Abstract
Organizational performance plays an important role as a measure of the success of an organization or company. To achieve this success, organizational performance is influenced by many factors, including environmental uncertainty and business strategy that has been implemented by the organization. The airline industry in Indonesia is in a high competitive condition and faces environmental uncertainty challenge with the gain of tight margin. The researches on the most suitable business strategy choice for airline in the midst of environmental uncertainty condition in order to obtain organizational performance have not been many examined in Indonesia. This study aims to determine the effect of environmental uncertainty and business strategy on organizational performance of Garuda Indonesia. Based on the research finding, it was known that the environmental uncertainty could affect positively on business strategy that has been implemented by the organization, for strategy choices of cost leadership, focus orientation, or differentiation. But, it turned that only the differentiation strategy which was able to affect positively the organizational performance. The conclusion of test result referred that the Indonesian airline in the midst of a very dynamic environment was demanded to be able to offer a unique and different product and service from other competitors and deliver the higher value to the customers, so it could achieve a good organizational performance.
Highlights
The airline industry in Indonesia is in a high competitive condition and faces environmental uncertainty challenge with the gain of tight margin
Three aspects have been evaluated in this process were composite reliability (CR), average variance extracted (AVE), and factor loadings (Hair, et al, 2014)
The environmental uncertainty and business strategy could affect positively on organizational performance, in which this research showed that the Environmental Uncertainty – Technological Uncertainty was approved to affect positively on Business Strategy – Cost Leadership, Business Strategy – Focus Orientation, or Business Strategy – Differentiation, but only the Business Strategy – Differentiation that was approved to affect positively on Organizational Performance
Summary
The airline industry in Indonesia is in a high competitive condition and faces environmental uncertainty challenge with the gain of tight margin. The airlines will strive implementing an optimal competitive strategy to get competitive advantage and win the heart of customers. The most frequently practice of competitive strategy by airlines to win the competition is pricebased strategies and product differentiation by route offered to the customers. Garuda Indonesia is faced to a competitive situation with low cost carrier either for domestic or international market. Garuda Indonesia is challenged by the competitive condition of aviation industry, especially with middle east carrier which obtains waive fuel surcharge subsidy, it turns the more competitive price and the more destination choice all over the world. For the domestic market, the low cost carrier expansion of Lion Air as the main competitor
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Journal of Economics, Finance And Management Studies
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
