FACING THE DISRUPTIVE INNOVATION ERA WITH THE IMPLEMENTATION OF MODERATED TRANSFORMATIONAL LEADERSHIP BEHAVIOR ON ENTREPRENEURIAL ORIENTATION EFFECT ON THE PERFORMANCE OF SME INNOVATION
Tri Siwi Agustina
Postgraduate School of Universitas Airlangga
Abstract
MSME managers are currently obliged to understand about disruption. Understanding disruption is not an exception. Instead, it is a requirement to exist in todays global arena. Related to this, entrepreneurial orientation is considerably necessary to improve the performance and to ensure the sustainability of their business. In MSMEs, leadership has a strong influence on entrepreneurial orientation and company performance. Transformational leadership is a relevant style to develop the performance of MSMEs in a rapid environment that requires adaptation (Matzler et al, 2008). This research aims to find out about 1) the influence of the entrepreneurial orientation on the performance of MSMEs assisted by the Surabaya City Trade Office, with the limitations of MSME performance; 2) knowing the moderating effect of transformational leadership on the influence of entrepreneurship on the performance of MSMEs under the guidance of the Surabaya City Trade Office with the limitations of MSME innovation performance. The sampling method is purposive sampling, with the provisions of several requirements. The sample in this study is the owner of the MSMEs in the processing sectors, namely food, garment and handicraft in the assistance of the Surabaya Ministry of Commerce in 2017 with a total of 50 respondents. The process of collecting data is conducted by giving questionnaires and interviews. To test the hypothesis, the data in this study is processed with Partial Least Square (PLS). The result shows that the Entrepreneurial Orientation proved to result in the innovation performance of MSMEs fostered by the Surabaya Ministry of Commerce. The next result shows that from 6 aspects of transformational leadership behavior, there are only four of them (Facilitating the Acceptance of Group Goals, Providing the Right Role Model, Setting High Expectations, Demonstrating Supporting Behavior) which have strong effects on improving organizational performance. Two other aspects of leadership behaviors, namely Articulating Vision and Offering Intellectual Stimulation were proven to weaken the influence of entrepreneurial orientation on the innovation performance of MSME Assisted by the Surabaya City Trade Office.
Keywords: Transformational Behavioral Leadership, Entrepreneurial Orientation, MSME Innovation Performance
Topic: Human Resource Development