Organizational Culture and Public Sector Performance: A Moderated Mediation Analysis of Leadership Competency and Employee Commitment

Public sector institutions face increasing systemic pressure to improve operational efficiency; however, the behavioral mechanisms that translate organizational values into performance remain poorly understood. Drawing on the Resource-Based View, Social Exchange Theory, and Path-Goal Theory, this study offers a moderated mediation framework to investigate the effect of organizational culture on public sector performance, with employee commitment as the mediator and leadership competency as the moderator. The study used an explanatory quantitative design and collected data through structured questionnaires from a sample of 387 employees. Using these 340 valid responses, the study used Partial Least Squares Structural Equation Modeling to examine the hypothesized relationships. Empirical findings revealed that organizational culture exerts a positive and significant direct effect on organizational performance, with employee commitment serving as a significant partial mediator. Moderation analysis further reveals that leadership competency substantially enhances this indirect effect. By providing empirical evidence from Ethiopia, this study bridges a critical geographic and theoretical gap regarding how institutional values translate into operational outputs. The research introduces a novel integrated theoretical synthesis, demonstrating that the relationship between organizational culture and performance depends crucially on competent leaders rather than on systemic design alone. Practically, this study helps public administrators optimize performance through human capital alignment.