The Relationship Between Islamic Leadership on Employee Engagement Distribution in FMCG Industry: Anthropology Business Review

Abstract

Purpose - This study aims to analyze the causality relationship between Islamic leadership style on employee engagement through empirical testing and anthropology economics approach. Research design, data, and methodology - The sample of this study 117 respondents who are employees of various levels of management in one of the FCMG industry in South Sulawesi Province, Indonesia. Data collection with surveys. Data analysis through three steps, i.e., Pearson Correlation, The Second order modeling and also regression using SPSS. Results - Islamic leadership style has a positive and significant effect on employee engagement. The Islamic leadership that we developed in this study can be an alternative solution for organizations in today's modern business. Apart from those anthropological elements in the viewpoint of contemporary activity in the example in this study illustrate that to realize employee engagement, the role of organizational atmosphere and leadership, as well as management and team support has a genuine impact on accomplishing the company's goals and sustainability. Conclusions - The Islamic leadership that we developed in this study can be an alternative solution for organizations in today's modern business. The critical elements in embodying employee engagement are mainly in the skills, reliability, and level of trust of a leader in the organization.

1. Introduction

Anthropology and business have links that are difficult to separate because business today is very closely related to cultural change along with technological change and the progress of the times. In the perspective of anthropology and business, the success of an organization lies in the governance of professional corporate culture, i.e., (the religionism of leaders, staff, employees, companies) and ability the company to make a more profit by production and distribution more their product (Haming, Murdifin, Syaiful, & Putra, 2019) and the external environment such as consumers. Business anthropology does not only prioritize aspects of culture and tradition or a habit, but comprehensively, business anthropology reinforces to realize corporate goals caused by various changes in the business environment so that the organization in carrying out its activities becomes more complex, measurable and directed. The leader is seen as the central part of the organization's drive because all policies and work procedures that later a leader applies in the organization will shape perceptions, culture and will also affect the organization in the future. Many previous studies examined the relationship between leadership in an organization, i.e., (Guillén, 1994; Daniëls, Hondeghem, & Dochy, 2019; Russell, Steffensen, Ellen, Zhang, Bishoff, & Ferris, 2018; Safavi & Bouzari, 2019). The purpose of the organization is to generate profits by enhancing the total quality of management (Ramlawati & Kusuma, 2018), but realizing benefit in the long run for the organization is not natural. Support from all parties is needed, not only the leader's role but also employee cooperation and involvement (Saks, 2006), (Macey & Schneider, 2008) and (Markos & Sandhya, 2010). Today's organizational development is increasingly complex due to the tight competition, so the business anthropology as part of the social sciences also plays an essential role in detecting these changes to develop important strategies in terms of internal strengthening of the organization. Many researchers in the western world have long echoed the theory of leadership and organization until now even these theories still used, i.e., (Leavy, 2004; Finkelstein & Hambrick, 1996). In Islam itself, the ideal leadership principle was set in the Al-Quran more than 600 years ago. In Islamic perspective, the excellent leadership style has several essential aspects, i.e., faith, the attitude of understanding others, as a role model, being able to provide support and arouse enthusiasm, the ability to convince, and the willingness to be invited to negotiate for fair decision making. Islamic Leadership style is a variable that we have developed that comes from the formulation of the Al-Quran; we also describe Islamic leadership style development as a novelty in this study. On the other hand, we developed the employee engagement variable measurement in this study through the employee engagement measurement standard. It has Gallup employee engagement hierarchy which is inspired by Herzberg's theory of needs. Objectively, this study analyzes the causality relationship between Islamic leadership styles on employee engagement through empirical testing

2. Literature Review

2.1. Theoretical Background

Leadership theory and organizational theory are essential instruments in carrying out activities in organizations (Stogdill, 1974). Leadership within the organization needs to be owned by all internal members of the organization, whatever the vision and mission of the organization or company. Therefore, an organization or company needs a leader figure who can be an example or example for other internal members of the organization. Leadership is the process of influencing existing activities, specifically to carry out an organization within a group as one of the efforts to be able to achieve goals (Mitchell & Scott, 1987). Pigorsin his book "Leadership and Domination," leadership is an encouraging process that controls human usability in pursuing a common goal, through successful interactions of various kinds of individual differences (Pigors, 1933).

Organizational theory is a collection of knowledge that talks about the mechanism of cooperation in more than one person systematically to achieve predetermined goals (Lewis & Abdul-Hamid, 2006). In its development history records organizational theory so that in modern times there was a relatively rapid development. The classic organization theory defines the organization as the structure of relationships, power, goals and communication roles if cooperation occurs (Schwartz, 2018). The striking thing in classic organizational theory is that delegation of tasks is centralized, specialization and structural rigid and does not contain creativity Lamond (2003) and Spender and Kijne (2012). The further development of organizational theory is the theory of neo-classics which merely is known as the theory of human relations. The concept of neo-classical organizational theory emphasizes the psychological and social aspects of employees as part of a workgroup. The thing that stands out in neo-classical organizational theory is the emphasis on participation points of each internal member of the organization in decision making, job expansion (job enlargement) and giving opportunities to junior members to participate in top management decision making (Guillén,1994).

Furthermore, the organizational theory then evolved towards a more modern one in which modern organizational theory states that all elements in the organization as a unified relationship are interdependent. Emphasis on classic and neo-classic methods that are closed shifts to the theoretical concepts of modern organizations. Where the theory of modern organizations that openly considers that achieving organizational goals to create a stable and transparent work environment (Katz & Kahn, 1978).

In an Islamic perspective, leadership includes several essential aspects such as having a belief in God, because to be a leader of ethical and moral concepts is one of the main elements. Ethics in the view of Islamic leadership is maintaining ethical behavior and adhering to the principles of humanity and divinity. Ethical and moral principles are matters that must be maintained for every leader to be able to do justice Simola, Barling, and Turner (2010) and AC Ortega (2017). The implementation of leadership in Islam is also obliged to have a responsible attitude. In a modern organizational system, wise leaders and responsible positions will give a good influence to the organization (Cismas, Dona, & Andreiasu, 2016). The attitude of responsibility to the leader will make each organization's progress more active and constructive, including in resolving conflicts within the organization (Cismas et al., 2016; SzczepañskaWoszczyna, 2015). In the next Islamic perspective, such as the ability of a leader to consult to reach a fair decision for all members of the organization. Because, for modern organizations employees also have the right to voice opinions and this is the reason that determines whether employees feel valued or not (Ruck, Welch, & Menara, 2017a).

Furthermore, the principle of leadership in Islam is to be fair. Moreover, leaders in the Islamic perspective are leaders who have the nature of understanding and do not burden members of the organization beyond their capabilities (Bay, 2011). The next dimension, leadership in the perspective of Islam is a trustworthy leader. As the top part of management, leaders play an essential role in directing the organizational climate to be effective at all levels, so that to realize the role of leaders who can enter all lines in the organization's body then a leader must be trusteeship by all members of the organization (Burke, Sims, Lazzara, & Salas, 2007). Finally, leadership in an Islamic perspective can direct and provide positive support for members of the organization and can be role models. There are exciting things about the variety of leadership styles, such as transformational leadership and Islamic leadership both have some similarities and also some fundamental differences in Table 1. Describe in detail both similarities and differences.

Table 1: Similarities and Differences Between Transformational Leadership vs Islamic Leadership Style

Table 1 illustrateseach of the similarities and differences between transformational leadership and Islamic leadership. The second equation is located in 1) the effort to make leaders as role models, can be trusted by subordinates and get subordinate respect. 2) The ability of a leader to be responsible by the position and responsibility charged to him as a leader In transformational leadership the development of abilities refers to individual strengths and weaknesses (Individual Potency), whereas in Islamic leadership capacity building is based on the concept of justice. Justice, in this case,can be interpreted based on individual potential, or it can also be interpreted as an effort to encourage the potential of subordinates to achieve thesame potential and evenly distributed. The striking difference between transformational leadership and Islamic leadership is in the pattern of decision making which in Islamic leadership prioritizes the principle of deliberation, while the transformational leadership concept developed by Robbin does not explain this. Gallup developeda hierarchical model namely HRM Key Performance Indicators (KPI) adopted from Herzberg's, The pioneer of motivation theory (Gawel, 1997; Ewen, 1964; Kusuma, 2017) and used for measure employee engagement in many company include distribution company. In the Gallup hierarchy, there are four main dimensions and 12 main indicators to achieve engagement hierarchy in the organization. Such as basic needs Management Support, Teamwork and, growth consists of; Progress in the last six months, opportunities to learn and grow. Gallup Modification hierarchy illustrated as in Figure 1.

Figure 1: Gallup Modification Hierarchy

Source: Gallup (2 019).

As a grand theory in this study, the selection of leadership theory and organizational theory plays a vital role in creating employee engagement and measuring human resource management (HRM) key performance indicators (KPIs) as the direction and point of view. Therefore, the correlation, justification, and justification in the development of the hypothesis and the conceptual model of the study are more explicit in section 2.2.

2.2. Conceptual Development

Regard to leadership theory and organizational theory that feels very important to create a pleasant and conducive atmosphere of work the character of leaders is fundamental in realizing feelings of happiness for internal employees and also fostering trust between employees to their leaders (Daniëls et al., 2019; Salas Vallina, Simone, & FernándezGuerrero, 2018a). The results of the study (Meng & Berger, 2019; Jena, Pradhan, & Panigrahy, 2018a; Beycioglu, Ozer, & Ugurlu, 2012) reveal that leadership can lead to a comfortable and conducive atmosphere, on the other hand, The leadership has a positive influence on foster employee trust. Apart from that leadership that is considered positive can change the atmosphere of the organization for the better, it is also a form of innovation in the organization itself (Xie, Xue, Li, Wang, Chen, Zheng, & Li, 2018; Pučëtaitë, 2014). Leadership Theory also provides tangible evidence that the open attitude built by a good leadership model will make communication between members of the organization more compact so that the impact on the growth of trust in each other. However, from the results of other studies stated different results as reported by (Yin & Zheng, 2018) which indicates that leadership does not affect the organization's internal trust.

In line with that, the leaders who can synergize with the organization's vision and the mission will make the organization better. Because the role of leaders in an organization is to determine all effective and efficient policies that are in line with the goals of the organization (Salas Vallina, Simone, & Fernández-Guerrero, 2018b), leadership style is also a method and characteristic that distinguishes between organizations (González-Cruz, Botella-Carrubi, & Martínez-Fuentes, 2019; Russell et al., 2018). Leadership is inseparable from leadership style; it aims to generate trust for the internal organization, to provide positive expectations for employees that the workplace organization can succeed in the future (Zhang, Cao, & Wang, 2018). Organizations in the process of their journey as an open system must fulfill all forms of equipment and equipment that support all organizational/company activities such as information on resources, adequate work time and types of work that are in accordance with the character and specialization of each employee (Cheng & O-Yang, 2018a; Drugbert, Labadie, & Tixier, 2018). Fulfillment of all forms of needs and equipment at work and support from the organization will undoubtedly have an impact and inspire employees to work professionally (Cheng & O-Yang, 2018b; Haas, 2019; Andersson, Cäker, Tengblad, & Wickelgren, 2019). The role of leaders in protecting employees becomes more responsible, to make the internal members of the organization more comfortable at work (Salas Vallina, Alegre, & Fernández Guerrero, 2018). To support the comprehensive employee engagement leaders must listen to opinions and positive input and consider positive views as a form of useful advice for future organizational development (Ye, Wang, & Guo, 2019; Ruck, Welch, & Menara, 2017b).

One effort to realize employee engagement is if the leader can show genuine interest in the organization and can provide clear visibility for the career development of employees (Scott, Jiang, Wildman, & Griffith, 2018). To realize of a professional management atmosphere besides the role of a wise leader, cooperation between teams is also a mandatory thing to be implemented to create employee engagement (Buil, Martínez, & Matute, 2019; Jena, Pradhan, & Panigrahy, 2018b). However, from the results of other studies stating different results (Nikolova, Schaufeli, & Notelaers, 2019) found the fact that there was no association between leadership and work engagement. In the process of its journey, to support employee engagement in an organization, personal development for internal members of the organization becomes fundamental which will determine whether an employee chooses to stay or leave the organization and switch to another organization (Lemon & Palenchar, 2018). Employees certainly want a comfortable working atmosphere, feeling that their place of work can provide feedback for their career development (Chlebikova, Misankova, & Kramarova, 2015; Opriş, 2015). The career path that continues to climb is indeed the hopes and dreams of all employees (Rudolph, Zacher, & Hirschi, 2019; Nagy, Froidevaux, & Hirschi, 2019; Blokker, Akkermans, Tims, Jansen, & Khapova, 2019), so with career clarity that will be achieved by employees, of course, will make employees feel challenged to work better (McMahon, Watson, & Lee, 2019; Safavi & Bouzari, 2019). Departing from the description of the relationship between leadership and organizational theory, the conceptual framework developed in this study is illustrated as in Figure 2.

Figure 2: Conceptual Framework

3. Research Design and Measurement

3.1. Samples

This study maps out 117 respondents who are employees of one of the national companies in Indonesia engaged in FMCG (Fast Moving Consumer Goods) production and distribution company who operates on South Sulawesi Province, Indonesia. Demographic data collection of respondents included age, gender, length of work, and marital status. In table 3 illustrates in detail about the respondents' data such as: gender (50.9% women and 49.1% men), based on the age group 18~25 years (12.9% or 15 people), ages 26~33 years (25% or 29 people), age 34~41 years (27.6% or 32 people), age 41~48 years (15.5% or 18 people), ages above 48 years (19% or 22 people). Position positions from low management to the middle management level. Based on working time (years); dominant respondents have worked more than 8 years (46.5% or 53 people), working long 5~8 years (14% or 16 people), working for 2~5 years (23.7% or 27 people), working time 1~2 years (15.8% or 18 people). Can be concluded based on the condition of the great working status that the respondent is very reliable as a subject of this study. The marital status in this study sample was dominantly married (80.2% or 93 people), the remaining 19.8% or 23 respondents were single.

Table 3: Data Respondent

3.2. Data Collection, Measurement and Analytic

Data collection uses surveys by measuring data using a Likert scale (1-7) (1=disagree, 7=agree) following the Likert scale pattern carried out by (Weijters, Cabooter, & Schillewaert, 2010). Variable measurements are carried out in several stages of measurement, namely: First Section, Measurement of items in the Islamic Leadership Style variable is measured using the Pearson Correlation approach with the sig error margin and profitability 0.01-0.05% using SPSS based on prior research by (Ahmad, 2013) to measure Islamic Leadership validity. Employee engagement variables which consist of four construct dimensions, i.e., personal development which consists of five queries. The organization of Atmosphere and leadership construct consists of 4 queries.

The dimension of the Equipment and support constructs consisting of four queries. The management and team construct consist of three questions. The personal development constructs include of 2 questions. The second section, measurement of employee engagement variables using second-order analyses in SPSS to determine the dominant item is informing the dimensional construct and dominant construct in forming latent variables of employee engagement. The third section, the measurement of causality between variables Islamic Leadership Style on Employee engagement using linear regression correlation approach also uses SPSS. Details of the construct and latent analyses of variables and major references as part of the fundamental study explain in Table 2.

Table 2: Measurement of Variables

4. Results and Discussion

4.1. Statistics Analysis

The results of descriptive statistical analysis pearson correlation tests of the first section in table 4 show robust results. The Latent variable of Islamic Leadership Style which consists of dimensions Faithfull (Fl); (Mean= 6.65; Std dev=0.63), responsible (Re); (Mean=6.70; std dev =0.57), Discussion (Dn); (Mean=6.37; SD=0.93), Fair (Fr); (mean=6.72; SD=0.53), Understanding (Ug); (Mean=6.71; SD =0.58), Trusteeship (mean=6.80; SD=0.49), Positive support (PS); (Mean=6.73; SD=0.49), Role Model (RM); (mean=6.66; SD=0.61). Shows a very significant correlation (**meaning, sig <0.01) for all dimensions of Islamic leadership style (see Table 3). The Confirmatory Analysis test also shows robust results for testing in two directions.

Table 4: Pearson Correlation Laten Variable Islamic Leadership Style

In stage 2 as shown in table 5. Latent variable Employee Engagement is formed by several construct variables, including: Individual feeling and beliefs dominant formed by items Recommended (mean=5.68; SD=1.31; correlation=0.858). Organization atmosphere and leadership were dominant formed by items aligned with company goals (mean=5.62; SD=1.55; correlation=0.897). equipment and support Dominant is formed by item effective of time (mean=4.95; SD=1.64; correlation=0.844). The management and team dominant are formed by items feel enjoy with team (mean=5.62; SD=1.49; correlation=0.917). Personal development is dominantly formed by items feeling challenge and excited (mean=5.61; SD=1.64; correlation=0.939). The final part of table 5. Also shows the value of the second-order construct model in forming the latent variable employee engagement which states that construct Management and Team is the most dominant dimension in forming variables employee engagement

Table 5: Second Order of latent Variable Employee Engagement

In stage 3. As shown in table 6. It shows that the regression test states that there is a positive and significant influence between Islamic Leadership style on Employee engagement (F=8,583, sig 0.004<0.05; R-square 0.69; SE=1, 20; Mean 5.5; SD=0.32). The positive relationship coefficient is equal to (0.720 or 72%) with an effect of (t=2.930) with probability (sig 0.004<0.05).

Table 6: Regression Test

4.2. Discussion

Anthropology and business have a connection that is difficult to separate because business today is closely related to cultural change along with technological change and the progress of the times so that anthropology can detect cultural differences within the organization as a reference for corporate decision-makers to create a culture more humane and more complex work. The test results in this study indicate that the role of Islamic Leadership has a causality relationship with employee engagement. The model we developed in this study derived through the principles contained in the Qur'an. We find that all dimension related to each other. Through organizational theory approaches and leadership theory, it turns out that it has the same principles following aesthetic principles and criteria for leaders in an organization within the Qur'an. We find that the level of faithfulness possessed by a leader in the organization can bring and guarantee the application of other ideal principles such as responsible attitude, the right attitude, positive attitude in supporting the organization, the ease of a leader to be trusted by his internal organization. Besides that, the view of openness realized through true principles also has an influence and has a connection that will lead a leader to be able to understand the organizational cycle, challenges, and opportunities faced by a leader for his organization. In this study, we also concluded that a reflection of the quality of a leader is a reflection of the extent to which the leader's constant level. Exclusively our study also states that organizational theory and leadership are also in line and following the principles of leadership in Islam. Therefore ideally, an anthropological approach to seeing the ideal principles of leadership in Islam is not just a tradition or an order in religious teachings.

If you look at the building causality of employee engagement (in Table 5), the role of organizational culture and leadership is the second place that has significant influence as supporting employee engagement after the management role as a corporate and team element as part of the work environment. Concerning anthropology, in fostering employee engagement becomes a positive role of the organization and leadership are seen to have a significant influence. This study illustrates that the anthropological approach is a reflection of the success and goals of the organization to achieve better employee engagement.

Theoretical Implication: The model that we developed in this study complements the puzzle on organizational and leadership theory. The Islamic Leadership Style that emphasizes the principles of faithful, fair, understanding, discussion, trusteeship, positive and support, and role models, provides an overview of the suitability of the concept of leadership and organization in the idea of the modern era. Which states that organizations are open systems (Katz & Kahn, 1978) Apart for anthropology that is thick with cultural linkages, the business that is closely related to the element of management, is a building that must not be separated.

Managerial Implication: The building of an organization reflected through the organizational culture itself whose derivatives from the leadership patterns adopted by an organization. The results of this study address the application of the design of the Islamic leadership style as a solution for today's modern business world that is more humanistic and holistic. Because in contemporary business, employees can not only be said to be an element of management and as one of the factors of production. More than that the employee is an intangible asset that loses employees who have the potential means the company has lost its valuable assets. Tight competition forces companies to strive to create and maintain sustainable profits. So that to take this matter the treatment of employees in a wise manner to fulfill employee job satisfaction is one of the efforts to realize sustainable corporate profits. Apart from that anthropological elements in viewpoint of contemporary business in the example in this study illustrate that in order to achieve employee engagement, the role of organizational atmosphere and leadership, as well as management and team support as a manifestation of the internal work environment, has a genuine impact on realizing the company's goals for success and sustainability. Ideal organizational support and leadership will bring with them individual trust and spur work morale. This corporate support can be realized throughout the organization as well is also able to fulfill all the equipment needs of optimal work (equipment and support) and can provide guarantees for the internal organization in terms of personal development in the organization.

5. Conclusion

The Islamic leadership that we developed in this study can be an alternative solution for organizations in today's modern business world. Robust results state that each element in the Islamic leadership style variable has a relationship with each other that is mutually supportive. For the sake of realizing Islamic employee engagement leadership style also has a significant and positive causality relationship. The critical elements in embodying employee engagement are mainly in the skills, reliability, and level of trust of a leader in the organization

Limitation for Future Research: This study only examined the causality of the relationship between Islamic leadership style on employee engagement, so in the next research in-depth measurement to see the level of commitment to the subject of research is needed. The author recommends cluster analysis as another measurement tool to measure comprehensive employee engagement variables from each of the clusters of the research subject demographics.