Modelling Business Sustainability in Agri Engineering Manufacturing Companies : Effect of Innovation, Technology and Business Model

Farm mechanization in Indian agricultural sector has been significantly supported by Agri Engineering Manufacturing Companies. It helps in tumbling the drudgery and thereby increasing the productivity of the labour. India agricultural machinery manufacturing sector is quite challenging which consists of countryside farmers, traditional small units, common craftsmen and small scale companies. They are the unorganised manufacturers, who are lacking proper infrastructure, business model and technology intervention. Hence this research has been conducted to identify and analyse the factors influencing the sustainability of Agri Engineering Manufacturing Companies. In this study quantitative research has been carried out. Agri Engineering Manufacturing Companies (AEMC) of the state of Karnataka has been considered as the study population. A total number of 372 AEMC spread across various districts of Karnataka have been identified to conduct the research. Initially the critical factors influencing the Business Sustainability of AEMC have been identified through Pilot Study. Further the variables influencing the Business Sustainability factors have been identified by reviewing scholarly journal articles and feedback collected from the Entrepreneurs of AEMC. The final Survey Questionnaire has been developed and validated by the Focus Group Discussion consisting of the panel members from academic background and Industry experts. Primary data has been collected through telephonic interview, Google Spread sheet and personal interview from the identified AEMC with the help of final Survey Questionnaire. A total number of 354 valid responses were received out of 372 AEMC, thus achieving 95% of response rate.Data analysis has been carried out by using Statistical Package for the Social Sciences 25 (SPSS 25) and Analysis of Moment Structures 25 (AMOS 25). Reliability test has been conducted and the Cronbach’s alpha value 0.817 indicated a good level of internal consistency. Kaiser-Meyer-Olkin and Bartlett’s Test has been conducted and the KMO value of 0.781was acceptable. Structural Equation Modelling (SEM) has been used to develop a model using the latent constructs such as Business Model, Innovation and Technology. There was significant improvement in the Goodness of Fit Statistics values when compared with the initial model and the new model. The Goodness of Fit Statistics values of the new model are Comparative Fit index (CFI) 0.988, Goodness of Fit Index (GFI) 0.958, Adjusted Goodness of Fit Index (AGFI) 0.923, Normated Fit Index (NFI) 0.956, Tucker Lewis Index (TLI) 0.980, Root mean square error of approximation (RMSEA) 0.031, Parsimony Normed-fit index (PNFI) 0.478 and these indicated a good model fit. The key findings of the research indicate that, there is a need to improve the technological infrastructure and operating mechanism for the business sustainability. Also there is need to improve R &D facilities and supporting policies necessary for innovativeness such as open innovation and motivation for employees who bring innovative ideas