Entrepreneurial Orientation and Product Innovation Performance of MSMEs in West Java: Foresight Capabilities as a Mediating Variable


Vigory Gloriman Manalu(1*), Faishal Rahimi(2), Ilham Akbar(3)

(1) Faculty of Economics and Business, Kuningan University, Kuningan,  
(2) Faculty of Economics and Business, Kuningan University, Kuningan, Indonesia
(3) Faculty of Economics and Business, Kuningan University, Kuningan, Indonesia
(*) Corresponding Author

Abstract


MSMEs have become the foundation for growth in various countries, including Indonesia. Especially in West Java, MSMEs play an essential role in absorbing labour. However, MSMEs in West Java face an uncertain business environment and difficulties in creating products that suit market needs. This research will use the Resource Based View (RBV) and Dynamic Capability View (DCV) theories. This research examines the influence of entrepreneurial orientation on the innovation performance of MSMEs by using foresight capabilities as a mediating variable. 245 MSMEs were collected as respondents to fill out the survey questionnaire. The MSMEs used in this research are from West Java, with the main characteristics of operating for more than one year and developing new products for at least two years. Structural equation modeling (SEM) was used to test the research framework. It was found that entrepreneurial orientation can influence the innovation performance of MSMEs positively and significantly. The influence of foresight capabilities on MSME product innovation performance has a positive effect. The mediating effect of foresight capabilities on the relationship between entrepreneurial orientation and product innovation performance was partially mediated. MSMEs that behave more entrepreneurially benefit from being more proactive, innovative, and risk-taking in an uncertain market environment. Product innovation can be achieved through a good understanding of entrepreneurial orientation mediated by an understanding of Foresight to process information for future decisions. Finally, managerial and theoretical implications and future research are presented.


Keywords


Entrepreneurial Orientation; Foresight; Product Innovation Performance; UMKM; West Java

Full Text:

PDF

References


Abuzaid, A. N. (2017). Exploring the impact of strategic intelligence on entrepreneurial orientation: A practical study on the Jordanian diversified financial services companies. International Management Review, 13(1), 72-84.

Adams, P., Freitas, I. M. B., & Fontana, R. (2019). Strategic orientation, innovation performance and the moderating influence of marketing management. Journal of Business Research, 97, 129-140. doi:https://doi.org/10.1016/j.jbusres.2018.12.071

AlMujaini, H., Hilmi, M., Abudaqa, A., & Alzahmi, R. (2021). Corporate foresight organizational learning and performance: The moderating role of digital transformation and mediating role of innovativeness in SMEs. International Journal of Data and Network Science, 5(4), 703-712. doi:DOI: 10.5267/j.ijdns.2021.7.011

Amer, M., Daim, T. U., & Jetter, A. (2013). A review of scenario planning. Futures, 46, 23-40. doi:https://doi.org/10.1016/j.futures.2012.10.003

Amsteus, M. (2011). Managerial foresight: measurement scale and estimation. Foresight. doi:https://doi.org/10.1108/14636681111109705

Ato Sarsah, S., Tian, H., Dogbe, C. S. K., Bamfo, B. A., & Pomegbe, W. W. K. (2020). Effect of entrepreneurial orientation on radical innovation performance among manufacturing SMEs: the mediating role of absorptive capacity. Journal of Strategy and Management, 13(4), 551-570. doi:https://doi.org/10.1108/JSMA-03-2020-0053

Bagozzi, R. P., & Yi, Y. (1988). On the evaluation of structural equation models. Journal of the academy of marketing science, 16(1), 74-94. doi:https://doi.org/10.1007/BF02723327

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120. doi:https://doi.org/10.1177/014920639101700108

Calof, J., Arcos, R., & Sewdass, N. (2020). Competitive intelligence practices of European firms. In Corporate Foresight and Innovation Management (pp. 34-47). doi: https://doi.org/10.1080/09537325.2017.1337890

Chusumastuti, D., Zulfikri, A., & Rukmana, A. Y. (2023). Pengaruh Digital Marketing dan Kompetensi Wirausaha Terhadap Kinerja Pemasaran (Studi ada UMKM di Jawa Barat). Jurnal Bisnis dan Manajemen West Science, 2(02), 83-93. doi:https://doi.org/10.58812/jbmws.v2i02.334

Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic management journal, 10(1), 75-87. doi: https://doi.org/10.1002/smj.4250100107

De Luca, L. M., & Atuahene-Gima, K. (2007). Market knowledge dimensions and cross-functional collaboration: Examining the different routes to product innovation performance. Journal of marketing, 71(1), 95-112. doi:https://doi.org/10.1509/jmkg.71.1.095

Dess, G. G., & Lumpkin, G. T. (2005). The role of entrepreneurial orientation in stimulating effective corporate entrepreneurship. Academy of Management Perspectives, 19(1), 147-156. doi:ttps://doi.org/10.5465/ame.2005.15841975

Fontela, E., Guzmán, J., Pérez, M., & Santos, F. J. (2006). The art of entrepreneurial foresight. Foresight, 8(6), 3-13. doi:https://doi.org/10.1108/14636680610712496

Genc, E., Dayan, M., & Genc, O. F. (2019). The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation. Industrial Marketing Management, 82, 253-264. doi:https://doi.org/10.1016/j.indmarman.2019.01.008

Havas, A., Schartinger, D., & Weber, M. (2010). The impact of foresight on innovation policy-making: recent experiences and future perspectives. Research Evaluation, 19(2), 91-104. doi:https://doi.org/10.3152/095820210X510133

Ibidunni, A. S., Kolawole, A. I., Olokundun, M. A., & Ogbari, M. E. (2020). Knowledge transfer and innovation performance of small and medium enterprises (SMEs): An informal economy analysis. Heliyon, 6(8). doi:https://doi.org/10.1016/j.heliyon.2020.e04740

Iqbal, S., Moleiro Martins, J., Nuno Mata, M., Naz, S., Akhtar, S., & Abreu, A. (2021). Linking entrepreneurial orientation with innovation performance in SMEs; the role of organizational commitment and transformational leadership using smart PLS-SEM. Sustainability, 13(8), 4361. doi:https://doi.org/10.3390/su13084361

Liao, Y.-C., & Zhao, H. (2020). The moderating effect of entrepreneurship orientation on new product innovation performance. International Journal of Business, 25(2), 195-213.

Lumpkin, & Dess. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of management Review, 21(1), 135-172. doi:https://doi.org/10.5465/amr.1996.9602161568

Madhoushi, M., Sadati, A., Delavari, H., Mehdivand, M., & Mihandost, R. (2011). Entrepreneurial orientation and innovation performance: The mediating role of knowledge management. Asian journal of business management, 3(4), 310-316.

Manalu, V. G., Adzimatinur, F., & Rahimi, F. (2022). PERAN MEDIASI ENVIRONTMENTAL SCANNING PADA ORIENTASI KEWIRAUSAHAAN DAN KINERJA UKM: IMPLEMENTASI UKM DI JAWA BARAT DAN JAWA TENGAH. AdBispreneur: Jurnal Pemikiran dan Penelitian Administrasi Bisnis dan Kewirausahaan, 7(2), 109-119. doi:https://doi.org/10.24198/adbispreneur.v7i2.34866

Manalu, V. G., Nurhayati, S., & Setyanto, R. P. (2023). The moderating effect of competitive intensity on foresight capability and product innovation of SMEs in Indonesia. Problems and perspectives in management, 21(1), 219-229. doi:http://dx.doi.org/10.21511/ppm.21(1).2023.19

Martínez-Román, J. A., Gamero, J., & Tamayo, J. A. (2011). Analysis of innovation in SMEs using an innovative capability-based non-linear model: A study in the province of Seville (Spain). Technovation, 31(9), 459-475. doi:https://doi.org/10.1016/j.technovation.2011.05.005

Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management science, 29(7), 770-791. doi:https://doi.org/10.1287/mnsc.29.7.770

Milshina, Y., & Vishnevskiy, K. (2018). Potentials of collaborative foresight for SMEs. Technology Analysis & Strategic Management, 30(6), 701-717. doi:https://doi.org/10.1080/09537325.2017.1406906

Muñoz-Pascual, L., Curado, C., & Galende, J. (2019). The triple bottom line on sustainable product innovation performance in SMEs: A mixed methods approach. Sustainability, 11(6), 1689. doi: https://doi.org/10.3390/su11061689

Newbert, S. L. (2007). Empirical research on the resource‐based view of the firm: an assessment and suggestions for future research. Strategic management journal, 28(2), 121-146. doi: https://doi.org/10.1002/smj.573

Nyuur, R. B., Brečić, R., & Sobiesuo, P. (2015). Foresight capabilities and SME product/service adaptiveness: the moderating effect of industry dynamism. International Journal of Foresight and Innovation Policy, 10(2-4), 145-164. doi:https://doi.org/10.1504/IJFIP.2015.074395

Paliokaitė, A., Pačėsa, N., & Sarpong, D. (2014). Conceptualizing strategic foresight: An integrated framework. Strategic change, 23(3-4), 161-169. doi:https://doi.org/10.1002/jsc.1968

Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior research methods, 40(3), 879-891. doi:https://doi.org/10.3758/BRM.40.3.879

Rastegari, H., Hosseini, S. H., & Ghayoor, H. (2020). Designing and developing the strategic foresight capabilities of medical universities in the accidents and crises of the country with emphasis on human resource agility. International Journal of Logistics Systems and Management, 36(1), 124-137. doi:https://doi.org/10.1504/IJLSM.2020.107238

Sarpong, D., & Meissner, D. (2018). Special issue on ‘corporate foresight and innovation management’. In (Vol. 30, pp. 625-632): Taylor & Francis.

Semke, L.-M., & Tiberius, V. (2020). Corporate foresight and dynamic capabilities: An exploratory study. Forecasting, 2(2), 180-193. doi:https://doi.org/10.3390/forecast2020010

Shaher, A., & Ali, K. (2020). The effect of entrepreneurial orientation on innovation performance: The mediation role of learning orientation on Kuwait SME. Management Science Letters, 10(16), 3811-3820. doi:http://dx.doi.org/10.5267/j.msl.2020.7.030

Slaughter, R. A. (1996). Foresight beyond strategy: Social initiatives by business and government. Long Range Planning, 29(2), 156-163. doi:https://doi.org/10.1016/0024-6301(96)00003-9

Tambunan, C. R. (2023). Kontribusi UMKM dalam Perekonomian Indonesia. Retrieved from Jakarta https://djpb.kemenkeu.go.id/kppn/lubuksikaping/id/data-publikasi/artikel.html

Tang, G., Chen, Y., & Jin, J. (2015). Entrepreneurial orientation and innovation performance: Roles of strategic HRM and technical turbulence. Asia Pacific Journal of Human Resources, 53(2), 163-184. doi:https://doi.org/10.1111/1744-7941.12053

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic management journal, 18(7), 509-533. doi:https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z

Vishnevskiy, K., & Egorova, O. G. (2015, 2015). Strategic foresight for SMEs: choice of the most relevant methods.

Wiklund, J. (1999). The Sustainability of the Entrepreneurial Orientation—Performance Relationship. Entrepreneurship theory and practice, 24(1), 37-48. doi:10.1177/104225879902400103

Wilden, R., Gudergan, S. P., Nielsen, B. B., & Lings, I. (2013). Dynamic capabilities and performance: strategy, structure and environment. Long Range Planning, 46(1-2), 72-96. doi:https://doi.org/10.1016/j.lrp.2012.12.001

Yoon, J., Kim, Y., Vonortas, N. S., & Han, S. W. (2018). Corporate foresight and innovation: the effects of integrative capabilities and organisational learning. Technology Analysis & Strategic Management, 30(6), 633-645. doi:https://doi.org/10.1080/09537325.2017.1395407

Zahra, S. A., & Covin, J. G. (1995). Contextual influences on the corporate entrepreneurship-performance relationship: A longitudinal analysis. Journal of business venturing, 10(1), 43-58. doi:https://doi.org/10.1016/0883-9026(94)00004-E

Zhai, Y.-M., Sun, W.-Q., Tsai, S.-B., Wang, Z., Zhao, Y., & Chen, Q. (2018). An empirical study on entrepreneurial orientation, absorptive capacity, and SMEs’ innovation performance: A sustainable perspective. Sustainability, 10(2), 314. doi:https://doi.org/10.3390/su10020314




DOI: https://doi.org/10.15575/ks.v5i3.29485

Refbacks

  • There are currently no refbacks.


Copyright (c) 2023 Vigory Gloriman Manalu

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

UIN Sunan Gunung Djati

Kota Bandung, Jawa Barat
Handphone: +6285961137790

E-mail: KSosial@uinsgd.ac.id

Lisensi Creative Commons

Khazanah Sosial  are licensed under Attribution-ShareAlike 4.0 International

Click Her For See Stats