Abstract
This study aims to specifically analyze the business environment in the construction service industry in DKI Jakarta, by using an external and internal dimension factor approach. The dimensions of external factors include several indicators such as political, economic, social, and technological indicators. While the internal factor dimensions consist of indicators of corporate culture, corporate structure, and corporate resources. The analysis technique uses Structural Equation Model (SEM) with SmartPLS. The number of samples included 370 leaders of construction service companies in DKI Jakarta. One company is represented by one company leader, either a large, medium or small scale company. The results showed that external factors are more dominant than internal factors in shaping the construction service business environment in DKI Jakarta. It can be understood because as the capital city, DKI Jakarta has a far more complex constellation than other regions. It means that in the case of operating companies in Jakarta, they must be agile in managing external threats and opportunities. Companies that cannot adapt to the very dynamic climate in the capital with the dramatic competition will not be able to survive.
Highlights
The business environment is related to all surrounding conditions that can affect the course of a business (Thind & Thind, 2018)
While the internal factors have three dimensions that are all significant, 178 | Ilomata International Journal of Management namely corporate culture, corporate structure, and corporate resources. These results are in line with (Brdesee, Corbitt, & Pittayachawan, 2013; Hidayat et al, 2015; Morioka & de Carvalho, 2016; Porter, 2008; Rundh, 2009) which states that the external and the internal factors are the main factors in a business environment
The following explanation is given on the research findings: 1. The results showed that the dimensions of the external environment had a T-statistic value of 89,34 with a Partial Least Squares (PLS) value of 0,95 which is greater than the dimensions of the internal environment with a T-statistic value of 30,05 with a PLS Algorithm value of 089
Summary
The business environment is related to all surrounding conditions that can affect the course of a business (Thind & Thind, 2018). Activities of the organization include interactions with the work environment. This comprises the relationships with customers, suppliers, and shareholders (Gupta, 2013). The environment is one factor that is very calculated in the management of business activities. This is because the business environment can influence important variables. The business influences the environment in business strategy planning (Buchory Herry Acmad and Saladin Djaslim, 2010), business performance (Adeoye & Elegunde, 2012; Shirokova, Vega, & Sokolova, 2013), and competitive advantage (Barquet, Seidel, Seliger, & Kohl, 2016; Ko & Liu, 2017; Nenzhelele & Pellissier, 2014), Corporate entrepreneurship (de Villiers-Scheepers, 2012; Osarenkhoe, 2010), Strategy innovation (Fernandes & Solimun, 2017), entrepreneurial orientation (Acıkdilli & Ayhan, 2013; Yang & Wang, 2014), technology strategies (Chen, He, & Jin, 2008), Corporate sustainability (Dyllick & Hockerts, 2017; Høgevold & Svensson, 2012; Kleine & von Hauff, 2009a, 2009b; Tassal sustainability report, 2014), sustainable innovation
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