The Limits of Situational Leadership: Work Conflict, Work Environment, and Employee Performance in a Public Utility

Abstract

On the heels of this very powerful practice of Situational Leadership Theory (SLT) in corporate contexts, SLT's moderating role in public service organizations has less deterrent exploration. This research examines the moderating effect of situational leadership on work conflict, work environment, and employee performance at one of the Water Treatment Plants of Regional Company, Surabaya, Indonesia with a quantitative-descriptive approach and a survey of 50 employees by means of a saturated sampling technique. Data were analyzed using Structural Equation Modelling (SEM) with Smart PLS-3. The results found that performance decreased as work conflicts increased but made the work environment positively influenced performance. However, situational leadership did not moderate these relationships, which means that adaptive leadership alone cannot mitigate structural conflicts and environmental stresses in bureaucratic conditions. The research adds to SLT limits by bringing about such demand in rigid public sector environments and indicates the necessity for systemic conflict resolution strategies besides adaptive leadership. It explains the new practical implications for strengthening employees at public utilities on leadership strategies opposite institutional policies. These results contribute to the theoretical discourse on leadership effectiveness within public service institutions, particularly in water utility management.