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STRUCTURAL EQUATION MODELING :
EMPLOYEE SATISFACTION ASSESSMENT IN THE INDONESIAN
SHIPPING INDUSTRY
Introduction
The condition of competition in the transportation world in Indonesia is so tight
today, making the whole range of leaders of the Indonesian Shipping Industry must
work hard to be able to provide the best service. Add to the global challenge, which
implies that the implementation of the National Shipping Industry in the future
must immediately comply with international safety and security standards and
services. Such conditions must be anticipated so that the national shipping industry
of Indonesia will be able to compete with the global market and simultaneously
optimally play a role in supporting the competitiveness of national economy.
Indonesia National Shipping Industry is a collection of national companies
engaged in the business of sea transport, especially passenger and freight services.
The Business of the National Shipping Company is closely related to the trust that
customers that use their services. One of the main factors to increase customer
trust is through the services provided by all employees. Therefore, there is no other
word that all employees of the Indonesian Shipping Industry must improve themselves
especially on improvements in the company itself such as job satisfaction with its
employees.
In fact, the condition of the National Shipping Industry has not been fully able
to provide job satisfaction with its employees maximally. From the results of
preliminary research shows that job satisfaction with employees in the National
Shipping Industry is still many who are not satisfied with what they have received.
Uhl-Bien, et al., (2014: 84), Job satisfaction is the degree to which an individual
feels positive or negative about a job. This is in line with that stated by Robbins
& Judge (2013: 113-115): In fact, of the major job-satisfaction facets (work itself,
pay, advancement opportunities, supervision, coworkers). Youve probably noticed
that paying up often when people discuss job satisfaction.
Kreitner & Kinicki (2010: 171-172) states that a persons job satisfaction is
measured by calculating the difference between what should be and the reality he
feels. Job satisfaction is achieved when the desired minimum limit has been met ie
there is no difference between the desired for reality.
Robbins and Judge (2013: 67) who express job satisfaction is influenced by
motivation factors, leadership style, organizational structure, communication and
other factors. Then J.B. Rotter (2013: 433) also added ... and that followers with
in-group status will have higher performance ratings, engage in more help or
citizenship behaviors at work, and report greater satisfaction with their superior.
Motivation can be considered as a driver of action toward the desired goal.
Motivation is not only caused by money, but also can be with how organizations
run their daily activities as their culture. the application of an appropriate
organizational culture can encourage employees to work more productively and
effectively. Yusof (2016: 51) said the organizational culture plays a very important
role in developing and maintaining the level of motivation among the keryawan.
Organizational culture affects employee work motivation.
Other factors that affect employee motivation and satisfaction are the factors
of leadership can affect employee motivation according to the results of research
conducted by Khuong and Hoang (2015: 215) proving that of the eight leadership
styles such as task-oriented leadership, leadership-oriented relationships, leadership
oriented change, participative leadership, charismatic leadership, autocratic
leadership, ethical leadership, ethical leadership on terms of rewards all have an
effect on employee motivation.
In practice, the companys career development in its implementation is often
inconsistent, the employees that have attended the training and education conducted
by the company as the requirement of the adjustment of the class of office does not
automatically the employee get promotion or adjustment of the position class.
Formulation of the problem
The formulation of the problem as follows.
1. Does the organizational culture affect work motivation in the Indonesian
Shipping Industry?
STRUCTURAL EQUATION MODELING 355
2. Does leadership affect work motivation in the Indonesian Shipping Industry?
3. Do career development affect work motivation in the Indonesian Shipping
Industry?
4. Does the organizational culture affect the job satisfaction with the Indonesian
Shipping Industry?
5. Does leadership affect job satisfaction with the Indonesian Shipping Industry?
6. Do career development affect work satisfaction with the Indonesian Shipping
Industry?
7. Do work motivation affect job satisfaction with the Indonesian Shipping
Industry?
Literature Review
Job Satisfaction
According to Uhl-Bien, et.al, (2014: 84), Job satisfaction is the degree to which an
individual feels positive or negative about a job. Then Robbins (2013: 79) Define,
Job satisfaction describes a positive feeling about a job, resulting from an evaluation
of its characteristics.
A person with a high level of job satisfaction has a positive feeling about the
job, while an unsatisfied person has a negative feeling about the job. The more
aspects of the job that suit the individuals desires, the higher the level of perceived
satisfaction, and vice versa.
While Colquitt, Lepine & Wesson (2015: 98) states: Job satisfaction is defined
as a pleasurable emotional state resulting from the appraisal of ones job or job
experience. In addition Newstrom (2011: 220) defines, Job satisfaction is a set of
favorable or favorable feeling and emotions with which employees view their work.
Job satisfaction as a reference to an employees effective orientation to their role
in the current position he holds. Greenberg and Baron (2008: 221) describe that Job
satisfaction is positive or negative attitudes held by the individuals toward their
jobs. Kreitner & Kinicki (2010: 171-172) states that a persons job satisfaction is
measured by calculating the difference between what should be and the reality he
feels. Job satisfaction is achieved when the desired minimum limit has been met ie
there is no difference between the desired for the reality. When it gets bigger than
expected, then people will become more satisfied. The gap is a positive gap. Conversely,
if the gap that occurs far below the minimum standards that is expected, then the
negative discrepancy that resulted in greater discontinuity of the work.
Organizational culture
Organizational culture is a combination of, values, attitudes and norms shared in
an organization. Values, attitudes, and norms and beliefs become the reference of
every individual in acting. This organizational culture also distinguishes one
organization of another.
Organizational culture is also an identity or character or characteristic of an
organization that becomes the pride of the organization so it needs to be maintained,
356 JAKFAR, KASMIR, NANDAN LIMAKRISHNA, ARYANDA AND ET AL.
and maintained with the best. Identity or character of an organization is a reference
for every individual who is involved in the organization to uphold it, so as to
influence the organization of carrying out its activities in order to achieve the
desired goals.
Colquitt, Lepine & Wesson (2015: 546-547) says organizational culture as the
shared social knowledge within the organization of the rules, norms and values
that shape the attitudes and behaviors of its employees.
That definition helps highlight the number of facets of organizational culture.
First, culture is social knowledge among members of the organization. This transfer
of knowledge might be through explicit communication, simple observation, or
other, obvious methods. In additional culture is share knowledge, which means
Second culture tells what the rules, norms and values are within the organization.
Robbins and Judge (2013: 585) are, Organizational Culture refers to a system of
shared meaning held by members that distinguish the Organization of other
Organizations. While Kreitner and Kinicki (2010: 64) say the organizational culture
is The set of shared, taken-for-granted implicit assumptions that a group holds
and determines how it perceives, thinks about, and reacts to its various
environments. & Davis (2011: 91) says Organizational Culture is the set of
assumptions, beliefs, values, and norms that are shared by organizations members.
Leadership
Leadership is the style or way of a leader in influencing his employees to carry out
his work. Influential or not leadership of employees in running the companys
activities, very dependent of leadership style brought by the leader. Attention to
this leadership style is so important that employees are willing to carry out the
tasks assigned to them.
Kreitner and Kinicki (2010: 467) states, that leadership is a process whereby
an individual influences others to achieve a common goal). Stogdill in Yukl says
leadership is a process of influencing group activities in the formulation and
achievement of goals. Effective leadership should provide direction to the efforts of
all work (employees) in achieving organizational goals, without leadership or guidance
of the relationship between individual goals and organizational goals may be weak.
Then Yukl (2006: 5), defines leadership as follows: Leadership is defined broadly as
influencing the influence of the leadership of the organization, the organization of
work activities to accomplish the objectives, the motivation of followers to achieve
the objectives, the maintenance of cooperation from people outside the group or
organization. While Robbins and Judge (2013: 402) provide the definition of
Leadership as the ability to influence a group toward the achievement of a vision
or set of goals. Next Daft (2015: 5) Leadership is an influence relationship between
leaders and followers who intend real changes and outcomes that reflect their
shared purposes. Newstrom (2011: 171) asserts that Leadership is the process of
influencing and supporting others to work enthusiastically toward achieving
objectives. leadership is a process used by a person to influence group members
towards achieving the goals of group organizations. Ivanceviech, Konopaske and
Matteson (2014: 435) say that leadership is an attempt to influence people or
STRUCTURAL EQUATION MODELING 357
Career
Most people consider that a career equals an advancement in an organization or
moves upward on ones work line. Moving up means entitled to greater income,
taking on greater responsibility, and gaining greater status, prestige and power.
The definition of Career by Mondy and Martocchio (2016:229) is: a general
course that a person chooses to pursue throughout his or her working life.
Furthermore Benardin and Russel (2013:322) more broadly defined career: as an
individually perceived sequence of attitudes and behaviors associated with work
related activities and experiences over the span of a persons life. Mondy and
Martocchio (2016:234) define; career development are a formal approach used by
the organization to ensure that people with the proper qualifications and experiences
are available when needed. According to Werther and Davis (2006: 311) career
development consists of individual improvements in the goal of achieving career
plans. Next Steward (2011: 376) defines; career development is activities that help
people manage the progression of their work experiences across their lives.
According to Long, et.al (2014: 87) Many organizations implement career
development programs in the workplace to retain the best workers. Organizations
claiming with various development program they can retain a larger number of
employees. Employee career growth is an organizational asset strategy. Career
development does not always have to get promoted, or move to a higher level
within the organization, but further how to get something the best place for employees
in order to achieve organizational goals.
Mondy and Noe III (2008: 362) there are two dominant factors that affect
ones career in addition to other factors namely: Life tags and Career Anchor. Life
stages can be translated into four stages:
358 JAKFAR, KASMIR, NANDAN LIMAKRISHNA, ARYANDA AND ET AL.
1. The first stage, establishing identity. Someone is at this stage at the age of
10 to 20 years. Individuals explore the options and embark on a career to
move or move into the adult world.
2. The second stage, growth and determination in a career (growing and
getting establish). This stage is passed at the age of 20 to 40 years. In this
stage one chooses a placement and stance on a career path.
3. The third stage, maintaining and adjusting (maintenance and adjustment
to self). Treating and adjusting generally ends of the age of 50 years and
thereafter. Career changes and separations occur during this phase because
people are seriously questioning about the quality of life.
4. The final stage, decline, decreased physical and mental ability may accelerate
to this stage. At this stage a person has low aspirations, reduced motivation,
although extra care is always possible and can be adjusted.
Furthermore Gibson (2012: 645) explains that a person generally moves through
four stages of career namely; determination, progress, maintenance and setbacks.
Then Benardin and Russel (2013: 324-325) state that both life and career
stages both are meticulously linked with age and culture norms. Both life stages
and career stages both reveal new advances or challenges on entry into a level,
both stabilization (displaying high productivity performance over a certain level)
and transition (making changes to the current level of demand in anticipation of
subsequent levels of demand ).
To be effective, the needs of career programs are tailored to find unique individual
needs at various levels in their lives and careers. According to Decenzo, et al (2013:
226) the following career issues need to get the attention to individuals and
organizations that include: early career, middle and final career.
1. Early career issues (Early-career issues)
2. Middle-career issues
3. Late-career issues
The definition of career by Mondy and Martocchio (2016: 229) is: a general
course that a person chooses to pursue throughout his or her working life.
Furthermore Benardin and Russel (2013: 322) broadly define a career: as an
individually perceived sequence of attitudes and behaviors associated with work
related activities and experiences over the span of a persons life.
Motivation
Motivation is one of the important aspects a person needs to achieve something he
wants. Motivation is an effort that encourages a person to take a desired action.
According to Robbins & Judge (2013: 209) defines Motivation as the processes
that account for individuals intensity, direction, and persistence of effort toward
attaining goal. Then according to Bernardin and Russell (2013: 402) say: motivation
is function of the perception a worker has about the likelihood or probability that
working harder will lead to higher performance and probability that higher
performance will lead to valued outcomes like more money.
STRUCTURAL EQUATION MODELING 359
There are three key elements in motivation: effort, organizational goals and
needs. When a motivated person will do his utmost to achieve the goal, but not
necessarily high effort will result in high performance.
Another opinion states that motivation is the motivation of work, as stated by
Newstrom (2011:101): Work motivation is the set of internal and external forces
that cause an employee to choose a course of action and engage in certain behaviors.
Ivancevich (2014:298) sees that: Motivation is the set of attitude and values that
predisposes a person to act in specific, goal-directed manner. While Luthan
(2015:226) motivation refers to the forces either internal or external to a person
that arouse enthusiasm and persistence to pursue a certain course of action.
Motivation is a desire for a person that causes the person to act. People usually
act for a reason: to achieve goals. So, motivation is an impulse governed by purpose
and rarely appears in the void. Words of need, desire, desire, and encouragement
are all similar to motives, which are the origin of words of motivation. Understanding
motivation is important because performance, reactions to compensation, and other
human resources (HR) issues is influenced and influence motivation.
Research methodology
In this study the population used is employees in the National Shipping Industry of
Indonesia with a minimum education diploma III. The number of branch offices in
the Indonesian Shipping Industry is 48 branches. Based on these criteria the
population is assumed to be homogeneous. Number of permanent employees with
non-managerial positions and minimum level of diploma three in the Indonesian
National Shipping Industry totaling 439 people.
The guidelines on determining the number of samples of this study refer to Hair
et al (2010: 605) which states that there is no single criterion for determining sample
size of a structural equation model / SEM, is at least 200 observations based on the
relation of the number of variables and sample size of the method of equation between
2 to 10 variables or by a ratio ratio of 1: 5 of the observed variables in the maximum
Likelihood Estimator approach. Sample sizes used to analyze the Structural Equation
Model / SEM in this study amounted to 250 respondents, while the way the distribution
of sampling is determined by the number of population of each in the Indonesian
Shipping Industry. Based on the calculation and the characteristics above, the sample
of this study was selected as many as 250 non-managerial employees.
Data Analysis
Data analysis technique using Structural Equation Model (SEM) According Sugiyono
(2013: 329) if a model using more than one dependent variable then the solution to
the model using some regression equation becomes inappropriate. Other analytical
techniques are needed, ie the model in the form of many dependent variable structures
namely structural equation modeling (SEM). SEM analysis is basically to obtain a
structural model that can be used to predict or prove the model.
Besides, SEM can also be used to see the magnitude of the influence, both
direct, indirect and the influence of total free variables (exogenous variables) to the
dependent variable (endogenous variable).
360 JAKFAR, KASMIR, NANDAN LIMAKRISHNA, ARYANDA AND ET AL.
While Santoso (2014: 14) states Structural Equation Modeling is a multivariate
statistical technique that is a combination of factor analysis and regression analysis
(correlation) that aims to test the relationships between variables exist in a model,
either inter-indicator with construction or inter construct. To analyze Structural
Equation Modeling using LISREL 8.70 program.
Results and discussion
The result of research which is poured in the form of full structural model by using
LISREL 8.70 obtained two models of track diagram, that is standardized model
and t-value model as shown in the following figure:
Picture 1: Full result of structural model (Standardized)
Picture 2: Full result of structural model (t-value)
STRUCTURAL EQUATION MODELING 361
Based on the picture above, then will be presented testing for structural coefficient
factor (�) in exogenous and endogenous model. This test aims to determine the
influence of one latent variable to other latent variables as shown in the table below.
Table 1
Statistical Test of Structural Model
Structure Models
Endogenous Variables Exogenous / Endogenous Coefficient factor tcount/ Test Result
Variables (Standarized) Fcount
Work motivation Organizational culture 0.281 3.313 Significant
(Partial)
Leadership 0.324 3.823 Significant
(Partial)
Career development 0.181 2.161 Significant
(Partial)
Organizational culture, R2=0.496 80.698 Significant
Leadership, and Career (Simultaneous)
development
Job satisfaction Organizational culture 0.196 2.465 Significant
(Partial)
Leadership 0.266 3.837 Significant
(Partial)
Career development 0.222 3.316 Significant
(Partial)
Work Motivation 0.361 5.151 Significant
(Partial)
Organizational Culture, R2=0.675 127.212 Significant
Leadership, Career (Simultaneous)
Development and Work
Motivation
Source: Results of Data Processing, LISREL 8.70, 2017
Based on the test results listed in the table above, then all the hypotheses (in
this study there are nine hypotheses) accepted. The full results of the testing of
each hypothesis can be seen in the following table.
Table 2
Hypothesis Testing Results
Hypothesis Description Conclusion
H1 Organizational culture affects the motivation of work Be accepted
H2 Leadership affects the motivation of work Be accepted
H3 Career development has an effect on work motivation Be accepted
H4 Organizational culture affects job satisfaction Be accepted
H5 Leadership affects job satisfaction Be accepted
H6 Career development has an effect on job satisfaction Be accepted
H7 Work motivation affects job satisfaction Be accepted
Source: Data Processing Results, 2017
From the test results from, it can be explained things as follows: Organizational
culture has a significant effect on work motivation, meaning that the stronger the
362 JAKFAR, KASMIR, NANDAN LIMAKRISHNA, ARYANDA AND ET AL.
organization culture perceived by the employee, the higher the work motivation of
employees on. The amount of influence Cultural organizations partially to work
motivation is 0.281. Furthermore, Leadership has a significant effect on work
motivation, meaning the better Leadership in the company is increasingly Motivated
employees work, partially influence of 0.324. Likewise with career development has
a significant effect on work motivation, which means the better career development,
the more motivated employees work of 0.181. Then organizational culture, Leadership
and Career development together have a significant effect on work motivation.
This means the better Organizational Culture, Storage and career Development
perceived by employees, it will be increasingly Motivated employee work. The
amount of contribution to the influence of organizational culture, Leadership and
Career development together to Motivation of work is 49.6% (R2 = 0.496), while
the remaining 50.4% is influenced by other factors not examined such as;
compensation, competence and work environment.
1. Organizational culture proved to have a positive and significant effect on Work
Motivation
The results of the above analysis strengthen the research results Diputra and Riana
(2014: 276) which states that organizational culture has a positive and significant
impact on employee motivation. This shows that the higher the suitability between
organizational culture and its members, it will increase employee work motivation.
The results of this study in line with the results of research Yusof et, all (2016),
states that, organizational culture is an important determinant to improve employee
motivation. Strong organizational culture encourages increased employee motivation.
Organizational culture plays an important role in developing and maintaining the
level of motivation of its employees. An employee can be more effective and more
potent in working if there is a match between individual motivation and
organizational culture.
Similarly Parthasarathy and Ramalingam (2015) stating that organizational
culture variables can be used to improve employee motivation. Strong organizational
culture leads to higher work motivation.
In line with the above findings, the results of this study have confirmed the
theory brought by Shani et al. (2009: 167) that organizational culture is able to
encourage employee motivation to behave in performing tasks to achieve
organizational goals.
2. Leadership proved to have a positive and significant effect on Work Motivation
The results of the above analysis reinforce the results of research Khasanah, Umi,
et.al, (2016) to prove that leadership has an effect on the motivation of work.
Leadership that applis the elements of ability, ability, wise and able to solve problems
effectively will affect the employees motivation.
The results of this study have confirmed the theory that Daft (2015: 226) has
elaborated, the study of motivation to help the parties understand what prompts
people to initiate action, and why they persist in that action over time. Leadership
is a pattern of behavior in which a person motivates others to work hard towards
STRUCTURAL EQUATION MODELING 363
3. Career Development proved to have a positive and significant impact on Work
Motivation
The results of the above analysis reinforce the results of Umars research, (2015)
which proves that there is a positive and significant effect of career development
with work motivation. Career development consisting of training and development,
leadership roles, and reward systems significantly influences work motivation. The
study results also show that career development is considered better by the employee
will increase the motivation of work.
Furthermore, this study supports the findings of Haryani (2013: 187) and Bianca,
et al (2013: 339) the results of his research to prove that the development of
positive and significant career to motivation of work. Curry development is done
with transparent able meningktan employee motivation.
The results of this study have confirmed the theory that Mondy and Martocchio
(2016: 234) explained with career development so that the loyalty and motivation
of employees increases, thus reducing employee turnover.
4. Organizational culture proved to have a positive and significant impact on
Employee Satisfaction
The results of the above analysis reinforce the results of research Biswas (2015) to
prove that there is influence of organizational culture on the job kepuasa. Culture
includes a companys collective goals and standards of behavioral expectations in
achieving this goal. Culture of discipline, close relationship of the organization,
performance norms, relationships with seniors, meritorious culture, empathy, risk
taking, innovation and environmental participation as well as empowerment contained
in an organization affect the job satisfaction.
Similarly, this research is in line with Belias and Koustelios, (2014) from the
research result proved organizational culture significantly influence on job satisfaction.
The results from also reinforce previous research from Yamsul, et.al, (2013) who
found that organizational culture has an effect on the job satisfaction.
These findings confirm the theories put forward by Colquitt, Lepine and Wesson
(2015: 564) states: When employees feel that their values and personality match
those of the organization, they experience higher levels of job satisfaction.
5. Leadership proved to have a positive and significant impact on Employee
Satisfaction
The results of the above analysis reinforce the results of research conducted Budiman
(2017: 7) to prove that leadership affect job satisfaction.
This research is in line with the research done by Khasanah, et al, (2016),
Simaremare and Isyandi (2016: 385), Suprapta, et al (2015: 430) and Sari et al.
(2014: 33) also proved that leadership has a positive and significant influence on
job satisfaction. Effectively applied leadership in organizations can be perceived by
employees positively in order to increase employee satisfaction and encourage them
364 JAKFAR, KASMIR, NANDAN LIMAKRISHNA, ARYANDA AND ET AL.
to achieve organizational goals. Leadership plays an important role in overall efforts
to improve job satisfaction, both at the individual level, at the group level, and at
the organizational level.
The results of this study have confirmed the theory put forward by Mullin
(2010: 282) job satisfaction among others determined by organizational factors,
including; nature and size, formal structure, human resources policies and procedures,
employee relations, employment nature, technology and work organization,
supervision and leadership, management system, working conditions.
7. Motivation Work proved to have a positive and significant impact on Employee
Satisfaction
The results of the above analysis reinforce the results of research Yamsul, et.al.,
(2013) which proves that the motivation of work has a positive and significant impact
STRUCTURAL EQUATION MODELING 365
on job satisfaction. Furthermore, the results of this study also strengthen the results
of research Umar (2015) and Bianca (2013) from the results of his research to prove
that there is a positive influence and significant motivation on job satisfaction. The
results of this study also show that higher employee motivation tends to affect higher
levels of job satisfaction. Increased job satisfaction can be done if there is an increase
in employee incentives that encourage increased motivation. So employees are eager
to complete tasks on time. The motivational elements of job design to provide
knowledge of factors that may contribute to job satisfaction and motivation.
Furthermore, the above analysis results are also in line with the results of
Sohails research, et al (2014) explaining that more employees are motivated so
they is more satisfied with their work and more committed to the organization and
lead to higher performance.
These findings confirm Kinicki and Kreitners (2010: 183) theory, from the
development of Victor Vrooms expectations theory clarified, motivated employees
will result in higher job satisfaction.
Then the results of this study are also in line with the theory put forward Griffin
and Moorhed (2012: 119) said the motivation of some of the factors involved in
improving the potential for motivated behaviors directed at increasing job satisfaction.
Conclusion
Based on the description of hypothesis test results from, it can be concluded that
employee job satisfaction is reflected by the dimensions of the work itself (Z5) and
formed by the indicator of conformity of work in the Indonesian National Shipping
Industry will increase, if work motivation increases which is defined by the dimension
of power Y3) and formed by indicators affecting other employees, then supported
by strengthening the organizational culture that is reflected by the companys
regulatory dimension (X1.3) formed by indicators of task implementation
instructions, supported by leadership strengthening reflected by the dimension of
initiating structure X2.1) and built by initiation indicators (giving clear assignment
to each employee), and supported by career development enhancements that are
reflected by the career management dimension (X3.2) and built by education and
training indicators.
The result of this finding mean that the strengthening of organizational culture
(X1), especially the corporate regulation dimension, supported by the strengthening
of leadership (X2), especially the orientation of the implementation of the task
(initiating structure), and supported by the improvement in career development
(X3), especially education and training can increase motivation (Y) especially the
power that implication can improve employee job satisfaction (Z) especially
satisfaction with the work itself.
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