Effect of transformational leadership and breakthrough leadership on organizational performance through the variable of employee satisfaction : a case study

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.