The Role of Business Strategy in Mediating the Influence of Management Capabilities on Business Performance

Abstract

The ever-changing business environment, competition of similar industries and the presence of new entrant industries and exacerbated by the pandemic condition COVID 19 is very demanding for companies in improving management capabilities and the application of good business strategies to survive and achieve competitive advantages of the company. This research was conducted to determine the influence of management capabilities by focusing on the implementation of strategies on IMK business performance. This research was conducted in micro small business (IMK) food industry in Gorontalo who is also the owner and manager of small and medium embroidery industry at PT Jawa Timur.

The method used in this study is a survey method with a research population is a businessman / owner of IMK with a sample number of 377 people the method of sampling research is Non-Probability with purposive sampling techniques. The research uses quantitative approach with PLS (Partial Least Square) analysis tool.

The results showed that 1). Management capabilities have a significant impact on business strategy and directly affect business performance; 2). Business strategy has proven to have a significant positive effect in mediating the influence of management capabilities on business performance