Sustainable Leadership and Customer-Oriented Culture Drive Employee Performance Excellence
DOI:
https://doi.org/10.70062/harmonymanagement.v2i3.370Keywords:
Sustainable Leadership, Customer Oriented Culture, Employee Performance, Resource Based View (RBV), Organizational BehaviorAbstract
This study investigates the influence of sustainable leadership and customer-oriented culture on employee performance at PT Krakatau Sarana Properti (PT KSP), a subsidiary of PT Krakatau Steel operating in Indonesia’s commercial property sector. Amid rapid globalization and technological change, organizations are compelled to foster adaptive cultures and leadership approaches that ensure both operational excellence and long-term sustainability. Drawing on Organizational Behavior and the Resource-Based View, this research positions sustainable leadership as a strategic resource that not only directly enhances employee performance but also shapes a customer-oriented culture—an intangible asset vital for organizational competitiveness. Employing a quantitative, explanatory research design, data were collected from 95 employees using a structured questionnaire and analyzed with Structural Equation Modeling-Partial Least Squares (SEM-PLS). The findings reveal that sustainable leadership has a significant positive impact on employee performance and customer-oriented culture. Additionally, customer-oriented culture exerts a strong influence on employee performance and partially mediates the relationship between sustainable leadership and employee performance. These results underscore the importance of integrating sustainability principles into leadership practices and embedding customer-centric values throughout the organization. The study provides both theoretical and practical contributions, offering a more holistic understanding of how sustainable leadership and organizational culture jointly drive superior performance. For PT KSP and similar organizations, investing in sustainable leadership development and cultivating a customer-oriented culture are recommended strategies to enhance employee motivation, adaptability, and long-term competitive advantage in a dynamic business environment.
References
Aburumman, M., & Wasfi Alrweis, R. (2024). Transactional leadership and organizational performance: A contextual analysis. Journal of Leadership Studies, 18(1), 45–60.
Ahsan, M., & Khawaja, K. (2024). Sustainable leadership and employee performance: Evidence from emerging markets. International Journal of Human Resource Management, 35(4), 789–812.
Alshahrani, S., Alghamdi, A., & Alharthi, M. (2024). Transformational leadership and innovation in Saudi Arabian enterprises. Leadership & Organization Development Journal, 45(2), 123–140.
Armstrong, M., & Qi, H. (2020). Handbook of human resource management practice (15th ed.). Kogan Page.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27(6), 625–641. https://doi.org/10.1177/014920630102700601
Bass, B. M. (1990). Bass & Stogdill's handbook of leadership: Theory, research, and managerial applications (3rd ed.). Free Press.
Bornay-Barrachina, M., et al. (2025). Dynamic capabilities and sustainable leadership: A new synthesis. Strategic Management Review, 12(1), 50–68.
Burns, J. M. (1978). Leadership. Harper & Row.
Chaudhuri, S., Ghosh, S., & Roy, S. (2024). Revisiting the resource-based view: A framework for sustainability. Sustainability, 16(3), 1450. https://doi.org/10.3390/su16031450
Connell, J., O’Neill, M., & Salas, E. (2023). Organizational culture and customer orientation: An integrated framework. Journal of Business Research, 156, 113456. https://doi.org/10.1016/j.jbusres.2023.113456
Constantinides, P., Henfridsson, O., & Parker, G. G. (2025). Platforms and ecosystems in the digital age. Information Systems Research, 36(1), 1–15.
Demenenko, T., Shafait, Z., & Huang, J. (2019). Customer orientation and organizational culture: A meta-analysis. Journal of Marketing Theory and Practice, 27(4), 456–477.
Demenenko, T., Shafait, Z., & Huang, J. (2020). The impact of organizational culture on customer orientation in service firms. Marketing Intelligence & Planning, 38(1), 88–103.
Denison, D. R. (1990). Corporate culture and organizational effectiveness. Wiley.
Deshpandé, R., Farley, J. U., & Webster, F. E., Jr. (2023). Corporate culture, customer orientation, and innovativeness in service firms. Journal of Marketing, 87(5), 108–126.
Egan, T. (2024). Contingency theory and leadership effectiveness: A review. Leadership Quarterly, 35(1), 101–117.
Eustachio, C. D., Finkelstein, S., & Kannan, V. R. (2023). Sustainability in leadership: Evidence from global firms. Journal of Sustainable Business, 9(2), 34–50.
Fiedler, F. E. (1967). A theory of leadership effectiveness. McGraw-Hill.
Freeman, R. E., & Fields, W. (2020). Stakeholder theory and corporate social responsibility. Business Ethics Quarterly, 30(1), 12–45.
Ghlichlee, B., & Bayat, A. (2021). Internal customer orientation and its impact on organizational effectiveness. International Journal of Business and Management, 16(8), 37–49.
Griffin, M. A., Neal, A., & Parker, S. K. (2007). A new model of work role performance: Positive behavior in uncertain and interdependent contexts. Academy of Management Journal, 50(2), 327–347.
Hargreaves, A., & Fink, D. (2005). Sustainable leadership. Jossey-Bass.
Hargreaves, A., & Fink, D. (2021). Leadership for sustainability in education. Educational Leadership, 78(3), 22–29.
Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M. A., Singh, H., Teece, D. J., & Winter, S. G. (2009). Dynamic capabilities: Understanding strategic change in organizations. Blackwell Publishing.
Huo, Y., Zhao, X., & Li, J. (2023). Leadership style and employee performance: A meta-analysis. Journal of Applied Psychology, 108(2), 234–251.
Iqbal, M., & Piwowar-Sulej, K. (2022a). Sustainable leadership and employee engagement: A cross-cultural study. Sustainability, 14(6), 3237. https://doi.org/10.3390/su14063237
Iqbal, M., & Piwowar-Sulej, K. (2022b). Impact of sustainable leadership on employee performance. Journal of Business Ethics, 176(4), 731–742.
Iqbal, M., Piwowar-Sulej, K., & Nawaz, A. (2021). Sustainable leadership and innovation: The mediating role of employee creativity. Journal of Cleaner Production, 313, 127874.
Javed, A., Khan, N., & Shafait, Z. (2021). Leadership styles and employee performance: A study of the Pakistani banking sector. International Journal of Business and Management, 16(4), 45–59.
Johansen, B., & Swigart, B. (2022). Leadership in a VUCA world: Adaptive strategies for success. Harvard Business Review, 100(3), 112–119.
Karimi, S., Daryaei, A. A., & Aghaz, A. (2023). Transformational leadership and innovation performance: Evidence from Iran. Leadership & Organization Development Journal, 44(1), 89–105.
Khairy, R. M., Elbaz, J., & Abu Elanain, H. M. (2023). Transactional leadership and organizational effectiveness: Moderating role of organizational culture. Management Research Review, 46(3), 456–474.
Khan, H., Khan, A., & Khan, S. (2020). Transformational leadership and employee performance: Evidence from Pakistan. International Journal of Management Science, 18(2), 25–38.
Khan, N., & Muktar, S. (2021). Customer-oriented culture and organizational performance in service industries. International Journal of Business Excellence, 23(1), 12–29.
Koopmans, L., Bernaards, C. M., Hildebrandt, V. H., van Buuren, S., van der Beek, A. J., & de Vet, H. C. (2014). Conceptual frameworks of individual work performance: A systematic review. Journal of Occupational and Environmental Medicine, 56(2), 144–152.
Kozlowski, S. W. J. (2025). Multilevel theory, measurement, and analysis in organizations: Implications for the future. Annual Review of Organizational Psychology and Organizational Behavior, 12, 3–25.
Lambert, L. (2012). Leadership capacity for lasting school improvement. ASCD.
Lambert, L. (2023). Sustainable leadership for organizational success: A systemic approach. Journal of Leadership Studies, 17(1), 14–29.
Latifah, S., Sari, R. F., & Pratama, A. (2024). Employee performance and organizational success: A systematic review. Management Science Letters, 14(3), 321–330.
Liao, Z. (2022). Customer-oriented culture and innovation performance: An empirical study. Journal of Business Research, 138, 468–479.
Luo, Y., Zhang, B., & Fang, S. (2025). Organizational culture and employee performance: The mediating role of leadership. Human Resource Management Review, 35(1), 100849.
Matsuo, M. (2019). Internal customer orientation and its impact on organizational effectiveness. Service Industries Journal, 39(6), 442–460.
Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.
Olan, F., et al. (2024). Workforce capabilities in the era of Industrial Revolution 4.0. International Journal of Production Economics, 262, 108030.
Parasuraman, A. (1987). Customer-oriented organizational culture: A framework for service quality. Journal of Marketing, 51(4), 68–81.
Peillon, S., & Lemoine, J. F. (2018). Customer orientation and organizational effectiveness: A meta-analytic review. European Management Journal, 36(6), 726–738.
Permata, F., & Satrio, B. (2024). Customer culture and employee performance in Indonesian infrastructure firms. Journal of Infrastructure Systems, 30(1), 04023042.
Ployhart, R. E., & Nyberg, A. J. (2023). Human capital and competitive advantage: A resource-based view. Academy of Management Perspectives, 37(2), 204–220.
Porkodi, S. (2024). Contingency theory and leadership effectiveness. International Journal of Management Reviews, 26(1), 87–105.
Prabhu, V., & Westerman, J. (2023). Sustainable leadership and organizational performance: A meta-synthesis. Leadership Quarterly, 34(2), 101709.
Raza, S. A., & Johannsdottir, L. (2024). Best practices in sustainable leadership implementation. Journal of Business Ethics, 170(1), 123–141.
Ray, S., Gupta, R., & Singh, V. (2023). Human capital and organizational performance: An RBV perspective. Human Resource Management Journal, 33(3), 567–585.
Rimita, K., et al. (2020). Organizational behavior in VUCA environments. Journal of Organizational Change Management, 33(8), 1457–1472.
Robbins, S. P., & Judge, T. A. (2022). Organizational behavior (19th ed.). Pearson.
Rotatori, D., Ma, S., & Chen, J. (2021). Automation and workforce transformation in Industry 4.0. Technology in Society, 64, 101482.
Sajjad, A., et al. (2024). Sustainable leadership and innovation: Empirical evidence from Asia. Sustainability, 16(4), 1938.
Sajjad, A., et al. (2022). Sustainable leadership and employee well-being: A systematic review. Journal of Leadership & Organizational Studies, 29(3), 295–310.
Schein, E. H. (1990). Organizational culture and leadership (2nd ed.). Jossey-Bass.
Shafait, Z., & Huang, J. (2023). Organizational culture as a mediator between leadership and performance. International Journal of Organizational Analysis, 31(5), 1175–1191.
Shafait, Z., & Huang, J. (2024). Leadership styles and organizational culture: A meta-analytic review. Leadership Quarterly, 35(1), 101–120.
Silva, E. C., & Mendis, P. (2017). Challenges in operationalizing sustainable leadership. Sustainability Accounting, Management and Policy Journal, 8(3), 411–429.
Slater, S. F., & Narver, J. C. (1990). Market orientation and the learning organization. Journal of Marketing, 54(4), 3–7.
Sugiyono. (2018). Metode penelitian kuantitatif, kualitatif, dan R&D. Alfabeta.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Varshney, D., & Varshney, N. (2024). Employee performance and organizational culture in Indian IT firms. International Journal of Human Resource Management, 35(2), 234–256.
Varga, A., Horváth, L., & Molnár, K. (2024). Resource heterogeneity and competitive advantage: A resource-based view. Journal of Strategic Management, 9(1), 44–59.
Waqar, A., Khan, M., & Khan, A. (2024). Sustainable leadership and CSR: A conceptual framework. Corporate Social Responsibility and Environmental Management, 31(2), 412–425.
Waldman, D. A., & Sparr, J. L. (2023). Organizational behavior in the age of AI. Annual Review of Organizational Psychology and Organizational Behavior, 10, 129–151.
Widodo, C. P., & Purnama, A. (2023). Customer-oriented culture and employee performance in Indonesia’s infrastructure sector. Asian Journal of Business and Management, 11(1), 56–72.
Zablah, A. R., Bellenger, D. N., & Johnston, W. J. (2012). Customer-oriented culture: The influence of internal and external customer orientation on performance. Journal of Business Research, 65(5), 645–651.
Zabel, A., & O’Brien, C. (2024). Market orientation and dynamic capabilities: The role of customer orientation. Journal of Marketing, 88(1), 45–61.
