The Mediation Effect of Business Strategy on the Relations between External Factors, Internal Factors and Business Performance
Keywords:
External Factor, Internal Factor, Business Strategy, Business Performance.
Abstract
This study aims to test the influence of external, internal factors and business strategy on business performance, in addition to the mediation effect of business strategy on external, internal and business performance. This research was carried out in 150 restaurants in Dili, Timor-Leste, and questionnaires were used to collect data. SMART-PLS 3.0 was used to test the hypothesis. The finding reveals that external factors had no significant impact on business performance, and internal factors positively influenced business performance. The mediation effect of external and internal factors had no significant impact on business performance. This research extends the empirical works of Huang & Lee (2012), Metts, (2007) and Barney (1991) on the relationship among external factors, internal factors, and business strategy and performance. This study practically contributes to the restaurant manager and regulators being aware of threats and opportunities from the external environment and improving internal construct to enhance business performance.
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References
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Gabrielsson, M., Seppäläb, T., & Gabrielsson, P. (2016). Realizing a hybrid competitive strategy and achieving superior financial performance while internationalizing in the high-technology market. Industrial Marketing Management, 54, 141–153.
Gathmann, C., & Schönberg, U. (2010). How general is human capital? A task-based approach. Journal of Labor Economics, 28(1), 1–49.
George, J. M., & Zhou, J. (2001). When job dissatisfaction leads to creativity : encouraging the expression of voice. Academy of Management Journal, 1892(713), 682–696.
González-Rodríguez, M. R., Jiménez-Caballero, J. L., Martín-Samper, R. C., Köseoglu, M. A., & Okumus, F. (2018). Revisiting the link between business strategy and performance: Evidence from hotels. International Journal of Hospitality Management, 72(November 2017), 21–31.
Gorondutse, A. H., & Gawuna, M. S. (2017). Cost Leadership Strategy and Performance of Hotels in Nigerian Context. Journal of Applied Structural Equation Modeling, 1(1), 1–12.
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Hair, J., Hollingsworth, C. L., Randolph, A. B., & Chong, A. Y. L. (2017). An updated and expanded assessment of PLS-SEM in information systems research. Industrial Management & Data Systems, 117(3), 442–458.
Hair Jr, J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modeling ( PLS-SEM ) An emerging tool in business research. European Business Review, 26(2), 106–121.
Hall Jr., E. H., & Lee, J. (2014). Assessing the Impact of Firm Reputation on Performance: An International Point of View. International Business Research, 7(12), 1–13.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135.
Hilman, H., & Kaliappen, N. (2015). Innovation strategies and performance: are they truly linked? World Journal of Entrepreneurship, Management and Sustainable Development, 11(1), 48–63.
Huang, H. I., & Lee, C. F. (2012). Strategic management for competitive advantage: A case study of higher technical and vocational education in Taiwan. Journal of Higher Education Policy and Management, 34(6), 611–628.
Huang, T. C. (2001). The effects of linkage between business and human resource management strategies. Personnel Review, 30(2), 132–151.
Kamboj, S., Goyal, P., & Rahman, Z. (2015). A Resource-Based View on Marketing Capability, Operations Capability and Financial Performance: An Empirical Examination of Mediating Role. Procedia - Social and Behavioral Sciences, 189, 406–415.
Kamoche, K. (1996). Strategic Human Resource Management Within a Resource Capability View of The Firm. Journal of Management Studies, March.
Kaplan, R. S., & Norton, D. P. (2001). Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I. Accounting Horizons, 15(1), 87–104.
Karagiannopoulos, G. D., Georgopoulos, N., & Nikolopoulos, K. (2005). Fathoming Porter’s five forces model in the internet era. Info, 7(6), 66–76.
Kaya, N. (2015). Corporate Entrepreneurship, Generic Competitive Strategies, and Firm Performance in Small and Medium-sized Enterprises. Procedia - Social and Behavioral Sciences, 207, 662–668.
Landry, C. C. (2003). Self-Efficacy, Motivation, and Outcome expectation correlates of college students intention Certainty. In Lousiana State University.
Larry, M., Luis, S., & Johnson, F. (2014). The five competitive forces framework in a technology mediated environment : do these forces still hold in the industry of the 21st century?
Li, J. (Justin), Kim, W. G., & Choi, H. M. (2019). Effectiveness of social media marketing on enhancing performance: Evidence from a casual-dining restaurant setting. Tourism Economics, 1–20.
Lichtenthaler, U. (2009). Outbound open innovation and its effect on firm performance: Examining environmental influences. R and D Management, 39(4), 317–330.
Lin, H., Chen, L., Yu, M., Li, C., Lampel, J., & Jiang, W. (2021). Too little or too much of good things ? The horizontal S-curve hypothesis of green business strategy on firm performance. Technological Forecasting & Social Change, 172(November 2020), 121051.
López-Cabarcos, M. Á., Göttling-Oliveira-Monteiro, S., & Vázquez-Rodríguez, P. (2015). Organizational Capabilities and Profitability: The Mediating Role of Business Strategy. SAGE Open, 5(4).
Lorenzo, J. R. F., Rubio, M. T. M., & Garcés, S. A. (2018). The competitive advantage in business, capabilities and strategy. What general performance factors are found in the Spanish wine industry? Wine Economics and Policy, 7(2), 94–108.
Manz, C. C., & Sims, J. H. P. (1987). Leading Workers to Lead Themselves : The External Leadership of Self- Managing Work Teams (Vol. 32, Issue 1).
Mcevily, S. K., Das, S., & Mccabe, K. (2000). Avoiding competence substitution through knowledge sharing. Academy of Management Review, 25(2), 294–311.
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Published
2022-12-19
How to Cite
Legimai, N., Saldanha, E. and Graciana, B. (2022) “The Mediation Effect of Business Strategy on the Relations between External Factors, Internal Factors and Business Performance”, Timor Leste Journal of Business and Management, 4, pp. 34-47. doi: 10.51703/bm.v4i0.66.
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Articles
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