Muhammad Syafri, Mohammad Gifari Sono

The Effect of Transformational Leadership and Organizational Culture on Organizational Performance with Employee Engagement Mediation

Introduction

The effect of transformational leadership and organizational culture on organizational performance with employee engagement mediation. This study examines how transformational leadership & organizational culture influence performance, with employee engagement as a mediator. SEM-PLS confirms strong positive effects.

Abstract

This study investigates the influence of transformational leadership and organizational culture on organizational performance with employee engagement as a mediating variable. Using a quantitative approach, data were collected from 190 respondents through a structured questionnaire employing a five-point Likert scale. The data were analyzed using Structural Equation Modeling with Partial Least Squares (SEM-PLS 3). The results indicate that organizational culture has the strongest positive and significant effect on organizational performance, followed by transformational leadership. Furthermore, organizational performance significantly influences employee engagement, highlighting its role as a driver of employee commitment and motivation. The R² values demonstrate that the model explains 84.0% of the variance in organizational performance and 62.5% of the variance in employee engagement, suggesting strong explanatory power. These findings emphasize the importance of embedding strong cultural values and transformational leadership behaviors to enhance organizational performance and foster employee engagement.

Review

This study presents a timely and relevant investigation into the intricate relationships between transformational leadership, organizational culture, employee engagement, and organizational performance. Employing a quantitative methodology with data from 190 respondents analyzed through SEM-PLS 3, the research aims to provide a nuanced understanding of how leadership and cultural elements contribute to performance, with a specific focus on the mediating role of employee engagement. The approach is sound, utilizing a well-established statistical technique for complex model testing, and the sample size appears adequate for the chosen methodology. The findings offer several compelling insights. Foremost, organizational culture emerges as the strongest positive predictor of organizational performance, closely followed by transformational leadership. This underscores the fundamental importance of a well-established and positive cultural environment in driving organizational success. A particularly interesting finding noted is that organizational performance significantly influences employee engagement, interpreted by the authors as engagement's role in fostering commitment and motivation. This suggests a potentially dynamic or even reciprocal relationship where improved performance can reinforce employee commitment. The high R² values (84.0% for organizational performance and 62.5% for employee engagement) attest to the robust explanatory power of the developed model, indicating that the included variables account for a substantial proportion of variance in these critical organizational outcomes. While the abstract clearly highlights direct relationships and significant effects, including the intriguing performance-to-engagement link, a more explicit detailing of the specific mediated pathways involving employee engagement would further strengthen its theoretical contribution and align more directly with the title's emphasis on mediation. Nevertheless, the study provides valuable practical implications, urging organizations to prioritize the embedding of strong cultural values and the cultivation of transformational leadership behaviors to concurrently enhance organizational performance and foster a highly engaged workforce. Future research could benefit from exploring these relationships within diverse industry contexts or employing longitudinal designs to fully unravel the causal directions and potential feedback loops within this complex framework.

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