Psychological empowerment and organizational task environment in commitment to change

Psychological empowerment and organizational task environment in commitment to change Wustari L.Mangundjaya Wustari L.Mangundjaya: Faculty of Psychology, Universitas Indonesia, Email: wustari@gmail,com Abstract The purpose of this study is to elaborate the role of psychological empowerment, and perceptions of external environment in committing employees with organizational change. This study tested the effect of dimensions of psychological empowerment as well as the effect of employee s perception on external environment on organizational commitment to change in financial state owned organizations in Indonesia. Data was gathered from 539 employees working in financial state owned organizations in Indonesia. Results showed the significant effect of Psychological Empowerment and Organizational task Environment on commitment to change. Results also showed that of all dimensions of psychological empowerment (meaning, competence, self-determination and impact) has significant effect on commitment to change. This study is a contribution to theory and practice of change management, with an increased understanding on commitment to change, psychological empowerment and perceptions of external environments in committing the employees with the organizational change. Keywords: Psychological Empowerment, Organizational Task Environment, Commitment to Change and Organizational Change. 119

Introduction Organization lived in an open system; consequently any changes in external environment will have an impact on the organization and vice versa. In this regard, as a response of environment s demand, organization has to change. However, not all the change program has succeeded, and there are many variables that play important role on the success, amongst them is people. Without the supports from people, organizational change will not have succeeded. As a result, commitment from people about the change program is a must. People itself, cannot be separated from external environment, as well as his/her own characteristics. Which variable is more important in developing commitment to change? People characteristics or people perceptions about external conditions? This paper will identify from both psychological empowerment and external organizational environment in relation with commitment to change. Literature Review Commitment to Change Herscovitch & Meyer (2002) define commitment to change as a force (mindset) that binds an individual to a course of action deemed necessary for the successful implementation of a change initiative. This mind-set can be reflected to varying degree in three dimensions: a) desire to provide support for the change based on a belief in its inherent benefits to change (affective commitment); b) a recognition that there are costs associated with failure to provide support for the change (continuance commitment to change); and c) sense of obligation to provide support for the change (normative commitment to change.) In other words, individuals can feel bound to support a change initiative because they want to, have to, and/or ought to (Parish et al.., 2008) External Environments External environments play an important role in organizational change, as one of the sources in organizational change is because of the changes in the environments, as well as demands from external competitors, customers and other stakeholders. In this regard, Dess & Beard (1984) have mentioned about dimensions of environments that should be taken into consideration in management, especially in organizational change management. These dimensions describe an approach to measure the task environment of organizations, using the data and schema developed to record resource transactions in the national social accounts. These dimensions were called Organizational Task Environments (OTE), consists of: 1) Capacity, is the extent to which the environment can support sustained growth of the organization (Beard & Dess, 1984). 2) Environmental Dynamism, turn over, absence of pattern and unpredictability are the best measures of environmental stability-instability (Dess & Beard, 1984). Dynamism should be restricted to change that is hard to predict and that heightens uncertainty for key organizational members (Dess & Beard, 1984). and 3) Environmental Complexity, is the heterogeneity of and range of an organization s activities (Child, in Dess & Beard, 1984). 120

Psychological Empowerment Psychological empowerment refers to a set of psychological states that are necessary for individuals to feel a sense of control in relation to their work (Spreitzer, 1995). This perspective refers to empowerment as the personal beliefs that employees have about their role in relation to the organization (Spreitzer, 2007). There are four dimensions of psychological empowerment are as follows (Spreitzer, 2007): a) Meaning involves a fit between the needs of one's work role and one's beliefs, values, and behaviors (Hackman & Oldham in Spreitzer, 2007); b) Competence refers to selfefficacy specific to one's work, or a belief in one's capability to perform work activities with skill (Gist, 1987; Bandura, 1989 in Spreitzer, 2007); c) Self-determination is a sense of choice in initiating and regulating one's actions (Deci, Connell, & Ryan, 1989). It reflects a sense of autonomy or choice over the initiation and continuation of work behavior and processes (Bell and Staw, 1989 in Spreitzer, 2007); and d) Impact is the degree to which one can influence strategic, administrative, or operating outcomes at work (Ashforth, 1989 in Spreitzer, 2007). Methods and Measures Data Collection Data was collected through 3 types of questionnaires, namely: 1) Commitment to Change Inventory, which was developed and modified to Indonesian language from Herscovitch and Meyer (2002), consists of 18 items from three dimensions: a) Affective commitment to change; b) Continuance commitment to change; and c) Normative commitment to change, and each dimensions consists of 6 dimensions; 2) Organizational Task Environment, consists of 3 dimensions namely, capability, dynamism, and complexity; and 3) Psychological Empowerment, based on the concept from Spreitzer (1996), consists of four dimensions namely: meaning, competence, determination, and impact. All the scales were tested its significance using SEM, and the resuls were valid, however, the continuance commitment was not significant, so in this study the dimensions of commitment to change only consits of 2 dimensions, namely Affective Commitment to Change and Normative Commitment to Change. Sampling & Sample Sample was collected from two financial state owned companies that had undergone some organizational changed, such as restructuring the organizational, development of strategic marketing, and changes on general system and procedures. Samples were chosen by convenience sampling. The numbers of participants were 539 respondents, with the characteristic as follows: permanent employees, minimum working in the company is 2 years, minimum education is senior high school, and the age is between 21 56 years old. The profile of the respondents are as follows: male (61.97%), range of age between 25 44 years old (78.29%), bachelor s degree (74.77%), staff (43.42%), length of works more than 10 years (51.95%). Data Analysis Data were analyzed using Descriptive Statistics, Multiple Regression, and SEM. 121

Results Table 1: Descriptive Analysis of Commitment to Change, Psychological Empowerment and Organizational trust Demographics Variable Commitment to Change Psychological Empowerment Organizational Task Environment Mean SD Sign. Mean SD Sign. Mean SD Sign. Total 4.4696 0.5107 4.6008 0.5412 - Sex/Gender - - 0.022* 0.13 0.234 Male 4.509 0.5245-4.6424 0.5660 4.296 0.4229 Female 4.405 0.4816-4.5329 0.4919 4.339 0.3841 Age - - 0.004** 0.006** 0.135 <25 y.o. 4.1111 0.3504 4.4583 0.3468 4.1231 0.2529 25-44 y.o. 4.4593 0.5075 4.5735 0.5279 4.3241 0.4167 >44-56 y.o. 4.5521 0.5212 4.7268 0.5941 4.2879 0.3863 Education 0.009** 0.000** 0.237 Sr. High Sch. 4.5278 0.2842 4.5714 0.4766 4.1143 0.2844 Diploma 4.5934 0.4172 4.6163 0.5219 4.3991 0.3880 Bachelor Degree 4.4309 0.5064 4.5295 0.5289 4.3114 0.4085 Master Degree 4.5851 0.5538 4.9059 0.5055 4.2990 0.4235 Position 0.00** 0.000** 0.006** Staff 4.3672 0.5314 4.4834 0.5228 4.2517 0.3893 Section Head 4.4592 0.5018 4.6021 0.5325 4.2964 0.4027 Department Head 4.4872 0.5168 4.7069 0.5686 4.3481 0.3760 Division Head 4.8737 0.4949 5.0227 0.3987 4.3670 0.4183 Length of Works 0.000** 0.000** 0.349 2-10 years 4.3817 0.5036 4.5324 0.5351 4.2954 0.4014 >10 years 4.5509 0.5045 4.6723 0.5378 4.3284 0.4156 From the table it can be seen that there are significant differences between the profile of demographic such as: 1. In terms of commitment to change, the results show that male and female have significant differences, in which male has higher commitment to change than female. The results also show that the older of the position, the higher of the position, and the longer they work in the company, the more committed they are to the organizational change. Education also has significant differences on the commitment to change, although it cannot be said that the higher education will be followed with the more committed to the organizational change. It shows that bachelor degree is the lowest committed to change and employees with diploma degree has the highest one. 2. In relation to psychological empowerment, the results show that male and female have no significant differences. Furthermore, it shows that the older of the person, the higher of the position, and the longer they work in the company, the higher their psychological empowerment. Education also has significant differences on psychological empowerment, however, it can t be said that the higher the education the higher their psychological empowerment. It shows that bachelor degree is the lowest psychological empowerment, and employees with master degree have the highest one. 3. In terms of organizational task environment, the results show that the higher the position, the more positive their perceptions about organization s environment. However, there 122

are no significant differences in relation to other demographic profiles, such as gender, age, education and lengths of work. Table 2: Results of Multiple Regression Analysis Variables R R Square Adjst R Square Sign. OTE, PE and C2C 0.506 0.256 0.253 0.000** OTE and C2C 0.325 0.106 0.104 0.000** PE and C2C 0.334 0.111 0.110 0.000** OTE & C2C Cap OTE & C2C 0.585 0.342 0.341 0.000** Dyn OTE & C2C 0.138 0.019 0.017 0.001** Com OTE & C2C 0.343 0.118 0.116 0.000** OTE & AC2C 0.192 0.037 0.035 0.000** OTE & NC2C 0.468 0.219 0.218 0.000** PE & C2C Comp PE & C2C 0.304 0.093 0.091 0.000** Meaning PE & C2C 0.345 0.119 0.117 0.000** Det PE & C2C 0.216 0.047 0.045 0.000** PE & AC2C 0.340 0.115 0.114 0.000** PE & NC2C 0.331 0.109 0.108 0.000** From the Table 2 above, the results of the study shows as follows: 1. Psychological Empowerment and Organizational Task Environment both have significant contribution to commitment to change (25.6%). 2. The impact of Psychological Empowerment in commitment to change (11.1%) in Commitment to change is slightly higher compares to Organizational Task Environment (10.6%). 3. Feeling meaningful at work has the highest impact to commitment to change (11.9%), rather than feeling of competence (9.3%), impact (6.4%), or determination (4.7%) 4. Psychological Empowerment (11.5%) has the highest impact to affective commitment to change compares to normative commitment to change, however Organizational Task Environment only contributes (3.7%) to affective commitment to change, and has contributed the highest impact to Normative Commitment to Change (21.8%) 5. Capability in Organizational Task Environment (34.2%) has the highest impact to commitment to change, compares to dynamism (11.8%) or complexity (1.9 %). The analysis by SEM also showed that both Organizational Task Environment and Psychological Empowerment have contributed to commitment to change, the model was tested its significance. Discussion The study showed that both psychological empowerment and organizational task environment have significant contribution to commitment to change (C2C); however psychological empowerment has slightly higher impact than organizational task environment. In this regard, both external organizational conditions and individual characteristics (in this case Psychological Empowerment) is very important in order to develop commitment to change. Furthermore, the study showed that Psychological Empowerment has higher impact to Affective Commitment to Change, it can be concluded that individuals who have self confidence, and has 123

high a sense of meaning in their work, and has impact on the work environment will support change in the organization, and believe that the change is important for the organization. This study was supported the previous study done by Galpin (1996) and Walker et al., (2007), that mentioned content, process, context of the organization, and individual characteristic have played important role in the success of organizational change. The study also showed that individual characteristic, especially feeling of meaningful is very important during organizational change in order to develop commitment to change, this feeling of meaningful will overcome the fear and anxiety during the process of organizational change (Cartwright & Cooper,1993), as the feeling of meaningful at work similar to the feelings of self-esteem and recognition from the management (Maslow in Robbins, 2010). On the other hand, the study also showed that the positive perceptions about external organization, will develop more of normative commitment to change rather than affective commitment to change, it can be concluded that if individual has positive feelings about external environment, especially about capability of the external environment, will develop a high sense of normative commitment to change, in other words individuals will feel a sense of obligations to support the organization and commit to change, as they understand that there are lots of potential for development and expansion for the organization (Dess & Berad, 1984) The results also show that the older of the position, the higher of the position, and the longer they work in the company, the more committed they are to the organizational change. This results were supported the previous research done by Mangundjaya (2014), who found that the older and the longer people worked in the same organization, their commitment to change will be higher. However, these findings should not be generalized, as in these studies were conducted at state owned organizations, which are not conducted a large-scale/radical organizational change. The study also revealed that, the older, the longer and the higher position of the employee, the higher and stronger their psychological empowerment. This finding can be explained as by life and work experience that people have, these experiences will develop their sense of selfconfidence and comptence. Conclusion & Implications Studying about commitment to change is important, as through employee s commitment to change; it will lead to the implementation of change success (Parish et al, 2008) and increasing performance (Parish et al. 2008). In this regard, paying attention to psychological empowerment of the employee is important, as psychological empowerment will boost organizational commitment (Hashmi, 2002) and according to the research conducted by Rindang & Mangundjaya (2013) psychological empowerment will boost commitment to change. The objective of this study not only for the development of the knowledge about the Commitment to Change but also for practical benefit. In this regard, the results of the study can be used for management in implementing change management in their organization. The followings are the implications of this study for management and organizations involved in change implementation. First, management should identify, what kind of variables that can develop psychological empowerment, as this variable play an important role in developing commitment to change. Second, as change and transformation will create many anxieties (Cartwright & Cooper,1993, Galpin 1996), developing the feeling of meaning will enable people to develop their self-confidence to face the organizational change, fears and anxieties. Third, management can assign senior people (who are in the higher position, older and 124

longer work in the company) to become a change agent as they are more committed to organizational change. Limitations and Future of the Study This study was held at state owned organizational that conducted organizational changes in terms of organizational structures, strategy and operating procedures, however it is not large scale and radical types of organizational change, in this regard, and generalization cannot be done. Based on the above conditions further studies should be conducted in many types of organizations in other types of organization who undertake different types of transformation, and in different types of organizations such as private, government and non-government organizations is still needed. In this study, it was showed that there is a positive and significant correlation between age, and tenure with commitment to change, in other words the older and the longer people stay in the organization they will more commit to change, however this findings might have different results if the study was conducted at large-scale organizational change, such as merger and acquisition. Concluding remarks Organizational change has to be successful, and in order to do that organization should pay attention to their people, especially their commitment to the organizational change. The study showed that Psychological Empowerment, or feeling of self-confidence and self efficacy in their work, as well as feeling of meaning in their work environment is important to create commitment to change. In this regard, organization should create many activities in order to develop high sense of Psychological empowerment, activities such as training, coaching, mentoring and counseling can be done to develop this. 125

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