Title: Mediating effect of business process performance on innovation strategy-cost performance relationship: case study of manufacturing industry in East Java Province, Indonesia

Authors: Nanik Kustiningsih; Bambang Tjahjadi

Addresses: Department of Accounting, Faculty of Economy and Business, Universitas Airlangga, Jl. Airlangga 4, Gubeng, Surabaya, East Java, Indonesia ' Department of Accounting, Faculty of Economy and Business, Universitas Airlangga, Jl. Airlangga 4, Gubeng, Surabaya, East Java, Indonesia

Abstract: This study investigates the mediating effect of business process performance on innovation strategy-cost performance relationship of manufacturing companies in the East Java Province, Indonesia. As many as 170 managers from 170 companies participated in this study. Purposive sampling technique was employed and questionnaires were used to collect data. The data were analysed using the partial least square-structural equation modelling (PLS-SEM) approach. This study provides the new insight on how business process performance mediates the relationship between innovation strategy and cost performance. The findings of the study suggest that managers need to improve their innovation strategy and business process performance to optimise the companies' cost performance.

Keywords: innovation strategy; business process performance; BPP; cost performance; manufacturing industry; Indonesia.

DOI: 10.1504/IJBPM.2020.108324

International Journal of Business Performance Management, 2020 Vol.21 No.3, pp.346 - 362

Received: 21 May 2019
Accepted: 21 Oct 2019
Published online: 08 Jul 2020 *

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