Business Analytics Socio-Technical Perspective in Driving Market Orientation and Absorptive Capacity: Its Impacts on Innovation Ambidexterity

This study examines the influence of business analytics, social capital, market orientation, and absorptive capacity on innovation ambidexterity in Indonesia’s emerging market context. Drawing on the socio-technical perspective and dynamic capabilities views, the study develops a conceptual model and tests it with a disjoint two-stage SEM-PLS approach to examine the hierarchical component model using data from 218 large and medium-sized enterprises. The results show that business analytics significantly enhances social capital and builds socio-technical capabilities. Market orientation positively influences absorptive capacity, and both constructs act as complementary partial mediators. The study advances business analytics and sustainable innovation literature by strategically harnessing business analytics while acknowledging social capital. Some countries have practical manifestations of social capital in their communities that support their innovation activities. Furthermore, firms’ business analytics adoption strategy must be tailored to local cultural values to harness economic and social performance. These findings also highlight the critical roles of market orientation and absorptive capacity in selecting insights with high potential utility from the vast data amassed and preserved by business analytics. This relationship, in turn, helps balance the competing activities of exploitative and exploratory to sustain innovation in an emerging market.