Innovation Capability towards Business Performance trough Company Resources Industry Creatif Handycraft in Bali

Abstract

This study aims to explain the role of innovation capability in mediating company resources on business performance to overcome the gaps in internal human resource relations which are unable to provide a strategic composition that improves the performance of the business. Determination of the sample in this study using a purposive sampling method with a sample of 120 respondents and data collection was carried out by distributing questionnaires which were measured using a Likert scale. The data analysis techniques used in this research are Path Analysis and Sobel Test to test the hypothesis about the role of mediation. The results showed that company resources had a positive and significant effect on business performance. Company resources also have a positive and significant effect on innovation capabilities. Furthermore, innovation capability has a positive and significant effect on business performance and innovation capability can partially mediate the influence of company resources on business performance. The implication of the research results is to develop the previous theory about RBV which emphasizes the role of intangible resources that can lead companies to achieve competitive advantage. In this study, the company resource variables, both tangible and intangible, can influence their ability to compete by increasing innovation capabilities and having an impact on improving business performance. Also, the practical implications are providing input to SME businesses in the handicraft sector to always develop their resources thoroughly so that innovation capabilities are higher and ultimately have an impact on business performance.