Leadership Styles during Economic Turbulence That Improve Performance in Tax Service Offices: Leader-Follower Dyad

Abstract

This quantitative study analyzes the transformational and transactional leadership styles in turbulent conditions on the performance of Tax Service Offices (TSOs) in Indonesia, involving 774 respondents. The analysis was conducted using Structural Equation Modeling (SEM), with the dyadic relationship of the Leader-Member Exchange (LMX) theory between Leaders and Followers (L-F). The results show that most TSO leaders are male, have a master’s degree aged > 50 years and have held the position for more than two terms, while the characteristics of the employees are more diverse in terms of their sex, education, and age. The model shows adaptive and responsive behavior as a performance mediation of competency, transformational leadership, and transactional leadership. Conversely, turbulence and transactional leadership directly influence performance. A dyadic leader-follower relationship exists in the context of leadership style during turbulence conditions in public organizations. This study analyzes the transformational and transactional leadership styles in turbulent conditions on the performance of Tax Service Offices (TSOs) in Indonesia. The analysis used structural equation modeling (SEM). Primary data were collected by distributing structured questionnaires, both online and face-to-face, to 744 respondents consisting of 64 TSO leaders and 710 followers in the form of TSO employees and tax-payers. The model shows adaptive and responsive behavior as a performance mediation of competency, transformational leadership, and transactional leadership. Conversely, turbulence and transactional leadership directly influence performance, encouraging the formation of new structural positions, TSOs, or autonomous bodies, the decentralization of HR authority, and developing soft-skill capacity building programs and performance appraisal basis (leadership, adaptive, innovative, and responsive behavior) for TSO leaders. There is a dyadic leader-follower relationship in the context of leadership style during turbulence conditions in public organizations. Keywords: leadership style, leader-follower dyad, transformational leadership, transactional leadership. DOI: https://doi.org/10.55463/hkjss.issn.1021-3619.60.64