Competitive Strategy Based on Transformation and Dynamic Capabilities in Resulting Business Performance of Islamic Microfinance Institutions

DOI

10.2991/imm-16.2016.9How to use a DOI?

Keywords

transformation, dynamic capabilities, competitive advantage, business performance and Baitul Maal wat Tamwil

Abstract

Since there is 100 million people with an income less than USD2.00 per day, poverty considered as a major problem in Indonesia. Microfinance as an important solution in poverty alleviation program, could not yet meet the needs of 500 million poor people to small business credit to improve their business performance. Islamic microfinance institutions ("MFIs") especially Baitul Mall wat Tamwil ("BMT") considered as major instrument in regulate an overall social system includes the existence of human and high values. Although BMT in smaller than other Islamic MFIs, but it has a bigger number of beneficiaries so more be able to serve and fulfill the need of microfinance's business. Along with the increasing role of BMT within microfinance business, it is necessary to execute a dynamic transformation associated with a variety of other factors to improve its business performance. There is not yet a study that explores and evaluates the relationship among transformation, dynamic capability, competitive advantage and performance constructs in Islamic MFIs. The study which presenting the effect of transformation and dynamic capability approach in improving the BMT's performance, either through competitive advantage or not, will become a positive contribution either for BMT or Islamic MFIs to overcome dynamic changes faced in implementing their mission to alleviate poverty. The result of hypothetical descriptive test are (a) transformation and dynamic capability approach are able to respond as opportunities to improve the company's quality of management and profit; and (b) the company is able to increase its competitive advantage and business performance. To strengthen the descriptive test results, a statistical test by using Partial Least Square method is required on hypotheses that have been made.

Copyright

© 2016, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Harry Sutanto
PY  - 2016/10
DA  - 2016/10
TI  - Competitive Strategy Based on Transformation and Dynamic Capabilities in Resulting Business Performance of Islamic Microfinance Institutions
BT  - Proceedings of the International Conference, Integrated Microfinance Management for Sustainable Community Development (IMM 2016)
PB  - Atlantis Press
SP  - 53
EP  - 58
SN  - 2352-5428
UR  - https://doi.org/10.2991/imm-16.2016.9
DO  - 10.2991/imm-16.2016.9
ID  - Sutanto2016/10
ER  -