The Effect of Enterprise Agility and Network Structure on Firms’ Performance in the Housing Industry

The purpose of this paper is to examine the relationship of enterprise agility and network structure on firms’ performance in the housing industry with special reference to the Small Medium Enterprises (SMEs). SMEs play a key role in building and supplying low-cost houses for low-income people in Indonesia. The study uses a survey method. The data was collected from 379 SME housing developers which spread over 33 REALESTAT INDONESIA (REI) region chapters. Data was analyzed using Structural Equation Modeling (SEM) method with Lisrel Software as the measurement tool. SEM examines the causal effects among latent variables and the testing of hypotheses. This study is related to the national issue of housing backlog in Indonesia which is predicted to reach 15 million units in 2014. The findings show that the biggest contributors for low-cost housing in Indonesia are the SMEs who are members of REI. Majority of them are small-sized enterprises (SEs) which have limited organizational and resources. Results of the hypothesis tested indicates that the SME housing developers should have an ability of enterprise agility and able to develop its own network structure to acquire access to external resources in-order to enhance their firms’ performance.