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Development of Quality Digital Innovation by Optimally Utilizing Company Resources to Increase Competitive Advantage and Business Performance

Author

Listed:
  • Saiful Hidayat

    (Management Department, Faculty of Economic and Business, Brawijaya University, Malang 65145, Indonesia)

  • Margono Setiawan

    (Management Department, Faculty of Economic and Business, Brawijaya University, Malang 65145, Indonesia)

  • Fatchur Rohman

    (Management Department, Faculty of Economic and Business, Brawijaya University, Malang 65145, Indonesia)

  • Ananda Sabil Hussein

    (Management Department, Faculty of Economic and Business, Brawijaya University, Malang 65145, Indonesia)

Abstract

Purpose: This study aims to find out how to increase the competitive advantage of a company through the development of digital innovation that utilizes company resources optimally to improve business performance. Namely, the aim is to examine the effect of company resources on digital innovation and business performance, and the effect of company resources on business performance through digital innovation. Methods: 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 in Indonesia, which amounted to 474 companies, and the unit of observation was the management. Samples were taken from 240 respondents. This study used structural equation modeling (SEM) to test the causality correlational relationship between constructs. Results: The hypothesis testing shows that company resources have a significant direct effect on business performance, and company resources have a significant indirect effect on business performance through digital innovation. The indirect effect of company resources on business performance through digital innovation is more dominant than the direct effect of company resources on business performance. Conclusions: Improving business performance and competitive advantage will be better achieved by optimizing the utilization of the company’s existing resources to develop digital innovation, compared to directly increasing the company’s resources to improve business performance.

Suggested Citation

  • Saiful Hidayat & Margono Setiawan & Fatchur Rohman & Ananda Sabil Hussein, 2022. "Development of Quality Digital Innovation by Optimally Utilizing Company Resources to Increase Competitive Advantage and Business Performance," Administrative Sciences, MDPI, vol. 12(4), pages 1-16, November.
    • Handle: RePEc:gam:jadmsc:v:12:y:2022:i:4:p:157-:d:964416
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    References listed on IDEAS

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    1. Abdulkadir Ali Tifow & Ozlem Sayilir, 2015. "Capital Structure and Firm Performance: An Analysis of Manufacturing Firms in Turkey," Eurasian Journal of Business and Management, Eurasian Publications, vol. 3(4), pages 13-22.
    2. Hussein A. Hassan Al-Tamimi, 2010. "Factors Influencing Performance Of The Uae Islamic And Conventional National Banks," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 4(2), pages 1-9.
    3. Nylén, Daniel & Holmström, Jonny, 2015. "Digital innovation strategy: A framework for diagnosing and improving digital product and service innovation," Business Horizons, Elsevier, vol. 58(1), pages 57-67.
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