Open Access
American Research Journal of Business and Management
ISSN (Online): 2379-1047
DOI: 10.46568/arjbm
The role of employee engagement as a mediating effect on corporate culture and human capital for enhancing defence industry effectiveness
Erry Herman, Haryono Umar, Willy Arafah, ”The role of employee engagement as a mediating effect on corporate
culture and human capital for enhancing defence industry effectiveness.” American Research Journal of Business and
Management, vol 6, no. 1, 2020, pp. 1-11.
Abstract
BResearch on organization effectiveness has shown a significant upward trend in the recent past. The purpose of the present study is to propose
a conceptual model that empirically examines the relationship between organization effectiveness and related variables that affect it such as
corporate culture and human capital and also indirectly affected by employee engagement of Indonesia Defense Industry - PT Pindad Persero,
PT Dirgantara Indonesia and PT Pal Indonesia Persero. A data set of managers and staff was collected from defence industries and it represents
the X, Y, Z generation. It was collected through a survey instrument based on quota with random proportional samples. The collected responses
were subsequently tested by using structural equation modelling (SEM).
The research result shows the importance of intangible dimension is a crucial factor and the most significant variable to increase defense
industry organization effectiveness is to put forward employee high level working commitment through employee engagement development.
Employee engagement is the binding factor in order to enhance corporate culture transformation and to absorb knowledge, competency and
employee qualification through human capital development, which are lead to improve defense industry organization effectiveness in terms of
productivity, adaptability and flexibility.
Managerial implication from this research gives the theoretical approach to the researcher and manager to apply a good employee engagement
in developing creativity and innovation capability, making proper culture transformation to produce a solid team work, which is supported by
high performance human capital development in order to improve organizational effectiveness. For further research, it is needed to examine
other variables for measuring organizational effectiveness such as, integrity, trustworthiness and business intelligence /big data analytics. This
research demonstrates the impact of organization effectiveness on the defence industry, a relatively under research in Indonesian context. The
present study is an earnest effort in this direction to analyze the relationship of corporate culture, human capital through employee engagement
in order to enhance organizational effectiveness.
