The Effect of Innovation on Increasing Business Performance of Smes in Indonesia

Herlinawati, Erna; Machmud, Amir

doi:10.37394/23207.2020.17.7

Cited by 14 publications

(18 citation statements)

References 13 publications

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“…Although the notion of cluster is usually directed to large industry, this study supports an argument on the role of innovation capability to the performance of SMEs operate in small industry clusters. This research is also in line with the result given by (Maldonado-Guzmán et al, 2019); (Kafetzopoulos et al, 2020); (Herlinawati & Machmud, 2020); (Ahmed et al, 2020); (Alam & Adeyinka, 2021); (Faisol., Astuti, P., Winarko, 2021). They have proved that innovation in product, process, marketing and management significantly and positively influences the business performance of SMEs.…”

Section: Resultssupporting

confidence: 92%

Pathway of Building SMEs Performance in Cluster through Innovation Capability

Faisol

Aliami

Anas³

2022

EDAJ

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The purpose of this study is to investigate the impact of business strategies and social capital on the performance of small and medium-sized firms (SMEs) that operate in small industry clusters. An emphasis is placed on examining the function of innovation capability in mediating this interaction. Data was acquired by sending questionnaires to various clusters in East Java, Indonesia, utilizing multi-stage sampling. The study then found 98 SME owners who had completed all of the surveys. The Partial Least Square approach was then utilized to evaluate the hypotheses using SmartPLS. The findings show that business strategies have no direct impact on performance. The impact of business strategy on performance appears to be mediated by innovation capabilities. On the other hand, social capital, as measured by bridging and linking social capital, has a direct impact on firm performance. As a result, this study suggests that SMEs improve their performance through increasing cluster social capital and increasing innovation capability. We recommend further research to replicate this study on large industry clusters. It is expected that the interplay between business strategies and social capital to performance will explain different result for the development of industry clusters.

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Section: Resultssupporting

confidence: 92%

Pathway of Building SMEs Performance in Cluster through Innovation Capability

Faisol

Aliami

Anas³

2022

EDAJ

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“…The introduction of new products positively affects the firm's performance, according to Varis and Littunen [25]. Process innovation, as demonstrated by Murat and Baki, has positive effects on firm performance [26], including firm growth [27], firm productivity [28,29], as well as industrial development [30]. It was determined that compensation and rewards aid in the smooth and efficient operation of organizations, helping them achieve their objectives and boost business performance [18].…”

Section: Literature Reviewmentioning

confidence: 99%

“…Varis and Littunen [25] claim that the success of a company is positively impacted by the launch of new items. Along with firm growth [26], firm productivity [28,29], and industrial development [30], process innovation genuinely has a positive effect on firm performance. According to Huselid, HRM practices positively affect firm performance by affecting work attachment, firm financial performance, and productivity.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Innovation-Oriented Human Resource on Small and Medium Enterprises’ Performance

et al. 2023

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This research paper aims to examine the impact of innovative HRM practices, including employee participation, performance appraisal, reward and compensation, recruitment and selection, and redeployment–retraining on firm performance. For this purpose, four different models are utilized to examine the impact of innovative HRM department practices on the performance of small and medium enterprises (SMEs) in a country. The dependent variable, firm performance, is proxified by different variables such as labor productivity, product innovation, process innovation, and marketing innovation. For empirical analysis, primary data are collected using a questionnaire. Estimation is conducted using ordinary least squares (OLS) and logit regression techniques. The estimated results indicate that most innovative HRM practices have a statistically significant impact on firm performance in terms of labor productivity, product, process, and marketing innovations. These results imply that SMEs in a country may observe the benefits of devoting greater attention to innovative HRM practices to achieve their future growth potential.

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“…SMEs tend to be more creative in finding market opportunities so they can continue to survive in all conditions. The entrepreneurial mindset according to Herlinawati and Machmud (2020), is needed to create new opportunities and facilitate existing businesses. This is also supported by SMEs entrepreneurial orientation research which is engaged in the manufacturing industry sector in West Java, that the weak desire of SME players to look for business opportunities in a dynamic environment will inhibit the growth of market opportunity.…”

Section: Effect Of Entrepreneurial Orientation To Business Performancementioning

confidence: 99%

Business Competitiveness Strategy of Processed Mushroom in East Java: A Resource-Based View Model Approach

Haryati

Salleh

Choirunnisa

2020

JAM

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Mushrooms are one of the strategic agro-industrial commodities in Indonesia. It is because the mushroom market share for consumption is very high. People consume mushrooms as a snack, side dishes, and also as a main dish. The mushroom business in Malang Indonesia is very lively, especially in this city, there are many students and employees as consumers who like snacks on the sidelines of their activities. Due to many of those industries, the SME of mushroom needs to increase the production. Leading competitiveness in the product are the factors that must be kept by companies to be successful in their business. This research aims to understand the effect of tangible resources, entrepreneurship orientation, business uncertainty on competitive strategy, and the influence of competitive strategy on the company’s performance. The research uses methods such as quantitative descriptive analysis and inferential (SEM) based on Partial Least Square (PLS). Strategic resources, entrepreneurial orientation, and environmental uncertainty of mushroom small-medium enterprises have a direct effect more than an indirect effect. Strategic resources have the strongest significance if it is compared to entrepreneurial orientation and entrepreneurial uncertainty. Further research is needed to see the effect of competitive strategy on business performance.

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The Effect of Innovation on Increasing Business Performance of Smes in Indonesia

Cited by 14 publications

References 13 publications

Pathway of Building SMEs Performance in Cluster through Innovation Capability

Pathway of Building SMEs Performance in Cluster through Innovation Capability

Impact of Innovation-Oriented Human Resource on Small and Medium Enterprises’ Performance

Business Competitiveness Strategy of Processed Mushroom in East Java: A Resource-Based View Model Approach

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