14
4 The psychological empowerment X2; in this present study, it refers to the empowerment which is conceptualized into four cognitions; they are meaning,
competence, self-determination, and impact Chiang and Hsieh, 2012; Tutar et al., 2011.
5 The Asta Brata leadership X3; in this present study, it refers to the leadership which
exemplifies the essential natures of Almighty God, Hyang Widhi, which are
implemented as a totality which greatly contributes to the great authority which a leader has; as a result, heshe can easily activate the human resources, especially hisher
subordinators when doing their jobs Wiratmaja, 1955; Yasasusastra, 2011; Kariyadi, 2013. Such eight natures are referred to as follows:
Indra Brata, Yama Brata, Surya Brata, Casi Brata, Bayu Brata, Dhanaba Brata or Kuwera Brata, Paça Brata, and Agni
Brata. The variables of the present study are measured using the
Likert Scale with the interval of assessment which starts from score 1 completely disagreeing to score 5
strongly agreeing. Each indicator of the variable made up of several items is measured using the average value.
3.2 Population, Sample, and Research Respondent
This present study was conducted at the manufacturing UMKM in Gianyar Regency, Bali Province. The manufacturing UMKM includes wood craft, rattan craft,
precious metal craft, textile industry, batik and tenun ikat industries. The samples were
taken using the quota sampling approach, totaling 90 key human resources taken from 30 manufacturing UMKM in Gianyar Regency.
3.3 Types, Sources and Method of Collecting Data
The data needed in the present study include the qualitative and quantitative data. The quantitative data include the number of UMKM, the number of employees, the
respondents’ ages. The qualitative data include the in-depth descriptions of the respondents’ perception of creativity, innovation, structural empowerment, psychological
empowerment, and the asta brata leadership. The data were taken from the primary and
secondary data sources. The primary data source included the research respondents, and the secondary data source included the Cent
er of Statistics Badan Pusat Statistik ‘BPS’ and the Bank of Indonesia’s publications in the Economic and Financial Statistics of Bali
15
Province. The data were collected through the research instrument questionnaire and interview.
Before the research instrument was used to collect the data, its validity and reliability were examined. The
product moment correlation was used to examine the validity of the instrument. The instrument is stated to be valid if the coefficient value of the
correlation between the score for each item of question and the total score for every variable is positive and higher than 0.30 or r 0.30. The reliability of the internal
consistency was used to examine the reliability of the instrument in which Alpha Cronbach ά was calculated. The research instrument is stated to be reliable if the score for the
Alpha Cronbach is higher than 0.60 ά≤0.60.
The result of the examination of the instrument validity proved that the instrument can be stated to be valid as the coefficient value between the score for each item of
question and the total score for every variable showed that the coefficient value was higher than 0.30 r 0.30. Similarly, the result of the reliability of the instrument proved that the
instrument can be stated to be reliable, as the value of the Alpha Cronbach for every
variable is higher than 0.60 ά ≤ 0.60.
3.4 Data Analysis Technique
This present study employed the quantitative approach supported with the descriptive analysis. The technique of analysis used was the variance-based structural
equation model or what is referred to as Component-based SEM, namely, the Partial Least Square PLS.
4. Results 4.1 General Description of UMKM Used as Sample
UMKM plays a strategic role in the economic growth and supports the government’s program to create job opportunities. The competition which is getting tighter
and the fact that there are more and more overseas products and services have been challenges to UMKM, especially the manufacturing UMKM in Gianyar Regency. What
has seriously challenged the manufacturing UMKM is how to survive such an uncertain situation. Those who are involved in UMKM should be creative and innovative to make
use of the opportunities available.
16
Those who were used as the samples of the study were creative and innovative enough to make use of the opportunities available in order to survive. In this present study,
innovation includes the innovation in creating new products and modifying the existing products. In the last two years, several manufacturers created new products which had
never been produced before such as lamp shades, ketzel painting, silver bracelets with the
black dragon as the motive, bracelets with what is called cangkang kerang as the motive,
Balinese carved bracelets with the face as the motive, bracelets with red garnet as the stone, dragon bones, rings with the topaz blue stone flower as the motive, and so forth.
Such products are marketed in local markets and are exported. Out of the UMKM used as the samples in the present study, 7 23 percent market their products in domestic
markets, while 23 77 percent, the rest, market their products in local markets and overseas.
4.2 Respondents’ Characteristics
The respondents of the present study were the employees who played key roles in the success achieved by the Manufacturing UMKM in Gianyar Regency, totaling 90.
Based on the result of the study, it was identified that the dominant employees were females 84 percent. This indicates that the UMKMs involved in the creative industry
were activated by mothers. If viewed from their ages, they were between 20 and 50 years of age. Most of them 62 percent were senior high school graduates; some 8 percent
were university graduates. However, viewed from their working experience, they had been involved in the manufacturing business for a relatively long time. Out of them, 21 23
percent had been involved in the manufacturing business for 11 – 15 years, and 16 percent
were involved in the creative industry for more than 20 years.
4.3 Results of Data Analysis
In the present study, PLS with Program SmartPLS was used to analyze the data.
Based on the result of the data analysis, the empirical model of research was produced as shown in Figure 1 as follows.
Based on what is shown in the Figure 1, the result of the outer model is described in order to identify the validity and reliability of the indicators used to measure the latent
variable. In addition, the evaluation of the inner model is also described in order to identify
17
whether the accuracy of the model and the result of the examination of the research hypothesis.
1 The Result of the Outer Model
The evaluation of the outer model was used to examine the validity and reliability of the indicators used to measure the construct or the latent variable. In this present study,
the variable of the Structural Empowerment X1, the Psychological Empowerment X2, Creativity Y1, and Innovation Y2 are classified as the outer model with reflective
indicators, whereas the variable of the Asta Brata leadership X3 is classified as the
formative outer model. In the reflective outer model, evaluation was made by examining the convergent and discriminant validity of the indicator and the composite reliability of
the indicator block. In the variable of the formative outer model, evaluation was made based on the relative weight. The results of the evaluation of the outer model are described
as follows.
1 Convergent Validity
The result of the examination of the outer model showed that the outer loading of every indicator of the Structural Empowerment variable X1, the Psychological
Empowerment X2, Creativity Y1, and Innovation Y2 is higher than 0.5; in addition, it
18
also showed that the T-statistics is higher than 0.96 the critical point in the 5 alpha, meaning that all the indicators are valid for measuring the variables.
The evaluation of the measurement of the Asta Brata Leadership variable X3, if
viewed from the Outer Weights, showed that the T-statistics of several indicators X3.2, X 3.4, X 3.5, X 3.6, X 3.7 is less than 1.96, meaning that it is insignificant. However, in
relation to this, it is impossible to delete the insignificant formative indicator. The reason is that if the insignificant formative indicator were deleted, then the essence of the construct
would change Hair et al., 2013 in Sholihin and Ratmoni, 2013. Therefore, if viewed from the outer loading, the validity of the construct shows that all the indicators of the
Asta Brata Leadership variable are higher than 0.5 and the T-statistics is higher than 1.96,
meaning that all the indicators are valid for measuring the variable.
2 Discriminant Validity
The discriminant validity was examined by comparing the score for the square root of average variance extracted AVE of every variable with the correlation among the other
latent variables in the model. The related data are presented in Table 1. Table 1 The score for the square root of average variance extracted AVE of every
variable and correlation among the variables
Variables AVE
√AVE Innovation
Asta Brata Leadership
Creativity Psychological
Empowerment Structural
Empowerment Innovation
0.8067 08.898
3 1
Asta Brata Leadership
0.7519 0.8671
0.8272 1
Creativity 0.8835
0.9399 0.8446
0.8009 1
Psychological Empowerment
0.7597 0.8716
0.8397 0.7226
0.7728 1
Structural Empowerment
0.9319 0.9653
0.8051 0.7377
0.8513 0.8065
1
Based on the data in Table 4.8, it can be identified that the AVE values of the five variables which were analyzed are higher than 0.5, and that the AVE root value of every
variable is higher than the correlation among the variables, meaning that the latent variables such as the Innovation variable Y2, the Creativity variable Y1, the
Psychological Variable X1, the Structural Empowerment variable, and the Asta Brata
leadership variable predict that their indicators are better than the other latent variable indicators. Based on the result of such an analysis, it can be explained that the discriminant
validity of the model is enough.
