Enterprises In Indonesia Research Articles

The Effect of Islamic Financing on the Growth of Micro, Small and Medium Enterprises in Indonesia

This study investigates the impact of Islamic financing on the growth of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Utilizing a quantitative approach, the research involved 110 MSMEs that have accessed Islamic financing products. Data were collected using a structured questionnaire and analyzed through SPSS version 26, employing correlation and multiple regression analyses. The study focuses on three key growth indicators: profitability, market expansion, and operational efficiency. The results reveal that Islamic financing has a significant positive impact on all three indicators, with the strongest effect observed on operational efficiency. These findings highlight the potential of Islamic financing to promote MSME growth in Indonesia, providing valuable insights for policymakers, financial institutions, and business owners. The study contributes to the growing body of literature on Islamic finance and its role in supporting sustainable business practices.

Revolutionizing Payment Systems: The Integration of TRAM and Trust in QRIS Adoption for Micro, Small, and Medium Enterprises in Indonesia

Background: In an era where digital finance is growing rapidly, the Quick Response Code Indonesian Standard (QRIS) revolutionizes the payment system through a single unifying code. This study brings novelty in integrating TRAM and Trust in the adoption of QRIS in micro, small, and medium enterprises (MSMEs) in Indonesia, for which studies are still limited. Objective: To observe determinants of QRIS adoption by integrating the Technology Readiness Acceptance Model (TRAM) and Trust in the emerging Indonesian market where QRIS is in a growing stage. Methods: This study collects data through the survey of 210 MSME owners and staff who are familiar with and/or have used QRIS through convenience sampling. In analyzing the data, this study uses the Structural Equation Model-Partial Least Square (PLS-SEM) to examine the relationship between variables that explain influencing factors of QRIS adoption. Results: The results show that 7 of 13 hypotheses were accepted; optimism and trust positively significantly affect perceived ease of use and perceived usefulness, while insecurity and innovation have no significant influence on perceived ease of use and perceived usefulness. Besides, this study shows unexpected positive results between discomfort, perceived ease of use, and perceived usefulness. Overall, the proposed TRAM and Trust model contributes 60.9 % in explaining QRIS adoption. Conclusion: This study emphasizes the importance of optimism, discomfort, trust, perceived ease of use, and perceived usefulness in influencing QRIS adoption in micro and small businesses in Indonesia. It guides QRIS providers, policymakers, financial institutions, and MSMEs in having effective QRIS adoption in business operations. Keywords: Micro Small and Medium Enterprises, QRIS, TRAM, Trust

Innovation capabilities and performance of small and medium-sized enterprises in Indonesia

Orientation: Entrepreneurial orientation (EO), knowledge management (KM), human resource management (HRM) and knowledge sharing (KS) are important aspects in driving innovation capabilities (IC) to improve organisational performance (OP).Research purpose: The purpose of this research was to analyse the mediating effect of IC on individual EO, KM, HRM and KS and small and medium-sized enterprises (SMEs) performance.Motivation for the study: The fluctuation in batik business performance can be attributed to a lack of studies that examine the dynamic capability perspective in the context of batik SMEs in developing countries.Research design, approach and method: A quantitative approach was used for this study. A structured self-administrative measuring instrument was employed to collect the data. A non-probability sample of 297 participants was obtained. The collected data were then analysed using SmartPLS3 software.Main findings: Innovation capabilities have been verified to significantly mediate the relationship between HRM and KS on OP. Innovation capabilities mediated the relationship between KS and OP in a negative direction, whereas previous studies indicate a positive direction.Practical/managerial implications: Entrepreneurial orientation has the most prominent role in OP in batik SMEs. An EO allows business actors to optimise their creativity and innovation to develop ideas, which helps maximise the growth of OP in SMEs.Contribution/value-add: This study’s results support the concept that EO develops various skills, from managing uncertainty to tolerating risk and forming strong entrepreneurial abilities to improve business performance.

The Influence of Enterprise Risk Management, Corporate Social Responsibility, Cost of Capital, and Firm Size on Firm Value

Implementing corporate social responsibility (CSR) and enterprise risk management (ERM) is becoming more important, since it is an indication of a long-term sustainable business. Investigating the effects of ERM, CSR, cost of capital (CoC), and company size on the value of manufacturing sector enterprises in Indonesia is the aim of this study. 56 manufacturing companies that are listed on the Indonesia Stock Exchange and that provide annual reports and detailed financial statements for the fiscal years 2016 through 2019 make up the study’s sample. Firm value is proxied by the Tobins’q (TQ) value. CoC is determined using WACC, CSR is evaluated using each company’s disclosure index, and the firm’s size is indicated by LnTotal Assets. The data in Eviews 12 was analyzed using panel data regression. The study results show that CSR and ERM are essential to raising a company’s worth. The company value increases with the degree of ERM and CSR adoption. The study also found a significant negative correlation between company size and worth. However, this study is unable to show how capital expenses affect the value of a company. Keywords: CSR, cost of capital, enterprise risk management, firm size, firm value

The Potential of Halal Micro, Small, and Medium Enterprises and Halal Lifestyle in Building the Indonesian Economy

Introduction: Indonesians contribute to the national Gross Domestic Product, contributing 60.5%. The number of Muslim populations in Indonesia is the most important compared to other countries, thus creating a large market for halal products. Objective: The research can provide an in-depth understanding of the market potential for Micro, Small, and Medium Enterprises focusing on halal products. This research also aims to understand how these halal products are related to the halal lifestyle, which is a lifestyle that complies with the principles of Islamic sharia in various aspects of life. Method: This research is considered most appropriate using a descriptive qualitative approach with a literature review. Data sources use secondary data. Furthermore, descriptive analysis techniques are used to analyze the collected data. Result: The results of the study show that to increase Indonesia's role in the global halal industry, steps are needed, such as halal certification, training and mentoring for Micro, Small, and Medium Enterprises, financial service facilities, and socialization regarding the importance of halal products. Implication: In general, the expected impact of this research is the creation of a more robust and more competitive ecosystem for halal Micro, Small, and Medium Enterprises in Indonesia, which will strengthen the national economy and improve Indonesia's position in the global halal industry.

ASSESSING THE HUMAN DIMENSION OF DIGITAL LEADERSHIP TO SUCCESSFUL DIGITAL TRANSFORMATION

All industries are experiencing significant changes due to Industry 4.0 and the upcoming Industry 5.0. These advancements will greatly impact the industry globally over the next five years. Therefore, several companies are undergoing digital transformation. Successful digital transformation relies on various factors, with leadership being crucial for setting a vision and driving change. By undertaking digital transformation, companies ensure their leaders continuously develop essential digital leadership skills. According to the assessment at PT X a state-owned enterprise in Indonesia engaged in transportation and logistics, the results indicate a gap between employees' current digital leadership competencies and the required level. This study aims to improve digital leadership competency at PT X. Objectives include identifying existing training programs, evaluating digital leadership dimensions needing improvement, and determining necessary improvements. The study uses the Digital Leadership Scale by Haroon Abbu et al. (2022), with a quantitative design involving 124 respondents. Findings show that digital leadership is part of the leadership development program, tailored to job levels from junior managers to executive presidents. The lowest scores based on assessment are in skill acquisition and courage, indicating areas for improvement. This research provides insights into digital leadership and competency improvement, crucial for successful digital transformation.

Factors affecting employee performance in regionally owned enterprises in Indonesia

This article analyzes the factors that can influence employee performance at Regional Owned Enterprises (ROE), Klaten Regency, Indonesia. The factors tested in this research are the influence of religiosity, organizational culture, internal control, discipline, and incentives on employee performance. This research focuses on all active employees at Klaten Regency Regional Owned Enterprises (ROE). The sample in this study consisted of 110 respondents from various departments and various types of employees and was analyzed using the Partial Least Squares (PLS) program. The results of this research indicate that the religiosity and incentive variables have no impact on employee performance. It can be said that the influence of religiosity will not be able to improve employee performance, and this research found that the problem of religiosity is a personal problem that is not related to work. Meanwhile, incentives are not able to boost employee performance because employees feel satisfied with what they have received. The variables of organizational culture, internal control and discipline, will significantly improve employee performance. So, this research provides implications regarding the importance of emphasizing a good organizational culture by management for all members of the organization as well as continuing to implement a good internal control system and not ignoring employee work discipline.

Stakeholder Value and Firm Performance: Empirical Study of State-owned Enterprises in Indonesia

Stakeholder Value and Firm Performance: Empirical Study of State-owned Enterprises in Indonesia

Legal Transformation of Trading Businesses into Individual Limited Companies for Indonesian Micro and Small Enterprises

This study discusses the transformation from a Trading Business (UD) to an Individual Limited Company (PT Perorangan) as an effort to empower micro and small enterprises in Indonesia. In the context of corporate law, this transformation provides a strong legal basis and good corporate governance, enabling a Trading Business to obtain legal entity status as well as broader access to funding sources and legal protection. Utilizing a normative legal research approach, this study analyzes related legislation and assesses its impact on the sustainability of micro and small enterprises. The findings indicate that this transformation not only enhances legal certainty but also offers opportunities for companies to grow more professionally and sustainably. Moreover, the obligation to report financial documents digitally increases transparency and trust among business partners. The findings of this study are expected to make a significant contribution to the literature on empowering small businesses and encourage the government to continue supporting the transformation of Trading Businesses into Individual Limited Companies as part of an inclusive economic development strategy.

The Impact Of Working Capital Management On Profitability In Micro And Small Processed Food Enterprises In Indonesia

Effective management of working capital is essential for the profitability and long-term sustainability of micro and small-scale processed food businesses. However, at present, the business has not yet developed strong competency in managing working capital efficiently. This can certainly increase the potential for business bankruptcy, especially in the processed food business. This research examines the impact of working capital management, liquidity, and solvency ratios on the profitability of 1,563 micro and 241 small processed food enterprises in Indonesia. Multiple linear regression is used to assess the relationship between working capital management and profitability. The independent variables include the payable deferral period, inventory conversion period, current ratio, and debt-to-asset ratio, while profitability, as the dependent variable, is measured by return on assets (ROA). The findings indicate that both the payable deferral period and debt-to-asset ratio significantly affect the profitability of micro and small businesses, with the current ratio having a particular effect on the profitability of small businesses. These findings suggest that improving financial management practices, such as daily sales optimization and enhanced cash flow monitoring, could significantly enhance profitability in the micro and small processed food sector.

Market and entrepreneurial orientations model to increase product innovation of culinary micro small medium enterprises in Indonesia

The objective of the article is to examine how market orientation and entrepreneurial orientation within an organization might bolster product innovation capabilities. By exploring these connections, the research aims to present a more comprehensive understanding of the research model and bridge existing limitations. This study employed a quantitative associative with a proportional-clustered-random-sampling technique. Data were collected through a questionnaire survey involving 400 respondents representing micro, small, and medium enterprises (MSMEs) and used structural equation modeling (SEM) to test hypotheses. The results indicated a significant impact of market and entrepreneurial orientations on product innovation with market orientation having a more dominant effect on product innovation than entrepreneurial orientation. A strong market orientation shows business players can absorb market knowledge for product innovation. Thus, MSME owners must swiftly digest this market information to plan future product developments, especially since some product types change rapidly during the product life cycle. The findings also show that the entrepreneurial approach has a poorer influence on product creation in MSMEs due to the necessity for competencies and risk-taking that the organization lacks. The Ministry of Cooperatives and MSME can use this input to design targeted programs to help MSME owners and creativity and invention to make distinctive things while being highly impacted by market demands. With its findings, the study augments our understanding of the product innovation position in Indonesian MSMEs and, illuminates MSMEs owners' next steps to sustain the competitiveness and operationalization of their businesses.

Corporate Sustainability Performance in the Indonesian Fertilizer Industry: A Strategic Approach with PT Pupuk Indonesia (Persero)

This study investigates the determinants of Corporate Sustainability Performance (CSP) in PT Pupuk Indonesia (Persero), a leading state-owned enterprise in Indonesia's fertilizer industry. The research focuses on the impact of Environmental, Social, Governance (ESG), Operational, Leadership, and Strategic Transformation factors on CSP. Utilizing a Structural Equation Modeling-Partial Least Squares (SEM-PLS) approach, the study reveals that Operational Performance is the most significant driver of CSP, with Governance and Social factors also playing crucial roles. However, Environmental, Leadership, and Strategic Transformation variables show limited direct influence on CSP. These findings suggest that while operational efficiency and governance are critical for enhancing sustainability, the importance of social responsibility, visionary leadership, and long-term environmental strategies should not be underestimated. The study offers strategic insights for corporate leaders, emphasizing a balanced and comprehensive approach to achieving sustainable growth in energy-intensive industries.

Women in business: The impact of digital and financial literacy on female-owned small and medium-sized enterprises

The growth of small and medium enterprises (SMEs) shows a positive trend and has even become a major highlight in the national economic landscape. Moreover, most of these businesses are owned by women. Examining how digital capability and financial literacy and a dynamic environment affect the success of female-owned small and medium-sized enterprises in Indonesia is the main goal of this study. Financial and digital capability are examined as mediators between performance and these factors. The study used a causal explanatory research approach. The data in this study were collected through questionnaires. This research surveyed 100 female-owned small and medium-sized enterprises in Indonesia’s food and beverage, herbal and pharmaceutical, fashion, and craft industries. Partial Least Square (PLS) analysis was utilized in this work as an analytical tool. The study reveals that financial literacy significantly enhances SMEs` performance by improving resource management. However, a dynamic environment alone does not impact performance unless supported by other competencies. Financial competence does not strengthen the effect of financial literacy, indicating it may not be sufficient for success. Conversely, digital competence is crucial, mediating the relationship between a dynamic environment and SMEs` performance. Therefore, SMEs with strong digital skills are better positioned to adapt and thrive, making digital competence key to sustained business success.

Government policy towards small and medium tourism enterprises in Indonesia: Proposal for development and increasing regional revenue

The small and medium tourism enterprises sector has experienced a decline in Indonesia’s economic conditions in recent years. This research aims to advise stakeholders regarding factors that must be considered and included in future policy formulation. The research methodology is a mixed method supported by the N-Vivo computer program, interview studies, and FGD. This research focuses on four tourism provinces in Indonesia. The research results using thematic analysis identified 133 codes, 19 categories, nine core themes, and one impact theme. This research’s novelty highlights that government policy’s effects on tourism SME marketing are not significant due to weak support. Apart from that, partnerships and collaboration between the central regional government and tourism SMEs are the main factors determining their development at the regional level. This research concludes that government intervention and support in encouraging the growth and sustainability of tourism SMEs are necessary. The Government must promote collaboration between tourism SMEs because increasing the number of tourists is crucial, as well as encouraging sustainable marketing practices and simplifying regulations. The recommendation is that the Government immediately simplify regulations, expand partnerships and collaboration, and promote innovation in tourism SMEs. By implementing these recommendations, policymakers can create an environment that supports the development of tourism SMEs, allowing the tourism sector to increase GRDP.

AI and Human Collaboration: The Future of HR in the Fourth Industrial Revolution

This study investigates the interplay of Adoption of Advanced HR Technologies, Workforce Management Effectiveness, Employee Engagement and Productivity, and Employee Performance within PT Danareksa (Persero), a prominent state-owned enterprise in Indonesia's financial services sector. Using a quantitative approach and Structural Equation Modeling (SEM) with Smart PLS, data from 80 employees were analyzed to explore the direct and indirect relationships among these variables. The findings reveal significant direct effects of Adoption of Advanced HR Technologies and Workforce Management Effectiveness on Employee Engagement and Productivity, highlighting their role in enhancing employee engagement and productivity levels. Moreover, both Adoption of Advanced HR Technologies and Workforce Management Effectiveness indirectly influence Employee Performance through their impacts on Employee Engagement and Productivity. These results underscore the critical importance of strategic investments in HR technologies and effective workforce management practices in optimizing organizational performance and competitiveness. This research contributes to understanding how HR innovations and management practices can foster a conducive work environment that drives employee performance and organizational success in the financial services industry.

Strategi Bisnis Sebagai Dasar Keunggulan Kompetitif Bagi Usaha Mikro di Kota Bandung : Peran Model Inovasi

Micro enterprises in Indonesia are known to have obstacles in innovating, even though innovation is one of the demands in today's modern industrial era. The involvement of innovation in business strategy can be a strength for micro enterprises to grow and develop. The purpose of this study is to determine the role of innovation models in mediating the relationship between business strategy and competitive advantage in micro-enterprises in Bandung City. The method used is descriptive analysis and verification with non-probability sampling techniques. Data processing uses the PLS-SEM model through SmartPLS 4.0 with 100 micro enterprises as respondents. The research findings state that business strategy has a significant effect on competitive advantage. In addition, it is known that process and product innovation mediate the influence of business strategy on competitive advantage, but only on differentiation strategy. Meanwhile, human resource innovation has no influence as a mediator. Therefore, micro enterprises that use differentiation strategy are advised to carry out process and product innovation to increase competitive advantage. However, micro-enterprises that implement cost-leadership strategy are recommended to focus on cost efficiency strategy.

Systematic Literature Review: Digital Financial and MSME Performance in Indonesia

The aim of this study is to examine trends and developments in research related to digital financials and the performance of small and medium-sized microenterprises in an effort to improve the economy of small and medium-sized enterprises in Indonesia. Digital Financial research bibliometric data is taken from secondary data via the Publish or Perish application search engine version 8 with the search engine option feature of the Google Scholar application menu. The study finds information about how many research articles and keywords are used, the number of publishers, as well as the reputation rankings of any journal that publishes digital financial and micro and medium enterprises. Performance themes; the year trend begins to emerge and the majority of queries on digital financial and micro enterprises performance; the implications generated by previous investigations related to Digital Financial, and the performance of micro and small enterprises; the impact of digital financial withdrawal by micro and medium enterprises can face uncertain global economic challenges; the role of Digital Financial can enhance financial inclusion; the government has an important and vital role in formulating policies related to the development of the digital financial ecosystem Micro Small Medium Enterprises (MSME) ; the implementation of Digital Finance is well implemented by the Micro Finance Institutions to accelerate the positive performance of MSME.

Sovereignty and Human Rights: Examining Sustainable Plantation Enterprises in Indonesia

The Sovereignty Principle in the Plantations Law legalizes dynamics that disproportionately empower plantation companies while disenfranchising indigenous peoples. Under this principle, plantation permits are granted to companies, not indigenous communities, limiting the latter's involvement in mandatory deliberations set by the law. Consequently, indigenous peoples are coerced into relinquishing their lands in exchange for compensation, leading to the erosion of their collective land rights. This practice is at odds with the protections intended under Article 28D Paragraph (1) and Article 28H Paragraph (2) of the 1945 Constitution of Indonesia, which safeguard collective rights to property. The lack of political will to recognize and protect these rights suggests a troubling disregard for the existence and sovereignty of indigenous peoples.

Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia

Batik, an Indonesian textile art form, holds immense economic and cultural importance. Small and medium enterprises (SMEs) specialising in batik play a crucial role in Indonesia's economic growth and cultural preservation, contributing significantly to the gross domestic product (GDP) and preserving the nation's heritage. Nevertheless, these enterprises face several challenges, such as slow growth and limited access to credit. The batik industry also lags in financial literacy and the adoption of digital marketing strategies, hindering its development. This quantitative study aims to investigate the relationship between financial literacy, digital financial literacy, and financial inclusion in batik SMEs and also examined the moderating effect of online social networks. A survey was conducted involving 535 managers, owners, and financial officers of small batik enterprises. Subsequently, the SmartPLS statistical analysis method was employed for data analysis. The results demonstrate that financial literacy and digital financial literacy play a significant role in accessing financial inclusion for batik small enterprises. Moreover, the utilisation of social media was found to moderate these relationships, amplifying the impact of financial and digital literacy on financial inclusion. The findings contribute to the existing knowledge, provide insights for enhancing batik small enterprises, and propose a digital financial model to promote financial inclusion.

High-Speed Railway Project of a Chinese State-Owned Enterprise in Indonesia: A Cross-Cultural Management Assessment

This study examined cross-cultural management in a diverse organization. Employees (varying in age, sex, background, etc.) disagreed on the company's cultural competence, particularly in communication, trust, and leadership. Further analysis revealed discrepancies in communication styles, values, business practices, and navigating regulations. Interestingly, age seemed to influence how employees viewed these issues. While cultural intelligence, communication, and open-mindedness on their own didn't necessarily improve specific areas, a more positive and collaborative work environment with increased trust did bridge cultural divides. Based on these findings, the study proposes a comprehensive Cross-Cultural Management Plan including diversity training, improved communication initiatives, leadership development focused on inclusivity, and activities fostering a positive workplace culture. This plan aims to address the identified challenges and create a more inclusive and successful organization.