INVESTIGATING THE LINK BETWEEN TRANSFORMATIONAL LEADERSHIP, PSYCHOLOGICAL EMPOWERMENT, AFFECTIVE COMMITMENT AND ORGANIZATIONAL CITIZENSHIP BEHAVIOR IN THE PHARMACEUTICAL SECTOR OF INDONESIA

INVESTIGATING THE LINK BETWEEN TRANSFORMATIONAL LEADERSHIP, PSYCHOLOGICAL EMPOWERMENT, AFFECTIVE COMMITMENT AND ORGANIZATIONAL CITIZENSHIP BEHAVIOR IN THE PHARMACEUTICAL SECTOR OF INDONESIA

Sri Handayani ¹, Udin^*1, Ahyar Yuniawan ¹, Tri Wikaningrum ² and Sri Supriyati ³

Diponegoro University ¹, Jl. Erlangga Tengah No. 17, 50241, Semarang, Indonesia.

Sultan Agung Islamic University ², Jl. Terboyo Kulon, Semarang, Indonesia.

Institute of Health Sciences Kendal ³, Jl. Laut, Ngilir, No. 31, 51311, Kendal, Indonesia.

ABSTRACT: Modern organizations face increasing competition due to globalization, technological change, politics and economics. In order to cope with these, public organizations, including organizations at the central and local government levels, must improve their efficiency and performance to reflect the presence of organization in other countries. Leaders, therefore, must act more quickly in encouraging and motivating followers to achieve goals in groups and organizations; doing organizational transformation by explaining their vision in the future; and effectively driving employees growth. This study aims to investigate whether transformational leadership is associated with psychological empowerment, affective commitment, and organizational citizenship behavior. By using partial least squares (PLS) based structural equation modeling (SEM) technique to analyze 244 employees working in Indonesian’s pharmaceutical sector, the results show that transformational leadership is significantly associated with psychological empowerment, affective commitment, and organizational citizenship behavior as well as psychological empowerment is significantly associated with affective commitment and organizational citizenship behavior; and at the same time, affective commitment is not significantly associated with organizational citizenship behavior. The findings imply that management should take into consideration the transformational leadership style in terms of inspirational motivation, individual consideration, intellectual stimulation and idealized influence to encourage and improve OCB, psychological empowerment, and affective commitment of employees.

Transformational leadership, Psychological empowerment, Affective commitment, Organizational citizenship behavior

INTRODUCTION: Modern organizations face increasing competition due to globalization, technological change, politics and economics. In order to cope with these, many experts argue that public organizations, including organizations at the central and local government levels, must improve their efficiency and performance to reflect the presence of organization in other countries ¹.

Leaders, therefore, must act more quickly in encouraging and motivating followers to achieve goals in groups and organizations; doing organizational transformation by explaining their vision in the future; and effectively encouraging employees growth ².

Some studies have reported that transformational leadership has a positive effect on employee outcomes, especially including satisfaction, commitment and employee achievement ^{3, 4}. Transformational leadership plays an important role in effort to achieve organizational goals and foster the development of employee innovative behaviors and other work behaviors, such as affective commitment and organizational citizenship behavior ^{1, 5}. Previous studies have examined the relationship between transformational leadership and organizational citizenship behavior with respect to trust, psychological empowerment, job satisfaction, personal identification, motivation, organizational commitment, job involvement, self-efficacy, and procedural justice ^{1, 3, 6 - 9}.

Previous research that examined the relationship between transformational leadership and organizational effectiveness more focus on organizations in North America than in Asia. Furthermore, several studies have examined these relationships in the context of public sector in Asia ^{1, 10}, but it has no highlighted to Indonesian public sector in particular. Therefore, this study focuses on pharmaceutical organizations in Asia particularly in Indonesia by identifying methodological issues concerning the linkage between transformational leadership, psychological empowerment, affective commitment, and organizational citizenship behaviour.

Literature Review and Hypotheses:

Organizational Citizenship Behaviour: Recent years have shown to scientists and managers about employee discretionary behaviors, especially the behaviors that can improve work effectiveness in the period of dramatic change ¹¹. This is because of these behaviors are closely related to task performance ¹², which can lead to increase organizational effectiveness and efficiency ¹³.

Organizational citizenship behavior (OCB) is defined by Organ ¹⁴ as extra role behavior that goes beyond the roles and responsibilities described. Barker ¹⁵ defines OCB as a discretionary and facilitative behavior that has no related to the formal reward system of organization and can lead to increase organizational effectiveness. Organ ¹⁴, Podsakoff et al., ¹⁶ divided OCB into five sub-dimensions: civic virtue, conscientiousness, altruism, courtesy, and sportsmanship. Civic virtue refers to actively involvement in dealing with organizational problems and issues, such as offering innovative ideas to promote organizational growth and development ⁶. Conscientiousness refers to the behaviors that in accordance with organizational rules and instructions, such as not taking unnecessary rest and reporting to work on time. Altruism means helping peers in need. Courtesy is linked to the actions that can prevent problems, such as avoiding practices that make others work harder and giving sufficient notice to employees so that they can manage over workload. Sportsmanship refers to the acts of tolerance of various problems that exist within the organization ¹⁴.

Transformational Leadership: According to Mac Kenzie et al., ¹⁷transformational leadership is to motivate followers to try and show their performance go beyond simple exchange of rewards. Bass and Avolio ² argued that transformational leadership is motivating followers to exceed their expectations by making awareness of the importance of particular goals, making followers incorporate self-interest for the benefit of the organization, and motivating them to achieve, grow, and self-actualize.

Bass and Avolio ² classified transformational leadership dimensions into four categories: (1) Idealized influence: Transformational leaders become role model for followers, facilitate acceptance of group goals, and encourage them to upgrade their organizational goals; (2) Intellectual stimulation: Leaders help followers to identify new approaches when they face difficult challenges; (3) Individual consideration: Leaders pay more attention to the needs of followers, act as mentors, and listen to the followers complaints; and (4) Inspirational motivation: Leaders communicate high expectations to followers, inspire them through motivation to commit and become part of a shared vision of the organization.

Transformational leadership behaviors get highly attention in terms of its relationship to OCB followers ^{3, 18}. The scientists found a positive influence of transformational leadership on OCB - particularly with regard to helpful behavior and organizational compliance ¹⁹, and helpful behavior, organizational compliance and civic virtue ¹⁸.

When transformational leaders function as role model and pay special attention to the needs of individual followers and common goals, they encourage followers to engage in self-sacrificing behavior related to OCB ¹⁸. Several studies have reported a direct influence between trans-formational leadership behaviors and OCB ^{7, 8}.

Based on strong theoretical and empirical evidence, the proposed hypothesis is:

Hypothesis 1: Transformational leadership positively related to OCB. Epitropaki and Martin ²⁰ noted that transformational leaders are able to empower followers to develop their conviction that they are seriously viewed as valuable assets of organization. Several studies have reported a strong positive impact of transformational leadership on psychological empowerment ^{10, 21}. Based on strong evidence, the proposed hypothesis is:

Hypothesis 2: Transformational leadership positively related to psychological empowerment. Trans-formational leaders build an environment in which followers are more likely to be committed to their organization. Many studies have shown a positive influence of transformational leadership on employee organizational commitment ^{10, 22}. The results of Kim's study ²³ indicated a positive relationship between transformational leadership and affective commitment. Based on strong theoretical and empirical evidence, the proposed hypothesis is:

Hypothesis 3: Transformational leadership positively related to affective commitment.

Psychological Empowerment: Psychological empowerment has been viewed as an important variable in terms of employee attitudes and behaviors ²⁴. Psychological empowerment is considered as a process of enhancing the sense of self-efficacy and encouraging task motivation, reflecting the individual attitudes related to work, career and purpose of life ²⁵.

According to Spreitzer ²⁶, psychological empowerment consisted of four dimensions: competence, meaning, self-determination and impact. These dimensions display the status of active employees. Competence refers to an individual belief in his or her capacity to successfully perform a given task ²⁶. Meaning is the value and personal standard that individual is placed in accordance with the demand for a given job ²⁵. Self-determination or choice involves a feeling of autonomous individual to initiate and manage action in the workplace. Impact refers to the extent of individual behavior related to work that result a difference outcome to organizational ²⁵.

Conger and Kanungo ²⁷ stated that psychological empowerment is a kind of internal motivation that is useful in promoting OCB. Psychologically empowered employees render better about the tasks they perform and consider it as a meaningful and challenging. Thus, employees who are psychologically empowered perform better and show higher OCB. Morrison ²⁸ explained that empowerment can encourage employees, increase their motivation, ideal, and demonstrate OCB. The findings of Jha ⁸, Wat and Shaffer ²⁹ also showed that employee psychological empowerment significantly influence OCB. Based on strong theoretical and empirical evidence, the proposed hypothesis is:

Hypothesis 4: Psychological empowerment positively related to OCB. Psychological empowerment is achieved by encouraging employees’ belief about the meaning of their work, their ability to accomplish the tasks, and their sense of self-determination to influence outcomes of their work ³⁰. Previous research has shown that empowered followers display better commitment to the organization ^{21, 31}. Based on strong theoretical and empirical evidence, the proposed hypothesis is:

Hypothesis 5: Psychological empowerment positively related to affective commitment.

Affective Commitment: The concept of organizational commitment has been defined in various ways. Mowday et al., ³² defined organizational commitment as the extent to which employees identify or understand deeply about values or norms of their organization. O'Reilly and Chatman ³³ defined organizational commitment as the perceived psychological affection of employees to their organizations.

Allen and Meyer ³⁴ divided organizational commitment into three dimensions, namely affective, continuous, and normative commitment. Affective commitment refers to the emotional attachment of employees to the organization; Continuous commitment refers to the perceived cost of an employee when leaving the organization or refers to something valuable that the employee has invested, which will be lost when employee leaves the organization; and normative commitment is defined as the perceived task of employees to remain within the organization. The study of the relationship between affective commitment and OCB in public organizations in Asia, especially in Korea, Kim ^{1, 23} reported that affective commitment is positively associated with OCB dimensions such as altruism, civic virtue, and conscientiousness.

Affective commitment can make employees more likely to help co-workers who have a heavy workload (altruism); abided the rules and instructions of the organization (conscientious-ness); refrain from complaining about trivia (sportsmanship); and voluntarily participate in meetings (civic virtue). Based on theoretical and empirical evidence, the proposed hypothesis is:

Hypothesis 6: Affective commitment positively related to OCB.

MATERIALS AND METHODS:

Sample and Data Collection: The population of this study was all civilians who working in the pharmaceutical sectors in four large cities of Southeast Sulawesi - Indonesia, which were Kendari, Kolaka, Bau-bau, and Wakatobi City. The sample was conducted using simple random sampling techniques. Technique of data collection was done by distributing 268 questionnaires. After deletion of incomplete responses, 244 questionnaires were usable and analyzed. Out of 244 respondents, 52% were male and 48% were female. In addition, the respondents generally were dominated by the age of 31 - 40 years (40%) and 41 - 50 (30%). With respect to the educational level of respondents, the majority (87%) were graduated from university and 13% went to senior high school (refers to Table 1).

Measurement: The total questionnaires consisted of 16 items. All items were measured using a 5-point Likert scale where 1 = strongly disagree and 5 = strongly agree. Organizational citizenship behavior (OCB) was measured using 5 items including altruism, conscientiousness, civic virtue, courtesy and sportsmanship ³⁵. Affective commitment was measured using 3 items adopted from Organizational Commitment Scale ³⁶. Psychological empowerment was measured using 4 including competence, meaning, self determination and impact which adopted from Empowerment at Work Scale ²⁶. Transformational leadership was measured using 4 items including idealized influence (charisma), intellectual stimulation, individualized consideration, and inspirational motivation which adopted from Multifactor Leadership Questionnaire (MLQ-5X) ².

TABLE 1: DESIGNATION OF THE RESPONDENTS

Structural Equation Modelling and Partial Least Square: Structural equation modelling (SEM) is a multivariate analysis technique to test theoretical model that hypothesized by the researcher by using a combination of statistical data and qualitative causal assumption ³⁷. This approach is more confirmatory than exploration, and more suitable for theory testing than theory development. The results of SEM include two components, namely the measurement model and the structural model. The measurement model provides the relationship between latent variables and observed variables, which aims to provide reliability and validity based on these variables. The structural model provides the path strength and the direction of the relationship between latent variables. The combination of both is essential to ensure the quality of a research ³⁸.

SEM can be categorized into two approaches include: (1) covariance-based approach, which is related to some tools such as EQS and Analysis of Moment Structures (AMOS); and (2) variance-based approach, which is related to Partial Least Square (PLS). Thus, in this research, PLS approach was chosen to analyze the data because of the following reasons: research on requirements relationships is relatively new, and there is no measurement model that is already available. PLS can be a reasonable technique to be used when the phenomenon to be investigated is relatively new ³⁹.

RESULT AND DISCUSSION: The measurement model showed that all of the standardized factor loadings of each construct were high (above 0.50) that ensured the convergent validity ⁴⁰. Composite reliability and cronbach α for all the four constructs was above 0.70 that ensured the internal consistency ⁴⁰. The average variance extracted (AVE) from all constructs exceeds the cut-off criterion of 0.50 and were greater than the squared correlations between any pair of constructs (refers to Table 2). Since all the figures and measurement of reliability and validity of the measurement items, therefore, this research tested the same measurement model for further testing of the structural models and hypotheses.

TABLE 2: RESULTS OF MEASUREMENT MODEL

Test of Hypotheses: Fig. 1 and Table 3 contained the results of the Smart PLS M3 Version 2.0 software process that was carried for Ringle et al.,⁴¹ which was performed to test the proposed hypotheses H1 until H6.

FIG. 1: HYPOTHESES TESTING

TABLE 3: SUMMARY OF HYPOTHESES TESTING RESULTS

The empirical results showed that (1) transformational leadership positively related to OCB (0.729, t - value = 21.911), psychological empowerment ((0.150, t - value = 2.738), and affective commitment (0.099, t - value = 2.194); (2) Psychological empowerment positively related to OCB (0.098, t - value = 3.399), and affective commitment (0.426, t - value = 7.850); and (3) affective commitment did not relate to OCB (0.013, t - value = 0.252). The empirical findings supported hypotheses H1, H2, H3, H4, and H5, whereas the result did not support hypothesis H6.

There is a very little research attempted to test the direct or indirect relationship between trans-formational leadership and OCB ^{9, 23}. For example, Podsakoff et al., ³⁵ used job satisfaction as a mediating variable and reported that transformational leadership has a positive indirect influence on OCB. Leithwood and Jantzi ¹⁹ suggested that transformational leadership has a positive influence on the two dimensions of OCB (helping and compliance). In addition, Organ et al., ⁹ asserted that leadership style has a significant positive influence on two types of OCB (altruism and conscientiousness), with job satisfaction as a mediating variable. They also argued that transformational leadership has a positive indirect influence on sportsmanship, civic virtue, and conscientiousness through job satisfaction and trust, and transformational leadership has a positive direct influence on altruism.

Through mentoring and coaching, transformational leaders shape employees behavior and nurture them to become better individuals. Transformational leaders have a long-term vision for the organization and prepare their subordinates to achieve it. They assist employees in visualizing their own goals and organizational goals. Transformational leaders also provide direction by inspiring employees to make extra efforts and place organizational goals above individual goals ⁸.

Transformational leaders often emphasize collaboration, attainment of tasks collectively, learn through shared experience, control and freedom of decision making, and delegate authority to implement ideas that encourage employee participation in the formation and implementation of the ideas. Thus, transformational leadership builds a work environment where employees feel motivated, competent and independent to experience psychological empowerment ⁴². In other words, the more transformational leaders act as exemplary models, paying particular attention to employee achievement and growth through coaching and mentoring; articulate vision; and encourage employees to show innovation and creativity in new ways, the more likely employees have identification with organizational values, goals, and norms.

When employees equate their success with their organizations and identify organizational values, goals and norms, they tend to work together to make a positive contribution to the organization ³, which in turn makes employees more likely to support their colleagues (altruism), presenting positive ideas for organizational development (civic virtue), in accordance with organizational rules and procedures (conscientiousness), avoiding practices that make other employees jobs more difficult (courtesy), and being tolerant to organizational problems (sportsmanship) ¹¹.

The concept of empowerment means that employees learn the importance of taking initiative and decision making, and respond to the challenges of their work innovatively ²⁶. Psychological empowerment is not only about sharing responsibility and delegating power by superiors, but also involving subordinates who accept the tasks and responsibilities that have been delegated to them. Employees who are psychologically empowered feel comfortable with the task they are doing and regard it as challenging and meaningful. Thus, employees who are psychologically empowered are able to perform better and show higher OCB. Previous researches had shown that empowered employees demonstrate better commitment to the organization ^{31, 43}. Psychological empowerment leads to motivating employees to take initiative and show endurance at work; giving higher meaning of employees to work; and inculcating higher organizational commitment within employees ⁴⁴.

Employee commitment is consistently found to be related to critical behavior in the workplace. Affective commitment facilitates employees in creating trust and strong acceptance of the goals and values of an organization ⁴⁵. According to collectivist perspective, employees who have strong collectivistic cultures can show greater loyalty and attachment to their group, so that collective individuals will form affective enchantment to the larger organizations ⁴⁶.

In addition, the present study found that affective commitment is not related to OCB. This result is different from the previous findings of Jain ⁴⁷, Kim ²³, Lavelle et al., ¹¹, and Mac Kenzie et al., ¹⁷ who found that affective commitment is related to OCB. This may be due to the characteristics of Indonesian organizational culture reflecting the collectivist society ⁴⁸ and emphasizing the harmonization of employees, working together, helping each other, and religious values to do better for humanity.

CONCLUSION: Overall, this study extends theory and empirical research that transformational leadership is positively related to employee work attitudes, such as OCB, psychological empowerment, and organizational affective commitment. The results of this study provide theoretical basis for leadership management. According to the findings, organizations especially top management should improve leadership skills in terms of inspirational motivation, individual considerations, intellectual stimulation and idealized influence. There is an interesting point in this study that transformational leadership has a significant influence on employee work attitudes.

The results of this study provide implications for management that organizations can train leadership in terms of inspirational motivation, individual considerations, intellectual stimulation and idealized influence to encourage and improve OCB, psychological empowerment, and affective commitment of employees.

Like most other studies, this study has limitation that must be considered, that is related to the generalization of research. Using simple random sampling technique tends to decrease one's belief that the sample is representative of the population. Similarly, the clan or tribe of each region in Indonesia needs to be considered to obtain a convincing result of the research. Although this study demonstrates the relevance of transformational leadership, psychological empowerment, and affective commitment to OCB, this study does not take into account a number of other variables that may influence reported results. Therefore, future studies should incorporate experimental and longitudinal design to establish further conclusions on the direction of causality.

ACKNOWLEDGEMENTS: This study was partially supported and sponsored by C. V. Ning Sri Stone Crusher.

CONFLICTS OF INTEREST: None.

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    How to cite this article:

    Handayani S, Udin, Yuniawan A, Wikaningrum T and Supriyati S: Investigating the link between transformational leadership, psychological empowerment, affective commitment and organizational citizenship behavior in the pharmaceutical sector of Indonesia. Int J Pharm Sci Res 2018; 9(2): 766-74.doi: 10.13040/IJPSR.0975-8232.9(2).766-74.

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