Fostering Industry 4.0 Readiness: Exploring the Synergy of Transitional Leadership, Dynamic Capabilities, and Organizational Support

ABSTRACT


Corresponding Author:
Afriza Ferdiansyah Bahono Faculty Of Business And Communication Swiss German University Tangerang Banten, Indonesia

BACKGROUND
The past decade has witnessed businesses facing escalating disruptions, necessitating quick adaptations to varying demands and substantial cost reductions [1].The emergence of Industry 4.0, characterized by transformative manufacturing practices, emphasizes agile value chain management [2].However, Indonesian automotive companies' Industry 4.0 readiness remains uncharted territory, with organizational strategy and structure being pivotal [3] Notably, while Industry 4.0's global presence is undeniable, its implementation in Indonesia lags behind.Figure 1 highlights that though 93% of Manufacturing firms are aware of Industry 4.0, only 9% have initiated its implementation (Ishardita Pambudi Tama et al., 2021).A survey of Southeast Asian corporate leaders underscored the significance of Industry 4.0's success while revealing that only 48% felt adequately prepared for the transition, echoing Indonesia's situation (McKinsey, 2017).The challenge of Indonesia's limited skilled labor and its intricate relationship with Industry 4.0's potential is acknowledged [4].Indonesian initiatives such as "Making Indonesia 4.0" outline strategies for Industry 4.0 adoption [5].Industry 4.0 implementation challenges include financial constraints, organizational resistance, and technology limitations [1].Transitional leadership emerges as a significant element, offering the potential to facilitate organizational readiness [6].Transitional leadership, characterized by employee involvement and emotional investment, plays a crucial role in organizational preparedness [7], [8].Dynamic capabilities, particularly adaptive resource reconfiguration, hold the key to successful Industry 4.0 adaptation [9], [10].Organizational structure flexibility, encompassing technology, processes, and transformation capabilities, aids Industry 4.0 integration [11].A fundamental challenge is employees' confidence in navigating Industry 4.0's uncertainty, necessitating supportive leadership and organizational backing [12].These aspects emphasize the interplay of transitional leadership, dynamic capabilities, perceived organizational support, and Industry 4.0 readiness.However, gaps remain in understanding the intricate relationships among these elements [13].While existing research addresses Industry 4.0 adoption and organizational change, comprehensive studies integrating leadership, resource-based views, and digital transformation are lacking, impeding a holistic comprehension of the subject.As such, exploring the synergies and dynamics of these components becomes essential to unlocking a comprehensive understanding of Industry 4.0's readiness and implementation.The study focuses on the Indonesian automotive manufacturing industry, examining the connections between transitional leadership, dynamic capability, perceived organizational support, and Industry 4.0 readiness.Targeting respondents across organizational levels, the research delves into how these factors interact in this specific context.However, its scope is restricted to the automotive sector, encompassing local, joint venture, and foreign-owned firms, which could limit generalizability.Using cross-sectional data and statistical analysis, the study provides insights into current conditions, though causal relationships may not be established.The study's theoretical value lies in confirming interrelationships, while its practical significance aids automotive stakeholders in understanding these dynamics, identifying influential constructs, and potentially redirecting focus toward non-technological aspects for Industry 4.0 readiness within the industry.

LITERATURE REVIEW
The concept of Transitional Leadership (TL) is explored through antecedents and outcomes.Personality traits influence TL emergence [14], which then impacts perceptions of job quality and individual care [15].Positive job attitudes encourage extra-role behaviors essential to TL [7], [16].TL enhances employee performance and commitment, stimulating the willingness to seek new opportunities [7].TL's outcome of research and learning aligns with the antecedent for Dynamic Capabilities, suggesting a positive relationship between TL and dynamic skills.Perceived Organizational Support theory emphasizes employees' views on company care and value (Eisenberger et al., 1986; Rhoades & Eisenberger, 2002).TL-driven motivation leads to favorable job conditions, creativity, innovation, and added value, fostering perceived organizational support (Gallo & Hlupic, 2019).The hypothesis of TL's positive effect on perceived organizational support is grounded in these relationships In the context of Industry 4.0, TL is deemed vital for business survival and growth [17].TL's development of employee capabilities influences competitiveness, future viability, qualifications, acceptance, and strategy alignment.This study also posits that TL positively influences Readiness for Industry 4.0 based on these discussions.Industry 4.0, characterized by advancements like cyber-physical systems and the IoT, aims to enhance dynamic capabilities in businesses.This research also highlights a positive relationship between dynamic capability and readiness for Industry 4.0, emphasizing that dynamic capabilities yield competitive advantages and managerial competencies that feed into strategic readiness for Industry 4.0.Next part of this study explores the association between perceived organizational support and readiness for Industry 4.0.The outcomes of perceived organizational support, including reduced strain and increased desire to remain, are identified as antecedents influencing the organizational environment and individuals, thus contributing to Industry 4.0 readiness.The premise of a positive correlation between perceived organizational support and readiness for Industry 4.0 is supported.

RESEARCH METHOD
The research methodology encompasses several key components.The research method involves a quantitative approach with a cross-sectional time horizon.The study's goal is to evaluate correlations among constructs using a deductive approach and primary data collected through questionnaires.The research design encompasses a descriptive, explanatory, and confirmatory approach.The study's research context involves manufacturing industry companies in Indonesia preparing for Industry 4.0, targeting multilevel positions within the firms.The population and sample selection are carried out using stratified random sampling, dividing the population into relevant groups.Data collection involves self-administered online questionnaires distributed to randomly selected industrial companies in Indonesia.The study's variables include four main constructs: Transitional Leadership (TL), Dynamic Capability (DC), Perceived Organizational Support (POS), and Readiness for Industry 4.0 (RI).

RESULT AND DISCUSSION
This study investigates five hypotheses: (1) the connection between transitional leadership and dynamic capability; (2) the link between transitional leadership and perceived organizational support; (3) the association between transitional leadership and readiness for Industry 4.0; (4) the correlation between perceived organizational support and readiness for Industry 4.0; and (5) the relationship between dynamic capability and readiness for Industry 4.0.The results reveal support for four hypotheses, confirming the positive relationships between transitional leadership and dynamic capability, transitional leadership and perceived organizational support, perceived organizational support and readiness for Industry 4.0, and dynamic capability and readiness for Industry 4.0.However, the third hypothesis, which posits a connection between transitional leadership and readiness for Industry 4.0, is not substantiated as shown below Overall, the study contributes the significance of dynamic capabilities and perceived organizational support as key factors in preparing organizations for the challenges of Industry 4.0.

CONCLUSSION
The rise of Industry 4.0 presents a critical juncture for the manufacturing sector, where technological strides promise efficiency gains but demand swift adaptation.In this context, effective leadership, particularly transitional leadership (TL), emerges as a linchpin for organizations, especially within the automotive manufacturing industry, to navigate challenges and gear up for Industry 4.0.By nurturing dynamic capabilities and fostering a conducive environment through TL dimensions like idealized influence, customized consideration, inspirational motivation, and intellectual stimulation, companies can cultivate adaptability.This study underscores the pivotal role of TL in bridging gaps among constructs such as dynamic capability, perceived organizational support, and readiness for Industry 4.0, emphasizing the need to prioritize human resources and cohesive leadership to facilitate successful technological transitions.

Figure 1 Figure 1 . 1
Figure 1 Recent Knowledge Related with Industry 4.0 Figure 1.1 Recent Knowledge Related with Industry 4.0 (Ishardita Pambudi Tama, Ceria Farela Mada Tantrika, Dewi Hardiningtyas Effendi Mohamad, 2021).Figure1highlights that though 93% of Manufacturing firms are aware of Industry 4.0, only 9% have initiated its implementation (Ishardita PambudiTama et al., 2021).A survey of Southeast Asian corporate leaders underscored the significance of Industry 4.0's success while revealing that only 48% felt adequately prepared for the transition, echoing Indonesia's situation(McKinsey, 2017).The challenge of Indonesia's limited skilled labor and its intricate relationship with Industry 4.0's potential is acknowledged[4].Indonesian initiatives such as "Making Indonesia 4.0" outline strategies for Industry 4.0 adoption[5].Industry 4.0 implementation challenges include financial constraints, organizational resistance, and technology limitations[1].Transitional leadership emerges as a significant element, offering the potential to facilitate organizational readiness[6].Transitional leadership, characterized by employee involvement and emotional investment, plays a crucial role in organizational preparedness[7],[8].Dynamic capabilities, particularly adaptive resource reconfiguration, hold the key to successful Industry 4.0 adaptation[9],[10].Organizational structure flexibility, encompassing technology, processes, and transformation capabilities, aids Industry 4.0 integration[11].A fundamental challenge is employees' confidence in navigating Industry 4.0's uncertainty, necessitating supportive leadership and organizational backing[12].These aspects emphasize the interplay of transitional leadership, dynamic capabilities, perceived organizational support, and Industry 4.0 readiness.However, gaps remain in understanding the intricate relationships among these elements[13].While existing research addresses Industry 4.0 adoption and organizational change, comprehensive studies Reliability is assessed using Cronbach's alpha values, and confirmatory factor analysis (CFA) is conducted to evaluate construct validity.The questionnaire development process involves adapting questions from previous studies, translating them, and conducting a pilot test for refinement.Data coding is established for each construct and variable.The data analysis employs structural equation modeling (SEM) through LISREL software, assessing relationships and fit indices for the model.The overall structural model, which includes all of the variables observed from the various constructs in the theoretical study model, is shown in figure below: