Examining the role of human capital and strategic management in Islamic perspective

Abstract

This study examines and analyzes the effect of; (i) Human Capital in Islamic Perspective (HCIP) on Business Sustainability (BS); (ii) Strategic Management in Islamic Perspective (SMIP) on Business Sustainability, (iii) Mediation of Strategic Management in Islamic Perspective in relation to Human Capital in Islamic Perspective on Business Sustainability. This study uses Batik MSME respondents in Pekalongan City. Pekalongan is a Batik city that has the batik talents, qualified craftsmen, known worldwide and have been passed down from one generation to the next. The target sample is 150 MSMEs. It is conducted purposively with a return rate of 116 questionnaires (response rate 77%). The data is collected through questionnaires and interviews with several owners or managers of MSMEs. The statistical technique uses Partial Least Square (PLS 3.3). This study finds that; (i) Human Capital in Islamic Perspective has no significant effect on Business Sustainability; (ii) Strategic Management in Islamic Perspective has a significant effect on Business Sustainability, (iii) Strategic Management in Islamic Perspective mediates the effect of Human Capital in Islamic Perspective on Business Sustainability