Indonesian Small And Medium Enterprises Research Articles

SME owners’ roles for mutual reinforcement of innovation and entrepreneurship in dealing with digital technologies: case studies of selected Indonesian SMEs

ABSTRACT This article explores the relationships among innovation, entrepreneurship, and digital technology, specifically how the management of small and medium enterprises (SMEs) utilise innovation and entrepreneurship to deal with digital technologies and/or how the management leverages digital technologies for innovation and entrepreneurship. A qualitative research approach using a case study was employed to examine the phenomena, focusing on deep observations. The research found that SME owners play crucial roles in three areas: (i) demonstrating entrepreneurial ability through knowledge, experience, talent, and innovation; (ii) performing strategic functions by leveraging external sources of innovation, with the help of digital technology; and iii. acting as digitally minded entrepreneurs to enhance manufacturing processes and establish new marketing channels. The mutual reinforcement of innovation and entrepreneurship in dealing with digital technology, is influenced by both user and demand-driven innovation, knowledge and technology-driven innovation, experiential knowledge-driven innovation, articulation of innovation outcomes, digital network-based marketing, and technical guidance on digital transactions in e-commerce and e-business. This research confirmed that there is a mutual reinforcement between the innovation and entrepreneurship of SMEs in adopting digital technology. New insight for digitally minded entrepreneurs is the use of digital technology to boost business efficiency toward global enterprises’ competitiveness and sustainability.

The Revival of SMEs in Indonesia from the Impact of the Covid-19 Pandemic

This research examines the revival of Small and Medium Enterprises (SMEs) in Indonesia amidst the Covid-19 pandemic. This pandemic presents major challenges and is a catalyst for unprecedented change in the SME sector. This article aims to identify and analyze the main factors that play a role in the resilience and growth of Indonesian SMEs during and after the pandemic. Utilizing quantitative data and qualitative interviews, this research reveals that digital transformation and government stimulus play an important role. The research results show that SMEs that use digital marketing show good adaptability and growth, and benefit from the shift in consumer behavior to online platforms. The Indonesian government's fiscal support, by assisting struggling SMEs, enables business continuity and recovery from the impact of the pandemic. The study concludes with policy recommendations to maintain the growth and resilience of SMEs, emphasizing the importance of digital inclusion, easy access to financial institutions, and community support networks. The impact of this research is significant for policymakers, business leaders, and community developers aiming to protect the SME sector from future crisis

An integrated structural equation modeling and fuzzy qualitative comparative analysis model for examining green procurement adoption drivers

This research examines the factors that influence the implementation of green procurement in small and medium enterprises (SMEs), namely top management commitment, regulations, costs, pressure from consumers, and transformational leadership as moderation. The research employs a quantitative approach with 206 samples from the Indonesian SME industry. It utilizes Structural Equation Modeling (SEM) and Fuzzy-set Qualitative Comparative Analysis (FsQCA). The data set includes factors such as top management commitment, regulations, costs, consumer pressure, and transformational leadership as moderation variables. The results show that management commitment, regulations, costs, and customer pressure influence green procurement. The role of the moderating variable shows that transformational leadership only strengthens the influence of costs on green procurement and regulation on green procurement. Meanwhile, the influence of top management commitment to green procurement and customer pressure on green procurement shows that transformational leadership does not strengthen these variables. The research’s novelty lies in combining SEM and FsQCA to analyze the causal relationships among variables influencing green procurement in SMEs. It highlights the importance of understanding and effectively managing these relationships for organizations adopting green procurement practices.

Investigating the role of e-commerce application and digital marketing implementation on the financial and sustainability performance: An empirical study on Indonesian SMEs ,

The paper examined the influence of digital marketing and e-commerce on marketing performance and sustainability of the small and medium enterprises (SMEs). This research is quantitative research using a questionnaire approach method. Quantitative research is a research method based on the philosophy of positivism, used to research certain populations or samples, collecting data using research instruments, quantitative or statistical data analysis, with the aim of testing predetermined hypotheses. The sampling technique in this research is non-probability sampling. The respondents of this research were 580 SME owners in Indonesia. Research data was obtained by distributing online questionnaires via social media. The questionnaire was designed using a Likert scale from 1 to 7 and the analysis of research data used structural equation modeling (SEM). Based on the research results, it is concluded that digital marketing had a positive and significant relationship to marketing performance, E-Commerce had a positive and significant relationship with marketing performance, Digital marketing had a positive and significant relationship with business sustainability. In SMEs, E-Commerce had a positive and significant relationship with business sustainability in SMEs.

DOES THE COMPETITIVENESS REALLY AFFECT THE SMES FIRM PERFORMANCE?

Competitiveness factors are important for the performance of small and medium enterprises (SMEs) not only in advanced countries but also in emerging economies. This study aims to investigate the impact of SMEs competitiveness factors on firm performance in Indonesia context through a quantitative analysis approach by applying structural equation model (SEM) path analysis. The result shows a significant causal relationship between the variables in Indonesian SMEs.

How Randomness is Controlled in Dynamic Identity to Maintain Recognisability: A Case Study of Flip Burger, an Indonesian SME

The digital world’s development impacts how brands are established. Digital branding continues to increase in cost despite digital marketing being an affordable marketing approach. Information and communication technologies are revolutionizing the world and entities are changing rapidly similar to brand identity. Small and medium enterprises (SMEs) encounter challenges in adopting fast-changing technological advances due to the lack of resources and finances. In the past, brand identity used to be static but the digital brand identity concept is currently emerging. The study investigated the role of digital brand identity in a popular Indonesian SME food chain, Flip Burger. A brief introduction is introduced of the company, the company is evaluated on three aspects namely Creator, Imagery, and Audience. A detailed description of the statistical analysis and tools used is presented. Furthermore, the study identified the control, randomness, and recognisability of the company. The study benefits SMEs in developing their digital dynamic brand identity.

Connecting the dots: Linking technological, individual, organizational and environmental factors towards SMEs performance with the mediation role of e-commerce adoption

Despite the proven potential of e-commerce in generating business competitiveness and performance, small and medium enterprises (SMEs) adopting that particular technology in developing countries such as Indonesia remains relatively low. It is critical to evaluate the obstacles, expose them, and find a way to overcome the issue, especially as the recent global pandemic of COVID-19 has impacted this sector to a great extent. The impact of COVID-19 on Indonesian SMEs and how they are dealing with it are highlighted in this paper, which is quite scarce and insufficient to cover the gap. Using a survey of 278 SME owners and/or managers in Indonesia, our study aims to explore the influence of technological, individual, organizational, and environmental factors on SMEs' adoption of e-commerce and business performance. We use PLS to explore the relationships proposed in our framework model. The results of this study revealed that technological, individual, organizational, and environmental factors positively affect the adoption of e-commerce. The findings also confirmed that technological, organizational, and environmental factors are the determinant factors that affect Indonesian SMEs' performance. Interestingly, the study did not prove the direct effect of individual characteristics on performance. It indicates that the performances and innovativeness of SMEs within our study are more rooted in their organizational setting rather than individual.

Diversification Strategy and its Impact on Sustainability: Research on Indonesian SMEs

Sustainable development and its contingency aspects have emerged as a fascinating topic in recent years, particularly for small and medium enterprises (SMEs). Several studies have looked at innovation, technology, and individual contexts, as well as diversification tactics, and found mixed results. Consequently, the purpose of this study is to investigate the impact of SMEs' diversification on their long-term viability. The 180 respondents that took part in the survey were all owners of SMEs from around Yogyakarta Province. The hypothesis was tested using Analysis of Variance (ANOVA), and the results revealed that there were substantial disparities in sustainability among SMEs, depending on their linearity. Furthermore, SMEs that engaged in linear diversification outperformed their non-linear counterparts in terms of profitability. The findings have implications for SME owners who want to ensure their long-term viability by employing the most appropriate approach.

The Evaluation of Technology Startup Role on Indonesian SMEs Industry 4.0 Adoption Using CLD-ABM Integrated Model

The role of the Association of Southeast Asia Nations (ASEAN) small and medium enterprises (SMEs) as the regional socioeconomic stabilizer is inseparable from endogenous multisector collaboration. Indonesian SMEs struggled with Industry 4.0 adoption due to the lower digital infrastructure (DI) and digital literacy (DL) index. This study aims to develop a provisional model to explore the role of technology startups (TS) in covering the DI and DL of SMEs. The evaluation was through a simulation model of Indonesian SMEs’ collaboration with the government and TS. The developed model is a concurrent real-time integration of an agent-based model (ABM) with a causal loop diagram (CLD). The simulation results imply that SMEs’ collaboration with TS leads to the early adoption of Industry 4.0 that balances the business competition environment. The model also shows that exponentially rising government aid can help the SMEs into late adoption of Industry 4.0. However, SMEs are still unable to sustain the business competition. Thus, the integrative simulation model is a state-action planning model with each state result bounded to the previous state result. The initial input parameters determine the model behavior. Thus, the model is a good resiliency planner for SMEs’ Industry 4.0 adoption.

Do Psychic Distance, International Experience and Risk-Taking Ability Matter for Indonesian SMEs in the Distant Market?

The discussion of internationalization small and medium enterprises (SMEs) internationalization is salient in international business literature. In entering and performing in distant international markets, SMEs face more significant challenges than larger firms. This research aims to analyze the effects of psychic distance, international experience, and risk-taking ability among Indonesian SMEs internationalization in a distant market. This research was carried out with a survey involving 76 SMEs in Indonesia, and then the data were analyzed using multiple regression. The result shows that although the regression model is a good fit for the data, only international experience has a significant effect. This paper contributes by providing empirical evidence of (a) factors affecting the internationalization of SMEs of an emerging market in a distant market and (b) the role of psychic distance on internationalization in the context of SMEs.

The role of supply chain management and competitive advantage on the performance of Indonesian SMEs

The purpose of this study is to analyze the effect of supply chain management on competitive advantage, the effect of supply chain management on performance and the effect of competitive advantage on performance of small and medium enterprises (SMEs). The object of this research includes all SMEs in Tangerang, the population in this study also covers all 680 Small and Medium Enterprises in Tangerang, Indonesia. The research method uses quantitative methods and the technique used for data collection is by using an online questionnaire. Questionnaires are given to 210 owners or managers of Small and Medium Enterprises who were selected using the simple random sampling method. Data analysis used Structural Equation Modeling (SEM) with data processing tools using SmartPLS software. The results of data analysis show that supply chain management has a positive and significant effect on the performance of SMEs. Supply chain management has a positive and significant effect on competitive advantage. Finally, competitive advantage has a positive and significant effect on performance.

The Effect of Fintech Implementation on The Performance of SMEs

The emergence of FinTech has now made the unstoppable growth of technology in this digital era complete. Defined as technology-based financial services, FinTech allows transactions to be processed anywhere and anytime. It has provided small and medium enterprises (SMEs) with advantages, from provision of capital funding to ease of transactions that supports growth in SMEs. This study aims to identify how FinTech adoption and financial literacy affect Indonesian SMEs’ performance. Online questionnaires were distributed among respondents—100 business owners—selected using convenience sampling technique, and data were then analyzed using OLS regression. It was later found that FinTech adoption positively and significantly influences SMEs’ performance. Financial literacy, at the same time, strengthen the association between FinTech adoption and SMEs’ performance.

The Influence of Safety Climate, Motivation, and Knowledge on Worker Compliance and Participation: An Empirical Study of Indonesian SMEs

Safety behavior is a crucial thing which must be considered concerning accidents in work areas. Work accidents are primarily led by unsafe behaviors. Those behaviors can be expressed based on the degree of safety compliance and safety participation of employees. Several studies related to safety behavior in Small and Medium Enterprises (SMEs) have been conducted. However, studies related to the integration of person-related factors and situation-related factors are rare. The purpose of the study is to observe the safety climate (as a situation-related factor), and safety motivation and safety knowledge (as person-related factors) toward safety compliance and safety participation in SMEs. This study was conducted on 29 Indonesian SMEs’ metal manufacturing, and a self-administered questionnaire was utilized as a research instrument. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to evaluate the effect of safety climate, safety motivation, and safety knowledge on safety behavior. The results showed that safety climate and safety knowledge are positively significant in influencing both safety compliance and safety participation. However, safety motivation has a positive significant effect on safety participation only. The implication of this result has been discussed.

The Effect of Product Knowledge and Service Quality on Customer Satisfaction

Small and Medium Enterprises (SMEs) is one of several activators that drives the economy of Indonesia because SMEs provide jobs, increase Gross Domestic Product (GDP), and assure the delivery of products and services. However, Indonesian SMEs are not very competitive in the industrial world, and one of the causes is the low quality of products that undermine customer satisfaction. There are several factors presumed as influencing customer satisfaction, which among others include product knowledge, service quality, and competitive advantage. The objective of this research is to reveal the contribution of product knowledge and service quality to customer satisfaction with competitive advantage as the mediation variable. This research used a quantitative approach. The causal relationship across variables was examined with Structural Equation Modeling-Partial Least Squares (SEM-PLS). The sample of this research involved 140 respondents. Data was collected through a questionnaire and the items in the questionnaire were processed with a software called SmartPLS version 3.3.2. Results of this research indicate (1) product knowledge and service quality can increase competitive advantage and customer satisfaction in East Java SMEs; (2) competitive advantage can act as a mediator in the effect of service quality on customer satisfaction (3) product knowledge can increase customer satisfaction but the increase is not significant statistically.

How does the Government of Indonesia empower SMEs? An analysis of the social cognition found in newspapers

PurposeThis study aims to acknowledge that most Indonesian small and medium enterprises (SMEs) experience slow growth. It highlighted that this sluggishness is because of some falsification of Indonesia’s ecological psychology. It focuses on investigating the situated cognition that probably supports this falsification, such as affordance, a community of practice, embodiment and the legitimacy of peripheral participation situated cognition and social intelligence theories.Design/methodology/approachThis study obtained data from published newspapers between October 2016 and February 2019. The authors used the Waikato Environment for Knowledge Analysis and the J48 C.45 algorithm. The authors analyzed the data using the emergence of news probability for both the Government of Indonesia (GoI) and Indonesian society and the situated cognition concerning the improvement of the SMEs. The authors inferred ecological psychology from these published newspapers in Indonesia that the engaged actions were still suppressed, in comparison with being and doing.FindingsThis study contributes to the innovation and leadership policies of the SMEs’ managerial systems and the GoI. After this study identified the backward-looking practices, which the GoI and the people of Indonesia held, this study recommended some policies to help create a forward-looking orientation. The second one is also a policy for the GoI, which needs to reduce the discrepancy between the signified and the signifier, as recommended by the structuralist theory. The last one is suggested by the social learning theory; policies are needed that relate to developing the SMEs’ beliefs, attitudes and behavior. It means that the GoI should prepare the required social contexts, which are in motoric production and reinforcement. Explicitly, the authors argue that the GoI facilitates SMEs by emphasizing the internal learning process.Research limitations/implicationsThe authors present some possibilities for the limitations of this research. The authors took into account that this study assumes the SMEs are all the same, without industrial clustering. It considers that the need for social learning and social cognition by the unclustered industries is equal. Second, the authors acknowledge that Indonesia is an emerging country, and its economic structure has three levels of contributors; the companies listed on the Indonesian Stock Exchange, then the SMEs and the lowest level is the underground economy. Third, the authors did not distinguish the levels of success for the empowerment programs that are conducted by either the GoI or the local governments. This study recognizes that the authors did not measure success levels. It means that the authors only focused on the knowledge content.Practical implicationsFrom these pieces of evidence, this study constructed its strategies. The authors offer three kinds of policies. The first is the submission of special allocation funds from which the GoI and local governments develop their budgets for the SMEs’ social learning and social cognition. The second is the development of social learning and social cognition’s curricula for both the SMEs’ owners and executive officers. The third is the need for a national knowledge repository for all the Indonesian SMEs. This repository is used for the dissemination of knowledge.Originality/valueThis study raises argumental novelties with some of the critical reasoning. First, the authors argue that the sluggishness of the Indonesian SMEs is because of some fallacies in their social cognition. This social cognition is derived from the cultural knowledge that the GoI and people of Indonesia disclosed in the newspapers. This study shows the falsifications from the three main perspectives of the structuration, structuralist and social learning theories. Second, this study can elaborate on the causal factor for the sluggishness of Indonesia’s SMEs, which can be explained by philosophical science, especially its fallacies (Hundleby, 2010; Magnus and Callender, 2004). The authors expand the causal factors for each gap in every theory, which determined the SMEs’ sluggishness through the identification of inconsistencies in each dimension of their structuration, structuralism and social learning. This study focused on the fallacy of philosophical science that explains the misconceptions about the SMEs’ improvement because of faulty reasoning, which causes the wrong moves to be made in the future (Dorr, 2017; Pielke, 1999).

Contextual factors and performance impact of e-business use in Indonesian small and medium enterprises (SMEs).

This study proposes an integrated framework that investigates interrelationships between contextual factors that influence e-business use and consequently its impact on enterprise performance among small and medium enterprises (SMEs). This study starts with an extensive systematic review of e-business use factors that are contextualized in the technology, organization and environment (TOE) framework and conceptualized using resource-based view (RBV). Data are obtained through a survey of 325 Indonesian SMEs. The partial least square structural equation modeling technique is used to analyze the data and test the hypotheses. The organizational context emerges as the most significant predictor of e-business use, followed by technological and environmental contexts respectively. In addition, e-business use has stronger positive influence on enterprise performance at operational level, rather than managerial and strategic levels. However, e-business use's influence on performance impact at strategic level is indirect, mediating through operational and managerial levels. While the study has attempted to explain the contextual factors that influence the use of e-business as a whole, it is deficient in explaining contextual factors that influence each of e-business applications being used. This study could help SMEs identify contextual areas that may guide them to successfully use e-business and realize its potential benefits.

ANTECEDENTS OF ENVIRONMENTAL MANAGEMENT ACCOUNTING AND ENVIRONMENTAL PERFORMANCE: EVIDENCE FROM INDONESIAN SMALL AND MEDIUM ENTERPRISES

Small and Medium Enterprises (SMEs) play a significant role in Indonesian business growth. Therefore, the objective of the present study is to investigate the association of antecedents of environmental management accounting and environmental performance in Indonesian SMEs. In doing so, the current study seeks to identify the internal and external influencing factors for firms in adopting EMA and its subsequent impact on SMEs environmental performance. the outcomes of the PLS-SEM confirm that Benefit Expectation has significantly and positively impacted on Environmental Management Accounting. The results of PLS-SEM also confirm that Regulatory Pressure has a positive and significant impact on Environmental Management Accounting. Finally, the results of partial least square modelling confirm that Environmental Management Accounting also has a positive and significant impact on Environmental Performance.Keywords: Environmental management accounting, environmental performance, SMEs, Indonesia.JEL Classifications: Q55, Q50DOI: https://doi.org/10.32479/ijeep.8366

Inovasi UMKM Boga Tradisional Dalam Mencapai Keunggulan Bersaing

Empowerment of Small and Medium Enterprises (SMEs) becomes very strategic, because of its huge potential in driving the economic activities of the community and at the same time being the foundation of the income sources of some people in improving their welfare. But there are still many problems faced by Indonesian SMEs, some of which include competitiveness of MSMEs in national and global markets. The low competitiveness of these SMEs as expressed by Kumorotomo (2008), is due to the large number of problems in the development of MSMEs, such as financing, marketing, management and development of Human Resources (HR), and production efficiency and innovation. Where organizations that have advantages can be pursued through product and service innovation. The specific objective in this study is to produce an innovation model for MSMEs that produce traditional regional food products, so that they can help them find strategies to win the competition. This SMEs innovation model is carried out through innovation so that it can have an influence on improving the competitiveness of SMEs, especially traditional food producers in Jakarta.

A Combined ANP, TOPSIS and MCGP Approach to Select Knowledge Transfer Strategy: A Case Study in Indonesian SMEs ERP System Implementation

In order to enhance business sustainability and become more competitive in the international market, many Indonesian Small and Medium Enterprises (SMEs) have attempted to implement Enterprise Resource Planning (ERP) System albeit with some problems. This research draws from the relevant literature of information system success models, knowledge management and user behaviour, to develop an integrated model to select various factors of knowledge transfer strategy in ERP implementation within Indonesian SMEs. The research model includes specific constructs and paths which affect the evaluation of a successful knowledge transfer strategy. Multiple Criteria Decision Making and Goal Programming were used to select the most appropriate knowledge transfer strategy in an adopting company. The study found that knowledge sharing culture depends on absorptive capacity and consulting companies capability. The study also found that the proposed model can assist Indonesian SMEs in knowledge transfer strategy selection and decision during their ERP system implementation project.

Implementation the Trilogy Juran in SMEs Business Case Study in Indonesia

The study was conducted on 12 Small and Medium Enterprises (SMEs) in 4 cities in West Java Province using qualitative research methods in-depth interviews became the main source for obtaining data. SMEs have major weaknesses with regard to low product quality. The purpose of this study is to obtain information and data analysis regarding how the Juran Trilogy is applied in quality management. Grounded theory is used for research methods with the Snowball Sampling approach to determine the number of samples. Based on field data shows that Indonesian SMEs have weaknesses in the planning phase especially for the transformation of the quality dimension into the production process. This condition is caused by weak access to technology and raw materials. In the process of quality control, it is generally already well done by SMEs but it has not been supported by the process of recording a new reactive to the problem, so the high inconsistency in the quality dimension. The government must be involved in assisting SMEs to access mastery of technology and raw materials and improve the skills of SME owners to be able to carry out planning, control and quality development (The Trilogy Juran) transformation for all their employees.