The Effect of Strategic Plan, Leadership, Financial Performance, and Product/Service Quality on Satisfaction of Credit UnionMembers

Abstract

Credit Union, in Indonesia, has well developed and plays an important role in supporting economic empowerment of its members. Based on its members, assets, and financial performance, BKCU of Kalimantan was regarded as the best credit union coordinating body in Indonesia. In addition, 15 Primary Credit Unions (PCU) in Indonesia have been selected to be included into Asian Access Branding evaluation, 10 of which were PCUs within BKCUK. Objective of this study is to analyze the impact of strategic management, leadership, financial performance, and product/service quality on satisfaction of PCU members. Ten PCUs within Kalimantan BKCU (i.e., 8 in Western Kalimantan and 2 in Central Kalimantan) were selected as objects of this study. No less than 386 respondents which consist of managers, adminitrative staff, activists, and members of the selected PCUs were randomly selected and used as sources of primary data. Data were collected from respondents using questionnaires. Path analysis was used to estimate the magnitude of direct and/or indirect causal relationships between exogenous variables and endogenous variables. AMOS Version 16 was used to perform the analysis. Results of the study show that: (i) strategic planning indirectly affect member satisfaction through three channels i.e., manager of leadership, quality of products/services, and leadership of managers and the quality of products/services; (ii) financial performance target affects member satisfaction, both directly and indirectly through three channels i.e., managers leadership, quality of products/services, and leadership of managers and quality products/services; and (iii) there are two critical paths that need to be considered in an effort to improve the satisfaction of members of credit unions (i.e., strategic planning manager-leadership-quality product/service-member satisfaction and the financial performance targets managersleadership- quality product/service-member satisfaction).