The Role of Business Strategy in Mediating the Influence of Management Capabilities on Business Performance

Abstract

The ever-changing business environment, competition of similar industries and the presence of new entrant industries and exacerbated by the pandemic condition COVID 19 is very demanding for companies in improving management capabilities and the application of good business strategies to survive and achieve competitive advantages of the company. This research was conducted to determine the influence of management capabilities by focusing on the implementation of strategies on IMK business performance. This research was conducted in micro small business (IMK) food industry in Gorontalo who is also the owner and manager of small and medium embroidery industry at PT Jawa Timur. The method used in this study is a survey method with a research population is a businessman / owner of IMK with a sample number of 377 people the method of sampling research is Non-Probability with purposive sampling techniques. The research uses quantitative approach with PLS (Partial Least Square) analysis tool. The results showed that 1). Management capabilities have a significant impact on business strategy and directly affect business performance; 2). Business strategy has proven to have a significant positive effect in mediating the influence of management capabilities on business performance

The effect of management capability and entrepreneurial orientation on business performance through business strategy as an intervening variable

“…The findings of this study can be implemented by all lines of business, especially food IMK business actors to improve business performance by implementing and maximizing their management capabilities properly, which of course are based on management capability indicators developed through this research, (Niode, et al, 2021) The Effect of Entrepreneurship Orientation on Business Performance in the Food Micro Small…”

“…It is interesting if traced from the research results that the freedom and breadth of each IMK/business actor in formulating and implementing business strategies because starting and running their own business makes it easier for IMK business actors to organize and manage their business. business, especially in implementing business strategy, (Niode et al, 2021)…”

“…Thus, it can be interpreted that better management ability will affect the implementation of the business strategy carried out by IMK food actors in Gorontalo. This means that IMK business actors in Gorontalo Province in carrying out their business have been able to carry out management functions which are reflected in verbal communication, management skills in terms of managing time and pressure, managing decisions, identifying & determining problems, motivating/influencing other people, delegation, and building work teams and managing conflict, (Niode et al, 2021) The results of theoretical studies and empirical studies prove that the implementation and formulation of business strategies will be better if they are supported by the managerial skills possessed by entrepreneurs. Therefore, in the management of Gorontalo food IMK in developing a business, the strategic steps that must be taken according to the perception of food IMK entrepreneurs are to combine creative, innovative ideas and actions that are part of the management capabilities and business strategy within the company.…”