THE EFFECT OF RESOURCES ON OPERATIONAL PERFORMANCE THROUGH INNOVATION STRATEGY AND BUSINESS ENVIRONMENT AS MODERATOR (RATTAN SMES IN PALU CITY)

Abstract

The general purpose of this study is to examine the determinants of the operating performance of rattan SMEs in Palu. Specifically, it intends to: (1) test the effect of resources on operating performance, (2) test the effect of resources on innovation strategies, (3) test the effect of innovation strategies on operating performance, (4) test the uncertainty of the business environment as moderating the effect of innovation strategy on performance of the Palu City rattan SMEs. This study involves 15 rattan SMEs in Palu City by means of census method. Smart PLS is considered appropriate for data analysis. The results confirm that (1) resources have a significant effect on the performance of rattan SMEs in Palu city, (2) Resources significantly influences their innovation strategy, (3) the innovation strategy has a significant effect on their operational performance, (4) the business environment moderates the effect of innovation strategy on their operational performance.