Market orientation, performance and the mediating role of innovation in Indonesian SMEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Clare D'souza ◽  
Marthin Nanere ◽  
Malliga Marimuthu ◽  
Mokhamad Arwani ◽  
Ninh Nguyen
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Structural Equation ◽  
Customer Orientation ◽  
Point Of View ◽  
Theoretical Point ◽  
Content Type ◽  
Mediating Role ◽  
Competitor Orientation

PurposeDespite the theoretical advancements of market orientation and firm performance, there is a paucity of research regarding SMEs in Indonesia. Customer and competitor orientation were examined as two distinct constructs as per the literature, as it has been questioned for its robustness. They have been used synonymously, even though customer orientation is operationalised as a component of a market orientation construct. There is support for the argument from a theoretical point of view to keep customer orientation and competitor orientation separate. The objective of this research was to empirically test market orientation concepts on firm performance and assessing customer and competitor orientation separately. Furthermore, it also tests whether innovation plays a mediating role.Design/methodology/approachA sample of 309 small and medium-sized firms was found eligible for this study. Structural Equation Modelling was used to analyze the data. A multi-industry sample of firms was used to strengthen the generalisability of the results. The sample was acquired from two databases of SMEs directory in Kudus and Pati, East Java Indonesia, participants were randomly selected.FindingsThe findings show that innovation mediates the relationship between competitor orientation and firm performance, while competitor orientation had no significant relationship with firm performance. Customer orientation was found to positively influence firm performance.Originality/valueThe role of innovation as a mediator within SMEs in a developing country opens up avenues for further research among other developing countries. By examining both the concepts of customer and competitor orientation separately and establishing relationships, we validate support for this argument both from a methodological and theoretical point of view.

How collaboration impacts in the market orientation-performance relationship of SMEs? A perspective from belt and road initiative

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zafran Ahmad ◽  
Liu Chao ◽  
Wang Chao ◽  
Saqib Ilyas
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Structural Equation ◽  
Regional Cooperation ◽  
Content Type ◽  
Mediating Role ◽  
Belt And Road ◽  
Business Practitioners ◽  
Relationship Of

Purpose This article extends knowledge of market orientation (MO) and strategic collaboration by analyzing MO-collaborations in the context of firm performance of small- and medium-sized enterprises (SMEs). Design/methodology/approach A proposed framework built on the Knowledge and resource-based theory was tested using Structural Equation Modelling with data collected from 171 SMEs. Findings This research study supported the direct impact of market orientation on performance as well as the mediating role of collaboration in this focal relationship and assumed it would have a significant role in SME’s performance. Practical implications These findings have noteworthy implications for managers. Managers can focus on potential collaboration in order to acquire the needed assets. Owners-mangers should closely evaluate the FTAs, economic corridors, and regional cooperation agreements like BRI as these sources can lead them to collaboration with international partners. Additionally, it provides insight for entrepreneurs, business practitioners, and stakeholders of SMEs that are already operating or plan to increase their market share. Originality/value The study findings give interesting bits of knowledge to academia, entrepreneurs, and small- and medium-sized enterprises (SMEs). Given that market orientation and collaboration must proceed in parallel to improve firm performance, Assets like MO provide valuable knowledge and information about partners, which will lead to further valuable information to help the SME succeed. This study further extend the KBV theory recommendation that information and knowledge on collaboration works better and integration will be more successful in ‘resource rich’ firms.

Role of market orientation in sustainable performance

Humanomics ◽  
2016 ◽  
Vol 32 (3) ◽  
pp. 352-375 ◽  
Author(s):  
Soheil Kazemian ◽  
Rashidah Abdul Rahman ◽  
Zuraidah Mohd Sanusi ◽  
Abideen A. Adewale
Keyword(s):  
Market Orientation ◽  
Structural Equation ◽  
Customer Orientation ◽  
Partial Least Square ◽  
Least Square ◽  
Three Dimensions ◽  
Equation Modeling ◽  
Future Research ◽  
Content Type ◽  
Competitor Orientation

Purpose Without prejudice to the efficacy of other poverty alleviation mechanisms, micro-financing arguably enjoys relative prominence. However, notwithstanding the remarkable loan repayment rate that the microfinance firms report, they still face the challenge of sustainability. The paper aims to provide insights into how three dimensions of market orientation, namely, customer orientation, competitor orientation and inter-function coordination, affect the two aspects of the sustainability of microfinance institutions (MFIs; management and financial). Design/methodology/approach To achieve this goal, this study focuses on Amanah Ikhtiar Malaysia (AIM), a leading microfinance provider which is also the largest MFI in South East Asia. Data elicited via a survey questionnaire administered on 190 management staff of AIM across Malaysia are subjected to statistical analysis via the partial least square-structural equation modeling using SmartPLS 2.0. Findings The results provide empirical evidences that indicate that management sustainability is significantly influenced by customer orientation and inter-function coordination. However, only customer orientation affects the financial sustainability of AIM. Nevertheless, competitor orientation has non-significant effects on both aspects of sustainability of AIM. Research limitations/implications The result of the paper contributes to the literature in understanding the long-term sustainable financial and social performance-based market orientation. Originality/value Findings are useful for policy makers, management of MFIs, practitioners and academics to enhance microfinance system. Managerial implications, limitation of the study and suggestions for future research are also included.

The impact of balanced agile project management on firm performance: the mediating role of market orientation and strategic agility

2020 ◽  
Vol 30 (4) ◽  
pp. 457-490 ◽  
Author(s):  
Randy Kurniawan ◽  
Dyah Budiastuti ◽  
Mohammad Hamsal ◽  
Wibowo Kosasih
Keyword(s):  
Project Management ◽  
Firm Performance ◽  
Market Orientation ◽  
Content Type ◽  
Mediating Role ◽  
Telecommunication Technology ◽  
Agile Project Management ◽  
Strategic Agility ◽  
The Impact

Purpose This study aims to examine the impact of balanced agile project management (balanced APM) on firm performance through the mediating role of market orientation and strategic agility of medium and large telecommunication technology providers in Indonesia. Design/methodology/approach Research data was collected from the executive management of telecommunication technology providers in Indonesia via a questionnaire survey to obtain 150 valid questionnaires for analysis. This study analyzed the overall model fit through confirmatory factor analysis and causal relationships through structural equation modeling. Findings The results indicate that market orientation mediates the link between balanced APM and strategic agility and that strategic agility mediates the link between market orientation and firm performance. Research limitations/implications The choice of single telecommunication industry in a single country, Indonesia, provides a limitation on external validity. It is, therefore, suggested to extend the research efforts to other industry sectors in multi-country environments. Originality/value This study extends the knowledge about agile project management by embracing balancing control enforcement and tests it empirically. This study also re-conceptualizes strategic agility to embrace business partner switching capability and market orientation to embrace the inter-partner coordination dimension. Finally, the results highlight that agile project management needs to be framed by market orientation to create higher value for customers. However, market orientation alone is not enough and that the organization requires strategic agility to achieve firm performance.

The influence of internal market orientation on external outcomes

2015 ◽  
Vol 25 (4) ◽  
pp. 486-523 ◽  
Author(s):  
Vicent Tortosa Edo ◽  
Jaume Llorens-Monzonís ◽  
Miguel Ángel Moliner-Tena ◽  
Javier Sánchez-García
Keyword(s):  
Relationship Quality ◽  
Market Orientation ◽  
Structural Equation ◽  
Internal Marketing ◽  
Internal Market ◽  
Outpatient Services ◽  
Content Type ◽  
Mediating Role ◽  
Internal Market Orientation

Purpose – The purpose of this paper is to analyse the possible influence of internal marketing (represented by internal market orientation (IMO)) on external customer outcomes (perceived service quality and customer satisfaction) through the mediating role of employees’ attitudes (job satisfaction, trust and commitment) that comprise relationship quality. Design/methodology/approach – The authors employ a dyadic methodology, with 244 dyads (employee-the average of his/her three patients) at the outpatient services of five Spanish hospitals. The authors use structural equation modelling (EQS6.1) to test the relationships of the model. Findings – The results corroborate the hypotheses proposed in the model, with the exception of the influence of IMO on commitment. Significant differences in some relationships, depending on the experience of the employee, are also corroborated. Research limitations/implications – The paper analyses one service activity in the same region. Only perceptual data are used to measure the variables of the model. Practical implications – Service companies should consider IMO because it contributes to creating an excellent customer experience. Furthermore, managers should bear in mind their employees’ needs when taking decisions. Originality/value – This paper contributes to the literature by demonstrating, for the first time, the mediating role of relationship quality in the influence of IMO on external outcomes. It is also the first paper in internal marketing to analyse the differences in the consequences of IMO according to employee tenure.

scholarly journals The Influence of Entrepreneurial Orientation and Innovation Capability on Perceived Firm Performance with The Mediating Role of Market Orientation: Case study in PT WIKA Industri & Konstruksi

2021 ◽  
Vol 5 (3) ◽  
pp. 149-156
Author(s):  
Anggiat Maju Lubis ◽  
Firdaus Basbeth
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Entrepreneurial Orientation ◽  
Structural Equation ◽  
Equation Modeling ◽  
Innovation Capability ◽  
Construction Company ◽  
Mediating Role

Performance of PT WIKON in two consecutive years indicated run into downtrend from the year 2018 to the year 2019. Low levels of Entrepreneurial Orientation, Innovation Capability, and Market Orientation have been suspected as factors leading to the performance of PT WIKA Industri & Konstruksi.  The objective of this study is to investigate Market Orientation as the mediator of relationship Entrepreneurial Orientation and Innovation Capability on Firm Performance in a construction company. However, study-related Market Orientation as a mediator on the indirect effect of Innovation Capability and Firm Performance is still rare, therefore research on this subject can be seen as Novelty. There are Six theory-based hypotheses are measured. This research employs a quantitative approach with empirical evidence of employees and BOD of PT WIKA Industri & Konstruksi. Survey data are from 93 respondents were analyzed used structural equation modeling (SEM). The findings of this research showed that Market Orientation has a positive effect on Firm Performance. Surprisingly, Entrepreneurial Orientation (EO) and Innovation Capability (IC) independently do not have a direct effect on Firm Performance. The Effect of Entrepreneurial Orientation (EO) on Firm Performance (FP) is mediated by Market Orientation. Likewise, the effect of Innovation Capability (IC) on Firm Performance (FP) is mediated by Market Orientation. These results suggest that Entrepreneurial Orientation and Innovation Capability should focus on Market Orientation to improve the overall Firm Performance. Besides, it is highly recommended to middle management and above of PT WIKA Industri & Konstruksi should focus and allocate resources to Market Orientation to improve their Firm Performance.

Business intelligence and competitiveness: the mediating role of entrepreneurial orientation

2018 ◽  
Vol 28 (2) ◽  
pp. 213-226 ◽  
Author(s):  
Nuno Caseiro ◽  
Arnaldo Coelho
Keyword(s):  
Business Intelligence ◽  
Entrepreneurial Orientation ◽  
Structural Equation ◽  
Point Of View ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Mediating Role ◽  
The Impact

Purpose This study aims to investigate the influence of business intelligence (BI) in startups competitiveness, contributing to a gap in literature as this relationship is normally more focused on stablished businesses. The mediating role of entrepreneurial orientation (EO) was taken in to account in the proposed research model. Design/methodology/approach The model was tested using structural equation modeling. A total of 228 valid questionnaires were collected from a research sample comprised of incubated startups from several European countries. Findings The results point to significant mediating role of EO in the impact of BI on competitiveness. The direct impact of BI on competitiveness was not confirmed. Research limitations/implications The results highlight the importance that BI can have in startups competitiveness, namely, reinforcing the role of pro-activeness, innovativeness and risk taking – the traditional dimensions of EO, providing the information needed for more supported decisions. Originality/value Although there are several approaches to BI, namely, in a more technical perspective, this paper addresses the topic in a managerial and decisional point of view, and studies it regarding his impact in startups competitiveness, thru the mediating effect of EO.

Networking capability and firm performance: the mediating role of market orientation and business process agility

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Randy Kurniawan ◽  
Dyah Budiastuti ◽  
Mohammad Hamsal ◽  
Wibowo Kosasih
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Direct Effect ◽  
Business Process ◽  
Content Type ◽  
Mediating Role ◽  
Telecommunication Technology ◽  
The Relationship ◽  
Significant Direct Effect

Purpose This study aims to examine the effect of networking capability through market orientation and business process agility on the firm performance of medium and large telecommunication technology providers in Indonesia. Design/methodology/approach Research data was collected from the executive management of telecommunication technology providers in Indonesia via a questionnaire survey to obtain 150 valid questionnaires for analysis. This study analysed the overall model fit and hypotheses through confirmatory factor analysis and structural equation modelling. Findings The results reveal that networking capability has a positive and significant effect on market orientation. However, networking capability does not have a significant direct effect on business process agility. The results also indicate that market orientation does not have a significant direct effect on firm performance but through the mediating role of business process agility. Practical implications The findings provide a practical foundation for the organisation’s networking capability to be framed by market orientation and business process agility to enhance firm performance. Originality/value The results indicate that market orientation mediates the relationship between networking capability and business process agility. The findings also reveal that business process agility mediates the relationship between market orientation and firm performance. This study also reconceptualises market orientation to embody the inter-partner coordination dimension and reconceptualise business process agility to embody business partner switching capability.

IT strategy and business strategy mediate the effect of managing IT on firm performance: empirical analysis

2020 ◽  
Vol 33 (6) ◽  
pp. 1357-1378
Author(s):  
Aboobucker Ilmudeen ◽  
Yukun Bao
Keyword(s):  
Firm Performance ◽  
Business Strategy ◽  
Structural Equation ◽  
Mediating Effect ◽  
Equation Modeling ◽  
It Strategy ◽  
Content Type ◽  
Mediating Role ◽  
Role Of It

PurposeThe multifaceted effect of IT in organizations has been widely examined. However, the intervening role of IT strategy and business strategy on the effect of managing IT on firm performance remains less strong. This study examines how managing information technology (MIT) effects on firm performance by looking at the mediating role of IT strategy and business strategy.Design/methodology/approachDrawing on the resource-based view of IT and contingency perspective, theoretical insights for managing IT and the mediating effect of IT strategy and business strategy on firm performance are established. The model is empirically tested by using hierarchical regression and structural equation modeling for the data collected through the survey of 194 senior IT and business managers in China.FindingsThe significant and impactful relationship found in the model for the proposed idea. The results show that both IT strategy and business strategy partially mediate the effect of managing IT on firm performance.Research limitations/implicationsThe findings highlight that managing IT does not merely influence better firm performance; instead, the coherent amalgamation of IT strategy and business strategy can enrich firm performance. The theoretical and practical implications are also discussed.Originality/valueIn line with the call for rigorous research to integrate the managing IT and firm strategies, this study demonstrates the mediating role of business strategy and IT strategy between the managing IT and the firm performance relationship, hence contributing to the IS research literature.

Family managers' propensity towards mergers and acquisitions: the role of performance feedback

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rosalia Santulli ◽  
Carmen Gallucci ◽  
Mariateresa Torchia ◽  
Andrea Calabrò
Keyword(s):  
Firm Performance ◽  
Family Involvement ◽  
Performance Feedback ◽  
Family Firms ◽  
Theory Of The Firm ◽  
Point Of View ◽  
Content Type ◽  
Mediating Role ◽  
Upper Echelons Theory

PurposeDrawing on upper echelons theory (UET) and arguments from behavioral theory of the firm, this paper aims to contribute to the debate on family involvement-performance relationship, by considering the mediating role of the propensity towards merger and acquisition (M&A) and the moderating role of performance feedback.Design/methodology/approachThe hypotheses are tested by applying a moderated mediation analysis on a sample of 111 German family firms. First, a mediation model is run to verify the mediation role of the propensity towards M&A; then, to evaluate the magnitude of the mediation at different values of the moderator (performance feedback), conditional indirect effects are tested using normal-theory standard errors and bootstrapping procedure.FindingsThe main findings suggest that a higher percentage of family members sitting in TMT is related to better performance and that this effect is mediated by the propensity towards M&A. Furthermore, findings also show that a higher percentage of family managers is positively related to the propensity towards M&A and, in turn, exerts a positive effect of firm performance, especially when performance feedback is negative.Practical implicationsThe paper suggests to family firms' managers that when performance feedback is negative, a riskier behavior, such as M&A, could represent a way to improve firm performance.Originality/valueThe paper provides a full application of UET to the context of family firms, offers the point of view of TMT, instead of that of ownership, to study the propensity towards M&A in family firms and goes beyond the rational view to explain family managers' risk-taking behaviors.

Market orientation and product innovation: the mediating role of technological capability

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hakan Aydin
Keyword(s):  
Market Orientation ◽  
Product Innovation ◽  
Customer Orientation ◽  
Manufacturing Firms ◽  
Technological Capability ◽  
Content Type ◽  
Mediating Role ◽  
Technological Intensity ◽  
The Relationship

PurposeThis study aims to examine the relationship between market orientation and product innovation and the mediating role of technological capability in this relationship. It also aims to examine the effect of market orientation on product innovation within the framework of technological intensity classification of the fields of business activity.Design/methodology/approachThe research data were obtained from 186 senior and mid-level managers of 627 manufacturing firms that are widely considered to be innovative, and that are ranked among Turkey's largest 1,000 manufacturing firms (ISO 1000). The data were analyzed using partial least squares structural equation modeling.FindingsCustomer orientation and interfunctional coordination, two distinct dimensions of market orientation, had positive effects on product innovation. Technological capability played a mediating role in the effect of customer orientation and interfunctional coordination on product innovation. In addition, interfunctional coordination positively affected product innovation in firms with low technological intensity, whereas customer orientation positively affected product innovation in firms with medium-high technological intensity.Practical implicationsFor the success of product innovations, firms should establish mechanisms to obtain information about customer needs and expectations and to disseminate and effectively use this information among organizational functions. They also need to improve their technological capabilities to effectively transform market knowledge into product innovation.Originality/valueThe relationship between market orientation and product innovation has been examined in previous studies; however, there is an insufficient number of studies on the mediating role of technological capability in this relationship. This study aimed to eliminate the gap in the literature regarding the mediating role of technological capability. In addition, innovation activities of firms vary depending on the technological intensity, but only a limited number of evaluations have been conducted on this subject. This study contributes valuable knowledge to the relevant literature by examining the impact of market orientation dimensions on product innovation according to technological intensity.

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