Analysis of The Influence of Soft And Hard QM Practices on Business Sustainability And Competitive Advantage of SMEs: An Organizational Culture Mediation Approach

This study investigates how Soft and Hard Quality Management (QM) practices influence business sustainability and competitive advantage among creative manufacturing SMEs, with organizational culture as a mediating variable. Using a quantitative approach, data were collected through structured questionnaires from 210 SMEs engaged in creative manufacturing linked to tourism in Yogyakarta and Central Java. Structural Equation Modeling with Partial Least Squares (SEM-PLS) was applied to analyze the relationships between constructs. The results reveal that both Soft and Hard QM significantly enhance business sustainability, with Soft QM having a stronger impact. Organizational culture also mediates the relationship between QM practices and business sustainability. Furthermore, sustainable business performance positively affects competitive advantage. The model confirms that an integrated approach to QM, which combines technical systems and behavioral values, produces better strategic outcomes. The findings encourage SMEs to balance technical improvements with internal cultural development. Government and support institutions should design interventions that address both system implementation and value-based capacity building.