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Strategic Orientations and Absorptive Capacity on Economic and Environmental Sustainability: A Study among the Batik Small and Medium Enterprises in Malaysia

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  • Noorshella Che Nawi

    (Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, Pengkalan Chepa, Kota Bharu 16100, Malaysia)

  • Abdullah Al Mamun

    (UCSI Graduate Business School, Faculty of Business and Management, UCSI University, Cheras, Kuala Lumpur 56000, Malaysia)

  • Raja Rosnah Raja Daud

    (Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, Pengkalan Chepa, Kota Bharu 16100, Malaysia)

  • Noorul Azwin Md Nasir

    (Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, Pengkalan Chepa, Kota Bharu 16100, Malaysia)

Abstract

This research intended to evaluate the effects of innovation orientation (INO), customer orientation (CSO), supplier orientation (SPO), network orientation (NWO), and absorptive capacity (ABC) on economic and environmental sustainability among the Batik small and medium enterprises (SMEs) in Malaysia. This study adopted a cross-sectional design and collected quantitative data using self-reported adopted scales from 213 randomly selected Batik SMEs from Kelantan and Terengganu, Malaysia. The results revealed that INO, CSO, and ABC had a positive and significant effect on the economic sustainability (ECS) of the Batik SMEs in Malaysia. The effects of SPO and NWO on ECS were positive but not statistically significant. It was found that ECS significantly and positively affected the environmental sustainability (ENS) of the Batik SMEs in Malaysia. Besides that, ECS mediated the effects of CSO and ABC on the ENS of the Batik SMEs in Malaysia. Furthermore, important performance matrix analysis revealed that the most important factors for ENS were Batik SMEs’ ECS, absorptive capacity, and INO. For the performance of ENS, the most important factors were CSO, SPO, and NWO. The Batik SMEs and entrepreneurial development programs and policies should focus on innovation and CSO as well as improving ABC to sustain in today’s competitive business environment.

Suggested Citation

  • Noorshella Che Nawi & Abdullah Al Mamun & Raja Rosnah Raja Daud & Noorul Azwin Md Nasir, 2020. "Strategic Orientations and Absorptive Capacity on Economic and Environmental Sustainability: A Study among the Batik Small and Medium Enterprises in Malaysia," Sustainability, MDPI, vol. 12(21), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:21:p:8957-:d:436143
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    References listed on IDEAS

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    1. Wang, Qiang & Zhao, Xiande & Voss, Chris, 2016. "Customer orientation and innovation: A comparative study of manufacturing and service firms," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 221-230.
    2. Kostopoulos, Konstantinos & Papalexandris, Alexandros & Papachroni, Margarita & Ioannou, George, 2011. "Absorptive capacity, innovation, and financial performance," Journal of Business Research, Elsevier, vol. 64(12), pages 1335-1343.
    3. repec:ucp:bkecon:9780226316529 is not listed on IDEAS
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