Islamic Leadership and Organizational Culture Drive Employee Performance After Bank Merger, Study Finds
A new study by Kahar, Prof. Muslimin Kara, Dr. Abdul Wahab, and Dr. Amiruddin from Universitas Islam Negeri (UIN) Alauddin Makassar, Indonesia, reports that Islamic leadership and value-based organizational culture significantly improve employee satisfaction and performance in post-merger Islamic banking. Published in 2026 in the International Journal of Global Sustainable Research (IJGSR), the research highlights how ethical leadership and shared institutional values can stabilize workforce productivity during large-scale organizational transitions.
The study focuses on employees at Bank Syariah Indonesia (BSI) Makassar Branch, a financial institution formed through the consolidation of several state-owned Islamic banks. Bank mergers often create operational uncertainty, cultural adjustment challenges, and shifts in corporate identity. The findings matter because human capital stability is widely recognized as a decisive factor in determining whether financial integrations succeed or fail.
Banking Consolidation Raises New Workforce Challenges
The rapid expansion of Islamic banking across emerging economies has accelerated consolidation strategies aimed at strengthening competitiveness and improving capital structures. However, merging institutions is not simply a technical process—it requires aligning leadership styles, organizational values, and employee expectations.
Periods of transition frequently disrupt workplace morale. Employees may face new reporting structures, revised performance metrics, and unfamiliar corporate cultures. Without strong leadership and cohesive values, these disruptions can lead to declining productivity.
Against this backdrop, the research from UIN Alauddin Makassar positions Islamic management principles—such as justice, trustworthiness, accountability, and social responsibility—as strategic tools for maintaining organizational cohesion.
Unlike earlier studies that examined motivation, leadership, or culture separately, this research integrates five interconnected variables: Islamic work motivation, Islamic leadership, Islamic organizational culture, job satisfaction, and employee performance. The model provides a more comprehensive explanation of how values influence measurable workplace outcomes.
Simple Quantitative Approach With Real Employees
The research team applied a quantitative explanatory design to map relationships between organizational factors and performance indicators.
A total of 232 permanent employees from Bank Syariah Indonesia’s Makassar branch participated in a structured survey. Their responses were analyzed using Structural Equation Modeling with Partial Least Squares, a statistical approach commonly used to evaluate complex cause-and-effect relationships within organizational settings.
By examining both direct and indirect influences, the method allowed researchers to identify which factors most strongly predict employee performance during institutional change.
Key Findings: Organizational Values Outweigh Individual Motivation
The study delivers a clear message: organizational environment matters more than personal drive alone when it comes to sustaining high performance after a merger.
Major findings include:
- Islamic leadership significantly improves both job satisfaction and employee performance. Leaders perceived as fair, ethical, and supportive foster stronger commitment among staff.
- Islamic organizational culture positively affects satisfaction and productivity. Shared values help employees adapt more quickly to structural change.
- Islamic work motivation increases job satisfaction but does not directly boost performance. Motivation requires a supportive environment to translate into measurable outcomes.
- Job satisfaction acts as a critical mediator, particularly in converting motivation into higher performance levels.
Together, these findings reinforce the idea that performance is not solely the result of individual effort—it emerges from the interaction between leadership, culture, and employee well-being.
Why Leadership Plays a Central Role
In value-driven organizations, leadership extends beyond operational direction. Leaders serve as ethical role models who translate institutional principles into daily practice.
Islamic leadership emphasizes transparency, moral responsibility, and collective welfare. When employees trust leadership, uncertainty declines and engagement rises—conditions that are especially important during post-merger restructuring.
Organizational culture further amplifies this effect by providing behavioral consistency. Values such as integrity, collaboration, and spiritual accountability create a stable psychological framework that guides decision-making even amid rapid transformation.
The study suggests that motivation alone cannot sustain performance without structural support. Instead, a healthy culture acts as a catalyst that converts employee enthusiasm into productivity.
Strategic Implications for Banking and Corporate Management
The findings carry practical relevance not only for Islamic financial institutions but also for corporations navigating mergers, acquisitions, or internal restructuring.
Key strategic lessons include:
- Invest in ethical leadership development. Training programs that integrate emotional and spiritual intelligence can strengthen managerial effectiveness.
- Align HR policies with institutional values. Recruitment, evaluation, and promotion systems should reinforce the organization’s ethical framework.
- Prioritize cultural integration after mergers. A unified value system can function as a psychological anchor for employees facing uncertainty.
More broadly, the research underscores that long-term organizational success depends not only on operational efficiency but also on meaning-driven workplaces where employees feel respected and aligned with institutional goals.
As the authors from UIN Alauddin Makassar note, organizations that successfully combine professionalism with moral leadership are better positioned to sustain performance during large-scale change.
Academic Insight From the Authors
The researchers emphasize that leadership grounded in ethical principles creates a work climate that strengthens trust and organizational commitment. According to Kahar and colleagues from Universitas Islam Negeri Alauddin Makassar, job satisfaction becomes the bridge connecting value-based leadership with measurable employee performance, particularly in complex post-merger environments.
Their integrated framework contributes to the growing field of Islamic management studies while offering evidence-based guidance for modern organizational strategy.
Author Profiles
- Kahar, Doctoral Candidate — Universitas Islam Negeri Alauddin Makassar; specializes in management and value-based organizational studies.
- Prof. Dr. Muslimin Kara — Faculty of Economics and Business, Universitas Islam Negeri Alauddin Makassar; expert in Islamic economics and strategic management.
- Dr. Abdul Wahab — Faculty of Economics and Business, Universitas Islam Negeri Alauddin Makassar; focuses on organizational behavior and human resource management.
- Dr. Amiruddin — Faculty of Economics and Business, Universitas Islam Negeri Alauddin Makassar; specializes in governance and organizational performance.
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