American Journal of Theoretical and Applied Business

2017; 3(4): 71-80

http://www.sciencepublishinggroup.com/j/ajtab
doi: 10.11648/j.ajtab.20170304.12
ISSN: 2469-7834 (Print); ISSN: 2469-7842 (Online)

The Effect of Strategic Management Practices on SME

Performances in Makassar, Indonesia
Sirajuddin Omsa*, Muhammad Ridwan, Muhammad Jayadi
Accounting Department, State Polytechnic of Ujung Pandang, Makassar, Indonesia

Email address:
sirajomsa31@gmail.com (S. Omsa), ridho70@yahoo.com (M. Ridwan), jayadaming@yahoo.com (M. Jayadi)
*
Corresponding author

To cite this article:

Sirajuddin Omsa, Muhammad Ridwan, Muhammad Jayadi. The Effect of Strategic Management Practices on SME Performances in
Makassar, Indonesia. American Journal of Theoretical and Applied Business. Vol. 3, No. 4, 2017, pp. 71-80.
doi: 10.11648/j.ajtab.20170304.12

Received: November 26, 2017; Accepted: December 22, 2017; Published: January 8, 2018

Abstract: The increasingly dynamic market conditions and competition among companies encourage business owners,
including small and medium enterprises (SME) owners in Indonesia and in other countries to understand how SMEs can be
maintained or enhanced their marketing and financial performances. In order to compete, strategic and policy management
experts encourage companies, including SME to apply strategic management practices. This study aims to measure how strong
the effect of the implementation of strategic management practices on the performance of SMEs in Makassar, Indonesia
especially the performance associated with sales turnover, break even point (BEP), and profit. This research uses quantitative
data with primary data source through interview process and questionnaire. The interview process was conducted with the head
of the small and medium enterprises (SME) in Makassar, whereas questionnaires were distributed directly to 178 respondents
by the survey officer. Of the 178 questionnaires distributed to the respondents, 158 of them (88.76%) were eligible to be
processed and analyzed. The results show that the strategic management practices such as strategic planning, strategic
execution, and strategic evaluation have a positive and significant impact on sales volume, BEP achievement, and profits of
SMEs, especially in medium-sized of enterprises. But the level of education does not serve as an important factor in
moderating these strategic management practices against sales volume, BEP and profits. The study also shows that the
determination of mission and strategic formulation (part of strategic management practices) have no significant effect on sales
volume, BEP and profit. The results of this research are expected to contribute both to the academic community and to
business actors, especially managers and/or owners of SME in Makassar. Another practical contribution is to provide inputs to
policy makers such as Department of Cooperative and SME in Makassar, in order to develop the quality of SME to remain
competitive and still exist in an increasingly dynamic and more competitive market.

Keywords: Strategic Management Practices, Sales Volume, Break Even Point (BEP), Profit,
Small and Medium Enterprises (SME)

the effect of strategic management practices on corporate

1. Introduction performance. The results of previous research indicate that
As business competition is tighter and market conditions is the relationship between the strategic management practices
more dynamic, many small and medium enterprises (SME) in and corporate performances was inconsistent. Some argue
Indonesia and in other countries develop their efforts to that there is a strong relationship between the two variables,
understand how SME can maintain or improve their but no less believe that the two variables do not have a strong
marketing and financial performances. In order to be able to relationship [1]; [2]. As a result, until now, there is still a
compete, some strategic and policy management experts have research gap in regard to the effect of strategic management
encouraged companies to implement strategic management practices on business performance.
practices. However, there is still an unresolved debate over This study aims to measure how strong the effect of
strategic management practices on performance of SME in
 American Journal of Theoretical and Applied Business 2017; 3(4): 71-80 72

Makassar, Indonesia especially the performance associated goals.

with sales volume, break even point (BEP), and profit. The The key components of strategic management practice
study also explores whether the level of education and the require answers to the question of where the future
size of SME have a role in moderating the effect of strategic business direction is, where the current business will be,
management practices on sales volume, BEP and SME’s what business will be in the future, and what changes will
profit. occur in the business environment [5]. According to [6]
and [3], key aspects of strategic management include
2. Theoretical Background environmental analysis, corporate mission setting, strategy
formulation, strategy execution, strategy evaluation and
The literature review will be explained and discussed the control. [7] have observed that key aspects of strategic
characteristic of small and medium enterprises (SME), management include the company's long-term outlook,
strategic management practices, and business performances. and defining the line of business to ensure the right
strategy is applied to the company based on the
2.1. Characteristics of Small and Medium Enterprises environmental condition. This idea shows that the right
(SME) strategy can help the organization to take advantage of
Some agencies and regulators in Indonesia have defined emerging opportunities to minimize the threat posed by an
small and medium enterprises (SME), such as the State unstable market environment.
Ministry of Cooperative and Small Medium Enterprises, Strategic management evolved in four different periods.
Central Bureau of Statistics (BPS), Decree of Minister of Theoretically, the latest theory of strategic management is a
Finance No. 316 / KMK.016 / 1994 dated June 27, 1994, and resource-based view of the company [8] that focuses
law number 20 Year 2008. This study is based on the attention on the internal aspects of the company, where [9]
definition of the Central Bureau of Statistics (BPS) related to characterizes representing an important research domain in
SME using the amount of labor to distinguish between micro, the era of development the beginning of strategic
small and medium enterprises. Central Bureau of Statistics management in the 1960s. Strategy pioneers such as [10] and
(BPS) provides the definition of SME based on the labor [11] focus more on identifying best practices of companies
quantity. According to BPS, micro, small, and medium that contribute to the their success. Researchers in this period
enterprises are business entities that each has less than 5 have emphasized their opinion that the company's success is
labors, has 5 to 19 labors, and has 20 to 99 labors due to the role of internal factors and the company's unique
respectively. Furthermore, law number 20 year 2008 states competitiveness [9]. The argument that emphasizes the
that small business is a stand-alone productive economic success of the company due to the internal factor is called by
enterprise, conducted by an individual or a business entity [12] as resource-based view (RBV).
that is not a subsidiary or not a branch of a company owned, In the 1970s, the focus of strategic management attention
neither controlled or become part directly or indirectly from a was on the external factor of the firm, known as industrial /
large business. In general, SME’s characteristics in Indonesia organizational or I / O [13]. This theory was basically came
are as follows: from [14] and [15]. According to Porter in [16], in this era,
a. There is no clear separation between the owner and the corporate strategy is grouped according to the industrial
manager of the company. Owner acts also as a manager structure. [14] and [15] believe that the performance of an
of SME. enterprise is largely determined by external or industrial /
b. Capital is provided by an owner or a small group of organizational (I / O) factors that the company's management
capital owners. cannot fully control. In the third period, the focus of strategic
c. The area of operation is generally local, although there planning theory shifted again to the internal corporate factors
are also export-oriented SME. (RBV), characterized by an emphasis on competitive
d. Have small size of the company, in terms of total dynamics and the boundaries of the relationships between
assets, number of employees, and infrastructure. companies and their environment [17].
e. The scale of business is small, labor-intensive, based Compared to I / O, strategic management moves closer to
on local resources, multiple actors, and spread across internal corporate factors (RBV) and the competition among
multiple locations. firms in a competitive environment [18]. In the fourth period,
the company's resource-based view (RBV) became the focus of
2.2. Strategic Management Practices attention for the company in managing its strategy.
Theoretically, the main premise of a resource-based view of a
According to [3] strategic planning and strategy company addresses the fundamental question of how a company
management are similar. The first term is often used in the can achieve and sustain its competitive advantage [19].
business world, while the former is often used in the In relation to strategic management practices, [20] describe
academic world. In this research will be used the terminology four stages or strategic management processes, namely: (1)
of strategic management practiecs. [4] defines strategic environmental scanning; (2) strategy formulation; (3) strategy
management as a method of formulating and implementing implementation; and (4) evaluation and control. The strategic
long-term plans widely and flexibly to achieve organizational management process can be seen in the following figure 1:
73 Sirajuddin Omsa et al.: The Effect of Strategic Management Practices on SME Performances in Makassar, Indonesia

Figure 1. Strategic management process [20].

In the environmental scanning stage, the company often manipulated, and is difficult to compare among
performs an analysis of the company's internal and external different business sectors. Furthermore, [24] suggest that
environment. According to [3], the analysis of the external objective measurements are unreliable because they are too
environment includes the economic, social, cultural, general and tend to look backward rather than forward.
demographic, political, governance, legal, and technological Objective measurements are also more emphasizing on short-
environments. Furthermore, according to [20], the internal term benefits rather than on long-term benefits.
environment consists of structure, culture and resources. [21] Consequently, managers or owners are difficult to understand
also explain that core resources, capabilities, and the root causes of performance problems to make cross-
competencies are part of the internal environment that affects functional decisions in order to survive in uncertain business
companies. Meanwhile, according to [3] there are six major environments.
internal forces that affect an internal environment of the A study by [22] reveals that objective performance data is
company that is management, marketing, finance / influenced by certain industry factors and therefore
accounting, production / operation, research and inappropriate to make cross-industry comparisons. As a
development, and management information systems. In the consequence of these inaccuracies, [22] argue that previous
stage of strategy formulation, the company determines the researchers relied more on subjective company performance
mission that is reason of the company to be established, the tracking due to difficulties in obtaining objective
purpose or what and when a result is achieved, the strategy or performance data, particularly in small and medium
plan to achieve the company's mission and objectives, as well enterprises (SME). With regard to subjective performance
as general policies or guidelines for decision-making. In the measurement, performance information is provided in non-
stages of strategy implementation, the company prepares a monetary terms, such as sales volume, market share,
prorgam that is planned detailed activity, budget required to customer satisfaction, employee turnover and new product
carry out activities, and the procedure to undertake activities. development, relevant to survive in a competitive
At the end of the strategic management stage, the company environment [28]. [29] argue that by subjective measurement,
evaluates by comparing targets with real performance. firm managers or owners are willing to give their perceptions
Performance of companies that have not been in accordance about business performance, including their perception in
with the target, will be corrected for the improvement in the regrads to the sensitive or confidential information needed by
next periods. Those strategic management stages will be the the frims to survive in a competitive and rapidly changing
basis in determining the independent variables of the environment. [9] presents argument that the power of non-
business strategy on the performance of SME. financial actions lies on their ability to provide insight into
business processes, which in the long run is a better predictor
2.3. Business Performances of the future business performances.
The methods of business performance measurement still There is little evidence from previous empirical studies
remain the subject of debate for both business practitioners that seek to evaluate strategic management in the domain of
and academic communities [22] and [23]. However, some small business research [30]. Furthermore, [31] also agree
researchers tend to agree that in general organizations may that despite the wide recognition of the importance and
use performance measurement based on predetermined goals significance of SME’s contribution to employment, SME
rather than using assessments of respondents, provided that research still needs to be encouraged. [32] advocates the need
the information presented is much more accurate [24] and for more systematic research aimed at revealing the true
[25]. According to [26], performance measurement methods nature of strategic management in SME and their relationship
can be divided into two types: objective and subjective to the marketing and financial performances.
measurement. Objective measurements include profit, sales In general, a review of the literature on strategic
volume, return on investment, break even point, and management in developing countries shows that focused
inventory turnover whose data are analyzed from financial research on the impact of strategic management practices on
statements, such as balance sheet and income statement. the SME’s marketing and financial performances is still
While the subjective measurement rely on the perception of limited. There was a study conducted in South Africa on the
firm managers or owners in regards to the business subject, but the research did not specifically analyze the
performance achieved. relationship between strategic management practices and
The criticism on the objective measurement business SME’s marketing and financial performances. [33], for
performance is that its performance reports are difficult to example, examines the strategic management processes in the
access, confidential, incomplete, and often inaccurate [27]. In retail sector. [34] evaluates business development strategies
addition, in the objective approach, the amount of profit is in the SME sector. Furthermore, [4] examines the general
 American Journal of Theoretical and Applied Business 2017; 3(4): 71-80 74

strategic management processes. Whereas [35] examines the Makassar, the number of samples can be calculated as
relationship between strategic planning and entrepreneurial follows:
orientation in the financial and business sectors. Meanwhile, .
[36] focuses his research on strategic planning in the small n= = 177,76 counted as 178
. ( , )
and medium-sized retail sector, as well as [37] conducts
study on the relationship between entrepreneurship and Therefore, the number of respondents expected to fill the
SME’s performances in South Africa. Although there is a questionnaire is 178 people. Of the 178 number of
considerable amount of research related to SMEs, but the questionnaires distributed, 158 (88.76%) fill in complete items
research that links between strategic management practices of questions and statements, hence it is worth to be analyzed.
and its impact on SME’s marketing and financial The analysis unit in this study is the owner or manager of the
performances is still very limited. SME. They are identified by position in the business who are
The researchs that have aims to analyze the effect of responsible for strategic management practices. In the
strategic management practices on SME performances give demographic section, respondents have been asked for
important way because this type of reseach can broaden information regarding their positions in business, gender, age,
valuable konwledge for the SME’s owners or managers in educational level, year of establishing, number of employees,
order to have intiation on how strategic management type of business, and business location. Furthermore,
practices can offer the good mechanism that may increase structured questionnaires are used to track the opinions of
their SME’s performances. respondents on the strategic management practices and
In this research, business performances defined as SME’s marketing and financial performances of the SME.
performances in marketing (sales volume), and in finance
3.2. Research Hypothesis
(break even point & profit. These three business
performances were selected based on the ease of In order to support the aforementioned research objectives,
investigating the SME’s performances. In addition, based on the research hypotheses are formulated as the following:
the limited previous emperical findings in regards to the Hypothesis 1: Strategic management practices have
relationship between strategic management practices and significant effect on SME sales volume.
SME’s performances, this research aims to analyze the effect Hypothesis 1a: Strategic management practices have a
of strategic management practices on SME’s performance in significant effect on SME sales volume moderated by the
Makassar. company size.
Hypothesis 1b: Strategic management practices have
3. Research Methods significant effect on SME sales volume moderated by the
level of SME owners education.
Research methods described the population and samples, Hypothesis 2: Strategic management practices have
research hypotheses, research conceptual framework, and significant effect on the accelerated achievement of SME
hypothesis testing procedures. break even point (BEP).
Hypothesis 2a: Strategic management practices have
3.1. Population and Samples
significant effect on accelerating the achievement of SME
This research uses quantitative data with primary data breakeven point (BEP) moderated by company size.
source through interview process and questionnaire Hypothesis 2b: Strategic management practices have
circulation. The interview process was conducted with the significant effect on the accelerated achievement of SME
head of cooperative and small and medium enterprises break even point (BEP) moderated by the level of SME
(SME) of Makassar. The population of this study is the owners education.
owner of the SME in Makassar which amounted to 8,419 Hypothesis 3: Strategic management practices have
units. Prior to circulating questionnaires, first selected significant effect on the achievement of SME profit.
samples using Slovin formula with inaccuracy slack due to Hypothesis 3a: Strategic management practices have
sampling error tolerated 1 to 10%. The formula used to significant effect on SME profit achievement moderated by
determine the sample is: company size.
Hypothesis 3b: Strategic management practices have
=

(1) significant effect on the achievement of SME profit
moderated by the level of SME owner education.
Remarks:
n: number of samples 3.3. Research Conceptual Framework
N: number of population
Based on the above hypotheses, the research conceptual
a: percentage of inaccuracy lees due to intolerable
framework can be described as follows (Figure 2).
sampling errors. By using 7.5% precision of 8,419 SMEs in
75 Sirajuddin Omsa et al.: The Effect of Strategic Management Practices on SME Performances in Makassar, Indonesia

Figure 2. Research conceptual framework.

The variables of strategic management practices consist of business strategy planning, corporate mission setting, business
strategy formulation, business strategy execution, and business strategy evaluation & control. Furthermore, company size (as
moderating variable) consists of small size and medium size. The level of education also as a moderator variable consists of
elementary school, junior high school, senior high school, diploma, and bachelor.
3.4. Hypothesis Testing Procedures

Prior testing the hypotheses, it is necessary to teste the validity, reliability, autocorrelation, and multicollinearity of the
items used in the questionnaire.

3.4.1. Validity Testing Results

From the instrument validity test, it indicates that the whole item is valid because it has a correlation coefficient (r) ≥ 0.30
and the significant value of all instruments is below α = 0.05 as shown in Figure 3. Therefore, all items in this research
instrument can be used for further analysis.

Correlations

RENSTRA MISI RUMUSTRA LAKSTRA EVASTRA KINERJA

RENSTRA Pearson Correlation 1 ,623** ,620** ,620** ,584** ,634**
Sig. (2-tailed) ,000 ,000 ,000 ,000 ,000
N 59 59 59 59 59 59
MISI Pearson Correlation ,623** 1 ,630** ,419** ,549** ,497**
Sig. (2-tailed) ,000 ,000 ,001 ,000 ,000
N 59 59 59 59 59 59
RUMUSTRA Pearson Correlation ,620** ,630** 1 ,524** ,804** ,581**
Sig. (2-tailed) ,000 ,000 ,000 ,000 ,000
N 59 59 59 59 59 59
LAKSTRA Pearson Correlation ,620** ,419** ,524** 1 ,449** ,689**
Sig. (2-tailed) ,000 ,001 ,000 ,000 ,000
N 59 59 59 59 59 59
EVASTRA Pearson Correlation ,584** ,549** ,804** ,449** 1 ,567**
Sig. (2-tailed) ,000 ,000 ,000 ,000 ,000
N 59 59 59 59 59 59
KINERJA Pearson Correlation ,634** ,497** ,581** ,689** ,567** 1
Sig. (2-tailed) ,000 ,000 ,000 ,000 ,000
N 59 59 59 59 59 59
**. Correlation is significant at the 0.01 level (2-tailed).

Figure 3. Validity testing results.

 American Journal of Theoretical and Applied Business 2017; 3(4): 71-80 76

3.4.2. Reliability Testing Results

Model Summaryf
The next step after testing the validity is conducting the
reliability test. The results of the reliability test can be seen in Adjusted Std. Error of Durbin-
Model R R Square R Square the Estimate Watson
Figure 4. Figure 4 shows that the six variables are realibel 1 ,689a ,475 ,466 1,25080
because its Cronbach Alpha value is greater than 0.6 that is 2 ,747b ,558 ,543 1,15772
0.887. Therefore, all items are reliabile, hence, the 3 ,776c ,602 ,581 1,10834
4 ,806d ,649 ,623 1,05090
questionnaire used in this study can be considered as an 5 ,822e ,676 ,646 1,01863 1,994
instrument for measuring. a. Predictors: (Constant), LAKSTRA
b. Predictors: (Constant), LAKSTRA, EVASTRA
Reliability Statistics c. Predictors: (Constant), LAKSTRA, EVASTRA, 10-99 ORANG
d. Predictors: (Constant), LAKSTRA, EVASTRA, 10-99 ORANG, 25-40

Cronbach's e. Predictors: (Constant), LAKSTRA, EVASTRA, 10-99 ORANG, 25-40,

RENSTRA
Alpha Based f. Dependent Variable: KINERJA
on Figure 5. Autocorrelation testing results.
Cronbach's Standardized
Alpha Items N of Items 3.4.4. Multicollinearity Testing Results
The Figure 6 shows that the VIF value is < 10, hence can be
,887 ,895 6
concluded that there is no multicollinearity symptoms in this
Figure 4. Reability testing results. study. In the 5th model obtained, 5 variables significantly affect
the company's marketing and financial performances with a
3.4.3. Autocorrelation Testing Results significance level of 5%. The variables are the strategic
The results of the autocorrelation test can be seen in Figure planning, strategy implementation, strategy evaluation &
5. Durbin Watson's value in Figure 5 shows the magnitude conrol, number of employees between 10-99 people and age of
between -2 and 2, hence, can be concluded that there is no owners (managers) between 25-40 years. Of the 5 variables,
autocorrelation symptoms in this study. only medium size enterprises (10-99 labors) variable that has
negative effect on firm performances.
Coefficientsa

Unstandardized Standardized
Coefficients Coefficients Collinearity Statistics
Model B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) 5,960 ,861 6,923 ,000
LAKSTRA ,531 ,074 ,689 7,185 ,000 1,000 1,000
2 (Constant) 4,488 ,917 4,895 ,000
LAKSTRA ,419 ,077 ,545 5,479 ,000 ,799 1,252
EVASTRA ,352 ,108 ,323 3,246 ,002 ,799 1,252
3 (Constant) 4,553 ,878 5,185 ,000
LAKSTRA ,437 ,074 ,568 5,937 ,000 ,791 1,264
EVASTRA ,348 ,104 ,319 3,352 ,001 ,798 1,253
10-99 ORANG -,778 ,315 -,211 -2,470 ,017 ,990 1,011
4 (Constant) 3,911 ,866 4,514 ,000
LAKSTRA ,457 ,070 ,593 6,509 ,000 ,782 1,279
EVASTRA ,363 ,099 ,333 3,687 ,001 ,796 1,257
10-99 ORANG -,958 ,306 -,260 -3,128 ,003 ,942 1,061
25-40 ,761 ,284 ,223 2,679 ,010 ,935 1,070
5 (Constant) 3,704 ,846 4,380 ,000
LAKSTRA ,377 ,078 ,489 4,834 ,000 ,597 1,676
EVASTRA ,265 ,106 ,243 2,496 ,016 ,644 1,554
10-99 ORANG -1,001 ,297 -,272 -3,366 ,001 ,938 1,067
25-40 ,752 ,275 ,221 2,732 ,009 ,934 1,070
RENSTRA ,166 ,079 ,235 2,116 ,039 ,496 2,016
a. Dependent Variable: KINERJA

Figure 6. Multicollinearity testing results.

77 Sirajuddin Omsa et al.: The Effect of Strategic Management Practices on SME Performances in Makassar, Indonesia

4. Result and Discussion The testing result of the hypothesis 1a show that the
medium-sized enterprises moderate between the the strategy
Of the 158 respondents dominated by men with a implementation and sales volume, while company size (small
percentage of 66.46%, while women only amounted to and medium-size) does not moderate between strategic
33.54%. Based on the age, the respondents are predominantly management practices (as a whole) and sales volume.
productive age, such as 25-40 years as many as 83 people Similarly, the testing result of hypothesis 1b shows that the
(52.53%) and age 41-50 years as many as 51 people level of education does not moderate between the strategic
(32.28%). In regards to the educational level, respondents are management practices and sales volume.
dominated by bachelor and senior high school with a The testing result of the hypothesis 2 which states that
percentage of 45.57% (72 people) and 34.18% (54 people) strategic management practices have significant effect on the
respectively. The long standing of SME owned by acceleration of SME breakeven point (BEP) achievement
respondents surveyed is very varied with very small shows that the strategic planning and strategy evaluation (two
difference. The age of SME 6-10 years ranks first with 49 strategic management practices) have significant effect on the
units (31%), followed by 11-15 years as many as 40 units acceleration of break even point (BEP) achievement. This
(25.32%), then the age of SMEs over 15 years as many as 35 result shows that to accelerate SME’s BEP achievement it is
units (22.15%), and SME aged 3-5 years as many as 34 units necessary for the SME owners to arrange strategic planning
(21.52%). Finally, by size, small-sized enterprises (5-9 earlier and then evaluate its business strategy
employees) is 91 units (57.59%), and medium-sized (10-99 implementation. An important emphasis on strategic
employees) is 67 units (42.41%). This characteristic indicates planning and strategy evaluation indicates that when SME
that the SME in Makassar have considerable potential to want to achieve BEP in 1 year or less, both strategic
grow and develop, as the dominant SME owners are management practices should be more concerned than other
productive (25-40 years and 41-50 years old), and the strategic management practices.
educational level of majority SME owners is bachelor and The testing result of the hypothesis 2b shows that the firm
senior high school graduates. size does not moderate between strategic management
Prior testing the above nine hypotheses, the validity, practices and firm profit. Likewise the testing result of
reliability, autocorrelation, and multicolonoerity tests of hypothesis 2b show that the level of education does not
items related to each dependent variable, such as sales moderate between strategic management practices and firm
volume, break even point (BEP), and profit must be profit.
conducted. The test results show that the whole data (which The testing result of hypothesis 3 which states that
is not of the dummy variable) are valid because its have a strategic management practices have significant effect on the
correlation coefficient which is > 0.3, and reliable because its achievement of SME profit indicates that strategic planning
reliability value > 0.60. Similarly, there is no autocorrelation and strategy implementation have significant effect on the
between the data on the dependent variable because its achievement of firm profit. This implies that both strategic
Durbin-Watson value is between -2 and +2, and there is no management practices hold an important role for SME in
multicolonoerity because its VIF value is < 10. Because the achieving tehir targeted profit.
data has fulfilled the validity, reliability, autocorrelation, and The testing result of hypothesis 3a shows that the firm size
multicolinearity requirement, then it can be concluded that does not moderate between strategic management practices
the questionnaire used to measure the dependent variable and the accelaration of break even point (BEP) achievement.
(sales volume, BEP, and profit) is feasible used to measure Similarly, the testing result of hypothesis 3b shows that the
the effect of the independent variables on the dependent educational level does not moderate between strategic
variables. management practices and the accelaration of break even
The testing result of hypothesis 1 which states that point (BEP) achievement.
strategic management practices have a significant effect on Based on the hypothesis testing results, the research results
SME sales volume indicates that the strategic planning and can be shown in the following figure (Figure3):
strategy implementation in medium-sized enterprises have The research findings are consistent with a number of
significant effect on sales volume. This indicates that the role research findings from [6] as well as consistent with research
of strategic planning and strategy implementation in results by [3], who states that the key aspects of strategic
medium-sized enterprise is very urgent to achieve sales planning include environmental analysis, corporate mission
volume. While in small-sized enterprises, there is no setting, strategy formulation, strategy execution, strategy
difference in achieving sales volume, neither formulate evaluation and control have important roles in maintaining
strategic management and strategy implemention nor ignore and improving company performance.
these two strategic management practices.
 American Journal of Theoretical and Applied Business 2017; 3(4): 71-80 78

Figure 7. Research results.

[4] Odame, A. M. (2007). The relevance of strategic planning for

entrepreneurial businesses in South Africa. (Master of
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Sirajuddin Omsa is a lecturer in the State
[24] Chow, C. W., & Van Der Stede, W. A. (2006). The use and
Polytechnic of Ujung Pandang (SPUP),
usefulness of nonfinancial performance measures.
Management Accounting Quarterly, 7 (3), 1-8. Makassar, Indonesia. He works at the
Accounting Department. In the SPUP, he
[25] Panigyrakis, G. G., & Theodoridis, P. K. (2009). Internal teaches Strategic Management and Corporate
marketing impact on business performance in a retail context.
Policy, Financial Management, Business
International Journal of Retail and Distribution Management,
37 (7), 600-628. Management, Micro and Macro Economics,
and Business Budgetting. He has published
[26] Phillips, P., Davies, F., & Moutinho, L. (2000). The interactive several articles in academic journals in International Journal of
effects of strategic planning on hotel performance: a neural
Applied Business and Economics Research (IJABER), Science
network analysis. Management Decision Journal, 37 (3), 279-
288. Journal of Business and Management (SJBM), and in Management
and Administrative Science Review (MASR). He took his bachelor
[27] Chong, H. G. (2008). Measuring performance of small-and- degree in Hasanuddin University (Indonesia), master degree in
medium sized enterprises: the grounded theory approach.
Flinders University (Australia), and PhD in Brawijaya University
Journal of Business and Public Affairs, 2 (1), 1-10.
(Indonesia).
[28] Verbeen, F. H. M., & Boons, A. N. A. M. (2009). Strategic
priorities, performance measures and performance: An Muhammad Ridwan is a lecturer in the
empirical analysis in Dutch firms. European Management Accounting Department, State Polytechnic of
Journal, 27, 113-128. Ujung Pandang (SPUP), Makassar, Indonesia.
In the SPUP, he teaches Strategic
[29] Lema, D. G. P., Cortes, E. A., Lizano, M. M, dan Ochovo, R.
B. (2012). Strategy, competitive factors and performance in Management and Corporate Policy,
small and medium enterprise (SMEs). African Journal of Organizational Behavior, Public Accounting,
Business Management, 6 (26), 7714-7726. Financial Management, and Financial
Accounting. He has published several articles
[30] Omsa, S., Salim, U., Djumahir, Rahayu, M. (2015).
Competitive Strategi Orientation and Company Performance in academic journals in Economic Journal of the Economic
in Selected SMEs Wooden Furniture in Pasuruan City. Faculty, Hasanuddin University and in JASSA Finsia’s quarterly
International Journal of Applied Business and Economic Journal of Applied Finance. His bachelor degree was taken in
Research (IJABER). Vol. 13, No. 7. 4659-4676. Hasanuddin University, master degree in Newcastle University
[31] Sum, C., Jukow, L., & Chen, S. (2004). Taxonomy of (Australia), and PhD in University of Indonesia (UI).
operations strategies of high performing small and medium
 American Journal of Theoretical and Applied Business 2017; 3(4): 71-80 80

Muhammad Jayadi is a lecturer in the

Accounting Department, State Polytechnic of
Ujung Pandang (SPUP), Makassar, Indonesia.
His subjects are Database Computer
Application, Financial math, Descriptive and
Inferencial Statistic, and Spreadsheet
Computer Application. He has conducted
research entitled Financial Report Module
Design for Small and Medium Enterprises (SME), and Marketing
Mix Strategy for Bread companies in Maros. He took his bachelor
degree in Math and Exact Science Faculty in Hasanuddin
University (Indonesia), and master degree in Sepuluh November
Technology Institute (ITS) Surabaya (Indonesia).