

CFA was carried out on the sample data for confirming the initial model fitness. Results of the first-order multifactorial model were compared with the second-order multifactorial model to determine the overall model fit criterions (refer Figures 2 and 3). Results showed poor model fit associated with the first-order multifactorial model; however, in the case of the second-order multifactorial model, the overall measures indicated adequate model fit (see Table 3). General rules and identifications need to be adhered to while assessing second-order models. For example, in the case of a single second-order factor, there must be at least three first-order factors. In a situation where there are less than three first-order factors for a single second-order factor, the general goodness of fit indices is not applicable in the study (Koufteros et al., 2009).

Figure 2.

Second-order measurement model. Note: RTC: resistance to change; OD: organizational dissent; LMX: leader–member exchange; POP: perception of politics; RTCER: resistance to change (emotional reaction); RTCST: resistance to change (short-term focus); ODAD: organizational dissent (articulated); ODDA: organizational dissent (antagonistic).

Figure 3.

First-order measurement model. Note: RTC: resistance to change; OD: organizational dissent; LMX: leader–member exchange; POP: perception of politics; RTCER: resistance to change (emotional reaction); RTCST: resistance to change (short-term focus); ODAD: organizational dissent (articulated); ODDA: organizational dissent (antagonistic).

Table 3.

Model fit indices (confirmatory factor analysis).

Model	CMIN/DF	IFI	TLI	CFI	RMSEA
Second order	1.98	0.91	0.89	0.91	0.06
First order	2.48	0.82	0.78	0.82	0.08

Hypotheses testing

Results of linear regression for ascertaining the effect of LMX quality (mean = 3.28) on individual RTC (hypothesis 1) were found to be negative and significant in the study (effect = −0.22, p < 0.000). In addition, the R² or explained variance was noted at 0.26. Once support for the main hypothesis was established, mediation test (hypothesis 2) was carried out in the study by using Preacher and Hayes (2008) technique of bias-corrected bootstrap analyses (5000 bootstrapped samples). Results indicated a negative and significant indirect effect of OD on LMX and RTC (effect = −0.16, LLCI = −0.22, ULCI = −0.11) as the CI did not contain zero. Additionally, in the presence of OD, the direct effect of LMX on RTC was found to be insignificant (effect = −0.0399, LLCI = −0.0.02, ULCI = 0.10) indicating the presence of full mediation effect. The overall model was significant with p < 0.000 and R² = 0.44.

Following the support for the mediation effect, we tested for hypothesis 3 in the proposed moderated-mediation model by implicating the effect of employee’s POP as a moderator between LMX and RTC. Test indicated that overall moderated-mediation model was significant at p < 0.000 and R² was noted at 0.46 (see Figure 4). In addition, the conditional effect of employee’s POP was also found to be significant for LMX on RTC in the presence of OD (see Table 4). Finally, the index of moderated mediation (hypothesis 3) was also found to be significant as the CI did not contain zero (Index = 0.07, LLCI = 0.01, ULCI = 0.12) indicating the presence of moderated mediation in our study.

Table 4.

Hypotheses testing.

Hypothesis 1: LMX on resistance to change.
Effect	SE	t	p
−0.22	0.03	−3.69	0.000

Hypothesis 2.

Indirect/mediation effect: LMX on RTC via organizational dissent (OD).

	Effect	BootSE	LLCI	ULCI
OD
Direct	−0.03	0.03	−0.02	0.10
Indirect	−0.16	0.02	−0.22	−0.11

Hypothesis-3.

Moderated-mediation test.

Direct effect of LMX on resistance to change
Effect	SE	t	p	LLCI	ULCI
0.03	0.03	1.29	0.195	−0.02	0.10

			Bootstrapping percentile 95% CI
POP	Effect	SE	Lower	Upper
−0.77	−0.14	0.03	−0.22	−0.08
0.00	−0.09	0.03	−0.15	−0.03
0.77	−0.03	0.04	−0.11	0.04

Note: Conditional indirect effects of POP on LMX and RTC via OD.

Index of moderated mediation.

	Index	SE	Lower	Upper
POP	0.07	0.02	0.01	0.12

Figure 4.

Interaction plot of perception of politics (POP) on leader–member exchange (LMX) and organizational dissent (OD).

Common method bias

In the present study, respondents were assured of complete anonymity and confidentiality through a cover letter that also explained the importance of the research. Such a procedural technique helps enhance the motivation for self-expression and self-disclosure by respondents during surveys. It was further explained to the respondents that there were no right or wrong answers to the question, and respondents needed to answer the questions based on their actual experience at work. Such an approach helps reduce method bias related to low self-efficacy and low cognition among the respondents in the study (MacKenzie and Podsakoff, 2012).

Harman single factor test was used to ascertain any common method bias (CMB) issue in the data. Results of the unrotated factor solution further suggested that there is no issue of CMB in the study as all the items loaded into a single factor with total variance extracted standing at only 29.3%, which is significantly less than the cut-off level of 50% (Harman, 1967). Due to increasing concerns about the merits of Harman’s single factor test, the results were further corroborated with the correlation matrix (see Table 5) of the constructs for determining if any of the correlation was above 0.80 (Lowry and Gaskin, 2014). None of the reflective indicators in the present study breached the threshold level. Additionally, the study used a common latent factor in CFA as a surrogate for method variance and for testing CMB in the study. χ² value of zero constraint test was insignificant (i.e. measurable bias was not detected), indicating minimal concern for method bias in the study (Gaskin and Lim, 2017).

Table 5.

Correlation among study variables.

	Variable name	1	2	3	4	5	6	7
1	Gender	1
2	Experience	−0.25**	1
3	Organization type	−0.16*	0.14*	1
4	Resistance to change	−0.07	−0.02	0.06	1
5	Perception of politics	−0.13*	0.07	0.11	0.55**	1
6	Leader–member exchange	0.06	−0.03	−0.16**	0.22**	−0.61*	1
7	Organizational dissent	−0.07	0.01	0.10	0.66**	0.46**	−0.41*	1

Note: Gender (1 = Male; 2 = Female; Other = 3); Experience (1 = 0–5 years; 2 = 6–10 years; 3 = 11–15 years; 4 = 16–20 years; 5 = more than 20 years); Organization type (Private = 1; Public = 2).

* Significant at the 0.05 level; **Significant at the 0.01 level.

Discussion

The study explored the relationship between LMX quality on individual RTC of employees. As predicted, a negative relationship exists between these two factors. The results also confirm that OD by employees mediates the relationship between LMX quality and individual RTC and that the indirect effect of LMX quality on RTC (via OD) was stronger when employees perceived politics in the organization as low than high. The result is not surprising as a low level of perceived politics within the existing workplace situation may have induced confidence among the employees to express emotions and dissent from any impending change within the organization. Secondly, given a situation where employees perceive the level of politics as high, it is not too complicated to understand that employees would not like to raise voice or express dissent from fear of supervisory action and punishment.

As far as RTC of employees is concerned, emotional reaction and short-term focus were significant predictors of overall RTC while cognitive rigidity and routine seeking behavior did not load onto any significant value within the construct. Because the particular change addressed in this study is forced and not self-initiated in nature, it makes sense that during forced M&A, both cognitive rigidity and routine-seeking components did not manifest onto the overall outcome. Within the employee dissent forms, the articulated and antagonistic form of dissent was found to be significant predictors of OD, whereas no such support was found for displaced dissent. Intuitive logic suggests that both articulated and antagonistic dissent are directed toward targeted supervisors and peer groups within the workplace and are considered a better and effective medium of expressing voice with regards to a particular incident or situation of change. On the other hand, displaced dissent is directed toward people outside the organization, such as family members and friends. Since they form the most ineffective audience in the given context, it is not hard to guess that employees choose to direct their voice and dissent expression limited to the organizational workplace.

In the organizational context, politics is regarded as an informal and nonsanctioned form of organizational behavior. When victims of organization politics recognize the existence of politicking in the organizational decision-making process, they are more likely to exhibit resistance. Results in the present study confirm this assertion as the moderated-mediation effect of employee’s POP on LMX and RTC via OD was found to be significant. Specifically, our analysis supports the notion that employees perceive “pay and promotion” as well as “go along to get ahead” tactics as key determinants of organization politics. The findings are line with the results and outcome of the study on employee’s POP in the organization by Kacmar and Carlson (1997).

Theoretical implication

While operational and business complexities continue to grow, managing such complexities require modern-day managers to remain steadfast while guiding followers toward the achievement of organizational goals. Notably, past studies also point out to a paucity in extant literature that highlights individual characteristics as a predictor of organizational outcomes based on social exchange theory principles (Carnevale et al., 2019). This could perhaps be explained by the fact that individuals may react and reciprocate differently to different situations and managerial stimuli and mere exchanges may not be sufficient to explain interpersonal outcomes (Kim et al., 2017). To that end, the study’s results reinforce previous findings on the importance of leader–subordinate relationships as a potent means of directing employees toward organizationally sanctioned attitude, behavior, and performance. The study’s findings add to the existing body of knowledge in the domain of organizational change management in several ways. In the present study, consistent with the tenets of social exchange theory, our first theoretical contribution demonstrates a negative relationship of LMX with individual RTC, which suggests the importance of LMX in curbing workplace deviant employee outcomes in the organization.

The study’s second contribution highlights organizational communication in the form of dissent expression as an important predictor of individual dispositional characteristics that consequently influence employee actions. Specifically, the study demonstrates that employees resort to an articulated and antagonistic form of dissent as an effective and preferable form of dissent expression in organizational workplace situations. Third, the study addresses the need to empirically test the role of employee’s POP under a variety of contexts. The present study relates forced merger as a relevant context that may exasperate politicking behavior among organizational members for enhancing personal interest. Importantly, the study demonstrated that “pay and promotion” and “go along to get ahead” are important determinants of organizational politics, which manifest in critical decision-making processes such as M&A. Last, the present study relates to the testing of a moderated-mediation model grounded in theoretical and methodological rigor, especially concerning second-order constructs in the present study. Such an approach helps gauge the varying employee reaction to complicated workplace relationships that generally accompany change events and one that needs careful consideration.

Managerial implications

The present study provides many practical insights and suggestions to managers for managing their business primarily within the context of organizational change. First, it appears that followers are likely to perceive their relative position within the dyadic relationship shared between leader and follower. Managers would do well to understand that high-quality LMX relationship benefits both subordinate and the leader themselves. In particular, employees are less likely to demonstrate deviant workplace activities, when organization members perceive the LMX quality as high. Second, in the present study, we relate communication forms such as dissent expression as a tool for managers for building high-quality LMX within the workplace and engaging employees to receive actual feedback in the overall scheme of business management. Such feedbacks provide useful insights and suggestion that may help improve the organizational decision-making process. Thus managers must not suppress employee voice and other forms of dissent expression, which may also affect the quality of LMX shared between the leader and the follower. Third, politics is perceived as an informal and nonsanctioned form of organization behavior. Victims of organizational politics may develop an adverse perception of leader and managerial action, manifesting into inappropriate employee behavior and outcomes. Leaders need to promote an environment of fairness and equity wherein employees are less likely to perceive the organization workplace as a political arena. In particular, while perceptions of managerial actions vary from individual to individual within an organization, we suggest that leaders and managers would do well to pursue a contingent boundary management tactics instead of focusing on the “best strategy” for guiding managerial actions especially during the course of any organizational change event.

Limitations and future research

Although the findings reinforce many encouraging results, it is important to recognize certain limitations associated with the current study. First, it is desirable to increase the sample size for further validation in future studies. Second, cross-sectional data have been used in the study, which may limit our ability to draw causal inferences from the study. Last, the study utilizes a sample from only one industry (banking). While such a sample helps control industry effects, it may have precluded certain important factors that may differ across industries. These limitations notwithstanding, the current study has made a meaningful contribution to the existing literature on change management by adding new contextual variables such as dissent expression and POP on employee attitude and workplace outcomes. Future researchers would do well by addressing the role of communication on employee’s behavioral outcomes through informal networks, especially within the change context. Organizational culture is a subset of national culture. Future researches could extend the findings of the study by implicating the role of culture, such as power distance and uncertainty avoidance tendency of individuals in a cross-cultural context. Overall, the study suggests that managers must not overlook detrimental effects related to counterproductive employee attitude and behavior, such as RTC, and must continue to explore potential remedies for mitigating such effects that result in better employee and organizational outcomes.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Arbind Samal

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