e-ISSN 2231-8542
ISSN 1511-3701
Valentinus Ricky Sjofyan and Ruslan Prijadi
Pertanika Journal of Tropical Agricultural Science, Volume 26, Issue S, August 2018
Keywords: Financial goals, non-financial goals, owner-manager, small enterprise, strategy
Published on: 26 June 2018
Small and Medium Enterprises (SMEs) play an important role in the Indonesian economy. Not only do they generate jobs, they also nurture a culture of innovation and entrepreneurial skills that enable small firms manage economic downturns with minimal fallouts. Because of the SMEs' unique management characteristics and mixed business-personal goals, they are an interesting subject of research. This study examined if the strategy of SMEs executed by owner-managers affected their performance (financial/economic vs. non-economic). One of the strategies pursued by SMEs is a differentiation strategy, characterised by a unique product that is hard to imitate and results in customers' willingness to purchase goods or services at higher prices. Using a small sample size and applying SEM-PLS, this research attests to the strategic role of owner-managers for achievement of their non-economic goals, but not the SMEs' economic/financial goals. These results imply the presence of non-financial goals that may be considered to be important or perhaps more important than the financial goals. Small sample size and self-assessed performance measures are among the limitations of this research.
ISSN 1511-3701
e-ISSN 2231-8542