Business Environment and Competitive Strategy in Improving Sharia Bank Performance in Indonesia

Febri Rusnal, Dian Masyita, Erie Febrian, Sulaeman Rahman Nidar, Erika Nurmartiani, Miftachul Huda


This study aimed to examine the influence of business environment and competitive strategy on the performance of sharia banks in Indonesia. The time horizon of this study was cross-section/one-shot in the year 2018. The unit of analysis was Sharia Banking in Indonesia, with a leader from each bank as an observation unit. According to Bank Indonesia's data, the total population was 34 Islamic banks consisting of two categories: 12 sharia commercial banks and 22 sharia business units. A cross-sectional study approach was used in this study, and the census conducted data collection. Verification analysis measures quantitative data and hypothesis testing using partial least square (PLS). The results showed that the business environment and competitive strategy significantly affected the performance of sharia banks. The competitive strategy had a greater impact than the business environment in improving the performance of Islamic banks. The results of this study were expected to be useful for the management of sharia banking to improve bank performance by improving the implementation of competitive strategies, especially speed strategy accompanied by the strengthening of the internal environment in terms of organizational structure and sharia bank management policies.


Keywords: business environment, competitive strategy, performance of sharia bank.

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