TRANSFORMATIONAL LEADERSHIP AND EMPLOYEE INNOVATIVE WORK BEHAVIOUR IN PAKISTAN'S IT SECTOR: THE MODERATING ROLE OF PSYCHOLOGICAL SAFETY

Abstract

This study investigates the moderating role of psychological safety between the effect of transformational leadership and employee innovative work behaviour in an Information Technology (IT) industry in Pakistan. The study was based on Social Exchange Theory and Social Cognitive Theory, suggesting that transformational leadership positively affects innovative work behaviour, and psychological safety enhances the relationship between the two. A cross-sectional survey design was used, qualitative. Proportionate stratified random sampling was used to collect data from 406 full-time workers of IT firms in Pakistan Software Export Board (PSEB) registered firms in Karachi, Lahore and Islamabad/Rawalpindi. Transformational leadership was measured using validated scales (12 items), and psychological safety and innovative work behaviour were measured using validated scales (7 items) and (6 items), respectively. The data were analysed by using SPSS version 26 and SmartPLS version 4. The measurement model was found to be reliable and valid. The results of the structural model assessment showed that there was a significant positive effect of transformational leadership on innovative work behaviour (β = 0.347, t = 6.284, p < .001). The relationship between transformational leadership and innovative work behaviour was significantly moderated by psychological safety (β = 0.186, t = 3.416, p < .001), such that the positive relationship between transformational leadership and innovative work behaviour was significantly stronger when psychological safety was high (β = 0.496, p < .001) as opposed to low (β = 0.198, p = .004). The variance in innovative work behaviour could be accounted for 35.8 per cent of the full model. The findings add to the body of leadership and innovation literature as a boundary condition, while providing leadership development and climate interventions for the IT industry of Pakistan.