The Impact of Internal and External LOC with Intrinsic Motivation as a Mediator on the MSME’s Business Performance in Indonesia
DOI:
https://doi.org/10.22441/jurnal_mix.2025.v15i2.017Kata Kunci:
Business Performance, External LOC, Internal LOC, Intrinsic Motivation. EEP Theory (Theory of Early Entrepreneurial Performance)Abstrak
Objectives: This research explores the impact of internal and external locus of control (LOC) and mediating role of intrinsic motivation on business performance’s MSME owners in Indonesia.
Methodology: This study employs Structural Equation Modelling (SEM) for quantitative analysis. The sample includes 157 MSME owners in Indonesia, selected through convenience sampling.
Finding: The findings reveal that internal LOC influences business performance, with intrinsic motivation enhancing this effect as a mediator. Conversely, external LOC does not impact business performance, and intrinsic motivation does not mediate its effect. This indicates that MSME owners with a strong internal LOC tend to achieve better business performance, especially when driven by intrinsic motivation.
Conclusion: The originality of this study concludes the truth of the EEP Theory, which explains role of entrepreneurial motivation in relationship between the influence of LOC with business performance. Its empirical findings strengthen previous research, and provide a perspective that confirms that generally business owners have an intrinsic motivation orientation with high internal LOC, they see and have a strong belief that business success is something that is under their control and is reinforced by the motive to achieve success. In contrast, their external LOC is low and has no influence on their intrinsic motivation and business performance.
Referensi
Aftan, Y., & Hanapi, M. (2018). The impact of entrepreneurial motivation on small business performance in Iraq. International Journal of Academic Research in Business and Social Sciences, 8(1), 401–411. https://doi.org/10.6007/IJARBSS/v8-i1/3816
Agarwal, A., & Ojha, R. (2023). Prioritising the determinants of industry-4.0 for implementation in MSME in the post-pandemic period – A quality function deployment analysis. The TQM Journal, 35(8), 2181–2202. https://doi.org/10.1108/TQM-06-2022-0204
Agustina, T. (2019). Improving business performance through competitive advantage: A study on SMEs in Banjarmasin, Indonesia. Eurasia: Economics & Business, 6(26), 39–59.
Agustina, T., Nurhikmah, N., & Rudiansyah, M. (2022). The influence of locus of control, self-efficacy, and adversity quotient on business performance. Jurnal Economia, 18(1), 1–15. https://doi.org/10.21831/economia.v18i1.34013
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T
Alfred, D. O., & Idoghor, U. (2020). Internal vs external locus of control: The better option for maximization of students’ academic performance. International Journal of Humanities, Social Sciences and Education, 7(4), 171–174. https://doi.org/10.20431/2349-0381.0704017
Anugerah, R., Anita, R., Sari, R. N., & Zenita, R. (2016). External locus of control and reduced audit quality behavior: The mediating effects of auditor performance and organizational commitment. Journal of Economics, Business and Management, 4(5), 353–357. https://doi.org/10.18178/joebm.2016.4.5.416
ASEAN Secretariat, & United Nations Conference on Trade and Development (UNCTAD). (2022). Pandemic recovery and investment facilitation. Retrieved from https://asean.org/wp-content/uploads/2022/10/AIR2022-Web-Online-Final-211022.pdf
Chen, M. H., & Chang, Y. (2013). The impacts of human capital in enhancing new venture’s performance: Competence, motivation and creativity. Journal of Knowledge-Based Innovation in China, 5(2), 146–168.
Chin, W. W. (1998). The partial least squares approach for structural equation modeling. Advances in Hospitality and Leisure, 8(2), 295–336.
Daft, R. L. (2021). Management, 14th ed. Cengage Learning, Boston.
Daft, R. L. (2023). Leadership experience, 8th ed. Cengage Learning, Boston.
Dede, F., & Kuşakcı, S. (2022). An up-to-date overview of the motivation-performance relationship: A study on the Bosnian banking sector. South East European Journal of Economics and Business, 17(2), 96–112. https://doi.org/10.2478/jeb-2022-0017
Fitri, D., & Dwita, V. (2024). Can self-leadership enhance the impact of motivation on entrepreneurial performance? MIX: Jurnal Ilmiah Manajemen, 14(3), 630–645. https://doi.org/10.22441/jurnal_mix.2024.v14i3.004
Folan, P., Browne, J., & Jagdev, H. (2007). Performance: Its meaning and content for today’s business research. Computers in Industry, 58(7), 605–620. https://doi.org/10.1016/j.compind.2007.05.002
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39. https://doi.org/10.2307/3151312
Hajiali, I., Kessi, A. M. F., Budiandriani, B., Prihatin, E., & Sufri, M. M. (2022). Determination of work motivation, leadership style, employee competence on job satisfaction and employee performance. Golden Ratio of Human Resource Management, 2(1), 57–69. https://doi.org/10.52970/grhrm.v2i1.160
Hajmohammadi, E., & Aghayani, B. (2022). A study on motivation and locus of control among male and female EFL learners. Mextesol Journal, 46(2), 1–13. https://doi.org/10.61871/mj.v46n2-13
Hanandeh, R., Alharafsheh, M., Albloush, A., lehyeh, S. M. A., & Kilani, Q. (2024). The impact of entrepreneurship self-concept, work motivation, and risk taking on human resource department performance and business overall performance at Jordan Private Universities. Uncertain Supply Chain Management, 12(1), 143–150. https://doi.org/10.5267/j.uscm.2023.10.010
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Hermawan, F., & Kaban, D. F. (2014). Pengaruh locus of control terhadap kinerja karyawan (studi pada karyawan di PT X). Jurnal Manajemen Bisnis, 5(1), 31–39.
Holden, S. L., Forester, B. E., Williford, H. N., & Reilly, E. (2019). Sport locus of control and perceived stress among college student-athletes. International Journal of Environmental Research and Public Health, 16(16), 2823. https://doi.org/10.3390/ijerph16162823
Hulin, C., Netemeyer, R., & Cudeck, R. (2001). Can a reliability coefficient be too high? Journal of Consumer Psychology, 10(1), 478–487.
Indonesian Chamber of Commerce and Industry. (2024). UMKM Indonesia. Retrieved from https://kadin.id/data-dan-statistik/umkm-indonesia/
Lin, G.-Y., Wang, Y.-S., Wang, Y.-M., & Lee, M.-H. (2021). What drives people’s intention toward live stream broadcasting. Online Information Review, 45(7), 1268–1289. https://doi.org/10.1108/OIR-10-2020-0466
Monteiro, D. L. C., Peñaloza, V., Pinto, F. R., Denegri Coria, M. del C., & Orellana Calderón, L. M. (2015). Attitudes towards money and motivational orientation to work in Brazilian young workers. Contaduría y Administración, 60(1), 11–30. https://doi.org/10.1016/S0186-1042(15)72145-5
Murti, C. D., & Utami, E. R. (2021). Pengaruh motivasi kerja, self efficacy dan internal locus of control terhadap kinerja karyawan Badan Kredit Desa (BKD). Reviu Akuntansi Dan Bisnis Indonesia, 5(2), 197–207.
Ng, T. W. H., Sorensen, K. L., & Eby, L. T. (2006). Locus of control at work: A meta-analysis. Journal of Organizational Behavior, 27(8), 1057–1087. https://doi.org/10.1002/job.416
Ngoc, N. L. B., Kesavayuth, D., & Rangkakulnuwat, P. (2022). Effect of locus of control on job performance: evidence from Australian panel data. Applied Economics Journal, 29(1), 1–25.
Purbasari, R. N., & Septian, T. A. (2017). Factors influencing on employee performance of production department on the manufacturing food industry in Indonesia. Polish Journal of Management Studies, 16(2), 233–242. https://doi.org/10.17512/pjms.2017.16.2.20
Purbasari, Rr. N. (2022). Pengaruh attitude toward money dan locus of control terhadap motivasi wirausaha dan kinerja bisnis (Studi pada wirausaha mahasiswa perguruan tinggi di Jakarta). Doctoral dissertation, Universitas Brawijaya, Malang, Indonesia. Retrieved from https://www.neliti.com/id/publications/563147/destertasi-s3-rr-niken-purbasari
Purbasari, Rr. N., Thoyib, A., Sumiyati, & Irawanto, D. W. (2022). The mediating role of motivation and its relationship with performance. The Seybold Report Journal, 17(10), 1610–1633.
Purwati, A. A., Sitompul, S. S., Sandria, W., Sari, T. P., & Hamzah, M. L. (2023). Locus of control analysis in improving satisfaction and performance of Sharia Bank’s employee. International Journal of Social Science and Business, 7(3), 560–569. https://doi.org/10.23887/ijssb.v7i3.50649
Rachman, M. M., Sugijanto, & Handayani, Ch. M. (2022). Improving lecturer performance: The role of locus of control, motivation and competence. Jurnal Manajemen, 26(1), 99–120. https://doi.org/10.24912/jm.v26i1.842
Rahmawati, A., Wahyuningsih, S. H., & Garad, A. (2023). The effect of financial literacy, training and locus of control on creative economic business performance. Social Sciences & Humanities Open, 8(1), 100721. https://doi.org/10.1016/j.ssaho.2023.100721
Rotter, J. B. (1966). Generalized expectancies for internal versus external control of reinforcement. Psychological Monographs: General and Applied, 80(1), 1–28. https://doi.org/10.1037/h0092976
Sarstedt, M., Ringle, C. M., & Hair, J. F. (2022). Partial least squares structural equation modeling. In Handbook of Market Research (pp. 587–632). Springer International Publishing. https://doi.org/10.1007/978-3-319-57413-4_15
Selvi, S., Pakaya, Abd. R., & Nahar, F. H. (2024). Management behavior: The role of financial literacy and financial knowledge of MSME actors. Jurnal Aplikasi Manajemen, 22(3), 909–919. https://doi.org/10.21776/ub.jam.2024.022.03.20
Shin, Y., Hur, W.-M., Moon, T. W., & Lee, S. (2019). A motivational perspective on job insecurity: Relationships between job insecurity, intrinsic motivation, and performance and behavioral outcomes. International Journal of Environmental Research and Public Health, 16(10), 1812. https://doi.org/10.3390/ijerph16101812
Sink, D. S., Tuttle, T. C., & Devries, S. J. (1984). Productivity measurement and evaluation: What is available? National Productivity Review, 3(3), 265–287. https://doi.org/10.1002/npr.4040030305
Spector, P. E., Cooper, C. L., Sanchez, J. I., O’driscoll, M., Sparks, K., Bernin, P., Büssing, A., Dewe, P., Hart, P., Lu, L., Miller, K., Renault De Moraes, L., Ostrognay, G. M., Pagon, M., Pitariu, H. D., Poelmans, S. A. Y., Radhakrishnan, P., Russinova, V., Salamatov, V., … Theorell, T. (2002). Locus of control and well-being at work: how generalizable are western findings? Academy of Management Journal, 45(2):453-466.
Srimulyani, V. A., Hermanto, Y. B., Rustiyaningsih, S., & Waloyo, L. A. S. (2023). Internal factors of entrepreneurial and business performance of small and medium enterprises (SMEs) in East Java, Indonesia. Heliyon, 9(11), e21637. https://doi.org/10.1016/j.heliyon.2023.e21637
Sugiarti, E. (2022). The influence of training, work environment and career development on work motivation that has an impact on employee performance at PT. Suryamas Elsindo Primatama in West Jakarta. International Journal of Artificial Intelligence Research, 6(1). https://doi.org/10.29099/ijair.v6i1.304
Sugiharjo, R. J., Marlapa, E., Paijan, P., Purbasari, Rr. N., Parasakti, R. D., & Soelton, M. (2024). Significant and substantial opportunities to improve distributive justice and perceived organizational support. International Journal of Advanced and Applied Sciences, 11(6), 147–155. https://doi.org/10.21833/ijaas.2024.06.016
Sundjoto. (2017). The role of internal locus of control on intrinsic motivation and employee performance of ceramic company in East Java. IOSR Journal of Business and Management, 19(7), 29–35.
Virgana, & Lapasau, M. (2024). Elevating teachers’ performance through locus of control, leadership style, environmental factors, and work motivation. Knowledge Management & E-Learning: An International Journal, 16(1), 65–87. https://doi.org/10.34105/j.kmel.2024.16.003
Wijbenga, F. H., & van Witteloostuijn, A. (2007). Entrepreneurial locus of control and competitive strategies – The moderating effect of environmental dynamism. Journal of Economic Psychology, 28(5), 566–589. https://doi.org/10.1016/j.joep.2007.04.003
Zain, M. A. A., Murwani, D., & Churiyah, M. (2023). The influence of internal locus of control and work overload on employee performance through work-life balance in the teleworking era (Study on consultant sector freelancers in Indonesia). International Journal of Business and Quality Research, 1(2).
Zakiyah, E. F., Kasmo, A. B. P., & Nugroho, L. (2022). Peran dan fungsi usaha mikro kecil dan menengah (UMKM) dalam memitigasi resesi ekonomi global 2023. Jurnal Cakrawala Ilmiah, 2(4), 1657–1668.
Unduhan
Diterbitkan
Cara Mengutip
Terbitan
Bagian
Lisensi
The copyright to this article is transferred to Universitas Mercu Buana (UMB) if and when the article is accepted for publication. The undersigned hereby transfers any and all rights in and to the paper including without limitation all copyrights to UMB. The undersigned hereby represents and warrants that the paper is original and that he/she is the author of the paper, except for material that is clearly identified as to its original source, with permission notices from the copyright owners where required. The undersigned represents that he/she has the power and authority to make and execute this assignment.
We declare that this paper has not been published in the same form elsewhere.
Furthermore, I/We hereby transfer the unlimited rights of publication of the above mentioned paper in whole to UMB. The copyright transfer covers the right to reproduce and distribute the article, including reprints, translations, photographic reproductions, microform, electronic form (offline, online) or any other reproductions of similar nature.
The corresponding author signs for and accepts responsibility for releasing this material on behalf of any and all co-authors. This agreement is to be signed by at least one of the authors who have obtained the assent of the co-author(s) where applicable. After submission of this agreement signed by the corresponding author, changes of authorship or in the order of the authors listed will not be accepted.
Retained Rights/Terms and Conditions
Although authors are permitted to re-use all or portions of the Work in other works, this does not include granting third-party requests for reprinting, republishing, or other types of re-use.
