Effect of governance practices on value co-creation and organizational performance: Evidence from village-owned enterprises in Riau, Indonesia


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A broader community is currently paying a significant deal of attention to the existence of social enterprises. This is due to the belief that social enterprises can bring answers to community issues. Village-Owned Enterprises (VOEs), as one of the social enterprises that are expected to continue providing sustainable welfare for villages, must always strive for excellent organizational performance to fulfill their objectives. This study is based on the notion of participatory governance; it seeks to evaluate the effect of governance practices on value co-creation, as well as the effect these practices have on organizational performance. This paper collects data utilizing a structured questionnaire and a quantitative research approach. A cluster sampling methodology is used. The respondents are directors of VOEs in Riau Province, Indonesia. One hundred twenty-five data were analyzed using partial least squares (PLS) of the second order. The results reveal that good governance practices will boost value co-creation, enhancing organizational performance. The findings suggest that VOEs should pay particular attention to their process of managing, monitoring, and accountability to achieve value co-creation and fulfill their mission. The uniqueness of this study lies in its investigation of the governance practices of VOEs and the crucial role of value co-creation in enhancing their organizational performance.

We express our gratitude and appreciation to The Directorate of Resources, The Directorate General of Higher Education, The Ministry of Education, Culture, Research and Technology (Ref. 1615/UN. for financial support for this study. We also express the same appreciation to LPPM Universitas Riau for facilitating this research project.

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    • Figure 1. Path analysis model
    • Table 1. Descriptive statistics of the respondents
    • Table 2. The fit model quality indices
    • Table 3. Reliability, validity, and correlation values
    • Table 4. Outer model
    • Table 5. Path analysis result
    • Table 6. VAF calculation
    • Conceptualization
      Ria Nelly Sari, Dewi Junita, Rita Anugerah
    • Funding acquisition
      Ria Nelly Sari
    • Investigation
      Ria Nelly Sari, Raisya Zenita
    • Methodology
      Ria Nelly Sari, Dewi Junita, Rita Anugerah
    • Supervision
      Ria Nelly Sari, Rita Anugerah
    • Writing – original draft
      Ria Nelly Sari, Dewi Junita
    • Writing – review & editing
      Ria Nelly Sari, Rita Anugerah
    • Data curation
      Dewi Junita, Satria Tri Nanda
    • Resources
      Dewi Junita, Satria Tri Nanda
    • Software
      Dewi Junita
    • Formal Analysis
      Rita Anugerah, Satria Tri Nanda, Raisya Zenita
    • Project administration
      Satria Tri Nanda
    • Validation
      Satria Tri Nanda, Raisya Zenita
    • Visualization
      Satria Tri Nanda, Raisya Zenita