DOI: 10.36347/sjavs.2018.v05i01.002

Pages: 6-14

The importance of organizational learning process and adaptation of organizational culture to the improvement of organizational performance should be considered by most business actors, especially small and medium scale business actors. This study aims 1) to analyze the effect of organizational learning capability on improving the performance of fruit chips MSMEs in Batu 2) to analyze the influence of organizational culture on improving the performance of fruit chips MSMEs in Batu. The research method used in this study is quantitative approach using survey method with explanatory research. The sampling method used in this study is mixed sampling method. The types of data used in this research are primary data and secondary data. The data were analyzed using SEM method with Partial Least Square (PLS) approach and WarpPLS 5.0 software. This study was conducted on 10 MSMEs fruit chips in Batu from July 2017 until October 2017. The result of data analysis with SEM-PLS shows that organizational learning capability and organizational culture have positive but insignificant influences on MSMEs’ performances. This indicates the need of improvement and conformity of learning process and adaptation to organizational culture. The innovation process can help fruit chips MSMEs to improve their organizational performances since innovation is the main key in improving performance either directly or indirectly. It is proved to have a positive and significant influence towards organizational culture and organizational culture learning ability in which the ability of learning and adaptation demanded by the owners will increase innovation in fruit chips MSMEs. Innovation has a positive and significant impact on the performance of MSMEs, in this case, if an organization can improve their innovation process in terms of technology, marketing and management, they will be able improve the performance of fruit chips MSMEs in Batu.