To simplify detecting success or failure, I just echoed success or failure. I also made some other corrections to your attempt:

• Used && instead of ; so that tar extraction is not attempted if the cd fails.
• Changed the parens to create sub-shell on RHS.
• Used . rather than * in the tar command to get all files in the dir (even those starting with .) and to ensure all sub-dirs are (recursively) copied.
• Removed verbosity on tar command.

I used the existence of the target directory as a simple way to test the failure case (how are you testing the failure case?). Worked for me as shown below:

$ pwd
/home/knob
$ cat t1.sh
#!/bin/ksh
if tar cf - . | (cd /var/tmp/dump && tar xf -); then
   echo "success"
else
   echo "failure"
fi
$ rm -fr /var/tmp/dump
$ ./t1.sh
./t1.sh[2]: /var/tmp/dump:  not found.
failure
$ mkdir /var/tmp/dump
$ ./t1.sh
success
$ ls -l
total 8
-rwxrwxrwx    1 knob    devel         108 30 Aug 17:51 t1.sh
$ ls -l /var/tmp/dump
total 8
-rwxrwxr-x    1 knob    devel         108 30 Aug 17:51 t1.sh
[download]

Note that, for simplicity, I created a scratch directory (/home/knob above) containing just the test script itself t1.sh and cd'ed into this directory -- so this is the directory that is copied. If yours does not work, post the output of running your command (as I did above).

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