Title : The Mediating Effect of Operational Performance on the Relationship of Entrepreneurship Toward Financial Performance. A case of Hand Drawn Batik Industry in East Java, Indonesia
Author(s) : Noorlailie Soewarno, Bambang Tjahjadi
Corresponding Author : Noorlailie Soewarno
DOI : https://doi.org/10.2991/icoi-17.2017.14
Abstract Indonesia has been well known for its beautiful batik. In fact UNESCO has awarded Indonesian batik as a masterpiece of oral and intangible heritage of humanity. UNESCO insisted that Indonesia must preserve its heritage. Batik has become part of the creative economy in Indonesia. East Java province has many batik industrial centers spread in several cities, such as Madura, Sidoarjo, Tuban, Tulungagung, etc. Batik, especially hand drawn batik companies in Indonesia usually run by entrepreneurs of small companies. The success of financial performance in hand drawn batik industry was apparently the result of entrepreneurship of batik company owner/manager, and good operational performance in their internal business process. This study focuses on the mediating effect of operational performance on the relationship of entrepreneurship toward financial performance in hand drawn batik industry in East Java Province in Indonesia. This study used a quantitative approach. The sample of this study was 111 small business batik companies, and analyzed using Warp PLS. The results of the study showed that operational performance mediated the relationship between entrepreneurship and financial performance. The results of this study contributed input to the policy maker in East Java Province government abot developing sustainable and successful batik industry to boost creative economic activity in East Java Province. This study also gave a contribution in management accounting area especially about factors that give impact to financial performance in batik industry.
