Effective HR Management as a Key Requirement for Successful Business Administration

Abstract

Purpose: This study aims to assess the impact of Human Resource (HR) management on the success of business administration within medium-sized retail enterprises in Indonesia.
Method: Regression analysis further explores the impact of HR management investments and effectiveness on business profitability. The data spans from 2018 to 2023 and includes various financial metrics from medium-sized retail enterprises.
Findings: The study finds a strong positive correlation between HR management expenses and both business administration expenditures and profitability. Factor analysis reveals HR management as a key factor influencing business administration success, while regression analysis indicates that increases in HR management expenses and effectiveness are significantly associated with higher profitability. These findings emphasize the critical role of strategic HR investments in enhancing organizational performance.
Novelty: This research contributes new insights into the strategic value of HR management within medium-sized retail enterprises in Indonesia. It highlights the direct impact of HR management on business success, offering empirical evidence that supports the strategic alignment of HR practices with business objectives. The study's focus on a specific regional and industry context adds a unique perspective to the existing literature on HR management.
Implications: Organizations should prioritize HR management as a strategic component to enhance business performance and profitability. By investing in effective HR practices, companies can improve their overall administrative efficiency and financial outcomes. The findings suggest that HR management should be integrated into strategic planning to leverage human capital as a competitive advantage.