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Business Environment Turbulence and Industrial Connections Instruments as Determinants of Firm Performance Mediated by an Industrial Connections Climate

Author

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  • Muhamad Faisal

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Mohammad Syamsul Maarif

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Idqan Fahmi

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Budi Yulianto

    (School of Business, IPB University, Bogor 16151, Indonesia)

Abstract

The year 2022 was characterized by several major events that occurred after the COVID-19 pandemic, which devastated business sectors in Indonesia and the rest of the world. The current business environment is experiencing accelerated turbulence characterized by an increasing intensity of business competition, rapid changes in the market, and a changing industrial connections climate. The industrial connection climate of an institution can be measured by the pattern of relationships that occur between workers and management. Industrial connections are fundamental to the sustainability of an organization and are understood as an important factor in influencing institutional performance. This research aims to look at the impact of industrial connections instruments and turbulence in a business environment on the industrial connections climate. In addition, whether the industrial connections climate relates to firm performance was also explored. The research design is inferential and quantitative, and sampling and snowball sampling methods, with a total sample of 406, were used. The data collected were analyzed using a Structural Equation Model using LISREL version 8.70. This research used a survey to build an SEM model that tests the effect of organizational turbulence and industrial connections instruments on organizational climate directly and tested mediation of organizational performance. This research shows that an industrial connections climate has a positive effect on business turbulence and industrial connections instruments. However, industrial connections instruments have a greater impact on the industrial connections climate. This is because industrial connections instruments are the media used in the implementation of industrial connections in organizations. This research also confirms that an industrial connections climate is positively related to organizational performance. The result of the indirect influence (IE) means that the industrial connections climate is able to mediate the influence of industrial connections instruments on organizational performance.

Suggested Citation

  • Muhamad Faisal & Mohammad Syamsul Maarif & Idqan Fahmi & Budi Yulianto, 2022. "Business Environment Turbulence and Industrial Connections Instruments as Determinants of Firm Performance Mediated by an Industrial Connections Climate," Sustainability, MDPI, vol. 14(19), pages 1-13, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:19:p:12150-:d:925107
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    References listed on IDEAS

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    1. Amanda Pyman & Peter Holland & Julian Teicher & Brian K. Cooper, 2010. "Industrial Relations Climate, Employee Voice and Managerial Attitudes to Unions: An Australian Study," British Journal of Industrial Relations, London School of Economics, vol. 48(2), pages 460-480, June.
    2. Batara Surya & Hernita Hernita & Agus Salim & Seri Suriani & Iwan Perwira & Yulia Yulia & Muhlis Ruslan & Kafrawi Yunus, 2022. "Travel-Business Stagnation and SME Business Turbulence in the Tourism Sector in the Era of the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(4), pages 1-37, February.
    3. Putri Mega Desiana & Mohamad Syamsul Ma’arif & Herien Puspitawati & Riani Rachmawati & Ruslan Prijadi & Mukhamad Najib, 2022. "Strategy for Sustainability of Social Enterprise in Indonesia: A Structural Equation Modeling Approach," Sustainability, MDPI, vol. 14(3), pages 1-19, January.
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    Cited by:

    1. Yan Han & Cheng Pan & Fengjun Jin, 2023. "Does the Improvement of the Business Environment Improve the Innovation Efficiency of Enterprises? Evidence from the Listed Companies in China," Sustainability, MDPI, vol. 15(14), pages 1-25, July.

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