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 performance ⁶ 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 behavior ¹⁵ 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 performance ²⁴ 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).

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}

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. Likewise ²² 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 r _wg 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.

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.