THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP, LOCUS OF CONTROL AND EMPLOYEES' READINESS TO CHANGE: THE MEDIATING ROLE OF PSYCAP

Abstract

This study investigates the influence of transformational leadership and internal locus of control on readiness to change. We examine the role of psychological capital as the mediating construct. Data were collected by the survey from 149 employees working at several start-up companies in Indonesia. The findings reveal that transformational leadership directly influences readiness to change, while internal locus of control influences both directly and indirectly. The mediating role of psychological capital does not significantly affect the relationship between transformational leadership and readiness to change. We also found that psychological capital fully mediates the influence of internal locus of control on readiness to change. This study contributes to understanding the psychological mechanism of psychological capital as an essential tool to link the effect of internal locus of control in building employees’ readiness to change. Theoretical and practical implications and suggestions for further research are further discussed.