The effect of continuous reconfiguration capability on disruptive business model innovation study on Indonesia digital startups

This paper aims at examining the effect of continuous reconfiguration capability on disruptive business model innovation on Indonesia digital (tech) startups.
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The effect of continuous reconfiguration capability on disruptive business model innovation study on Indonesia digital startups International Journal of Mechanical Engineering and Technology (IJMET) Volume 10, Issue 04, April 2019, pp. 22-30, Article ID: IJMET_10_04_004 Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=4 ISSN Print: 0976-6340 and ISSN Online: 0976-6359 © IAEME Publication Scopus Indexed THE EFFECT OF CONTINUOUS RECONFIGURATION CAPABILITY ON DISRUPTIVE BUSINESS MODEL INNOVATION STUDY ON INDONESIA DIGITAL STARTUPS Kurnadi Gularso Binus Business School, Doctor of Research in Management Bina Nusantara University, Jakarta, 11540, Indonesia Tirta Nugraha Mursitama International Relations Department, Faculty of Humanities Bina Nusantara University, Jakarta, 11480, Indonesia Pantri Heriyati, Boto Simatupang Binus Business School, Doctor of Research in Management Bina Nusantara University, Jakarta, 11540, Indonesia ABSTRACT Several studies have indicated that digital (tech) startups’ behaviors tend toward disruptive business model innovation in facing volatility, uncertainty, complexity, ambiguity (VUCA) environment. One of the necessary capabilities to perform such innovation as well as to attain an excellent firm operational performance is continuous reconfiguration capability. This paper aims at examining the effect of continuous reconfiguration capability on disruptive business model innovation on Indonesia digital (tech) startups. This study applied a quantitative method with a partial least-squares structural equation modeling (PLS-SEM) approach to analyze the data obtained. The survey was used to understand the perceptions of Founders/C-Level out of 107 Indonesia startups. This study showed an essential contribution to the literature about the role of transformational capability viz continuous reconfiguration capability for digital (tech) startups as an initiator in executing disruptive business model innovation. The study recommends startups to have this capability that should be followed by determining strategic orientations, especially entrepreneurship orientation, market orientation, and technology orientation. Key words: Continuous reconfiguration capability, Disruptive business model innovation, Digital startups http://www.iaeme.com/IJMET/index.asp 22 editor@iaeme.com Kurnadi Gularso, Tirta Nugraha Mursitama, Pantri Heriyati, Boto Simatupang Cite this Article: Kurnadi Gularso, Tirta Nugraha Mursitama, Pantri Heriyati, Boto Simatupang, The Effect of Continuous Reconfiguration Capability on Disruptive Business Model Innovation Study on Indonesia Digital Startups, International Journal of Mechanical Engineering and Technology 10(4), 2019, pp. 22-30. http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=4 1. INTRODUCTION Today, in the era of the digital economy, digitization has urged and promoted the implementation of business model innovation in incumbent and startup business (Hafkesbrink & Schroll, 2010; Birkinshaw & Ansari, 2015; Teece & Linden, 2017). Further, digital (tech) startups – hereafter in this paper is named “startups” – should create disruptive business model innovation to achieve a significant growth and viable business (PwC, April 2013); Balboni, Bortoluzzi, Tivan, Tracogna, and Venier, 2014; O’Connell, Delaney, & Moriarty, 2015). However, there is scant research on disruptive business model innovation by startups as the initiator. There are also a few research on the antecedents of disruptive business model innovation as first mover strategy particularly in the startups' industry which is facing VUCA (volatility, uncertainty, complexity, ambiguity) business environment. Dynamic capabilities have long been believed to be the ability of businesses to face fast- moving business environments which are characterized by rapid technological change (Teece, 2007) which is currently known as VUCA. Three dimensions of dynamic capabilities are sensing, seizing, and reconfiguring. Reconfiguring as a transformation capability plays an important role especially in the implementation of innovation. Reconfiguration should be continuously conducted to accommodate the continuous innovations being implemented in ever-changing and uncertainty environments. Startups have an entrepreneurial mentality that encourages them to search and create new opportunities to serve their targeted customers. Startups also have always to respond to the market changes and technological turbulence to make them viable and continue managing significant growth. Strategic orientations will align the startups’ organization to manage their goals. The research question here is “What are the effect of continuous reconfiguration capability on strategic orientation and eventually the achievement of disruptive business model innovation of Indonesia startups?” Hence, the general objective of this research is to understand the importance of building continuous reconfiguration capability for startups to make their business viable and get significant growth. The benefit of this study is to contribute to the theory that continuous reconfiguration capability requires the mediation of a strategic orientation for startups in applying the disruptive business model innovation. 2. LITERATURE REVIEW ‘Dynamic capabilities’ is the firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments. These enterprise capabilities are difficult to replicate and should adap ...