Purpose -The purpose of this paper is to determine the direct influence of the mechanism of good corporate governance (GCG) and corporate social responsibility (CSR) on financial performance as well as through earnings management as a mediating variable. Design/methodology/approach -The data used in this research are secondary data involving 102 companies listed on the Indonesian Stock Exchange for the period 2014. The data used in this study were analyzed using partial least square and carried out with the help of software WarpPLS 5.0. Findings -The results show that the mechanism of GCG and CSR has a positive effect on financial performance as well as the CSR on financial performance. Originality/value -The results also show partial mediation of earnings management on impact of GCG mechanisms on financial performance and full mediation of earnings management on impact of CSR on financial performance.

PurposeThis study aims to investigate the intellectual capital–financial performance relationship using two models, namely the conventional Value-Added Intellectual Coefficient (VAIC) model and the adjusted Value-Added Intellectual Coefficient (A-VAIC) model.Design/methodology/approachThis study is designed as a quantitative research focusing on the relationship between intellectual capital and financial performance of the banking industry in Indonesia. As many as 114 data are derived from the publicly listed banks on the Indonesia Stock Exchange for the period of 2012–2017. The multiple regression analysis is employed to test the hypotheses studied.FindingsIn general, the result confirms that intellectual capital affects financial performance. Although not all hypotheses of the study are supported by either the VAIC model or the A-VAIC model, the results provide a deeper and new insight on how each component of intellectual capital efficiency (human capital, structural capital, capital employed, innovation capital) relates to financial performance (return on asset, return on equity, asset turnover, price to book ratio). The results also justify that further improvements in measuring intellectual capital are still needed in the future.Research limitations/implicationsThis study limits its generalization since the sample is only in the Indonesian banking industry. Notwithstanding the limitation, the results imply that the Indonesian banking managers need to be aware of intellectual capital management because of its strategic role in enhancing financial performance.Practical implicationsThis study contributes to the intellectual capital literature by providing empirical evidence on the use of both models, namely the conventional VAIC and the A-VAIC in the Indonesian banking industry research setting which is never been studied before.Social implicationsThis study has the social implication to the enhancement of the quality life of the society. The higher the quality of intellectual capital in the banking firms, the better the banks serve the needs of the community.Originality/valueThis study contributes to the IC literature by providing empirical research on the use of the VAIC model and the A-VAIC model in the Indonesian banking industry.

Purpose The purpose of this paper is to explore whether green innovation strategy has a positive effect on green innovation. Furthermore, this study investigates whether both green organizational identity and environmental organizational legitimacy mediate the relationship between green innovation strategy and green innovation. Design/methodology/approach This study is designed as a quantitative research using questionnaires to collect data and employing a variance-based or partial least squares structural equation modeling to test the hypotheses. Findings The empirical results show that green innovation strategy positively affects green innovation. This study also demonstrates that green innovation strategy positively affects green innovation indirectly via green organizational identity and environmental organizational legitimacy in manufacturing companies in Indonesia as a developing country. This study suggests that firms should develop green innovation strategy and it must be reflected as green organizational identity to get environmental organizational legitimacy, and then firms will achieve a better green innovation performance. Research limitations/implications This study has the following limitations. First, a structural equation modeling is used as an approach to test the hypotheses and this may raise the issue of causality. Second, although examining the antecedents of green innovation, this study does not investigate its consequences. Third, the sample size used in this study is relatively small and limited to companies in the Surabaya Industrial Estate Rungkut, Indonesia. Finally, this study employs a cross-sectional survey and the data obtained are based on the Likert scales that may raise the issue of perception bias of the sampled managers. Practical implications The results of this study suggest that managers need to verify the roles of green organizational identity and environmental organizational legitimacy in their companies. In the era of environmentally conscious society, managers need to start with developing a green innovation strategy. However, managers also need to understand that having a strategy is not sufficient enough to directly enhance green innovation performance. Managers need to seek approaches on how to cultivate a strong green organizational identity and use the identity to get environmental organizational legitimacy from the stakeholders. Social implications This research model and results provide the empirical evidence of the importance of green innovation and its antecedents, namely, a green innovation strategy, green organizational identity and environmental organizational legitimacy. When manufacturing companies in Indonesia implement this model of managing environmental issues, the society will get more benefits in terms of the reduction of environmental degradation, the availability of more green products and programs, the improvements in resource efficiencies and economic development and the enhancement of the quality of life. Originality/value A research framework exploring the mediating roles of green organizational identity and environmental organizational legitimacy on green innovation strategy–green innovation relationship is developed to provide the empirical evidence for the organizational identity theory and the organizational legitimacy theory. This study also provides practical implications for managers who are facing the environmental awareness business environment. If they want to achieve a better green innovation performance, managers should enhance their awareness in managing the antecedents of green innovation performance, namely, green innovation strategy, green organizational identity and environmental organizational legitimacy.

This study aims to investigate the effect of good corporate governance (GCG) on corporate sustainability performance (CSP) using the Triple Bottom Line (TBL) approach in a two-tier GCG system. GCG is measured by the size and education background of board of commissioners (BoC) and top management team (TMT). CSP consists of economic, social, and environment sustainability performance. As many as 117 sample data were collected from the financial statements, annual reports and sustainability reports of non-financial companies listed on the Indonesia Stock Exchange (IDX) for the period of 2013-2017. Multiple regression analysis was employed to test the hypotheses studied with the following results. First, BoC education has a negative effect on economic and environmental sustainability performance and no effect on social sustainability performance. Second, BoC size has a positive effect on economic sustainability performance, a negative effect on social sustainability performance and no effect on environmental sustainability performance. Third, CEO's education has a negative effect on economic sustainability performance, and no effect on environmental and social sustainability performance. Fourth, TMT size has a negative effect on economic and environmental sustainability performance and no effect on social sustainability performance. Contributions, limitations and implications of the study are also discussed.

Purpose The purpose of this paper is to examine the mediating effect of intellectual capital (IC), management accounting information systems, internal process performance and customer performance (CP) on the relationship of strategies with financial performance (FP). Design/methodology/approach The population in this research was medium and large manufacturing company business units in Java. The business unit as the unit of analysis in this research is part of the organization that: is responsible for the production and marketing of a product or set of products; is formed by product type; has its own competitors which are different from competitors of other business units or divisions within a parent company; and has a manager who is responsible and has authority over the planning and implementation of strategies to achieve the specified profit target. Findings An innovation strategy that includes product innovation, process innovation and technology has an impact on FP if there is a good internal process performance, reliable management accounting information system and good CP. The internal process performance, which includes operations management processes, customer management processes, innovation processes and regulatory and social processes, optimizes the relationship of the strategy with FP. In this study, IC does not affect CP and internal process performance, nor does the management accounting information system affect FP. However, information systems affect FP through internal process performance and CP. Originality/value The originalities of this study are: the use of the continuous innovation strategy in an integrated manner between product innovation and process and information technology – this has never been conducted by other researchers, especially in Indonesia; the use of IC, management accounting information systems, internal process performance and CP as mediating variables; the use of an integrative approach by including variables of IC, management accounting information systems and non-FP as contextual variables related to contingency approaches that have never been conducted in previous research; the modeling of new related concepts with the one developed in the balanced scorecard; and using single mediating and multiple mediating on the influence of sustainable innovation strategies on FP.

The focus of this research was to investigate the effect of green market orientation on business performance. For that purpose, this research tested that green market orientation has a direct effect on business performance, that green market orientation affects green innovation, and that green innovation affects business performance. As a quantitative research, partial least squares structural equation modeling (PLS–SEM) was used to test the hypotheses. Data were collected by using both online and offline questionnaires from owners/managers of the manufacturing micro, small- and medium-sized enterprises (MSMEs) in the East Java Province of Indonesia. A total of 175 respondents participated in this study. The results show that green market orientation has a positive and direct effect on business performance. The results empirically support the theory of sustainability and entrepreneurship in the research setting of Indonesian MSMEs. The results also imply that the owners/managers of MSMEs need to balance economic, environmental, and social issues in their business. In the era of sustainable development and environmental awareness, manufacturing MSMEs need to adopt a green market orientation and carry out green innovation in their business processes to obtain a better business performance.

PurposeThis study aims to investigate whether human capital readiness affects business performance, and if so, whether the effect is mediated by global market orientation.Design/methodology/approachThis is a quantitative study employing partial least square structural equation modeling (PLS-SEM) to test the hypotheses. Using a survey method, the data were collected using both online and offline questionnaires. As many as 433 owners/managers of micro-, small- and-medium-sized enterprises (MSMEs) in the East Java Province of Indonesia participated in this study. A mediating research framework was developed to investigate the mediating role of global marketing orientation on the human capital readiness–business performance relationship.FindingsThe results show that human capital readiness has a direct and positive effect on business performance. Further analysis reveals that global market orientation partially mediates the effect of human capital readiness on business performance.Research limitations/implicationsFirst, this study focuses on the MSMEs in the East Java Province of Indonesia. Caution needs to be taken if the results are generalized to other regions. Second, it employed a survey method that is commonly criticized as having the potential to be biased.Practical implicationsThe findings provide a more comprehensive understanding of owners/managers of human capital readiness and how it should be improved to better execute global market orientation strategies to achieve the desired business performance.Social implicationsBecause MSMEs play a crucial role in society, this study provides a general model to improve the welfare of society by enhancing the MSMEs' business performance. By understanding its antecedents, namely, human capital readiness and the global market orientation, improvements can be made.Originality/valueHuman capital readiness has been rarely examined in previous studies. This is the only study applying the constructs of human capital readiness, global market orientation and business performance to the Indonesian MSME research setting.

Purpose With a particular emphasis on corporate strategies for innovation, the purpose of this paper is to examine how cost behaviour operates under conditions of strong competition in the retail industry. Design/methodology/approach Retail companies listed on the Indonesian, Singaporean and Malaysian capital markets are studied using the regression analysis method. Findings The findings of this study show the sticky behaviour of changes in the selling, general and administrative (SGA) costs when companies are under competitive pressure. When sales increase, SGA costs will increase; however, when sales decline, SGA costs evidently increase. This is especially true for retail companies which have suffered a decrease in their sales of less than 7 per cent, but experienced positive sales growth in the previous period. The suggestion would seem to be that competition leads to greater aggression and the contemporary real options theory bears this out. Research limitations/implications This study only uses data from retail companies listed on stock exchanges in Singapore, Indonesia and Malaysia. Practical implications The type of industry, the extent of the competition and the corporate strategy employed might influence the extent of cost stickiness. Therefore, the users of financial statements need to understand these factors. Originality/value While previous studies incorporated a variety of industries, this paper focuses on examining cost behaviour amid the competitive pressure from recent phenomena in the retail industry. The study provides empirical evidence for supporting the contemporary real options theory. When an industry experiences competition, investing in an uncertain situation will add value to a company, even if it causes sticky cost behaviour. This result contributes to the literature on cost behaviour and strategy management.