Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Abstract

Transformational Leadership, Organizational Culture and Organizational Performance: A Study of General Insurance Industry in Indonesia

Author(s): Eka Listiani Kartono, Hendrawan Supratikno, Innocentius Bernarto, Niko Sudibjo, Rudy Pramono

This study seeks to examine the relationship of transformational leadership towards organizational culture and organizational performance of general insurance industry in Indonesia. Previous researches have studied both the relationship between transformational leadership and organizational performance and the relationship between transformational leadership and organizational culture; nevertheless, they have only presented inconclusive outcomes. In this study, a goal-oriented synergistic interaction plays a role to fill the research gap. Online electronic questionnaires were used to gather the data and to represent the general insurance industry in Indonesia, the respondents involved were all actively operated general insurance firms in 2021. The methodology included a pilot study and quantitative method. The quantitative method applied Structural Equation Modeling (PLS-SEM) in Partial Least Square. This study outcome proposed vital implications with regards to organizational interaction in Indonesia's emerging market of insurance industry. This study confirmed that the transformational leadership positively influences both goal-oriented synergistic interaction and organizational performance, but not the organizational culture. The goal-oriented synergistic interaction influences positively on both organizational performance and organizational culture. In order to achieve both firm financial and operational performance, this study recommends synergistic interactions among employees under direction of transformational leaders to generate a sturdy organizational performance.

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