Performance reconfiguration in Indonesian MSMEs: Digital transformation, emerging skills, and organizational health
Vol 8, Issue 3, 2024
VIEWS - 816 (Abstract) 532 (PDF)
Abstract
Organisational competitiveness hinges on the strategic integration of digital transformation (DT), emerging skills (ES), and organizational health (OH) to foster sustainable performance. Despite the pivotal role of these variables, limited research investigates their interplay in Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. This study addresses this gap by empirically examining how MSMEs navigate challenges and opportunities amid the digital transformation landscape. Specifically, the research probes the intermediary function of the synergistic integration between DT and ES, influencing organisational performance (OP) moderated by OH. Utilizing a validated questionnaire, a three-month convenience sample involved 120 MSME managers. Partial least squares structural equation modelling analysis was employed to assess hypotheses. Findings indicate a significant relationship between DT, ES, and OH, with DT influencing OP. Interestingly, ES alone does not impact OP. Structural equation modelling reveals OH as a mediating variable between DT, ES, and OP. While the proposed model is preliminary, offering avenues for further research, this study underscores the importance of emerging skills in the MSME sector, contributing to a nuanced understanding of organisational competitiveness dynamics.
Keywords
Full Text:
PDFReferences
Aarons, G. A., Hurlburt, M., & Horwitz, S. M. (2010). Advancing a Conceptual Model of Evidence-Based Practice Implementation in Public Service Sectors. Administration and Policy in Mental Health and Mental Health Services Research, 38(1), 4–23. https://doi.org/10.1007/s10488-010-0327-7
Ahamd, M. (2019). State of the Art Compendium of Macro and Micro Energies. Advances in Science and Technology Research Journal, 13(1), 88–109. https://doi.org/10.12913/22998624/103425
Akpan, I. J., & Ibidunni, A. S. (2021). Digitization and technological transformation of small business for sustainable development in the less developed and emerging economies: a research note and call for papers. Journal of Small Business & Entrepreneurship, 35(5), 671–676. https://doi.org/10.1080/08276331.2021.1924505
Al Marshoudi, F. B., Jamaluddin, Z., Ba Aween, A. M., Al Balushi, F. I., & Mohammad, B. A. (2023). The Mediating Role of Employee Engagement in the Relationship Between Leadership Styles and Organizational Performance. International Journal of Management Thinking, 1(2), 40–61. https://doi.org/10.56868/ijmt.v1i2.26
Alashkar, A. S., & Al-Kasasbeh, M. M. (2022). The effect of organizational health on the employee performance in the extractive industries. Management Science Letters, 12(4), 229–236. https://doi.org/10.5267/j.msl.2022.6.001
Alathamneh, F. F., & Al-Hawary, S. I. S. (2023). Impact of digital transformation on sustainable performance. International Journal of Data and Network Science, 7(2), 911–920. https://doi.org/10.5267/j.ijdns.2022.12.020
Bakhtawar, Ali Mehdi, A., Zalfaqar, M., & Asad, M. (2023). Exploring External Stakeholder Engagement Strategies and their Impact on Project Success. International Journal of Management Thinking, 1(1), 72–98. https://doi.org/10.56868/ijmt.v1i1.13
Berman, S. J. (2012). Digital transformation: opportunities to create new business models. Strategy & Leadership, 40(2), 16–24. https://doi.org/10.1108/10878571211209314
Bouwman, H., Nikou, S., & de Reuver, M. (2019). Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs? Telecommunications Policy, 43(9), 101828. https://doi.org/10.1016/j.telpol.2019.101828
Bristow, G., & Healy, A. (2017). Innovation and regional economic resilience: an exploratory analysis. The Annals of Regional Science, 60(2), 265–284. https://doi.org/10.1007/s00168-017-0841-6
Bruhn, J. G. (2001). Trust and the Health of Organizations. New York: Kluwer Academic/Plenum Publishers. https://doi.org/10.1007/978-1-4615-0739-0
Bush, C., Koch, T., Clasen, J., Winkler, J., Vowinkel, J. (2017). Evaluation of an organisational health intervention for low-skilled workers and immigrants. Human Relation, The Tavistock Institute, 1–23.
Byrne, B. M. (2010). Structural equation modelling with AMOS: basic concepts, applications, and programming (multivariate applications series). New York: Taylor & Francis Group, 396(1), 7384.
Chen, Y. Y. K., Jaw, Y. L., & Wu, B. L. (2016). Effect of digital transformation on organisational performance of SMEs. Internet Research, 26(1), 186–212. https://doi.org/10.1108/intr-12-2013-0265
Cohen, L., Manion, L., & Morrison, K. (2017). Research Methods in Education. Routledge. https://doi.org/10.4324/9781315456539
Costa Melo, Dr. I., Queiroz, G. A., Alves Junior, P. N., de Sousa, T. B., Yushimito, W. F., & Pereira, J. (2023). Sustainable digital transformation in small and medium enterprises (SMEs): A review on performance. Heliyon, 9(3), e13908. https://doi.org/10.1016/j.heliyon.2023.e13908
Creswell, J. W. (2014). A concise introduction to mixed methods research. SAGE publications.
Davies, C., & Fisher, M. (2018). Understanding research paradigms. Journal of the Australasian Rehabilitation Nurses Association, 21(3), 21-25.
Denicolai, S., Zucchella, A., & Magnani, G. (2021). Internationalization, digitalization, and sustainability: Are SMEs ready? A survey on synergies and substituting effects among growth paths. Technological Forecasting and Social Change, 166, 120650. https://doi.org/10.1016/j.techfore.2021.120650
Ehlers, U. D., Kellermann, S. A. (2014). Future skills are the future of learning and higher education. Results of the international future skills Delphi survey.
Eller, R., Alford, P., Kallmünzer, A., & Peters, M. (2020). Antecedents, consequences, and challenges of small and medium-sized enterprise digitalization. Journal of Business Research, 112, 119–127. https://doi.org/10.1016/j.jbusres.2020.03.004
Fitzgerald, M., Kruschwitz, N., Bonnet, D., Welch, M. (2014). Embracing digital technology: a new strategic imperative. MIT Siloam Management Review, 55(2), 1.
Gabinete, G., Tanan, C., Tutor, J. A., & Escantilla-Lebuna, M. L. (2022). Public Service Delivery Assessment Using the Citizen Satisfaction Index System in Western Visayas, Philippines. Pakistan Journal of Life & Social Sciences, 20(1): 36–44.
Gray, P., El Sway, O. A., Asper, G., Thordarson, M. (2013). Realising strategic value through centred digital transformation in consumer centrist industries. MIS Quarterly Executive, 12 (1).
Gupta, M., & George, J. F. (2016). Toward the development of a big data analytics capability. Information & Management, 53(8), 1049–1064. https://doi.org/10.1016/j.im.2016.07.004
Haghighatjoo, Z., Naazem, F. (2007). Relationship between employees’ creativity and organisational health with the Medical Sciences University of Iran employees. Health Information Management, 4(7).
Heredia, J., Castillo-Vergara, M., Geldes, C., Carbajal Gamarra, F. M., Flores, A., & Heredia, W. (2022). How do digital capabilities affect firm performance? The mediating role of technological capabilities in the “new normal.” Journal of Innovation & Knowledge, 7(2), 100171. https://doi.org/10.1016/j.jik.2022.100171
Hess, T., Matt, C., Benlian, A., Wiesbock, F. (2016). Options for formulating a digital transformation strategy. MIS Quarterly Executive, 15(2).
Hossein Jalilvand. (2015). The relationship between the negotiation skill of a manager and organisational health. IJMAE International Journal of Management Accounting and Economics, 2(11), 1349–1356.
Ibidunni, A. S., Moses, C. L., Adegbuyi, O. A., Oladosun, M., & Olokundun, M. (2018). Empirical Evidence of Organizational Knowledge From a Typological Perspective and Its Linkages With Performance. International Journal of Sociotechnology and Knowledge Development, 10(4), 45–60. https://doi.org/10.4018/ijskd.2018100103
Ikhwan, S., Noermijati, A., Rahayu, M. (2017). An Indonesia Case study examines the link between workplace spiritual values, learning orientation, human resources practices, and organisational health. International Review of Management and Marketing, 7(3), 17–24.
Jeza, S. (2021). The influence of digital transformation on the growth of small and medium enterprises in KwaZulu-Natal (Doctoral dissertation).
Kaplan, B., Truex, D. P., Wastell, D., Wood Harpel, A. T., & DeGross, J. I. (2004). Information systems research: Relevant theory and systems research: Relevant theory and informed practice. IFIP Advances in Information and Communication Technology.
Keller, S., & Price, C. (2012). Beyond Performance. How great organisations build ultimate competitive advantage. Mc.Kinsey & Co. (Wiley & Sons). https://doi.org/10.1002/9781119202455
Konopik, J., Jahn, C., Schuster, T., Hoßbach, N., & Pflaum, A. (2022). Mastering the digital transformation through organizational capabilities: A conceptual framework. Digital Business, 2(2), 100019. https://doi.org/10.1016/j.digbus.2021.100019
Kraft, C., Lindeque, J. P., & Peter, M. K. (2022). The digital transformation of Swiss small and medium-sized enterprises: insights from digital tool adoption. Journal of Strategy and Management, 15(3), 468–494. https://doi.org/10.1108/jsma-02-2021-0063
Kramar, R., & Steane, P. (2012). Emerging HRM skills in Australia. Asia-Pacific Journal of Business Administration, 4(2), 139–157. https://doi.org/10.1108/17574321211269289
Lindert, L., Kühn, L., Kuper, P., & Choi, K. E. (2022). Organizational Health Literacy in the Context of Employee Health: An Expert-Panel-Guided Scoping Review Protocol. International Journal of Environmental Research and Public Health, 19(7), 4381. https://doi.org/10.3390/ijerph19074381
Liu, H., Zhu, Q., Muhammad Khoso, W., & Khalique Khoso, A. (2023). Spatial pattern and the development of green finance trends in China. Renewable Energy, 211, 370–378. https://doi.org/10.1016/j.renene.2023.05.014
Mahajan, K., Pal, A., & Desai, A. (2023). Revolutionizing Fan Engagement: Adopting Trends and Technologies in The Vibrant Indian Sports Landscape. International Journal of Management Thinking, 1(2), 122–141. https://doi.org/10.56868/ijmt.v1i2.35
Martínez-Caro, E., Cegarra-Navarro, J. G., & Alfonso-Ruiz, F. J. (2020). Digital technologies and firm performance: The role of digital organisational culture. Technological Forecasting and Social Change, 154, 119962. https://doi.org/10.1016/j.techfore.2020.119962
Medearis, J. (1997). Schumpeter, the New Deal, and Democracy. American Political Science Review, 91(4), 819–832. https://doi.org/10.2307/2952166
Moen, P., Kelly, E. L., Fan, W., Lee, S. R., Almeida, D., Kossek, E. E., & Buxton, O. M. (2016). Does a Flexibility/Support Organizational Initiative Improve High-Tech Employees’ Well-Being? Evidence from the Work, Family, and Health Network. American Sociological Review, 81(1), 134–164. https://doi.org/10.1177/0003122415622391
Mondalizadeh, Z., & Shakeri, E. (2021). Explaining the Relationship of Organizational Health and Employee Depression with Productivity: A case study: Sporting and Youth Organizations Personnel in Isfahan Province. Journal Occupational Hygiene and Health Promotion, 5(1), 2588–3062.
Mubarak, M. F., Shaikh, F. A., Mubarik, M., Samo, K. A., & Mastoi, S. (2019). The Impact of Digital Transformation on Business Performance: A Study of Pakistani SMEs. Engineering, Technology & Applied Science Research, 9(6), 5056–5061. https://doi.org/10.48084/etasr.3201
Picazo Rodríguez, B., Verdú-Jover, A. J., Estrada-Cruz, M., & Gomez-Gras, J. M. (2023). Does digital transformation increase firms’ productivity perception? The role of technostress and work engagement. European Journal of Management and Business Economics. https://doi.org/10.1108/ejmbe-06-2022-0177
Pineda, R., Lopes, A., Tseng, B., & Salcedo, O. H. (2012). Service Systems Engineering: Emerging Skills and Tools. Procedia Computer Science, 8, 420–427. https://doi.org/10.1016/j.procs.2012.01.081
Priyono, A., Moin, A., & Putri, V. N. A. O. (2020). Identifying Digital Transformation Paths in the Business Model of SMEs during the COVID-19 Pandemic. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 104. https://doi.org/10.3390/joitmc6040104
Rahim Abdul Hamid, A., Inayah Mohd Khazid, N., Yunus, R., Halim, H. A., & Raihan Abdul Razak, A. (2018). The emerging of employment gap in the Malaysian construction industry. Journal of Physics: Conference Series, 1049, 012033. https://doi.org/10.1088/1742-6596/1049/1/012033
Robertson, I. T., & Cooper, C. L. (2010). Full engagement: the integration of employee engagement and psychological well‐being. Leadership & Organization Development Journal, 31(4), 324–336. https://doi.org/10.1108/01437731011043348
Saad Farhan Ibrahim Alabdullah, Mushtaq Ahmad, B. S. M. A. (2022). Investigation of the Critical Factors Influencing Low-Cost Green Sustainable Housing Projects in Iraq. Mathematical Statistician and Engineering Applications, 71(2), 310–329. https://doi.org/10.17762/msea.v71i2.90
Sabai Khin, Theresa, C. F., HO. (2018). Digital technology, digital capability, and organisation performance: A mediating role of digital innovation, 2, 1757–2223.
Sanchez-Segura, M. I., Dugarte-Peña, G. L., Medina-Dominguez, F., Amescua Seco, A., & Menchen Viso, R. (2023). Digital transformation in organizational health and safety to mitigate Burnout Syndrome. Frontiers in Public Health, 11. https://doi.org/10.3389/fpubh.2023.1080620
Schwarzmüller, T., Brosi, P., Duman, D., & Welpe, I. M. (2018). How Does the Digital Transformation Affect Organizations? Key Themes of Change in Work Design and Leadership. Management Revu, 29(2), 114–138. https://doi.org/10.5771/0935-9915-2018-2-114
Sebastian, I. M., Mocker, M., Ross, J. W., Moloney, K. G., Beath, C., & Fonstad, N. O. (2017). How Big Old Companies Navigate Digital Transformation. MIS Q. Exec. 42, 150–154.
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.
Sekaran, U., Bougie, R. (2013). Research Methods for Business. In: A Skill-Building Approach, 7th ed. Chichester: Wiley. pp. 237–266.
Singh Dubey, R., Paul, J., & Tewari, V. (2021). The soft skills gap: a bottleneck in the talent supply in emerging economies. The International Journal of Human Resource Management, 33(13), 2630–2661. https://doi.org/10.1080/09585192.2020.1871399
Svahn, F., Mathiassen, L., & Lindgren, R. (2017). Embracing Digital Innovation in Incumbent Firms: How Volvo Cars Managed Competing Concerns. MIS Quarterly, 41(1), 239–253. https://doi.org/10.25300/misq/2017/41.1.12
Tarigan, A., Gustomo, A., & Ros Bangun, Y. (2023). Enhancing Fairness in Performance Appraisals: A Conceptual Framework Through a Systematic Literature Review. Journal of Advances in Humanities Research, 2(3), 202–228. https://doi.org/10.56868/jadhur.v2i3.176
Teng, X., Wu, Z., & Yang, F. (2022). Impact of the Digital Transformation of Small- and Medium-Sized Listed Companies on Performance: Based on a Cost-Benefit Analysis Framework. Journal of Mathematics, 2022, 1–14. https://doi.org/10.1155/2022/1504499
Ullah, S., Khan, U., Begum, A., Han, H., & Mohamed, A. (2023). Indigenous knowledge, climate change and transformations of Gwadar fishing community. International Journal of Climate Change Strategies and Management. https://doi.org/10.1108/ijccsm-06-2022-0069
Usman, M. (2020). Transformational Leadership and Organizational Change: In The Context of Today’s Leader. International Business Education Journal, 13(1), 95–107. https://doi.org/10.37134/ibej.vol13.1.8.2020
Xenidis, Y., & Theocharous, K. (2014). Organizational Health: Definition and Assessment. Procedia Engineering, 85, 562–570. https://doi.org/10.1016/j.proeng.2014.10.584
Yuliantari, N. P. Y., & Pramuki, N. M. W. A. (2022). The Role of Competitive Advantage in Mediating the Relationship Between Digital Transformation and MSME Performance in Bali. Jurnal Ekonomi & Bisnis JAGADITHA, 9(1), 66–75. https://doi.org/10.22225/jj.9.1.2022.66-75
Zemestani, G., Bonab, P. M., Heravi, B. S. (2013). Investigate the relationship between organisational health and personnel productivity of the Islamic Azad University, Tabriz Branch staff. The Journal Productivity Management, 1(24), 49–70.
Zikmund, W. (2010). Business Research Method, 8th ed. Canada: Cengange Learning.
Zomer, T., Nelly, A., Martinez, V. (2020). Digital transformation capability and performance: A Micro foundational perspective. International Journal of Operation and Production Management, 22, 1–44.
DOI: https://doi.org/10.24294/jipd.v8i3.3101
Refbacks
- There are currently no refbacks.
Copyright (c) 2024 Ikhwan HS, Ditiya Himawati
License URL: https://creativecommons.org/licenses/by/4.0/
This site is licensed under a Creative Commons Attribution 4.0 International License.