The role of leadership style and organizational culture in enhancing employee performance

Erjayana Ginting; Popong Nurhayati; Anggraini Sukmawati

doi:10.29210/020244614

The role of leadership style and organizational culture in enhancing employee performance

Erjayana Ginting

⁽¹⁾, Popong Nurhayati ⁽²⁾, Anggraini Sukmawati ⁽³⁾,
(1) School of Business IPB University

Indonesia
(2) School of Business IPB University

Indonesia
(3) School of Business IPB University

Indonesia

Corresponding Author

DOI : https://doi.org/10.29210/020244614

Full Text:

Language : en

Abstract

Employee performance is critical to the success of an organization, heavily influenced by leadership style and organizational culture. This study aims to measure the influence of transformational leadership style on organizational culture and its impact on improving employee at PT XYZ, a consulting firm specializing in Strategic Project Management across multiple sectors, including Oil & Gas, Energy, Chemicals, Industrial & Infrastructure (ECI), Financial Services, Telecommunications, and Property. A quantitative approach was adopted, utilizing SEM-PLS for data analysis. The research sample consisted of 220 employees of PT XYZ in Pekanbaru, selected using non-probability convenience sampling, with the criterion that participants had a minimum of one year of work experience. Data were collected through structured questionnaires. The results revealed that transformational leadership significantly enhances organizational culture (R² = 86.4%) and directly improves employee performance (R² = 76.3%). Additionally organizational culture positively mediates the relationship between leadership style and employee performance. Employees working in teams characterized by trust, openness to risks, and idea-sharing demonstrated significantly higher performance levels. This study highlights practical implications for organizations: implementing transformational leadership training programs and fostering team-oriented cultures can drive employee performance and align with strategic organizational goals. These findings serve as a basis for developing leadership strategies and cultural initiatives to optimize workforce potential.

Keywords

Organizational culture, Leadership style, Employee performance

References

Abdallat, Y., Suifan, T., Oklah, K., Sweis, G., & Sweis, R. (2020). The impact of human resource management practices on organizational performance in construction companies in Jordan. International Journal of Business Innovation and Research, 1(1), 1. https://doi.org/10.1504/ijbir.2020.10025591

Abdullah, H., Arjuniadi, A., & Kusma, A. (2023). Pengaruh gaya kepemimpinan otoriter, demokrasi dan kedisplinan terhadap kinerja pegawai pada badan pusat statistik kabupaten Pidie. Jurnal Ekobismen, 3(1), 1–18.

Alheet, A. F., Adwan, A. Al, Areiqat, A. Y., Zamil, Ahmad. M. A., & Saleh, M. A. (2021). The effect of leadership styles on employees’ innovative work behavior Ahmad. Management Science Letters, 11, 239–246. https://doi.org/10.5267/j.msl.2020.8.010

Aranki, D. H., Suifan, T. S., & Sweis, R. J. (2019). The Relationship between Organizational Culture and Organizational Commitment. Modern Applied Science, 13(4), 137. https://doi.org/10.5539/mas.v13n4p137

Ayu Putu Widani Sugianingrat, I., Rini Widyawati, S., Alexandra de Jesus da Costa, C., Ximenes, M., Dos Reis Piedade, S., & Gede Sarmawa, W. (2019). The employee engagement and OCB as mediating on employee performance. International Journal of Productivity and Performance Management, 68(2), 319–339. https://doi.org/10.1108/IJPPM-03-2018-0124

Baig, S. A., Iqbal, S., Abrar, M., Baig, I. A., Amjad, F., Zia-ur-Rehman, M., & Awan, M. U. (2021). Impact of leadership styles on employees’ performance with moderating role of positive psychological capital. Total Quality Management and Business Excellence, 32(9–10), 1085–1105. https://doi.org/10.1080/14783363.2019.1665011

Bhuiyan, F., Baird, K., & Munir, R. (2020). The association between organisational culture, CSR practices and organisational performance in an emerging economy. Meditari Accountancy Research, 28(6), 977–1011. https://doi.org/10.1108/MEDAR-09-2019-0574

Darma Sabri, M. A., Utami, S., & Harmen, H. (2024). Manajemen Sumber Daya Manusia Dalam Konteks Perencanaan Pembangunan. Syiah Kuala University Press.

Fonseca Da Costa Guterresa, L., Armanu, & Rofiaty. (2020). The role of work motivation as a mediator on the influence of education-training and leadership style on employee performance. Management Science Letters, 10(7), 1497–1504. https://doi.org/10.5267/j.msl.2019.12.017

Ichsan, R. N., Nasution, L., & Sinaga, S. (2021). The influence of leadership styles, organizational changes on employee performance with an environment work as an intervening variable at pt. Bank sumut binjai branch. Journal of Contemporary Issues in Business and Government, 27(02). https://doi.org/10.47750/cibg.2021.27.02.032

Jaqua, E., & Jaqua, T. (2021). Transactional leadership. American Journal of Biomedical Science and Research, 14(5), 399–400.

Jiang, D., & Chen, Z. (2021). Innovative enterprises development and employees’ knowledge sharing behavior in China: The role of leadership style. Frontiers in Psychology, 12, 747873.

Kenedi, J., Satriawan, B., & Khaddafi, M. (2020). The Effect of Organizational Culture on Employee Loyalty. Almana : Jurnal Manajemen Dan Bisnis, 4(3), 380–387. https://doi.org/10.36555/almana.v4i3.1476

Koeswayo, P. S., Haryanto, H., & Handoyo, S. (2024). The impact of corporate governance, internal control and corporate reputation on employee engagement: a moderating role of leadership style. Cogent Business & Management, 11(1), 2296698.

Kuswati, Y. (2020). The Influence of Organizational Culture on Employee Performance. Budapest International Research and Critics Institute (BIRCI-Journal) : Humanities and Social Sciences, 3(1), 296–302. https://doi.org/10.33258/birci.v3i1.761

Nguyen, P. T., Yandi, A., & Mahaputra, M. R. (2020). Factors That Influence Employee Performance: Motivation, Leadership, Environment, Culture Organization, Work Achievement, Competence and Compensation (A Study Of Human Resource Management Literature Studies). DIJDBM: Dinasti International Journal Business Management, 1(4), 645–662. https://doi.org/10.31933/DIJDBM

Noratta, S., Masriah, I., & Prabowo, B. (2022). Pengaruh Gaya Kepemimpinan Otoriter Dan Kompensasi Terhadap Stres Kerja Serta Dampaknya Terhadap Kinerja Karyawan. Inovator, 11(2), 341–350.

Nurhasanah, N., Jufrizen, J., & Tupti, Z. (2022). Pengaruh Etika Kerja, Budaya Organisasi Dan Beban Kerja Terhadap Kinerja Karyawan Dengan Kepuasan Kerja Sebagai Variabel Intervening. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 5(1), 245–261. https://doi.org/10.36778/jesya.v5i1.618

Nurlina, N. (2022). Examining Linkage Between Transactional Leadership, Organizational Culture, Commitment and Compensation on Work Satisfaction and Performance. Golden Ratio of Human Resource Management, 2(2), 108–122. https://doi.org/10.52970/grhrm.v2i2.182

Olayisade, A., & Awolusi, O. D. (2021). The Effect of Leadership Styles on Employee’s Productivity in the Nigerian Oil and Gas Industry. Information Management and Business Review (ISSN 2220-3796) Vol. 13, No. 1, Pp. 47-64, March 2021, 47(4), 124–134. https://doi.org/10.31857/s013116462104007x

Paul Thumbi, N., Hannah, B., & Rosemarie, W. (2020). Moderating Effect of Organizational Culture on the Relationship between Organizational Learning and Employees’ Performance in Classified Hospitality Firms in Kenya. International Journal of Business and Management, 15(12), 51. https://doi.org/10.5539/ijbm.v15n12p51

Rahmi, M. (2021). Kepemimpinan dalam budaya organisasi. Seminar Nasional Magister Manajemen Pendidikan UNISKA MAP, 1(1), 106–117.

Ridwan, S., & Anik, H. (2020). The effect of organizational culture, non financial compensation and job satisfaction on organizational commitments in the center for strategic studies of TNI. Dinasti International Journal of Education Management and Social Science, 1(4), 525–534. https://doi.org/10.31933/DIJEMSS

Sari, F., Sudiarditha, I. K. R., & Susita, D. (2021). Organizational Culture and Leadership Style on Employee Performance. The International Journal of Social Sciences World (TIJOSSW), 3(2), 98–113.

Sutrisno, H. E. (2019). Budaya organisasi. Prenada Media.

Teguh Soedarto, M. P., & Tri Hardi ST, M. M. (2023). Meningkatkan kinerja bisnis melalui employee engagement. Uwais Inspirasi Indonesia.

Torlak, N. G., & Kuzey, C. (2019). Leadership, job satisfaction and performance links in private education institutes of Pakistan. International Journal of Productivity and Performance Management, 68(2), 276–295. https://doi.org/10.1108/IJPPM-05-2018-0182

Young, H. R., Glerum, D. R., Joseph, D. L., & McCord, M. A. (2021). A meta-analysis of transactional leadership and follower performance: Double-edged effects of LMX and empowerment. Journal of Management, 47(5), 1255–1280.

Zaman, U., Florez-Perez, L., Khwaja, M. G., Abbasi, S., & Qureshi, M. G. (2021). Exploring the critical nexus between authoritarian leadership, project team member’s silence and multi-dimensional success in a state-owned mega construction project. International Journal of Project Management, 39(8), 873–886. https://doi.org/https://doi.org/10.1016/j.ijproman.2021.10.007

Article Metrics

Abstract Views : 336 times

PDF Downloaded : 0 times

Refbacks

There are currently no refbacks.