Investigation of the Effect of Organizational Ambidexterity and Innovation Capability on Supply Chain Performance: An Empirical Study of Indonesian MSMEs

Abstract

Objective: There is no research on organizational ambidexterity and innovation capability on supply chain performance in Indonesia. The purpose of this research is to analyze the relationship between Organizational Ambidexterity on supply chain performance, Organizational Ambidexterity on innovation capability, Innovation capability on supply chain performance in SMEs in Indonesia.   Method: This research method is quantitative causality, data analysis uses structural equation modeling (SEM) partial least squares (PLS) with the data processing tool SmartPLS 3.0. The respondents of this research were 350 SMEs owners in Indonesia who were determined by simple random sampling method. The research data was obtained by distributing online questionnaires through social media. The questionnaire was designed using questions with a Likert scale of 1 to 7. The stages of data analysis were the outer model test, namely convergent validity, discriminant validity and composite reliability and the inner model test, namely the determination test and hypothesis testing or significance test. The independent variable in this study is organizational ambidexterity, the mediating variable is innovation capability and the dependent variable is supply chain performance.   Result: The results of the data analysis show that organizational ambidexterity has a positive and significant effect on supply chain performance, organizational ambidexterity has a positive and significant effect on innovation capability, innovation capability has a positive and significant effect on supply chain performance.   Conclusion: This research only focuses on MSME businesses. The results of this study can complement existing theories. The results of this study can be used as reference material for MSME business owners. Then the results of this research can also be used as a reference for MSMEs in improving marketing performance by increasing product innovation and market orientation directly or through organizational ambidexterity. Based on this, there is an influence of Organizational Ambidexterity and Innovation Capability on SMEs Performance. So it is necessary to analyze whether or not there is an influence exerted by Organizational Ambidexterity Innovation Capability and on SMEs Performance. This research is expected to provide theoretical benefits, namely increasing the contribution of knowledge, especially regarding Organizational Ambidexterity and innovation capability to MSME performance, while practical benefits can be used as input for SMEs in carrying out Organizational Ambidexterity and Innovation Capability in order to improve SMEs performance.