Main Article Content
Abstract
The increasingly dynamic business environment requires business actors, especially MSMEs, to adapt quickly and strategically to remain sustainable. Human resource management that is not only administrative but also oriented towards entrepreneurial values is believed to be the key to strengthening competitiveness in an era of rapidly changing markets. This study aims to analyse the effect of entrepreneurial human resource management integration on business ecosystem sustainability, with the dynamic market era as a mediating variable. This study employs an explanatory quantitative approach to examine MSMEs in Magelang Regency, Central Java. The study population consists of all active MSME actors, and through the proportionate stratified random sampling method, 71 respondents were obtained as the study sample. Primary data were collected using a Likert scale questionnaire and analysed using Partial Least Squares-Structural Equation Modelling (PLS-SEM) with SmartPLS version 4.0. The results show that integrating entrepreneurial human resource management has a positive effect on market adaptability, which significantly improves the sustainability of the business ecosystem. Furthermore, the dynamic market era was found to mediate the relationship between entrepreneurial human resource management and business sustainability. This confirms that successful innovative human resource management must be accompanied by the ability to cope with changes in the external environment. These findings have important implications for strengthening MSME development strategies based on human capabilities and sustainable market adaptation.
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References
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- Al-Abbadi, L. H., & Abu Rumman, A. (2023). Sustainable performance based on entrepreneurship, innovation, and green HRM in e-business firms. Cogent Business & Management, 10(1), 2189998. https://doi.org/10.1080/23311975.2023.2189998
- Al Mamun, A., Ibrahim, M. D., Yusoff, M. N. H. B., & Fazal, S. A. (2022). Entrepreneurial orientation, human capital, and SME performance: The mediating effect of innovation. Journal of Small Business and Enterprise Development, 29(2), 257–276. https://doi.org/10.1108/JSBED-04-2021-0138
- Arshad, M., Khan, M. A., & Nazir, S. (2022). Agile human resource management: Antecedents and impact on innovation capability in SMEs. European Journal of Innovation Management, 26(3), 588–605. https://doi.org/10.1108/EJIM-11-2021-0567
- Bansal, P., Jiang, G. F., & Jung, J. C. (2023). Managing business sustainability: Reintegrating time into management theory. Academy of Management Review, 48(1), 1–23. https://doi.org/10.5465/amr.2020.0052
- Barney, J. B., & Wright, P. M. (1998). On becoming a strategic partner: The role of human resources in gaining competitive advantage. Human Resource Management, 37(1), 31–46. https://doi.org/10.1002/(SICI)1099-050X(199821)37:1<31::AID-HRM4>3.0.CO;2-W
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- Chatterjee, S. (2022). The impact of dynamic capability on business sustainability: A review and future research agenda. Vision: The Journal of Business Perspective, 26(3), 267–278. https://doi.org/10.1177/23197145221107432
- Cooke, F. L. (2023). The changing role of HRM in sustainable organisational transformation. Human Resource Management Review, 33(4), 100921. https://doi.org/10.1016/j.hrmr.2023.100921
- Correggi, C., Rancati, E., & Bastianoni, S. (2024). Rethinking dynamic capabilities in light of sustainability: A systematic review. Business Strategy and the Environment, 33(1), 201–218. https://doi.org/10.1002/bse.3901
- Covin, J. G., & Wales, W. J. (2022). Crafting high-impact entrepreneurial orientation research: Some suggested guidelines. Entrepreneurship Theory and Practice, 46(5), 1097–1123. https://doi.org/10.1177/10422587221089956
- Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). SAGE Publications.
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- Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91. https://doi.org/10.5465/amr.1995.9503271992
- Etikan, I., & Bala, K. (2017). Sampling and sampling methods. Biometrics & Biostatistics International Journal, 5(6), 215–217. https://doi.org/10.15406/bbij.2017.05.00149
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- Jackson, S. E., Schuler, R. S., & Jiang, K. (2014). An aspirational framework for strategic human resource management. Academy of Management Annals, 8(1), 1–56. https://doi.org/10.5465/19416520.2014.872335
- Khan, K., & Anwar, M. (2023). Dynamic market orientation and organisational performance: The mediating role of adaptive capabilities. Journal of Business Research, 157, 113527. https://doi.org/10.1016/j.jbusres.2022.113527
- Kashive, N., Joshi, A., & Bhaskar, A. U. (2023). Human resource practices for innovation and sustainable competitive advantage in small businesses. Journal of Small Business and Enterprise Development, 30(2), 254–273. https://doi.org/10.1108/JSBED-03-2022-0111
- Kusa, R., Duda, J., & Suder, M. (2024). Human resource management practices and entrepreneurial orientation: A systematic review and research agenda. Entrepreneurship Research Journal, 14(1), 1–25. https://doi.org/10.1515/erj-2021-0479
- Li, X., Song, Y., & Zhang, Y. (2023). Building resilient business ecosystems for SMEs through digital transformation. Technological Forecasting and Social Change, 192, 122564. https://doi.org/10.1016/j.techfore.2023.122564
- Li, Z., Qiu, Y., & Shi, Y. (2023). Sustainable business ecosystems: Integrating green innovation and stakeholder engagement. Sustainability, 15(5), 4127. https://doi.org/10.3390/su15054127
- Mahmood, R., Hafeez, M. H., & Iqbal, N. (2021). The impact of entrepreneurial orientation on firm performance: The mediating role of dynamic capabilities. Journal of Entrepreneurship in Emerging Economies, 13(4), 627–647. https://doi.org/10.1108/JEEE-12-2019-0194
- Nguyen, H. T., & Luu, T. T. (2023). Entrepreneurial HRM and firm innovation in emerging markets: The mediating role of market responsiveness. Journal of Small Business Management, 61(2), 287–305. https://doi.org/10.1080/00472778.2022.2064315
- Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
- Pratono, A. H. (2018). From social network to firm performance: The mediating effect of trust, selling capability, and pricing capability. Management Research Review, 41(6), 680–700. https://doi.org/10.1108/MRR-05-2017-0139
- Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice, 33(3), 761–787. https://doi.org/10.1111/j.1540-6520.2009.00308.x
- Rogoza, R., & Agnieszka, K. (2021). Sustainable business models: A bibliometric and systematic review. Journal of Cleaner Production, 278, 123773. https://doi.org/10.1016/j.jclepro.2020.123773
- Sakib, M. N., Biswas, T., & Chowdhury, M. M. H. (2025). A twenty-two-year journey of sustainable human resource management: A systematic literature review and research agenda. Future Business Journal, 11(1), 1–24. https://doi.org/10.1186/s43093-025-00608-5
- Sarstedt, M., Ringle, C. M., Hair, J. F., & Gudergan, S. P. (2022). Partial least squares structural equation modelling using SmartPLS 4. SAGE Publications.
- Sevilla, C. G., Ochave, J. A., Punsalan, T. G., Regala, B. P., & Uriarte, G. G. (1992). Research methods. Rex Printing Company.
- Sofyani, H. (2013). Testing the model of the relationship between the implementation of the government agency performance accountability system (SAKIP), organisational commitment, organisational culture, and government agency performance. Dissertation, Gadjah Mada University.
- Sugiyono. (2018). Quantitative, qualitative, and R&D research methods. Alfabeta.
- Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49. https://doi.org/10.1016/j.lrp.2017.06.007
- Wiklund, J., & Shepherd, D. (2022). Entrepreneurial orientation and small business performance: A configurational approach. Journal of Business Venturing, 37(2), 106216. https://doi.org/10.1016/j.jbusvent.2021.106216
- Yu, J., Yuan, C., Han, W., Li, M., & Pengfei, X. (2022). Human resource management system strength and organisational resilience: Evidence from manufacturing SMEs. Frontiers in Psychology, 13, 977434. https://doi.org/10.3389/fpsyg.2022.977434
- Zahra, S. A., & Covin, J. G. (2020). Contextualising entrepreneurship theory. Academy of Management Perspectives, 34(3), 345–368. https://doi.org/10.5465/amp.2018.0179
- Zainol, F. A., Daud, W. N. W., & Halim, H. A. (2022). Entrepreneurial orientation, market dynamics, and SME performance: Evidence from emerging economies. Asia Pacific Journal of Innovation and Entrepreneurship, 16(4), 475–491. https://doi.org/10.1108/APJIE-05-2022-0062
References
Acs, Z. J., Audretsch, D. B., & Lehmann, E. E. (2017). The knowledge spillover theory of entrepreneurship. Small Business Economics, 48(4), 757–774. https://doi.org/10.1007/s11187-016-9766-4
Afuah, A. (2022). Business model innovation in dynamic environments: A review and research agenda. Journal of Management, 48(3), 567–596. https://doi.org/10.1177/01492063211058455
Al-Abbadi, L. H., & Abu Rumman, A. (2023). Sustainable performance based on entrepreneurship, innovation, and green HRM in e-business firms. Cogent Business & Management, 10(1), 2189998. https://doi.org/10.1080/23311975.2023.2189998
Al Mamun, A., Ibrahim, M. D., Yusoff, M. N. H. B., & Fazal, S. A. (2022). Entrepreneurial orientation, human capital, and SME performance: The mediating effect of innovation. Journal of Small Business and Enterprise Development, 29(2), 257–276. https://doi.org/10.1108/JSBED-04-2021-0138
Arshad, M., Khan, M. A., & Nazir, S. (2022). Agile human resource management: Antecedents and impact on innovation capability in SMEs. European Journal of Innovation Management, 26(3), 588–605. https://doi.org/10.1108/EJIM-11-2021-0567
Bansal, P., Jiang, G. F., & Jung, J. C. (2023). Managing business sustainability: Reintegrating time into management theory. Academy of Management Review, 48(1), 1–23. https://doi.org/10.5465/amr.2020.0052
Barney, J. B., & Wright, P. M. (1998). On becoming a strategic partner: The role of human resources in gaining competitive advantage. Human Resource Management, 37(1), 31–46. https://doi.org/10.1002/(SICI)1099-050X(199821)37:1<31::AID-HRM4>3.0.CO;2-W
Magelang Regency Statistics Agency. (2023). Magelang Regency in Figures 2023. Magelang Regency Statistics Agency.
Campos-García, I., Arredondo-Trapero, F. G., & González-Morales, O. (2024). Human resource management and sustainability: Bridging the gap. Corporate Social Responsibility and Environmental Management, 31(2), 742–755. https://doi.org/10.1002/csr.2680
Chatterjee, S. (2022). The impact of dynamic capability on business sustainability: A review and future research agenda. Vision: The Journal of Business Perspective, 26(3), 267–278. https://doi.org/10.1177/23197145221107432
Cooke, F. L. (2023). The changing role of HRM in sustainable organisational transformation. Human Resource Management Review, 33(4), 100921. https://doi.org/10.1016/j.hrmr.2023.100921
Correggi, C., Rancati, E., & Bastianoni, S. (2024). Rethinking dynamic capabilities in light of sustainability: A systematic review. Business Strategy and the Environment, 33(1), 201–218. https://doi.org/10.1002/bse.3901
Covin, J. G., & Wales, W. J. (2022). Crafting high-impact entrepreneurial orientation research: Some suggested guidelines. Entrepreneurship Theory and Practice, 46(5), 1097–1123. https://doi.org/10.1177/10422587221089956
Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). SAGE Publications.
Dess, G. G., Lumpkin, G. T., & McFarlin, D. B. (1997). Entrepreneurial strategy making and firm performance: Tests of contingency and configurational models. Strategic Management Journal, 18(9), 677–695. https://doi.org/10.1002/(SICI)1097-0266(199710)18:9<677::AID-SMJ893>3.0.CO;2-Q
Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91. https://doi.org/10.5465/amr.1995.9503271992
Etikan, I., & Bala, K. (2017). Sampling and sampling methods. Biometrics & Biostatistics International Journal, 5(6), 215–217. https://doi.org/10.15406/bbij.2017.05.00149
Fayolle, A., & Liñán, F. (2020). The future of research on entrepreneurial intentions. Journal of Business Research, 110, 1–10. https://doi.org/10.1016/j.jbusres.2020.01.045
Fitria, T., & Rachmawati, D. (2021). The influence of human resource competence and innovation on the performance of MSMEs. Indonesian Journal of Economics and Business, 6(3), 211–222. https://doi.org/10.37673/jebi.v6i3.1072
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2021). A primer on partial least squares structural equation modelling (PLS-SEM) (3rd ed.). SAGE Publications.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modelling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Jackson, S. E., Schuler, R. S., & Jiang, K. (2014). An aspirational framework for strategic human resource management. Academy of Management Annals, 8(1), 1–56. https://doi.org/10.5465/19416520.2014.872335
Khan, K., & Anwar, M. (2023). Dynamic market orientation and organisational performance: The mediating role of adaptive capabilities. Journal of Business Research, 157, 113527. https://doi.org/10.1016/j.jbusres.2022.113527
Kashive, N., Joshi, A., & Bhaskar, A. U. (2023). Human resource practices for innovation and sustainable competitive advantage in small businesses. Journal of Small Business and Enterprise Development, 30(2), 254–273. https://doi.org/10.1108/JSBED-03-2022-0111
Kusa, R., Duda, J., & Suder, M. (2024). Human resource management practices and entrepreneurial orientation: A systematic review and research agenda. Entrepreneurship Research Journal, 14(1), 1–25. https://doi.org/10.1515/erj-2021-0479
Li, X., Song, Y., & Zhang, Y. (2023). Building resilient business ecosystems for SMEs through digital transformation. Technological Forecasting and Social Change, 192, 122564. https://doi.org/10.1016/j.techfore.2023.122564
Li, Z., Qiu, Y., & Shi, Y. (2023). Sustainable business ecosystems: Integrating green innovation and stakeholder engagement. Sustainability, 15(5), 4127. https://doi.org/10.3390/su15054127
Mahmood, R., Hafeez, M. H., & Iqbal, N. (2021). The impact of entrepreneurial orientation on firm performance: The mediating role of dynamic capabilities. Journal of Entrepreneurship in Emerging Economies, 13(4), 627–647. https://doi.org/10.1108/JEEE-12-2019-0194
Nguyen, H. T., & Luu, T. T. (2023). Entrepreneurial HRM and firm innovation in emerging markets: The mediating role of market responsiveness. Journal of Small Business Management, 61(2), 287–305. https://doi.org/10.1080/00472778.2022.2064315
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
Pratono, A. H. (2018). From social network to firm performance: The mediating effect of trust, selling capability, and pricing capability. Management Research Review, 41(6), 680–700. https://doi.org/10.1108/MRR-05-2017-0139
Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice, 33(3), 761–787. https://doi.org/10.1111/j.1540-6520.2009.00308.x
Rogoza, R., & Agnieszka, K. (2021). Sustainable business models: A bibliometric and systematic review. Journal of Cleaner Production, 278, 123773. https://doi.org/10.1016/j.jclepro.2020.123773
Sakib, M. N., Biswas, T., & Chowdhury, M. M. H. (2025). A twenty-two-year journey of sustainable human resource management: A systematic literature review and research agenda. Future Business Journal, 11(1), 1–24. https://doi.org/10.1186/s43093-025-00608-5
Sarstedt, M., Ringle, C. M., Hair, J. F., & Gudergan, S. P. (2022). Partial least squares structural equation modelling using SmartPLS 4. SAGE Publications.
Sevilla, C. G., Ochave, J. A., Punsalan, T. G., Regala, B. P., & Uriarte, G. G. (1992). Research methods. Rex Printing Company.
Sofyani, H. (2013). Testing the model of the relationship between the implementation of the government agency performance accountability system (SAKIP), organisational commitment, organisational culture, and government agency performance. Dissertation, Gadjah Mada University.
Sugiyono. (2018). Quantitative, qualitative, and R&D research methods. Alfabeta.
Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49. https://doi.org/10.1016/j.lrp.2017.06.007
Wiklund, J., & Shepherd, D. (2022). Entrepreneurial orientation and small business performance: A configurational approach. Journal of Business Venturing, 37(2), 106216. https://doi.org/10.1016/j.jbusvent.2021.106216
Yu, J., Yuan, C., Han, W., Li, M., & Pengfei, X. (2022). Human resource management system strength and organisational resilience: Evidence from manufacturing SMEs. Frontiers in Psychology, 13, 977434. https://doi.org/10.3389/fpsyg.2022.977434
Zahra, S. A., & Covin, J. G. (2020). Contextualising entrepreneurship theory. Academy of Management Perspectives, 34(3), 345–368. https://doi.org/10.5465/amp.2018.0179
Zainol, F. A., Daud, W. N. W., & Halim, H. A. (2022). Entrepreneurial orientation, market dynamics, and SME performance: Evidence from emerging economies. Asia Pacific Journal of Innovation and Entrepreneurship, 16(4), 475–491. https://doi.org/10.1108/APJIE-05-2022-0062