Relationship between competitive SMEs orientation and Catur Paramitha

Abstract Purpose – The purpose of this paper is to identify dimensions and indicators of “Catur Paramitha” that improve the performance of SMEs in Sarbagita area. Design/methodology/approach – The study used a quantitative and qualitative approach. Glaser and Strauss’s (1967) grounded theory, and Strauss and Corbin (1990) were the bases for the qualitative approach. It also employed a quantitative approach to analyze the difference between the SMEs. The setting comprised of three municipalities in Bali and Denpasar; altogether, these areas are known as “Sarbagita.” Bali is divided into 8 districts, 1 city, and 57 regions. Due to the large number of SMEs in Bali, there is no institution that has been able to identify the exact number of SMEs in “Sarbagita.” Findings – There is a significant and positive relationship between “Catur Paramitha” and the performance of SMEs in both East Java and Bali. The finding also describes the performance of the SMEs that apply the principles of “Catur Paramitha” and those that do not. “Catur Paramitha” that consists of “metria,” “karuna,” “upeksa” and “mudita” is a pivotal concept to apply for SME owners/management in order to prevent money from being the only basis for capitalist competition. Local wisdom can control cannibalism, turning it into humanism and friendship-based partnership or cooperation. Originality/value – The originality of this research is its methodology, and the fact that the local culture becomes the basis for a successful business venture and organizational performance as the key for a successful business venture. Improved organizational performance is the result of more developed internal resources and competitive advantage. Local culture is a very important element to develop a competitive advantage (Barney and Clark, 2007). Local culture is local wisdom. Studies focusing on the local wisdom theory (Clayton and Birren, 1980; Robinson, 1990; Sternberg, 2000) use qualitative methods. Quantitative method is the approach used to explain the relationship between humanistic values and the performance of the SMEs (competitive advantage) based on statistical analysis. Therefore, the originality of this study is a mixed approach between quantitative and qualitative with interpretive-based approaches. Keywords Catur Paramitha, Local wisdom Paper type Research paper