Does Adapting the Business Environment Have a More Dominant Effect on Business Performance Than Optimizing Company’s Resources?: Strategies to Improve Business Performance

Purpose: This study aims to examine during the Covid-19 pandemic situation in the ISP Industry in Indonesia, what is the effect of adapting to changes in the business environment on business performance and the effect of optimizing company resources to business performance, and which ones have a more dominant effect to business performance? Research Design: This study uses a quantitative research approach. Observations were made in a cross-section/one-shot, in 2022. The population of this study was the ISP industry, which amounted to 474 companies, and the unit of observation was the management. Sampling used stratified random sampling. ISPs are grouped based on the size of each company based on the number of customers and branch cities which are divided into 3 groups, namely: small, medium, and large. Samples were taken from as many as 100 respondents. Sampling from each classification is done randomly based on a list of population members. Testing the causality hypothesis in this study used Partial Least Square (PLS). Result: The hypothesis testing shows that both adapting the business environment and optimizing the company’s resources have a direct significant effect on business performance. This study shows the results that optimizing a company's resources has a more dominant effect on business performance rather than adapting to changes in the business environment. Despite changes in the business environment, namely the weakening of the economy and the decline in people's purchasing power due to the covid-19 pandemic. Findings: The results of this study provide managerial implications for ISP companies in Indonesia that efforts to improve business performance can be done by optimizing and developing more adequate ownership of the company’s resources and following by adapting to changes in the business environment. Optimizing and developing of company’s resources needs to be prioritized over intangible resources then tangible resources. Efforts to adapt to the change in the business environment need to be prioritized on the macro-environment first then the micro-environment. On Business Performance, Company needs to prioritize achieving better ROIC, increase market share and asset growth, better ROA, and Ebitda Margin.