Entrepreneurial Orientation in Government-Owned Bank: Do They Improve Competitive Advantage?

Abstract

In Indonesia, housing finance is mainly raised from banks, with the government-owned housing bank (GOHB) BTN taking the largest share of the market. In constantly growing population need for new housing unit every year and increased number of competitors requires managers of government-owned housing bank to be able to develop their dynamic capabilities and adopt a more entrepreneurial orientation (EO). However, (GOHB) are typically being linked to organization that administratively influenced by government that impeding GOHB from being high performance organization driven by EO. Moreover, the dual goals of GOHB which are business and social goals makes the managers struggle to develop and adopt entrepreneurial orientation, since they have to set priorities and trade-off between those goals. The aims of this study is to investigate the role of entrepreneurial orientation (EO) in improving competitive advantage of government-owned housing bank, and fills a gap in the literature by linking entrepreneurial orientation to the theory of dynamic capabilities. This study explored the mediating effect of multi-dimensional EO which is: innovativeness, proactiveness, and risk taking in the relationship between dynamic capabilities (DC) and competitive advantage. The method of the study is a survey using area sampling and proportionate random sampling to collect data from 115 managers in 20 branches in island of Java, during the month of May to August, 2018 (cross-sectional method). The result shows a positive relationship between dynamic capabilities to innovativeness, proactiveness and risk taking. As expecting risk taking has no mediating effect to competitive advantage.