Exclusive human values as a mediator of leadership skills to improve organisational performance

Abstract

Orientation: The Indonesian sugar industry faces significant challenges, including high production costs, reliance on imported raw materials, and centralised production in Java. Addressing these issues requires leadership that integrates technical competence with strong human values to drive organisational performance.
Research purpose: This study analyses the direct influence of leadership soft skills on organisational performance and its indirect influence, mediated by Exclusive Human Values (EHV). The EHV encompass industry-specific attributes such as work enthusiasm, problem-solving ability, intellectual quality, and adaptability.
Motivation for the study: The research is motivated by the need to understand how values-based leadership can cultivate a more ethical, inclusive, and high-performing work environment within this strategically vital yet challenged sector.
Research approach/design and method: A quantitative, cross-sectional survey design was employed. Data were collected from 406 leaders across 29 sugar factories under Sinergi Gula Nusantara, using proportional random sampling. The hypothesised relationships were tested using structural equation modelling.
Main findings: Leadership soft skills demonstrated a direct, positive, and significant effect on both EHV and organisational performance. Furthermore, EHV significantly and indirectly influenced organisational performance and fully mediated the relationship between leadership skills and performance.
Practical/managerial implications: Organisations should invest in leadership development programmes that build both technical skills and EHV. Fostering a corporate culture that embodies and rewards these values is crucial for achieving sustainable performance improvements.
Contribution/value-add: This study provides empirical evidence for EHV’s fully mediating role, offering policymakers and practitioners in state-owned enterprises valuable insights for enhancing performance through values-based leadership.