THE ROLE OF EMPLOYEE SATISFACTION AND QUALITY MANAGEMENT IN STRENGTHEN THE INFLUENCE OF LEARNING ORGANIZATION ON FIRM’S FINANCIAL PERFORMANCE

Business development in Indonesia has been transformed. It is shown from the move of a lot of companies from domestic to global market. The degree of global competition influence has accelerated the change, as a product or service easily imitated, manufactured and shipped to anywhere. From the issues of business environment turbulence and transformation, the concept of learning organization became an interested research topic, not only for the theoretical but also practical improvement. Business organization has been called to be a learning organization as it is needed to make the organization, and also the people inside it, to have continuous improvement. This study examines the relationship of learning organization on firm’s financial performance throughout employee satisfaction and quality management as the intervening variables. Structural Equation Model (SEM) is employed to measure the relationship. The objects are manufacturing and non-manufacturing companies in Surabaya, in total 65 companies. Surabaya is the capital of East Java province in Indonesia. The important finding is the significant role of employee satisfaction and quality management as the intervening variables for strengthening the influence of learning organization on firm’s financial performance. The significant findings in this study are addressed to show the benefit of learning in the organization.