BUSINESS PROCESS LIFE CYCLE AFFECTS COMPANY FINANCIAL PERFORMANCE: MICRO, SMALL, AND MEDIUM BUSINESS ENTERPRISES DURING THE COVID-19 PERIOD

Widarti Widarti,Zulfadhli Zulfadhli,Desfitrina Desfitrina

doi:10.32479/ijefi.10516

Abstract

The business process life cycle is a collection of structured work activities that are interconnected to solve a problem that results in an output (product / output) or service that achieves goals and supports the achievement of strategic goals and objectives of an organization's financial performance. Business processes aim to achieve financial performance that is effective, efficient and increases the productivity of an organization. The life cycle of micro, small and medium enterprises aims to survive post-Covid-19 in order to increase the productivity performance of the organization's financial performance. To achieve this goal, an organization needs a good business process to support the organization's financial performance and business ventures in designing activities to produce new products in order to develop management techniques so that they can survive the midst of the global Covid-19 crisis. The product life cycle that can identify opportunities for environmental improvement is an important part of an organization that aims to minimize total costs, low prices and production results, improve the financial performance of micro, small, and medium business processes. Techniques in producing using financial and non-financial information, to improve the company's financial performance, and to contribute to the sustainability of business processes aim to provide physical information on material and energy use, as well as monetary information on costs, revenues and savings related to the company's financial performance. This research was carried out on micro, small and medium enterprises in Indonesia. This research method is descriptive and verification methods, the analysis tool is structural equation modeling (SEM, Lisrel). The results showed that the business process life cycle had an effect on the financial performance of the Covid-19 small, and medium enterprises business companies.Keywork: Business Process Life Cycle, Corporate Financial Performance. Micro, Small, And Medium Enterprises, Covid-19 PeriodJEL Classifications: E3, G2DOI: https://doi.org/10.32479/ijefi.10516

Highlights

Micro, small and medium enterprises are the sector most vulnerable to the impact of the corona virus pandemic. Hertati and Safkaur (2020) this sector can no longer be a buffer for the economy like during the 1998 and 2008 economic and financial crises
Life cycle affects the financial performance of micro, small and medium enterprises in the Covid-19 period
PLS is an indeterminacy factor in a powerful analysis method because it does not assume that the data must be measured at a certain scale and a small number of samples (Arellano and Bond, 1991).) such as χ2, GFI, AGFI, CFI, TLI or NFI, RMR, and RMSEA, so that the financial performance model of the Covid-19 MSME business company has met the criteria for a good measurement model and can be used as a manifest for the formation of a full model

Summary

Introduction

Small and medium enterprises are the sector most vulnerable to the impact of the corona virus pandemic. Hertati and Safkaur (2020) this sector can no longer be a buffer for the economy like during the 1998 and 2008 economic and financial crises. When Indonesia experienced the 1998 monetary crisis, micro, small and medium enterprises became a buffer for the national economy. Hertati, et al (2020) stated that during the global financial crisis, micro, small and medium enterprises remained strong to support the economy. The results of the study concluded that the Covid-19 outbreak was concerning in the financial crisis and affected the financial sector of micro, small and medium enterprises (Hertati et al, 2020). Controlling the distribution chain of Covid-19 so as not to have an impact on the economy Strategies to strengthen micro, small and medium enterprises that can be done, such as digitizing sales or marketing, digitizing payments, and transferring SME businesses difficult financing, slow distribution, difficulty in raw materials, and slightly hampered production (Ohlson, 1980) Small and medium enterprises never got access to finance from the financial sector, the government. controlling the distribution chain of Covid-19 so as not to have an impact on the economy Strategies to strengthen micro, small and medium enterprises that can be done, such as digitizing sales or marketing, digitizing payments, and transferring SME businesses difficult financing, slow distribution, difficulty in raw materials, and slightly hampered production (Ohlson, 1980)

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Discussion

Conclusion