Still waters run deep: differences in employee empowerment between public and private sector firms in India

Abstract

The different structural contexts of public and private sector firms frame the specific organizational work environment. However, public-private comparative studies have been unable to isolate how these differences influence aspects of organizational work, such as employee empowerment, with similarities and differences among key constructs. We develop a contingency view of employee empowerment, theoretically arguing and empirically demonstrating how authentic leadership with different levels of organizational politics influences employee empowerment in different contextual settings, namely public vs. private sector firms. We present evidence of a three-way interaction. We surveyed 173 senior Indian managers working in public and private sectors to measure their perceptions of empowerment, authentic leadership, and organizational politics. Employing ordinary least-square regression, we tested for simple and complex interactions. We found that authentic leadership had interactive effects on how organizational politics and public-private differences impact empowerment. The differences in the effect of authentic leadership on employee empowerment between public and private firms became more, with an increase in organizational politics.

Keywords:

• India
• empowerment
• public-private
• authentic leadership
• organization politics
• contingency theory

Introduction

Public and private sector firms differ significantly in terms of their structural aspects, such as objectives, performance measures, and public visibility. While private firms often prioritize profits as their primary performance measure, public firms tend to emphasize substantive purposes, necessitating a focus on political obligations alongside service delivery (Pereira et al., 2018). Given these differences, contingency-rooted disparities arise, and lessons learned in the private sector context may not be directly generalizable to the public sector (Brunetto & Beattie, 2020; Kelman, 2005), but need to be contextualized to that sector (Buckland, 2009). Recognition of how a contingency impacts organizational working is important, as public sector management becomes more conscious of what it is doing and why it is doing so in managerial terms (Llewellyn & Tappin, 2003). These distinctions indicate important disparities, highlighting the need to consider the unique context of each sector. Recognizing how contingencies impact organizational dynamics is crucial to enhance the public sector’s awareness of its actions and rationale in managerial terms (Llewellyn & Tappin, 2003).

In this study, we aim to explore the different relationships between employee empowerment, organizational politics and authentic leadership influenced by the sector context of the firm, namely public vs. private firm within the context of an Asian economy (India). We ask three key questions: 1) Is the relationship between employee empowerment and organizational politics moderated by the sector context of the firm (i.e. public vs. private firm)? 2) Is the relationship between employee empowerment and authentic leadership moderated by the sector context of the firm (i.e. public vs. private firm)? 3) How is the moderating effect of a firm’s sector on the relationship between employee empowerment and authentic leadership altered by the level of organizational politics?

Overgeneralizing insights without considering public-private disparities can be risky (Bryson & George, 2020). The literature has provided ambiguous findings so far with regard to the similarity and difference between public and private sectors. For example, Knies et al. (2022) concluded that public and private sectors indicate several differences in their HRM systems. They found that the traditional public sector investment in employee well-being continues to be distinctive, with a focus on equal opportunities. Private sector organizations, on the other hand, make greater use of performance oriented HRM practices including compensation and benefits, performance appraisal data, and modern development and career management practices (Knies et al., 2022). Public sector employees place a higher importance on the chance to engage in public service compared to their private sector counterparts as the public employees are more inclined to find motivation from the intrinsic aspects of their work rather than monetary incentives (Bozeman & Su, 2015). Based on public service motivation, public sector employees have a higher desire and intention to contribute to greater good of the citizens (Iacovino et al, 2017), often driven by their community citizenship behaviours (Miao et al., 2019) and organisation identification (Bao and Zhong, 2021). Contingency factors become important considerations when HRM practices are analysed in the private and public sectors. For example, the influence of external environmental conditions impacts control, specifically managerial control, which can be perceived differently for public and private sectors (Kreutzer et al., 2015). HR managers and researchers face challenges in understanding best practices in the public sector due to a lack of research in this area compared to the private sector (Brunetto & Beattie, 2020; Huselid, 1995). The differences in HRM practices in private and public sectors are not straightforward and thus call for future studies (Blom et al., 2020).

New Public Management (NPM), a management approach that emphasizes the use of market mechanisms and private sector management techniques in the public sector, acknowledges the above stated complexity and agrees that public sector employees may still be driven by public service motivation (Iacovino et al., 2017). Nonetheless adoption of NPM principles may lead to a greater focus on performance and efficiency. Under the overarching concept of NPM (Armstrong, 1998; Pollitt & Bouckaert, 2017), public sector reforms emphasize employee empowerment to improve management and achieve performance equal to or better than that of the private sector, making the public sector an ideal context to study the antecedents of employee empowerment. Employee empowerment is a set of psychological states, necessary for individuals to feel a sense of control over their work environment (Spreitzer, 2008). Understanding the differences in antecedents of employee empowerment in private and public sector firms is important because employee empowerment has been shown to have significant implications for both public and private firm outcomes, including performance (Fernandez & Moldogaziev, 2011), organizational commitment (Mohapatra & Sharma, 2010), employee commitment with quality of work life (Nayak et al., 2018), job satisfaction and employee productivity (Kumar & Kumar, 2017). Although there are some debates regarding the distinctiveness of HRM systems between public and private sectors, this study proposes that the structural dimensions of these sectors influence the interactions among key dimensions, ultimately affecting outcomes such as employee empowerment (Budhwar & Boyne, 2004; Vigoda-Gadot & Kapun, 2005). The study extends existing research by examining how employee empowerment is shaped by authentic leadership and organizational politics. While authentic leadership has been linked to empowerment (Seibert et al., 2011), its effects might vary across sectors. Similarly, organizational politics’ relationship with empowerment has been underexplored (Landells & Albrecht, 2019). By investigating these relationships in both public and private sectors, the study aims to provide a comprehensive understanding of their interplay.

HR practices are often developed based on North American perspectives and do not guarantee applicability to emerging economics and Asian countries (Naseer et al., 2016; Pereira et al., 2018). Over the last ten years, emerging markets have contributed to almost half of the global GDP and approximately two-thirds of global economic growth (Morris et al., 2023). Given the substantial contributions of emerging markets such as India to global GDP and economic growth, studying these countries becomes crucial (Morris et al., 2023). Furthermore, India is not only home to the largest population, but also a country with one of the largest numbers of working-age youths (Pereira et al., 2018). As described by Boselie et al. (2021), context is key to the study of HR practices, therefore an India-focused study is desirable. There are studies within the Indian context that explicitly discuss employee outcomes between the public and private sectors (Kumar & Saha, 2017; Mohapatra & Sharma, 2010; Pereira et al., 2018; Saha & Kumar, 2018); we will elaborate these in detail in the literature section under the contextual setting and develop our research hypotheses accordingly.

As mentioned, the current study aims to investigate the relationships between employee empowerment, organizational politics, and authentic leadership within the specific sector context of firms in India. By analyzing these key relationships highlighted earlier and tackling the three research questions, our study makes key theoretical contributions to the empowerment literature by exploring the interactions among the antecedents of employee empowerment. We are able to report that public/private differences manifest in complex ways, affecting employee empowerment, a central call in this literature (Kumar & Saha, 2017). In the following section, we review the relevant literature which forms the basis for our hypotheses about the impact of authentic leadership and organizational politics on empowerment contingent to public and private contexts. We then describe our data, presenting the results of the empirical study and discussing our findings. Finally, we conclude the article by highlighting the theoretical contributions, managerial implications, limitations and future research directions.

Literature review

The key HRM dimensions investigated in this study within the theoretical framework of contingency theory are related to employee empowerment, and the effect of authentic leadership and organizational politics on empowerment. The following is a brief description of the significance of each of these dimensions that comprise the central theme of this study.

Theoretical background

Contingency theory, which posits that organizational structure and management behaviour are contingent on the environment of the organization, has been applied in various studies to understand and improve public sector management (Alford, 2002; Felício et al., 2021). The theory recognizes that there is no one-size-fits-all approach and that organizations are influenced by unique circumstances, contextual and cultural values, which shape their behaviour and decision-making processes. Contingency theory is relevant in the context of emerging markets like India as the country, since liberalization started in 1991, has been witnessing institution-led rapid transformations and heightened market competition, which is expediting development of organizational capabilities due to accelerated infrastructure development and technological advancement (Banalieva & Sarathy, 2011). Dimaggio and Powell (1983) argued that organizations conform to institutional expectations, norms and rules to gain legitimacy and ensure their survival. This aligns with the concept of contingency theory, which suggests that organizations adapt their strategies and structures based on the contingencies of their institutional environment. Kalufya and Nyello (2021) found this to be true in the case of public institutions in Tanzania as their effective functioning depended on their ability to adapt to the institutional context.

Meyer and Rowan (1977) explored the concept of institutionalized organizations, highlighting how formal structures and practices become deeply ingrained in organizations as myths and ceremonies. However, Estrin and Prevezer (2011) highlights the existence of informal mechanisms, termed as ‘substitutive informal institutions’, which serve to supplant ineffective formal institutions in India. Although India’s formal legal framework being more transparent, there is a lack of clarity regarding the actual locus of control due to the influence of institutional factors in shaping organizational behaviour and performance within organizations (Darwish et al, 2020). Further, the narrative of liberalization and associated divestments of public sector undertaking was built on their wider public perception of being bureaucratic, inefficient, and continually bogged down by political constraints (Sardana & Zhu, 2017; Zhu et al., 2020). Contrary to this, private sector firms were seen as competitive and market responsive. The formal shift in institutional expectations vis-à-vis national building and development from public sector undertaking to private sectors, post-liberalization, had a contingent impact on the organizations and their strategies. It buttressed the informal expectations and norms from these sectors. More recently, with the advent of NPM across the globe, there is again a shift in formal expectations from public sector in both developed and developing countries; that is public sectors becoming inefficient to deliver public good. Especially in the context of India, this not only creates a tension within public sector organizations due to the past perception and informal expectations, but also impacts organizational structure and employee behaviour (George et al., 2019).

Overall, one can argue that institutional factors, formal and/or informal, can shape organizational behaviour and performance within organizations (Darwish et al., 2020). Consequently, contingency theory provides a robust theoretical lens for this study on public and private sector differences because it emphasizes the importance of aligning organizational structures with the specific institutional characteristics and contexts in which organizations operate.

Employee empowerment

Employee empowerment, defined as a sense of control over the work environment, significantly impacts factors such as trust, commitment, and productivity (Kumar & Kumar, 2017; Spreitzer, 2008). Employees take initiative without being prodded and serve the collective interest of the organization without being micromanaged (Maynard et al., 2012; Seibert et al., 2011). At its core, empowerment is about the sharing of power between superiors and subordinates; it is about delegation of decision-making and sharing information, resources, rewards, and authority in the organizational context (Ivanova & von Scheve, 2020). Despite the traditional hierarchical Indian context, employee empowerment matters because it impacts organizations (Kumar & Saha, 2017) by promoting both employees’ sense of satisfaction in their job and organization (Kumar & Kumar, 2017), and organizational commitment (Mohapatra & Sharma, 2010). In specifically exploring the differences in antecedents of employee empowerment in public and private sector firms, our study answers the call in the literature to understand the differences in important relationships among constructs in public and private sector firms, an important contingency (Kelman, 2005; Liang et al., 2012). This research focuses on the contingency theory to understand how HRM practices differ between public and private sectors and emphasizes the influence of structural factors on employee empowerment (Paauwe & Boselie, 2005).

We extend prior research that has examined how perceptions of employee empowerment are moulded by socio-structural attributes in an organization, namely authentic leadership and organizational politics. Since positive leadership styles vary depending on context (Luu, 2021), we examine how the effects of authentic leadership, based on trust and support, differ for public and private firms, given authentic leaders are critical as role models in shaping organizational climate (Boekhorst, 2015). In terms of understanding how organizational politics shape empowerment perceptions, we also explore how the relationship of organizational politics with empowerment perceptions differs for public and private firms. Some scholars have found no distinct models/styles between public and private sectors in the area of organizational politics (Saleem, 2015; Vigoda-Gadot & Kapun, 2005) and leadership (Andersen, 2010). However, in the present study, we propose that whilst there may not be distinct models/styles for these key dimensions that distinguish the public sector from the private sector, it is the structural dimensions of these sectors that will lead to distinct interactions among the key dimensions to produce different outcomes, such as employee empowerment. Consequently, our study focuses on how organizational politics may alter the interaction effect of authentic leadership according to the firm’s sector, specifically distinguishing between public vs. private sector.

Authentic leadership and empowerment

Authentic leadership can be defined as the characteristic of a leader who pursues their moral values and reinforces employee engagement (Furmańczyk, 2010). In a meta-analytical study, Seibert et al. (2011) identified 51 studies that linked positive leadership behaviour with empowerment and found a positive correlation of 0.53 between the two. Carasco-Saul et al. (2015) also found a significant relationship between authentic leadership and employee empowerment. Positive leadership impacts empowerment when, among other aspects, leaders openly share and supply information to employees, serve as role models with high internal moral standards and values, and provide feedback and coaching to followers. Towsen et al. (2020) developed their study by positioning authentic leadership and psychological empowerment as enablers of work engagement through the investigation of the empowerment processes in which authentic leadership exerts its effect on work engagement. By exhibiting transparency, authentic leaders are inclined to develop sound and trusting relationships with followers (McAuliffe et al., 2019). Employees also feel increasingly empowered when they view their leaders’ behaviours as being positive (Cummings et al., 2014); authentic leadership is a form of positive leadership (Cummings et al., 2014; Zhang et al., 2021).

There are four components of authentic leadership, namely balanced processing, internalized moral perspectives, relational transparency, and self-awareness. Walumbwa et al. (2008) identified authentic leadership as fostering positive self-development among employees, however, prior studies have not yet examined the specific relationship between authentic leadership and employee empowerment, and the boundary conditions for such a relationship. Given the limited research on the relationship between authentic leadership and empowerment, we contribute to the scant but noteworthy scholarly literature on the subject by extending the line of enquiry within the Indian context in different organizational settings, namely public vs. private sectors.

Organizational politics and empowerment

Organizational politics have been described as behaviour that is driven by self-interest, contradictory to the organization’s objectives, and intentionally causing harm to individuals, groups, or entities (Saleem, 2015). Organizational politics are a fact of organizational life, emerging from resource constraints, heterogeneity in the interests of employees, presence of powerful and dominant cliques, and power-seeking and self-serving behaviours of individuals. Studies indicate political behaviour in organizations is typically perceived as non-sanctioned, manipulative, self-interested and is often construed negatively (Vigoda, 2000). Politics within the organization can impede the development of an integrative culture which encourages people to care for the company and its members (Buchanan & Badham, 2020). The key to understanding how politics influences organizational commitment is to focus on the employee’s subjective experience of politics (Ferris & Kacmar, 1992). The study of Atta et al. (2012) within the Indian context, concludes with the notion of organizational politics as an individual, perceptual and subjective construct impacting employees psychological empowerment.

Based on this understanding, our study not only examines the association between organizational politics and empowerment, but also investigates the interactive effects of authentic leadership and organizational politics on empowerment. This investigation thus addresses the concern of Maynard et al. (2012) that ‘less is known about how the various characteristics interact, leading to psychological empowerment’.

Hypotheses development

Contextual setting: public and private distinction in India

A rich stream of literature has sought to identify what distinguishes public from private organizations. The premise for public and private contexts to be different lies in the recognition that they are driven by alternative logics. While market incentives rooted in economic efficiency drive private sector firms, studies based on India highlighted that public organizations are influenced by political logic that prioritizes serving public interest (Kumar & Saha, 2017; Pereira et al., 2018). With the impact of the New Economic Policies (NEP) implemented after economic liberalization in 1991, the government prioritized creating a greater role for the private sector in nation building and contributing to the economy (Singh et al., 2023). For example, studies have shown a trend of public sector banks being taken over by private sector banks, since the public sector was projected to be inefficient and loss-making (Tiwari & Vidyarthi, 2018). Similarly, with the downfall of Air India, private airlines such as IndiGo and SpiceJet have surged in the private airline industries sector (Maheshwari & Mishra, 2023). There are a number of other examples that demonstrate how the public sector in India has been overtaken by the private sector in various industries, including essential services, such as airports, shipping ports, and power distribution. Furthermore, while both sectors may be influenced by managers, employees, and trade unions, public sector organizations are more subject to the influence of diverse stakeholder groups, both formal (example, bureaucrats, the government, regulatory bodies) and informal (such as local politicians, influential family-led business groups, social activists) (Estrin and Prevezer, 2011). This multiplicity of stakeholders adds complexity and unique considerations to the decision-making processes and overall functioning of work practices in the public sector in India (Pereira et al., 2018). Multiplicity in stakeholders would often lead to competing expectations from the organization and a balancing act would often call for political deftness and compromises by the leadership. This may have an adverse impact on the employees due to less clear goals and performance expectations.

While the initial assumption that theories and practices developed within HRM can be applied broadly across all types of organizations (Wajeeh-ul-Husnain et al., 2022), public management scholars have struggled to make a direct application of these practices due to the nuances and distinctive aspects between public and private organizations (Tiwari & Vidyarthi, 2018). The public-private distinction has been studied in both structural and behavioural aspects. At the structural level, distinctions have been explored with regard to objectives, ownership, environmental complexity, size and the formalization level. At the behavioural level, the distinction has been investigated in leadership (Andersen, 2010), performance (Hvidman & Andersen, 2014), and employee attitudes and perceived rewards (Bullock et al., 2015). At the organizational level, distinction has been studied in terms of formalization (Chen & Rainey, 2014) and organizational politics (Meisler, 2022). Boyne (2002) reviewed 34 empirical studies exploring the distinction between public and private sector firms and found differences in 3 of the 14 examined aspects. To understand public-private differences, Baarspul and Wilderom (2011) reviewed 28 comparative studies and found ‘no clear pattern of unequivocal significant differences’ and ‘almost every individual-level variable that has been studied showed mixed—and therefore inconclusive results’ (pg. 987). The above mixed findings lead to two contrasting views on the distinction between the public and private sectors (Baarspul & Wilderom, 2011). According to the first view, public and private domains differ in important structural ways (Perry & Rainey, 1988). The second view dismisses public-private differences and considers them to be ‘harmful and misleading oversimplifications’ based on ‘crude stereotypes’. Therefore, comparative public-private distinction studies have been inconclusive and hence a continuing interest for nuanced studies providing useful insights (Cooke et al., 2020).

As discussed earlier, a study within the Indian context is important because of substantive changes that have taken place in this context vis-a-vis the contribution of the two sectors to the Indian economy. As suggested by Morris et al. (2023), understanding an emerging market context such as that of India will require adapting the established theories from developed markets. However, existing findings strongly indicate that HR practices from Western contexts often result in subpar outcomes compared to when these practices are tailored to align with emerging markets (Darwish et al., 2020). Even within the South Asian studies, there are intra-regional differences in HRM practices (Wajeeh-ul-Husnain et al., 2022). The intricacies of HR systems and their correlation with performance in emerging markets underscore the critical need to understand and address these specific contextual factors to foster more effective HR integration and organizational performance (Darwish et al., 2020). Further, given the increasing importance of the Indian economy globally, we seek to demonstrate the unique functioning of HRM practices in the Indian context and draw implications for future management development relevant for an emerging economy (Milićević et al., 2016). We take a nuanced approach of the contingency theory (Paauwe & Boselie, 2005) to understand the boundary conditions that impact employee empowerment in the different organizational settings of public and private, and to determine whether they are distinct.

Hence, by focusing on the relationships between employee empowerment, organizational politics, and authentic leadership in the Indian public and private sectors, we respond to the call of Nair et al. (2022) for developing new management research in the Indian setting.

Public-private distinction in the effect of authentic leadership on employee empowerment

Authentic leaders act in alignment with their personal values and beliefs to establish credibility, and gain the respect and trust of their followers (Peus et al., 2012). Existing leadership research has argued that organizational culture is a contingent element in clarity around common goals and leads to predictability and certainty in any given context or situation (Ayman et al., 1995). For example, goal multiplicity and ambiguity in the public sector (Backhaus et al., 2022; Rainey & Jung, 2015) increase the challenges faced by the leadership in the alignment of individual and organizational goals. The leader has to negotiate a myriad of alternative interpretations and prioritization of goals on account of the multiplicity, and in light of goal ambiguity, face challenges in making and justifying the choice of organizational goals to be pursued.

Contingency theory suggests that the effectiveness of leadership styles, such as authentic leadership, may vary depending on the specific context or situation (Darvish & Rezaei, 2011). In a study on 117 workers, Alok and Israel (2012) identified that authentic leadership can predict work engagement within the Indian context when leaders are seen as personal manifestations of an organization’s intent. In another study within the Indian context, Saha and Kumar (2018) highlighted that the supportive cultures can impact employee job satisfaction and influence employee empowerment when appreciated by their managers. However, the bureaucratic system in India’s public sector hinders a supportive climate (Tripathi & Tripathi, 2022) and decreases employee job satisfaction within that public sector (Saha & Kumar, 2018). In contrast, the pursuit of profit and the focus on outcomes in the private sector, pose fewer challenges to authentic leadership in achieving organizational/individual goal alignment (Pereira et al., 2018). Furthermore, private sector organizational policies, such as pay performance linkages, provide the leader with powerful organizational levers to change the work environment and align employee decisions and actions with his/her self-concept (Boselie et al., 2021).

Our arguments above lead us to expect attenuation of the authentic leadership- empowerment relationship in public sector firms compared to private sector firms. Hence, we hypothesize as follows:

Hypothesis 1: The positive relationship between authentic leadership and employee empowerment is moderated by the sectoral context of firms, whereby the relationship is stronger in the private sector firms than in the public sector firms.

Public-private distinction in the effect of organizational politics on employee empowerment

Organizational politics often limit managers’ attention to the internal functioning of the organization due to the dependency on external conditions for decision-making (Kreutzer et al., 2015). For example, organizational goals may be perceived to be less concrete, challenging to quantify, more varied, and frequently conflicting in the public sector in comparison to the situation in the private sector (Blom et al., 2020). There are higher levels of goal multiplicity and ambiguity in public sector organizations, rendering these goals less tangible and conflicting (Backhaus et al., 2022). As multiple goals in public sector organizations are pursued simultaneously, speculations abound on whether decisions and actions are being taken in the organizations’ interests or to fulfil political objectives, thus increasing ambiguity (Kreutzer et al., 2015). When employees are unsure about the goals they are working towards, it can be difficult for them to feel a sense of purpose and fulfilment in their work. In contrast, profit pursuit and outcome focus in the private sector allows easier rationalization and alignment of individuals’ activities with those of the organization, bringing clarity in the goals to be pursued, enabling employees to derive greater meaning from their work or a clearer understanding of the impact of their work, or both (Saleem, 2015). Such an alignment leads to employees’ work having higher impact, thus attenuating the adverse effects of organizational politics on employee empowerment. Therefore, dimensions of organizational politics can control decisions and resources, and influence decision-making (Landells & Albrecht, 2019). For example, private sector managers possess more authority to oversee their employees compared to their counterparts in the public sector (Blom et al., 2020). Based on the contingency theory, this control mechanism in leaders can assist employees in better balancing their work and private lives, acting as a resource at multiple levels in an organization (Kreutzer et al., 2015). Although several studies have consistently shown that organizational politics have detrimental effects on outcomes, such as causing stress, burnout, turnover intentions, job satisfaction, and organizational commitment, there is limited research on how organizational politics affect employee empowerment (Landells & Albrecht, 2019).

According to Naseer et al. (2016), the perception of organizational politics is higher in collectivistic cultures where power is not distributed equally. A study based on the Indian sub-continent indicated that good leaders can impact organizational politics to improve job satisfaction among employees (Saleem, 2015). According to Saha and Kumar (2018), within the Indian public sector, bureaucratic cultures that often include politics can act more negatively on employees’ commitment compared to less bureaucratic and more supportive cultures. Nevertheless, Tripathi and Tripathi (2022) revealed that public sector employees in India are used to political tactics as a socially desirable and necessary means to survive and advance. Hence, the public sector context does not substantively influence the negative effects of politics on empowerment and remains more stable in the context of high or low organizational politics. However, in the private sector, this negative relationship between organizational politics and employee empowerment is weakened in the context of low organizational politics. We thus hypothesize:

Hypothesis 2: The negative relationship between organizational politics and employee empowerment is moderated by the sectoral context of firms, whereby the relationship is weaker in the private sector firms than in the public sector firms.

Three-way interaction

The arguments leading to the above hypothesis share a common premise: authentic leadership and organizational politics influence employee empowerment by shaping organizational working. As the differences in public/private structural features also mould organizational working (Blom et al., 2020; Morris et al., 2023), we expect the public/private difference to interact in a complex way with the relationship of authentic leadership, and organizational politics with empowerment. Empirical findings on these complex relationships in the context of India, a major emerging economy, augments the significance of this study (Boselie et al. (2021).

The investigation of this relationship is supported by the nuanced attempt by Meier and O'Toole (2011) to reframe the debate from ‘Are public organizations different from private organizations?’ to focusing on the differences in public and private management. Some empirical evidence exists in line with these arguments. Recently, public sector motivation theory has been used to analyze public sector employees’ motivation that is influenced by structures (Boselie et al., 2021; Ritz et al., 2016). For example, Blom et al. (2020) suggested that public sector leaders have less power to manage their employees’ performance compared to their private sector counterparts. These characteristics might be due to higher levels of goal ambiguity in public sectors (Backhaus et al., 2022) causing the positive impact of authentic leadership on empowerment to be reduced due to higher organizational control accounting for a contingency. In contrast, authentic leadership has a positive effect on employee empowerment in the private sector due to the existence of morality and ethicality in the authentic leaders, and the legitimacy of goal alignment to the private sector’s unambiguous focus on profits and higher shareholder value (Mbata et al., 2023; Muniandi et al., 2022; Pereira et al., 2018).

Based on the contingency theory, the impact of authentic leaders is different depending on the sector context (Darvish & Rezaei, 2011) and level of organizational politics. For instance, in private sector contexts, which are driven by unambiguous goals, an authentic leader can influence employee empowerment in either low or high organizational political context. because unambiguous goals limit multiple interpretations of an authentic leader’s moral and ethical emphasis and the effects on employee empowerment. Quid pro quo less authentic leadership will adversely impact employee empowerment more in private sector.

With regard to the level of organizational politics, it is reasonable to contend that in conditions of low politics (i.e. less self-serving behaviour of individuals and cliques), the authentic leader, in general, faces less ambiguity and confusion in the alignment of organizational goals and there is less clouding of decision-making and its intentionality by political considerations (Naseer et al., 2016). This will be true even in a public sector context that has low politics. Hence, in general, employee empowerment is likely to be substantively and positively impacted in the public sector with low politics, if the leader displays an authentic leadership style. In contrast, the positive effect of authentic leadership on empowerment in the public sector is restricted in situations of high organizational politics. This is because high organizational politics further accentuate ambiguity of goals and moderate the positive relationship between authentic leadership and employee empowerment. Hence, the weak positive effects of authentic leadership on empowerment in the public sector will be more evident in high organizational political contexts in the public sector. However, in the context of low organizational politics, an authentic leader can empower employees irrespective of the sector (i.e. public, or private), as argued. Consequently, the distinction between the public and private sectors will manifest at the relationship level of major attributes, such as employee empowerment, leadership style, and organizational politics.

Based on the above arguments, we hypothesize as follows:

Hypothesis 3: The moderating effect of a firm’s sector on the relationship between authentic leadership and employee empowerment (hypothesized in H1) is altered by the level of organizational politics, whereby the positive effect of authentic leadership on employee empowerment is substantively more in the case of the private sector in comparison to the public sector when the organizational politics are high, and the positive effect of authentic leadership on empowerment is not dissimilar in the case of the public and private sectors when the organizational politics are low. Alternatively, the difference in the effect of authentic leadership on employee empowerment for the private and public sectors is greater in situations of high organizational politics compared to situations of low organizational politics.

Methods

This study is an empirical investigation into how public-private differences impact the relationship of authentic leadership and organizational politics with employee empowerment at the individual unit of analysis. A survey was conducted of senior managers working with public and private organizations in India. The senior managers surveyed were top-level officials in government-owned corporations (public) or senior managers in large private organizations (private).

Data and scales

We surveyed 173 senior managers, of whom 77 worked in public sector corporations, and 96 worked in private firms between April 2018 and February 2019 in a single run. A total of 22 public sector corporations, and 62 private sector corporations were represented in the sample. The unit of analysis was an individual; and, the sample ensured representation of all Maharatna companies, and most of the Navaratna companies, that is very large to large-sized public sector enterprises of the Government of India. The industry sectors represented in the public and private sector organizations were many, including those in the energy production and transmission, natural resources, banking, hospitality, logistics, manufacturing, IT and retail sectors.

In constructing our survey measures, we started with established scales in the literature. We felt the need to adapt the survey instruments, primarily to reduce respondents’ overload and in order to adapt the instruments to the Indian context. We carefully selected items which were pertinent to our context, while ensuring that the measurement scales remained theoretically valid. We used a seven-level Likert scale for all the measures. A measurement model was developed using SmartPLS4, and a confirmatory factor analysis (CFA) was conducted (refer to Figure 2). Since the data was collected from the senior management in each organization, and the scales were adapted from established literature, we conducted CFA directly using the measurement model and full data. Reaching out to the senior management executives for the data collection took us about 8–10 months because it was very difficult to secure an appointment from the senior corporate leaders in the public as well as private sectors.

Employee empowerment (EE)

The measure for employee empowerment was adapted from Leslie et al. (1998), who had proposed a scale consisting of 18 items, across the three dimensions of i) personal orientation to work, ii) work environment, and iii) work relationships. With regard to the collection of responses, we carefully chose seven items from the list, such as ‘I am in charge of my work situation’ and ‘I think I am able to say what I want to say to my supervisor’, which were suited and relevant to the Indian context. Our selection of scale items suitable for the context, was guided by best practices in survey design (Hochwarter et al., 2003; Kreutzer et al., 2015). While selecting the items for measurement, we emphasized the need for the scale to remain simple, compact, and self-explanatory to the respondents without losing theoretical relevance (refer to Table 1 for the survey items list). We removed a few items from the work environment and work relationships scale on account of their high semantic overlap, complexity, and negative connotation. For example, the subscale of empowerment in work environment included the item ‘I have lots of control over my work’, which we felt was similar to the item ‘I am in charge of my work situation’, and hence would be a source of unnecessary overload on the respondent.

Table 1. Measurement model (Confirmatory Factor Analysis).

Code	Item Name	All
		Mean	SD	Loadings
	Organizational Politics (OP)
C1.1	Promotions go to top performers (R')	3.08	1.40	0.79
C1.2	‘In groups’ (or ‘groupism’) hinders effectiveness	4.70	1.31	0.60
C1.3	Co-workers distort or selectively report information	4.12	1.38	0.73
C1.4	Get along by being a good guy (Stay in good books with sole objective for personal benefits)	4.43	1.36	0.65
C1.5	Supervisor communicates in such a manner to make himself or herself look good	4.78	1.22	0.52
	Employee Empowerment (EE)
C2.1	I am in-charge of my work situation	5.81	1.03	0.72
C2.2	I know how to get what I need to get the job done	5.94	0.76	0.66
C2.3	I can usually figure out how to deal with my supervisor when there is a problem	5.67	0.90	0.77
C2.4	I find that if I ask my supervisor for help, it is usually provided	5.60	1.08	0.77
C2.5	I think I am able to say what I want to say to my supervisor	5.57	1.17	0.78
C2.6	My innovative ideas are received well by my superiors	5.47	1.08	0.77
	Authentic Leadership (AL)
C3.1	My CEO/MD solicits feedback for improving his/her dealings with other	4.89	1.47	0.69
C3.2	My CEO/MD shows consistency between his/her beliefs and actions	5.33	1.14	0.72
C3.3	My CEO/MD admits mistakes when they occur	4.68	1.26	0.72
C3.4	My CEO/MD carefully listens to alternative perspectives before reaching a conclusion	5.29	1.24	0.84
C3.5	My CEO/MD openly shares information with others	5.14	1.27	0.79
C3.6	My CEO/MD objectively analyzes relevant data before making a decision	5.46	1.16	0.79
C3.7	My CEO/MD encourages others to voice opposing points of views	4.81	1.35	0.79

Similarly, in the subscale of empowerment (i.e. work relationships), we found the item ‘If I need help, it is hard to get others to help’ to be vague in our context and unlikely to give us an adequate response. During some initial surveys, we came across queries on this question from respondents with regard to social desirability concerns and confidentiality; hence we deleted the item in the later surveys. Our selected items covered two of the three dimensions, leaving out personal orientation to work. We do not see this item as a concern since empowerment has been established as a unitary psychological construct and a reflective scale (Leslie et al., 1998). Furthermore, in a large sample meta-analytic study, Seibert et al. (2011) (992) found little evidence of discriminant validity among the subdimensions of the scale.

During reliability checks, we had to drop one item as it was not loading, leaving us with six items (Cronbach alpha 0.82 for the full sample, 0.80 for the private sector, and 0.84 for the public sector). Furthermore, the Average Variance Extracted (AVE) for the measure was 0.55 for the full sample, which meets the threshold of 0.5 suggested by Hair et al. (2006). A Composite Reliability (CR) of 0.88 for the full sample confirmed the convergent validity of the scale. The two independent samples T-test to compare means for EE between the public and private sector firm sub-samples was observed as not significant (p val = 0.09, LCL = −0.03, UCL = 0.42 at 95% confidence level).

Authentic leadership (AL)

The AL scale was adapted from Neider and Schriesheim (2011) (see items detailed in Table 1). We used a seven-item measure (Cronbach alpha 0.88 for the full sample, 0.89 for the private, and 0.87 for the public sector). With an AVE of 0.58 and CR of 0.91 for the full sample, we confirmed the convergent validity of the scale. The two independent samples T-test to compare means for AL between public and private sector firms sub-samples was observed as not significant (p val = 0.46, LCL = −0.40, UCL = 0.18 at 95% confidence level).

Organizational politics (OP)

While developing the scale for the perception of organizational politics, Kacmar and Ferris (1991) had initially proposed a 31-item scale and later reduced it to a 12-item scale. This scale had five key dimensions: i) Go along to get ahead, ii) Self-serving content, iii) Co-worker content, iv) Clique content, and v) Pay and promotion. In subsequent empirical research, researchers have adapted and used part of the scale (Hochwarter et al., 2003; Kreutzer et al., 2015). We used five items of the scale which we considered suitable and relevant to our context, and which sought to theoretically capture the dimensions of the construct (Table 1 lists the items that we used). The five-item scale for OP (with one item reverse coded) had overall scale reliability of 0.70 (0.73 for the private sector and 0.65 for the public sector). With an AVE of 0.37 and CR of 0.76 for the full sample, we confirmed the convergent validity of the scale. Since the AVE was marginally less than the threshold, we also assessed the discriminant validity of this construct. We observed that the square root of the AVE for OP (i.e. 0.67) was well above the bi-variate correlation of OP with other constructs (refer Table 2 for the correlations). The two independent samples T-test to compare means for OP between public and private sector firm sub-samples was observed as not significant (p val = 0.13, LCL = −0.06, UCL = 0.48 at 95% confidence level).

Table 2. Correlations and descriptive statistics.

Variables	Ch Alpha	µ	σ	Min	Max	V01	V02	V03	V04	V05	V06	V07	V08	V09	V10	V11	V12	V13	V14	V15
V01. Gender		1.03	0.18	1.00	2.00
V02. Education		1.68	0.70	1.00	4.00	0.04
V03. Top management (Y/N)		1.13	0.33	1.00	2.00	0.02	−0.00
V04. Sales per employee		3.04	4.53	0.02	23.00	−0.08	0.09	−0.07
V05. Firm performance (FP)	0.80	4.30	1.06	1.75	7.00	0.01	−0.03	−0.04	0.04
V06. Energy sector		0.29	0.46	–	1.00	0.02	0.10	−0.13	0.47	0.06
V07. Financial services		0.14	0.35	–	1.00	0.20	−0.13	0.10	−0.18	0.10	−0.26
V08. Automobile sector		0.14	0.35	–	1.00	−0.08	0.09	0.15	−0.14	0.01	−0.26	−0.16
V09. Consulting		0.08	0.26	–	1.00	−0.05	−0.06	−0.11	−0.08	0.09	−0.18	−0.11	−0.11
V10. Logistics services		0.08	0.26	–	1.00	0.07	−0.09	0.09	−0.05	−0.08	−0.18	−0.11	−0.11	−0.08
V11. Mines metal sector		0.06	0.23	–	1.00	−0.05	0.15	0.20	−0.10	−0.11	−0.16	−0.10	−0.10	−0.07	−0.07
V12. Manufacturing vs. services		0.49	0.50	–	1.00	0.07	−0.08	0.01	−0.26	0.09	−0.41	0.41	0.11	0.20	0.29	−0.24
V13. Indicator (Public = 0 vs. Private = 1)		0.55	0.50	–	1.00	0.04	−0.21	−0.01	−0.25	−0.02	−0.31	0.23	−0.15	0.26	−0.19	−0.13	0.04
V14. Authentic leadership (AL)	0.88	5.08	0.97	1.57	7.00	0.11	0.08	−0.07	0.06	0.42	0.09	−0.07	−0.03	0.13	−0.00	−0.06	−0.09	0.06
V15. Organizational politics (OP)	0.71	4.22	0.91	1.60	6.20	−0.18	−0.09	0.04	−0.03	−0.16	−0.04	−0.11	0.18	−0.18	0.08	0.00	−0.04	−0.12	−0.42
DV. Employee empowerment (EE)	0.84	5.68	0.75	3.17	7.00	0.14	0.06	−0.12	0.12	0.27	0.11	−0.19	−0.01	0.12	0.05	0.09	−0.11	−0.13	0.52	−0.31

Controls

Individual characteristics (i.e. education, job level, and gender) are a significant antecedent of employee empowerment (Seibert et al., 2011). With the focus of our study being on structural antecedents of employee psychological empowerment, we controlled for these individual characteristics by using control variables of gender, education, and top management roles in our analysis.

The firm context (service or manufacturing) also plays an important role in perceptions of empowerment and affects performance. Empowerment is likely to be more effective in the service industry context as service employees have more opportunity to engage in discretionary behaviour than their counterparts in manufacturing industries, where standard procedures and bureaucratic structures prevail (Seibert et al., 2011). While our study does not intend to consider the consequences of empowerment, we felt the need to control for industry (service or manufacturing) to ensure that our results were not driven by the industry context (Batt, 2002).

With larger firms being more bureaucratic in nature and having more established and rigid structures, we also expected employee empowerment to be impacted by firm size. Hence, we also controlled for firm size in our analysis.

The firms with varying performance may influence the results, and therefore the firm performance has been used as a control variable in all the models. Multi-faceted firm performance was measured as a four-item construct including budget performance, on time schedule performance of projects, profitability, and customer satisfaction. We used subjective measures to capture the firm performance because accessing factual financial measures of the private sector companies was not always possible, and the senior leaders of private and/or not-listed organizations are usually sensitive to share the actual financial performance data. A series of studies (Guerrero et al., 2022; Ling et al., 2009; Singh et al., 2015; Yu et al., 2019) have used the subjective measures to capture the performance. Singh, Darwish, and Potočnik, (2016) argued that subjective measures internally reported by the industry leaders in an organization are consistent and equally reliable to the objective measures of performance. They further describe that due to different accounting standards being used in different sectors and geographies to measure performance, it is difficult to capture actual performance data. The loadings of all the four items were above 0.71 (threshold > 0.7), and the construct reliability coefficient was 0.8 (threshold > 0.7).

Analysis

To test for the hypothesized relationships, we ran ordinary least square regressions in STATA 15 (see Table 3 for results). A set of incremental regression models were developed.

Table 3. Regression results.

Details	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7
Gender	0.756*	0.764*	0.495	0.404	0.452	0.395	0.425
	(0.300)	(0.301)	(0.273)	(0.271)	(0.275)	(0.272)	(0.267)
Education	0.018	0.011	(0.051)	(0.043)	(0.059)	(0.046)	(0.058)
	(0.079)	(0.080)	(0.072)	(0.071)	(0.073)	(0.072)	(0.070)
Top management (Yes/No)	(0.285)	(0.277)	(0.240)	(0.260)	(0.241)	(0.259)	(0.332)*
	(0.169)	(0.170)	(0.152)	(0.150)	(0.152)	(0.150)	(0.152)
Sales per employee	0.014	0.012	0.011	0.012	0.012	0.013	0.011
	(0.014)	(0.014)	(0.012)	(0.012)	(0.012)	(0.012)	(0.012)
Firm performance	0.206***	0.205***	0.072	0.083	0.080	0.085	0.077
	(0.051)	(0.052)	(0.051)	(0.050)	(0.051)	(0.051)	(0.050)
Energy sector	0.114	0.071	0.016	0.030	0.024	0.032	0.033
	(0.162)	(0.175)	(0.157)	(0.154)	(0.157)	(0.154)	(0.152)
Financial sector	(0.245)	(0.239)	(0.243)	(0.203)	(0.230)	(0.201)	(0.178)
	(0.214)	(0.215)	(0.192)	(0.189)	(0.192)	(0.190)	(0.186)
Automobile sector	0.197	0.160	0.161	0.147	0.161	0.148	0.207
	(0.192)	(0.200)	(0.181)	(0.178)	(0.180)	(0.178)	(0.176)
Consulting	0.413	0.436	0.227	0.187	0.205	0.182	0.188
	(0.236)	(0.239)	(0.217)	(0.213)	(0.217)	(0.214)	(0.210)
Logistics sector	0.387	0.340	0.214	0.269	0.233	0.272	0.283
	(0.249)	(0.259)	(0.234)	(0.231)	(0.234)	(0.232)	(0.227)
Mines and metal	0.548*	0.494	0.487	0.470	0.466	0.464	0.385
	(0.263)	(0.276)	(0.247)	(0.243)	(0.247)	(0.244)	(0.246)
Manufacturing Vs	(0.126)	(0.142)	(0.052)	(0.058)	(0.069)	(0.063)	(0.079)
Services	(0.146)	(0.148)	(0.134)	(0.132)	(0.134)	(0.133)	(0.130)
Indicator (Public = 0;		(0.089)	(0.172)	(1.496)**	0.473	(1.194)	5.618*
private = 1) (DMX)		(0.134)	(0.120)	(0.520)	(0.507)	(0.884)	(2.759)
Authentic leadership			0.303***	0.160	0.293***	0.165*	1.404**
(AL)			(0.061)	(0.081)	(0.061)	(0.082)	(0.427)
Organizational politics			(0.117)	(0.094)	(0.025)	(0.065)	1.289**
(OP)			(0.061)	(0.061)	(0.093)	(0.093)	(0.467)
AL X DMX				0.265**		0.248*	(1.069)*
				(0.101)		(0.109)	(0.512)
OP X DMX					(0.150)	(0.051)	(1.504)*
					(0.115)	(0.121)	(0.582)
AL X OP							(0.265)**
							(0.090)
AL X OP X DMX							0.283*
							(0.110)
_cons	4.201***	4.285***	4.199***	4.859***	3.878***	4.709***	(1.552)
	(0.442)	(0.460)	(0.611)	(0.651)	(0.657)	(0.743)	(2.238)
N	173.000	173.000	173.000	173.000	173.000	173.000	173.000
adj. R-sq	0.147	0.144	0.315	0.339	0.318	0.336	0.364

Model 1 included all the control variables as follows: Eq 1. $$\left[\mathit{\text{EE}}\right]={\mathbf{\beta }}_{\mathbf{0}}+{\mathbf{\beta }}_{\mathbf{c}}*\left[\mathit{\text{CONTROLS}}\right]$$Eq 1.

Model 2 included the contextual binary variable (Public sector Vs Private Sector), DMX, along with all control variables as follows: Eq 2. $$\left[\mathit{\text{EE}}\right]\hspace{0.17em}={\beta }_0+{\beta }_c*\left[\mathit{\text{CONTROLS}}\right]\hspace{0.17em}+{\beta }_1*\left[\mathit{\text{DMX}}\right]$$Eq 2.

Model 3 included the incremental direct effects of the authentic leadership (AL), and organizational politics (OP) along with all variables of Model 2 as follows: Eq 3. $$\left[\mathit{\text{EE}}\right]\hspace{0.17em}={\beta }_0+{\beta }_c*\left[\mathit{\text{CONTROLS}}\right]\hspace{0.17em}+{\beta }_1*\left[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_{2*}\left[\mathit{\text{AL}}\right]\hspace{0.17em}+{\beta }_{3*}\left[\mathit{\text{OP}}\right]$$Eq 3.

Model 4 included the incremental interaction effect of authentic leadership with DMX. The first hypothesis argued for a positive relationship between authentic leadership and employee empowerment, which is stronger for the private sector than for the public sector (refer to Figure 1). Based on Model 4 (Table 3), we found the relationship to be significant at 0.01 level (0.065 to 0.464 is the 95% confidence interval of coefficient), see Figure 3(A). Eq 4. $$\begin{array}{c}\left[\mathit{\text{EE}}\right]\hspace{0.17em}={\beta }_0+{\beta }_c*\left[\mathit{\text{CONTROLS}}\right]\hspace{0.17em}+{\beta }_1*\left[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_2*\left[\mathit{\text{AL}}\right]\hspace{0.17em}+{\beta }_{3*}\\ *\left[\mathit{\text{OP}}\right]\hspace{0.17em}+{\beta }_4*\left[\mathit{\text{AL}}\left]*\right[\mathit{\text{DMX}}\right]\end{array}$$Eq 4.

Figure 1. The conceptual model.

Figure 2. Measurement model (Confirmatory Factor Analysis).

Figure 3. (A) Moderation of public vs. private on AL→EE Link. (B) Moderation of public vs. private on OP→EE Link.

Model 5 included the incremental interaction effect of organizational politics with DMX. Our second hypothesis argued that the relationship between organizational politics and employee empowerment is weaker for the private sector than for the public sector (refer Figure 1). Based on Model 5 (Table 3), we found the relationship to be not significant (-0.37 to 0.07 is the 95% confidence interval of the coefficient), see Figure 3(B). Eq 5. $$\begin{array}{c}\left[\mathit{\text{EE}}\right]\hspace{0.17em}={\beta }_0+{\beta }_c*\left[\mathit{\text{CONTROLS}}\right]\hspace{0.17em}+{\beta }_1*\left[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_2*\left[\mathit{\text{AL}}\right]\hspace{0.17em}+{\beta }_{3*}\\ *\left[\mathit{\text{OP}}\right]\hspace{0.17em}+{\beta }_5*\left[\mathit{\text{OP}}\left]*\right[\mathit{\text{DMX}}\right]\end{array}$$Eq 5.

Model 6 included the incremental interaction effects of authentic leadership with DMX and organizational politics with DMX together, and we notice that our results are stable as per Model 5 and Model 6 as follows: Eq 6. $$\begin{array}{c}\left[\mathit{\text{EE}}\right]\hspace{0.17em}={\beta }_0+{\beta }_c*\left[\mathit{\text{CONTROLS}}\right]\hspace{0.17em}+{\beta }_1*\left[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_2*\left[\mathit{\text{AL}}\right]\hspace{0.17em}+{\beta }_{3*}\\ *\left[\mathit{\text{OP}}\right]\hspace{0.17em}+{\beta }_4*\left[\mathit{\text{AL}}\left]*\right[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_5*\left[\mathit{\text{OP}}\left]*\right[\mathit{\text{DMX}}\right]\end{array}$$Eq 6.

Model 7 included the incremental effect of interaction between authentic leadership, organizational politics and DMX. The third hypothesis was about organizational politics moderating the effects of public/private differences on the relationship between authentic leadership and empowerment. We argued that the effect of AL on EE is substantively greater in the case of the private sector in comparison to the public sector when the OP is high. Based on Model 7 (Table 3), we found the coefficient of interaction to be positive and significant at 0.05 level (0.07 to 0.50 is the 95% confidence interval of the coefficient), therefore H3 is supported. Eq7. $$\begin{array}{c}\left[\mathit{\text{EE}}\right]\hspace{0.17em}={\beta }_0+{\beta }_c*\left[\mathit{\text{CONTROLS}}\right]\hspace{0.17em}+{\beta }_1*\left[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_2*\left[\mathit{\text{AL}}\right]\hspace{0.17em}+{\beta }_{3*}\\ *\left[\mathit{\text{OP}}\right]\hspace{0.17em}+{\beta }_4*\left[\mathit{\text{AL}}\left]*\right[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_5*\left[\mathit{\text{OP}}\left]*\right[\mathit{\text{DMX}}\right]\hspace{0.17em}+{\beta }_5\\ *\left[\mathit{\text{AL}}\right]*\left[\mathit{\text{OP}}\left]*\right[\mathit{\text{DMX}}\right]\end{array}$$Eq7.

Hence, we find that and the difference in the effect of authentic leadership on employee empowerment for the private and public sector is higher in situations of high organizational politics compared to situations of low organizational politics (refer to Figure 4(A–D)).

Figure 4. (A) Moderation of public vs. private on AL→EE (Low OP). (B) Moderation of public vs private on AL→EE (High OP). (C) Effect of AL on EE in various levels of OP. (D) Difference in the effect of AL on EE in various levels of OP.

For robustness check, we re-ran our analysis by clustering the data according to firm, as some of our respondents came from the same organization (overall, our data came from 84 unique organizations). Our results remained unaltered.

Robustness checks

Common method bias (CMB)

While our primary arguments are about the manifestation of organizational differences between public and private organizations, measures for which are externally determined, our constructs are survey measures making common method variance a possible concern in our cross-sectional analysis (Podsakoff et al., 2003). In order to check and address concerns of common method variance, we carried out validity checks (Podsakoff et al., 2003), adopting best practices to handle the concerns (Change et al., 2010). Specifically, we have three reasons to be assured that our results are unlikely to be biased by common method variance. Firstly, our study involves complex relationships (i.e. three-way interactions and multi-group analysis), in which case it is difficult for an individual to bias the responses because they cannot visualize the ultimate objective of the study (Chang et al., 2010; Podsakoff et al., 2003). Secondly, during the survey design and administration stage, we undertook numerous precautionary steps such as changing the order of presenting the constructs during the survey to reduce possibilities of false correlations, presenting survey items in a clear, concise, and explicit manner to the respondents, and collecting responses in person, or over the phone enabling the respondents to clear their queries when necessary. Thirdly, and most importantly, we conducted the Harman single factor test to determine the variance extracted by a single factor (Hair et al., 2006). The single forced factor with all items of the four constructs extracted a variance of 31.45%, which is well below the threshold (i.e. 50%). We also conducted the test with the two sub-sample groups of public and private individuals. The single factor variance extracted for the public organizations was 28.69%, while for the private organizations, it was 34.79%. Hence, we are relatively assured that our results are largely free of common method bias.

Endogeneity bias

The endogeneity bias results in inflated and misleading beta coefficients. The bias exists when the error variances are correlated with the exogenous variable, or there is a reverse causation and an exogenous variable may start to act as an endogenous variable (Bascle, 2008). The endogeneity may also be caused when there is an external variable which shares a common variance of endogenous and exogenous variables (Bascle, 2008); the EE is the original endogenous variable and the AL and OP are the exogenous variables. The endogeneity bias was tested for the two exogenous variables using the STATA statistical software. The two-stage least square (2SLS) method was applied in Stata with the command ivregress. Appropriate instrumental variable was identified, as below.

The instrumental variables should be correlated with the exogenous variable but not with the original endogenous variable. The endogeneity tests were performed using Stata with the command estat endog, (Ullah et al., 2021). Firm performance showed no correlation with the EE, the original endogenous variable, but it was correlated with AL, the exogenous variable. Hence, we used firm performance as an instrumental variable. The Durbin (p val = 0.3498) and Wu-Hausman (p val = 0.3541) tests of endogeneity showed not significant, which confirmed the absence of endogeneity bias among AL ad EE. The instrumental variable, gender, was not correlated with the EE, but correlated with OP. The Durbin (p val = 0.2440) and Wu-Hausman (p val = 0.2479) tests of endogeneity showed not significant, which confirmed the absence of endogeneity bias among OP and EE.

Discussion and conclusion

In developing a structural contingency perspective on employee empowerment (Kreutzer et al., 2015), we explore the interactive nature of the antecedents while recognizing that the contingencies arising from structural differences in public and private sectors would impact the relationships differently. We find no difference in the base level perceptions of empowerment between public and private organizations in India, a finding shared with other scholars in public-private comparative literature (Boselie et al., 2021; Bozeman & Su, 2015; Mohapatra & Sharma, 2010). The differences become significant at different levels of authentic leadership. However, in India, public and private organizations are not different in terms of how perceptions of organizational politics impact empowerment perceptions of employees; in either case the impact was negative. Furthermore, we found that the differences in the effects of authentic leadership on employee empowerment are significant between public and private organizations when organizational politics are high, compared to when organizational politics are low (refer to Model 7 and Figure 4(A–D)).

Based on a contingency perspective, stemming out of two distinctive sectors, namely, public vs. private, we identified mechanisms by which organizational aspects such as authentic leadership and organizational politics not only mould perceptions of empowerment but also how these aspects interact in a complex manner to influence empowerment. In the Indian public sector, especially where organizational politics are high, it is also possible that the authentic leader does not have enough opportunities in a public sector context with high-level politics to make a positive difference to employee empowerment. Alternatively, it is also possible that employees appear to become accustomed to higher levels of bureaucracy and political interference, and therefore the negative impact of less authentic leadership on employee empowerment is minimal. However, the private and public sector distinction is exhibited in a high organizational political context, whereby the expected positive relationship between authentic leadership and employee empowerment in the private sector is more evident but is absent (or subdued) in the public sector. In a low organizational politics context, the positive relationship between authentic leadership and employee empowerment is seen in both public and private sectors. Hence, this study provides a nuanced understanding of how organizational politics and authentic leadership impact employee empowerment differently in India, contingent to public and private contexts (Buckland, 2009). Our investigation is motivated by the recognition that while contingency theory accepts that broad structural features impact organizational working (Ashour, 1973; Fiedler, 1967), public/private comparative studies have been abandoned on account of equivocal findings (Boselie et al., 2021; Naseer et al., 2016). We find differences existing in relationships within the Indian context and how constructs interact in complex ways, rather than at the construct level, which earlier studies attempted to identify.

Theoretical contributions

This study includes two theoretical contributions. Our first theoretical contribution is adding to the literature of contingency theory. Contingency theory posits that different situations require different approaches for optimal outcomes, recognizing that there is no one-size-fits-all solution (Dimaggio & Powell, 1983). This study demonstrates the application of contingency theory to researchers by showing how authentic leadership, employee empowerment, and organizational politics manifest differently based on the specific context of an organization (Paauwe & Boselie, 2005). The findings of this study will allow researchers to identify further contextual factors such as industry, organizational structure, cultural influences, and external environment that enhance or hinder the impact of these constructs and develop nuanced understandings (Leisink et al., 2021). While leadership has been extensively studied and we know that effective leadership plays a key role in the success of organizations, the contingencies for a leader’s empowering behaviour have been the subject of few studies (Hakimi et al., 2010). Moving beyond leader and follower traits, this study motivates to find structural contingencies lying in public-private differences that influence perceptions of employee empowerment.

As a second contribution, our study adds to public-private literature, which has been seeking to identify key differences between these two contexts (Boselie et al., 2021; Boyne, 2002; Bozeman, 1987; Huselid, 1995; Naseer et al., 2016). Generally speaking, Indian public sector has relatively higher organizational politics historically with higher levels of bureaucracy and political interference in comparison with the private sector. Therefore, the positive impact of authentic leadership on employee empowerment has been diminished, even under the reform of the public sector based on the NPM which has not addressed the problem of bureaucracy and political interference effectively (Fusarelli & Johnson, 2004). On the other hand, the overall organizational politics are relatively low in the private sector in comparison with the public sector in India (Atta et al., 2012). However, even in those private firms with high politics, the positive impact of authentic leadership on employee empowerment is more evident. This reflects that personal relationship and leader-subordinate engagement with authentic leadership support can overcome the obstacle of organizational politics in the private sector, but it is impossible to achieve the same outcome in the public sector due to the established bureaucracy and sever political interference. This is a meaningful implication for future development of public-private literature.

Managerial implications

Our findings highlight two managerial implications. First, the findings on the public-private distinction of this study will help managers create more meaningful and impactful empowerment strategies that resonate with employees in diverse roles and settings. The public sector has struggled to implement the New Public Management approach by applying lessons from the private sector (Mongkol, 2011; Savoie, 2006), assuming that the underlying relationships were the same.

Second, our findings provide some significant managerial implications within the emerging market context, indicating a substantive relationship between organizational politics (an aspect over which individual managers have less control) and authentic leadership (an aspect fully under a manager’s control). Hence, from a managerial perspective, our findings can be interpreted to reflect the key agency managers possess in changing how their organizations work, but the organizational context in which the agency acts must be recognized, thereby deepening insights into the public sector’s readiness for change (Cinite et al., 2009). More specifically, in the Indian context, it is interesting to note that authentic leadership style influences employee empowerment to a greater extent in a low political context in a public sector setting. This finding is significant from the perspective of market-oriented reforms within the public sector in India in terms of making these reforms more efficient. It is also stimulating to see that employee empowerment in the public sector remains more resilient in the face of twin adversity, that is, a high political context and a less authentic leader. The resilience that public sector employees demonstrate in this adversarial context can be further studied, and some learnings from it can also be derived, with implications not just for Indian corporates but also in other emerging market contexts.

Limitations and future research directions

There are some limitations in this study. First, we study the public and private distinction in the Indian context, which has its own nuances. The relationships and interactions studied need to be explored in other contexts, especially in the context of other emerging economies (Milićević et al., 2016; Morris et al., 2023). In other words, the complex nature of the interaction of empowerment antecedents needs to be explored in the context of a western economy, which originally gave rise to most of the empowerment research, simultaneously confirmed in emerging market contexts similar to those of India (i.e. China, Russia, Brazil, and South Africa) (Sardana & Zhu, 2015). India’s size, population, economic potential and geopolitical standing enable India to have a significant influence on BRICS countries and other emerging economies. We see this as a rich area for future replication of empowerment studies in other such contexts. Second, we recognize that our findings are based on cross-sectional survey responses. The interaction patterns that we identified need to be reconfirmed through alternative large-sample studies, qualitative studies, and mixed-method studies. Thirdly, we examine the empowerment antecedents but not the consequences. Our results provide for the possibility that the aspects leading to the consequences of empowerment may also interact at more complex levels rather than in simple ways, as argued in the current research.

In conclusion, our study indicates that the still waters of the public-private sector distinction run deep. Our findings suggest that it is not prudent to transfer private sector practices to the public sector, as the underlying mechanisms through which the constructs relate and how these mechanisms manifest may be different due to structural differences. Therefore, managerial teams in the public sector have to be cautious when implementing the New Public Management approach and should do so to suit their specific structural and organizational cultural contexts. Furthermore, by demonstrating the unique functioning of HRM practices within Indian context, the study contributes to the Indian management literature and engenders more such research.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data worksheet is available to be provided to the editor and reviewers by request.