Indirect Relationship of Corporate Image, Organizational Culture, Employee Loyalty, and Business Performance among Private Business Organization: Structural Equation Modelling Approach

Abstract

This study is very important for business organizations to formulate and plan strategies to ensure the ability to maintain sustainable business performance. The purpose of this study was to evaluate the direct relationship between organizational culture and corporate image with business performance, as well as the direct relationship between organizational culture and corporate image with employee loyalty. This study also evaluates the effect of mediating employee loyalty on the relationship between organizational culture and business performance as well as the effect of mediating employee loyalty on the relationship between corporate image and business performance. This study uses a quantitative approach by using primary data for analysis. Adopted and adapted survey questionnaires from previous studies were used to collect data. A total of 329 clean data were used in data analysis using Structural Equation Modelling (SEM) techniques. This study used Smartpls3 software to analyze multivariate data and proposed hypotheses. Furthermore, by using Smartpls3, model measurement and structural model assessment procedures were also carried out. Evaluation of construct validity and reliability was performed to confirm the presence of convergent validity and reliability. Subsequently, the discriminant validity was assessed through crossloadings and Hetrotrait-Monotrait (HTMT) ratios., Then the structural model assessment was assessed, and from the hypotheses testing results, it was found that both organizational culture and corporate image have a positive and significant relationship with business performance and employee loyalty. Mediating effect analysis revealed that employee loyalty significantly mediated the relationships between organization culture and corporate image with business performance. The findings showed that organizational culture and corporate image were important factors to be considered in strengthening employee loyalty which will eventually lead to better organizational business performance.