Examining Leadership Capabilities, Risk Management Practices, and Organizational Resilience: The Case of State-Owned Enterprises in Indonesia

• Published in: Sustainability (Switzerland)
• Main Author: Lisdiono P.; Said J.; Yusoff H.; Hermawan A.A.
• Format: Article
• Language: English
• Published: MDPI 2022
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85130973642&doi=10.3390%2fsu14106268&partnerID=40&md5=d4c84c43ac5a636f94818d055c9ad6c0

This study aims to assess the role of leadership in Indonesia’s State-Owned Enterprises in bringing the companies to be resilient amid uncertainties and a dynamic environment based on dynamic capability theory. Risk management practices are used to mediate the relationship between leadership capabilities and enterprise resilience. The authors conducted a quantitative and cross-sectional study using a questionnaire distributed to members of the board of directors and senior managers of Indonesia SOEs and their subsidiaries. Based on the structural equation modeling analysis, the findings reveal that leadership capabilities play a role in developing enterprise resilience and risk management practice. Additionally, risk management practice partially mediates the relationship between leadership capabilities and enterprise resilience. The empirical findings enrich the knowledge on the relationship between enterprise resilience, leadership capability, and risk management practice. These results enable management SOEs and their subsidiaries and policymak-ers to develop strategies and a policy framework to create and develop enterprise resilience and help SOEs navigate safely and triumphantly in uncertain and disruptive business environments. This study supports empirical evidence that expands the context of applying the enterprise resilience concept and dynamic capability theory in hybrid organization types, such as SOEs, that operate in emerging countries. © 2022 by the authors. Licensee MDPI, Basel, Switzerland.