The effect of strategic entrepreneurship to innovation with creativity as a moderating variable at culinary industry in Bandung city

A.L. Lahindah

Sekolah Tinggi Ilmu Ekonomi Harapan Bangsa, Bandung, Indonesia

ABSTRACT: Culinary industry in Bandung has become one of the national culinary tourism destinations.

1 INTRODUCTION

Creative economy is the trigger of the birth of indus­try 4.0. This era was followed by the birth of new innovative and creative business models. The birth of industry 4.0 began with the emergence of gener­ation Z who had a very high level of innovation and creativity. Bandung is designated as the city of national culinary destinations by the Ministry of Tourism along with other cities namely Bali, Solo, Semarang, and Yogyakarta (Budhiman 2017). The Mayor of Bandung stated that this condition occurred because of the many culinary varieties of Bandung and innovation.

According to data from the Bandung City Culture and Tourism Office, the culinary industry that has permits in August 2014 totaled 660 restaurants. This number consists of three classifications: 301 restaur­ants, 13 bars, and 346 canteens. From the classifica­tion, the culinary business in Bandung has a variety of business themes and specifications starting from the culinary business that serves certain types of food to culinary businesses that even offer a variety of the beauty of nature.

This study attempts to analyze the factors of human capital and organizational social capital and relate them to innovation variables. Human resources are important variables for organizational success (Pfeffer 1994, Hitt et al. 2001a, b) where human resources include skills, abilities, knowledge, and experience.

Social capital is a series of organizational capital that includes relationships between individuals and between individuals and organizations. Variables of human capital and social capital of creative industry players then join the entrepreneurial variable which includes the entrepreneurial mindset and entrepre­neurial culture. Entrepreneurship leadership which is rooted in the ability to know the opportunities and behaviors that produce superior organizational per­formance is called strategic entrepreneurship (Ire­land et al. 2003).

Strategic entrepreneurship is expected to illustrate the condition of the culinary industry in Bandung, which is influenced by creativity and innovation that can make culinary actors in the city of Bandung sur­vive. Creativity is sensitivity in dealing with prob­lems (Cheng 2007) to form unusual patterns and then create ideas that ultimately create innovation (Tang 1998, Cook 1998).

Based on that situations, this research objective is to understand the effect of strategic entrepreneurship to innovation on culinary industry in Bandung City with creativity as a moderating variable.

1.1 Strategicentrepreneurship

Strategic entrepreneurship includes a combination of the ability to recognize the opportunities and behav­iors that result in superior organizational perform­ance (Ireland et al. 2003). Strategic entrepreneurship is a very unique and specific concept because of its ability to create organizational well-being.

Ireland et al. (2003) suggested that entrepreneur­ship and strategic management focus on growth and the creation of organizational welfare. The creation of welfare and growth of organizations are intercon­nected with each other even though growth is a pre­dictable factor that can help organizations create prosperity and build economies of scale as much as market forces. Strategic entrepreneurship creates output that is an additional resource and contributes to achieving competitive advantage.

Strategic entrepreneurship consists of actions with a strategic perspective to create organizational skills and identify opportunities (Ireland et al. 2003). With­out these skills, the organization will not innovate and will be disturbed.

1.2 Creativity

Creativity is an important part of research on cre­ative behavior. How to assess creativity can be seen from how many new products, processes, and market systems are produced to deal with environ­mental dynamics and limited resources. Creativity is a response or level of sensitivity in dealing with problems (Cheng 2007), or forming unusual patterns to create ideas that ultimately create innovation (Tang 1998, Cook 1998).

1.3 Innovation

Innovation is an instrument to realize an entrepre­neurial economy (Drucker 1985). Innovation comes from Latin “innovatio” or “innovo” which means updating or making something new (Abouzeedan 2011). Innovation can be seen in several characteris­tics such as introducing new products, introducing new methods, opening new markets, acquiring new sources of raw materials, and updating organizations (Schumpeter 1934). With the realization of innov­ation, delivery of products, processes, marketing techniques, and organizational updates can be car­ried out (Mazzarol & Rebound 2008) through new technology, intellectual property, and business and physical change (Abouzeedan 2011).

1.4 The effect of strategic entrepreneurship to innovation with creativity as a moderation variable

Strategic entrepreneurship consists of finding a bal­ance between looking for potential opportunities (to identify areas of activity in the future) and how organizations experience learning, the absorption of new knowledge and technology, and several other strategies that bring organizations towards prosperity and achievement.

Ireland et al. (2003) argue that strategic entre­preneurship includes entrepreneurial action with a strategic perspective so that the organization is able to identify opportunities. Organizations that have the ability to exploit opportunities will innovate and ultimately achieve their goals. Innov­ation is a real act of sensitivity when individuals face problems (Cheng 2007), and is a measure of the level of creativity that is formed as an unusual pattern (Tang 1998, Cook 1998). Thus, innovation as an action to achieve competitive advantage of an organ­ization arises because of the existing strategic entre­preneurial spirit, which is supported by creativity.

From the above explanation, the hypothesis com­piled in this study is:

H₁: Strategic Entrepreneurship influences innov­ation with creativity as a moderating variable.

2 RESEARCH METHODOLOGY

This study is a causal explanative research to under­stand the influence of strategic entrepreneurial causal relationships, creativity, and innovation. Data was taken from 203 culinary actors in the city of Ban­dung from 660 culinary actors registered in the city of Bandung. The questionnaire was distributed to culinary owners or managers by simple random sam­pling method. By using partial least square (PLS) method, the data is analyzed to find out the hypoth­esis. In-depth interviews were conducted to ascertain the results after the data was analyzed.

3 RESULTS AND DISCUSSION

In this research, WarpPLS 3.0 software was used to test the previously described hypothesis.

Figure 1 shows that strategic entrepreneurship influences innovation but the influence of creativity moderating on the relationship between strategic entrepreneurship and innovation is not significant with a P value of 0.28. These results indicate that creativity is not a moderating variable in the relation­ship between strategic entrepreneurship and innov­ation. Furthermore, several main outputs will be interpreted from the results of the testing of the mod­eration model above, as follows:

Table 1 shows that fit model indicators have been met, i.e., APC and ARS are significant with P value

Figure 1. Research model.

Source: WarpPLS 3.0, 2016.

Table 1. Model fit indices and P values.

Average path coefficient (APC)=0.352, Pcan be facilitated. Developing an entrepreneurial cul­ture in an organization will continuously create cul­tural patterns of member organizations that want to continuously develop and create innovation. The success of cultivators in developing their entrepre­neurial culture is due to the form of culinary organ­ization in Bandung city on average on the small and medium scales. On the scale of small and medium organizations, the formation of culture is usually easier and more focused.

Effective entrepreneurial leadership gains infor­mation disclosure with organizational members to describe innovations that may be disengaged as a potential advantage (for example, stimulating the development of new competitive advantages). By stimulating the development of new products, it will create a product innovation that is an advantage for the organization. Entrepreneurship leadership in the culinary sub-sector in Bandung influences Innov­ation. This condition can occur, because most

culinary in Bandung are companies that are in the middle business category, and in this category, owners have full power to manage and develop the company (Mintzberg et al.

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