THE INFLUENCE OF LEADERSHIP STYLE AND ORGANIZATIONAL CULTURE

ON EMPLOYEE PERFORMANCE

 

Afrid Budi Cahyono1, Nur Wening2�

Universitas Teknologi Yogyakarta, Jawa Tengah, Indonesia

 

[email protected]1 , [email protected]2

 


ABSTRACT

Human resources have an important role as implementers of company policies and operations so that they become the most important asset for an organization or company. To achieve the vision and mission of an organization or company's goals, leadership style and organizational culture play an important role in its success. This study aims to determine the effect of leadership style and organizational culture on employee performance. This literature study with secondary data is used as a research method. Data related to the research topic was obtained from national journal publications from 2017 to 2023. The results of the literature review analysis show that leadership style and organizational culture have a positive and significant effect on employee performance. This research implies that organizations can focus more on developing effective leadership styles, such as transformational or democratic, which have been shown to have a positive impact on employee performance. And building a supportive, inclusive, and motivating culture will be key in improving employee performance.

 

Keywords: Leadership Style, Organizational Culture, Performance.

 



Corresponding Author: Afrid Budi Cahyono

Email: [email protected]

 

INTRODUCTION

The development of science and technology in the era of globalization has caused changes and technology in this era of globalization has caused changes in organizations (Amir, 2022). In an increasingly tight competitive situation, government agencies and private companies must adapt and improve their capabilities to survive. Human resources (HR) are the most valuable assets for an organization or company because they act as subjects implementing policies and operational activities (Riniwati, 2016). Therefore, the performance of human resources is an important factor in achieving the organization's vision, mission, and goals.

According to several studies conducted by Bass et al., Locander et al., and Yammarino et al. (Mariam, 2009), leadership is important in determining employee performance and the organization's ability to adapt to environmental changes. Effective leadership must provide clear direction for all employees to achieve their goals. At the same time, the organization could be more effective in achieving the stated goals.

Several experts, such as Bass and Avolio (1993:160-175) and Schein (2004:25), state that a leader can shape the culture of an organization and, in turn, is shaped by the culture that exists in the organization. According to (Govindarajan, 2019), organizational culture (Govindarajan, 2019)includes shared beliefs, espoused life values, behavioral norms, and assumptions that are implicitly accepted and explicitly manifested throughout the organization. These elements are the basis for monitoring employee behavior and how they think, work together, and interact with their environment. Organizational culture can be defined as a system of values, beliefs, assumptions, or norms that are valid, agreed upon, and followed by the members of an organization as a guide for behavior and solving organizational problems.

In several previous studies (as shown in the table below), the author has tried to evaluate the influence of leadership style and organizational culture on employee performance in government agencies and private companies (Pebrian et al., 2023). However, the results of these studies still have differences. For example, a study conducted by Samsul (Junaidi & Susanti, 2019)shows that leadership style and organizational culture significantly affect employee performance. However, research by (Rahayu Cantika, 2022) shows that leadership style only significantly affects performance.

Table 1. Data extraction in the ASN scope

WRITER

RESULTS

Influence of leadership style on performance (Partial)

The influence of organizational culture on performance (Partial)

The influence of leadership style and organizational culture on performance (Simultaneous)

Information

(Junaidi & Susanti, 2019)

Significant

-

Significant

-

Significant

-

(Anandita et al., 2022)

-

Positive but not significant

Positive and significant

-

Positive and significant

-

(Maryani et al., 2020)

Significant

-

Significant

-

Positive and significant

-

(Syurya et al., 2019)

Positive and significant

 

Positive and significant

 

Positive and significant

-

(Windaryadi, 2018)

Significant

-

Significant

-

Positive and significant

-

(Thamrin, 2020)

Positive and significant

-

Positive and significant

-

-

-

Table 2. Data extraction table in the BUMN/BUMD/PRIVATE sector

 

WRITER

RESULTS

Influence of leadership style on performance (Partial)

The influence of organizational culture on performance (Partial)

The influence of leadership style and organizational culture on performance (Simultaneous)

Information

(Widianto & Supriyono, 2018)

Significant

-

Significant

-

-

-

(Jufri & Marimin, 2022)

Significant

-

Significant

-

Positive and significant

-

(Prasada, 2020)

Significant

-

Significant

-

Positive and significant

-

Alfina, et al (2019)

Significant

-

Positive and significant

-

Significant

-

(Kurniawan, 2021)

Significant

-

Significant

-

Significant

-

(Zeindra & Lukito, 2020)

Positive and significant

-

Positive and significant

-

Positive and significant

-

(Mufarrahah, 2022)

-

Positive but not significant

Positive and significant

-

Positive and significant

-

(Mariani & Sepdiana, 2021)

 

Not significant

Positive and significant

-

-

-

(Prasada, 2020)

Significant

-

Significant

-

Significant

-

(Hasyim & Nuridin, 2020)

Positive and significant

-

Positive and significant

-

Positive and significant

-

(Imron, 2018)

Significant

-

Significant

-

Positive and significant

-

(Gunawan & Baharudin, 2019)

Significant

-

Significant

-

Positive and significant

-

(Manunggal, 2020)

Significant

-

Significant

-

Positive and significant

-

(Rivai, 2020)

Positive and significant

-

Positive and significant

-

Positive and significant

-

The literature review study table above shows some inconsistencies in the research results. With this evidence gap, it is hoped that the author will find out how significant the influence of leadership style and organizational culture is on employee performance and what factors can influence employee performance. This research aims to determine and analyze the influence of leadership style and organizational culture on employee performance.

 

METHOD

Method

Research method using Systematic Literature Review. The data source was taken from research publications on leadership style, organizational culture, and employee performance. The publication results are taken from national journals that already have ISSN.

The research method used in this research is a Systematic Literature Review. The data sources used in this research are the results of research publications related to leadership style, organizational culture, and employee performance, which have been published in journals that have ISSN in the 2020 - 2022 period.

Assessment criteria

In this study, the article inclusion criteria used must meet the following requirements:

a)    Articles must be accessible online and have been published in a journal.

b)    Articles must be related to research topics within a maximum period of the last four years, namely 2019 � 2022

Apart from that, there are exclusive criteria used in this research; articles that meet the inclusion criteria but are published by journals that do not have an ISSN will be excluded from this research.

Research Phase

This systematic review research stage consists of several steps that must be followed according to (2015), namely planning, conducting, and reporting.

1.    Planning

At the Planning stage, researchers begin by formulating questions that will be used to conduct a review based on PICOC. PICOC is an abbreviation of the following terms: Population (P), Intervention (I), Comparison (C), Outcomes (O), and Context (C).

a)    Population (P) refers to the target group of a study or the results of an article investigation. The population studied in this research were employees, both from private companies and government agencies.

b)   Intervention (I) covers detailed aspects of the investigation or issue of interest to the researcher, such as leadership style, work culture, and employee performance.

c)    Comparison (C) is the aspect of an investigation that compares the interventions carried out from the research results. An example is how significantly leadership style influences employee performance compared to organizational culture.

d)   Results (O) include the effects and results of interventions that have been written and published, such as the results of leadership style, organizational culture, and their influence on employee performance.

e)   Context (C) includes the environment and settings of the investigation in the work environment of companies and agencies.

2.    Conducting

The conducting stage is the stage of carrying out systematic review research by carrying out the following steps:

a)    Determine keywords to search for literature using the keywords leadership style, organizational culture, and employee performance

b)    Select literature that is relevant to the research topic with the help of research inclusion and exclusion criteria.

c)    Assess the quality of literature through quality assessment by referring to appropriate question parameters.

d)    Extract data by creating a grouping matrix of the articles' results.

e)    Synthesize the selected literature narratively and quantitatively to obtain clear conclusions.

3.    Reporting

The reporting stage in systematic review research is where the results are compiled and written down in the form of a report or article.

 

 


 

RESULTS AND DISCUSSION

Table 1. Data extraction in the ASN scope

Researcher

Title

Journal

Method

Results

(Junaidi & Susanti, 2019)

 

The Influence of Leadership & Organizational Culture on Employee Performance at the Nanggalopadang Subdistrict Office.

 

 

Journal of Management & Business Development.

Vol.2, No.3, September 2020

ISSN-P: 2355-0376

ISSN-E: 2656-8322

a.       Quantitative

b.       Sample of 61 people.

The research results of the leadership style and organizational culture variables jointly influence the performance of employees at the Nanggalo Padang Subdistrict Office with a significant value.

(Anandita et al., 2022)

The Influence of Leadership Style & Organizational Culture on Employee Performance at the Jombang Public Works and Spatial Planning Department

 

Management Journal.

Vol.1, No.4, October 2022

e-ISSN 2809-8099 | p-ISSN 2810-0484

a.       Quantitative

b.       Sample 60 respondents

The research results show that the Leadership Style variable partially has a positive but insignificant influence on employee performance. In contrast, the Organizational Culture variable positively and significantly influences employee performance. Simultaneously, the Leadership Style and Organizational Culture variables positively and significantly affect the Performance of Jombang PUPR Service Employees.

(Maryani et al., 2020)

The Influence of Principal Leadership Style and School Organizational Culture on Teacher Performance (State Kindergarten in the Ogan Ilir Regency area)

Journal of Innovation in Teaching and Instructional Media Vol. 1 No 1, September 2020 Page:18-25

a.       Quantitative

b.       A sample of 47 people

The results of the research show that 1) there is an influence that the principal's leadership style has on teacher performance, 2) there is an influence of school organizational culture on teacher performance, 3) there is a significant influence between the principal's leadership style and school organizational culture on teacher performance.

(Syurya et al., 2019)

The Influence of Leadership, Organizational Culture & Work Motivation on the Performance of Pare-Pare City DPRD Secretariat Employees.

Journal of Management, Volume 2 Issue 3 (2019) Pages 175 � 188, ISSN: 2614-851X (Online)

a.       Quantitative

b.       A sample of 51 people

The research results show that leadership, organizational culture, and work motivation positively and significantly affect employee performance at the Parepare City DPRD Secretariat. Of the three independent variables used in this research, the leadership variable has a dominant influence in improving employee performance.

(Windaryadi, 2018)

The Influence of Leadership and Organizational Culture on Employee Performance (Tugumulyo District Office, Musi Rawas).

Sriwijaya Journal of Management and Business Vol.16 (3), 2018,

ISSN: 1412-4521

a.       Quantitative

b.       Sample of 26 people

The research results show that (1) Leadership partially influences employee performance, and (2) organizational culture influences employee performance. (3) Leadership and organizational culture influence employee performance at the Tugumulyo District office, Musi Rawas.

 

(Thamrin, 2020)

The Influence of Visionary Leadership & Organizational Culture on Employee Performance in Cimahi City Government.

Journal of Economics & Sharia Economics, Vol 3 No 1, January 2020, E-ISSN: 2599-3410. P-ISSN: 2614-3259

a.       Quantitative

b.       A sample of 93 people

The results of this research show that visionary leadership has a positive and significant influence on the performance of Cimahi City Government employees. In addition, it was found that organizational culture had a positive and significant influence on the performance of Cimahi City Government employees.

 


 

Table 2. Data extraction in the BUMD/ BUMN/ PRIVATE Scope

Researcher

Title

Journal

Method

Results

(Widianto & Supriyono, 2018)

The Influence of Leadership and Organizational Culture on the Performance of Sharia Bank Employees with Job Satisfaction as an Intervening Variable

Journal of Economics and Banking Vol 3. No. 2 (2018).

ISSN 2579 - 5597

a.       Quantitative

b.       Sample of 90 people

This research shows that leadership and organizational culture have a positive and significant effect on employee performance.

(Jufri & Marimin, 2022)

The Influence of Leadership Style & Organizational Culture on Employee Performance. (At the central Baitul Maal Hidayatullah Amil Zakat Institution).

Journal of Civilization Administration,

Vol. 2, No. 2, May 2022

p-ISSN: 2775-1880

e-ISSN: 2775-1872

a.       Quantitative

b.       Sample of 48 people.

The research results simultaneously show a positive and significant influence of leadership style and organizational culture variables on employee performance.

(Prasada, 2020)

 

 

 

 

The Influence of Leadership Style & Organizational Culture on Employee Performance at PT. Independent Construction in South Tangerang.

Journal of Education, Humanities & Social Sciences (JEHSS). Vol 3, No. 2, December 2020.

ISSN 2622-3740

a.       Quantitative

b.       Sample of 52 people.

 

Leadership Style and Organizational Culture simultaneously have a significant effect on employee performance.

 

Alfina et al. (2019)

 

 

 

 

The Influence of Leadership Style & Organizational Culture on Employee Performance (Study at PO. Dedy Jaya Brebes 2016-2018).

Journal of Economics and Management (JECMA), Vol. 1, No. 1, February 2019.

ISSN: 2746-0568

 

a.       Quantitative

b.       Sample of 50 people

 

 

So, this research can conclude that the variables of leadership style and organizational culture simultaneously or together significantly affect the dependent variable, namely employee performance.

 

 

(Kurniawan, 2021)

 

The Influence of Leadership Style & Organizational Culture on PT Employee Performance. Nusa Construction Engineering.

 

Pundi Journal.

Vol. 04, No. 03, November 2020.

ISSN: 2556 - 2278

 

 

a.       Quantitative

b.       A sample of 54 respondents

 

From the results of 3 studies and five discussions, it was concluded that 1 Leadership Style and Organizational Culture 9 had a positive and seven significant effect on the performance of 0 employees at PT. Nusa 1 Construction 2 Engineering Tbk.

 

(Zeindra & Lukito, 2020)

 

 

 

The Influence of Transformational Leadership Style & Organizational Culture on PT Semen Padang Employee Performance with Job Satisfaction as Mediation.

 

Scientific Journal of Management Economics Students.

Vol. 5, no. 2, May 2020.

E-ISSN: 2598-635X, P-ISSN: 2614-7696

 

a.       Quantitative

b.       Sample of 129 employees.

 

 

 

The research analysis results show a positive and significant influence between transformational leadership and organizational culture on employee satisfaction, and transformational leadership and organizational culture have a positive and significant influence on employee performance.

(Mufarrahah, 2022)

Influence of Leadership Style & Organizational Culture

On Employee Performance at PT. Wahana Safety Indonesia.

 

Research Journal of Accounting and Business Management.

Vol.6, No.2, (2022)

P-ISSN: 2580 � 3115; E-ISSN: 2580 - 3131

a.       Quantitative

b.       Sample of 150 employees.

 

The research results show that partial leadership style does not significantly affect performance. However, leadership style (X1) and organizational culture (X2) simultaneously have a positive and significant effect on employee performance (Y). This shows the relationship between leadership style (X1) and organizational culture (X2) simultaneously influencing the performance of employees from PT Wahana Safety Indonesia.

(Mariani & Sepdiana, 2021)

The Influence of Leadership Style & Organizational Culture on PT Employee Performance. As no Horie Indonesia

Journal of Entrepreneurship Strategic Management, Vol. 1 (No.1), 2021, p: 1 � 10. ISSN: 2723-701X

 

a.       Quantitative

b.       A sample of 77 people

The research results show that the leadership style variable does not significantly affect employee performance. However, organizational culture has a significant positive effect.

(Prasada, 2020)

The Influence of Leadership Style & Organizational Culture on Employee Performance at PT. Mandiri Construction in South Tangerang

Journal of Education, Humanities and Social Sciences (JEHSS), Vol 3, No. 2, (2020), 629-636, ISSN 2622-3740 (Online)

a.       Quantitative

b.       Sample of 52 people

The results of this research indicate that leadership style and organizational culture partially and simultaneously have a significant effect on employee performance.

(Hasyim & Nuridin, 2020)

The Influence of Leadership & Organizational Culture on PT Employee Performance. KAO Indonesia

Krisnadwipayana Business Management Journal, Vol.8. No. 2, May-August 2020, p-ISSN: 2338-4794 e-ISSN: 2579-7476

a.       Quantitative

b.       Sample of 75 people

Based on the research results, the following can be concluded: 1). Simultaneously, there is a positive influence of leadership and organizational culture variables on employee performance 2) There is a positive and partially significant influence from the leadership variable on employee performance 3). There is a positive and partially significant influence of organizational culture variables on employee performance

(Imron, 2018)

The Influence of Leadership & Organizational Culture on Employee Performance (Study at Bank Central Asia KCP. Singosari Malang)

Journal of Management Science,

Volume 4, Number 2, July 2018. ISSN: 2460-1012

a.       Quantitative

b.       Sample of 40 people

The research results show that leadership and organizational culture influence employee performance simultaneously; Leadership has a dominant influence on employee performance. A limitation of this research is that the variables used as predictors of employee performance only consist of two independent variables: leadership and organizational culture.

(Gunawan & Baharudin, 2019)

The Influence of Leadership Style & Organizational Culture on PT Employee Performance. KMPlus

Journal of Administration and Management Vol 9 no 2, 2019, e-ISSN: 2623-1719

p-ISSN: 1693-6876.

a.       Quantitative

b.       A sample of 85 people

The research results show that leadership style and organizational culture positively and significantly influence employee performance and other factors.

(Manunggal, 2020)

The Influence of Leadership & Organizational Culture on the Performance of BPJS Employment Yogyakarta Employees

Upajiwa Dewantara, Vol. 4 No. June 1, 2020.

a.       Quantitative

b.       Sample of 50 people

The research results show that leadership and organizational culture have a significant effect on employee performance, and together, they have a significant effect on BPJS employee performance.

(Rivai, 2020)

The Influence of Transformational Leadership & Organizational Culture on Employee Performance (PT. Federal International Finance � Medan)

Maneggio: Master of Management Scientific Journal, Volume 3, Number 2, September 2020, e-ISSN 2623-2634

a.       Quantitative

b.       Sample of 60 people

The results of this research indicate that transformational leadership and organizational culture have a positive and significant effect on the performance of PT Federal International Finance - Medan employees. Transformational leadership and organizational culture simultaneously have a positive and significant effect on the performance of PT employees. Federal International Finance - Medan

Based on the results of the literature analysis, 20 articles were selected, divided into six articles taken from the civil servant environment and 14 articles from the private/BUMD/BUMN environment. From the results of each article above, it can be classified as follows:

Categories in the Civil Service Environment

a. � Most of the influence of leadership style and organizational culture on the performance of employees in the civil service environment is positive and significant. However, the difference is obtained from the article studied (Anandita et al., 2022), which concludes that leadership style and organizational culture do not significantly affect teacher performance. This implies that increasing or decreasing the leadership level does not have much influence on teacher performance.

b. Apart from leadership style and organizational culture, other factors can influence employee performance, including competence, job satisfaction, work motivation, and organizational communication.

Categories in BUMN/BUMD/Private Environment

a. � Most of the influence of leadership style and organizational culture on the performance of employees in BUMN/BUMD/private environments has a positive and significant influence on the performance of employees/employees. However, different from the research results, (Mariani Sepdiana, 2021) concluded that leadership style only significantly affects employee performance. The same thing was also obtained from the results of the research conclusions (Mufarrohah, 2022)

b. According to Kurniawan (2020), four leadership styles significantly influence employee performance: supportive, directive, participative, and achievement-oriented. Positive leadership can influence subordinates' perceptions and motivate them by providing clarity of tasks and goals to be achieved and providing satisfaction and effective work implementation. Apart from that, Kurniawan (2020) also found that positive organizational culture variables related to employee behavior rules, work standards, and monitoring of work results also significantly affect employee performance.

This is in line with one of the research results concluded by (Junaidi & Susanti, 2019) and (Jufri Marimin, 2022), which confirms that leadership style and organizational culture simultaneously positively and significantly influence employee performance.

Different findings were revealed by (Mariam, 2009), who concluded that intervening variables influence leadership style and organizational culture on employee performance. A good leadership style and organizational culture will first increase employee job satisfaction, which will increase employee performance.

Mukmin explained that the right leadership style would create a conducive work environment for employees, good working relationships between employees and superiors, and eliminate social gaps between lines within the company, creating a comfortable working atmosphere for all parties, including employees. Employees will feel satisfied if they work in good conditions or situations by the employee's expectations. Once employee job satisfaction is met properly, it will affect employee performance.

Organizational culture is also known to positively and significantly affect employee performance. The better the organizational culture created, the more satisfied employees will be, resulting in higher performance.

This is in line with one of the research results concluded by (Zeindra Lukito, 2020). However, Zeindra revealed something more complex, where in his research, Zeindra showed a positive relationship between transformational leadership and employee job satisfaction. A leadership style that not only leads subordinates but can also motivate subordinates will further increase the job satisfaction of company employees. Freedom for employees to complete work in their style and to propose ideas shows a positive organizational culture (Zeindra & Lukito, 2020).

Apart from that, Management must pay attention to factors influencing employee job satisfaction, such as need fulfillment, value attainment, and equity (fairness). Employees who are satisfied with transformational leadership have a greater influence on employee performance, where employee performance can be improved through transformational leadership without first increasing job satisfaction.

Some research also reveals that apart from job satisfaction, other factors influence the results of the influence of Leadership Style and Organizational Culture on employee performance. Prasada (2020) stated this. Most leadership styles and organizational cultures have a significant influence on employee performance. However, other factors contribute to influencing employee performance. However, unfortunately, (Prasada, 2020) does not reveal other factors that influence this performance in detail.

Several studies show that leadership style can influence employee performance. However, research results are more significant (Alfina et al., 2019), which show a positive influence of leadership style on employee performance. Although insignificant. Therefore, leadership style is not the only factor determining increased employee performance. Companies can improve employee performance by providing appreciation in the form of appropriate rewards to satisfy employees and by improving a positive organizational culture that can significantly influence employee performance regardless of the leadership style used. Apart from that, organizational culture also positively influences employee performance. A well-developed organizational culture can influence employee behavior and improve employee performance. The partial correlation test (Alfina et al., 2019)proves that organizational culture positively and significantly affects employee performance. The better the organizational culture provided, the greater its influence on improving employee performance.

This is in line with the results of research (Anandita et al., 2022)which produced the following conclusions: a. Leadership style is influential but has little impact on employee performance due to the presence of indicators of authoritarian leadership, employees do not like leaders who do not want to accept suggestions from their subordinates. b. Organizational culture is proven to have a positive impact on employee performance because a positive organizational culture encourages employees to carry out tasks by specified work standards, which impacts a fair division of tasks, motivating employees to achieve optimal work results.

 

CONCLUSION

Based on the results of the discussion in literature study cases, research on leadership style and organizational culture variables largely influence employee performance. However, there are still phenomena related to leadership style that only sometimes significantly affect employee performance. This is because many factors influence leadership style and work culture on employee performance. Likewise, organizational culture also partially influences employee performance, even though the percentage is very small. With the results of the research above, there may be factors that influence employee performance. Therefore, future research can find other factors that can influence employee performance.

 

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