IDEAS home Printed from https://ideas.repec.org/a/mgs/ijoied/v6y2020i4p82-95.html
   My bibliography  Save this article

The Impact of External Integration and Internal Integration to Product Innovation and Competitive Advantage on Small and Medium Enterprises (SMEs)

Author

Listed:
  • Chamdan Purnama

    (School of Economics Al-Anwar Mojokerto, Indonesia)

  • Ludi Wishnu Wardana

    (Faculty of Economics, State University of Malang, Indonesia)

  • Yusriyah Rahmah

    (Faculty of Computer Science, University of Brawijaya Malang)

  • Dinda Fatmah

    (School of Economics Al-Anwar Mojokerto, Indonesia)

  • Mirhamida Rahmah

    (School of Economics Al-Anwar Mojokerto, Indonesia)

Abstract

This study aims to analyze the influence of external integration and internal integration to product innovation and competitive advantage. The research was conducted on a sample of 180 manager small and medium enterprises (SMEs) in East Java clothing taken with stratified cluster sampling technique. Selection of sample areas based on areas that have the potential development of the industry. Data collection was done by using questionnaire that has been tested for its validity and reliability. Data analysis used Structural Equation Modeling (SEM) analysis with help of AMOS version 21 program. Based on the analysis of SEM, it was found that the first, external integration influence on product innovation SMEs and affect the competitive advantage of SMEs. Second, the internal integration effect on product innovation SMEs and affect the competitive advantage of SMEs. Third, product innovation SMEs effect on the competitive advantage of SMEs. In this respect, the company needs to build a collaboration of external integration and internal integration in order to improve product innovation and competitive advantage of SMEs.

Suggested Citation

  • Chamdan Purnama & Ludi Wishnu Wardana & Yusriyah Rahmah & Dinda Fatmah & Mirhamida Rahmah, 2020. "The Impact of External Integration and Internal Integration to Product Innovation and Competitive Advantage on Small and Medium Enterprises (SMEs)," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 6(4), pages 82-95, October.
    • Handle: RePEc:mgs:ijoied:v:6:y:2020:i:4:p:82-95
    as

    Download full text from publisher

    File URL: https://researchleap.com/wp-content/uploads/2020/11/06.-The_Impact_of_External_Integration_and_Internal_Integration_to_Product.pdf
    Download Restriction: no
    File URL: https://researchleap.com/the-impact-of-external-integration-and-internal-integration-to-product-innovation-and-competitive-advantage-on-small-and-medium-enterprises-smes/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chamdan Purnama & Waspodo Tjipto Subroto, 2016. "Competition Intensity, Uncertainty Environmental on the use of Information Technology and its Impact on Business Performance Small and Medium Enterprises," International Review of Management and Marketing, Econjournals, vol. 6(4), pages 984-992.
    2. Antonella Martini & Paolo Neirotti & Francesco Paolo Appio, 2017. "Knowledge Searching, Integrating and Performing: Always a Tuned Trio for Innovation?," Post-Print halshs-02292295, HAL.
    3. Prajogo, Daniel & Olhager, Jan, 2012. "Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration," International Journal of Production Economics, Elsevier, vol. 135(1), pages 514-522.
    4. Ekaterina Pustynnikova & Elena Uskova, 2017. "The Formation of Competitive Advantages for Corporate Structures Based on the Cluster Integration," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 500-510.
    5. Chamdan Purnama & Waspodo Tjipto Subroto, 2016. "Competition Intensity, Uncertainty Environmental on the use of Information Technology and its Impact on Business Performance Small and Medium Enterprises," International Review of Management and Marketing, Econjournals, vol. 6(4), pages 984-992.
    6. Li, Suhong & Ragu-Nathan, Bhanu & Ragu-Nathan, T.S. & Subba Rao, S., 2006. "The impact of supply chain management practices on competitive advantage and organizational performance," Omega, Elsevier, vol. 34(2), pages 107-124, April.
    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. Moses Waiganjo & Danijela Godinic & Bojan Obrenovic, 2021. "Strategic Planning and Sustainable Innovation During the COVID-19 Pandemic: A Literature Review," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 7(5), pages 52-59, December.
    2. Asif Arshad Ali & Asif Mahmood, 2023. "How Do Supply Chain Integration and Product Innovation Capability Drive Sustainable Operational Performance?," Sustainability, MDPI, vol. 16(1), pages 1-20, December.

    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. Prajogo, Daniel & Toy, Jordan & Bhattacharya, Ananya & Oke, Adegoke & Cheng, T.C.E., 2018. "The relationships between information management, process management and operational performance: Internal and external contexts," International Journal of Production Economics, Elsevier, vol. 199(C), pages 95-103.
    2. Ra’ed Masa’deh & Ismail Muheisen & Bader Obeidat & Ashraf Bany Mohammad, 2022. "The Impact of Supply Chain Integration on Operational Performance: An Empirical Study," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    3. Yang, Qian & Zhao, Xiande, 2016. "Are logistics outsourcing partners more integrated in a more volatile environment?," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 211-220.
    4. Yanling Yang & Yanling Zheng & Guojie Xie & Yu Tian, 2022. "The Influence Mechanism of Strategic Partnership on Enterprise Performance: Exploring the Chain Mediating Role of Information Sharing and Supply Chain Flexibility," Sustainability, MDPI, vol. 14(8), pages 1-23, April.
    5. Barnes, Jane & Liao, Ying, 2012. "The effect of individual, network, and collaborative competencies on the supply chain management system," International Journal of Production Economics, Elsevier, vol. 140(2), pages 888-899.
    6. Sener, Abdurrezzak & Barut, Mehmet & Oztekin, Asil & Avcilar, Mutlu Yuksel & Yildirim, Mehmet Bayram, 2019. "The role of information usage in a retail supply chain: A causal data mining and analytical modeling approach," Journal of Business Research, Elsevier, vol. 99(C), pages 87-104.
    7. Abdurrezzak Sener & Mehmet Barut & Ali Dag & Mehmet Bayram Yildirim, 2021. "Impact of commitment, information sharing, and information usage on supplier performance: a Bayesian belief network approach," Annals of Operations Research, Springer, vol. 303(1), pages 125-158, August.
    8. Jing Li & Chien-Wen Chen & Chi-Hui Wu & Hsing-Chun Hung & Ching-Torng Lin, 2020. "How do Partners Benefit from IT Use in Supply-Chain Management: An Empirical Study of Taiwan’s Bicycle Industry," Sustainability, MDPI, vol. 12(7), pages 1-24, April.
    9. Dewi Hanggraeni & Beata Ślusarczyk & Liyu Adhi Kasari Sulung & Athor Subroto, 2019. "The Impact of Internal, External and Enterprise Risk Management on the Performance of Micro, Small and Medium Enterprises," Sustainability, MDPI, vol. 11(7), pages 1-17, April.
    10. Nina Shin & Jung-Sang Yoo & Ik-Whan G. Kwon, 2020. "Fostering Trust and Commitment in Complex Project Networks through Dedicated Investment in Partnership Management," Sustainability, MDPI, vol. 12(24), pages 1-21, December.
    11. Jafari, Hamid & Eslami, Mohammad H. & Paulraj, Antony, 2022. "Postponement and logistics flexibility in retailing: The moderating role of logistics integration and demand uncertainty," International Journal of Production Economics, Elsevier, vol. 243(C).
    12. Gunasekaran, Angappa & Papadopoulos, Thanos & Dubey, Rameshwar & Wamba, Samuel Fosso & Childe, Stephen J. & Hazen, Benjamin & Akter, Shahriar, 2017. "Big data and predictive analytics for supply chain and organizational performance," Journal of Business Research, Elsevier, vol. 70(C), pages 308-317.
    13. Acar, Yavuz & Atadeniz, Sukran Nilvana, 2015. "Comparison of integrated and local planning approaches for the supply network of a globally-dispersed enterprise," International Journal of Production Economics, Elsevier, vol. 167(C), pages 204-219.
    14. Panagiotis Trivellas & Georgios Malindretos & Panagiotis Reklitis, 2020. "Implications of Green Logistics Management on Sustainable Business and Supply Chain Performance: Evidence from a Survey in the Greek Agri-Food Sector," Sustainability, MDPI, vol. 12(24), pages 1-29, December.
    15. Pietro Cunha Dolci & Antonio Carlos Gastaud Maçada, 2014. "Information technology investments and supply chain governance," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 18(2), pages 217-235.
    16. Priom Mahmud & Sanjoy Kumar Paul & Abdullahil Azeem & Priyabrata Chowdhury, 2021. "Evaluating Supply Chain Collaboration Barriers in Small- and Medium-Sized Enterprises," Sustainability, MDPI, vol. 13(13), pages 1-28, July.
    17. Kumar, V.N.S.A. & Kumar, V. & Brady, M. & Garza-Reyes, Jose Arturo & Simpson, M., 2017. "Resolving forward-reverse logistics multi-period model using evolutionary algorithms," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 458-469.
    18. Gallear, David & Ghobadian, Abby & Chen, Weifeng, 2012. "Corporate responsibility, supply chain partnership and performance: An empirical examination," International Journal of Production Economics, Elsevier, vol. 140(1), pages 83-91.
    19. Sung Tae Kim & Hong-Hee Lee & Taewon Hwang, 2020. "Logistics integration in the supply chain: a resource dependence theory perspective," International Journal of Quality Innovation, Springer, vol. 6(1), pages 1-14, December.
    20. Prof Wang Jiuhe & Matari, Davis Festo & Kwabena Amanor Anim-Boateng & Lincoln G F Morris Jr, 2024. "“Assessing the Water Supply Chain Activities in Tanzania Water Authorities, a case of Arusha regionâ€," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(4), pages 1406-1435, April.

    More about this item

    Keywords

    External integration (EI); Internal integration (II); Product innovation (PI); Competitive advantage (CA); Small and medium enterprises (SMEs);
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

    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:mgs:ijoied:v:6:y:2020:i:4:p:82-95. 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: Bojan Obrenovic (email available below). General contact details of provider: https://researchleap.com/ .

    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.