Syntax Literate: Jurnal Ilmiah Indonesiaï¿½ pï¿½ISSN: 2541-0849 e-ISSN: 2548-1398

Vol. 7, No. 10, Oktober 2022

HOW DO INVOLVED COMMUNICATION AND LEADERSHIP AFFECT READINESS FOR CHANGE THROUGH ORGANIZATIONAL IDENTIFICATION IN PUBLIC SECTOR?

Rino Afriantoro, Aryana Satrya

Magister Manajemen, Fakultas Ekonomi dan Bisnis, Universitas Indonesia, Indonesia

Email: [email protected], [email protected]

Abstract

Changes in the external environment demand that public organizations respond and adapt to enhance public services. In addition to examining the effect of involved communication and leadership on change readiness, the purpose of this study is to investigate the mediating influence of organizational identification in the public sector. The information was acquired through a web-based questionnaire of 387 tax service employees scattered throughout Indonesia. Application Lisrel 8.8 was used in order to verify the hypotheses. All hypotheses positive relationships are statistically significant in the results. The findings of this study indicate that organizational identification mediates not only the relationship between involved communication and change readiness but also the transformational leadership and change readiness relationship. This paper's research is limited to small percentage of public service employees, which may not have fully captured the development of the phenomena being studied. In a public sector undergoing change, the implementation of involved communication, transformational leadership, and organizational identification will impact and positively contribute to employee readiness for change.

Keywords: involved communication; leadership; organizational identification; readiness for change, public sector.

Introduction

The challenges facing the global economy in the future will feel heavier amid dynamic global economic development. Adaptation is needed due to the continuing global volatility, uncertainty, complexity, and ambiguity or VUCA (BINS, 2018; Yu, Yuan, Han, Li, & Li, 2022). In addition to VUCA, the level of business competition in the world also needs to be cautious (Thakur & Srivastava, 2018). Organizational resilience is essential for modern business to success in the VUCA environment (Yu et al., 2022). Organizations must be prepared to change by having the resources and conditions necessary to support the process of change (Diab, Safan, & Bakeer, 2018). Change is a phenomenon that is becoming increasingly common today, including for public sector organizations (Hameed, Khan, Sabharwal, Arain, & Hameed, 2019). Therefore, the preparation to be able to withstand the face of change must be owned by all stakeholders (Thakur & Srivastava, 2018).

Since the national reformation of 1998, the Government of Indonesia has continued to improve the quality of public services by increasing the Index of Government Effectiveness, which demonstrates an upward movement trend from 1996 to 2021 (GlobalEconomy, 2021). Consistent with the modern era, public services face an ongoing challenge to improve their speed, accuracy, and efficiency. To meet the growing demand for public services in terms of both quality and quantity, bureaucratic processes must be continuously improved (KemenPANRB, 2019). The Ministry of Finance (MoF) is tasked with assisting the President with financial and state assets affair including formulation and implementation of tax policies. The projected tax revenue in the State Budget Act for 2023 exceeds 2 quadrillion rupiah for the first time. As the custodian of public services in the field of taxation, each tax office in the nation must adapt to the future development of the growth dynamics of tax revenue targets (Ministry_of_Finance, 2022).

The implementation of information technology as one of the forms of transformation in line with the mission of the organization must be supported by an adaptive and collaborative organizational culture as well as an integrated, professional and motivated tax employees (DGT, 2022). The new system desired by the Government is called the Core Tax Administration System (CTAS) in which 2024 will begin to apply nationally. Other issue like delayering is the simplification of bureaucratic processes in which administrative employee are encouraged to become functional employee with expertise and competence is an external factor that also drives organizations to change. There is also the establishment of the organization of either merger, dissolution, elimination of many tax offices to optimize tax revenue through the maintenance of an efficient, effective, integrated and fair taxation administration, as well as to create a reliable organization.

Changes in the field of taxation not only on the organizational aspects, but also on the human resource aspects within them (DGT, 2021). The various changes experienced by the the organizations require adjustments to the human resource aspect not only the need for adjustment of work patterns, an understanding of changing business processes, and also a work culture. Every employee should be prepared to share various changes especially ahead of the nationwide implementation of the CTAS system next year.

Success in communication will depend on how a change is presented and discussed. (Palmer, Dunford, & Buchanan, 2017). Study find that involved communication is a factor affecting employeeï¿½s readiness to change (Hameed et al., 2019; Wardani et al., 2020). Participation in the change communication process has a positive effect on the change readiness of employees (Hameed et al., 2019). Organizations should encourage their employees to develop or share ideas so that, through a variety of daily activities in support of the change, employees feel accountable for the changes (Kebede & Wang, 2022). With approximately 44,000 employees dispersed across the country, communication involvement is crucial because the quality of communication also plays an important role in the change process, as it influences the cognition and commitment of employees and prevents resistance (Simoes & Esposito, 2014). For instilling awareness, perspective, and work patterns in accordance with the development of digital technology, material pertaining to change readiness is required for CTAS changes (PusdiklatPajak, 2022). The headquarters had provided numerous internal communication channels for media participation in controlling changes, including webinars, Fiskus app, Mantra app, Podcasts, Formal Meetings, In-House Training, Corporate Value Internalization, and/or official social media accounts. On occasion, organizational leaders also provide employees with the opportunity to monitor the evolution of the change and provide feedback on aspects.

Organizations when facing or undergoing change must also take leadership factors into consideration. Transformational leaders alter the perceptions of the people who follow them and encourage social identification by inspiring vision, which increases employee pride and loyalty to the organization (Buil, Martï¿½nez, & Matute, 2019). In an organization, the transformational leadership demonstrated by the leader is an intrinsic factor that tends to influence how the subordinate can act and show attachment to the organization (Breevaart et al., 2014; Schaufeli, 2015). Leaders minimize the followerï¿½s uncertainty in the organization by informing subordinates what they are supposed to follow, schedule, coordinate work, provide particular guidance, and clarify procedures and policies (Bose, Patnaik, & Mohanty, 2021). ï¿½Transformational leaders have vision and change their followers to do extraordinary things in changes period by increasing the productivity of their subordinate by organizing and acquiring the necessary skills (Abbasi, 2017).

During a period of change, organizational identification may serve as a intervening variable between involved communication and readiness for change (Lichtenstein, Maxham III, & Netemeyer, 2011). Organizational identification as the mechanism by which employees form a strong and lasting relationship with the organization (Hameed et al., 2019). Similarly, communication about organizational values, policies, procedures, priorities, structures, roles, and cultures is crucial for fostering a sense of organizational unity (Atouba, Carlson, & Lammers, 2019). Strong identification skills make employees more receptive to organizational change and less resistant to it (Hameed, Roques, & Ali Arain, 2013). The MoF initiated and implemented the collaborative effort "Kemenkeu Satu, Kemenkeu Tepercaya" as form of organizational identification to obtain a better system and work culture that requires all employees to emotionally engage with the organization (Ambarwati, 2022).

Based on the preceding explanation, research on the readiness for change on tax service employees confronted with change seeks to identify predictors of readiness for change. In terms of search results and the author's knowledge, research on change readiness in the public sector is still scarce. As a result, the author is interested in investigating the direct and indirect effects of involved communication and transformational leadership on public sector preparedness for change via the mediation of organizational identification.

Research Methods

Quantitative research methods are utilized in this form of study, which collects primary data via online questionnaires. The mean, standard deviation, item-total correlation, reliability, and exploratory factor analysis or factor loading did not differ between the 4, 5, 6, and 11-point Likert scales (Leung, 2011). Additionally, analyzing that the use of different scale formats, such as scale 5, 7, or 10, does not exhibit significant differences in standard deviation, skewness, or kurtosis (Dawes, 2008). Therefore, the researcher utilized a seven-point Likert scale to evaluate each variable's statement items. The readiness for change (RFC) variable statement includes seven statement items that correspond to the research conducted by Hameed et al. (Hameed et al., 2019). The statement for the involved communication (IC) variable comprises four statement items derived from Edwards' (Edwards, 2009) study. The seven item statements of leadership (LS) taken from Carlessï¿½s study (Carless, Wearing, & Mann, 2000). The organizational identification (OI) statement concludes with five research-based statement components from (Mael & Ashforth, 1992) and (Hameed et al., 2019).

Research questionnaires were disseminated via online channels to tax service employees as respondents. A purposive sampling was conducted based on the proportion of employees distributed across the six island groups. Researchers collected primary data from 387 respondents then using the Lisrel 8.8 software for further analysis. Figure 1 depicts the model utilized for this study.

Figure 1

Research Model

Results and Discussions

Descriptive Analysis

A large proportion of respondents are male, between the ages of 25 and 35, and have worked for more than 10 years but fewer than 15 years. In addition, more than half of respondents hold a bachelor's degree, and Java islands group is work location for the majority of tax service employees. For detail see Table 1.

Table 1

Respodent Profile

Respondent Characteristicï¿½s		N	%
Gender	Male	258	66,67
Gender	Female	129	33,33
Age	< 25 y.o	16	4,13
	25-35 y.o	237	61,24
	35-45 y.o	117	30,23
	45-55 y.o	15	3,88
	> 55 y.o	2	0,52
Tenure	3 ï¿½ 5 years	24	6,20
	≥ 5 ï¿½ 10 years	83	21,45
	≥ 10 ï¿½ 15 years	226	58,40
	≥15 years	54	13,95
Education	High school or equivalent	2	0,52
	Diploma I	35	9,04
	Diploma III	48	12,40
	Bachelor	222	57,36
	Master	78	20,16
	Doctoral	2	0,52
Islands group work location	Java	261	67,44
	Sumatera	65	16,80
	Kalimantan	23	5,94
	Sulawesi	15	3,88
	Bali & Nusa Tenggara	14	3,62
	Papua & Maluku	9	2,33

Confirmatory Factor Analysis

Confirmatory Factor Analysis (CFA) was used to examine the output values of Standard Loading Factor (SFL) for each indicator in relation to its corresponding variable to test the validity of all variables in the study. Considered variables RFC, IC, LS, and OI. CFA was employed to determine the relationship between observed measures or indicators and latent variables. CFA was used to ensure that the measured variables could represent the constructs with the desired level of accuracy (Hair, Black, Babin, & Anderson, 2019). It was supposed that the SLF values for each variable item would be more than 0.5. In instances where the SFL value was less than 0.5, it was possible to conclude that the item was invalid. According to Figure 2, all variables are valid because the loading values for each of the 23 statement items are greater than 0.50.

Figure 2

Standard Loading Factor

Reliability test

Table 2 depicts the application of Composite Reliability (CR) and Average Variance Extracted (AVE) for the validity test, which can be accomplished with Microsoft Excel. A composite reliability value greater than 0.7 indicates good measurement, and a variance extracted value greater than 0.5 also indicates good measurement (Wijanto, 2015). Table 2 displayed all of composite reliability value are greater than 0.7, and all of the the variance extracted value are greater than 0.5, indicating that the measurement model is good.

Table 2

Composite Reliability (CR) and Average Variance Extracted (AVE)

Variables	CR	AVE
RFC	0.9195	0.6248
IC	0.8402	0.5757
LS	0.9668	0.8062
OI	0.8372	0.5100

Goodness of Fit

Table 3 reveals that there are three categories of absolute fit measurements that meet the criteria, namely chi-square, RMSEA, and GFI. There are five indicators in the range of incremental with good fit and one indicator in the range of marginal fit. According to (Hair et al., 2019), the fit of the model do not need to satisfy all the criteria of goodness of fit, the use of four to five criteria is sufficient to evaluate the model's fit. RMR value that indicates not fit is not a problem because it only need one of RMRS, SRMR, or RMEA that has fit value (Malhotra & Dash, 2016). Therefore, it can be concluded that the model in this study already satisfies the criteria for goodness of fit and can be utilized for further analysis.

Table 3

Goodness of Fit

Measurement test

Test results

Description

Absolute

Chi-square

RMSEA

RMR

GFI

740.90 p-value=0,000

0.077

0.055

0.86

Fit

Good Fit

Not Fit

Marginal Fit

Incremental

NFI

NNFI

CFI

IFI

RFI

AGFI

0.97

0.98

0.97

0.82

Good Fit

Marginal Fit

Hypotheses test

Table 4 illustrates that there are several pairs of variables with t-statistics values greater than 1.96 and p-values less than 0.05, indicating all of relationship are significant. These pairs include IC to RFC, LS to RFC, IC to OI, LS to OI, and OI to RFC. The highest path coefficient is from the relationship ofï¿½ LS to RFC while LS to OI relationship has the highest t-statistic value.

Table 4.ï¿½ Hypothesis Testing

Correlation	t-statistics	Standardized Solution	Decision
H1: IC -> RFC	2,32	0.15	Supported
H2: LS -> RFC	4,75	0.35	Supported
H3: IC -> OI	5,70	0.32	Supported
H4: LS -> OI	8,88	0.52	Supported
H5: OI -> RFC	3,33	0.27	Supported

Mediating Variable

This study also investigates the role of OI as a intervening variable. This variable lies on two paths: between IC and RFC and also between LS and RFC. Based on Table 5, both of two path are partial mediation. Partial mediation is when an independent variable has a direct effect on the dependent variable and indirect effect on the dependent variable through one or more intervening variables (Hayes, 2018).

Table 5

Intervening Variable Test Results

Item	Path			Conclusion
Between IC and RFC	IC ï¿½ OI	OIï¿½ ï¿½ RFC	IC ï¿½ RFC	OI partially mediated IC and RFC
t-values	5.70	3.33	2.32
β	0.32	0.27	0.15
Total Effect	0,23 (0,32 x 0,27 + 0,15)
Between LS and RFC	LS ï¿½ OI	OIï¿½ ï¿½ RFC	LS ï¿½ RFC	OI partially mediated LS and RFC
t-values	8.88	3.33	4.75
β	0.52	0.27	0.35
Total Effect	0,49 (0,52 x 0,27 + 0,35)

Hypotheses Analysis

The coefficient on the path diagram between the IC and RFC shows a positive and significant relationship. From the results it can be said that the higher the communication involvement of employee, the higher their readiness for change. This findings is in line with research conducted by (Hameed et al., 2019) in abroad public sector and the study from (Wardani et al., 2020) in public health sector in Indonesia. Both researcher teams have proven that that when the employees in an organization are more involved in the communication process, they will feel more prepared to face change. In practice, the tax service organization has provided a vast array of internal communication channels for media participation in controlling changes, including: webinars, Fiskus app, Mantra app, podcasts, formal meetings, In House Training, Corporate Value Internalization, and/or Official Social Media Accounts. Frequently, organizational executives also provide employees with the opportunity to continue to monitor changes and provide feedback. The employee involvement through communication channels above may assist the employees in accomplishing assigned tasks and serve as a resource for follow-up when technical obstacles are encountered. Thus, if employees feel involved in decisions related to their field of work, it will have a direct impact on employeesï¿½ readiness to support change.

The coefficient on the path diagram between the LS and RFC shows a positive and significant relationship. From the results of this analysis can be said that the better transformational leadersip, the better level of employee readiness for change. This findings is in line with studies conducted by Abbasi (Abbasi, 2017). The main indicator that has the greatest contribution to transformational leadership is statement that my leader gives encouragement and recognition to me as his/her subordinates and the most dominant indicator of readiness for change is the that employees will be ready to support change. Organizations should therefore encourage leaders to be able to encourage and guide their subordinates by providing them with opportunities to develop themselves. Leaders can recognize their subordinates by recommending that they get appropriate training and formal academic education or technical assistance in the execution of a specific task.

The coefficient on the path diagram between the IC and OI shows a positive and significant relationship. From the results of this analysis can be said that the better involved communication employee, the better the organizational identification condition of employee. This findings is in line with studies conducted by three research teams (Atouba et al., 2019; Hameed et al., 2019; Wiesenfeld, Raghuram, & Garud, 1999) whom proved involved communication had a positive influence on organizational identification. The main indicator that has the greatest contribution to the variable IC is statement: employees feel involved in decisions related to their respective field of work and the most dominant indicator on organizational identification is statement: when one praises the achievement of the organization, it feels like also giving praise to the employee himself. High organizational identification conditions can be formed when an organization is able to manage praise and criticism from outside parties quickly and accurately.ï¿½ In addition, the organization through the performance assessment system also actively gives input periodically also contributes to the oneness of employees with the organization.

The coefficient on the path diagram between the LS and OI shows a positive and significant relationship. This findings is line with previous studies (Bose et al., 2021; Buil et al., 2019). With the support of leaders, subordinates will perceive their role in the organization to be more consistent and distinct because they focus on the subordinate's self-esteem within the organization. This awareness enables subordinates to understand their place within the organization (Bose et al., 2021). The main indicator that has the greatest contribution to the variable LS is statement my leader gives encouragement and recognition to me as his/her subordinates and the most dominant indicator on organizational identification is statement: when one praises the achievement of the organization, it feels like also giving praise to the employee himself. Therefore, leaders can give their subordinates vary opportunities to develop their abilities by providing challenging jobs and giving appreciation for their achievements in a fair way.

The coefficient on the path diagram between the OI and RFC shows a positive and significant relationship. From the results of this analysis can be said that the better employeeï¿½s organizational identification, the better the employeeï¿½s readiness for change. This findings is in line with studies conducted by research (Hameed et al., 2019; Hameed et al., 2013) teams. The main indicator that has the greatest contribution to the organizational identification variable is that employees will also feel praised when someone praises an organizationï¿½s achievement and the most dominant indicator of readiness for change is the that employees will be ready to support change. Thus, if an employee feels also praised when someone praises an organizationï¿½s achievement, it will have a strongest and direct impact on the employeeï¿½s readiness to support change. In case organizations are required to choose one of the mediation paths of organizational identification, eg: due to funding constraints, then organizations can choose to run programs that can increase the effectiveness of LS than IC. LS deserve priority because not only the direct effect is greater than IC but also the mediation effect is also better than IC.

Conclusion

The study highlights the influence of involved communication and transformational leadership on readiness for change with mediation of organizational identification in the public sector. Analytical data from 387 employees show all of hypotheses are positive and significant. This study is demanded to have a positive contribution on enhancing the readiness for change in public sector.ï¿½

This research has some limitations follows: first, quantitative research methods using questionnaires are not accompanied by an in-depth interview of respondent opinions to obtain further information related to the phenomenon being studied. Second, research subjects are limited to only one government agency, so that when research done in other research subject even in the same field in the public sector maybe produce different outputs. These two pieces of advice are for further research who might want to study more about the topic of readiness for change in the public sector.

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Rino Afriantoro, Aryana Satrya (2022)

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