The influence of resource flexibility and product complexity on operational performance moderated by employee competence in Indonesian defense industry

Abstract

Operational performance reflects the company’s operating performance in terms of waste reduction, product quality improvement, and product delivery. This study examines the effect of resource flexibility and product complexity on operational performance moderated by employee competence in the Indonesian defense industry at PT. Pindad (Persero) Turen, Malang. 194 employees who work in the production function are sampled in this research. The data analysis model used is a structural equation model with a Partial Least Square approach using SmartPLS 3.0 software. The results show that resource flexibility has a positive and significant effect on operational performance, product complexity does not affect operational performance, and employee competence has a positive and significant effect on operational performance. The moderation test shows that employee competence strengthens the effect of resource flexibility on operational performance and employee competence does not weaken or strengthen the effect of product complexity on operational performance.