The Significance of Innovation Orientation in Firm Performance: Technological Capabilities as A Moderating Role
Keywords:
Entrepreneurial marketing, SMEs, Sustainability, AI, Customer satisfaction
Abstract
Entrepreneurial marketing is considered to be suitable for small businesses. However, innovation orientation as an Entrepreneurial marketing dimension is a critical instrument that small and medium-sized businesses can use to obtain a competitive advantage. Thus, the general objective of this study is to explore and describe the significant relationship between innovation orientation and firm performance in SMEs in Khartoum-Sudan utilizing technological capabilities as a moderating variable. The resource-based view provides the theoretical foundation for this study regarding the effect of innovation orientation on firm performance through technological capabilities. In this manner, our study is quantitative. Reliable with the purpose of this study. Furthermore, our study relied on the “Positivism philosophy”, a deductive approach to theory development. Accordingly, overall, 255 responses were received in responding to our online questionnaire. To analyze the data firstly Principal Component Analysis, Correlation, and Rotation matrix were utilized to test the appropriateness of the study pre-model and check the validity of the questionnaire measurements. secondly, we used Path analysis to examine the significant relationships between study variables. Consequently, the findings confirm both significant and insignificant relationships between innovation orientation and firm performance. Our analysis revealed significant relationships between innovation orientation, technological capabilities, and firm performance indicators such as profitability, sustainability, and customer satisfaction. Moreover, we found that technological capabilities play a crucial moderating role in enhancing the effects of innovation orientation strategy on firm performance. Anyhow, these results confirmed the partial support of the study’s hypotheses.
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References
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35. Santos, J. B., & Brito, L. A. L. (2012). Toward a subjective measurement model for firm performance. BAR-Brazilian Administration Review, 9, 95-117.
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37. Sekeran, (2003), Research method for business, A Skill-Building Approach Fourth Edition, ISBN 0-471-20366-1 -ISBN 0-471-38448-8 (WIE)
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39. Seo, R. (2020). Entrepreneurial orientation and innovation performance: insights from Korean ventures. European Journal of Innovation Management, 23(4), 675-695.
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41. Teece, D. J. (2018). Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world. Research policy, 47(8), 1367-1387.
42. Trott, P. Trott-2017-Roz Innovation-management-and-new-product-development.
43. Wang, H. L. (2014). Theories for competitive advantage.
44. Wu, J. (2014). Cooperation with competitors and product innovation: Moderating effects of technological capability and alliances with universities. Industrial Marketing Management, 43(2), 199-209.
45. Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic management journal, 31(5), 547-561.
2. Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2018). Financing SMEs and economic development. In Handbook of Finance and Development (pp. 503-533). Edward Elgar Publishing.
3. Bachmann, J. T., Ohlies, I., & Flatten, T. (2021). Effects of entrepreneurial marketing on new ventures' exploitative and exploratory innovation: The moderating role of competitive intensity and firm size. Industrial Marketing Management, 92, 87-100.
4. Biesok, & Wyród-Wróbel, J. (2011). Customer satisfaction-Meaning and methods of measuring. Marketing and Logistic Problems in the Management of Organization, Wydawnictwo Akademii Techniczno-Humanistycznej W Bielsku-Białej, Bielsko-Biała, 23-41.
5. Blomkvist, K., Kappen, P., & Zander, I. (2017). Gone are the creatures of yesteryear? On the diffusion of technological capabilities in the ‘modern’MNC. Journal of World Business, 52(1), 1-16.
6. Borodako, K., Berbeka, J., Rudnicki, M., & Łapczyński, M. (2023). The impact of innovation orientation and knowledge management on business services performance moderated by technological readiness. European Journal of Innovation Management, 26(7), 674-695.
7. Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long range planning, 43(2-3), 354-363.
8. Christmann, P., & Taylor, G. (2006). Firm self-regulation through international certifiable standards: Determinants of symbolic versus substantive implementation. Journal of International Business Studies, 37(6), 863-878.
9. Damanpour, F., & Aravind, D. (2012). Managerial innovation: Conceptions, processes and antecedents. Management and organization review, 8(2), 423-454.
10. Danneels, E. (2002). The dynamics of product innovation and firm competences. Strategic Management Journal, 23(12), 1095-1121.
11. De Mendonca, T. R., & Zhou, Y. (2019). Environmental performance, customer satisfaction, and profitability: A study among large US companies. Sustainability, 11(19), 5418.
12. Ferna, E., & Garcı, F. (2012). Learning from exporting: The moderating effect of technological capabilities.
13. Gupta, A. K., & Gupta, N. (2020). Effect of corporate environmental sustainability on dimensions of firm performance–Towards sustainable development: Evidence from India. Journal of cleaner production, 253, 119948.
14. Hacioglu, G., Eren, S. S., Eren, M. S., & Celikkan, H. (2012). The effect of entrepreneurial marketing on firms’ innovative performance in Turkish SMEs. Procedia-Social and Behavioral Sciences, 58, 871-878.,
15. Haeussler, C., Patzelt, H., & Zahra, S. A. (2012). Strategic alliances and product development in high technology new firms: The moderating effect of technological capabilities. Journal of business venturing, 27(2), 217-233.
16. Hair, J.F., Black, W.C., Babin, B.J. and Anderson, R.E. (2019) Multivariate data analysis. Eighth edition edn. Andover, Hampshire, UK: Cengage Learning, EMEA.
17. Hamad, A. Y. A. (2019), The moderating effect of technological capabilities in the relationship between strategic orientation and service innovation to enhance operational performance in Sudanese services firms p (39-44).
18. Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20(4), 986-1014.
19. Hemmert, M., Cross, A. R., Cheng, Y., Kim, J. J., Kotosaka, M., Waldenberger, F., & Zheng, L. J. (2022). New venture entrepreneurship and context in East Asia: a systematic literature review. Asian Business & Management, 21(5), 831-865.
20. Hult, G. T. M., Ketchen Jr, D. J., & Slater, S. F. (2005). Market orientation and performance: an integration of disparate approaches. Strategic management journal, 26(12), 1173-1181.
21. Hult, G. T. M., Hurley, R. F., & Knight, G. A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429-438.
22. Isichei, E. E., Emmanuel Agbaeze, K., & Odiba, M. O. (2020). Entrepreneurial orientation and performance in SMEs: The mediating role of structural infrastructure capability. International Journal of Emerging Markets, 15(6), 1219-1241.
23. Jayawarna, D., Jones, O., & Macpherson, A. (2014). Entrepreneurial potential: The role of human and cultural capitals. International Small Business Journal, 32(8), 918-943.
24. Josh Siepel, Marcus Dejardin. (2020) How do we measure firm performance? A review of issues facing entrepreneurship researchers. 2020. ffhalshs-02571478
25. Kumar, V., Dalla Pozza, I., Petersen, J. A., & Shah, D. (2009). Reversing the logic: The path to profitability through relationship marketing. Journal of Interactive Marketing, 23(2), 147-156.
26. Kura, A. B. (2019). Influence of Marketing Research Application on Customer Attraction, Customer Satisfaction and Retention in Small and Medium Scale Enterprises in Borno State, Nigeria (Doctoral dissertation, Kwara State University.
27. Lichtenthaler, U. (2011). Open innovation: Past research, current debates, and future directions. Academy of Management Perspectives, 25(1), 75-93.
28. Madhani, P. M. (2010). Resource based view (RBV) of competitive advantage: an overview. Resource based view: concepts and practices, Pankaj Madhani, ed, 3-22.
29. Marcuse, P. (1998). Sustainability is not enough. Environment and urbanization, 10(2), 103-112.
30. Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20-35.
31. Prahalad, C. K., & Hammond, A. (2002). Serving the world's poor, profitably. Harvard Business Review, 80(9), 48-57.
32. Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship theory and practice, 33(3), 761-787.
33. Rushes and Waples, (2008) The share price is not something we control. We control innovation, sales and profits.
34. Sadiku-Dushi, N., Dana, L. P., & Ramadani, V. (2019). Entrepreneurial marketing dimensions and SMEs performance. Journal of Business Research, 100, 86-99.
35. Santos, J. B., & Brito, L. A. L. (2012). Toward a subjective measurement model for firm performance. BAR-Brazilian Administration Review, 9, 95-117.
36. Schrettle, S., Hinz, A., Scherrer-Rathje, M., & Friedli, T. (2014). Turning sustainability into action: Explaining firms' sustainability efforts and their impact on firm performance. International Journal of Production Economics, 147, 73-84.
37. Sekeran, (2003), Research method for business, A Skill-Building Approach Fourth Edition, ISBN 0-471-20366-1 -ISBN 0-471-38448-8 (WIE)
38. Selvam, M., Gayathri, J., Vasanth, V., Lingaraja, K., & Marxiaoli, S. (2016). Determinants of firm performance: A subjective model. Int'l J. Soc. Sci. Stud., 4, 90.
39. Seo, R. (2020). Entrepreneurial orientation and innovation performance: insights from Korean ventures. European Journal of Innovation Management, 23(4), 675-695.
40. Srivastava, M. K., Gnyawali, D. R., & Hat, D. E. (2015). Technological Forecasting & Social Change Behavioral implications of absorptive capacity: The role of technological effort and technological capability in leveraging alliance network technological resources.
41. Teece, D. J. (2018). Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world. Research policy, 47(8), 1367-1387.
42. Trott, P. Trott-2017-Roz Innovation-management-and-new-product-development.
43. Wang, H. L. (2014). Theories for competitive advantage.
44. Wu, J. (2014). Cooperation with competitors and product innovation: Moderating effects of technological capability and alliances with universities. Industrial Marketing Management, 43(2), 199-209.
45. Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic management journal, 31(5), 547-561.
Published
2024-04-30
How to Cite
Fegada, A., & Veres, Z. (2024). The Significance of Innovation Orientation in Firm Performance: Technological Capabilities as A Moderating Role. European Scientific Journal, ESJ, 20(10), 16. https://doi.org/10.19044/esj.2024.v20n10p16
Section
ESJ Social Sciences
Copyright (c) 2024 Alfateh Fegada, Zoltán Veres
This work is licensed under a Creative Commons Attribution 4.0 International License.
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