ISSN (Online): 2321-3418
server-injected
Economics and Management
Open Access

Does Strategic Leadership Impact Competitive Advantage, Mediated by Diversification Strategy In the Manufacturing Industry?

, , ,
DOI: 10.18535/ijsrm/v11i05.em03· Pages: 4875-4885· Vol. 11, No. 05, (2023)· Published: May 8, 2023
PDF
Views: 380 PDF downloads: 359

Abstract

The goal of this research is to conduct an analysis of the mediating role of diversification strategy in increasing competitive advantage, as well as the impact of strategic leadership, in the manufacturing industry located at Riau Island region, Indonesia, categorized as medium, large and export-oriented companies listed in the Riau Island’s Central Statistical Office 2021 directory.

The method applied is quantitative research with Structural Equation Modelling (SEM) to test the hypothesis. Primary data were collected by sending questionnaires to 210 respondents as the representative of the manufacturing industry, by using purposive sampling, which was then analyzed using AMOS software.

        The study's findings indicate that diversification strategy can operate as a significant and positive mediator in strategic leadership to achieve a competitive advantage, despite the fact that the direct effect test of the diversification strategy variable has no influence on competitive advantage. It may investigate adding other exogenous variables or applying dimensions such as cross-cultural leadership with a fixed population sample in the manufacturing industry, outside Riau Island, or in other countries for future research.

Keywords

strategic leadershipdiversification strategycompetitive advantagemanufacturing industry

References

  1. Adegelu, I. O. (2012). The Relationships Between Diversification Strategies and Financial Performance and Growth Amongst Established South African Contracting Firms.Google Scholar ↗
  2. Anderson, J. C., & Gerbing, D. W. (1988). Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach. Psychological Bulletin, 103(3), 411–423. https://doi.org/10.1037/0033-2909.103.3.411DOI ↗Google Scholar ↗
  3. Anil, I., & Yiǧit, I. (2011). The relation between diversification strategy and organizational performance: A research on companies registered to the Istanbul stock exchange market. Procedia - Social and Behavioral Sciences, 24, 1494–1509. https://doi.org/10.1016/j.sbspro.2011.09.093DOI ↗Google Scholar ↗
  4. Banmore, O. O., Adebayo, L., Mudashiru, M., Oluwatooyin, G., Falilat, A., & Olufunke, O. (2019). Effect Of Strategic Leadership On Competitive Advantage Of Selected Quoted Insurance Companies In Nigeria. The Journal of Accounting and Management, 9(2), 70–78. https://search.proquest.com/docview/2319823102?accountid=32819Google Scholar ↗
  5. Bátiz-Lazo, B., & Wood, D. (2003). Strategy, competition and diversification in European and Mexican banking. International Journal of Bank Marketing, 21(4), 202–216. https://doi.org/10.1108/02652320310479196DOI ↗Google Scholar ↗
  6. Benischke, M. H., Martin, G. P., & Glaser, L. (2019). CEO equity risk bearing and strategic risk taking: The moderating effect of CEO personality. Strategic Management Journal, 40(1), 153–177. https://doi.org/10.1002/smj.2974DOI ↗Google Scholar ↗
  7. BPS Propinsi Kepulauan Riau. (2021). Direktori Perusahaan Sedang dan Menengah Provinsi Kepulauan Riau.Google Scholar ↗
  8. Byrne, B. M. (2020). Sturctural Equation Modeling with AMOS. In Structural Equation Modeling With AMOS. https://doi.org/10.4324/9780203805534-23DOI ↗Google Scholar ↗
  9. Capuşneănu, S., Mates, D., Tűrkeş, M. C., Barbu, C. M., Staraş, A. I., Topor, D. I., Stoenică, L., & Fűlöp, M. T. (2021). The impact of force factors on the benefits of digital transformation in Romania. Applied Sciences (Switzerland), 11(5), 1–21. https://doi.org/10.3390/app11052365DOI ↗Google Scholar ↗
  10. Chan, L. F., An, B. A., & Nasir, A. B. M. (2019). Does the method of corporate diversification matter to firm’s performance? International Symposia in Economic Theory and Econometrics, 26, 208–233. https://doi.org/10.1108/S1571-038620190000026011DOI ↗Google Scholar ↗
  11. Chen, Y., Jiang, Y., Wang, C., & Hsu, W. C. (2014). How do resources and diversification strategy explain the performance consequences of internationalization? Management Decision, 52(5), 897–915. https://doi.org/10.1108/MD-10-2013-0527DOI ↗Google Scholar ↗
  12. Fatyandri, A. N., & Muchsinati, E. S. (2014). Pengaruh Dan Peran Manajer Sdm Terhadap Keharmonisan Hubungan Industrial. Jurnal Manajemen, 14(1), 1–14.Google Scholar ↗
  13. Hagen, A. F., Hassan, M. T., & Amin, S. G. (1998). Critical strategic leadership components: An empirical investigation. Management, 63, 39. http://search.epnet.com/login.aspx?direct=true&db=buh&an=1070606&loginpage=login.asp&site=ehostGoogle Scholar ↗
  14. Hair, J. F., Black, W. C., & Babin, B. J. (2016). Multivariate Data Analysis.Google Scholar ↗
  15. Hambrick, D. C., & Mason, P. a. (1984). Upper Echelons: The Organization as a Refelection of Its Top Managers. Management, 9(2), 193–206. http://www.jstor.org/stable/258434Google Scholar ↗
  16. Hitt, M.A., Ireland, R. D., & Hoskisson, R. . (2017). Strategic Management Competitiveness & Globalization Concepts and Cases, 12th edition. Cengage Learning, Boston, M.A.: USA.Google Scholar ↗
  17. Hitt, Michael A., & Duane, R. (2002). The Essence of Strategic Leadership: Managing Human and Social Capital. Journal of Leadership & Organizational Studies, 9(1), 3–14. https://doi.org/10.1177/107179190200900101DOI ↗Google Scholar ↗
  18. Hitt, Michael A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic Management: Competitiveness & Globalization: Concepts and Cases, 12e. © 2017, 2015 Cengage Learning®.Google Scholar ↗
  19. Hitt, Michael A., Ireland, R. D., & Hoskisson, R. E. (2017). STRATEGIC MANAGEMENT Competitiveness & Globalization Concepts and Cases 12e.Google Scholar ↗
  20. Hunitie, M. (2018). Impact of strategic leadership on strategic competitive advantage through strategic thinking and strategic planning: A bi-meditational research. Business: Theory and Practice, 19(2012), 322–330. https://doi.org/10.3846/btp.2018.32DOI ↗Google Scholar ↗
  21. Hussain, S., Khattak, J., Rizwan, A., & Latif, M. (2013). ANSOFF Matrix, Environment, and Growth- An Interactive Triangle. Management and Administrative Sciences Review, 2(2), 196–206. http://www.absronline.org/journals/index.php/masr/article/view/102Google Scholar ↗
  22. Jeong, I. (2003). A cross-national study of the relationship between international diversification and new product performance. International Marketing Review, 20(4), 353–376. https://doi.org/10.1108/02651330310485144DOI ↗Google Scholar ↗
  23. Kline, R. B. (2012). Principles and Practice of Structural Equation Modeling. In Canadian Graduate Journal of Sociology and Criminology (Vol. 1, Issue 1). https://doi.org/10.15353/cgjsc.v1i1.3787DOI ↗Google Scholar ↗
  24. Lear, L. W. (2012). The relationship between strategic leadership and strategic alignment in high-performing companies in South Africa. University of South Africa, February, 1–235.Google Scholar ↗
  25. Mahdi, O. R., & Almsafir, M. K. (2014). The Role of Strategic Leadership in Building Sustainable Competitive Advantage in the Academic Environment. Procedia - Social and Behavioral Sciences, 129, 289–296. https://doi.org/10.1016/j.sbspro.2014.03.679DOI ↗Google Scholar ↗
  26. Mahdi, O. R., & Almsafirb, M. K. (n.d.). The Role of Strategic Leadership in Building Sustainable Competitive Advantage in the Academic Environment | Elsevier Enhanced Reader. Retrieved August 30, 2021, from https://reader.elsevier.com/reader/sd/pii/S1877042814028614?token=791C038F6751ED1426FCC52B8DA9B0687A9B5EB194FD6E97D35BC7FEB43F904B5700B707E48892CD8F0A0290A8370782&originRegion=eu-west-1&originCreation=20210830084914Google Scholar ↗
  27. Mahdi, O. R., Nassar, I. A., & Almsafirc, M. K. (2021). Strategic Leadership Capabilities and Sustainable Competitive Advantage in Private Universities. Academy of Strategic Management Journal, 20(2), 1–23. https://www.proquest.com/docview/2516305470/abstract/48BF4B4CCE214B57PQ/15Google Scholar ↗
  28. Najmi, K., Kadir, A. R., & Kadir, M. I. A. (2018). Mediation effect of dynamic capability in the relationship between knowledge management and strategic leadership on organizational performance accountability. International Journal of Law and Management, 60(2), 517–529. https://doi.org/10.1108/IJLMA-01-2017-0004DOI ↗Google Scholar ↗
  29. Oladimeji, M. S., & Udosen, I. (2019). The Effect of Diversification Strategy on Organizational Performance. Journal of Competitiveness, 11(4), 120–131. https://doi.org/10.7441/joc.2019.04.08DOI ↗Google Scholar ↗
  30. Rijamampianina, R., February, Y., & Abratt, R. (2003). A framework for concentric diversification through sustainable competitive advantage. Management Decision, 41(4), 362–371. https://doi.org/10.1108/00251740310468031DOI ↗Google Scholar ↗
  31. Scheepers, C. B., & Maher, C. R. (2019). Leadership’s Thinking Process with Contextual Intelligence in Executing Diversification Strategy. In Journal of Economics and Behavioral Studies (Vol. 11, Issue 1(J), pp. 73–89). https://doi.org/10.22610/jebs.v11i1(j).2750DOI ↗Google Scholar ↗
  32. Sekaran, & Bougie. (2016). Research methods for business: A skill-building approach (8th Editon).Google Scholar ↗
  33. Sihite, M. (2018). Competitive Advantage: Mediator of Diversification and Performance. IOP Conference Series: Materials Science and Engineering, 288(1). https://doi.org/10.1088/1757-899X/288/1/012102DOI ↗Google Scholar ↗
  34. Varelas, S., & Apostolopoulos, N. (2020). The implementation of strategic management in greek hospitality businesses in times of crisis. Sustainability (Switzerland), 12(17). https://doi.org/10.3390/su12177211DOI ↗Google Scholar ↗
  35. Vera, D., & Crossan, M. (2004). Strategic leadership and organizational learning. Academy of Management Review, 29(2), 222–240. https://doi.org/10.5465/AMR.2004.12736080DOI ↗Google Scholar ↗
  36. Wanjiru, K. W., & Nzulwa, D. J. (2018). Influence of Diversification Strategies on Competitive Advantage of Commercial Banks in Kenya. In Journal of Business and Strategic Management (Vol. 3, Issue 1, pp. 67–90). https://doi.org/10.47941/jbsm.254DOI ↗Google Scholar ↗
  37. Wibisono, E., & Tarigan, J. (2016). Pengaruh strategic leadership terhadap competitive advantage melalui intellectual capital sebagai variabel intervening pada perusahaan non-manufaktur terbuka di kota Surabaya. Business Acounting Review, 4(1), 13–24.Google Scholar ↗
Author details
Adi Neka Fatyandri
Dcotoral Program in Economic, Faculty of Econmics and Busines Trisakti University, Jakarta-Indonesia
✉ Corresponding Author
👤 View Profile →
Yolanda Masnita Siagian
Dcotoral Program in Economic, Faculty of Econmics and Busines Trisakti University, Jakarta-Indonesia
👤 View Profile →
Wahyuningsih Santosa
Dcotoral Program in Economic, Faculty of Econmics and Busines Trisakti University, Jakarta-Indonesia
👤 View Profile →🔗 Is this you? Claim this publication
Agustinus Setyawan
Dcotoral Program in Economic, Faculty of Econmics and Busines Trisakti University, Jakarta-Indonesia
👤 View Profile →🔗 Is this you? Claim this publication