Abstract

The aims of this research are to analyze the influence of (1) Community Empowerment on the performance of MSMEs (2) Learning organization on the performance of MSMEs (3) Community Empowerment on Organizational Commitment (4) Learning Organization on Commitment. This research used Quantitative method by involving 354 samples comprising the owners (for variable of the performance of MSMEs) and employees (for variable of learning organization, community empowerment and organizational commitment). This research was conducted at MSMEs in 17 districts of South Minahasa Regency. Data analysis technique used is SEM (structural equation modeling) and the CFA test (Confirmatory Analysis factor). Models were tested by comparing the model alignment criteria.The results of the research show that four variables are directly significant or proven to be influential. Those variables are: (1) Community Empowerment to the performance of MSMEs (2) Learning Organization directly influences the performance of MSMEs (3) Community Empowerment directly influences Organizational Commitment (4) Learning Organization to Organizational Commitment. Exogenous variables (learning organization, community empowerment) are proved to have an impact on the performance of MSMEs. The findings in this study lead to the need for the development of economic education curriculum such as training, as well as mentoring process, as an effort to improve human resources. Keywords : Community Empowerment, Organizational Commitment, Learning Organization, Performance of MSMEs DOI : 10.7176/EJBM/11-18-05 Publication date :June 30 th 2019

Highlights

  • Micro, Small and Medium Enterprises (MSMEs) undeniably play an important role as the backbone of the national economy

  • Learning Organization directly affects to the Organizational Commitment

  • The research results find out that learning organization directly affects to the organizational commitment or called proven

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Summary

Introduction

Small and Medium Enterprises (MSMEs) undeniably play an important role as the backbone of the national economy. There are some evident indicators which show how important this sector is in order to support the Indonesian economy such as the number of MSMEs in 2013 reaching 56, 5 million business units or 99.9% of total business in Indonesia (source: Kompas, 25 October 2013). Its contribution to the national economy is 57 ,95% of 4,303.57 trillion, with total investment value of Rp 830.9 trillion of gross domestic product (GDP), and Micro, Small and Medium Enterprises (MSMEs) absorb labor at 110.80 million people. According to Tambunan (2009: 60), this bigger proportion is the result of their number of units instead of its productivity (total or partial). Tambunan (2008: 1-2) reported the empirical studies which explain that " MSMEs have low contribution to the economic condition in developing countries, and it results from low education level or skills of workers and employers, lack of capital, impartial government policies which lead to MSMEs distortion. Budiretnowati (2008: 14) added "the knowledge of MSME owners about the economic value of goods to be produced is low, so and MSMEs do not get the benefits from the added value they have produced

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