[Paper Review] Effects of dynamic capability and marketing strategy on the organizational performance of the banking sector in Makassar, Indonesia

Akhmad Muhammadin, Syamsul Ridjal+4 more|arXiv (Cornell University)|Jan 1, 2020

Islamic Finance and Banking Studies8 citations

TL;DR

This study investigates the impact of dynamic capability and marketing strategy on organizational performance in 39 banks in Makassar, Indonesia, using survey data and regression analysis. Results show that while dynamic capability has a positive but non-significant effect, marketing strategy and the combination of both factors significantly enhance organizational performance.

ABSTRACT

The dynamic capability and marketing strategy are challenges to the banking sector in Indonesia. This study uses a survey method solving 39 banks in Makassar. Data collection was conducted of questionnaires. The results show that, the dynamic capability has a positive yet insignificant impact on the organizational performance, the marketing strategy has a positive and significant effect on organizational performance and, dynamic capability and marketing strategy have a positive and significant effect on the organization's performance in the banking sector in Makassar. Keywords : dynamic capability, marketing strategy, organizational performance, banking

Motivation & Objective

• To examine the influence of dynamic capability on organizational performance in Indonesian commercial banks.
• To assess the impact of marketing strategy on organizational performance in the banking sector of Makassar.
• To analyze the combined effect of dynamic capability and marketing strategy on organizational performance.
• To provide empirical evidence on strategic factors affecting bank performance in a competitive emerging market context.
• To support strategic decision-making in Indonesian banks through evidence-based insights on capability development and marketing alignment.

Proposed method

• A survey-based research design was employed, collecting primary data from 39 commercial banks in Makassar.
• Data were gathered using structured questionnaires targeting bank managers and executives to assess dynamic capability and marketing strategy.
• Organizational performance was measured using a composite index based on financial and operational indicators.
• Multiple linear regression analysis was applied to test hypotheses, with significance assessed at α = 0.05.
• ANOVA and t-test results were used to evaluate the overall and individual effects of predictors on organizational performance.
• The study employed a hierarchical regression model to assess the unique and combined contributions of dynamic capability and marketing strategy.

Experimental results

Research questions

• RQ1 What is the effect of dynamic capability on organizational performance in the banking sector of Makassar?
• RQ2 How does marketing strategy influence organizational performance in Indonesian commercial banks?
• RQ3 To what extent do dynamic capability and marketing strategy jointly affect organizational performance?
• RQ4 Is there a significant relationship between dynamic capability and organizational performance in the context of Indonesian banking?
• RQ5 What role do strategic capabilities and marketing alignment play in enhancing bank performance in emerging market settings?

Key findings

• Dynamic capability has a positive but statistically insignificant effect on organizational performance (β = 0.152, p = 0.099).
• Marketing strategy has a positive and statistically significant effect on organizational performance (β = 0.255, p = 0.024).
• The combined effect of dynamic capability and marketing strategy on organizational performance is positive and significant (F = 3.550, p = 0.039).
• Marketing strategy contributes 25.5% to the variance in organizational performance, indicating a strong practical impact.
• Dynamic capability contributes 15.2% to organizational performance, though this effect does not reach statistical significance.
• The overall model explains a significant portion of the variance in organizational performance, as confirmed by the ANOVA test (p = 0.039).