A Contiguity of Social Capital, Competence, and Business Performance Moderating by Government Policy

Abstract

The purpose of this study is to investigate the contiguity of social capital and competence on business performance moderating by government policy. A total sample of 225 Village Credit Institution (LPDs) managers in Bali, the hypothesis is examined using the WarpPLS analysis. The findings reveal that social capital has an important role in enhancing performance, Competence is also an important factor for managers because it can intensify performance. Social capital is largely related to the recognition of society regarding the credibility of the managers, while competence emphasizes the ability of the managers to manage the organization. Government policy must be viewed as a regulation that is able to help improve performance. However, the public policies issued by the government are still unable to help improve social capital and competence. Thus, to create public policies that are able to improve the competence and social capital, a further examination into the variables must be conducted. The findings suggest that two-way communication must be developed and synergy between the government and organizations to create opportunities and overcome the increasingly complex business challenges. The results emphasized the importance of social capital in enhancing business performance. In addition, the role of competence is of equal importance to enhance business performance.

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“…The results also indicate that soft quality management indirectly affects performance through State and Government Policies which is consistent with several studies (Kim et al, 2016;Santosa et al, 2020). So, the present result also shows the positive and significant effect of SQM on USP with SGP.…”

“…So, the current study outcomes also show significant relationship between H3, H4, H5, and H6. Thus, H3, H4, H5, and H6are accepted in this present research.H7 indicates that our study supports the positive impact effect of SQM on USP with moderating variables such as SGP, which is consistent with the findings of a study done by (Santosa et al, 2020).…”

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