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Market orientation and innovation on corporate performance: A study of food and beverage sector SMEs in Surabaya

Author

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  • Irwan Poerwanto

    (Faculty of Economics and Business, Brawijaya University, Malang, Indonesia)

  • Ananda Sabil Hussein

    (Faculty of Economics and Business, Brawijaya University, Malang, Indonesia)

  • Sri Palupi Prabandari

    (Faculty of Economics and Business, Brawijaya University, Malang, Indonesia)

Abstract

This study aims to examine and analyze the influence of market orientation on corporate performance with exploration innovation and exploitative innovation as mediation in SMEs. 85 respondents were used as samples from food and beverage sector SMEs at Sentra Siola Surabaya. Purposive sampling was used as the sampling method. Data analysis in this study used Structural Equation Modeling - Partial Least Square (SEM PLS). The result indicates that market orientation has a significant effect on exploration innovation, exploitative innovation, and corporate performance. Exploration innovation has a significant effect on corporate performance; therefore, exploration innovation partially mediates the effect of market orientation on corporate performance. However exploitative innovation was found to have no effect on corporate performance. Changes in external factors, primarily due to the COVID-19 pandemic, are seen as being able to cause a paradigm shift on the importance of a long-term orientation compared to a short-term orientation. Key Words:Market Orientation, Exploration Innovation, Exploitative Innovation, Corporate Performance

Suggested Citation

  • Irwan Poerwanto & Ananda Sabil Hussein & Sri Palupi Prabandari, 2022. "Market orientation and innovation on corporate performance: A study of food and beverage sector SMEs in Surabaya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(3), pages 27-32, April.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:3:p:27-32
    DOI: 10.20525/ijrbs.v11i3.1708
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    References listed on IDEAS

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    1. Justin J. P. Jansen & Frans A. J. Van Den Bosch & Henk W. Volberda, 2006. "Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators," Management Science, INFORMS, vol. 52(11), pages 1661-1674, November.
    2. G. Tomas M. Hult & David J. Ketchen & Stanley F. Slater, 2005. "Market orientation and performance: an integration of disparate approaches," Strategic Management Journal, Wiley Blackwell, vol. 26(12), pages 1173-1181, December.
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