DOI: https://doi.org/10.14710/jbs.32.1.102-111

THE INFLUENCE OF OPERATIONAL FACTORS ON EMPLOYEE TRUST AND COMMITMENT AND ITS IMPACT ON SME BUSINESS PERFORMANCE

*Ferdi Antonio  -  Universitas Pelita Harapan, Indonesia
Sherly Theresia  -  Universitas Pelita Harapan, Indonesia
Open Access Copyright 2023 JURNAL BISNIS STRATEGI

Citation Format:
Abstract

This study aims to investigate how operational factors in SMEs, influence employee trust and commitment and impact business performance using empirical data. The operational factors that were examined namely group formality, internal communication, teamwork, skill, knowledge sharing, and IT support. The eligible 208 respondents who have been working in the SME for more than a year, were obtained through a questionnaire and analyzed using the PLS-SEM method. The empirical findings demonstrate that the six operational influences significantly employee commitment and trust (p<0,05), except for group formality and teamwork skills to trust. Interestingly, commitment shows a larger impact on SMEs' business performance compared to trust, likewise, commitment could mediate the impact of trust. In addition, the model with the total sample shows moderate prediction accuracy (R2: 0,508). Furthermore, the FIMIX PLS identified the data heterogeneity and provide a segment analysis that provides a higher predictive capability (R2: 0,936) to ascertain the explanatory and predictive capability of the model. Finally, the outcomes enable SMS business leaders to make pertinent observations in the organization and encourage the effort to gain employee commitment.

Fulltext View|Download
Keywords: Business performance, organizational factors, trust, commitment, employee, and SME.

Article Metrics:

Article Info
Section: Articles
Language : EN
Recent articles
THE INFLUENCE OF OPERATIONAL FACTORS ON EMPLOYEE TRUST AND COMMITMENT AND ITS IMPACT ON SME BUSINESS PERFORMANCE EFFECT OF SUSTAINABILITY DISCLOSURE PERFORMANCE INDICATORS ON PROFIT MANAGEMENT WITH COMPANY SIZE AS A CONTROL VARIABLE BIBLIOMETRIC ANALYSIS OF SAFETY MANAGEMENT: A COMPREHENSIVE REVIEW More recent articles
Most cited articles
EXPORTING PROBLEMS OF MALAYSIAN SMES : A RECENT SURVEY DETERMINING THE MODERATING EFFECT OF ENVIRONMENT ON THE BUSINESS STRATEGY-PERFORMANCE RELATIONSHIP IN MALAYSIAN SMES THE INFLUENCE OF DIVIDEND POLICY, DEBT POLICY, INDEPENDENT COMMISSIONER, AND INSTITUTIONAL OWNERSHIP ON THE FIRM VALUE WITH GROWTH OPPORTUNITIES AS MODERATOR VARIABLES (Study on Non-Financial Companies Listed on IDX in the Period of Years of 2012-2015) DETERMINANTS OF SALES PERSON PERFORMANCE ANALISIS PENGARUH TARIF PENERBANGAN, JUMLAH PENERBANGAN DAN PENDAPATAN PERKAPITA DALAM MENINGKATKAN JUMLAH PENUMPANG More cited articles
  1. Akintimehin, O. O., Eniola, A. A., Alabi, O. J., Eluyela, D. F., Okere, W., & Ozordi, E. (2019). Social Capital and its effect on business performance in the Nigeria Informal Sector. Heliyon, 5(7). https://doi.org/10.1016/j.heliyon.2019.e02024
  2. Aljanabi, A. Q. R. (2017). The mediating role of absorptive capacity on the relationship between entrepreneurial orientation and technological innovation capabilities. International Journal of Entrepreneurial Behavior & Research, 24(4), 818–841. https://doi.org/10.1108/ijebr-07-2017- 0233
  4. Aldrich, H. E., & Fiol, C. M. (1994). Fools rush in? the institutional context of industry creation. The Academy of Management Review, 19(4), 645. https://doi.org/10.2307/258740
  5. Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten Years After 1991. Journal of Management, 27(6), 625–641. https://doi.org/10.1177/014920630102700601
  6. Bastug, G., Pala, A., Kumartasli, M., Günel, I. and Duyan, M. (2016) Investigation of the Relationship between Organizational Trust and Organizational Commitment. Universal Journal of Educational Research, 4, 1418-1425. https://doi.org/10.13189/ujer.2016.040619
  7. Bougie, R., & Sekaran, U. (2020). Research methods for business: A skill-building approach (8th ed.). John Wiley & Sons, Inc
  8. BPS (Biro Pusat Statistik), Micro and Small Industries during the COVID-19 Pandemic; Statistic Center Indonesia: Jakarta, Indonesia, 2020; ISBN 978-602-438-429-6
  9. Choi, J., Kim, S., & Yang, D.-H. (2018). Small and medium enterprises and the relation between social performance and financial performance: Empirical evidence from Korea. Sustainability, 10(6), 1816. https://doi.org/10.3390/su10061816
  10. Cicea, C., Popa, I., Marinescu, C., & Ștefan, S. C. (2019). Determinants of smes’ performance: Evidence from European countries. Economic Research-Ekonomska Istraživanja, 32(1), 1602–1620. https://doi.org/10.1080/1331677x.2019.1636699
  11. Engidaw, A. E. (2021). Exploring internal business factors and their impact on firm performance: Small Business Perspective in Ethiopia. Journal of Innovation and Entrepreneurship, 10(1). https://doi.org/10.1186/s13731-021-00167-3
  12. Gelderman, C. J., De Jonge, J., Schijns, J., & Semeijn, J. (2018). Investigating cooperative purchasing performance - A survey of purchasing professionals in Dutch hospitals. The Central European Review of Economics and Management, 2(1), 133. https://doi.org/10.29015/cerem.568
  13. Gobbi, C., & Hsuan, J. (2015). Collaborative purchasing of complex technologies in Healthcare. International Journal of Operations & Production Management, 35(3), 430–455. https://doi.org/10.1108/ijopm-08-2013-0362
  14. Grandori, A., & Kogut, B. (2002). Dialogue on organization and knowledge. Organization Science, 13(3), 224–231. https://doi.org/10.1287/orsc.13.3.224.2774
  15. Hair, J., Risher, J., Sarstedt, M., & Ringle, C. (2019). When to use and how to report the results of PLS- SEM. European Business Review, 31(1), 2–24. https://doi. org/10.1108/EBR-11-2018-0203
  16. Hair, Jr., J.F., Sarstedt, M., Matthews, L.M. and Ringle, C.M. (2016) Identifying and treating unobserved heterogeneity with FIMIX-PLS: part I – method, European Business Review, Vol. 28 No. 1, pp. 63- 76. https://doi.org/10.1108/EBR-09-2015-0094
  17. Henseler, J., Ringle, C., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. 198 https://doi.org/10.1007/s11747-014-0403-8
  19. Hemakumara, H. (2020). The impact of motivation on job performance: A review of literature. Journal of Human Resources Management and Labor Studies, 8(2). https://doi.org/10.15640/jhrmls.v8n2a3
  20. Hoffmann, W. H., & Schlosser, R. (2001). Success factors of strategic alliances in small and medium-sized enterprises—an empirical survey. Long Range Planning, 34(3), 357–381. https://doi.org/10.1016/s0024-6301(01)00041-3
  21. Judeh, M. (2016) The Influence of Organizational Trust on Job Performance: Mediating Role of Employee Engagement. International Journal of Business Research, 16, 53-66. https://doi.org/10.18374/IJBR- 16-5.4
  22. Kock, N., & Hadaya, P. (2018). Minimum sample size estimation in PLS-SEM: The inverse square root and gamma-exponential methods. Information Systems Journal, 28(1), 227–261. https://doi.org/10.1111/isj.12131
  23. Matthews, L.M., Sarstedt, M., Hair, J.F. and Ringle, C.M. (2016), "Identifying and treating unobserved heterogeneity with FIMIX-PLS: Part II – A case study", European Business Review, Vol. 28 No. 2, pp. 208-224. https://doi.org/10.1108/EBR-09-2015-0095
  24. Memon, M.A., Ramayah, T., Cheah, J.-H., Ting, H., Chuah, F., & Cham, T.H. (2021). PLS- SEM statistical programs: A review. Journal of Applied Structural Equation Modeling, 5(1), 1–14. https://doi.org/10.47263/JASEM.5(1)06
  25. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of Relationship Marketing. Journal of Marketing, 58(3), 20–38. https://doi.org/10.1177/002224299405800302
  26. McEvily, B., Perrone, V., & Zaheer, A. (2003). Trust as an organizing principle. Organization Science, 14(1), 91–103. https://doi.org/10.1287/orsc.14.1.91.12814
  27. Nahapiet, J., & Ghoshal, S. (1998). Social Capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242–266. https://doi.org/10.5465/amr.1998.533225
  28. Nitzl, C., Roldan, J.L., & Cepeda, G. (2016). Mediation analysis in partial least squares path modelling: Helping researchers discuss more sophisticated models. Industrial Management and Data Systems, 116(9), 1849–1864. https://doi.org/10.1108/ IMDS-07-2015-0302
  29. Nguyen, P. V., Huynh, H. T., Lam, L. N., Le, T. B., & Nguyen, N. H. (2021). The impact of entrepreneurial leadership on smes’ performance: The mediating effects of organizational factors. Heliyon, 7(6). https://doi.org/10.1016/j.heliyon.2021.e07326
  30. Paulraj, A., Lado, A. A., & Chen, I. J. (2007). Inter-organizational communication as a relational competency: Antecedents and performance outcomes in collaborative buyer-supplier relationships. Journal of Operations Management, 26(1), 45–64. https://doi.org/10.1016/j.jom.2007.04.001
  31. Rahman, S.A.A., Wahba, M., Ragheb, M.A.S. and Ragab, A.A. (2021) The Effect of Organizational Trust on Employee’s Performance through Organizational Commitment as a Mediating Variable (Applied Study on Mobile Phone Companies in Egypt). Open Access Library Journal, 8, 1-15. doi: 10.4236/oalib.1107806
  33. Ringle, C. M., & Sarstedt, M. (2016). Gain more insight from your PLS-SEM results the importance- performance map analysis. Industrial Management and Data Systems, 116(9), 1865–1886. https://doi.org/10.1108/IMDS-10-2015- 0449
  34. Ringle, C. M., Wende, S., and Becker, J.-M. 2022. "SmartPLS 4." Oststeinbek: SmartPLS GmbH, http://www.smartpls.com
  35. Rukshani, K. and Senthilnathan, S. (2014) Impact of Organizational Trust on Employee Morale. ELK Asia Pacific Journal of Human Resource Management and Organisational Behaviour, 1, 1-25. https://doi.org/10.2139/ssrn.243003
  36. Sarstedt, M., Ringle, C., & Hair, J. (2017). Partial least squares structural equation modeling. Handbook of Market Research. Springer International Publishing
  37. Sarstedt, M., Hair, J., Pick, M., Liengaard, B., Radomir, L., & Ringle, C. (2022). Progress in partial least squares structural equation modeling use in marketing research in the last decade. Psychology & Marketing, 39(5), 1035–1064. https://doi. org/10.1002/mar.21640
  38. Setini, M., Yasa, N. N., Gede Supartha, I. W., Ketut Giantari, I. G., & Rajiani, I. (2020). The Passway of Women Entrepreneurship: Starting from social capital with open innovation, through to knowledge sharing and innovative performance. Journal of Open Innovation: Technology, Market, and Complexity, 6(2), 25. https://doi.org/10.3390/joitmc6020025
  39. Shmueli, G., Sarstedt, M., Hair, J., Cheah, J., Ting, H., Vaithilingam, S., & Ringle, C. (2019). Predictive model assessment in PLS-SEM: Guidelines for using PLS predict. European Journal of Marketing, 53(11), 2322–2347. https://doi.org/10.1108/EJM-02-2019-0189
  40. Seo, Y. W., & Lee, Y. H. (2019). Effects of internal and external factors on business performance of start- ups in South Korea: The Engine of New Market Dynamics. International Journal of Engineering Business Management, 11, 184797901882423. https://doi.org/10.1177/1847979018824231
  41. Weiss, J., Anisimova, T., & Shirokova, G. (2019). The translation of entrepreneurial intention into start-up behaviour: The moderating role of regional social capital. International Small Business Journal: Researching Entrepreneurship, 37(5), 473–501. https://doi.org/10.1177/0266242619831170
  42. Williamson, O. E. (1979). Transaction-cost economics: The governance of contractual relations. The Journal of Law and Economics, 22(2), 233–261. https://doi.org/10.1086/466942
  43. Xuan, V. N., Thu, N. T., & Anh, N. T. (2020). Factors affecting the business performance of enterprises: Evidence at Vietnam Small and medium-sized enterprises. Management Science Letters, 865–870. https://doi.org/10.5267/j.msl.2019.10.010
  44. Zaheer, A., McEvily, B., & Perrone, V. (1998). Does trust matter? exploring the effects of interorganizational and Interpersonal Trust on performance. Organization Science, 9(2), 141–159. https://doi.org/10.1287/orsc.9.2.141

Last update:

No citation recorded.

Last update: 2024-11-21 07:00:11

No citation recorded.