Determinant of Development Strategies and Leadership Styles on Organizational Commitment and Their Implications for MSMEs Performance in Palembang

摘要

This study aims to analyse the determinants of the development strategy and leadership style on organizational commitment and its implications on the performance of micro, small and medium enterprises (MSMEs) in Palembang. The samples were taken using non-random sampling technique, namely purposive sampling technique; consist of 120 respondents from 252 MSMEs fostered by Palembang Office of Cooperatives and Small and Medium Enterprises. The research unit is entrepreneurs (managers) of MSMEs and the hypotheses are tested using the Structure Equation Model (SEM) with the Lisrel program. The results of the study show that the R-squared for structural equation I is 20% with error var of 80% while the R-squared for structural equation II is 64% with the error of 36%. The results also present that development strategy and leadership style, have a positive and significant effect on organizational commitment simultaneously. It is also found that, simultaneously, the development strategy, leadership style and organizational commitment have a positive and significant effect on the performance of micro, small and medium businesses. However, when tested partially, only development strategy has no significant effect on organizational commitment. Therefore, it can be said that organizational commitment is not act as a full mediator on the model.