Dynamic organisational capabilities: The role of authentic leadership and trust

Abstract

Orientation: The world of work has become unstable and precarious, thereby accentuating the need to maintain dynamic capabilities such as sensing, seizing and reconfiguring to adapt and thrive. Associated challenges potentially threaten the well-functioning of organisations and their employees. This problem might be alleviated by encouraging the leaders to be more authentic, resulting in various positive outcomes.

Research purpose: The aim of the study was to assess the associations authentic leadership (AL) have with trust in organisation (TO), trust in colleagues (TC) and dynamic organisational capabilities (DC) such as sensing, seizing and reconfiguring as these manifest within a context of extreme volatility.

Motivation for the study: Having a high level of DC might contribute to the feasibility of successful organisations in the struggling manufacturing industry, as it could enhance their sustainability and competitiveness.

Research approach/design and method: A quantitative cross-sectional survey design was used. The Authentic Leadership Inventory, Workplace Trust Survey and Dynamic Capabilities questionnaire were administered.

Main findings: AL positively associates with TO, TC and DC. The direct effect of AL on DC was further enhanced through both TO and TC as underlying mechanisms.

Practical/managerial implications: Manufacturing industry organisations should promote an AL style as it will contribute to higher levels of TO, TC and eventually improved DC.

Contribution/value-add: Our study highlights the association of AL with DC as an important outcome. Insight into the underlying mechanisms by which AL achieves effect is advanced through trust, simultaneously targeting interpersonal as well as organisational levels as foci.