The Impacts of Strategic Orientation and Knowledge Management on Firms’ Performance of SMEs in Surabaya
Keywords:
SMEs, Strategic Orientation, Knowledge Management, Firms' Performance
Abstract
The importance of SMEs as the driver of economic growth globally has become more crucial over recent decades because of the constantly changing business environment. SMEs especially in Indonesia have supported the government in fighting the unemployment rate. Nevertheless, the common problem of SMEs is sustaining their businesses because of ineffective operations and exploring competitive advantage. The objective of this study is to identify the performance of SMEs in Surabaya City, Indonesia. Three strategic orientations: market orientation, technology orientation, entrepreneurial orientation, and knowledge management were used to test firms’ performance. This study applies the multiple linear regression analysis, classic assumption test, and purposive sampling technique. The findings of this study encompass that technology orientation, entrepreneurial orientation, and knowledge management variables significantly influence firms’ performance. Only the market orientation variable was found not significant on firms’ performance.
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References
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Aloulou, W. J. (2019). Impacts of strategic orientations on new product development and firm performances: Insights from Saudi industrial firms. European Journal of Innovation Management, 22(2), 257-280.
Amin, M., Thurasamy, R., Aldakhil, A. M., & Kaswuri, A. H. B. (2016). The effect of market orientation as a mediating variable in the relationship between entrepreneurial orientation and SMEs performance. Nankai Business Review International, 7(1), 39-59.
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Batra, S., Sharma, S., Dixit, M. R., Vohra, N., & Gupta, V. K. (2015). Performance implications of industry appropriability for manufacturing SMEs: The role of technology orientation. Journal of Manufacturing Technology Management, 26(5), 660-677.
Avci, U., Madanoglu, M., & Okumus, F. (2011). Strategic orientation and performance of tourism firms: Evidence from a developing country. Tourism Management, 32(1), 147-157.
Batra, S., Dey, A.K., Singh, R. and Chaudhuri, M. (2023), "Influence of transactive memory systems and strategic orientations on the performance of hospitality firms", Journal of Hospitality and Tourism Insights, Vol. 6 No. 1, pp. 131-150.
Chung, D.S., Jung, H.W., Baek, S.J. and Lee, H.O. (2008), “The impacts of strategic orientation and HRM systems on firm performance”, International Journal of Business Strategy, Vol. 8 No. 2, pp. 82-89.
Dahan, G. and Shoham, A. (2023), "The relationship between strategic orientations and firm performance: is environmental munificence the missing link?", Journal of Strategy and Management, Vol. 16 No. 2, pp. 264-281.
Darroch, J. (2005). Knowledge management, innovation, and firm performance. Journal of Knowledge Management, 9(3), 101-115.
Erdin, C., & Ozkaya, G. (2020, “Contribution of small and medium enterprises to economic development and quality of life in Turkey”, Heliyon, Vol. 6 No. 2, pp. e03215.
Erista, I. F. S., Andadari, R. K., Usmanij, P. A., & Ratten, V. (2020). The influence of entrepreneurship orientation on firm performance: a case study of the salatiga food industry, Indonesia. In Entrepreneurship as Empowerment: Knowledge spillovers and entrepreneurial ecosystems (pp. 45-61). Emerald Publishing Limited.
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Gharakhani, D., & Mousakhani, M. (2012), “Knowledge management capabilities and SMEs' organizational performance”, Journal of Chinese Entrepreneurship, Vol. 4 No. 1, pp. 35-49.
Gotteland, D., Shock, J., & Sarin, S. (2020), “Strategic orientations, marketing proactivity and firm market performance”, Industrial Marketing Management, 91, 610-620.
Hair, J. R., Joseph, F., Black, W. C., Babin, B. J. and Anderson, R. E. (2010). Multivariate Data Analysis. Pearson Prentice Hall, USA
Hakala, H. (2011), “Strategic orientations in management literature: three approaches to understanding the interaction between market, technology, entrepreneurial and learning orientations”, International Journal of Management Reviews, Vol. 13 No. 2, pp. 199-217.
Hsu, T.T., Tsai, K.H., Hsieh, M.H. and Wang, W.Y. (2014), “Strategic orientation and new product performance: the roles of technological capability”, Canadian Journal of Administrative Sciences/ Revue Canadienne des Sciences de l’Administration, Vol. 31 No. 1, pp. 44-58.
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Karami, M., & Tang, J. (2019), “Entrepreneurial orientation and SME international performance: The mediating role of networking capability and experiential learning”, International Small Business Journal, Vol. 37 No. 2, pp. 105-124.
Kaukab, M. E. (2022). The Important Role of Government Support on Small and Medium Enterprises International Performance. JURNAL STIE SEMARANG (EDISI ELEKTRONIK), 14(1), pp. 134-146.
Kocak, A., Carsrud, A., & Oflazoglu, S. (2017). Market, entrepreneurial, and technology orientations: impact on innovation and firm performance. Management Decision, 55(2), 248-270.
Kör, B., & Maden, C. (2013), “The relationship between knowledge management and innovation in Turkish service and high-tech firms”, International Journal of Business and Social Science, Vol. 4(4), pp. 293-304.
Lee, D.H. and Dedahanov, A. (2014), “Firm performance and entrepreneurial, market and technology orientations in Korean technology intensive SMEs”, Asian Social Science, Vol. 10 No. 22, pp. 37.
Lee, W.L., Chong, A.L. and T., R. (2019), “The effects of entrepreneurial orientation on the performance of the Malaysian manufacturing sector”, Asia-Pacific Journal of Business Administration, Vol. 11 No. 1, pp. 30-45.
Le, T. T., & Ikram, M. (2022). Do sustainability innovation and firm competitiveness help improve firm performance? Evidence from the SME sector in vietnam. Sustainable Production and Consumption, 29, 588-599.
Li, Y., Zhao, Y., Tan, J., & Liu, Y. 2008, Moderating Effects of Entrepreneurial Orientation on Market Orientation‐Performance Linkage: Evidence from Chinese Small Firms*”, Journal of Small Business Management, 46(1): 113-133
Liu, Y., Chan, C., Zhao, C., & Liu, C. (2019). Unpacking knowledge management practices in China: do institution, national and organizational culture matter?. Journal of Knowledge Management, 23(4), 619-643.
Mantok, S., Sekhon, H., Sahi, G. K., & Jones, P. (2019), “Entrepreneurial orientation and the mediating role of organisational learning amongst Indian S-SMEs”, Journal of Small Business and Enterprise Development, Vol. 26 No. 5, pp. 641-660.
Manzoor, F., Wei, L., & Siraj, M. (2021), “Small and medium-sized enterprises and economic growth in Pakistan: An ARDL bounds cointegration approach”, Heliyon, Vol. 7 No. 2, pp. e06340.
Martens, C. D. P., Machado, F. J., Martens, M. L., & de Freitas, H. M. R. (2018), “Linking entrepreneurial orientation to project success”, International Journal of Project Management, Vol. 36 No. 2, pp. 255-266.
Martins, V. W. B., Rampasso, I. S., Anholon, R., Quelhas, O. L. G., & Leal Filho, W. (2019), “Knowledge management in the context of sustainability: literature review and opportunities for future research”, Journal of Cleaner Production. Vol. 229, Pp. 489-500.
Masa’deh, R. E., Al-Henzab, J., Tarhini, A., & Obeidat, B. Y. (2018), “The associations among market orientation, technology orientation, entrepreneurial orientation and organizational performance”, Benchmarking: An International Journal, 25(8), 3117-3142.
Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the impact of entrepreneurial orientation on SMEs’ performance. The role of the financing structure. Procedia Economics and finance, 23, 1649-1661.
McIver, D. and Lepisto, D.A. (2017), “Effects of knowledge management on unit performance: examining the moderating role of tacitness and learnability”, Journal of Knowledge Management, Vol. 21 No. 4, pp. 796-816.
Miller, D. (1983), “The correlates of entrepreneurship in three types of firms”, Management Science, Vol. 29 No. 7, pp. 770-791.
Mokhtar, M.S.S., Yusoff, Z.R. and Ahmad, A. (2014) ‘Key elements of market orientation on Malaysian SME’s performance’, International Journal of Business and Society, Vol. 15, No. 1, pp.49–64.
Morgan, R. E., & Strong, C. A. (2003). Business performance and dimensions of strategic orientation. Journal of Business Research, 56(3), 163-176.
Mu, J. and Di Benedetto, C.A. (2011), “Strategic orientations and new product commercialization: mediator, moderator, and interplay”, R&D Management, Vol. 41 No. 4, pp. 337-359.
Naala, M. N. I., Nordin, N., & Omar, W. A. W. (2017). Does technology orientation really matter for firm performance in north-western nigeria. Asian Journal of Multidisciplinary Studies, 5(11), 48-56.
Nasution, M. D. T. P., Rafiki, A., Lubis, A., & Rossanty, Y. (2021), “Entrepreneurial orientation, knowledge management, dynamic capabilities towards e-commerce adoption of SMEs in Indonesia”, Journal of Science and Technology Policy Management, Vol. 12 No. 2, pp. 256-282.
Narver, J.C. and Slater, S.F. (1990), “The effect of a market orientation on business profitability”, Journal of Marketing, Vol. 54 No. 4, pp. 20-35.
Ndubisi, O.N. and Agarwal, J. (2014), “Quality performance of SMEs in a developing economy: direct and indirect effects of service innovation and entrepreneurial orientation”, Journal of Business and Industrial Marketing, Vol. 29 No. 6, pp. 454-468.
Obeso, M., Hernández-Linares, R., López-Fernández, M. C., & Serrano-Bedia, A. M. (2020). Knowledge management processes and organizational performance: the mediating role of organizational learning. Journal of Knowledge Management, 24(8), 1859-1880.
Ode, E and Ayavoo, R (2020), “The mediating role of knowledge application in the relationship between knowledge management practices and firm innovation”, Journal of Innovation & Knowledge, vol. 5, 209–217.
Otache, I. (2019). The mediating effect of teamwork on the relationship between strategic orientation and performance of Nigerian banks. European Business Review, 31(5), 744-760.
Paladino, A. (2007), “Investigating the drivers of innovation and new product success: a comparison of strategic orientations”, Journal of Product Innovation Management, Vol. 24 No. 6, pp. 534-553.
Parhizgar, M.-M. and Saravi-Moghadam, N. (2017), “Selection and comparison the most suitable strategy in the public and private banks with BSC approach”, International Journal of Productivity and Quality Management, Vol. 20 No. 1, pp. 75-98.
Pour, M. J., & Asarian, M. (2018). Strategic orientations, knowledge management (KM) and business performance: An exploratory study in SMEs using clustering analysis. Kybernetes, 48(9), 1942-1964.
Pratono, A. H. (2016). Strategic orientation and information technological turbulence: Contingency perspective in SMEs. Business Process Management Journal, 22(2), 368-382.
Pulka, B.M., Ramli, A. and Mohamad, A. (2021), "Entrepreneurial competencies, entrepreneurial orientation, entrepreneurial network, government business support and SMEs performance. The moderating role of the external environment", Journal of Small Business and Enterprise Development, Vol. 28 No. 4, pp. 586-618.
Putra, P. O. H., & Santoso, H. B. (2020). Contextual factors and performance impact of e-business use in Indonesian small and medium enterprises (SMEs). Heliyon, 6(3).
Qasrawi, B.T., Almahamid, S.M. and Qasrawi, S.T. (2017), “The impact of TQM practices and KM processes on organisational performance: an empirical investigation”, International Journal of Quality and Reliability Management, Vol. 34, pp. 1034-1055.
Rafiki, A., Nasution, M. D. T. P., Rossanty, Y., & Sari, P. B. (2023). Organizational learning, entrepreneurial orientation and personal values towards SMEs’ growth in Indonesia. Journal of Science and Technology Policy Management, 14(1), 181-212.
Santoso, W., Sunyoto, H. K., & Usmanij, P. (2023). Managing Intangible Resources on e-Commerce Msme Embracing Digital Era in Surabaya: A Test of Business Adoption as Mediation. In Entrepreneurship Research: Developing New and Emerging Patterns in the Post COVID-19 Pandemic Era (pp. 83-102). Singapore: Springer Nature Singapore.
Sundiman, D., Wu, C. H., Mursidi, A., Johan, S. B. P., & Indahingwati, A. (2019). Knowledge management key factors: an empirical research on small and medium-sized enterprises in Indonesia. International Journal of Business and Systems Research, 13(2), 139-161.
Sunyoto, H. K., Vincentia, J., & Nathanael, V. (2024). Factors Influencing Consumers’ Purchasing Intention on BerryBenka E-commerce Application in Surabaya: Applying Mediation Test of Customer Satisfaction. JURNAL STIE SEMARANG (EDISI ELEKTRONIK), 16(1), 41-58.
Syahdan, R., Djaelani, Y., & Mahdi, S. (2020). Strategic orientation and the performance of SMEs in Indonesia: The mediating role of access to finance. Management Science Letters, 10(5), 1151-1160.
Tseng, S.-M. and Lee, P.-S. (2014), “The effect of knowledge management capability and dynamic capability on organizational performance”, Journal of Enterprise Information Management, Vol. 27 No. 2, pp. 158-179.
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2024-06-23
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