THE INFLUENCE LEADERSHIP AND INTERNAL CONTROL ON COMPANY PERFORMANCE THROUGH HUMAN RESOURCES COMPETENCE

Abstract

This study examines and analyzes the influence of leadership and internal control on company performance with human resources competence as a mediating variable at Perumda Delta Sari Sidoarjo. The instrument in the data collection technique was a questionnaire with a Likert Scale. The questionnaires were distributed online to the 65 respondents. They consisted of Structural and functional officers. The data analysis technique used was Structural Equation Modeling – Partial Least Squares (SEM-PLS). The result shows that internal control has a positive and significant effect on human resources competence and company performance. However, leadership has an insignificant effect on human resource competence and company performance. Additionally, human resource competence is proven to mediate significantly the effect of internal control on company performance. Unfortunately, it does not significantly mediate the relationship between leadership and a company performance. The findings indicate that within a public service-based organization such as Perumda Delta Sari Sidoarjo, a strong internal control system that runs effectively has more roles than the effect of leadership style in supporting the improvement of human resources competence, and finally the company performance. Therefore, strengthening in the internal system and developing human resources structurally becomes an essential strategy to improve organizational performance sustainability.