The Effects of Authentic Leadership and Perceived Organizational Support on Readiness for Change: The Mediating Role of Psychological Capital

Abstract

Organizational transformation has become increasingly important as organizations face digital disruption, sustainability pressures, post-merger integration, and evolving competitive environments. The study examines the effects of Authentic Leadership and Perceived Organizational Support on Readiness for Change, with Psychological Capital serving as a mediating mechanism.

Drawing upon Organizational Readiness for Change Theory, Social Exchange Theory, Organizational Support Theory, and Positive Organizational Behavior Theory, this study proposes that leadership and organizational resources enhance employees’ readiness for change both directly and indirectly through Psychological Capital. Data were collected from 428 first-line managers working in plantation estates and sugar mills undergoing large-scale organizational transformation. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM).

The findings reveal that Authentic Leadership and Perceived Organizational Support significantly influence Readiness for Change. Both variables also positively affect Psychological Capital, which in turn enhances employees’ readiness for change. Mediation analysis confirms that Psychological Capital serves as a critical psychological mechanism linking organizational resources to readiness for change.

The study contributes to the change management literature by integrating leadership and organizational support perspectives within a unified readiness-for-change framework and by identifying Psychological Capital as an underlying explanatory mechanism. The findings also provide practical implications for organizations undergoing transformation where leadership, organizational support, and employee psychological resources play a crucial role in facilitating successful change implementation.