The Effect of Organizational Culture’s Dimension, Total Quality Management and Entrepreneurial Orientation towards the Performance of Herbal Enterprises in Indonesia
DOI:
https://doi.org/10.37134/jcit.vol12.2.5.2022Keywords:
Culture, TQM, Entrepreneurship, PerformanceAbstract
This study aims to determine the effect of the dimension of organization culture (clan, adhocratic, hierarchy, market) on total quality management, the effect of the dimension of organization culture on entrepreneurial orientation, and the effect of the dimension of organization culture, total quality management and entrepreneurial orientation on the performance of herbal enterprises in Indonesian. The study uses quantitative approaches and deductive methods. The sample consists of 400 selected herbal entrepreneurs registered with the Asosiasi Pengusaha Herbal Indonesia using a simple random sampling method. Data is collected by using questionnaires and analysed by using structural equation modelling. The findings show that seven out of the 14 hypotheses tested were supported. Specifically, market culture is the only cultural factor that significantly and positively affects total quality management. Adhocratic and market culture are cultural factors that significantly influence entrepreneurial orientation positively. The subsequent findings show that clan culture, total quality management and entrepreneurial orientation are significant and positive determinants of the organisation performance, while market culture affects organizational performance significantly but negatively. In conclusion, the performance of the enterprises can be increased through clan culture, total quality management and entrepreneurial orientation; total quality management practices can be enhanced through market culture and entrepreneurial orientation can be enhanced through adhocratic and market culture. In implication, to improve the performance of herbal enterprises, organizational culture, particularly clan culture, total quality management and entrepreneurial orientation needs to be practiced intensively.
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References
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Al-Dhaafri, H. S., Al-Swidi, A. K., & Yusoff, R. Z. Bin. (2016). The mediating role of total quality management between the entrepreneurial orientation and the organizational performance. The TQM Journal, 28(1), 89–111.
Al-Dhaafri, H. S., & Alosani, M. S. (2020). Impact of total quality management, organisational excellence and entrepreneurial orientation on organisational performance: empirical evidence from the public sector in UAE. Benchmarking, 27(9), 2497–2519. https://doi.org/10.1108/BIJ-02-2020-0082
Alghamdi, F. (2018). Total Quality Management and Organizational Performance: A Possible Role of Organizational Culture. International Journal of Business Administration, 9(4), 186. https://doi.org/10.5430/ijba.v9n4p186
Aloulou, W. J. (2018). Examining entrepreneurial orientation’s dimensions – performance relationship in Saudi family businesses: Contingency role of family involvement in management. Journal of Family Business Management, 8(2), 126–145. https://doi.org/10.1108/JFBM-02-2018-0007
Aquilani, B., Silvestri, C., Ruggieri, A., & Gatti, C. (2017). A systematic literature review on total quality management critical success factors and the identification of new avenues of research. TQM Journal, 29(1), 184–213. https://doi.org/10.1108/TQM-01-2016-0003
Astari, P. D. S. (2020). Role of students in agromedicine development through health promotion to improve health quality in Indonesia. JIMKI: Jurnal Ilmiah Mahasiswa Kedokteran Indonesia, 8(2), 176–182.
Behram, N. K., & Özdemirci, A. (2014). The empirical link between environmental conditions, organizational culture, corporate entrepreneurship and performance: The mediating role of corporate entrepreneurship. International Journal of Business and Social Science, 5(2), 264–277.
Byrne, B. M. (2016). Structural equation modeling with AMOS: Basic concepts, applications, and programming. Routledge.
Cameron, K. S., & Quinn, R. E. (2006). Diagnosing and changing organizational culture: Based on the competing values framework (Revised ed). The Jossey-Bass Business & Management Series.
Cherchem, N. (2017). The relationship between organizational culture and entrepreneurial orientation in family firms: Does generational involvement matter? Journal of Family Business Strategy, 8(2), 87–98. https://doi.org/10.1016/j.jfbs.2017.04.001
Engelen, A., Flatten, T. C., Thalmann, J., & Brettel, M. (2014). The effect of organizational culture on entrepreneurial orientation: A comparison between Germany and Thailand. Journal of Small Business Management, 52(4), 732–752. https://doi.org/10.1111/jsbm.12052
Garson, G. D. (2012). Testing statistical assumptions. Asheboro, NC: Statistical Associates Publishing.
Garson, G. D. (2013). Validity and reliability. Asheboro, NC: Statistical Associates Publishers.
Hair, Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analysis (7th Edition). Pearson Education Inc.
Hair, J. F., Sarstedt, M., Ringle, C. M., & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40(3), 414–433.
Hinkin, T. R. (1995). A review of scale development practices in the study of organizations. Journal of Management, 21(5), 967–988. https://doi.org/10.1177/014920639502100509
Islami, A. C., Kunaifi, A., & Gunawan, J. (2017). Ragam pengukuran kinerja pada usaha mikro, kecil, dan menengah (UMKM) di Surabaya. Jurnal Sains Dan Seni ITS, 6(2), D168–D171.
Jo, N. (2016). Studi tanaman khas Sumatera Utara yang berkhasiat obat. Jurnal Farmanesia, 3(1), 11–21.
Khedhaouria, A., Nakara, W. A., Gharbi, S., & Bahri, C. (2020). The relationship between organizational culture and small-firm performance: Entrepreneurial orientation as mediator. European Management Review, 17(2), 515–528. https://doi.org/10.1111/emre.12383
Kline, R. B. (2015). Principles and practice of structural equation modeling. Guilford publications.
Krejcie, R. V, & Morgan, D. (1970). Small-Samlpe Techniques. The NEA Research Bulletin, 30, 607–610.
Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770–791.
Morched, S., & Jarboui, A. (2021). Is business performance linked to organizational culture? A study from Tunisian SMEs through subjective measures. Qualitative Research in Financial Markets, 13(1), 59–81. https://doi.org/10.1108/QRFM-01-2020-0005
Naranjo-Valencia, J. C., Jiménez-Jiménez, D., & Sanz-Valle, R. (2016). Studying the links between organizational culture, innovation, and performance in Spanish companies. Revista Latinoamericana de Psicologia, 48(1), 30–41. https://doi.org/10.1016/j.rlp.2015.09.009
O’Neill, D., De Vries, J., & Comiskey, C. M. (2021). Leadership and community healthcare reform: a study using the Competing Values Framework (CVF). Leadership in Health Services, 34(4), 485–498. https://doi.org/10.1108/LHS-01-2021-0007
Ogbonna, E., & Harris, L. C. (2000). Leadership style, organizational culture and performance: empirical evidence from UK companies. International Journal of Human Resource Management, 11(4), 766–788.
Patyal, V. S., Ambekar, S., & Prakash, A. (2020). Organizational culture and total quality management practices in Indian construction industry. International Journal of Productivity and Performance Management, 69(5), 895–913. https://doi.org/10.1108/IJPPM-10-2018-0368
Shahzad, F., Xiu, G. Y., & Shahbaz, M. (2017). Organizational culture and innovation performance in Pakistan’s software industry. Technology in Society, 51, 66–73. https://doi.org/10.1016/j.techsoc.2017.08.002
Shirokova, G., Bogatyreva, K., Beliaeva, T., & Puffer, S. (2016). Entrepreneurial orientation and firm performance in different environmental settings: contingency and configurational approaches. Journal of Small Business and Enterprise Development, 23(3), 703–727.
Singh, V., Kumar, A., & Singh, T. (2018). Impact of TQM on organisational performance: The case of Indian manufacturing and service industry. Operations Research Perspectives, 5(August 2017), 199–217. https://doi.org/10.1016/j.orp.2018.07.004
Umrani, W. A., Kura, K. M., & Ahmed, U. (2018). Corporate entrepreneurship and business performance. PSU Research Review, 2(1), 59–80. https://doi.org/10.1108/prr-12-2016-0011
Valmohammadi, C., & Roshanzamir, S. (2015). The guidelines of improvement: Relations among organizational culture, TQM and performance. International Journal of Production Economics, 164, 167–178. https://doi.org/10.1016/j.ijpe.2014.12.028
Yesil, S., & Kaya, A. (2013). The effect of organizational culture on firm financial performance: Evidence from a developing country. Procedia - Social and Behavioral Sciences, 81, 428–437. https://doi.org/10.1016/j.sbspro.2013.06.455
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Published
2022-08-06
How to Cite
Harianto, P., & Zainol, Z. (2022). The Effect of Organizational Culture’s Dimension, Total Quality Management and Entrepreneurial Orientation towards the Performance of Herbal Enterprises in Indonesia. Journal of Contemporary Issues and Thought, 12(2), 41–51. https://doi.org/10.37134/jcit.vol12.2.5.2022
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