Competitive Advantage as a Mediation of the Influence of Learning Organizations on SME Performance in Malang City

Abstract

The goal of the study is to examine how competitive advantage mediates the impact of learning organisations on MSMEs' performance. With a research sample of 100 SMEs, the population of this study's Small and Medium Enterprises (SMEs) in the city of Malang totals 113,000 units. Structural equation modelling is the analytical methodology employed in this work as the analytical method (SEM). The t-test was used to determine if this direct effect existed or not. The study's findings indicate that the performance of SMEs in Malang is not directly impacted by learning organisations; this could be due to a lack of employee engagement skills the ability to achieve the expected performancein facing challenges and competition in business. Learning organizations affect the competitive advantage of SMEs, meaning that SMEs in Malang City can have a competitive advantage if they pay attention to the learning process by providing the ability to develop themselves in knowledge, insight and technology in product innovation. The performance of SMEs is enhanced by competitive advantage. Competitive advantage can act as a buffer between learning organisations' effect and the performance of SMEs in Malang. SMEs that carry out learning organizations well as shown by teamwork shown by having the ability to work in coordinating and innovative ways are able to create competitive advantages.