The Effect of Service Innovation, Corporate Image, And Customer Loyalty On Human Capital Strategy And Business Performance Moderated By The External Environment At Bank Sultra In Southeast Sulawesi

Abstract

This study aims to analyze the influence of service innovation, corporate image, and customer loyalty on Human Capital Strategy and business performance. In addition, the study examines the influence of Human Capital Strategy on business performance, its role as a mediator in strengthening the effects of service innovation, corporate image, and customer loyalty on business performance, as well as the moderating role of the external environment on the influence of Human Capital Strategy on business performance. The research employed a quantitative approach using Structural Equation Modeling (SEM) with Partial Least Squares (PLS) to test the relationships among the variables. Data were collected through questionnaires distributed to 400 savings customers of Bank Sultra in Southeast Sulawesi. The results indicate that Service Innovation has a positive and significant influence on Human Capital Strategy and Business Performance, suggesting that improvements in new product innovation, service process innovation, and service technology innovation strengthen employee development, retention, and motivation strategies while enhancing service efficiency and attractiveness, ultimately improving business performance. Corporate Image also has a positive and significant influence on Human Capital Strategy and Business Performance, where a strong identity, good reputation, and positive public perception encourage more effective HR strategies and lead to increased service revenue, net interest margin, and market share growth. Customer Loyalty has a positive and significant influence on Human Capital Strategy and Business Performance, indicating that repeat purchase intentions and willingness to recommend services strengthen HR strategies and directly contribute to business performance. Furthermore, Human Capital Strategy has a positive and significant influence on Business Performance and acts as a partial mediator of the effects of Service Innovation, Corporate Image, and Customer Loyalty on Business Performance. This means that although these variables exert direct effects, their influence becomes more optimal when reinforced through HR strategies. Additionally, the study finds that the External Environment significantly moderates the influence of Human Capital Strategy on Business Performance, where competitive pressure, new market entrants, buyer bargaining power, and substitute products intensify the importance of HR strategies in supporting business performance amid increasing market competition.