Determinants of SMEs performance: The role of knowledge management, market orientation, and product innovation

Abstract

The role of knowledge management (KM) in the existence of Small Medium Enterprises (SME’s) has been an important aspect of entrepreneurship. However, to perform an SME may not merely rely on its knowledge but also on other aspects such as market orientation and product innovation. This study aims to contribute to the entrepreneurship literature in the context of emerging economies. This study can be classified as quantitative research by nature as the use of a survey to gather respondent data. About 211 samples of SMEs of the furniture cluster in East Java were obtained in this study. Thus, understanding that the focus on market orientation and innovation in SMEs has not fruitfully been exposed and explored enough in the context of emerging economies such as Indonesia. The result of this study indicated that KM is not a direct predictor of SME performance. This is an indication that the supremacy creation of SME performance could not depend heavily on KM but rather, other driving forces such as market orientation (MO) and product innovation (INNOV) are much more powerful drivers in crafting SME performances.

Knowledge management and innovativeness effects on product innovation in the textile context of Brazil

“…The research results confirmed hypotheses H1 and H2, reinforcing the relationship between knowledge management and innovativeness (Al-Tal & Emeagwali, 2019;Medase & Abdul-Basit, 2020;Mohamad, Ramayah & Lo, 2020;Trivedi & Srivastava, 2022) and product innovation and innovativeness (Lee et al, 2019;Setiyono, Iqbal, Alfisyahr, Pebrianggara, & Shofyan, 2022). This finding also converges with Sáenz et al (2012), who highlighted that a firm's progress in codifying, organizing, storing, and retrieving knowledge would lead to availability and easiness of access to knowledge.…”

“…Therefore, innovativeness mediates the relationship between the knowledge management process and innovation performance (Yu et al, 2014). The results also contribute to the findings of Urhahn & Spieth (2014), who identified a positive relationship between innovativeness and product innovation, just as product innovation is a strategic drive to bridge the gap between knowledge management and the performance of specific companies (Setiyono, Iqbal, Alfisyahr, Pebrianggara, & Shofyan, 2022). Knowledge acquisition, application, and protection were positively and significantly related to firm innovativeness (Mohamad, Ramayah & Lo, 2020).…”

“…Recently, a study identified that knowledge management, supported by determinants such as collaboration in idea exploration, idea advocacy, and encouraging participation in idea implementation, contributed significantly to the product innovation process (Bratianu, C., Stănescu & Mocanu, 2022). Another study found that product innovation is a strategic driver in bridging the gap between knowledge management and performance for specific companies (Setiyono, Iqbal, Alfisyahr, Pebrianggara, & Shofyan, 2022).…”

The Role of Knowledge Management in Adopting Industry 4 Technology: The Mediating Role of Market Orientation

“…However, additional supporting drives, such as market orientation may be appropriately viewed as an endeavor to become competitive in the marketplace and may not be the primary reason to establish the supremacy of performance. Market orientation is one of the most important prescriptions that must be established; it is a method of creating strategically oriented organizations (Setiyono et al, 2022). Therefore, market orientation could be considered a mediator between KM activities and Industry 4.0 adoption.…”

The Effect of Product Knowledge and Market Orientation on Business Performance in MSMEs

“…Market Orientation is an effort to translate marketing philosophy knowledge to be implemented into marketing practice (Kesuma & Istanto, 2021). Business actors try to understand what consumers need regarding the products they will provide, such as features that consumers may need more so as to attract sales and start carrying out Product Innovation (Darma et al, 2022;Setiyono et al, 2022). It is important for companies that consumers feel satisfied with the products they buy and do not get bored.…”