Job Satisfaction As A Mediator Of Leadership, Culture, And Innovation In State-Owned Defense Firms

Abstract

Background: Innovative work behaviour (IWB) plays a critical role in sustaining organizational competitiveness, particularly in dynamic and strategic sectors such as defense. Yet, the psychological mechanisms that connect leadership and culture with innovation remain underexplored, especially in state-owned enterprises (SOEs) operating under bureaucratic and hierarchical structures.

Purpose: This study examines the mediating role of job satisfaction in the relationships between transformational leadership, organizational culture, and IWB in the context of Indonesian defense SOEs.

Design/methodology/approach: The quantitative survey was conducted among 288 permanent employees of PT Pindad, who represent the arms, ammunition, and special vehicles divisions. The data was analyzed using PLS-SEM using SmartPLS version 4, applying a second-order construct approach.

Findings/Results: The results showed that job satisfaction mediated the relationship between transformational leadership and IWB, while partially mediating the relationship between organizational culture and IWB. These findings highlight the importance of job satisfaction as a psychological mechanism by which relational and structural factors shape innovative behaviors.

Conclusion: Job satisfaction functions as a central mechanism that translates leadership and cultural influences into employee innovation. This emphasizes the importance of enhancing employee satisfaction to strengthen innovation capacity in bureaucratic organizations.

Originality/value: This research contributes by extending theoretical understanding of IWB within highly regulated defense SOEs and by offering a psychologically grounded model of innovation in strategic industries.