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Business competition that occurs in every industry in the world these days is totally inevitable, especially in Indonesia as one of the new emergent market in the world. Every companies are expected to be able to cope and compete well to achieve the best result for the shake of the companies’ future. However, Small and Medium-sized Enterprises (SME) often encounter so many problems during their competition which could impacted on the decreasing company performance and to some extend the worse result which is bankruptcy. This research is conducted to investigate on the existence of gap that occur due to the lack of empirical evidence that focus on social networking, adaptability and competitive advantage on SMEs in Indonesia. Thus, this research focuses on the leader’s social networking and organizational adaptability to support the creation of competitive advantage. This is an associative causal research using 30 restaurant owners in Surabaya city as the respondent which has a maximum number of employees of 20 peoples. Structural Equation Modelling (SEM) is used to answer the research questions. It is found out that social networking affects significantly on adaptability, while adaptability affects on competitive advantage insignificantly.

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The Role of Social Networking on Adaptability and Competitive Advantage: An Empirical Evidence from Small and Medium-sized Enterprises in Restaurant Industry, Surabaya, Indonesia