Unpacking Individual Change Capacity through Psychological Capital: A Review of Organizational Behavior Literature

Introduction

Organizational capacity for change (OCC) is the capacity of an organization to adjust to the dynamics of a VUCA (Vulnerable, Uncertain, Complex, and Ambiguous) environment, which is contingent upon its competencies (Rengkung, 2022). Constant stress from an ever-changing work environment can adversely affect employees' mental and physical health (Riedl et al., 2020; Ciarrochi et al., 2022; Mathew et al., 2022; Moyo, 2023; Pogan et al., 2023; Saleh, 2023; Hsieh et al., 2024). Businesses must be adaptable and dynamic to surmount these challenges (Johnstone & Wilson-Prangley, 2021). Employees may be hesitant to embrace the changes and may even harbor a suspicion of them. This resistance frequently stems from a lack of understanding, fear of the unknown, or a perceived threat to one's job security or status (Obina & Adenike, 2022).

Individual change capacity (ICC) refers to an individual's ability to adapt and respond positively to organizational changes (Indriastuti & Fachrunnisa, 2020) by drawing upon their psychological resources and capabilities. It encompasses their cognitive, emotional, and behavioral readiness, willingness, and capability to embrace new situations within the workplace. This individual-level capacity is essential for navigating constant flux and complexity in contemporary organizational environments, as evidenced by prior research on psychological capital and dynamic capabilities (Datu et al., 2016; Alessandri et al., 2018; Widiatmaka et al., 2022).

Research has shown that psychological capital is positively correlated with favorable organizational outcomes, such as increased work engagement (Tang, 2020), better performance, and increased flexibility in the face of change (Ali et al., 2021). Although there is evidence linking PsyCap to positive organizational outcomes, little is known about how it mediates the development of an individual's capacity for change, creating a substantial vacuum in the research (Dawkins et al., 2013; Kalman & Summak, 2017; Liu, 2021).

Based on the systematic study, this conceptual essay provides a novel paradigm that shows how psychological resources, as dynamic skills, may alter an individual's ability to adjust, improving OCC and sustaining high performance levels.  We proposed a novel theoretical premise: individual resources, such as PsyCap, moderate the process of individual change, fostering adaptable, flexible, and positive behavior via a cyclic transformation process based on PsyCap.  As a result, in a VUCA environment, workers' positive resources influence OCC, increasing individual adaptability within the organization's dynamic context.

Materials and Methods

Procedure of Research, Classification, and Coding

Search Strategy

The present study utilizes a structural literature review to represent concepts emerging from previous research and identify new challenges for more studies (Hiebl, 2021; Sauer & Seuring, 2023). This research approach allows scholars to comprehensively represent the existing concepts and theories emerging from prior studies while also identifying new gaps and opportunities for further exploration (Mengist et al., 2019; Page et al., 2021; Pradana et al., 2023).

According to Conforto (Massaro et al., 2016), the systematic literature review typically involves the following steps:

• Collect articles published on the subject (Step 1).
• Structuring the knowledge with coding and classification (Step 2)
• Deduce the main value of research (Step 3).
• Showcasing the gaps, opportunities, and significance of current research (Step 4).

Our objective in this article is to give a clear view of ICC and to present their characteristics. The following paragraphs provide detailed explanations of the above steps.

Step 1: Data Collection: Screening Inclusion/Exclusion

January–November 2024 literature review. According to the positive organizational behavior paradigm and theories, the chosen publications were chosen especially to clarify the relationship between two paradigms: change management and positive psychology. We used the robust search engine Google Scholar for our preliminary investigation, which gave us a comprehensive overview of pertinent scholarly publications (Vallury et al., 2022).

Furthermore, we cross-checked our findings by examining the prominent Scopus and Web of Science databases, ensuring we captured the complete body of research on ICC (Mikalef & Gupta, 2021). To execute our search strategy, we carefully crafted keyword pairs that would encompass the full breadth of research on ICC (Rabin et al., 2022; Supriharyanti & Sukoco, 2022; Ed‐Dafali et al., 2024). Synthesizing terms from the domains of change management and organizational behavior, we were able to establish clear linkages to the concept of ICC, as illustrated in Table 1.

Table 1. Selection Criteria: Keywords for Journal Article Inclusion

Screening Inclusion: First, the first 30 pages were searched for ICC-related terms as part of the literature search method. 'Individual capability' was then searched for in the abstracts to identify places where the study intersected. If the abstract did not contain the term "individual capacity," the whole text was searched. Theoretical publications or empirical research that links organizational performance to change, individual psychological resources to change, and individual psychological resources to changing performance during change have all been investigated. Afterwards, the references were improved.

We read the abstracts of 100 references, and 86 relevant articles were collected for full-text analyses. In this step, we were in front of two categories of articles: (1) empirical or theoretical studies on psychological capital and change management (n = 25) and (2) empirical or theoretical articles on organizational change capacity and performance (n = 30). 

Screening for Exclusion: after careful review, a total of 3 articles were excluded because they were treating organizational change as project management. We couldn’t translate two articles, and eight other articles were irrelevant to the organizational change context.

Figure 1 presents the PRISMA chart:

Notably, the majority of the articles did not utilize "individual change capacity" as a central concept. 

However, the term "individual capacity" was present in some articles, where it was identified as a resource and an outcome of the change process (Supriharyanti & Sukoco, 2022). Other related terms that were more commonly employed included "adaptive individual capacity," "individual readiness," "individual change level," "change in individual attitude," and "engagement with change" (Liu, 2021; Albrecht et al., 2023; Reineholm et al., 2024).

According to the research conducted on the Rabbit platform and adhering to the specified keywords, Figure 2 below indicates that few researchers have examined how individuals can adapt within an always-evolving workplace.

There is increasing interest in examining how individuals perceive change (Baard et al., 2013; Dam, 2013), how they exhibit resilience in changing circumstances (Borgen et al., 2010; Smollan, 2011), and how they cognitively adjust to change (Butterfield et al., 2010). In recent years, more research has focused on individual adaptations in a variety of fields, including nursing (Chan, 2020; Chen & Tang, 2021; Almotawah et al., 2023; Ansari et al., 2023b; Avramova & Vasileva, 2023; Sakaliene & Zaroviene, 2023), management, politics, climate change (Loughlin & Priyadarshini, 2021), education (Chen et al., 2024), and psychology (Kachenkova et al., 2022; Kartashev et al., 2022; Makurina, 2022; Nguyen & Le, 2022; Di Fabio et al., 2023; Enwa et al., 2023; Karpov et al., 2023; Osadchuk et al., 2023; Stradze et al., 2023). Understanding individual responses to change is crucial, especially in organizational settings, where psychological resources and cognitive processes play a significant role during periods of crisis (Bonini et al., 2024).

The second graphical depiction in Figure 3 shows a recent emphasis on investigating psychological and emotional elements that contribute to individual adaptation (blue buttons).

Step 2: Data Analysis and Structuring Knowledge

After reviewing the collected articles, we then followed the codification process outlined in the work of Godinho Filho and Lages Junior (2014). This involved utilizing thematic coding to compress the data; these themes were grouped by analogy, forming the categories outlined below:

The studies based on POB (Psycap) related to change capability were coded as (P1).

The studies based on individual adaptability were coded as (P2)

The studies based on individual readiness to change were coded as (P3).

The studies based on the individual's attitude toward change were coded as (P4).

The studies based on individual change were coded as (P5).

Table 2 provides an overview of the key concepts and studies related to ICC, highlighting the mediating role of PsyCap. This helps identify the gap in research specifically focused on the concept of ICC.

Table 2. Individual change capacity through literature

The table shows the convergence of attitudes toward change and individual preparedness, with PsyCap acting as a moderator in determining a person's potential for change. Change capacity, which is demonstrated by flexibility and a readiness to accept change, incorporates ideas like engagement, readiness, and adaptability. The table emphasizes how complex and dynamic ICC is—a feature that has been recognized in certain research but hasn't always been discussed. We have highlighted the most trustworthy and pertinent articles in the table to give readers a clear picture of the scant and less focused research on ICC. This highlights the importance of conducting additional research in each of the five areas that we identified and reviewed with our supervisor, with the included articles ranging from early to recent studies.

Step 3: Deduce the Theoretical Framework

Osberghaus et al. (2010) investigate the idea of adaptation capability in light of climate change. Drawing on the work of Dannenberg et al. (in press) and Mendelsohn (2000), Osberghaus analyzes two types of adaptation: autonomous and designed. Individual drive for private advantages defines the former, which is consistent with the utility-maximizing paradigm for enterprises and individuals. This attitude results from a decision-making process impacted by uncertainties, which may be predicted using psychological elements like motivation and perceived capabilities. Grothmann and Patt (2005) performed two research studies on this subject and found that socio-cognitive factors explain adaptive ability more efficiently than socioeconomic factors. The second sort of adaptation is planned adaptation, which implies the collective efforts done for effective adaptation, subject to organizational support (Bouckenooghe et al., 2019).

Sechindra's (2022) analysis indicated that existing societal-level adaptive capacity measurement methods fail to address the phenomenon's complexity, particularly concerning cross-scale and cross-level interactions. This oversimplification limits understanding of social-ecological systems and neglects crucial decision-making-level dynamics that influence adaptation to environmental changes.

Furthermore, the interplay between environmental processes and social systems can shape adaptive capacity over time. Organizations are now seen as socially constructed spaces in constant evolution, enabling human meaning-making in the workplace (Makkonen et al., 2013). These are the foundations of the paradigm of complexity. This innovative viewpoint suggests that altering one system element amplifies the effect by prompting further modifications in other elements, subsequently encouraging additional changes in the original component.

Based on the broader reasoning and our review of articles, the closest concept that comprehensively addresses individual adaptability is the concept of individual readiness. It refers to the degree to which individuals within an organization view a change favorably and expect it to benefit both themselves and the organization as a whole. Bouckenooghe et al. (2009) outline three components that collectively define readiness for change. These components are an emotional aspect that reflects how individuals perceive the change being implemented, a cognitive aspect that encompasses beliefs and thoughts regarding the potential outcomes of that change, and an intentional aspect that pertains to the commitment and energy that members of the organization are prepared to dedicate to the change process. Weiner's 2009 posits that the psychological state of readiness for change occurs when members of an organization are committed to implementing it and have faith in their group's ability to accomplish it.

This model's holistic and multidimensional nature demonstrates that readiness for change joins the concept of adaptive capacity for change, which captures the cognitive factors influencing an individual's motivation for personal benefit. This model offers valuable insights when examining specific organizational environments, as it closely reflects the complexity inherent in real-world psychosocial contexts.

According to Purwanto (2023), readiness to change consists of two primary dimensions: commitment and efficacy. The commitment dimension signifies a mutual psychological assurance regarding the advantages of change and the collective aspiration of organizational members to achieve change initiatives. The efficacy dimension encompasses the overall capacity to effect change, which involves knowledge, resources, and the necessary prerequisites for transformation (Al-Kahtani et al., 2020). Significant complications arise when not every organization member is willing and dedicated to change initiatives (Asif & Shahbaz, 2025). Kirrane (2016) concluded that readiness to change is related to a variety of psychological variables, including attitudes, openness to change, tolerance for change, fear of the unknown, striving for security, and concerns about personal failure. The subjective perspective of the employee's perception of change influences the cognitive processes that shape their attitude and behavior.

Based on state-like variables, Kirrane argues that PsyCap facilitates those effects. This implies that individual psychological resources and views of the organizational environment influence employees' responses to change.

Désir et al. (2023) carried out a comprehensive literature study to investigate the recipient's change capability as described by its dimensions. The evaluation demonstrates the process of practical change capability and its representation in organizations or workers, which is measured in four dimensions: openness to change, change acceptance, change engagement, and behavioral support for change. These variables indicate employees' intentions, states of mind, and behavioral attitudes toward change. Désir believes that openness to change and acceptance indicate psychological preparedness to change.

Change engagement, on the other hand, is a psychological condition that results in a favorable attitude toward change, which eventually leads to behavioral support for change.

George and Jones (2001) emphasize examining the individual transformation process (Jimmieson et al., 2004). They indicate that early studies concentrated on employees' negative behaviors during change, such as resistance, aversion to insecurity, and apprehension (Borges & Quintas, 2020). Positive psychology then led George and Jones to examine the psychological aspects of resistance, contending the process is predominantly cognitive (Dent & Goldberg, 1999). Prior experiences shape employees' perceptions, leading them to resist change, as their reality framework is challenged by the change implementation (Iglesias, 2012). Cognitive perceptions elicit affective reactions, establishing a relationship with change and initiating sensemaking. According to their study, individuals achieve steady-state equilibrium and inertia if personal schemas align with the change process (Nistelrooij & Caluwé, 2015); conversely, if there is a discrepancy, resistance is anticipated.

Step 4: Showcasing the Gap: Outline the Mediating Role of Psychological Capital in Individual Change Processes

PsyCap is a state-like positive psychological construct comprised of four fundamental components: hope, optimism, resilience, and self-efficacy, often represented by the acronym HERO (Luthans & Youssef‐Morgan, 2017). Hope signifies a person's inclination to strive to realize specific goals. Optimism pertains to positive expectations regarding current or future endeavors. Resilience signifies the capacity to rebound effectively following difficulties. Self-efficacy encompasses the belief in one's ability to tackle challenging tasks effectively. Although conceptually distinct, these components exhibit a common variance. Empirical studies have consistently linked PsyCap to various positive outcomes, including improved work attitudes (Ali et al., 2021), enhanced job performance (Imran & Shahnawaz, 2020; Ngwenya & Pelser, 2020; Jackson et al., 2024), increased citizenship behaviors, stronger organizational commitment (Newman et al., 2014), enhanced well-being (Avey et al., 2010; Nolzen, 2018), and heightened work engagement (Datu et al., 2016). The mediating role of PsyCap in individual change processes represents a critical link between individual resources and organizational adaptability, reflecting a paradigm shift towards understanding how positive psychological attributes can foster capacities and facilitate change (Al-Ghazali & Afsar, 2022).

Based on the work of George and Jones (2001), the cyclic change process serves as a model for understanding the development of individual change capacity. Specifically, employees' emotional responses influence their affective states, which affect the individual judgments made during the change process (Bouckenooghe et al., 2023). When employees are in positive affective states, they tend to make favorable judgments about the change, feel self-efficacious, and engage in creative and flexible information processing (Rafferty & Minbashian, 2018). If divergence deviates from the individual's ability to integrate it or challenges their overarching schema, they will struggle to adapt, leading to negative emotions, helplessness, and denial. Studies have shown that many employees resist or struggle with changes, especially when persistent, leading to exhaustion and helplessness (Bennett & Lemoine, 2014).

 This cyclic process reinforces employees' cognitive schemas and gives deep understanding of how individuals modulate change within complexity, ambiguity, and uncertainty (Seo et al., 2004). This reduces an organization's competitive edge and impairs employees' capacities, necessitating time to shift their cognitive schemas to accommodate change. As a result, a strong psychological attitude is critical for developing adaptive schema conceptions, allowing personnel to respond systematically to difficult contexts within the company, and supporting effective organizational transformation.

Current literature often overlooks the dynamic characteristics of organizations and the interactions among individuals, groups, and their environment (Zeid et al., 2023). Furthermore, the relationship between PsyCap and OCC remains under-explored. The definition of the nature of resources within the dynamic capability theory (DCT), which shapes OCC, is also missing. OCC is frequently studied at the organizational level, with limited interaction found between OCC and individual change capacity (Castillo & López‐Zafra, 2021). This indicates a gap in studies focusing on the complexity of this construct across individual, group, and organizational levels and its dynamic characteristics within individuals, organizations, and the environment. Addressing this gap is essential to understanding how positive psychological attributes can shape individual change and contribute to organizational resilience and transformation.

In the following sections, we will explore ICC through the lens of DCT. We consider PsyCap as a crucial resource that shapes how individuals navigate change (Youssef‐Morgan, 2024). Our aim is to illustrate the mechanics of ICC and the complexities involved in developing OCC. This will be achieved by examining the continuous, parallel processes of individual change and cognitive adaptation, both of which are significantly enhanced by PsyCap. Ultimately, this fosters a readiness for change and promotes adaptability, which are key elements of ICC.

Results and Discussion

Presenting the Conceptual Framework

Individual Change Capacity: A Dynamic Capabilities View with PsyCap

Most academics believe that firms implement change through their members and that successful change happens when individuals adjust their behaviors accordingly. According to empirical research, people actively respond to change by making decisions (Choi, 2011), creating worries (Indriastuti & Fachrunnisa, 2020), assessing the process, and acting on their emotions. Positive correlation exists between supportive behavior, emotional commitment, and attitudes during transformation.

Based on DCT, resources can be combined, reconfigured, transformed and deployed to achieve a desired outcome (Alessandri et al., 2018). Hence, employees can proactively and sustainably use resources that are internal (e.g., psychological) and external (e.g., social support) to navigate and even flourish during workplace changes (Ling & Dale, 2013). The generic capabilities that compose OCC, as mentioned in DCT, are based on developed internal resources, that involve both reactive (adaptive) and proactive (innovative) components (Mushangai, 2023; Zhang et al., 2025). Wang and Ahmed suggest that dynamic capabilities have three generic components: adaptive, absorptive, and innovative capability (Lin & Wu, 2013). Adaptive capability refers to the ability to identify and capitalize on emerging market opportunities (Soparnot, 2011; Andreeva & Ritala, 2016). Absorptive capability is the ability to assimilate and transform new knowledge (Judge & Elenkov, 2004; Al-Mubarak et al., 2023; Ansari et al., 2023a; Cantile et al., 2024). Innovative capability is the ability to develop new products and processes (Liboni et al., 2016; Uyan & Aslan, 2019). These generic capabilities can be conceptualized as components of HERO (hope, efficacy, resilience, and optimism): Resilience and self-efficacy facilitate the development of adaptive capacities. Optimism and self-efficacy underpin the cultivation of absorptive capacities, and hope stimulates innovative capabilities.

Internal and external changes test dynamic skills, causing them to evolve continuously (Assali & Dowaikat, 2021; Elsey et al., 2022). They serve as both adaptive mechanisms and change agents.  As a result, the basic nature of resources within dynamic capabilities may be compared to PsyCap resources (HERO), which can build an individual change capacity that is co-constructed at the person level.

The idea of agency illustrates the dynamic and diverse character of change capability at both the individual and social levels. Individual agency represents the resolve to behave in ways that enhance one's surroundings while also allowing for the free expression of personal ideas and ethics (Ling & Dale, 2013). Personal agency functions within social networks, influencing and being impacted by social systems (Bandura, 1999). This encourages collective agency by bringing together individual values, interests, motives, and a shared sense of duty (Pelenc et al., 2015), eventually defining a group's potential for collective action.

Morin's complexity theory, rooted in uncertainty and incompleteness, provides a valuable lens for examining multilevel organizational development. His complex thinking approach highlights the ongoing nature of change, suggesting that relying on established methods is insufficient for addressing new challenges. This theory emphasizes the dynamic, non-linear, and unpredictable aspects of organizations, questioning traditional linear approaches to change management (Shehata et al., 2022). The dialogical principle highlights the coexistence of opposing yet complementary elements (Bouiss, 2021).

The hologrammatic principle of this theory posits that each component contains comprehensive information about the entirety of the system (Morín, 2005). Individuals are components of society, and society is reflected within each individual through culture. The organizational environment also embodies this hologrammatic nature.

The auto-production and auto-organization principle emphasizes the self-generating and self-organizing characteristics of living systems (Morin, 1990). The system's dynamics are auto-generative. Society emerges from interactions between individuals, subsequently influencing those individuals (Morin, 1990).

These principles underscore how OCC develops from individual adaptability at all levels, considering the intricate relationships within groups and their environment. The principle of recursivity highlights the complex, cyclical nature of these systems, where cause and effect are continuously intertwined (Morin, 1990; 2005).

A Conceptual Map of Individual Change Capacity

The literature review's analyses suggest that cognitive factors and schemas shape perceptions of change, consequently conditioning attitudes and behaviors within an organizational context. Based on the discrepancy theory, George and Jones (2001) assert that discrepancies between individuals' schemas and alterations necessitate their ability to adapt. The dissonance arising from these differences compels the individual to resolve this inconsistency. This mental action requires specific psychological resources, such as resilience, to enable individuals to develop the mental strength necessary for self-evaluation and to implement the changes needed for success (Liu, 2021). Hope is a key psychological resource that enables individuals to adopt a positive motivational state. It combines the ability to devise alternative paths with determination to achieve goals (Kalman & Summak, 2017).

According to Désir et al. (2023), these tools improve openness and acceptance as well as change preparedness. The first shows a person's capacity to accept change, remain optimistic in the face of uncertainty, and control their emotions. While remaining confident in one's ability to accomplish goals, the second demonstrates a readiness to embrace and adjust to change.

Proposition 1: Hope and resilience serve as psychological resources that facilitate handling discrepancies within the individual change process.

Proposition 2: Hope and resilience serve as psychological resources that precede readiness for change, which includes acceptance and openness to change.

The individual assumes responsibility for their emotional reactions to change. They seek to identify problems and opportunities to reduce negative impacts while emphasizing positives. Self-efficacy and optimism are psychological resources that bolster adaptability. Self-efficacy enables perceiving one's abilities to plan, coordinate, and support change. Optimism reinforces beliefs, intentions, and confidence in successful change implementation (Datu et al., 2016; Karimi, 2018; Uyan & Aslan, 2019; Albrecht et al., 2020; Xu & Ying, 2025).

Proposition 3: Self-efficacy and optimism are the psychological resources that empower one to reassess the emotional reaction to change.

Proposition 4: Self-efficacy and optimism are antecedents of adaptability to change. These resources engender engagement in change and support behavior toward change.

Subsequently, we can present Figure 4 to illustrate the cyclic process of change based on PsyCap.

This cyclical process underscores the dynamic interplay between PsyCap and ICC, mediated by the individual change process. Cultivating PsyCap empowers individuals, fostering proactive behaviors that enhance organizational commitment and confidently navigating future challenges (Tang, 2020; Westover, 2024).

Based on the precedent and the previous literature review, the conceptual map in Figure 5 can be presented as follows:

Contribution

Our discussion centers on psychological capital—hope, self-efficacy, resilience, and optimism—and its impact on employee attitudes, behaviors, and performance. We posit that individual capacity for change is dynamically co-constructed through PsyCap resources. It is progressing from individual to group and organizational levels, informed by agency theory. For a comprehensive understanding of ICC and organizational capacity for change, empirical future studies should integrate complexity theory to capture the multidimensional nature of these concepts. We present a conceptual map illustrating ICC components and PsyCap's influence on the individual change process that shapes ICC. Our model fosters a nuanced understanding of this complexity, offering avenues for future research to explore targeted training interventions for cultivating and sustaining PsyCap. As individuals experience change, this directly impacts their interpretations of future changes, thereby altering their reactions, shaping their professional identities, and bolstering their confidence in leveraging their abilities. The context of change affects the capacity to change by questioning employees' professional identities and fostering an organizational capacity for change, which can influence the organization's long-term performance in a VUCA environment. Consequently, based on dynamic capabilities theory, the co-construction of ICC and OCC is uniquely determined within each organization. Activating psychological capital proves most effective during times of change.

Limitations

Despite valuable insights, focusing solely on individual PsyCap may overlook critical systemic and organizational factors hindering change. Rigid hierarchies, resource limitations, and unsupportive cultures can impede progress regardless of individual psychological resources. Overemphasis on professional identity can also negatively skew change interpretations. Therefore, while developing PsyCap is beneficial, practitioners must acknowledge that external conditions and organizational dynamics significantly impact outcomes, necessitating a comprehensive strategy addressing both individual and contextual elements. The collaborative and communicative nature of co-constructed change also presents implementation challenges, particularly in large organizations

Conclusion

A literature review indicates that ICC includes readiness for change through openness, acceptance, and involvement (Choi, 2011). Drawing upon dynamic capabilities theory, this review highlights ICC as a co-construct rooted in PsyCap. Psychological resources like resilience, self-efficacy, hope, and optimism play a crucial role in an individual's sense-making and interpretation processes. This approach allows for the development of a conceptual map illustrating a cyclical transformation process grounded in PsyCap. Understanding these psychological resources and how they interact can improve the capacity for change and help predict its impact. Furthermore, this analysis demonstrates how psychological resources can be cultivated and how change can strengthen an individual's schemas, thereby facilitating their capacity to adapt within their environment, groups, and organization. This conceptual framework defines dynamic capabilities to construct capacity for change and demonstrates the process of changing at the individual and organizational levels.

Acknowledgments: Thanks to my supervisor, who assisted me with writing the above article.

Conflict of Interest: None

Financial Support: None

Ethics Statement: None