The Role of Visionary Leader Competency in Bridging Company's Levers of Controls and Dynamic Capabilities

Abstract

The new normal in business world leads to business uncertainty and risks attached in each decision making. The success in implementing LoC that supports the creation of qualified company’s dynamic capabilities cannot be separated from the role of a leader as a decision maker. This study is aimed at elaborating the results of previous research by explaining how visionary leader competency bridges the LoC and dynamic capabilities of the company as a novelty in this scientific study. The profiles of respondents in this study are first-line, middle and top managers of cross-industry companies in Indonesia. The questionnaire distributed consists of questions adopted from literatures. Hypothesis testing was done using structural equation model with SmartPLS 3.2.1 as a test tool. The results of testing the hypothesis of this study indicate that although there is a direct relationship between the effect of LOC on the company's dynamic capabilities (H1 is accepted), the role of visionary leader competency in bridging this direct effect is not proven (H4 is rejected). This is indicated by the magnitude of the indirect effect of LOC on dynamic capabilities mediated by the leader's visionary competency (p-value of indirect effect) which is 0.306 exceeding 0.05. It can be concluded that the visionary leader competency cannot be the only variable intervening the implementation of LOC to influence the company's capabilities. Instead, it must be equipped with competencies and other factors that synergize in the leadership style carried out by a leader.