JISIB-vol-12_Nr-1(2022) (3).pdf Journal of Intelligence Studies in Business Vol. 12 No. 1 (2022) Open Access: Freely available at: https://ojs.hh.se/ pp. 83–90 Networking capabilities and digital adoption of business agility with Business model innovation as a mediating variable Idris Gautama So Richardus Eko Indrajit Sri Bramantoro Abdinagoro ABSTRACT In business, agility is a method that places projects on a smaller scale and engages capabilities and digital adoption on business agility with the variable business model innovation as a mediation variable using quantitative method. The results show that all variables have digital adoption, and business model innovation can escalate business agility KEYWORDS: Business agility, networking capabilities, digital adoption, business model innovation 1. INTRODUCTION In the business world, agility is a method that places projects on a smaller scale and engages team members through constant collaboration and continuous iteration. This method offers an iterative and gradual approach, so it does not work sequentially and creates a product at the end of the project (Xie et al., 2022). Observing the current work environment, the need to have resources becomes very important, espe- cially for workers in a company. The develop- the dynamics of business and small businesses to be so volatile. Therefore, it is not surprising facing change is an important component in maintaining the sustainability of a company. This also has an impact on the Micro, Small, and Medium Enterprises(MSME)/Usaha Mikro Kecil dan Menengah (UMKM) sector. In order to maintain productivity and maintain their income, UMKMs are competing to take advan- tage of digital platforms. Coordinating Minister 84 that there are around 301,115 Micro, Small, and Medium Enterprises that switch digital platforms (Cepeda & Arias-Pérez, 2019). The agile process certainly reiterates the importance of the role of agility, especially during this pandemic. Agility is an important aspect that encourages individuals to be able to quickly adjust to changes and existing situ- ations. Unfortunately, in Indonesia, agility is actually a concept that has not been noticed for a long time. In fact, looking at the description of competencies that are a component of agil- employee potential, especially in the current In addition to business agility, business models are useful in modern business envi- ronments because they allow organizations to understand the value of future organizations and how companies in general operate (Orvos, model can be explained, for example, capturing the functioning of the company way and cre- ating value and providing value to customers a,nd converting customer responses into prof- its (Bouwman et al., 2018). The application of business model innovations is expected to be able to be better useful by collecting creative ideas to be processed which then the ideas become informative innovations that are able to be implemented on innovation projects in One of the factors that affect business agility is the company’s network capability or ability to develop and establish cooperation - eration. The advantage obtained from hav- ing network capability is the ease of obtain- ing information related to resources, markets and the latest technology that can be used to support company performance (Gulati, R., N. capability is important for the company’s long- term success and viability (Parida et al., 2016, 2017). Previous research conducted by (Majid the conclusion that network capability effec- tively affects the level of business agility. In addition to network capablity, the next factor that affects business agility is digital adoption. It is undeniable that by applying improve the company’s performance. So many conveniences can be achieved in various aspects of the business. Digital adoption can meet the information needs of the business world quickly, precisely, accurately and relevantly. In addition, Digital adoption also has an important role for companies in their compet- itive advantage strategy. Digital adoption will affect almost all aspects of 2 business manage- ment and can provide added value if managed properly and designed into an effective infor- mation system. (Karvonen et al., 2018) states that the behavioral aspect in the adoption of information technology is an important thing to pay attention to because the interaction between users and computers is the result of - tions as aspects of behavior that exist in indi- viduals as users. Therefore, based on the explanations pre- sented above, researchers are interested in conducting research on how networking capa- bilities and digital adoption affect business agility with the Business model innovation as a mediation variable. The latest in this study is the addition of business agility variables and network cpabilities based on suggestions from previous research conducted by nasution (2004), so that it becomes four variables net- working capabilities, digital adoption, business agility, Business model innovation. The pur- of Networking capabilities and digital adoption on business agility with the variable Business model innovation as a mediation variable. 2. LITERATURE REVIEW 2.1 Network capability Network capability is a dynamic capability that creates dependence inside and outside the organization (Battistella et al., 2017). Network capabilities allow companies to gain access to different resources, identify oppor- tunities and respond quickly to ever-changing marketing needs (Solano et al., 2018). This variable is a company’s ability to develop and utilize interactions between organizations to gain access to various recources owned by other parties (Walter et al. in Chabachib, capability is the company’s ability to create, improve, and use internal and external organi- zational relationships. In network capability there are four aspects, which are internal communication, coordina- tion, relationship skills, partner knowledge. Coordinationconsists of the integration and synchronization of resources to ensure their effective utilization to achieve organization’s 85 goals (Bengesi & Le Roux, 2014). The main essence of coordination is a situation in which various important organizational resources and activities are shared outside the bound- aries of the organization, which connect dif- ferent individuals and independent organiza- tions together, thereby developing a network of dalam Majid et al., 2019). 2.2 Digital Adoption (Lee et al., 2021), The adoption rate is the rel- ative speed at which innovation is adopted by members of the social system. It is generally measured as the number of individuals who adopt a new idea in a certain period, such as each year. So the adoption rate is a numerical indicator of the steepness of the adoption curve for an innovation. The perceived attributes of an innovation are one of the important expla- nations of the adoption rate of an innovation According to (Ghobakhloo & Ching, 2019), the adoption of innovation is a process of social change with the presence of new discoveries that are communicated to other parties, then adopted by society or social systems. Innovation is an idea that is considered new by a person, it can be a new technology, a new way of orga- nization, a new way of marketing agricultural products and so on. The adoption process is - son hears a new 16 xxx thing until the person adopts (accepts, applies, uses) the new thing. (Parra-Sánchez et al., 2021) mentions that the nature and character of technology devel- ops depending on one’s perception of technol- ogy. Technology can be viewed as an object, as a process, as a science (as a knowledge), and as control (as a volition) (Patil et al., 2022) Technology has three domains, namely: design technology (design), production Technology (Manufacture), And Marketing Technology (Pradhan Et Al., 2020). 2.3 Business Agility Nowaday’s business is moving very fast, inno- vation and disruption are emerging every day. If organizations do not implement agile meth- ods, then they can lose their advantage and be no longer relevant. Agility itself, is the ability to think and understand the situation quickly. In the business world, agility is a method that places projects on a smaller scale and engages team members through constant collaboration and continuous iteration. This method offers a iterative and gradual approach, so it does not work sequentially and creates a product at the end of the project. The concept of agility itself is originally - tems studies (Saputra et al., 2021). Meanwhile, in strategic management, Drucker conceived agility to explain the importance of increasing (Liao et al., 2019). The further research involved hundreds of companies and the results were studies on organizational agility in strategic management have been widely carried out In the study of entrepreneurship, organiza- tional agility itself is a form of entrepreneurial action (Attar & Abdul-Kareem, 2020). 2.4 Business model innovation According to (Geissdoerfer et al., 2018) one of - Underserved Markets” is adapt business model to community realities. Thus, business model innovation is one of the important keys to success. According to (Colovic, 2022), broadly speaking, business model innovation is plan- ning and designing new ways of doing business through changes, improvements, and improve- ments to existing business processes, both internally and in collaboration with externals so as to create new work processes that have never been done before to increase the added value of stakeholders. So in this study the author concludes that business model innovation is a unique, comple- and effectiveness where it is able to create, pro- vide and capture value. 3. RESEARCH METHOD Research Design This research is included in descriptive quan- states that, say that, research methods are used in the quantitative approach. According research is research that uses observations, interviews or questionnaires regarding the cur- rent state of affairs and also the subject we are researching. Through questionnaires and so 86 on researcher collect data to test hypothesis or answer a question. Through this descriptive research, the researcher will explain what is actually happening about the current situation that is being studied. Research Subject This research was conducted at culinary SMEs in Surabaya Bandung Semarang Jakarta this study was random sampling so that in this study a research sample of 100 Culinary SMEs in Surabaya Bandung Semarang Jakarta Data Collection Data collection technique done is through ques- tionnaires that are spread using google form. The google form can ease the collection of sur- vey research. Data Analysis The data analysis technique in this study used Partial Least Square (PLS). PLS is a struc- tural equation model modeling (SEM) with an approach based on variance or component- based structural equation modeling. According to (Sohaib et al., 2020), the purpose of PLS- SEM is to develop a theory or build a theory (predictive orientation). PLS is used to explain the presence or absence of relationships between latent variables (prediction). PLS is a powerful analysis method because it does not assume current data with a certain scale mea- surement, the number of samples is small. 4. RESULT a. Outer Model Analysis In order to measure the validity or valid- ity of a questionnaire, the researcher uses - ity testing is done using convergent validity value (> 0.6). 2) Uji Reliabilitas In this study, researchers used 2 types of reliability tests, namely the Cronbach Alpha test and the Composite Reliability Test. Cronbach Alpha measures the lowest value (lowerbound) reliability. The data is stated to be good if the data has a Cronbach alpha value and a composite reliability score of >0.7. Based on the calculations carried out, it was found that all instrument items met the require- ments of validity and reliability with scores that exceeded the criteria.. 3) R Square used in the measurement of how many endog- - ables. Based on data analysis carried out through the use of the smartPLS program, the R-Aquare value was obtained as stated in the following table in appendix. The score in the table explains that the business agility - ties, digital adoption, and business model inno- other variables that were not studied in this study. The table explains that the business Networking capabilities and digital adoption, variables that were not studied in this study. This table is avaluable in appendix. The presentation of the hypothesis results are The results of testing the business model innovation hypothesis on business agility obtained a score of (p = 0.039) with a p value of 0.773 (p1.96) showing that there was the business model innovation variable on business agililty. This rejects the research b) Effect of Networking capabilities (X1) on The results of testing the Networking capabilities hypothesis on business agility obtained a score (p = 0.436) with p values of 0.001 (p1.96) indicating that there was variable Networking capabilities on busi- ness agility. The better the networking capabilities owned by SMEs, the better that are in line with the results of this study (2012) that entrepreneurial networks have or performance. Then (Akintimehin et al., - on business performance in fabric centers the three dimensions of network capability 87 (internal communication, partner knowl- edge and relational skills) on performance in small and medium-scale companies. c) Effect of Networking capabilities (X1) on The results of testing the Networking capa- bilities hypothesis on business model inno- vation obtained a score (p = 0.555) with a p value of 0.000 (p1.96) showing that there the networking capabilities variable on business model innovation. The better the SME’s Networking capabilities, the bet- ter the SME’s business model innovation will be. This is in line with the research con- ducted by (Mihardjo, Sasmoko, Alamsjah, & Elidjen, 2018). d) Effect of digital adoption (X2) on Business The results of testing the digital adoption hypothesis on business agility obtained a score (p = 0.291) with p values of 0.009 variables on business agility. The better the digital adoption carried out by SMEs, the better the business agility will be. This is in line with the research conducted by e) Effect of digital adoption (X2) on Business The results of testing the digital adoption hypothesis on business model innovation obtained a score (p = 0.338) with p values of 0.000 (p1.96) showing that there is a sig- - ital adoption variables on business model innovation. The better the digital adoption owned by SMEs, the better the innova- tion of SME business models will be. This is in line with the research conducted by (Ghezzi & Cavallo, 2020). f) Effect of Networking capabilities (X1) on The results of testing the network capabli- ties hypothesis on business agility medi- ated by business model innovation obtained a score (p = 0.216) with p values of 0.009 - network capablities on business agility mediated by business model innovation . The better the network capabilities owned by SMEs, the more it will affect busi- ness agility, this is also strengthened by the innovation of business models. This is in line with research conducted by Mulyana g) Effect of digital adoption (X2) on Business The results of testing the network capablities hypothesis on business agility mediated by business model innovation obtained a score (p = 0.213) with p values of 0.008 (p1.96) show- - ence between variable network capablities on business agility mediated by business model innovation. The better the digital adoption car- ried out by SMEs, this can increase business agility, as well as the existence of business model innovation variables to strengthen dig- ital adoption of business agility. 5. DISCUSSION Business agility is a relatively new paradigm painted as a solution for maintaining compet- itive advantage during times of uncertainty and turbulence in the business environment. Quickness is about the speed with which the organization can respond to customer requests, market dynamics, and emerging tech- nology options. This includes the time to sense relevant events, the time to interpret what is happening and assess the consequences for the organization, the time to explore options and decide on which actions to take, and the time to implement appropriate responses. Resources are about the capabilities that are available within the organization including people, technology, processes, and knowledge. Resources can be both tangible and intangible and they provide the basis for doing business and for instantiating change. Adaptability is about how well the organization responds to changing demands, threats, or opportuni- ties. This requires the ability to learn as well costs. Agility is concerned with economies of scope, rather than economies of scale. Based on the results of this research, although business agility has increased, yet it is unaffected by the business model inno- vation. Business model innovation / BMI that has advantages to enable companies to be adaptive to market changes. Through a pro- duction framework that relies on cooperation with SME partners is one of the keys to being overcome, it will make it easier for companies 88 to change resource allocation and form compet- itive prices. In addition, such business mod- els form a unique attractive market segment. Thus, it allows the company to provide value added to the customer and will facilitate reve- nue streams. In addition, the network capability pos- sessed by entrepreneurs forms the foundation for entrepreneurial success. According to (R. as a company’s ability to initiate, develop, and utilize internal organizations as well as exter- nal inter-organizational relationships. When the network capability is increased, business agility will be able to be increased. Broadly speaking, the use of digital tech- nology is directed at increasing the company’s business agility. According to Sri Mulyani, the ability to create and also adopt digital technology determines how an economy and a country are able to enter the global value chain system that will increase productivity. So that with good digital adoption from SMEs, it will increase their business agility. Other than that, based on the result of this research, the existence of business model inno- vation can increase more the variables that affect business agility. The ability to collabo- rate between SMEs will continue to give birth to innovations. Changes in consumer needs and desires to satisfy themselves will spur compa- nies to innovate continuously in order to create products that are in accordance with consumer desires. So that this can increase the business agility of SMEs. In fact, this research also shows that busi- ness network capability is said by the ability to carry out integrated cooperation between two or more parties that is harmonious, synergis- tic, systematic, integrated and has the aim of establishing business potential in generating companies, it will provide business model inno- the diversity of insights from owners/manag- ers in SMEs on technology adoption strategies generates different driving forces and barriers related to adopting, adapting and assimilat- ing internet information technology in orga- nizations. (Bleicher & Stanley, 2016) noted organizational readiness is the main reason technology adopters differ from non-adopters. A critical characteristic of technology adoption is the ability of SME executives to navigate and adapt to an environment that sets the right organizations so it may shape business model innovations. 6. CONCLUSION Based on research and discussion, it can be innovation on business agililty, there is a sig- Networking capabilities on business agility, variable Networking capabilities on business - - variables on business model innovation, there - able network capablities on business agility mediated by business model innovation, there variable network capablities towards business agility mediated business model innovation. capabilities, digital adoption, and business model innovation by 49.7%, and business capabilities and digital adoption, by 68.3%. 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