Business strategy and performance in Indonesia’s service sector

Abstract

Purpose: The relationship between strategic choices and performance in service firms in emerging markets has remained largely under-researched. We address this issue by studying the performance of financial institutions in the context of Indonesia's political, institutional and socio-cultural environment. Design/Methodology/Approach: Using institutional theory, we analyzed data collected using surveys and interviews with senior managers in Indonesian financial institutions. Findings: We find that the regulative and normative elements have forced organizations to incorporate the values set by the external institutional bodies. The organizations have undertaken structural isomorphism in response to culturecognitive elements, and differentiate themselves by focusing on the provision of quality customer service and enhanced customer satisfaction. Originality/Value: We provide new insights by studying how the political and institutional environment and choice of strategy influences performance in the services sector in emerging economies.

Strategic Performance Measure, Innovativeness, Enterpreuneurship and Strategic Outcomes

“…It is not like in manufacturing industry, in financial institution, firm explore to find new how to achive an excellent service. Thus, our study supports Yuliansyah, Rammal and Rose (2016) that innovation in service sector can support differentiation strategy, not for low-cost strategy.…”

“…I predict that (1) differentiation is the key to sustainability in Indonesian financial institutions (Yuliansyah et al, 2016), and (2) that trust and excellent service are the ultimate predictor of success, especially for financial institutions which have relatively little difference in their 'product', financial services. This study implies that financial institutions in Indonesia may focus on differentiation strategy to compete with rivals.…”

“…With that encouragement, I send a total of 710 questionnaires to 355 organisations and receive 176 responses, from which 158 are usable (22.25%), a good response for this type of research. Table 1 illustrates the demography of respondents that was taken from Yuliansyah, Rammal, and Rose (2016) and . Thirteen questions about SPM are developed by , and are based on Explanatory Factor Analysis (EFA).…”

“…Simons (1995) notes that PMS can stimulate managers to search for new opportunities and gain information to be creative (Simons, 1995). I investigate the effect of PMS on entrepreneurship and innovation.Using Two recent studies of the Indonesian service sector data, Yuliansyah, Rammal, and Rose (2016) and Yuliansyah, Gurd, and Mohamed (2017), this study contributes to the extent to which PMS links with entrepreneurship and innovation (1) in the service sector and (2) in Asian countries in the last 20 years. In addition, practical contribution of the study is that SPM can help organisation to build their entrepreneurship and innovativeness culture to improve an organisational performance through creating of strategic outcomes.…”

Four possible rewards (or punishments) for innovation – their effect on the employee

“…We survey only Indonesian Stock Exchange-listed companies, in general, selecting for good systems of management (Lau & Sholihin, 2005;Yuliansyah & Khan, 2015a;Yuliansyah & Khan, 2015b;Yuliansyah et al, 2016b). This particular study makes several contributions to the field of management accounting.…”