Abstract
This research aims to analyze and develop a theoretical framework, built with a performance model influenced by the work environment and entrepreneurial orientation, and mediated by organizational commitment. This research used a quantitative approach as the methodology. The survey was distributed using a questionnaire instrument. The population in this study were 6,708 MSME owners in Brebes Regency, Central Java, Indonesia, and the sample in this study were 377 MSME owners, which was determined using the Slovin formula. The sampling technique in this research used a non-random sampling with proportional sampling. Simultaneously, the statistical method used to test the hypotheses in this study is a multivariate Structural Equation Modelling (SEM). Based on the results of statistical tests, it can be known partially that 1) Work environment has a significant effect on the performance of MSMEs, 2) Entrepreneurial orientation has a significant effect on the performance of MSMEs, 3) Organizational commitment has a significant effect on the performance of MSMEs. 4) Work environment has a significant effect on organizational commitment, 5) Entrepreneurial orientation has a significant effect on organizational commitment, 6) Work environment has a significant effect on the performance of MSMEs through organizational commitment, and 7) Entrepreneurial orientation has a significant effect on the performance of MSMEs through organizational commitment. The novelty in this study is that the empirically constructed model of organizational commitment has proven to be significant as a mediation of the work environment and entrepreneurial orientation towards performance. with the strongest influence of work environment and entrepreneurial orientation on organizational commitment.
Highlights
Micro, Small, and Medium Enterprises (MSMEs) play a large role in the Indonesian economy's growth, especially their contribution to gross domestic product
The latent variables that make up the full Structural Equation Modeling (SEM) model are the construct of the work environment, entrepreneurial orientation, organizational commitment, and MSME performance
The results of this study indicate variables that have a significant effect on employee performance in the banking company's accounting department, which are organizational commitment, work environment, and competence
Summary
Small, and Medium Enterprises (MSMEs) play a large role in the Indonesian economy's growth, especially their contribution to gross domestic product. Human Resources are a company working partner; it is important for MSMEs to understand their employees' needs, those who have the potential to be developed This initiative will encourage improvement in the quality and quantity of employees, which in turn can improve the performance of Micro and Small and Medium Enterprises so that the company's goals will be achieved. From many factors mentioned above, this research will discuss the effect of the work environment and entrepreneurial orientation on the performance of MSMEs from the perspective of HR Management through organizational commitment. This is an interesting issue because MSMEs with high HR performance will be able to face competition. Starting from the background of the problems mentioned above, the researcher is interested in taking the title “Causal Study of the Work Environment and Entrepreneurial Orientation on MSME Performance Through Organizational Commitment”
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