Structural impacts on formation of self-efficacy and its performance effects

The role of organizational structure as an important contextual variable has long been recognized in affecting a host of employee attitudes and behaviors, but there is a dearth of theoretical and empirical research that examines the ways in which organizational structure influences the occurrence of self-efficacy and its performance effects. This study addresses this gap by exploring how the two core structural components-formalization and centralization-separately and jointly affect employee self-efficacy and how they interact with self-efficacy to influence employee task performance. The study further examines the extent to which structure weaves its influence on individual performance through perceptions of self-efficacy. Data from 120 Pakistani public sector employees were analyzed using partial least squares structural equation modelling (PLS-SEM) and polynomial regression to assess the hypothesized relationships. The empirical analysis shows that formalization is positively associated with self-efficacy while centralization has a negative association, and such an improvement/attenuation in self-efficacy is partly transformed into performance improvements. The findings further reveal that self-efficacy and performance relationship is diminished under conditions of high formalization and high centralization. We discuss implications for theory and practice and delineate directions for future research.