Integration of Cultural, Dynamic Capability, and Levers of Control: An Ethical Leadership Role

Purpose: This research examines how organizational performance is affected by culture, levers of control, and dynamic capabilities. Furthermore, ethical leadership was analyzed to ascertain its potential to enhance or diminish the effect of organizational culture, levers of control, and dynamic capabilities on organizational performance, particularly within Village Credit Institutions (LPD) in Bali. Design/methodology/approach: This research employs a quantitative research methodology. The research sample consisted of LPD in Bali Province, encompassing a total of 492 entities with 1.341 respondents. The LPD administrators, namely pamucuk (head of the LPD), penyarikan (secretary), and patengen (treasurer) were the research respondents. The study used primary data through distributing questionnaires to LPD administrators. The study used Structural Equation Model (SEM) analysis, with the analysis tool using AMOS 22 for data processing. Findings: The findings show that organizational culture affects organizational performance. However, levers of control and dynamic capability do not affect organizational performance. Ethical leadership strengthens the positive influence of organizational culture on organizational performance, but it does not strengthen levers of control and dynamic capability on organizational performance. Research limitations/implications: This study was limited by the insufficient number of respondents willing to utilize digital forms and the varying operating hours of LPD. This research has theoretical implications by highlighting new measures of organizational culture and ethical leadership. LPD in Bali Province are expected to pay attention to the role of workspace to improve organizational performance. Originality/value: This study adds the workspace novelty factor, which has been shown to enhance LPD performance, to empirical evidence evaluating organizational culture.