IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxiiy2019i2p64-82.html
   My bibliography  Save this article

Determinants of Business Models Innovation of Islamic Bank in Indonesia

Author

Listed:
  • Firman Jatnika
  • Nury Effendi
  • Erie Febrian
  • Mokhamad Anwar

Abstract

Purpose: This study analyzes the effect of dynamic capabilities, customer knowledge management, and religiosity each as a determinant that drives all components and systems in an organization to run business model innovations, to improve business performance to be healthy and to grow sustainably. Design/Methodology/Approach: The quantitative, descriptive and explanatory analysis was taken by using the SEM-PLS method. Research data were collected through questionnaires with participants of this study being senior managers of Indonesia Islamic banks. Findings: The results show that religiosity variable together with the Customer Knowledge Management and Dynamic Capability variables simultaneously and partially through business model innovations are proved to influence business performance. Religiosity variables are positive and significant determinants of business model innovation. Religiosity, Customer Knowledge Management, and Dynamic Capability do not directly influence business performance. Practical Implications: The results show that the religiosity variable, alongside Customer Knowledge Management and Dynamic Capability variables simultaneously through business model innovations influences business performance and they can be used by the top management to improve performance. Originality/Value: The study implies a recommendation for Islamic banks to allocate enough resources and invest in improving learning capabilities, building tools and methodologies to find out customer needs in depth.

Suggested Citation

  • Firman Jatnika & Nury Effendi & Erie Febrian & Mokhamad Anwar, 2019. "Determinants of Business Models Innovation of Islamic Bank in Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 64-82.
    • Handle: RePEc:ers:journl:v:xxii:y:2019:i:2:p:64-82
    as

    Download full text from publisher

    File URL: https://ersj.eu/journal/1426/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Morris, Michael & Schindehutte, Minet & Allen, Jeffrey, 2005. "The entrepreneur's business model: toward a unified perspective," Journal of Business Research, Elsevier, vol. 58(6), pages 726-735, June.
    2. Lee, Ruby P. & Naylor, Gillian & Chen, Qimei, 2011. "Linking customer resources to firm success: The role of marketing program implementation," Journal of Business Research, Elsevier, vol. 64(4), pages 394-400, April.
    3. R. Rupeika-Apoga & S.H. Zaidi & Y.E. Thalassinos & E.I. Thalassinos, 2018. "Bank Stability: The Case of Nordic and Non-Nordic Banks in Latvia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 39-55.
    4. Cantrell, Brett W. & Yust, Christopher G., 2018. "The relation between religiosity and private bank outcomes," Journal of Banking & Finance, Elsevier, vol. 91(C), pages 86-105.
    5. Yu-Shan Chen, 2008. "The Positive Effect of Green Intellectual Capital on Competitive Advantages of Firms," Journal of Business Ethics, Springer, vol. 77(3), pages 271-286, February.
    6. Muhammad Farrukh & Sonia Butt & Shaheen Mansori, 2015. "Innovation capability: The role of Islamic work ethics," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 5(7), pages 125-131, July.
    7. Nicolas Dahan & Jonathan P. Doh & Jennifer Oetzel & Michael Yaziji, 2010. "Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets," Post-Print hal-00565517, HAL.
    8. Sugeng Wahyudi & Fernando Goklas & Maria Rio Rita & Hersugondo Hersugondo & Rio Dhani Laksana, 2019. "The Determinants of Corporate Hedging Policy: A Case Study from Indonesia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 113-129.
    9. Shahin Mokhlesian & Magnus Holm&#E9;n, 2012. "Business model changes and green construction processes," Construction Management and Economics, Taylor & Francis Journals, vol. 30(9), pages 761-775, September.
    10. Jacob Dalby & Rainer Lueg & Lea Stenskov Nielsen & Louise Pedersen & Andreea Catalina Tomoni, 2014. "National Culture and Business Model Change — A Framework for Successful Expansions," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 22(04), pages 463-483.
    11. Richter, Mario, 2013. "Business model innovation for sustainable energy: German utilities and renewable energy," Energy Policy, Elsevier, vol. 62(C), pages 1226-1237.
    12. Brettel, Malte & Strese, Steffen & Flatten, Tessa C., 2012. "Improving the performance of business models with relationship marketing efforts – An entrepreneurial perspective," European Management Journal, Elsevier, vol. 30(2), pages 85-98.
    13. Wu, Jiebing & Guo, Bin & Shi, Yongjiang, 2013. "Customer knowledge management and IT-enabled business model innovation: A conceptual framework and a case study from China," European Management Journal, Elsevier, vol. 31(4), pages 359-372.
    14. Desyllas, Panos & Sako, Mari, 2013. "Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance," Research Policy, Elsevier, vol. 42(1), pages 101-116.
    15. Frank Birkin & Thomas Polesie & Linda Lewis, 2009. "A new business model for sustainable development: an exploratory study using the theory of constraints in Nordic organizations," Business Strategy and the Environment, Wiley Blackwell, vol. 18(5), pages 277-290, July.
    16. Muhammad Farrukh & Sonia Butt & Shaheen Mansori, 2015. "Innovation Capability: The Role of Islamic Work Ethics," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 5(7), pages 125-131.
    17. Carina Eriksson & Thomas Kalling & Maria Åkesson & Tobias Fredberg, 2008. "Business Models for M-Services: Exploring the E-Newspaper Case from a Consumer View," Journal of Electronic Commerce in Organizations (JECO), IGI Global, vol. 6(2), pages 29-57, April.
    18. repec:ers:journl:v:vi:y:2018:i:2:p:39-55 is not listed on IDEAS
    19. Di Minin, Alberto & Frattini, Federico & Bianchi, Mattia & Bortoluzzi, Guido & Piccaluga, Andrea, 2014. "Udinese Calcio soccer club as a talents factory: Strategic agility, diverging objectives, and resource constraints," European Management Journal, Elsevier, vol. 32(2), pages 319-336.
    20. Raphael Amit & Christoph Zott, 2001. "Value creation in E‐business," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 493-520, June.
    21. E. W. Chirwa, 2003. "Determinants of commercial banks' profitability in Malawi: a cointegration approach," Applied Financial Economics, Taylor & Francis Journals, vol. 13(8), pages 565-571.
    22. B. Demil & X. Lecocq, 2010. "Business model evolution : in search of dynamic consistency," Post-Print hal-00572915, HAL.
    23. Lin, Hai-Fen & Su, Jing-Qin & Higgins, Angela, 2016. "How dynamic capabilities affect adoption of management innovations," Journal of Business Research, Elsevier, vol. 69(2), pages 862-876.
    24. Bindu Singh & M.K. Rao, 2017. "To Gear Up Firm Performance in Banking Industry: The Role of Dynamic Capability," Global Business Review, International Management Institute, vol. 18(4), pages 1019-1040, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dotun Olaleye Faloye & Idowu Owoeye & Kunle Jayeola, 2021. "The Key Drivers of Business Model Innovation in Developing Countries’ Firms: Survey of Micro and Small Scale Enterprises in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(07), pages 148-157, July.
    2. Dotun Olaleye Faloye & Idowu Owoeye & Kunle Jayeola, 2021. "The Key Drivers of Business Model Innovation in Developing Countries’ Firms: Survey of Micro and Small Scale Enterprises in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(7), pages 148-157, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Belussi, Fiorenza & Orsi, Luigi & Savarese, Maria, 2019. "Mapping Business Model Research: A Document Bibliometric Analysis," Scandinavian Journal of Management, Elsevier, vol. 35(3).
    2. Yuan Jing, 2022. "The Relationship Between Business Model Innovation and Operational Performance of Incubator Enterprise," International Journal of Science and Business, IJSAB International, vol. 16(1), pages 153-191.
    3. Mark Loon & Roy Chik, 2019. "Efficiency-centered, innovation-enabling business models of high tech SMEs: Evidence from Hong Kong," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 87-111, March.
    4. Esben Rahbek Gjerdrum Pedersen & Wencke Gwozdz & Kerli Kant Hvass, 2018. "Exploring the Relationship Between Business Model Innovation, Corporate Sustainability, and Organisational Values within the Fashion Industry," Journal of Business Ethics, Springer, vol. 149(2), pages 267-284, May.
    5. Marlena Ciechan-Kujawa & Michal Buszko, 2020. "The Susceptibility of the Business Model to Changes - Empirical Analysis of Internal Determinants of Variability," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 739-757.
    6. Lambert, Susan C. & Davidson, Robyn A., 2013. "Applications of the business model in studies of enterprise success, innovation and classification: An analysis of empirical research from 1996 to 2010," European Management Journal, Elsevier, vol. 31(6), pages 668-681.
    7. Arash Rezazadeh & Ana Carvalho, 2018. "A value-based approach to business model innovation: Defining the elements of the concept," NIPE Working Papers 12/2018, NIPE - Universidade do Minho.
    8. Qingfeng Tian & Shuo Zhang & Huimin Yu & Guangming Cao, 2019. "Exploring the Factors Influencing Business Model Innovation Using Grounded Theory: The Case of a Chinese High-End Equipment Manufacturer," Sustainability, MDPI, vol. 11(5), pages 1-16, March.
    9. Li, Feng, 2020. "The digital transformation of business models in the creative industries: A holistic framework and emerging trends," Technovation, Elsevier, vol. 92.
    10. Marko Peric & Jelena Durkin & Vanja Vitezic, 2017. "The Constructs of a Business Model Redefined: A Half-Century Journey," SAGE Open, , vol. 7(3), pages 21582440177, September.
    11. Balboni, Bernardo & Bortoluzzi, Guido & Pugliese, Roberto & Tracogna, Andrea, 2019. "Business model evolution, contextual ambidexterity and the growth performance of high-tech start-ups," Journal of Business Research, Elsevier, vol. 99(C), pages 115-124.
    12. Hu, Baoliang, 2014. "Linking business models with technological innovation performance through organizational learning," European Management Journal, Elsevier, vol. 32(4), pages 587-595.
    13. Adam Jabłoński & Marek Jabłoński, 2019. "Trust as a Key Factor in Shaping the Social Business Model of Water Supply Companies," Sustainability, MDPI, vol. 11(20), pages 1-48, October.
    14. Mara Del Baldo & Maria-Gabriella Baldarelli, 2017. "Renewing and improving the business model toward sustainability in theory and practice," International Journal of Corporate Social Responsibility, Springer, vol. 2(1), pages 1-13, December.
    15. Baoliang Hu & Wei Huang & Shuai Yan & Guang Liu & Tao Zhang, 2020. "Business Model Design and Customer Loyalty: The Mediating Role of Customer Citizenship Behavior," Sustainability, MDPI, vol. 12(17), pages 1-14, August.
    16. Cinzia Battistella & Gianluca Murgia & Fabio Nonino, 2021. "Free-driven web-based business models," Electronic Commerce Research, Springer, vol. 21(2), pages 445-486, June.
    17. Ahmed, Tanvir & D'Souza, Clare & Ahmed, Rafiuddin & Nanere, Marthin & Khashru, Amir, 2021. "Unpacking microlevel social-purpose organisation in a less affluent economy: The cases of type 2 social business," Journal of Business Research, Elsevier, vol. 125(C), pages 621-629.
    18. Luigi Fusco Girard & Marilena Vecco, 2021. "The “Intrinsic Value” of Cultural Heritage as Driver for Circular Human-Centered Adaptive Reuse," Sustainability, MDPI, vol. 13(6), pages 1-28, March.
    19. Helms, Thorsten, 2016. "Asset transformation and the challenges to servitize a utility business model," Energy Policy, Elsevier, vol. 91(C), pages 98-112.
    20. Rong, Ke & Patton, Dean & Chen, Weiwei, 2018. "Business models dynamics and business ecosystems in the emerging 3D printing industry," Technological Forecasting and Social Change, Elsevier, vol. 134(C), pages 234-245.

    More about this item

    Keywords

    Business model innovation; Islamic Banks; dynamic capabilities; customer knowledge management; religiosity.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxii:y:2019:i:2:p:64-82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.