Crisis and Organizational Sustainability: Empirical Analysis of the Implication of Transformational Leadership on the Decision to Stay Mediated by the Commitment of the Democratic Party in Indonesia

Abstract

The research focuses on the impact of transformational leadership on the decision to stay mediated by commitment after a court refusal regarding illegal extraordinary congress involving the outsiders of a political party in Indonesia (in this case, it is the Democratic Party currently led by Agus Harimurti Yudhoyono), where this phenomenon is classified as a crisis. Theories and the previous literature pointed out that transformational leadership would significantly affect an individual’s decision to stay with the institution through commitment. Therefore, this research empirically analyzes the hypotheses using quantitative methods on 349 respondents who are central (DPP) and local (DPD and DPC) active committees of the Democratic Party. Respondents are collected using cluster random sampling. Referring to theories and the previous literature, the latent variables of this research are constructed using dimensions. Transformational leadership (TL) has four dimensions which are charisma (idealized influence), inspirational motivation, intellectual stimulation, and individual considerations. Commitment has three dimensions which are affective, normative, and sustainable commitments. The decision to stay has two dimensions, which are intrinsic and extrinsic motivations. By using Structural Equation Modeling–Partial Least Square (SEM–PLS), the research revealed that the direct effect shows that transformational leadership and commitment significantly influence the decision to stay. On the other hand, the indirect effect indicates that commitment significantly mediates the relationship between transformational leadership and the decision to stay. The result indicates strong transformational leadership performed by Agus Harimurti Yudhoyono as the chief of the Democratic Party in Indonesia.