The Effect of Organisation Structure, Competency and Innovation on Firm Performance in The Era of Industry 4.0


organization structure
firm performance


The research aimed to determine the effect of organizational structure, competency, and innovation which are considered as key factors that affect firm performance in the era of industry 4.0. The research used purposive sampling survey to obtain primary data by distributing questionnaires directly to respondents or employees of Indosat Ooredoo's head office in Jakarta. The research had 135 respondents as samples. The method for data analysis was multiple regression analysis using SPSS version 25 software. The results show that the organizational structure has a positive influence of 58,6% on competency, the organizational structure has a positive influence of 44% on innovation, competency has a positive influence of 48,5% on innovation, competency has a positive effect of 72,7% on firm performance, innovation has a positive influence of 38,6% on company performance, and simultaneously both competency and innovation have a positive effect of 72,8% on firm performance. It is recommended that Indosat Ooredoo make improvements on the organizational structure to maximize employee competency and innovation to further enhance firm performance in the industry era 4.0.



Agbim, K. C. (2013). The impact of organizational structure and leadership styles on innovation. IOSR Journal of Business and Management, 6(6), 56-63.

Al-Qatawneh, M. I. (2014). The impact of organizational structure on organizational commitment: A comparison between public and private sector firms in Jordan. European Journal of Business and Management, 6(12), 30-37.

Barbosa, A. C. Q & Cintra, L. P. (2012). Innovation, competency and organizational performance – Articulating constructs and their operational capability. Future Studies Research Journal, 4(1), 30-59.

Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of Production Economics, 133(2), 662-676.

Hawi, R. O., Alkhodary, D., & Hashem, T. (2015). Managerial competency and organizations performance. International Journal of Management Sciences, 5(11), 723-735.

Kalay, F. (2016). The impact of organizational structure on management innovation: An empirical research in Turkey. Pressacademia, 5(1), 125-125.

Lestari, S. D., Sugiarto, D., Simamora, B. H., & Richter, U. H. (2016). The effect of the structure of an organization on project premier contractor’s performance, with rewards, training, and leadership as intervening variables. International Journal of Economics and Management, 10(S1), 109 – 122.

Shamim, S., Cang, S., Yu, H., & Li, Y. (2016). Management approaches for Industry 4.0: A human resource management perspective. 2016 IEEE Congress on Evolutionary Computation (CEC).

Shouyu, C. (2017). The relationship between innovation and firm performance: A literature review. Proceedings of the 2017 7th International Conference on Social Network, Communication and Education (SNCE 2017).

Taouab, O. & Issor, Z. (2020). Firm performance: Definition and measurement models. European Scientific Journal, 15(1), 93-106.

Ubeda, C., Santos, F., & Nagano, M. (2017). Analysis of the individual competencys contributions to innovation management based on methodological triangulation. Gestão & Produção, 24(3), 595-609.

Umar, A., Che Omar, C., Hamzah, M., & Hashim, A. (2018). The mediating effect of innovation on entrepreneurial competencies and business success in Malaysian SMEs. International Business Research, 11(8), 142.

Zainurossalamia, S., Setyadi, D., Hudayah, S., & Rusmilawati. (2016). The effect of innovation on firm performance and competitive advantage. European Journal of Business and Management, 8(29), 113-120.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Copyright (c) 2021 Array