Quality Management Journal

Building Emotional Bonds to Improve Notarial Practices and

Explore Sustainable Business Success in Semarang City

Journal: Quality Management Journal

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Manuscript ID Draft

Manuscript Type: Research Case Studies

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Relational Capability, Knowledge Acquisition Capability, Competence in
Keywords: creating economic value, ISE-based relational capacity, Business
Performance
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This research aims to develop a new model that integrates relational

capabilities, competence in creating economic value, and knowledge
acquisition capabilities in influencing business performance through
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intimacy spirit emotion (ISE)-based relational capacity. The study was

conducted on 124 notaries in Semarang, Central Java, Indonesia using a
quantitative survey approach. The findings reveal that knowledge
acquisition capability and competence in creating economic value have
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significant direct and indirect effects on notaries' business performance.

However, relational capability does not directly influence business
performance but is significant when mediated by ISE-based relational
capacity. This suggests that notaries who can build close, mutually
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Abstract:
understanding, and appreciative relationships with stakeholders tend to
demonstrate superior business performance. The results prove that non-
technical factors like relational capacity are crucial in determining
business performance, particularly in professional service industries like
notaries. The research also highlights the importance of integrating
emotional and spiritual aspects in building relationships with external
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stakeholders. Theoretically, the findings support the resource-based view,

social capital theory, and business relationship theory. To enhance
business performance, notary firms should invest in developing ISE-
based capacity, relational capabilities, competence in creating economic
ly

value, and knowledge acquisition capabilities.

URL: https://mc.manuscriptcentral.com/qmj
Page 1 of 15 Quality Management Journal

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3 Building Emotional Bonds to Improve Notarial Practices and Explore Sustainable Business
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5
Success in Semarang City
6 Agustinus Andy Toryanto(toryanto@yahoo.com)1, Bulan Prabawani (bulan@live.undip.ac.id)2, Reni
7 Shinta Dewi (renidinza@gmail.com)3, Andi Wijayanto (andibilt@gmail.com)4.
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9 Doctor of Social Science of Faculty of Social and Political Science,
10 Diponegoro University, Semarang-Indonesian
11 Abstract
12 This research aims to develop a new model that integrates relational capabilities, competence in
13 creating economic value, and knowledge acquisition capabilities in influencing business performance
14 through intimacy spirit emotion (ISE)-based relational capacity. The study was conducted on 124 notaries
15 in Semarang, Central Java, Indonesia using a quantitative survey approach. The findings reveal that
16 knowledge acquisition capability and competence in creating economic value have significant direct and
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17 indirect effects on notaries' business performance. However, relational capability does not directly influence
18 business performance but is significant when mediated by ISE-based relational capacity. This suggests that
19 notaries who can build close, mutually understanding, and appreciative relationships with stakeholders tend
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20 to demonstrate superior business performance. The results prove that non-technical factors like relational
21 capacity are crucial in determining business performance, particularly in professional service industries like
22 notaries. The research also highlights the importance of integrating emotional and spiritual aspects in
23
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building relationships with external stakeholders. Theoretically, the findings support the resource-based
24
view, social capital theory, and business relationship theory. To enhance business performance, notary firms
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should invest in developing ISE-based capacity, relational capabilities, competence in creating economic
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27 value, and knowledge acquisition capabilities.

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29 Keywords: Relational Capability, Knowledge Acquisition Capability, Competence in creating economic
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30 value, ISE-based relational capacity, Business Performance

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32 Introduction
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33 In the era of hypercompetitive globalization, businesses face dynamic and intensive challenges.
34 Previously established markets are now being eroded by instability. Fierce competition occurs in terms of
35 price positioning and product quality. Companies compete to create new knowledge (new know-how) to
36 gain the advantage of being the first to enter the market (first-mover advantage). The globalization of
37 business encourages companies to attack established markets and products with aggressive strategic
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38 maneuvers to gain a competitive advantage. In this hypercompetitive environment, only agile, innovative,
39 and adaptive companies will be able to survive and thrive. (Koguashvili & Otinashvili, 2022).
40 Competitiveness in this hypercompetitive environment depends on adapting to change, understanding
41 market dynamics, and utilizing internal and external factors that influence competitiveness. (Litvinova &
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Gridneva, 2022). Strategies such as acquisitions and collaboration between companies are essential
43
responses to external factors. At the same time, strategic leadership plays a vital role in ensuring the
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uniqueness of the internal environment, which ultimately determines a company's competitive advantage.
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46 (Lindskov et al., 2021). Understanding the nuances of competition, monitoring competitors, and continuing
47 to innovate are essential for maintaining competitiveness in the global business landscape and successfully
48 formulating and implementing a value creating strategy. (Koguashvili & Otinashvili, 2022).
49 As emphasized in various research papers, efforts to protect businesses from competitive threats and
50 improve market position require establishing and maintaining strong business networks. The
51 IMPG/Industrial Marketing and Purchasing Group strategic approach underlines the importance of actors
52 in business networks and their interdependence. Additionally, studies on factors influencing business
53 network development emphasize the importance of multi-actor dynamics, organizational variables, and
54 value creation through innovation and partnerships (Cheng et al., 2016). Furthermore, research on
55 contractors in Hong Kong shows that networking techniques such as information exchange and project
56 communication significantly impact business competitiveness, emphasizing the role of networking
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3 strategies in sustaining growth opportunities (Munawar et al., 2021). Additionally, the relationship between
4 a firm's business network, dynamic capabilities, and product innovation is explored, showing that the
5 breadth and depth of networks drive dynamic capabilities, which in turn influence successful product
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innovation, with strategic orientation moderating these effects (Keung & Shen, 2017).
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While many studies emphasize the positive impact of relational capabilities on firm performance, there
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are examples where different results are observed. For example, a research of Chourasia & Bahuguna,
10 (2023) found that relational capital did not significantly mediate the relationship between human capital
11 and financial performance. Additionally, the study of Magyar, (2018) revealed that relationship learning
12 negatively moderates the relationship between relationship management capabilities and service innovation
13 performance. Raza (2012) states that the influence of relational capital management or strategic alliance
14 capital, relations with competitors, and relations with the government is not significant on performance; in
15 other words, relational capability does not affect performance. These contrasting findings suggest that the
16 influence of relational capabilities on firm performance may vary depending on different factors
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17 . Research findings from various studies highlight the importance of relational capabilities and core
18 competencies in improving business performance. While some research, such as that conducted by Parente
19 et al., (2022), emphasizes the positive impact of relational capital on marketing performance, and so does
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20 the study Nuryakin & Ardyan, (2018) They investigated the post importance of relational capacity in
21 strategic alliances for companies in the technology sector. Relational capabilities and core competencies
22 improve business performance, leading to sustainable competitive advantage and high performance.
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(Parente et al., 2022). These insights collectively indicate a research gap in understanding how to strengthen
24 the link between relational capabilities and business performance, thereby requiring further exploration and
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development of new concepts to optimize core competencies for better business outcomes.
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This research aims to develop a new model that integrates relational capabilities, economic value
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creation competencies, and knowledge acquisition capabilities in influencing business performance through
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29 relational capacities based on emotional spirit intimacy. As research Alhaddad, (2023) Examined the
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30 correlation between emotional intelligence and organizational performance, especially in the context of
31 emotional labor workers show appropriate emotions to improve service quality. Research Jamil, (2022)
32 highlights the influence of emotional and spiritual intelligence on the performance of tax consultants and
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33 the impact of ego depletion on their performance. The study of Pudjiarti & Suharnomo, (2018) emphasizes
34 the importance of relational capabilities in increasing innovation and competitive advantage for small and
35 medium enterprises. These findings suggest that emotional and spiritual intelligence and relational abilities
36 are essential in determining business performance and relational capacity, underscoring the importance of
37 emotional and spiritual aspects in professional settings. This model is expected to comprehensively solve
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38 the research gap and explain the causal relationship between relational capabilities and business
39 performance.
40 This study was conducted on notaries in Semarang to see how relational abilities, value creation
41 competencies, and knowledge acquisition can improve business performance through relational capacities
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42 built from emotional and spiritual ties with clients. A notary is a profession that relies heavily on
43 relationships and trust with clients. They need solid relational capabilities, value creation, and knowledge
44 acquisition competencies to provide the best service. By researching notaries, valuable insights can be
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gained about the role of emotional bond-based relational capacity in improving business performance in
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the professional services sector.
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48 Literature Review
49 Theoretical basis for the concept of relational capacity based on intimation spirit emotion
50 Relational capacity based on emotional spirit intimacy originates from three main theories. First, the
51 Resource-Based View (RBV) views relational capacity as a valuable internal resource for the company
52 (Barney, 2001). Second, social capital emphasizes networks of relationships, norms, and trust to facilitate
53 cooperation (Cropanzano et al., 2017). Third, business relationships emphasize building long-term
54 relationships with business partners (Bhaktiar et al., 2023). Emotional intimacy refers to building a deep
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3 emotional connection based on trust, commitment, and understanding of a partner's aspirations. These three
4 theories form the basis for the concept of Relational Capacity.
5 Relational capacities based on the intimacy of emotional passion emphasize the multidimensional
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nature of building solid and meaningful relationships, integrating emotional and spiritual aspects beyond
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mere transactions. This concept is in line with research on narcissism, highlighting the importance of
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identity integration and social conformity in cultivating relational capacity. (Bogaerts & Janković, 2024).
10 Relational capabilities in technology-based companies underscore the importance of emotional and social
11 connections in collaborative product development, emphasizing the depth of interaction and synergy for
12 successful innovation (de Almeida et al., 2022).
13 Emotional passion intimacy, as described in the context, includes the capacity to understand and
14 address customers' emotional needs with sincerity and empathy. This involves exploring customers' values,
15 aspirations, and motivations to build deep emotional bonds through effective communication (Rydenfelt,
16 2015). Emotional branding strategies, such as sensory branding and storytelling, play an essential role in
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17 cultivating this emotional connection between customers and brands, especially in competitive markets
18 where emotional branding is critical to brand loyalty (Kidwell & Hasford, 2014). Additionally, emotional
19 skills influence nonverbal communication in face-to-face interactions, highlighting the importance of
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20 understanding emotional cues for customers and salespeople. As explored in psychological studies,
21 emotional intelligence underscores the importance of understanding and responding to one's and other's
22 emotions for effective personal and professional interactions.
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In a business context, intimate emotional spirits can help create strong customer loyalty, increase
24 satisfaction, and encourage positive word-of-mouth recommendations (Palmatier, et al., 2007). Building
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relationships based on solid emotional bonds can differentiate a company from competitors and build
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sustainable competitive advantages. Emotional branding strategies that appeal to customers' emotions
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(Sokhan et al., 2023) And relationship-selling practices that focus on long-term satisfaction through
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29 mutually beneficial partnerships (Gokarna, 2021) Are critical.
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30 Furthermore, competitive empathy introduces a new dimension by encouraging managers to be

31 empathetic and emotionally intelligent when dealing with competitors, potentially uncovering valuable
32 opportunities for strategic growth and value creation. (Alhamad, 2022). By leveraging emotional
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33 connections, cultivating strong relationships, and understanding competitors through an empathetic lens,
34 companies can differentiate themselves in the marketplace and secure long-term success. Research has
35 shown that successful companies building emotional intimacy with customers have better performance,
36 higher revenue growth, and higher customer retention rates. (Palmatier, et al., 2007).
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Hypothesis Development
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The influence of relational capability on business performance
40 Relational capability refers to a company's ability to build, maintain, and leverage relationships with
41 external stakeholders such as business partners, suppliers, and customers. This capability allows companies
to effectively manage partner relationships, including coordination, communication, and conflict resolution.
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43 Companies that have solid relational capabilities will be more effective in developing and maintaining
44 mutually beneficial relationships with partners (de Almeida et al., 2022). This gives companies access to
45 valuable resources, information, and new opportunities, which can ultimately improve the company's
46 business performance. This concept aligns with the views of experts (Weritz et al., 2024), who states
47 relational capabilities are crucial in increasing sales volume or profits, gaining access to new markets, and
48 developing innovation.
49 Relational capabilities are essential to business success, including increasing sales volume, gaining
50 access to new markets, and developing innovation (Udayana, 2022). In addition (Hibbard & lacobucci,
51 2015) Building, maintaining, and utilizing a network of relationships increases resource access, knowledge
52 exchange, and innovative collaboration, which has been proven to encourage cross-sector financial
53 performance. Rodríguez‐Díaz & Espino‐Rodríguez, (2006) Show that relational capabilities enable
54 companies to access external resources, share knowledge, and achieve collaboration that positively impacts
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3 competitive advantage and profitability. These findings emphasize the importance of the ability to manage
4 business relationships effectively. Therefore, the hypothesis that can be built is:
5 H1: Relational capability has a positive and significant effect on business performance.
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7 The influence of relational capability on ISE-based relational capacity
8 Relational capability become a valuable company asset in a dynamic and competitive business
9 landscape. Building, maintaining, and utilizing relationships with external stakeholders such as business
10 partners, suppliers, and customers is critical to partner success (de Almeida et al., 2022). Companies with
11 solid relational capabilities will be more effective in managing relationships with partners, including
12 coordination, communication, and conflict resolution. Intimation of emotional spirit is a solid foundation
13 in building this relationship, where trust, mutual understanding, and emotional bonds are essential.
14 (Rydenfelt, 2015). A company's ability to build relational relationships based on intimate emotional spirit
15 can increase the company's capacity to collaborate, share knowledge, and create sustainable innovation.
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(Luu, 2019). Mitrega, & Pfajfar, (2015) revealed that a company's ability to build and maintain solid
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relational relationships can increase the company's capacity to adapt to changes in the business
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environment. Thus, the hypothesis that can be built is:
H2: Relational capability positively and significantly affects relational capacity based on emotional spirit
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21 intimacy.
22 The influence of competence in creating economic value on ISE-based relational capacity
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In the face of increasingly fierce business competition, the competency to create economic value has
24 become a mainstay weapon for companies. The ability to produce unique and high-value products or
25 services for customers through collaboration with business partners is the key to achieving sustainable
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competitive advantage. Cheung et al., (2021) Found that value creation competencies supported by a deep
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understanding of customer preferences can encourage innovative collaboration between partners, ultimately
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increasing the company's adaptive capacity. Fang et al., (2008) Found that customer-oriented economic
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30 value creation competencies can encourage increased market share, sales growth, and company profitability
31 in the long term.
32 Companies that have this competency will be more effective in developing and maintaining mutually
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33 beneficial relationships with partners. Companies can increase innovation, efficiency, and competitiveness
34 through this collaboration, creating unique customer value. This process will encourage increased intimacy,
35 trust, and mutual understanding in relationships with partners, essential aspects of relational capacity based
36 on emotional spirit intimacy (Aarikka-Stenroos & Jaakkola, 2012). Therefore, the hypothesis that can be
37 built is:
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38 H3: Competence in creating economic value positively and significantly affects relational capacity based
39 on emotional spirit intimacy.
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41 The influence of knowledge acquisition capability on ISE-based relational capacity
Knowledge acquisition capability is a company's ability to identify, obtain, and integrate new
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43 knowledge from internal and external sources. This knowledge is essential for companies to build and
44 maintain effective stakeholder relationships. With solid knowledge acquisition capabilities, companies can
45 absorb, understand, and utilize knowledge from relational partners. This will increase the company's ability
46 to build mutually beneficial relationships, mutual trust, and mutual understanding with partners. This
47 concept aligns with the views of experts such as Cheung et al., (2021); social interaction and knowledge
48 exchange in partnership relationships increase the success of new product development. Cheung et al.,
49 (2021) Found that external knowledge acquisition capabilities improve innovation performance and overall
50 company performance. Lawson et al., (2009), strong relational capabilities facilitate knowledge transfer
51 between firms in strategic alliances. Chen et al., (2009) Revealed that trust-based partnership relationships
52 mediate the influence of knowledge acquisition on new product performance. Therefore, the hypothesis
53 that can be built is:
54 H4: Knowledge acquisition capability positively and significantly affects relational capacity based on
55 emotional spirit intimacy.
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3 The influence of competence in creating economic value to business performance
4 Economic value creation competency refers to a company's ability to produce unique and high-value
5 products or services for customers through collaboration with business partners. Companies with this
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competency can create added value that is difficult for competitors to imitate. This ability to create unique
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and superior value allows companies to increase innovation, efficiency, and competitiveness. This will
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ultimately encourage an increase in the company's business performance regarding sales growth,
10 profitability, and market share. Solutions-oriented economic value creation competencies can encourage
11 innovation and product differentiation, thereby increasing the company's competitiveness and profitability
12 in the long term. Ulaga (2003) shows that a company's ability to design high-value propositions can increase
13 customer loyalty and enable companies to obtain premium prices, positively impacting financial
14 performance. Fang et al., (2008). found that customer-oriented economic value creation competencies can
15 encourage increased market share, sales growth, and company profitability in the long term (Payne et al.,
16 2009). Therefore, the hypothesis that can be built is:
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H5: Competence in creating economic value positively and significantly affects business performance.
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19 The influence of knowledge acquisition capabilities on business performance
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20 Knowledge acquisition capability refers to a company's ability to identify, acquire, and utilize new
21 knowledge from internal and external sources. Knowledge is essential for companies to gain a competitive
22 advantage and improve business performance. Companies that can effectively acquire, absorb, and use new
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knowledge will be able to develop products, processes, and services that are more innovative than
24 competitors. This aligns with the views of experts such as (Fang et al., 2008). This shows that knowledge
25 acquisition capabilities supported by open communication and sharing insights with partners can strengthen
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emotional ties between organizations, thereby increasing the company's capacity to create innovative
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solutions for customers. Martín-de Castro (2015) found that knowledge acquisition capabilities supported
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by intensive interactions with customers and partners can sustainably increase a company's capacity to
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30 identify and meet market needs. Tortoriello et al., (2022) Found that a company's ability to acquire and
31 integrate knowledge from various external sources can encourage building emotionally solid relationships
32 with partners, thereby increasing the capacity for collaboration and innovation. Mu et al. (2018) show that
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33 a company's ability to absorb knowledge from business partners can encourage establishing relational
34 relationships based on a deep understanding of customer preferences and needs. Therefore, the hypothesis
35 that can be built is:
36 H6: Knowledge acquisition capability positively and significantly affects business performance.
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Send feedback
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39 The influence of relational capacity based on intimacy, spirit, and emotion on business performance.
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Relational capacity based on emotional spirit intimacy refers to a company's ability to build close
relationships, mutual understanding, and mutual respect with business partners. Companies with this
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43 capacity can develop collaborative solid relationships based on mutual trust, openness, and empathy.
44 Relational capacities based on superior emotional intimacy enable companies to obtain more significant
45 benefits from relationships with partners, such as access to new resources, information, and opportunities.
46 This will encourage increased innovation, efficiency, and company competitiveness. Ultimately, this
47 capacity can become a source of competitive advantage that drives improvements in the company's business
48 performance regarding sales growth, profitability, and market share. This concept is in line with the views
49 of experts. Research (Luu, 2019) Found that a company's ability to build relational relationships based on
50 intimate emotional spirit can increase the company's capacity to collaborate, share knowledge, and create
51 sustainable innovation. Palmatier, et al., (2007) It is revealed that relational capacity based on a deep
52 understanding of customer preferences and needs can increase customer loyalty, impacting sales growth
53 and company profitability. Vargo & Lusch, (2004) Found that relational capacity based on emotional
54 customer interactions can increase a company's ability to create unique value, positively impacting business
55 performance. Therefore, the hypothesis that can be built is:
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3 H7: Relational capacity based on emotional spirit intimacy positively and significantly affects business
4 performance.
5 The description of the relationship between exogenous and endogenous variables explained above
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can be described in an empirical model as shown in Figure 1 below:
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Knowledge Acquisition
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Capability
10 H6
11 H4
12 H2
Relational H7 Business
13 Capability ISE-based relational capacity
Performance
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15 H3
16 H5
H1
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17 Competence in creating
18 economic value
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20 Figure 1: Research Framework
21 Research Method
22 Using a convenient sampling technique, this research uses a quantitative method design through a
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survey of 124 notaries in Semarang, Central Java Province. This approach examines the relationship
24 between Relational Capability, Knowledge Acquisition Capability, Competence in Creating Economic
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Value, and ISE-Based Relational Capacity and its impact on Business Performance. Relational Capability,
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Knowledge Acquisition Capability, Competence in Creating Economic Value, ISE-Based Relational

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Capacity, and Business Performance were measured using a 7-point Likert scale, ranging from Strongly
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29 Disagree Once to Agree Once Strongly. The measurement items for each variable were adopted from
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30 previous research whose validity and reliability have been tested.

31 The Relational Capability variable is measured using an interval scale adopting measurements
32 developed by Smirnova et al., (2011) and Czakon, (2009). The relational capacity variable based on
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33 intimacy, spirit, and emotion is measured using an interval scale. Eiriz & Wilson, (2006) and Nix &
34 Zacharia, (2014). The economic value creation competency variable is measured using an interval scale
35 adopting measurements developed by Simpson et al., (2006) and Ulaga, (2003). The Knowledge
36 Acquisition Capability variable is measured using an interval scale measuring. Bontis et al., (2002); Goh,
37 (2005); Etikan, (2016). Business performance variables are measured using an interval scale adopting
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38 measurements developed Luu, (2019 and Heng et al., (2020). The collected data was then analyzed using
39 structural equation model (SEM) to test the measurement and structural models to test the causal
40 relationship between variables by the proposed hypothesis.
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Results
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43 Demographic Respondents
44 Here is a brief demographic table displaying the characteristics of the respondents. The table includes
45 information about gender, age, education level, and tenure as a notary. This data provides an overview of
46 the background of the respondents involved in the study.
47 Table 1. Demographic Respondents
48 Profile Category Frequency Percentage
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50 31- 40 Year 25 20.16%
51 41- 50 Year 50 40.32%
52 Age
51- 60 Year 38 30.65%
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54 More than 60 Year 11 8.87%
55 Educational Specialist 15 12.10%
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Strata2 102 82.26%
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5 Strata3 7 5.65%
6 Less than 5 Year 11 8.87%
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Tenure 6 - 10 Year 48 38.71%
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9 More than 10 Year 65 52.42%
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11 The table above displays the profile of respondents based on age, education, and tenure. The majority
12 of respondents (40.32%) are between 41-50 years old, followed by the 51-60 age group (30.65%). Most
13 respondents (82.26%) hold a Master's degree (Strata 2), while 12.10% have a specialist degree and 5.65%
14 have a Doctoral degree (Strata 3). More than half of the respondents (52.42%) have been working as
15 notaries for over 10 years, 38.71% have been working for 6-10 years, and only 8.87% have less than 5 years
16 of work experience.
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Measurement Model
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In PLS, construct reliability is validated and evaluated by analyzing loading factors, Cronbach's
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alpha, composite reliability, and average variance extracted (AVE). High factor loadings, Cronbach's alpha,
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21 and composite reliability values exceed the limits, and adequate AVE indicates good convergent validity
22 and construct reliability for further analysis. (Hair et al., 2017). Table 2 shows the validity and reliability
23 testing of four primary constructs: Relational Capability, Knowledge Acquisition Capability, Competence
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24 in Creating Economic Value, ISE-Based Relational Capacity, and Business Performance. The results show
25 that all items have loading factors > 0.7, indicating good convergent validity. Cronbach's Alpha and
26 Composite Reliability values > 0.8 for all constructs, indicating excellent reliability. Average Variance
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27 Extracted (AVE) > 0.5 for all constructs indicates good convergent validity. Meanwhile, the Variance
28 Inflation Factor (VIF) is below 5 for all items, indicating no multicollinearity problem in the model, so the
29 data is declared valid and reliable for further analysis.
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30 Table 2. Validity and reliability criteria for each construct

31 Outer Cronbach Composite
32 No Concept Item VIF AVE
Loading Alpha Reliability
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Relational Capability
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a. Ability to build
RC1 0.864
36 networks
A
37 b. Communication skills RC2 0.851 0.739 0.824 0.895
c. Ability to understand
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38 RC3 0.863
39 customer desires
40 B Knowledge Acquisition Capability
41 a. Search for solutions KAC1 0.869
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42 b. Increased partner
43 KAC2 0.849
understanding 0.738 0.823 0.894
44 c. Harmonization of
45 KAC3 0.859
relationships
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C Competence in creating economic value
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a. Cost efficiency CCEV1 0.857
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49 b. Product accuracy CCEV2 0.802 0.686 0.807 0.867
50 c. Speed of service CCEV3 0.825
51 D ISE-based relational capacity
52 a. Search for solutions ISERC1 0.851
53 b. Increased partner 0.723 0.809 0.887
ISERC2 0.852
54 understanding
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3 c. Harmonization of
4 ISERC3 0.849
relationships
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E Business Performance
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a. Sales volume growth BP1 0.840
8 b. Customer Growth BP2 0.830 0.721 0.807 0.886
9 c. Market share growth BP3 0.877
10 Table 3 presents the correlation coefficient between Relational Capability, Knowledge Acquisition
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Capability, Competence in Creating Economic Value, ISE-Based Relational Capacity, and Business
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Performance. These numbers reflect how strong the linear relationship is between the two constructs.
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However, further analysis is needed by examining statistical significance and its contextual implications to
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15 understand better the meaning and consequences of the relationships between variables in the research
16 model.
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17 Table 3. Result of Discriminant Validity (HTMT)
18 Knowledge Relational ISE-based Business
Variable
19 Acquisition Capability Capability relational capacity Performance
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20 Relational Capability 0,296
21 ISE-based relational capacity 0,426 0,504
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23 Business Performance 0,461 0,558 0,709
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24 Competence in creating
0,119 0,419 0,447 0,520
25 economic value
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The central diagonal values of Table 3 represent the square root of the AVE for each construct, while
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the values outside the diagonal show the correlation between constructs. To meet the discriminant validity
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criteria, the AVE's square root must exceed the correlation between that construct and the other constructs
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30 in the model. Based on the data in Table 3, it can be seen that this requirement is met, where the square root
31 value of AVE is higher than the correlation between constructs. This indicates that each construct in the
32 model is unique and able to capture different phenomena so that the discriminant validity of the
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33 measurement can be said to be adequate.

34 Structural Models
35 In this study, a structural model was developed using Smart-PLS software to examine the
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relationships between latent variables in the model. This structural model represents the research
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hypotheses and the paths connecting exogenous variables to endogenous variables. The figure below
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illustrates the structural model developed using Smart-PLS, displaying path coefficients, R-square values,
40 and the significance of relationships among variables.
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Figure 2: Assessment of measurement model
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3 After building the structural model using Smart-PLS, the next step is to perform goodness of fit
4 testing to evaluate how well the model fits the available data. Goodness of fit testing involves assessing
5 various indicators such as R-square, Composite Reliability, AVE, Fornell-Larcker Criterion, and Cross-
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Loadings to determine the validity and reliability of the model.
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Table 4. Determinant Coefficient (R2)
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9 Endogen Variable R Square
10 ISE-based relational capacity 0,376
11 Business Performance 0,438
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13 Based on Table 4, the R Square value for ISE-based relational capacity is 0.376, and for Business
14 Performance is 0.438. Referring to Chin (1998), this value is included in the moderate category. This means
15 that the exogenous variables in the model can explain around 37.6% of the variation in ISE-based relational
16 capacity and 43.8% of the variation in Business Performance. Even though it is pretty good, around 60%
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17 variation still cannot be explained. Therefore, further exploration is needed to identify other factors that
18 may significantly influence both constructs in this model.
19 Table 5. f-Square/f² Test
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20 ISE-based relational Business
21
capacity Performance
22
23 Knowledge Acquisition Capability 0,130 0,158
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24 Relational Capability 0,152 0,154

25 ISE-based relational capacity 0,197
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Competence in creating economic value 0,149 0,172

27
28 The f-square test shows that ISE-based relational capacity has a moderate effect (f²=0.197) on
29 Business Performance. Meanwhile, Knowledge Acquisition Capability, Relational Capability, and
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30 Competence in creating economic value have a moderate effect. This confirms ISE-based relational
31 capacity as a critical factor significantly influencing business performance in this research model.
32
Significance and Relevance Testing Significance and relevance testing uses p-values and t-values to
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33
evaluate the statistical significance of relationships in data. P-values indicate the likelihood of an outcome
34
35
occurring by chance, while t-values measure the magnitude of the effect in standard deviation units.
36 Table 6. Direct effect
37 Standard T P
Path Beta
Deviation Statistics Values
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38
39 Competence in creating economic value  Business Performance 0.231 0.074 3.116 0.002
40 Competence in creating economic value  ISE-based relational capacity 0.263 0.090 2.933 0.004
41 ISE-based relational capacity  Business Performance 0.369 0.099 3.727 0.000
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43 Knowledge Acquisition Capability  Business Performance 0.205 0.074 2.773 0.006
44 Knowledge Acquisition Capability  ISE-based relational capacity 0.282 0.083 3.400 0.001
45 Relational Capability  Business Performance 0.135 0.075 1.802 0.072
46
Relational Capability  ISE-based relational capacity 0.228 0.085 2.681 0.008
47
48 The Smart-PLS data processing results provide essential information about the relationship between
49 the variables in the tested model. Competence in creating economic value has a significant favorable
50 influence on Business Performance (β1=0.231: p=0.002 < 0.05) and ISE-based relational capacity
51 (β2=0.263: p=0.004 < 0.05). This shows that the better the ability to create economic value, the higher the
52 business performance and relational capacity based on ISE. ISE-based relational capacity also significantly
53
influences business performance (β3=0.369: p=0.000>0.05). This means that the company's relational
54
capacity based on ISE has a vital role in improving the company's business performance. Knowledge
55
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acquisition capability has a significant favorable influence on business performance (β1=0.205:
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3 p=0.006<0.05) and ISE-based relational capacity (β1=0.282: p=0.001<0.05). This suggests that a
4 company's ability to acquire new knowledge can improve ISE-based business performance and relational
5 capacity.
6
Meanwhile, relational capability has a significant favorable influence on ISE-based relational
7
capacity (β1=0.228: p=0.008 < 0.05), but its influence on Business Performance is not significant
8
9
(β1=0.135: p=0.072 > 0.05). This shows that the company's relational capabilities contribute to increasing
10 ISE-based relational capacity but are not strong enough to improve business performance directly.
11 Table 7. Indirect Effect
12 Standard P
Beta T Statistics
13 Deviation Values
14 Competence in creating economic value  ISE-based
0.097 0.046 2.119 0.035
15 relational capacity  Business Performance
16 Knowledge Acquisition Capability  ISE-based relational
0.104 0.044 2.387 0.017
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capacity  Business Performance
17
Relational Capability  ISE-based relational capacity 
18 0.084 0.037 2.250 0.025
Business Performance
19
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20 The results of Smart-PLS data processing provide information about the indirect effect of
21 independent variables on the dependent variable through mediating variables. These variables significantly
22 and indirectly affect business performance through ISE-based relational capacity (β=0.097, p=0.035). This
23
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means that, apart from direct influence, the ability to create economic value can indirectly improve business
24 performance through increasing ISE-based relational capacity.
25 Knowledge acquisition capability also significantly indirectly affects business performance through
26
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ISE-based relational capacity (β=0.104, p=0.017). This suggests that in addition to direct effects, knowledge
27
acquisition capabilities can improve business performance indirectly through ISE-based relational capacity
28
enhancement. Relational capability also indirectly affects business performance through ISE-based
29
relational capacity (β=0.084, p=0.025). However, the effect on business performance is not significant. This
ev

30
31 suggests that to improve business performance, relational capability must first be mediated by increasing
32 ISE-based relational capacity.
iew

33 These results provide a fascinating insight that although these independent variables directly
34 influence business performance, their indirect effects are also quite significant, except for relational
35 capability, which is not significant on business performance. This shows that the influence is only partial;
36 that is, it must go through the mediation of ISE-based relational capacity, which is vital in influencing
37 business performance. Companies must consider factors that can increase ISE-based relational capacity to
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38 support increased overall business performance.

39
40
Discussion
41 Several key factors influence business performance in the context of notary business practices. These
factors include economic value creation competence, knowledge acquisition capability, and relational
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42
43 capacity based on emotional spirit intimacy. Relational capability, namely an organization's ability to build,
44 maintain, and utilize relationships with external stakeholders, is an essential factor that determines the
45 success of notary business practices. Notaries who have strong relational capabilities tend to be able to
46 develop a vast network of connections and utilize them to support the success of their business practices.
47 This positively impacts client satisfaction and loyalty, operational efficiency, ability to innovate, and better
48 business risk management (Steffens et al., 2023).
49 Relational capability also significantly influences relational capacity based on emotional spirit
50 intimacy, namely, the organization's ability to establish close relationships, mutual understanding, and
51 mutual benefit with stakeholders. Notaries with strong relational capabilities tend to develop relational
52 capacities based on better emotional and spiritual intimacy to provide more personal and responsive
53 services and positively impact clients and business partners (Kleinbaum, A. M. & Stuart, 2014).
54 On the other hand, economic value creation competency, which refers to an organization's ability to
55 develop products or services that are unique and personal and provide tangible benefits for clients, also has
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3 a significant influence on relational capacity based on emotional spirit intimacy. Notaries who are
4 competent in creating value through innovative legal services that suit clients' specific needs tend to be able
5 to build better relational capacity based on emotional spirit intimacy because clients will feel valued and
6
prioritized, so they will be more open to sharing personal information and enable the notary to understand
7
them in more depth (Yoon & Deog-Ro, 2023).
8
9
In addition, knowledge acquisition capability, namely the organization's ability to identify, obtain,
10 and integrate new knowledge from internal and external sources, also significantly affects relational
11 capacity based on emotional spirit intimacy. This capability allows notaries to broaden their horizons and
12 understand legal, social, and cultural issues relevant to clients. Notaries with strong knowledge acquisition
13 capabilities tend to better understand clients' emotional and spiritual needs and establish closer and mutually
14 beneficial relationships with various stakeholders (Tortoriello et al., 2022).
15 Furthermore, economic value creation competence and knowledge acquisition capability also
16 significantly influence notary business performance. Notaries who can develop innovative, personalized
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17 legal services that provide tangible benefits for clients and are skilled at seeking, absorbing, and integrating
18 new knowledge tend to show superior business performance (Tortoriello et al., 2022).
19 Apart from that, relational capacity based on emotional spirit intimacy also significantly affects
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20 notary business performance. Notaries who can build close relationships, mutual understanding, and mutual
21 respect with stakeholders tend to show superior business performance. This capacity allows notaries to
22 understand client needs holistically, increase client satisfaction and loyalty, and assist notaries in building
23
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a superior reputation among legal professionals (Baškarada & Koronios, 2017).

24 Furthermore, relational capability does not directly affect notary business performance but is
25
significantly mediated by relational capacity based on emotional spirit intimacy. In this case, notaries who
26
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can build, maintain, and utilize a strong network of relationships tend to establish close, understanding, and
27
mutually beneficial relationships with stakeholders, ultimately improving their business performance.
28
29 (Gulati et al., 2000).
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30 Likewise, knowledge acquisition capability significantly affects notary business performance,

31 mediated by relational capacity based on emotional spirit intimacy. Notaries who can acquire and integrate
32 new knowledge tend to better understand clients' emotional and spiritual needs and establish close and
iew

33 mutually beneficial relationships with various stakeholders, ultimately improving their business
34 performance. Tortoriello et al., (2022). Overall, this discussion shows that in the context of notary business
35 practices, there is a complex interaction between relational capabilities, economic value creation
36 competencies, knowledge acquisition capabilities, relational capacities based on emotional spirit intimacy,
37 and business performance. These factors are interrelated and influence each other directly and indirectly in
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38 creating competitive advantages and encouraging the success of notary business practices.
39
40 Conclusion
41 This research provides valuable insight into the importance of non-technical factors in determining
notary business performance. The main findings reveal that knowledge acquisition capability and
ly

42
43 competence in creating economic value have a significant direct and indirect influence on notary business
44 performance. However, rational capability does not directly influence business performance; it is significant
45 through mediating relational capacity based on emotional spirit intimacy. This means that notaries who can
46 build close relationships, mutual understanding, and respect with stakeholders tend to show superior
47 business performance. These findings strengthen the theory that non-technical factors such as relational
48 capacity are vital in determining business performance, especially in professional services industries such
49 as notaries. This research also highlights the importance of combining emotional and spiritual aspects in
50 building relationships with external stakeholders. It confirms that relational capabilities, economic value
51 creation competencies, and knowledge acquisition capabilities indirectly influence business performance
52 through the mediating role of relational capacity-based intimacy of emotional spirit.
53 The findings of this research have significant theoretical implications related to resource-based view
54 (RBV), social capital, and business relations. The RBV views that a company's internal resources, such as
55
knowledge acquisition capabilities, economic value creation competencies, and relational capabilities, are
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3 critical factors in achieving competitive advantage and superior business performance. This confirms that
4 valuable, rare, difficult-mediating, and irreplaceable resources can provide sustainable competitive
5 advantages. These findings also confirm the importance of social capital, especially in the context of
6
business relationships. Relational capacity based on emotional spirit intimacy is a valuable form of social
7
capital for companies because it facilitates coordination, cooperation, and exchange of resources with
8
9
external stakeholders. This aligns with social capital, which emphasizes the importance of networks of
10 relationships, norms, and trust in achieving common goals. This research also strengthens business relations
11 theory, emphasizing the importance of building and maintaining strong long-term relationships with
12 customers, suppliers, and other business partners. These findings confirm that relational capacity based on
13 emotional spirit intimacy significantly influences business performance, especially in professional services
14 industries such as notaries.
15 These findings imply that notary companies need to increase investment in developing relational
16 capacity based on emotional spirit intimacy, such as empathy training, effective communication, and cross-
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17 cultural understanding. Notaries must proactively build close relationships, mutual understanding, and
18 respect with clients and other stakeholders, not just focusing on technical legal aspects. Notary companies
19 also need to develop strategies to improve relational capabilities, economic value creation competencies,
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20 and knowledge acquisition capabilities in an integrated manner to support better business performance.
21 However, this research has several limitations, such as limited coverage of the notary industry in a
22 particular region, so generalizing the results needs to be done with caution to other industries or regions.
23
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Future research could explore the specific factors that influence emotional-spiritual intimacy-based
24 relational capacity and how to develop it effectively. Longitudinal or experimental studies can be conducted
25
to test the causal relationships between these variables better. In addition, further research could explore
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the moderating role of factors such as organizational culture, leadership, or individual notary characteristics
27
in the relationship between these variables.
28
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