Enhancing Employee Engagement in Indonesian Logistics and Forwarders Industry: The Moderating Role of a Democratic Leadership Style

Abstract

The quality of employee skills and job commitments, measured based on their retention, is essential in the current rapidly changing technological world. This study aimed to identify the influences of corporate governance (CG), internal control (IC), and corporate reputation (CR) on employee engagement (EE) with democratic leadership style as the moderating variable. Data from 276 companies with 606 respondents were collected using a Google form questionnaire sent to logistics companies that are members of the Indonesian Logistics and Forwarders Association (ILFA) and analyzed using the Partial Least Square–Structural Equation Modeling (PLS–SEM) with the help of SmartPLS 4.0.7.8 software. The results showed that corporate governance, reputation, and internal control positively influence employee engagement. Furthermore, the democratic leadership style does not strengthen the effects of corporate governance, internal control, and corporate reputation on employee engagement. This implies that leaders of the Indonesian logistics and forwarders industry should find a more suitable leadership style for their respective organizations because democratic leadership may not always be the best choice.