THE USE OF PARTIAL LEAST SQUARES MODELING IN FINANCE BUSINESS PARTNERING RESEARCH

AMIN, TOHARI and FAISOL, FAISOL and Aeri, Rachmad (2021) THE USE OF PARTIAL LEAST SQUARES MODELING IN FINANCE BUSINESS PARTNERING RESEARCH. Jurnal Ilmiah Kursor, 11 (1). pp. 43-52. ISSN 0216 – 0544

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Abstract

Structural equation modeling (SEM) is a set of statistical techniques that allows testing a model that is built between one or more endogenous variables with one or more exogenous variables, where each endogenous and exogenous variable can be in the form of latent or a construct built from several variables of manifest or indicator. There is Structural Equation Modeling (SEM) based on covariance and variance, known as Partial Least Square (PLS), SEM-PLS is a powerful and flexible analysis method. This research provides about the application of SEM-PLS in the field of managerial accounting system, namely the application of non-financial performance’s role that delivers the sustainability of the company's financial performance. Based on the results obtained, it can be concluded that partial least squares can be applied to model finance business partnering, and it is known that employee performance and internal process performance affect significantly in mediating between finance business partnering and firms’ financial performance. This study provides, the first,empirical evidence that nonfinancial performance, such as employee competency, the internal process can be increased by regarding finance business partnering (FPB). It also presents practical implications recommending that manufacturing firms should motivate the employees in finance staff to be involved in various decision making processes.

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