The Relationship between Organizational Capability;Organizational Learning and Financial Performance

This study aims to empirically investigate the influence of organizational capability and organizational learning on the financial performance of family-business type small- and medium-sized enterprises (SMEs). In addition;this study examines the moderating role of SMEs’ ages and the managers’ experiences in the relationship between organizational capability and organizational learning on the SMEs financial performance. This study is a basic exploratory research conducted by using an empirical survey;i.e.;sampling of the businessman (the owner) of family-business type SMEs cross-functional in the area of DIY. The study uses purposive sampling. The respondents are the SME businessmen from the various business sectors in Yogyakarta;Indonesia. The number of respondents is 150. Hypothesis testing used SPSS program’s moderation regression approach; validity and reliability testing used confirmatory factor analysis and Cronbach’s alpha. The result of this study shows that organizational capability positively and significantly affects the financial performance. Also;organizational learning significantly affects the financial performance. The organization’s age factor does not moderate the relationship between organizational capability and the financial performance;but it is significant on the organizational learning. The factor of manager’s experience moderates insignificantly on the relationship between organizational capability and financial performance. However;it is significant to the organizational learning.