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Effect of Transformational Leadership and Breakthrough Leadership on Organizational Performance through the Variable of Employee Satisfaction: A Case Study

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  • Joko Triraharjo
  • Havidz Aima
  • Achmad Sutawijaya
  • Ahmad Badawy Saluy

Abstract

Purpose: The article investigates the impact of transformational leadership and breakthrough leadership on organizational performance both directly and through intervening variables. Design/ Methodology/Approach: This type of research is a quantitative method. Primary data were obtained from questionnaires distributed while secondary data were obtained from a company's annual reports published. Respondents are employees of 15 coal mining companies listed in Indonesia stock exchange with a total of 201 samples from supervisors to directors. The data collected are analyzed using the SEM-AMOS (Structural Equation Model-Analysis of Moment Structures) at that point for the intervention impact by using the Sobel Test. Findings: The findings of the study show that transformational leadership and breakthrough leadership both have a direct influence on employee motivation and satisfaction, but do not have a direct effect on organizational performance. Employees’ satisfaction mediates breakthrough leadership on organizational performance. Practical Implication: The study gives an input to the coal mining companies listed to improve organizational performance which requires a breakthrough leadership by fulfilling the requirements of employees’ satisfaction. Priority fulfillment of employee satisfaction starts from fulfillment of need, discrepancies, value attainment, equity, and dispositional/genetic component. Originality/ Value: The research provides new concepts in the research framework and builds and enriches alternative dimensions of leadership breakthrough.

Suggested Citation

  • Joko Triraharjo & Havidz Aima & Achmad Sutawijaya & Ahmad Badawy Saluy, 2020. "Effect of Transformational Leadership and Breakthrough Leadership on Organizational Performance through the Variable of Employee Satisfaction: A Case Study," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 554-568.
    • Handle: RePEc:ers:ijebaa:v:viii:y:2020:i:3:p:554-568
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    References listed on IDEAS

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    1. Subramony, Mahesh & Segers, Jesse & Chadwick, Clint & Shyamsunder, Aarti, 2018. "Leadership development practice bundles and organizational performance: The mediating role of human capital and social capital," Journal of Business Research, Elsevier, vol. 83(C), pages 120-129.
    2. Joko Triraharjo & Havidz Aima & Achmad Sutawijaya, 2019. "The Effect of Servant Leadership and Breakthrough Leadership on Organization Performance with Employee Satisfaction as Intervening Variable at IDX-listed (Indonesia Stock Exchange) Coal Mining Compani," International Review of Management and Marketing, Econjournals, vol. 9(3), pages 166-172.
    3. Mohammed Abdulai Mahmoud & Baba Yusif, 2012. "Market orientation, learning orientation, and the performance of nonprofit organisations (NPOs)," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 61(6), pages 624-652, July.
    4. Syahruddin Sappe & Yohanis Rante & Ruben Tuhumena & Bonifasia Elita Bharanti, 2016. "Effect of Leadership on Employee's Performance Mediated by Cultural Organization, Work Commitment and Motivation," Journal of Economics and Behavioral Studies, AMH International, vol. 8(2), pages 101-107.
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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative

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