Research purpose is to analyze direct effects and indirect effects of competitive capability on the performance of small industries using balanced score-card methode. Data collecting was conducted by using methods of key-persons interview and questionaire and data reliability and validity are tested. Research sample are 100 respondents were selected among the industry owner and its labor using purposive sampling technique. This research involved quantitative approach, and data analysis used descriptive method and path-analysis method. Independent variable of competitive capability is consist of delivery, value, flexibility, and innovation; dependent variable is industrial performance , and intermediary variables are perspectives of balanced score-card. Results show that (1) significant relationships among the competitive capabilities and variables of balanced score-card, (2) no significat direct relationship among the factors of competitive capability and performance of small industry, (3) significant direct effdects of balanced-scorecard factors on the industrial performance, (4) significant indirect effects of competitive capability on the industrial performance through the perspective factors of balanced scorecard. It is concluded that variable of value is the dominant variable in the path of indirect effect on the industrial performance through the balanced scorecard variables. Variables of balanced scorecard as the intermediary variable in obtaining any better performances