technological capability as antecedent to improve the

International Journal of Civil Engineering and Technology (IJCIET) Volume 8, Issue 9, September 2017, pp. 1111–1116, Article ID: IJCIET_08_09_124 Available online at http://http://www.iaeme.com/ijciet/issues.asp?JType=IJCIET&VType=8&IType=9 ISSN Print: 0976-6308 and ISSN Online: 0976-6316 © IAEME Publication

Scopus Indexed

TECHNOLOGICAL CAPABILITY AS ANTECEDENT TO IMPROVE THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN THE ARCHIPELAGIC GEOGRAPHIC REGION Arina Rubyasih Department Information, Universitas Terbuka, Jakarta, Indonesia Steven Anthony Department of Public Administration, Universitas Terbuka, Jakarta, Indonesia Yuyun Yunita Puspa Department Information, Universitas Terbuka, Jakarta, Indonesia Yasir Musdin Pidu Management Department of Faculty Economics, Universitas Terbuka, Jakarta, Indonesia Angga Sucitra Hendrayana Management Department of Faculty Economics, Universitas Terbuka, Jakarta, Indonesia Rakhmini Juwita Accounting Department of Faculty Economics, Universitas Terbuka, Jakarta, Indonesia Muhammad Agusalim Management Department of Faculty Economics, Universitas Terbuka, Jakarta, Indonesia Inneke Putri Widyani Accounting Department of Faculty Economics, Universitas Terbuka, Jakarta, Indonesia ABSTRACT This is a qualitative research which will be further developed in quantitative. A survey conducted on SME Furniture in Jepara Central Java as a pilot test to show the right construction. We find that technological capabilities are already being utilized by business agents to produce superior products to competitors. The role of integrated information in the system becomes a communication bridge to improve performance and connect SMEs with other parties. Employee's knowledge becomes the power of the company to be able to compete in the market. So that integrated technology and

http://www.iaeme.com/IJCIET/index.asp

1111

[email protected]

Technological Capability as Antecedent to Improve the Performance of Small and Medium Enterprises in the Archipelagic Geographic Region

information systems supported with knowledge and utilization can be the company's advantage. Key words: Technology Capability, Information System Integration, Competitive Advantage, Archipelago Geographical Region, Innovative, Performance. Cite this Article: Arina Rubyasih, Steven Anthony, Yuyun Yunita Puspa, Yasir Musdin Pidu, Angga Sucitra Hendrayana, Rakhmini Juwita, Muhammad Agusalim, Inneke Putri Widyani, Technological Capability as Antecedent to Improve the Performance of Small and Medium Enterprises in the Archipelagic Geographic Region. International Journal of Civil Engineering and Technology, 8(9), 2017, pp. 1111–1116. http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=8&IType=9

1. INTRODUCTION Probability of business development has always been very risky in making decisions (Fatia Fatimah, Dedi Rosadi, RB Fajriya Hakim, & Jose Carlos R. Alcantud, 2017). Technological developments that keep on increasing making the company must increase the speed of its service as well (Andriyansah & Sufian, 2017). Our empirical study found that technology is a significant right to improve performance (Chang, Park, & Chaiy, 2010; Plewa, Troshani, Francis, & Rampersad, 2012; Sok, O’Cass, & Sok, 2013; Kevin J. Trainor, Andzulis, Rapp, & Agnihotri, 2014; Kevin J Trainor, Rapp, Beitelspacher, & Schillewaert, 2011). But we also found that the technological sophistication has not been able to show performance (Isa & Othman, 2017; Legris, Ingham, & Collerette, 2003; Pentina, Koh, & Le, 2012), since it needs time and requires adaptation with the convenience of its users. Many variables drive the company's marketing performance to be better than the previous period. It seems to be delivered by Andriyansah et al. (2017) that leadership has a very crucial role to improve marketing ability, in addition the role of accounting is increasingly showing its quality in shaping marketing programs. But the application of technology is not as easy as it might be. The Technology Acceptance Model (TAM) theory discusses the linkage between technology and its users (Legris et al., 2003). Andriyansah and Aryanto (2017) Humans are not as simply as users of technology, they also created advanced technology to facilitate and alleviate the hard works. For example, travelling or things related to exploring the world. There exists the role of technology to facilitate or accelerate the flow of human movement and the movement of information. This is based on the development of small and medium-sized businesses in Indonesia (Handayani, Anggraeni, Andriyansah, Suharnomo, & Rahardja, 2017), which in our opinion their presence in the business world indirectly forces drivers and users at once to understand and utilize technology, with the aim of proving the hypothetical evidence that is the higher the utilization of technology, the higher the performance of the marketing company.

2. LITERATUREE REVIEW 2.1. Technological Capability Many technological experts can provide significant input to the development of the company (Retnawati, 2016b; Su, Xie, Liu, & Sun, 2013). This construct can act as an exogenous performance enhancer with overall role for industry. Baker and Sovacool (2017) this role becomes very important for MSMEs in Indonesia, considering Indonesia is a country with a very large number of islands, so that the existence of technology for production and marketing http://www.iaeme.com/IJCIET/index.asp

1112

[email protected]

Arina Rubyasih, Steven Anthony, Yuyun Yunita Puspa, Yasir Musdin Pidu, Angga Sucitra Hendrayana, Rakhmini Juwita, Muhammad Agusalim, Inneke Putri Widyani

becomes the center of all. In addition, the importance of technological capability in its application to the archipelago is that it can explore regional excellence (Morrison, Pietrobelli, & Rabellotti, 2017). This technology-based capability stems from competitive advantages for competition, so companies will be increasingly encouraged to improve capabilities that require the integration of multiple units, therefore mapping the working area using this technology can be used as a controller and to facilitate and shorten the time (Afuah, 2002).

2.2. Integrated Information System Information is not all useful, but there is a rank in information that companies need to know to take strategic action (F. Fatimah, D. Rosadi, R. F. Hakim, & J. Alcantud, 2017). The integration of this information is to support the company's technological capabilities in improving performance. Internal integration for accounting, finance, marketing and other fields is inseparable, means that technology won’t be perfectly worked if it does not integrate with others (Scheer & Schneider, 1998). Such communication systems are not only required for large-scale enterprises but, integrated systems for small businesses as well (Thong, 1999). The role of management has to be improved to obtain and to control the information system, so as not to be interrupted both internal and stakeholders (Gefen, Karahanna, & Straub, 2003).

2.3. Perfomance Performance is always estimated from an increase in the number of profits, although there are those who perceive that good performance is how to improve people, parties or other parties for the better (Andriyansah & Zahra, 2017; Retnawati, 2016a). Each field, such as HR, Finance, Marketing, Production, Customer Service surely want to improve their performance better, but not all of have the same goals in mind which is the big profits, but high performance must be oriented to consumers or users by implementing strategies that fit the needs of the company (Huselid, 1995).

3. RESEARCH METHOD This is our preliminary research based on qualitative research. The papers were developed since February 2017 by reviewing some literature that can support this research. Our research object focuses on Indonesian SMEs located in the archipelago given, the presence of authors who are not in one place or precisely located in different geographical areas to facilitate further research.

4. DISCUSSION Probability, which is a strategic choice, becomes stronger if in making decision it is followed by good and correct data (Fatia Fatimah, Dedi Rosadi, RB Fajriya Hakim, & José Carlos R Alcantud, 2017). Our preliminary survey of 50 MSMEs furniture in Jepara, Central Java Province, Indonesia found that starting from production to marketing of MSMEs are already technology based. The geographic of Indonesia with its territory might become a challenge to improve performance, for example, Belitung Island has become the top 10 tourist destinations of Indonesia after the releasing of a popular novel Laskar Pelangi. We are not discussing dynamic capabilities, but we see that dynamic economics shows an interrelated relationship between technology and system integration (Zhou, Peng, Sun, & Wei, 2009). Dynamically, with this information, MSMEs with unique research and development method will do the production and development of their company products.


1113

[email protected]

Technological Capability as Antecedent to Improve the Performance of Small and Medium Enterprises in the Archipelagic Geographic Region

Their market orientation is tourists and visitors, by producing the iconic products of the island, expected to be the main attraction to increase sales with the added value of iconic local products. Teece (1986) argues that market-oriented companies and consumers will always innovate. With the aim that their company still exist in the market. Each company's ability comes from both tangible and intangible resources. Good accounting and finance or administration is a source of data that can be the strength of the company in determining the steps. As for human resources, the embodiment is indeed tangible but their brilliant ideas are a good resource for enhancing the company's performance. Employees who are given the opportunity to develop creative ideas and integrate them with strategic decisions can get to a big decision, means that the company's decision is not only based on data but also supported by employees who are in direct contact with the environment (Suzuki et al., 2017). Technology and information are increasingly showing an indivisible role, but there are also important things to sync them in order to run more optimally. Ziman (1969) suggests that there is one variable of knowledge to run both, it is clear that the presence of reliable human resources with the support of knowledge will be concurrently in the better. Our preliminary survey proves that a reliable employee with all his knowledge can innovate. Innovative products made by providing or adding ornaments on furniture. In addition, color combinations increase the products’ artisticry, making the products’ performance attractive. Aside to from the fulfilled ergonomic elements, according to the consumer the display of ornament, design and attractive colors become the hallmark of their company's products. The next step is for the product to be on demand using knowledge and utilizing technology. SMEs are able to deal in their products not only in the Indonesian market, but also exporting from Asia, Europe, and even Middle East. It is clearly visible in developing product distribution channels. There are several countries that yet to have the trade agreement with Indonesia. Therefore, SMEs must have a trading network that can integrate the destination marketing country in order to enter the market of the country

5. CONCLUSIONS We do not find empirical data in which directly proves that technological ability cannot improve performance. We’ve come to an agreement that if it should be supported by an integrated system, in addition to employee’s knowledge in utilizing and managing technology-based information may become a strength for the company. This strength includes intangible resources by obtaining accurate information. SMEs as both strength and deficiency by utilizing the technology are expected to increase its performance. A point of view for production based on information can create a superior product. Continuing the basic strength of the product makes it a superior company that is ready to be competitive with its competitors. Regardless of the dominance of SMEs in the archipelago, the role of integrated technology and information systems between SMEs with distributors, SMEs and Consumers or fellow SMEs is a solid marketing network to increase excellencency and profitability.


1114

[email protected]

Arina Rubyasih, Steven Anthony, Yuyun Yunita Puspa, Yasir Musdin Pidu, Angga Sucitra Hendrayana, Rakhmini Juwita, Muhammad Agusalim, Inneke Putri Widyani

6. FUTURE RESEARCH We would like to use qualitative methode for our upcoming research by adding a marketing network (market orientation) with the aim of futuristic markets.

REFERENCES [1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11] [12]

[13]

[14] [15]

Afuah, A. (2002). Mapping technological capabilities into product markets and competitive advantage: the case of cholesterol drugs. Strategic management journal, 23(2), 171-179. Andriyansah, & Aryanto, V. D. W. (2017). A Stuctural Equation Modelling Approach On Tourism Mega Event Of Total Eclipse and Cutomer Value In Belitung, Indonesia International Journal of Mechanical Engineering and Technology, 8(6), 317-326. doi:http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=6 Andriyansah, & Sufian, S. (2017). Technology and Consumer Relationship Management: A Study Of Indonesian Travel Agencies. International Journal Of Business Research, 17(2), 25-36. doi:http://dx.doi.org/10.18374/IJBR-17-2.2 Andriyansah, & Zahra, F. (2017). Student Awareness Toward Socail Entrepreneurship: A Quality Study. International Journal of Civil Engineering and Technology, 8(6), 457–464. doi: http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=8&IType=6 Andriyansah, Zahra, F., Santorry, Parwati, N. M. S., Kurniawan, S., Simanjuntak, R. H., .Mulatsih, R. (2017). Does Accounting Control System Boost Marketing Capabilities? International Journal Of Civil Engineering & Technology, 8(8), 209–216. doi:http://www.iaeme.com/ijciet/issues.asp?JType=IJCIET&VType=8&IType=8 Baker, L., & Sovacool, B. K. (2017). The political economy of technological capabilities and global production networks in South Africa's wind and solar photovoltaic (PV) industries. Political Geography, 60(Supplement C), 1-12. doi:https://doi.org/10.1016/j.polgeo.2017.03.003 Chang, W., Park, J. E., & Chaiy, S. (2010). How does CRM technology transform into organizational performance? A mediating role of marketing capability. Journal of business research, 63(8), 849-855. Fatimah, F., Rosadi, D., Hakim, R. F., & Alcantud, J. (2017). N-soft sets and their decision making algorithms. Soft Computing. doi:https://doi.org/10.1007/s00500-0172838-6 Fatimah, F., Rosadi, D., Hakim, R. F., & Alcantud, J. C. R. (2017). Probabilistic soft sets and dual probabilistic soft sets in decision-making. Neural Comput & Applic. doi:DOI 10.1007/s00521-017-3011-y Fatimah, F., Rosadi, D., Hakim, R. F., & Alcantud, J. C. R. (2017). A social choice approach to graded soft sets. Paper presented at the Fuzzy Systems (FUZZ-IEEE), 2017 IEEE International Conference on. Gefen, D., Karahanna, E., & Straub, D. W. (2003). Trust and TAM in online shopping: An integrated model. MIS quarterly, 27(1), 51-90. Handayani, S., Anggraeni, A. I., Andriyansah, Suharnomo, & Rahardja, E. (2017). Analysis of Antecedent and Consequence of Employee Engagement in Small and Medium-Sized Enterprises in Central Java, Indonesia. European Research Studies Journal, XX(3A), 500-510. doi:http://www.ersj.eu/index.php?option=com_content&task=view&id=855 Huselid, M. A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38(3), 635-672. Isa, M. F. M., & Othman, S. N. (2017). Organizational Learning, Innovative Performance and the Moderating Effect of Entrepreneurial Orientation Among Jordanian SMEs. Legris, P., Ingham, J., & Collerette, P. (2003). Why do people use information technology? A critical review of the technology acceptance model. Information & Management, 40(3), 191-204.


1115

[email protected]

Technological Capability as Antecedent to Improve the Performance of Small and Medium Enterprises in the Archipelagic Geographic Region [16]

[17]

[18]

[19]

[20]

[21] [22]

[23]

[24]

[25] [26] [27]

[28]

[29] [30] [31]

[32]

[33]

Morrison, A., Pietrobelli, C., & Rabellotti, R. (2017). Concentric diversification based on technological capabilities: Link analysis of products and technologies. Technological Forecasting & Social Change, 118 246–257. Pentina, I., Koh, A. C., & Le, T. T. (2012). Adoption of social networks marketing by SMEs: exploring the role of social influences and experience in technology acceptance. International Journal of Internet Marketing and Advertising, 7(1), 65-82. Plewa, C., Troshani, I., Francis, A., & Rampersad, G. (2012). Technology adoption and performance impact in innovation domains. Industrial Management & Data Systems, 112(5), 748-765. Retnawati, B. B. (2016a). Developing Salesperson Performance: The Role of Customer Encountering Competence Portfolio, Relational Capital and Service Excellent Customer Heterogeneity. International Review of Management and Marketing, 6(4), 891-897. Retnawati, B. B. (2016b). Using Technological Relational Capabilities to Investigate Marketing Performance in International Wooden Market. International Information Institute (Tokyo). Information, 19(7A), 2555. Scheer, A.-W., & Schneider, K. (1998). ARIS—architecture of integrated information systems Handbook on architectures of information systems (pp. 605-623): Springer. Sok, P., O’Cass, A., & Sok, K. M. (2013). Achieving superior SME performance: Overarching role of marketing, innovation, and learning capabilities. Australasian Marketing Journal (AMJ), 21(3), 161-167. Su, Z., Xie, E., Liu, H., & Sun, W. (2013). Profiting from product innovation: the impact of legal, marketing, and technological capabilities in different environmental conditions. Marketing Letters, 24(3), 261-276. Suzuki, K., Suzuki, K., Tochimoto, K., Tochimoto, K., Isomura, K., & Isomura, K. (2017). Park24’s market creation and game-changing strategy: leveraging its strategic resources and capabilities. Strategic Direction, 33(7), 1-4. Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research policy, 15(6), 285-305. Thong, J. Y. (1999). An integrated model of information systems adoption in small businesses. Journal of Management Information Systems, 15(4), 187-214. Trainor, K. J., Andzulis, J., Rapp, A., & Agnihotri, R. (2014). Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM. Journal of Business Research, 67(6), 1201-1208. doi:http://dx.doi.org/10.1016/j.jbusres.2013.05.002 Trainor, K. J., Rapp, A., Beitelspacher, L. S., & Schillewaert, N. (2011). Integrating information technology and marketing: An examination of the drivers and outcomes of eMarketing capability. Industrial Marketing Management, 40(1), 162-174. Zhou, W., Peng, Y., Sun, H., & Wei, Q.-h. (2009). Dynamic economic dispatch in wind power integrated system. Proceedings of the CSEE, 25(006). Ziman, J. M. (1969). Information, communication, knowledge. Nature, 224(5217), 318324. Mohd.Irfan Khan, Anil Kumar Mishra, Prof. (Dr.) Y.P.Singh, A Review: Technology Innovation And Role Of Training And Education In Small And Medium Size Enterprise And It Sector. International Journal of Management (IJM), 4(3), 2013, pp. 75–81. Dr. A. Selvarani, Kanagaraj Venusamy. A Study of Technopreneurship in Small And Medium Industry. Technopreneurship As A Firm Strategy: Links To Innovation, Creation And Performance. International Journal of Management (IJM), 6(1), 2013, pp. 401–408. K. Vijaya Sekhar Reddy, Dr. Tamarana Srinivasa Rao and Dr N. Roopalatha, An Effectiveness of Human Resource Management In Small and Medium Industries – An Telangana Experience, International Journal of Mechanical Engineering and Technology. 8(7), 2017, p p. 1010–1017,


1116

[email protected]