Determinants of Performance and Structural Relationships of Rice Processing Industry Performance: Resources Based View Approach

Abstract

Purpose: Attention to the capacity of rice milling companies is very important because this company is the main business actor that creates added value. This study aims: (1) to identify the determinants of the performance of the rice milling industry based on the Resources Based View (RBV) framework and (2) to formulate the structural relationship that occurs between the resources of rice milling companies on business performance.    Methodology/Approach: RBV framework and formulate the structural relationships that occur between company resources and business performance Through the SEM-PLS method. Findings: Structurally, the results of the analysis show that the performance of rice mills is directly determined by reputation with the largest path coefficient of 0.856 and is then followed by marketing differentiation 0.184 and human capital 0.1822, while tangible assets directly have a negative relationship (-0.236) but indirectly through the latent variable the reputation as a mediator has a greater (0.558) and significant positive relationship. Research Limitation/Implication: The research has empirical implications that not all RBV dimensions can predict the performance of the rice industry, especially organizational variables. This illustrates that in reality in the manufacturing industry, organizational function variables do not really affect the produced. Originality/Value of paper: This article becomes an important for policymakers in Aceh Province to develop the rice milling industry based on the RBV.