Organizational Innovation Climate to Improve Employee Innovative Behaviour Through Psychological Ownership in Employees in the Department of Marine Affairs and Fisheries of East Java Province, Indonesia

Organizational Innovation Climate to Improve Employee Innovative Behaviour Through Psychological Ownership in Employees in the Department of Marine Affairs and Fisheries of East Java Province, Indonesia

Eliza Novi Rahmadania and Amiartuti Kusmaningtyas

Faculty of Economics and Business, Universitas 17 Agustus 1945 Surabaya, Indonesia

DOI: https://dx.doi.org/10.47772/IJRISS.2025.9010222

Received: 11 January 2025; Accepted: 15 January 2025; Published: 13 February 2025

ABSTRACT

Innovation is highly crucial for the survival of organizations in dynamic environments. However, how the combined effects of organizational innovation climate and psychological ownership influence employees’ innovative behaviour has received limited research, especially in the public sector. This study attempts to fill this gap by investigating how the organizational innovation climate influences the psychological ownership and innovative behaviour of employees in the East Java Provincial Marine and Fisheries Service, Indonesia. A quantitative approach was applied, and 78 respondents were selected by simple random sampling. Data collection was done through questionnaires, while the data analysis was done using SmartPLS, path analysis. Results indicate that organizational innovation climate significantly influences psychological ownership and employee innovative behaviour. However, psychological ownership does not lead to a significant impact on innovative behaviour of employees, which means that supportive organizational conditions are essentially required for innovation to take place. These findings confirm the Resource-Based Theory, which focuses on the organizational resources as a source of competitive advantage. The practical implications are the enabling innovative climate development to enhance the employee’s creativity and innovation capability in public sector institutions for better organizational performance.

Keywords: Behaviour, Creativity, Innovation, Ownership, Organizational Innovation Climate

INTRODUCTION

In the ever-evolving digital times, businesses all over the world face new challenges and opportunities that require adaptation and innovation. Innovation has shifted from being a choice to a strategic imperative for any organization willing to survive and thrive in a shifting business environment (Han et al., 2023). Innovation involves the implementation of new ideas, methods, or products to improve performance, efficiency, and effectiveness in goal achievement (Dai et al., 2024), it is regarded as the key to organizational survival. In such a context, the importance of employees’ role as the driving force for innovation has increased.

Innovative behaviour refers to the work employees do show one’s capacity for generating or creating something worth mentioning in every working environment (Muliana & Mansyur, 2024). Han et al. (2023) emphasized employee innovative behaviour enhances the innovation potential of the organization, besides helping survive the organizational death phenomenon. Other studies have shown that this behaviour enables organizations to adapt to the complexity of the business environment, thus becoming the basis for competitive advantage (You et al., 2022).

Employee innovative behaviour is a complex process, from idea development to implementation in the work context. Organizations are supposed to create an enabling environment and supportive conditions for this purpose. According to Gusmayanti et al. (2023), innovative behaviour might be generated with the help of a positive organizational climate. With organizational support, employees will be braver in offering new ideas that can upgrade efficiency and quality of service.

This has also been added by Wibawa et al. (2024), who pointed out that a good working atmosphere with transparency and psychological support will eventually contribute to higher outcomes from the work team. The organizational innovative climate, however, is very much crucial to encourage an enabling attitude towards pursuing innovation by the employees.

Among the factors of employee innovative behaviour, psychological ownership occupies a rather special place. In such a way, according to Ulum (2017), Resource-Based Theory underlines that only an enterprise’s internal resources may generate real competitive advantages for it. It is plain that workers who feel owners of their activity would show greater responsibility and commitment to job completion. Yet, this attitude of psychological ownership will grow only in the case of proper conditions created by an organizational innovative climate.

A study conducted by You et al. (2022) proved that the organizational innovation climate would provide important motivation to inspire employees in providing new ideas. In this context, support given by an organization avails opportunity for innovativeness and consequently improves overall organizational performance. This agrees with Mehmood et al. (2023), where the findings reveal that employee creativity and innovation are valuable corporate assets in realizing a competitive advantage on a sustainable basis.

Innovation in various fields becomes a necessity that must be faced by institutions in the modern era. One of the institutions that should do this is the East Java Provincial Marine and Fisheries Service as an institution responsible for managing the marine and fisheries sector; this agency needs to increase efficiency, effectiveness, and sustainability through adaptation to changing conditions with innovation. Having the main tasks of increasing the production side of the fisheries with concern for the marine ecosystem, innovative behaviour is very important in this agency.

Innovative behaviour from employees may enable the East Java Provincial Marine and Fisheries Service to create new solutions for complex problems. They can implement new technologies, new work methods that are more efficient, and relevant development concepts. Identification of organizational innovation climate and psychological ownership factors affecting innovative behaviour is important in this case.

This research is a study of the innovation climate in organizations, psychological ownership, and innovative behaviours found among employees at the East Java Province Marine and Fisheries Service. The proposed conceptual model represents the research of You et al. (2022), adjusted according to the conditions of the subject of study being researched. The current study should add to that knowledge and shed light on how these factors influence one another in driving innovations within the marine and fisheries industry.

METHODS

The research approach underlying this research applies the quantitative method, so in the research conducted, the relationship among variables is systematically and measurably considered. This research involves all employees of East Java Provincial Marine and Fisheries Services with a population of 350 persons in total. Sampling Slovin’s formula was used to get an error tolerance of 10%, and the result presented 78 respondents. Simple random sampling is then applied as a technique in drawing samples for the research. Data collection was done by distributing a questionnaire through Google Forms.

Variables analysed in this study are Organizational Innovation Climate as the independent variable, Psychological Ownership as the mediator variable, and Employee Innovative Behaviour as the dependent variable. The Organizational Innovation Climate is measured based on indicators of freedom, openness, support of ideas, and risk taking, referring to Ekvall (1996). According to Pierce et al. (2003), Psychological Ownership measures three aspects that include control over targets, closeness to targets, and self-investment in targets. Meanwhile, Nardo (2022) indicate that Employee Innovative Behaviour includes exploring information opportunities, investigation of information, and implementation of new ideas.

Data processing is done through several stages: editing, which is a stage to check the completeness of data; coding, which gives codes to data; tabulation, which organizes data in tables; and data entry, which inputs various data into analysis software. Afterwards, the data are analysed by using the path analysis technique with Smart PLS, enabling the testing of causal relationships between variables, both directly and through mediators. Testing the hypothesis with two steps-first, through a measurement model test or so-called outer model to ensure the validity and reliability of the measuring instrument-the criteria include a loading factor > 0.70, AVE > 0.5, and composite reliability > 0.7. The second order is the test of the structural model or inner model, which will be used to determine the predictive ability of the model with the R² value and test the significance of the relationship between variables in the research model.

RESULTS

Measurement Model Testing (Outer Model)

Fig. 1 PLS Algorithm Result Display

Convergent Validity

Convergent validity can be seen from the outer loadings value, which shows how much the indicator supports the research variable. Indicators with a loading factor value > 0.70 can be said to meet the requirements and are valid. The following is a table of outer loadings values ​​used to measure the convergent validity of each indicator.

Table I Outer Loading

Based on table 1. it shows that the final results of data processing on the variables of organizational innovation climate. psychological ownership and employee innovative behaviour have a loading factor value of > 0.70. So, it can be concluded that the indicators in these variables can be said to meet the requirements and are valid.

Discriminant Validity

Discriminant validity is used to measure the extent to which a variable or construct differs from other variables or constructs. In this study. the value of discriminant validity is seen in the cross loading. Discriminant validity is said to be good if the cross-loading value between the indicator and its construct is greater than the indicator with other constructs. The table of cross loadings values ​​used to measure discriminant validity is as follows.

Table II Cross Loading

Based on table II, it can be seen that the cross-loading value on each indicator shows a greater value on its construct than the indicators on other constructs. This shows that each indicator has good discriminant validity.

Table III Ave

Table III shows that the variables organizational innovation climate, psychological ownership and employee innovative behaviour have AVE values ​​> 0.50. Therefore, it can be concluded that the three variables have met the validity standards set in this study.

Composite Reliability

Composite reliability is used to assess how consistently indicators measure a variable. Cronbach’s alpha and composite reliability values ​​> 0.7 indicate a fairly good level of reliability. The following is a table of the results of the Cronbach’s alpha and composite reliability tests.

Table IV Cronbach’s Alpha and Composite Reliability

Based on table IV, it can be seen that the Cronbach’s alpha and composite reliability values ​​for each variable show values ​​above 0.70. Thus, it can be concluded that all variables have good reliability and can be stated as reliable.

Structural Model Testing (Inner Model)

Fig. 2 Bootstrapping Result Display

R Square

R-Square is used to see the extent to which the independent variable can explain the dependent variable. As explained by Ghozali (2011) that there are three criteria in the R-Square assessment, namely 0.67 indicates a good model, 0.33 indicates a moderate model and 0.19 indicates a weak model. The following are the results of the R-Square test.

Table V R-Square

Based on table V, the R-Square value of the psychological ownership variable is 0.545, which means moderate. This shows that 54.5% of psychological ownership is influenced by organizational innovation climate and the remaining 45.5% is influenced by other factors. The R-Square value of the employee innovative behaviour variable has a value of 0.544, which means moderate. This shows that 54.4% of employee innovative behaviour is influenced by organizational innovation climate and psychological ownership, while the remaining 45.6% is influenced by other factors.

Significance Test

Path Coefficients are used to see the significant value and strength of the relationship between variables. The following are the results of the path coefficients test.

Table VI Path Coefficients

Based on table VI, the path coefficients value is indicated by the original sample value (O), T-statistic value and P-values. A larger original sample value indicates a stronger influence between the independent variable and the dependent variable. In the table, all original sample values ​​are positive, so the relationship between variables is stated to be unidirectional, that is, when one variable increases, the other variable also increases. The relationship between variables is considered significant if the T-statistic> 1.96 and P-values ​​<0.05. The results of the analysis show that the relationship between organizational innovation climate and psychological ownership is significant with a T-statistic value of 11.112> 1.96 and P-values ​​0.000 <0.05. Conversely, the relationship between psychological ownership and employee innovative behaviour is not significant because the T-statistic value is 0.838 <1.96 and P-values ​​0.402> 0.05. Meanwhile, the relationship between organizational innovation climate and employee innovative behaviour is stated to be significant with a T-statistic value of 3.623 > 1.96 and P-values ​​of 0.000 < 0.05.

DISCUSSION

The Effect of Organizational Innovation Climate on Psychological Ownership

The first significance test shows that organizational innovation climate has an effect on psychological ownership. These results indicate that the better the innovation climate created by the East Java Provincial Marine and Fisheries Service, the greater the sense of psychological ownership felt by employees. When the East Java Provincial Marine and Fisheries Service supports innovation from employees, they tend to feel more involved and have a stronger emotional attachment to their work and organization.

These results are in line with the Resource Based Theory (RBT) that the innovation climate is a valuable resource that is difficult to imitate. By supporting the innovation climate, the East Java Provincial Marine and Fisheries Service can build a sense of employee ownership, which increases their involvement and contribution to creating competitive advantage in the management of the marine and fisheries sector. This is also in line with previous studies conducted by (You et al., 2022; Wibawa et al., 2024; Rochma & Prameswari, 2023) who concluded that a good innovation climate can increase psychological ownership and psychological well-being of employees, which ultimately encourages them to be more involved and improve performance.

The Effect of Psychological Ownership on Employee Innovative Behaviour

The second significance test showed that psychological ownership had no effect on employee innovative behaviour. This shows that although employees of the East Java Provincial Marine and Fisheries Service have a sense of psychological ownership of their work, this is not enough to encourage them to behave innovatively. This can happen because employees have tried to contribute to their work, but this contribution may be more focused on efficiency or task completion than on encouraging change or innovation. In the context of government such as the East Java Provincial Marine and Fisheries Service, work routines and bureaucratic rules can also be barriers for employees to behave innovatively even though they have a sense of ownership of their work.

These results are not in line with Resource Based Theory (RBT) and previous research conducted by (You et al., 2022; Limbunan & Kurniawan, 2022; indra Purwanto & Kusmaningtyas, 2023; Fitriyani, 2024; Djusmin & Dirgahayu, 2019) who concluded that the stronger the sense of psychological ownership of employees towards their work, the higher the innovative behaviour they show.

The Effect of Organizational Innovation Climate on Employee Innovative Behaviour

The third significance test shows that organizational innovation climate has an effect on employee innovative behaviour. These results indicate that the better the innovation climate created by the East Java Provincial Marine and Fisheries Service, the greater the encouragement for employees to behave innovatively. With a work environment that supports innovation, employees will be more motivated to implement the new ideas they generate, which ultimately increases their involvement in creating innovative solutions.

These results are in line with the Resource Based Theory (RBT) that a good innovation climate in an organization can be seen as a very valuable resource and is difficult for other organizations to imitate. When the East Java Provincial Marine and Fisheries Service creates an environment that supports innovation, it not only helps employees generate new ideas but also builds sustainable competitive advantage. The innovation climate helps improve employee innovative behaviour which is an important asset for organizations in achieving long-term success. This is also in line with previous studies conducted by (You et al., 2022; Susanti & Addinpujoartanto, 2024; Srirahayu et al., 2024; Lazim & Kusmaningtyas, 2024) which concluded that climate affects employee innovative behaviour in the company. The better the work environment, the higher the creativity and innovative behaviour produced.

Research Implications

The results of this study support the Resource Based Theory (RBT) by showing how resources play a role in creating competitive advantage. The results show that a good organizational innovation climate can increase a sense of psychological ownership and encourage employee innovative behaviour. This study also shows that psychological ownership alone is not enough to encourage employee innovative behaviour without adequate support. This finding broadens the theoretical understanding of the relationship between organizational innovation climate, psychological ownership and employee innovative behaviour, especially in the context of the public sector.

The results of this study can be used as a consideration for agencies, especially the East Java Provincial Marine and Fisheries Service to improve employee innovative behaviour by creating a more positive organizational innovation climate and good psychological ownership.

CONCLUSION

This study provides evidence on organizational innovation climate to improve employee innovative behaviour through psychological ownership in employees at the East Java Provincial Marine and Fisheries Service. The number of samples used in this study was 78 people and was processed using SmartPLS software version 4. Based on the analysis conducted, it can be concluded that:

Organizational innovation climate has an effect on psychological ownership. This shows that the better the innovation climate created by the East Java Provincial Marine and Fisheries Service, the greater the sense of psychological ownership felt by employees.

Psychological ownership does not have an effect on employee innovative behaviour. This shows that although employees of the East Java Provincial Marine and Fisheries Service have a sense of psychological ownership of their work, this is not enough to encourage them to behave innovatively.

Organizational innovation climate has an effect on employee innovative behaviour. This shows that the better the innovation climate created by the East Java Provincial Marine and Fisheries Service, the greater the encouragement for employees to behave innovatively.

From the above results and the review of research instruments, suggestions for the East Java Provincial Marine and Fisheries Service to create a more positive, comfortable, and enjoyable working atmosphere to increase employee engagement. It is also recommended to encourage job adjustments to employee skills and personalities so that they can be encouraged to play a more active role in innovation.

ACKNOWLEDGMENT

The authors would like to express his gratitude especially to the head of the East Java Provincial Marine and Fisheries Service, Indonesia for the opportunity given, as well as the parties who played a role in the implementation of this research.

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