Predictors and Impact of Openness to Change in Asset Management Contract (AMC) Implementation at the Electric Power Service Company

Abstract

The change strategy in asset management implementation is an effort made by the company to deal with the changing business environment. Management decisions with the asset management contract (AMC) mechanism are feared to impact employee satisfaction and employee continuance commitment. This study aims to examine (1) the effect of individual differences (self-esteem, optimism, perceived control) on employee openness in accepting changes in the reorganization of AMC implementation; (2) the effect of context-specific variables (information, participation, self-confidence) on employee openness in accepting changes in the reorganization of AMC implementation; (3) the effect of openness to change to employee job satisfaction; and (4) the effect of openness to change to continuance commitment. Data collection was done through a survey by distributing questionnaires. The subjects of this study were 155 employees from 477 employees in 3 (three) generating units. Data analysis was performed using structural equation modeling-partial least squares (SEM-PLS). The analysis results show that openness to change is successfully predicted from individual differences and context-specific variables (R2 = 0.650), and the job satisfaction and continuance commitment variables are also successfully predicted (R2 = 0.498 and 0.449). It is also found that the self-esteem, information, participation, and self-efficacy variables have positive and significant relationships to the level of openness to change. However, the optimistic variable and perceived control are found to have no significant relationship (p < 0.05). Three context-specific variables and an individual difference variable predict higher levels of acceptance of change, and lower levels of acceptance are associated with lower job satisfaction and lower employee continuance commitment.