The Effect of Organizational Culture and Work Motivation on Employee Performance in Fashion MSMEs in Makassar City

Abstract

The increasingly complex competitive environment in the modern era requires Micro, Small, and Medium Enterprises (MSMEs) to reorient their internal managerial foundations, particularly organizational culture and work motivation, as strategic factors that influence human resource performance amid intensifying competition. This study aims to examine the effects of organizational culture and work motivation on employee performance among fashion MSMEs in Makassar City. A quantitative research approach was employed using a structured survey involving 206 participants selected through non-probability sampling based on the criteria of being active employees of fashion MSMEs relevant to the study. Primary data were collected through a questionnaire using a Likert scale and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS version 4.0. The results indicate that both organizational culture and work motivation have a positive and significant effect on employee performance. A well-established organizational culture within the work environment contributes to fostering consistent productive behavior among employees. Meanwhile, work motivation serves as an intrinsic driving force that supports the improvement of employee performance in fashion MSMEs in Makassar City. These findings highlight the importance of strengthening organizational culture and maintaining employee motivation as integral components of human resource management to enhance employee performance in the fashion MSME sector.