The Influence of Entrepreneurship Organization and Quality of Human Resources on the Performance of MSMEs with Competitive Advantages as Intervening

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International Journal of Economics & Business
Publication Date: April, 2021

Moh. Sholeh, Ernani Hadiyati & Endang Suswati
Gajayana University
Malang, East Java, Indonesia

Journal Full Text PDF: The Influence of Entrepreneurship Organization and Quality of Human Resources on the Performance of MSMEs with Competitive Advantages as Intervening (Case Study on MSMEs in Probolinggo Regency).

Abstract
Abstract: Micro, Small and Medium Enterprises (SMEs) are believed to have a role in the wheels of the economy in Indonesia. The SMEs business contributes around 60% of GDP (Gross Domestic Product) and creates jobs for the community. In order for SMEs to perform optimally, it is necessary to have supporting factors, some of which are entrepreneurial orientation, quality of human resources and the competitive advantage of these SMEs. Therefore, the researcher intends to test these three factors whether they have an influence on the performance of SMEs in Probolinggo.The study population was all SMEs in Probolingo. SMEs in the fried onion processing industry in Probolinggo were chosen to be the research samples because the SMEs in this field are the SMEs that dominate and become the leading ones in Probolinggo, where the majority of farmers grow shallots. The research sample was taken using a questionnaire. This research uses explanatory research method. The analytical tool used in this research is path analysis so that it can be seen the direct or indirect influence between the independent variables and the dependent variable. The results showed that good entrepreneurial orientation and quality of human resources would improve the performance of SMEs in Probolinggo Regency, both partially and simultaneously. Entrepreneurial orientation and the quality of human resources both partially and simultaneously will increase the competitive advantage of SMEs in Probolinggo during the Corona pandemic. Competitive advantage has a positive effect on the performance of SMEs. Entrepreneurial orientation and the quality of human resources each have a significant positive effect on performance through competitive advantage..

Keywords: Entrepreneurial Orientaation, Quality of Human Resources, Competitive Advantage, Performance of SMEs.

1. Introduction
Micro, Small and Medium Enterprises (MSMEs) are believed to contribute to the wheels of the Indonesian economy, especially the contribution to Gross Domestic Product (GDP). Micro, Small and Medium Enterprises have been able to prove their existence in the economy in Indonesia. The MSME business contributes around 60% of GDP (Gross Domestic Product) and creates jobs for the community.
The micro, small and medium enterprises sector is one form of alternative strategy to support national economic development and assist poverty reduction programs based on empowering MSMEs through job creation. From various aspects, the role of MSMEs in the national economy involves the government as outlined in the Development Program in the National Medium Term Development Plan
The existence of MSMEs is very beneficial in terms of distributing people’s income. Besides that, it is also able to create creativity that is in line with efforts to maintain and develop elements of tradition and culture of the local community. This is a characteristic feature of the nature and existence of MSMEs that are able to synergize with the socio-cultural conditions of the local community, so that the existing traditions and culture do not disappear and remain firmly rooted, because tradition and culture are wealth assets that need to be preserved and maintained.
The growth of MSMEs in Indonesia has increased from year to year. In 2015 there were 56,540,000 SME units, increasing to 58,000,000 units in 2016 and becoming 60,000,000 UMKM units in 2017. Likewise, Probolinggo Regency MSMEs in particular prove that they can become a foundation for the national economy.
The quality of human resources plays an important role in the performance of MSMEs, most MSMEs have grown traditionally and are businesses that are down and down. The limited quality of human resources in terms of education, knowledge and skills greatly affects the management of their business. HR needs to be developed by developing competencies to increase productivity supported by technological developments, bearing in mind that many MSME players still use simple methods, both in the use of technology and in marketing, which are still very limited. The results of research by Priandari et al. (2019) proved that the quality of human resources has an effect on competitive advantage.
Organizational performance or in this study is referred to as the performance of MSMEs which is the actual result or output produced by a business which is then measured and compared with the expected results or output (Jahanshasi, et al., 2012: 64). Alimudin, et al (2019) have conducted research related to the performance of MSMEs, the results of the study show that the four Balanced Scorecard (BSC) perspectives significantly contribute to the improvement of MSME performance by 95.5%. Research by Arbawa and Wardoyo (2018) and Priandari et al. (2019) proved that organizational performance is influenced by competitive advantage.

2. Research Methods
2.1 Research Design
The object and purpose of a study will determine the research design used. Based on the object and research objectives that have been determined, this research uses explanatory research method, because it explains the effect that occurs between the research variables and then tests the previously formulated hypotheses. The variables to be examined in this study are entrepreneurial orientation, human resource quality and competitive advantage on the performance variables of MSMEs.

2.2 Population and Sample
This study uses a population of MSME entrepreneurs in Probolinggo district who are in the onion processing industry. JThe total population of the study was 184,970 MSMEs, with the largest proportion in the onion processing industry, which was 32.6% of the total population or as much as 60,270 MSMEs. Therefore the sample has been determined by the methodAccidental Sampling, then the number of research samples is determined as much as 100 MSMEs taken from the main processing industry from the superior UMKM under the guidance of the Office of Cooperatives and Micro Enterprises of Probolinggo Regency, namely various processed onions.

2.3 Operational Definition of Variables
a. Entrepreneurial Orientation (Exogenous Variable = X1)
The indicator refers to Lee and Tsang (20011), namely:
1) Need for achievement
2) Self confidence.
3) Self reliance.
4) Extroversion.
b. Quality of human resources (Exogenous variable = X2)
Indicators of the quality of human resources refer to Sedarmayanti (2009: 53), namely:
1) Physical ability (health).
2) Intellectual ability (intelligence).
3) Psychological (mental) abilities.
c. Competitive Advantage (Intervening Variable = Z)
The indicators used in this study refer to Bharadwaj (2008: 17) consisting of:
1) Price, is related to the price set by the UMKM business actor.
2) Quality, related to the condition of goods produced by MSME business actors, both what can be seen and can be felt.
3) Delivery DependabilityWhat is meant is that the goods or services produced by the UMKM business actor can satisfy customers.
4) Innovation is defined as taking creative ideas and turning them into useful products or work methods (Robbins & Coulter, 2016).
5) Time to Market, the ability of MSME players to introduce new products faster than their main competitors.
d. MSME Performance (Endogenous Variable = Y)
The four perspectives referred to are:
1) From a Financial Perspective, this indicator measures whether the planning and implementation of the MSME strategy provides improvement or not for increasing the benefits of MSMEs.
2) Customer Perspective, namely by measuring how much customer satisfaction with services or products from SMEs.
3) Internal Business Perspective, this indicator is to measure how well their business is doing and whether their products / services are in accordance with customer specifications.
4) Growth and Learning Perspective, this perspective identifies the infrastructure that the company must build to increase long-term growth and performance.

3. Analysis and Discussion
3.1 Path Analysis
The results of the path analysis are presented in the following figure:

Table 1. Variable Path Analysis Results
Standarized Sig α Information
Path Beta
X1 Z 0.374 0,000 0.05 Significant
X2 Z 0.296 0,000 0.05 Significant
X1 Y 0.244 0.006 0.05 Significant
X2 Y 0.209 0,000 0.05 Significant
ZY 0.204 0.015 0.05 Significant

Based on Table 1. To analyze the first path it can be explained that betweenEntrepreneurial Orientation (X1) withCompetitive Advantage(Z) has a significant effect. This can be seen with the results of a significant value that is 0.000 smaller than α = 0.05. The second line betweenQuality of Human Resources (X2) with Competitive Advantage(Z) has a significant effect that is equal to 0.000 smaller than α = 0.05. The third line betweenEntrepreneurial Orientation (X1) withMSME performance (Y) has a significant effect that is equal to 0.006 smaller than α = 0.05. The fourth line betweenQuality of Human Resources (X2) with MSME performance (Y) has a significant effect of 0.000 which is smaller than α = 0.05. The fifth line betweenCompetitive Advantage (Z) with MSME performance (Y) has a significant effect of 0.015 which is smaller than α = 0.05. The results of the path analysis can be seen in the following figure:

G.
Path Analysis Model
Information:
βX1Z: Direct effect path coefficientEntrepreneurial Orientation (X1) to Competitive Advantage (Z)
βX2Z: Direct effect path coefficientQuality of Human Resources (X2) to Competitive Advantage (Z)
βX1Y: Direct effect path coefficient Entrepreneurial Orientation (X1) to MSME performance (Y)
βX2Y: Direct effect path coefficientQuality of Human Resources (X2) to MSME performance (Y)
βZY: Direct effect path coefficient Competitive Advantage (Z) to MSME performance (Y)
The path coefficient is calculated by constructing a structural equation, a regression equation that shows the relationship. The path analysis model in the equation is as follows:
Z = 0.374X1Z + 0.296X2Z +e………… ………… (Equation 1)
Y = 0.244X1Y + 0.209X2Y + 0.204ZY +e . ……… (Equation 2)
Y = MSME performance
X1 = Entrepreneurial Orientation
X2 = Quality of Human Resources
Z = Competitive Advantage
= coefficient of independent variable
1,e2 = variable residual / error

3.2 Discussion
3.2.1. Entrepreneurial orientation affects the performance of MSMEs
An entrepreneurial orientation is a company orientation that has the principle of identifying and exploiting opportunities so that after all the conditions internally and externally the business company that has been worked on can still stand and develop (Lee & Chu, 2011). Prieto (2010) states that the entrepreneurial orientation of an entrepreneur is considered to have a significant role in the success of a business, so that the business can perform healthily, because an entrepreneur or someone who has an entrepreneurial orientation will act in accordance with the goals of MSMEs or business goals. Strive to be able to achieve business goals and control or overcome the risks they have.

3.2.2 The quality of human resources affects the performance of MSMEs
High quality human resources according to Ndaraha (2002) in Priandari (2019) are human resources that create not only comparative values but also competitive-generative-innovative values using the highest energies such as: intelligence, creativity and imagination; no longer solely using gross energy, such as raw materials, water fields, energy, muscles and so on. Quality human resources are needed in an organization, because the existence of good quality human resources with capabilities in the physical, intellectual and psychological fields greatly affects the back and forth of an organization. Indicators of the quality of human resources in this study consist of physical abilities and non-physical abilities.

3.2.3. Entrepreneurial orientation affects Competitive Advantage
Proactive reflects the willingness of entrepreneurs to dominate competitors through a combination and aggressive and proactive movements, such as introducing new products or services on top of competition and activities to anticipate future demands to create change and shape the environment. Innovative refers to an entrepreneurial attitude to be involved creatively in the process of experimenting with new ideas that make it possible to produce new production methods so as to produce new products or services, both for the current market and for new markets. In principle, entrepreneurial orientation is the nature, characteristics, and traits that have the ability to create innovative ideas into the real world that are done creatively or in short, the ability to create the new and different things (Peter F. Drucker:

3.2.4 Quality of Human Resources affects Competitive Advantage
Abdullah (2014) argues that the quality of human resources is always inseparable from professional work. So that a quality work, must be involved in the context of work which is one’s profession. Therefore, it is not surprising that high quality human resources are expected to appear in professionals, this is not surprising because professionals have the expertise, organization and code of ethics that make it easier for them to develop concepts, benchmarks, even measures that they can use to judge. and shape their self-image. Therefore, greater attention must be paid to HR Management itself.

3.2.5 Competitive Advantage affects the performance of MSMEs
Competitive Advantage has a significant positive effect on the performance of MSMEs. So, in this study it shows that Competitive Advantage affects the performance of MSMEs as indicated by the indicators of performance, namely: (1)From a Financial Perspective, this indicator measures whether the planning and implementation of the MSME strategy provides improvements or not for the increase in MSME profits. (2) Customer Perspective, namely by measuring how much customer satisfaction is with services or products from SMEs. (3) Internal Business Perspective, this indicator is to measure how well their business is running and whether their products / services are in accordance with customer specifications. (4) Learning and Growth Perspective, this perspective identifies the infrastructure that the company must build to increase long-term growth and performance.

3.2.6 Entrepreneurial orientation affects performance through competitive advantage
The higher the company’s competitive advantage is expected to be able to achieve profit as planned, increase market share, increase customer satisfaction, and continue the survival of a business. This means that the indicators of performance consist of: (1)From a Financial Perspective, this indicator measures whether the planning and implementation of the MSME strategy provides improvements or not for the increase in MSME profits. (2) Customer Perspective, namely by measuring how much customer satisfaction is with services or products from SMEs. (3) Internal Business Perspective, this indicator is to measure how well their business is running and whether their products / services are in accordance with customer specifications. (4) Learning and Growth Perspective, this perspective identifies the infrastructure that the company must build to increase long-term growth and performance. actually shows the results that Entrepreneurial Orientation affects performance through Competitive Advantagein Probolinggo Regency.

3.2.7 Quality of Human Resources on Performance through Competitive Advantage
Indicators of performance consist of: (1)From a Financial Perspective, this indicator measures whether the planning and implementation of the MSME strategy provides improvement or not for increasing the benefits of MSMEs. (2) Customer Perspective, namely by measuring how much customer satisfaction is with services or products from SMEs. (3) Internal Business Perspective, this indicator is to measure how well their business is running and whether their products / services are in accordance with customer specifications. (4) Learning and Growth Perspective, this perspective identifies the infrastructure that the company must build to increase long-term growth and performance. really shows the results that the quality of human resources has an effect on performance through the competitive advantage of MSMEs in Probolinggo Regency.
4. Conclusion
Based on the results of the analysis and discussion that the researcher has explained, it can be concluded as follows:
a. The results of the pathway test on the influence of Entrepreneurship Orientation on the Performance of MSMEs show a significant positive effect. This proves that a good Entrepreneurial Orientation will improve the performance of MSMEs in Probolinggo Regency during the Corona pandemic.
b. The results of the pathway test on the influence of the quality of human resources on the performance of MSMEs show a significant positive effect. This proves that a good Entrepreneurial Orientation will improve the performance of MSMEs in Probolinggo Regency during the Corona pandemic.
c. The path test results on the effect of Entrepreneurship Orientation on Competitive Advantage show a significant positive effect. This proves that a good Entrepreneurial Orientation will increase the Competitive Advantage of MSMEs in Probolinggo Regency during the Corona pandemic.
d. The results of the pathway test on the influence of Human Resource Quality on Competitive Advantage show a significant positive effect. This proves that a good Entrepreneurial Orientation will increase the Competitive Advantage of MSMEs in Probolinggo Regency during the Corona pandemic.
e. The results of the pathway test on the influence of Human Resource Quality on Competitive Advantage show a significant positive effect. This proves that good Competitive Advantage will improve the performance of MSMEs in Probolinggo Regency during the Corona pandemic.
f. The results of the path calculation analysis show that the higher the Entrepreneurship Orientation, the performance of MSMEs will increase through the Competitive Advantages of MSMEs in Probolinggo Regency during the Corona pandemic.
g. The results of the path calculation analysis show that the higher the quality of human resources, the performance of MSMEs will increase through the Competitive Advantage of MSMEs in Probolinggo Regency during the Corona pandemic.

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