DEVELOPING OF CORE COMPETENCE MODEL TO SUPPORT PERFORMANCE OF SOFTWARE SMALL AND MEDIUM INDUSTRY

• Main Author: Nur Aisha, Atya
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/55535
• Institution: Institut Teknologi Bandung

The software industry is one of the creative industries that play a role in national economic development, through expansion of employment opportunities, foreign investment, information technology development, and investment opportunities. In this sector the level of competition between companies is increasingly high, because customer needs are dynamic and rapidly changing, a short product life cycle, the availability of new technology, and innovation are demanded to take place quickly. Business failure rates in this sector are high, reaching 15.9%. To survive and win the competition, companies need to utilize organizational strength, namely core competences. Core competences are organizational capabilities that enable superior and sustainable corporate performance. In addition, in this industrial sector on every business scale has different problems faced and business processes carried out. Therefore, it is necessary to explore core competences that are appropriate to the business scale, taking into account the key business processes of the company. This study aims to develop a core competence model, including dimensions and elements of core competences, in the software SMI according to business scale that can improve organizational performance. This study used a mixed-method design with a gradual exploration type which was divided into a qualitative phase and a quantitative phase. In the qualitative phase, there are three stages of research, namely, the first stage is conducting semistructured interviews aimed at exploring business processes, dimensions and elements of core competences related to the condition of software SMIs. Qualitative data collection involves six small scale software SMIs and six medium scale software SMIs. Qualitative data processing is performed using content analysis techniques to identify relevant business processes in small and medium scale companies. Based on the results of the interviews obtained 10 categories of business processes that relevant to the software SMI context. The second stage is to determine key business processes using the Analytic Hierarchy Process (AHP) method. From the AHP results, five key business process categories were found in software SMIs, namely vision and strategy management, product and service development, marketing and product sales management, customer service management, and information technology management. There are three dimensions of core competences that are relevant to key business processes in software SMIs, namely strategic competence, technological competence, and marketing competence. The third stage is to identify the elements of core competence and the level of core competences using thematic analysis techniques with three methods of code identification, namely descriptive coding, protocol coding, and pattern coding. Based on the data processing in the third stage of the qualitative phase, a core competence model is resulted which includes dimensions, elements, and the level of core competences. The quantitative phase consists of two stages, including the first stage is to develop a quantitative stage instrument that aims to measure the core competences and performance of software SMIs. The proposed questionnaire was validated using a content validation method involving four SMEs software experts. In the second stage, data collection was carried out through the questionnaire which would be distributed to software SMIs in the West Java, DKI Jakarta, and DI Yogyakarta areas with a quota sampling approach to 88 samples of software SMIs. Quantitative data processing is performed using the Partial Least Squares Structural Equation Modeling (PLS-SEM) method. The core competence model that affect organizational performance in this study consist of three dimensions of core competence (including strategic competence, technological competence, and marketing competencie) which include 15 elements of core competence with four levels of mastery for each element of core competence. Based on the results of structural model testing, the three dimensions of core competence have a positive and significant effect on organizational performance of 0.227, 0.448, and 0.207 (p <0.05). The results of empirical testing between business scales show a significant difference in the influence of the dimensions of strategic competence on organizational performance. The value of the influence of the strategic competency dimensions on organizational performance on medium-scale software SMIs is larger (? = 0.355, p <0.01) compared to the small scale (? = 0.052, p> 0.1). In addition, the ability level of the core competence elements in the medium-scale software SMI is greater than the small-scale software SMI. Based on the classification of organizational performance, high-performance software SMIs have a higher level of core competence compared to lower-performance software SMIs, both on the small and medium scale. These results form the basis for formulating recommendations for developing core competences to support organizational performance and development of core competences for business scale shifting