The effects of business environment and supply chain governance on business strategies and company performance

Abstract

This study aims to examine the effects of the business environment and supply chain governance on business strategies and their impact on the performance of state-owned enterprises in Indonesia. Using Partial Least Square (PLS) and quantitative research, this study took state companies management and commissioners as the respondents. The study concludes that the business environment has a positive and significant effect on business strategy, and supply chain governance has a positive and significant effect on business strategy. Moreover, the results show that the business environment influences corporate performance, and supply chain governance has an effect on corporate performance. Business strategy influences corporate performance, and business strategy can mediate the influence of the business environment on corporate performance. Lastly, business strategy can mediate the influence of supply chain governance on corporate performance. The results theoretically confirm the supply chain governance in business practice and practically encouraged the company management to develop risk-management and effective internal controls to create competitive business climate and more agile supply chain management.