The Effect of Entrepreneurship Orientation and Organizational Culture on Funding Decisions and Organizational Performance on Spa Product Smes in Bali Province

  • Putu Ngr. Suyatna Yasa, Ni Wayan Sitiari, Imam Kreswanto

Abstract

This study aims to explain the constructive relationship of entrepreneurial orientation and organizational culture to funding decisions and organizational performance that are governed by financial performance, then explain the role of funding decisions in mediating the influence of entrepreneurial orientation and organizational culture on financial performance. This research was conducted on Small and Medium Enterprises (UKM) spa products in the Province of Bali. In general, financial research examines the relationship between financial variables, but studies that examine the role of non-financial variables (entrepreneurial orientation and Hofstede's national culture) on funding decisions and financial performance have not been widely studied. Based on phenomena and research gaps the results of previous studies are considered important for examined. Respondents of this study were 38 managers or managers of spa products SMEs in Bali Province. Data analysis was performed using PLS (partial least square). The results of this study indicate that: (1) Entrepreneurial orientation has a positive and significant influence on financial performance. (2) Entrepreneurial orientation has a negative and significant influence on funding decisions. (3) Organizational culture has a positive and significant influence on funding decisions. (4) Organizational culture has a positive and not significant influence on financial performance. (5) Funding decisions have a negative and significant influence on financial performance. (6) Funding decisions are not a mediating variable between entrepreneurial orientation to financial performance. (7) Funding decisions are not a mediating variable between organizational culture and financial performance. The findings of this study indicate that the application of indicators contained in Hofstede's national cultural concept has not been able to improve financial performance in spa products SMEs in Bali Province. It is suggested to further researchers to examine other non-financial variables that influence financial performance and for managers or managers of spa products SMEs are advised to pay attention to the company's long-term orientation.

Published
2020-06-05