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Research Article

Authentic leadership and innovative work behavior through organizational culture: A study in Indonesian state-owned enterprises

[version 1; peer review: awaiting peer review]
Indrayanti Indrayanti
https://orcid.org/0000-0002-4955-1917
1, Nida Ulfia1
Indrayanti Indrayanti
https://orcid.org/0000-0002-4955-1917
1, Nida Ulfia1
PUBLISHED 01 Nov 2022
Author details Author details
OPEN PEER REVIEW
REVIEWER STATUS AWAITING PEER REVIEW

Abstract

Background: Innovation is one of the keys for organizations to win the competition and be able to survive. State-owned enterprises require employees to face the competition by showing innovative work behavior where leadership factors and organizational culture could influence this behavior. This study examines the role of authentic leadership in innovative work behavior through organizational culture as a mediator.
Methods: Participants in this survey study were 272 employees of Indonesian state-owned enterprises, but only 153 employees from 17 work teams were involved in data analysis at the group level. The research instrument was adapted from the innovative work behavior scale, authentic leadership questionnaire, and the Indonesian state-owned enterprises culture scale, which consists of six core values: trustworthy, competent, harmonious, loyal, adaptive, and collaborative. Data collection in this study was carried out by distributing questionnaires in the form of a Likert scale online via a google form. The data were analyzed using partial-least square analysis.
Results: The results showed that organizational culture mediated the relationship between authentic leadership and innovative work behavior.
Conclusions: The group experience of the presence of an authentic leader can improve the implementation of organizational culture, which in turn may increase innovative work behavior at the group level.

Keywords

authentic leadership, innovative work behavior, organizational culture

Corresponding author: Indrayanti Indrayanti
Competing interests: No competing interests were disclosed.
Grant information: This work was supported by Gadjah Mada University’s Final Project Recognition, grant number 5722/UN1.P.III/Dit-Lit/PT.01.05/2022 for Indrayanti.
The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.
Copyright:  © 2022 Indrayanti I and Ulfia N. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
How to cite: Indrayanti I and Ulfia N. Authentic leadership and innovative work behavior through organizational culture: A study in Indonesian state-owned enterprises [version 1; peer review: awaiting peer review]. F1000Research 2022, 11:1243 (https://doi.org/10.12688/f1000research.126559.1) First published: 01 Nov 2022, 11:1243 (https://doi.org/10.12688/f1000research.126559.1) Latest published: 01 Nov 2022, 11:1243 (https://doi.org/10.12688/f1000research.126559.1)

Introduction

Indonesia is currently carrying out a transformation in state-owned enterprises (SOEs). The government requires that the development of companies contribute to the maximum state revenue. However, the current problem is that there are still many SOEs that have not grown or are stagnant. Thus, to overcome this, the Ministry of SOEs has developed a strategic plan to encourage companies to be competitive through innovation.1 Innovation is included as the second priority of the five strategic priorities as outlined in the roadmap of the Ministry of SOE's 2020-2024 strategic plan.2 According to Ref. 3, innovation is a work of new thinking applied in human life. Innovation consists of behaviors carried out by individuals (and groups of individuals) in an organization, including creating ideas, building coalitions, and realizing and transferring ideas.3 According to Ref. 4, innovative work behavior (IWB) is a complex behavior consisting of three stages: creating, promoting, and realizing ideas. Innovative work behavior is also defined as the intentional creation, introduction, and application of new ideas in work roles, groups, or organizations in order to benefit role performance, the group or the organization.5 Further, IWB can improve work performance6 and reduce the desire to leave the company.7

The government has developed Quality Control Circle (QCC) due to the assumption that innovation can emerge from the group level. QCC is a small group of employees consisting of three to eight people from the same work unit, who voluntarily and continuously hold meetings to carry out quality control activities in their workplace using quality control tools and problem-solving processes.8 QCC, in the group level (work unit), consists of many employees who work together to share ideas, generate, promote, and eventually implement them in the form of work instructions and procedures applied in the company, an innovation program requires cooperation and collaboration between group members in the work unit. Individuals with different backgrounds and talents would form a combination of thoughts and exchange creative knowledge to create innovation.9 Studies on innovation at the group level are in line with the concept of modern innovation.10–12 It is also in line with the opinion of Ref. 13 regarding the level of perspective within groups and organizations, which are perceptions raised at the individual level. As a group, individuals share the understandings or perceptions to be brought together as a collective perception. These individuals interact and share interpretations of events and behaviors over time. Ultimately, it can be structured as a group's collective perceptions of situations and events in the organization. Therefore, we conducted this research at the group level.

As an organizational outcome, innovative work behavior can be influenced by individual and situational factors.14 As a situational factor, leadership attracts researchers to study more. Leaders will strongly influence employee work behavior15 including innovative behavior.16–20 Authentic leadership becomes the contemporary style of leadership,21 including in the Indonesian context. Authentic leadership can be defined as a pattern of leadership behavior that utilizes and promotes psychological capacities and a positive ethical climate that encourages self-awareness, internalized moral perspective, balanced information processing, and relational transparency between leaders and employees to create positive self-development for each employee.21 According to Ref. 22, authentic leaders will improve organizational performance by increasing productivity, saving unnecessary expenses, and stimulating high employee commitment.23 states that authentic leadership can improve business performance by developing innovative solutions to solve problems and respond to market challenges.

Several studies have shown that authentic leadership has an effect not only on individual behavior but also on behavior at the team level and even at the organizational level.24 It can influence employee behavior through its effect on creativity.25–28 At the team level, authentic leadership controls how information resources affect team trust, atmosphere, and inter-team relationships. Authentic leadership significantly affects team performance24 by changing individual performance and team dynamics. A leader impacts individual and team-level creativity because a leader is also a team member whose individual characteristics and behaviors influence the team's output the most.

Other factors that influence innovation are organizational climate and culture.29 According to Ref. 30, the influence of leadership and organizational culture on innovative work behavior in industry 4.0 involves the organizational climate as a mediator in the relationship between leadership and innovative work behavior. Other research states that organizational culture mediates empowering leadership with innovation.31 Especially in the Indonesian context, organizational culture in SOEs must follow the Circular Letter of the Ministry of SOEs number SE-7/MBU/07/2020 concerning the core values of human resources: trustworthy, competent, harmonious, loyal, adaptive, and collaborative, abbreviated as AKHLAK.32 AKHLAK should be implemented thoughtfully and consistently to become a corporate culture that will ultimately result in employee behavior and shape organizational culture in SOEs. Trustworthy is defined as upholding the trust given. Competence is defined as continuing to learn and develop capabilities. Harmonious can be interpreted as caring for and respecting differences. Loyal means being dedicated and prioritizing the interests of the nation and state. Adaptive is defined as continuing to innovate and being enthusiastic in moving or facing change. Moreover, collaboration is defined as building a synergistic collaboration.33

In this study, we focus on implementing AKHLAK as an organizational culture becomes a mediator in the relationship between authentic leadership and employees' innovative work behavior. Organizational culture is a process of behavior, value, belief, and habits that direct individual behavior within the organization. In addition Ref. 34, explained that organizational culture is one the most significant determinants of innovative work behavior and enables leaders in the organization to gain a competitive advantage. According to the finding of the AKHLAK Culture Health Index (ACHI) survey conducted by SOEs in 2021,35 there has been an improvement in the innovative work behavior after implementing the AKHLAK’s organizational culture during one year. It is assumed that there is a possible influence on the implementation of AKHLAK's organizational culture through the leader. In this case, we examined the role of authentic leadership applied at SOEs, as mentioned above.

Furthermore Ref. 40, explained that organizational culture is a glue that binds employees and shared systems together and produces positive and innovative work behavior. According to Ref. 36, leaders can influence the norm, beliefs, and values that govern the organization. Following Schein's opinion that leaders have a role in maintaining a particular culture, authentic leaders will know their true selves and behave accordingly, which will be automatically communicated to their subordinates.37 Authentic leaders act according to personal values and convictions, build credibility, and win the respect and trust of followers by encouraging diverse viewpoints and building a network of collaborative relationships with followers, thereby leading in a manner that followers recognize as authentic. Furthermore, authentic leaders are deeply aware of how they think and behave and are also perceived by others as aware of their own and others' values and moral perspectives.22 Through the AKHLAK's organizational culture, authentic leaders can exemplify behavior toward their subordinates which directs employees in the team to strengthen the implementation of the AKHLAK's organizational culture.

For this reason, we assume that when employees in the work unit perceive that the leader is authentic, this will affect the implementation of the organizational culture applied in the work unit. Authentic leadership is based on ethics, so its application will be in line with the organizational culture that focuses on high moral character. In addition, organizational culture teaches employees to be enthusiastic, remain adaptive in facing the times, find solutions to problems, and direct employees to innovate. Based on this, we wanted to review innovative work behavior regarding authentic leadership and AKHLAK’s organizational culture roles using the following framework (Figure 1).

5fd3f730-47b5-45fc-9cdd-f3addc9d62e7_figure1.gif

Figure 1. Research framework organizational culture (AKHLAK) mediates the relationship between authentic leadership and innovative work behavior.

Methods

Ethics approval

We obtained ethical approval for this study from the Faculty of Psychology Ethics Committee, Gadjah Mada University, with letter number 7722/UN1/FPSi.1.3/SD/PT.01.04/2021. The ethical clearance statement was issued on December 29th, 2021. Informed consent was obtained from participants through a google form. Written informed consent for data collection was available on the google form before filling-out the questionnaire. The participants checked a list on the google form if they agree to be a participant. The participants were informed of their right to withdraw and that they could refuse to answer any question or end the survey.

Study design

This study uses a quantitative research method that uses a deductive approach, starting with the researcher verifying the theory, asking hypotheses or research questions, defining variables based on the theory, and then observing or measuring variables using an instrument to get a score.

Participants

This study was conducted by an online survey. We tested AKHLAK’s organizational culture instruments from December 31st, 2021, to January 4th, 2022. Based on the first instrument test, we revised several items and conducted a second instrument through the google form and distributed from January 6th until January 8th, 2022. Next, we collected the data by distributing this scale to the SOE’s employees from January 10th to January 20th, 2022. This study was conducted in one of the SOEs in Indonesia that implements innovative work behavior and AKHLAK’s organizational culture. This SOEs was chosen based on gaining access to data retrieval. Regarding the participants, the inclusion criteria were that they are permanent employees, have worked for at least one year (considering that the employee must have implemented the AKHLAK’s organizational culture), and have a minimum education of high school level (considering the minimum level of education in the company is high school). In contrast, the exclusion criteria were if they are contract employees, have not yet one year of work, and have a junior high school education level or below. We asked the Head of the company's Learning and Development Center (LDC) Division to distribute the scale. Then, we checked the completeness of the data and followed up on the lack of data. The head of the LDC helped the researcher complete the missing data by giving it back to the respondent.

Data collection

The sampling method in this study used a non-probability sampling technique, namely the convenience sampling method. Data collection in this study was carried out by distributing questionnaires in the form of a Likert scale online via a google form with responses from 1 to 6 (1=strongly disagree, 6= strongly agree).

Data collection in this study was measured at the individual level, so if we want to measure at the group level, the data must be aggregated. Aggregation is a method that uses the average value from a low to a higher level.38 As a justification for aggregation at the individual to a group level, it is necessary to calculate within-group interrater agreement (rwg) for each aggregated variable (collective perception). The agreement reflects the extent to which all group members give the same value. To conduct research at a group level, we can use the rwg value because it assesses the agreement in each group.39 The value of rwg ranges from 0 to 1, with a value of 0.7 being considered the minimum acceptable value for aggregation.40 The rwg value of innovative work behavior ranges from 0.51 to 0.97, with seven groups of work units having a rwg value of < 0.70. Authentic leadership ranges from 0.33 to 0.95, with two work units having rwg < 0.70. AKHLAK’s organizational cultures ranged from 0.66 to 0.96, with one group having rwg < 0.70. In order to meet the requirements for further analysis at the group level, where the rwg value required for group-level analysis to be carried out is below 0.7, we eliminate groups with an rwg value below 0.7. Finally, we had 153 participants of 17 work units.

Instrument

Innovative work behavior was measured using a scale compiled by Ref. 5 and has been adapted by Ref. 41. Before analyzing the data in this study, we first consider the outer loading value of each item in this research model at the individual level by using a cut of 0.50 and the average variance extracted (AVE) value of 0.50. All items meet the outer loading requirements in the innovative work behavior measurement tool. Then, the discriminant validity test was carried out with heterotrait-monotrait (HTMT) inference with a confidence interval value of less than 1. Based on this, it can be concluded that all existing indicators are valid, and there are no problems with convergent and discriminant validity with a reliability value of 0.934.

Authentic leadership was measured using the Authentic Leadership Questionnaire (ALQ) from Ref. 21, which was adapted by Ref. 42 based on the dimensions that make up the construct of authentic leadership, namely self-awareness, relational transparency, processing balance, and an internalized moral perspective. Based on the test results of measuring instruments, the average variance extracted (AVE) of 0.50 has been met, but one measuring item does not meet the outer loading requirement of 0.50, namely item AL2. Thus, one item is not included in further data analysis. Then, the discriminant validity test was carried out with HTMT inference with a confidence interval of 1. Based on this, it can be concluded that all existing indicators are valid, and there are no problems with convergent and discriminant validity with a reliability value of 0.916.

Organizational culture scale was measured using a tool made by researchers based on AKHLAK’s organizational culture.33 AKHLAK’s organizational culture in the form of a set of values and norms that have been understood and internalized jointly by leaders and employees as a guide in behavior to achieve company goals reflect the values of being trustworthy, competent, harmonious, loyal, adaptive, and collaborative, abbreviated as AKHLAK. Each of these core values has been revealed to be a behavioral guide that reflects AKHLAK’s organizational culture at SOEs. In the process of making instruments, we also conducted focus group discussions with employees involved in the implementation of AKHLAK’s organizational culture. Then this measuring instrument is tested for content validity using Aiken's V Test, which ranges from 0.70 to 0.95, with a total subject matter expert of 14 people. Based on the results of the convergent discriminant test on the model, the average variance extracted (AVE) <0.50 is 0.396. However, according to,46 an AVE value below 0.5 is still acceptable if this study's composite reliability value has been met, namely 0.928. Based on the outer loading value, eight measuring items do not meet the outer loading requirement of 0.50, namely items OC2, OC5, OC6, OC11, OC14, OC19, OC23, and OC24. Thus, eight items were not included in further analysis. Then, the discriminant validity test was carried out with HTMTinference with a confidence interval value of less than 1. Based on this, it can be concluded that all existing indicators are valid, and there are no problems with convergent and discriminant validity with a reliability value of 0.963.

Data analysis

Data analysis in this study uses component or variance-based structural equation modelling. The data processing uses the partial least square SmartPLS 3.3.7 for windows program, which can be used for causal-predictive analysis in situations of high complexity and low theoretical support.43 The PLS-SEM analysis in this study was carried out in two stages: the evaluation of the measurement model (outer model) and the structural model (inner model). The measurement of the outer model/measurement model evaluates the validity of construct indicators and the reliability of the measurement results before continuing with the structural model analysis.44 The measurement of the inner structural model aims to see and analyze the significance of the relationship between constructs.44 The use of PLS-SEM is that the test can be carried out without a robust theoretical basis, ignoring several assumptions (non-parametric) and the accuracy parameters of the prediction model seen from the value of the coefficient of determination (R-Square).

Results

Demographic

Approximately 79.41% of participants identified as cisgender men and 20.59% as cisgender women. As many as 85 participants (31.37%). were 26-30 years old. In this study, 52.21 % of participants had a bachelor’s degree educational background. This study involved participants from all job title grades, yet the number of participants in job title grade 4 dominated this study, that is 39.71% of participants. In this study, only 153 employees from 17 work teams were involved in data analysis at the group level.

Outer model measurement

Evaluation of the measurement model is carried out to assess the validity and reliability of the model. All latent variables in this study are reflective models. In the reflective construct, the measurement of the outer model includes a convergent validity test (outer loading value and average variance extracted [AVE] value), discriminant validity test (confidence interval), and composite reliability test.45

Convergent validity

Convergent validity is the degree to which the results of the measurement of a concept show a positive correlation with the results of the measurement of other concepts, which theoretically must be positively correlated. To analyze the reflective model, an outer loading greater than 0.5 – 0.7 was recommended by46 for exploratory research. When the outer loading is between 0.5 and 0.7, it is recommended to save or delete items depending on the external load of other items and consider the construct reliability value and the AVE value.46

According to Table 1, the AVE of authentic leadership construct is 0.42, which is below 0.5. Based on the cut-off outer loading of 0.6, six items of authentic leadership construct do not meet the outer loading: AL3, AL4, AL7, AL8, AL11, and AL16. Three items in the AKHLAK’s organizational culture construct do not meet the outer loading: OC17, OC18, and OC27. Invalid indicators are excluded from the model. The next step is to calculate the PLS Algorithm again to see the renewal of the outer loading value after excluding the invalid indicator and get an indicator that meets the minimum outer loading requirement of 0.6 as follows:

Table 1. Convergent validity testing.

Latent variableObserved variableOuter loadings (>0.60)ResultAVE (>0.50)
Authentic leadershipAL10.676Valid0.42
AL30.516Not valid
AL40.546Not valid
AL50.700Valid
AL60.714Valid
AL70.361Not valid
AL80.521Not valid
AL90.721Valid
AL100.730Valid
AL110.584Not valid
AL120.670Valid
AL130.675Valid
AL140.630Valid
AL150.911Valid
AL160.548Not valid
Organizational culture (AKHLAK)OC10.760Valid0.546
OC30.681Valid
OC40.634Valid
OC70.706Valid
OC80.782Valid
OC90.918Valid
OC100.603Valid
OC120.699Valid
OC130.724Valid
OC150.738Valid
OC160.775Valid
OC170.590Not valid
OC180.504Not valid
OC200.820Valid
OC210.848Valid
OC220.917Valid
OC250.868Valid
OC260.726Valid
OC270.346Not valid
OC280.875Valid
Innovative work behaviorIWB10.786Valid0.614
IWB20.717Valid
IWB30.824Valid
IWB40.799Valid
IWB50.739Valid
IWB60.826Valid
IWB70.641Valid
IWB80.867Valid
IWB90.827Valid

Based on Table 2, all items have met the loading factor > 0.6. Furthermore, to test the validity of the construct can be seen from the value of the AVE. The recommended value must be greater than 0.5, which means that 50% or more of the variance of the indicator can be explained.47 Based on the test results shown in Table 2, it can be interpreted that all measuring items have met the requirements for testing the value of the outer loading because there are no items below 0.6. It can be concluded that the measuring item has a measuring capacity above 50% for each variable.

Table 2. Final convergent validity testing.

Latent variableObserved variableOuter loadings (>0.60)ResultsAVE (>0.50)
Authentic LeadershipAL10.731Valid0.551
AL50.675Valid
AL60.687Valid
AL90.769Valid
AL100.749Valid
AL120.644Valid
AL130.785Valid
AL140.716Valid
AL150.898Valid
Organizational culture (AKHLAK)OC10.750Valid0.570
OC30.654Valid
OC40.636Valid
OC70.747Valid
OC80.797Valid
OC90.924Valid
OC100.639Valid
OC120.694Valid
OC130.694Valid
OC150.722Valid
OC160.802Valid
OC200.812Valid
OC210.860Valid
OC220.914Valid
OC250.867Valid
OC260.740Valid
OC280.901Valid
Innovative work behaviorIWB10.786Valid0.614
IWB20.714Valid
IWB30.826Valid
IWB40.795Valid
IWB50.741Valid
IWB60.821Valid
IWB70.638Valid
IWB80.869Valid
IWB90.832Valid

Discriminant validity

In Ref. 48, prioritizing using the HTMT inference rather than Fornell-Larcker criterion is suggested. This is due to the failure of the Fornell-Larcker criterion to identify discriminant validity, especially for significant cases or complex research models. Based on this, we used HTMT inference as a test to identify discriminant validity. The HTMT inference test can be seen from the confidence interval (CI) value ≤ 1.00 to identify no problem with discriminant validity.48 Furthermore, the bootstrapping procedure was run to get a confidence interval (CI) value of less than or equal to 1.00 to identify no problems with discriminant validity.

Based on Table 3 and Table 4, it was found that the confidence interval (CI) value was either 2.5% or 97.5% for each item and dimensions of the variables were less than 1.00,48 so it can be concluded that there is no supporting indicator that have discriminant validity problems.

Table 3. Discriminant validity testing.

Latent variableItem reflectiveOriginal sample (O)Sample mean (M)2.5%97.5%
Organizational culture (AKHLAK)OC1 ← OC0.7500.7500.6780.814
OC3 ← OC0.6540.6550.5620.740
OC4 ← OC0.6360.6360.5420.723
OC7 ← OC0.7470.7470.6580.828
OC8 ← OC0.7970.7950.7150.867
OC9 ← OC0.9240.9250.8960.950
OC22 ← OC0.9140.9140.8860.941
OC25 ← OC0.8670.8690.8010.928
OC10 ← OC0.6390.6400.5140.747
OC12 ← OC0.6940.6950.6130.776
OC13 ← OC0.6940.6930.6180.769
OC15 ← OC0.7220.7220.6070.824
OC16 ← OC0.8020.8010.7250.867
OC20 ← OC0.8120.8110.7500.870
OC21 ← OC0.8600.8590.7900.911
OC26 ← OC0.7400.7370.6580.814
OC28 ← OC0.9010.9020.8670.936
Innovative work behaviorIWB1 ← IWB0.7860.7840.6780.875
IWB2 ← IWB0.7140.7140.6070.811
IWB3 ← IWB0.8260.8280.7330.906
IWB4 ← IWB0.7950.7970.7310.857
IWB5 ← IWB0.7410.7410.6420.826
IWB6 ← IWB0.8210.8220.7490.885
IWB7 ← IWB0.6380.6380.5470.720
IWB8 ← IWB0.8690.8670.7940.928
IWB9 ← IWB0.8320.8350.7700.899
Authentic leadershipAL1 ← AL0.7310.7300.6460.813
AL5 ← AL0.6750.6760.5680.766
AL6 ← AL0.6870.6890.6150.770
AL9 ← AL0.7690.7680.7040.824
AL10 ← AL0.7490.7470.6700.810
AL12 ← AL0.6440.6420.5340.738
AL13 ← AL0.7850.7840.7150.843
AL14 ← AL0.7160.7140.6310.790
AL15 ← AL0.8980.8990.8680.923

Table 4. Discriminant validity each constructs testing.

Original sample (O)Sample mean (M)2.5%97.5%
AL ➔ OC0.9150.9160.8860.935
AL ➔ IWB0.4370.4350.3270.541
OC ➔ IWB0.5500.5520.4370.657

Reliability testing

The reliability test on PLS-SEM is recommended to see the value of composite reliability.45 The recommended reliability value is 0.70, but for exploratory research, the value of 0.60 is still acceptable.45

Based on Table 5 the evaluation results show that composite reliability of authentic leadership=0.916, AKHLAK’s organizational culture=0.963, and innovative work behavior=0.934. All constructs have a composite reliability value above 0.70, meaning that all constructs are reliable. The result of the outer model test shows that all the requirements have been met to proceed to the measurement of the inner model/structural model.

Table 5. Reliability testing.

Latent variableComposite reliability
Authentic leadership0.916
Organizational culture (AKHLAK)0.963
Innovative work behavior0.934

Inner model measurement

According to Ref. 44, the evaluation of structural models aims to predict the relationship between latent variables. The coefficient of determination (R2) shows how much the exogenous variable explains the endogenous variable. The structural model test with PLS begins by looking at the R-square value for each endogenous latent variable as the predictive power of the structural model. R-squares values 0.75 (strong) 0.50 (moderate) and 0.25 (weak).

The results of the PLS R-Squares represent the amount of variance of the construct described by the model.47 According to Table 6. The coefficient of determination (R-Square) of AKHLAK’s organizational culture is 0.838 and innovative work behavior is 0.932. Predictive relevance (Q2) for the structural model measures how well the observed values are generated. According to Ref. 46, if the Q2 value is more significant than zero for certain endogenous latent variables, it shows that the PLS path model has predictive relevance for that construct. The Q2 value of AKHLAK’s organizational culture is 0.501, and innovative work behavior is 0.565, which means it is more significant than zero indicating the predictive relevance of the path model in the context of endogenous construction and the corresponding reflective indicators.

Table 6. R-Square and predictive relevance testing.

R SquareR Square adjustedPredictive relevance (Q2)
Organizational culture (AKHLAK)0.8380.8370.501
Innovative work behavior0.9320.9310.565

The next structural evaluation is carried out using a bootstrapping process for testing research hypotheses by looking at the significance and direction of the relationship between variables based on the path coefficient, standard error, and t-value. Path coefficients have a range of -1 to 1. If the correlation/relationship variable is positive, then the influence of a variable is unidirectional, but if the value is negative, the influence of the variable is the opposite. Terms of a significant relationship if the t-statistic value> 1.96 and p-value 0.000 p<0.05.

Table 7 shows the path coefficient, t-statistic and p-value. It shows that both direct and indirect relationships have significant p values (p<0.01). It means AKHLAK’s organizational culture was proven to act as mediator in the relationship between authentic leadership and innovative work behavior (p=0.000; p<0.01). Based on the analysis results, it can be concluded that the hypothesis in this study is accepted.

Table 7. Hypothesis testing.

Latent variablebtp
Direct effect
AL ➔ IWB0.4377.7380.000
AL ➔ OC0.91575.6160.000
OC ➔ IWB0.5509.4790.000
Indirect effect
AL ➔ OC ➔ IWB0.5038.9600.000
Total effect
AL ➔ IWB0.940143.2950.000
AL ➔ OC0.91575.6160.000
OC ➔ IWB0.5509.4790.000

Discussion

The study examined authentic leadership and innovative work behavior through organizational culture in Indonesian SOEs under one hypothesis. Figure 2 shows the SmartPLS model developed in this study and Table 7 shows the results of hypothesis testing. The hypothesis in this study is accepted. Based on the rule of thumb, the p-value in both direct and indirect relationships shows a value of less than 0.01. This study’s results indicate that authentic leadership’s role in innovative work behavior will increase through the implementation of AKHLAK’s organizational culture in SOEs. It confirms the synergistic role of leaders, people, and culture. Leaders bring people through a culture that will eventually lead to positive behavior, in this case, innovative work behavior. Authentic leadership positively influences employees’ innovative work behavior.42,49,50

5fd3f730-47b5-45fc-9cdd-f3addc9d62e7_figure2.gif

Figure 2. Research model.

Note: AL=authentic leadership; OC=organizational culture; IWB=innovative work behavior.

Innovative work behavior in this study was collected at the group level. It was based on our assumption that innovative behavior in the workplace did not stop at an individual creating something. However, there is an effort to share it with a group of people and implement it for the organization’s benefit. We assumed that innovative work behavior was identic with one’s work excellence. However, innovative work behavior is innovation in work units as shared ideas that are raised, introduced, and implemented. Each work unit has its innovation according to their needs. The innovations produced in the work unit will be registered with the innovation manager for introduction to all employees, which is part of the process of promoting ideas. After promoting the idea, employees in the work unit realize the innovative idea in the hope of improving the work process, services, or services provided and producing new products to improve performance in the work unit.

In fact, this study found innovative work behavior as collective perceptive ideas among team members that the leader drives. Likewise22 conveyed that authentic leadership functions on individual, team, and organizational levels. Moreover,24 stated that leadership has an effect not only on individual behavior, but also on behavior at the team level and even at the organizational level. In this case, the leader will control how information resources affect team trust, the atmosphere, and the relationship within the team. When the leader in their work unit is authentic with high relational transparency, it allows the leader to openly show support and state that they value the capacity of subordinates and want employees to do well. Authentic leaders are very aware of themselves. Both in thinking and acting, they are broad-minded and have strength. Authentic leaders are aware of the context they are in, they are confident, hopeful, optimistic, tough, and have a high moral character to encourage employees in the team to come up with positive solutions for increasing company productivity.

Leaders have a role in maintaining a particular culture, and authentic leaders will know their true selves and behave accordingly, which will be automatically communicated to their subordinates. Furthermore, authentic leaders will know their strengths and weaknesses and behave accordingly. As this process cascades to followers, they may also operate similarly, portraying their authenticity to leaders, colleagues, customers, and other interested stakeholders, which over time may become a basis for the organization’s culture.28 So, when authentic leaders are rooted in positive psychology, based on morals and ethics, this aligns with the concept of AKHLAK’s organizational culture.

Through AKHLAK’s organizational culture, authentic leaders can exemplify behavior toward their subordinates which directs employees in the team to strengthen the implementation of AKHLAK’s organizational culture. This can be done by focusing on six core values: being trustworthy, holding fast to the given trust; competent, continuing to learn and develop capabilities; harmonious, mutual care and respect for differences; loyal, prioritizing the interests of the nation and state; adaptive, continuing to innovate and make improvements following technological advancement; and collaborative, building synergistic cooperation. Implementing AKHLAK’s organizational culture teaches employees to have the enthusiasm and adapt in the face of the times, to be innovative. It is in line with the opinion of Ref. 29, which states that organizational culture is one of the factors that lead to innovation.

This study has limitations related to the criteria of participants who have not controlled the respondent’s tenure in the current unit, where data collection is carried out. This situation is thought to affect the variation in the values held by participants in one group so that the rwg value becomes smaller than the required one. In addition, this study also has limitations related to the way the data is collected online. This way of collecting data makes researchers have limitations in providing instructions for filling out directly and cannot directly confirm if there are items that respondents do not understand. It is suspected to be the cause of the failure of several items on the AKHLAK organizational culture scale so that each dimension on the AKHLAK organizational culture scale does not have the same number of items. In general, reliability and validity have been met. However, this may affect the magnitude of the contribution of each dimension of AKHLAK on innovative work behavior. Therefore, future research needs to investigate further each AKHLAK dimension’s contribution to innovative work behavior. In addition, future research needs to control respondents when analyzing data at the group level.

Conclusion

In summary, this study shows that employees’ innovative work behavior can be increased from authentic leadership roles through the implementation of AKHLAK’s organizational culture in each SOE. When employees perceive that the leader is authentic, leads sincerely and openly, and emphasizes the transparency of the working relationship with employees, this will make them feel the presence of a natural leader and direct them to positive behaviors. In this study, we found that authentic leadership indeed contributes to innovative work behavior. However, the contribution of authentic leadership towards innovative work behavior will increase through the leader’s role in implementing AKHLAK’s organizational culture.

Based on the findings of this study, several suggestions can be made for SOEs:

  • 1. This study strengthens the role of leadership, especially authentic leadership. It can be done through a leadership training program or the Leadership Development Program.

  • 2. To cultivate more AKHLAK values as the basis for behavior, attitude, and action for SOEs employees daily, through recognition programs such as AKHLAK ambassadors, AKHLAK forums, and sharing knowledge about AKHLAK culture.

  • 3. Ensure that behaviors follow the AKHLAK culture’s dimensions in every work achievement.

Data availability

Underlying data

Figshare: Authentic Leadership and Innovative Work Behavior through Organizational Culture: A study in Indonesian State-Owned Enterprises. https://doi.org/10.6084/m9.figshare.21332958

This project contains the following underlying data:

  • • Questionnaire results.xlsx

  • • Questionnaire design.xlsx

Extended data

Figshare: Authentic Leadership and Innovative Work Behavior through Organizational Culture: A study in Indonesian State-Owned Enterprises. https://doi.org/10.6084/m9.figshare.21332958

This project contains the following extended data:

  • • Research Questionnaire.pdf

Data are available under the terms of the Creative Commons Attribution 4.0 International license (CC-BY 4.0).

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Comments on this article Comments (2)

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  • Author Response 08 Nov 2022
    Indrayanti Indrayanti, Psychology, Gadjah Mada University, Sleman, 55281, Indonesia
    08 Nov 2022
    Author Response
    Greetings Professor Sulphey. Thank you for providing a very valuable comment for our article. We are very grateful and will pay attention to it.
    Competing Interests: No competing interest
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  • Reader Comment 04 Nov 2022
    Sulphey M M, Professor, Prince Sattam Bin Abdulaziz University, AlKharj, Saudi Arabia
    04 Nov 2022
    Reader Comment
    I read the article with great interest. It is well written. I would like to make some comments:
    • You state that "This study was conducted in one of
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Indrayanti I and Ulfia N. Authentic leadership and innovative work behavior through organizational culture: A study in Indonesian state-owned enterprises [version 1; peer review: awaiting peer review]. F1000Research 2022, 11:1243 (https://doi.org/10.12688/f1000research.126559.1)
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Version 1
VERSION 1 PUBLISHED 01 Nov 2022
  • Author Response 08 Nov 2022
    Indrayanti Indrayanti, Psychology, Gadjah Mada University, Sleman, 55281, Indonesia
    08 Nov 2022
    Author Response
    Greetings Professor Sulphey. Thank you for providing a very valuable comment for our article. We are very grateful and will pay attention to it.
    Competing Interests: No competing interest
    Report a concern
  • Reader Comment 04 Nov 2022
    Sulphey M M, Professor, Prince Sattam Bin Abdulaziz University, AlKharj, Saudi Arabia
    04 Nov 2022
    Reader Comment
    I read the article with great interest. It is well written. I would like to make some comments:
    • You state that "This study was conducted in one of
    ... Continue reading
    Report a concern
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