ORGANIZATIONAL FACTORS SHAPING JOB SATISFACTION AND EMPLOYEE PERFORMANCE IN INDONESIA’S COMMUNITY-BASED ECONOMIC INSTITUTIONS

Abstract

Local economic entities, encompassing micro, small, and medium enterprises (MSMEs), cooperatives, and village-owned enterprises, play a critical role in fostering regional development, yet they frequently encounter ongoing challenges related to operational complexity and effectiveness. This study aims to examine the influence of leadership, motivation, organisational culture, and competence on employee job satisfaction and performance within these institutions. A structured survey was conducted in Soppeng Regency, Indonesia, involving 379 respondents selected through both offline and online sampling to ensure adequate representativeness. Measurement instruments were validated by experts and preceded by pilot testing to ensure reliability. Data were analysed using partial least squares structural equation modelling (PLS-SEM). The results indicate that motivation, organisational culture, and competence significantly affect both job satisfaction and performance. The strongest observed association is between organisational culture and job satisfaction (β = 0.525), followed by the relationship between job satisfaction and performance (β = 0.417). Leadership, however, does not show a significant effect on job satisfaction, implying that alternative leadership approaches tailored to cultural contexts may be necessary. These findings underscore the importance of people-centred and culturally attuned strategies to enhance institutional effectiveness. Furthermore, this research contributes to organisational behaviour literature by contextualising the performance of community-based economic organisations within ethnographic and decentralised governance settings.