Effect of Organizational Commitment on the Sustainability Firm Performance of Indonesian SMEs

Abstract

The purpose of this research is to analyze and determine the relationship between Organizational Commitment on sustainability firm performance represented by three dimension base on triple bottom line concept which areeconomic performance, environment performance, and social performance. The contribution of SMEs to employment in Indonesia reaches 97.02% of the total absorption of existing workforce and accounts for 60% of national GDP. This study tries to take the commitment dimension from the company's perspective (Organizational Commitment to its Employee) and the effect of its implementation on SME performance. Research conducted on 370 SMEs respondents in Indonesia. Structural equation modeling is used to test research hypotheses, and SPSS software is used to analyze data. Based on the results of data processing, it is found that the independent Organizational Commitment has positive and significant effect on economic performance,Organizational Commitment has a positive and significant effect on environmental performance, organizational commitment to its Employee has a positive and significant effect on social performance, and overall Organizational Commitment has a positive and significant effect on the firm's sustainability performancesimultaneously.