Human capital readiness and global market orientation in Indonesian Micro-, Small- and-Medium-sized Enterprises business performance

Abstract

PurposeThis study aims to investigate whether human capital readiness affects business performance, and if so, whether the effect is mediated by global market orientation.Design/methodology/approachThis is a quantitative study employing partial least square structural equation modeling (PLS-SEM) to test the hypotheses. Using a survey method, the data were collected using both online and offline questionnaires. As many as 433 owners/managers of micro-, small- and-medium-sized enterprises (MSMEs) in the East Java Province of Indonesia participated in this study. A mediating research framework was developed to investigate the mediating role of global marketing orientation on the human capital readiness–business performance relationship.FindingsThe results show that human capital readiness has a direct and positive effect on business performance. Further analysis reveals that global market orientation partially mediates the effect of human capital readiness on business performance.Research limitations/implicationsFirst, this study focuses on the MSMEs in the East Java Province of Indonesia. Caution needs to be taken if the results are generalized to other regions. Second, it employed a survey method that is commonly criticized as having the potential to be biased.Practical implicationsThe findings provide a more comprehensive understanding of owners/managers of human capital readiness and how it should be improved to better execute global market orientation strategies to achieve the desired business performance.Social implicationsBecause MSMEs play a crucial role in society, this study provides a general model to improve the welfare of society by enhancing the MSMEs' business performance. By understanding its antecedents, namely, human capital readiness and the global market orientation, improvements can be made.Originality/valueHuman capital readiness has been rarely examined in previous studies. This is the only study applying the constructs of human capital readiness, global market orientation and business performance to the Indonesian MSME research setting.

Impact of digital literacy and market orientation through e-commerce adoption on the MSME performance moderated by O2O business adoption

“…So that market orientation does affect the performance of MSMEs. This is in line with research by (Tjahjadi et al, 2020)who states that market orientation has effect on MSME performance.…”

The effect of talent management and human capital on sustainable business performance: an empirical investigation in Malaysian hospitals

“…If organizations lose their skilled workers they become uncompetitive, and this is the difference between tangible and intangible human capital (Riley et al, 2017). Traditionally, the HC literature has shown a significant relationship with superior performance (Adesina, 2021;Brixiov a et al, 2020;Tjahjadi et al, 2020), although strategies for creating added value for organizations vary according to their human capital, whether aiming for innovation or high-quality products (Kianto et al, 2017). This is reflected in the organization's ability to create value from human capital in the form of revenue or a competitive strategic position (Minbaeva, 2018).…”

Digital Marketing, Msme Product Marketing Innovation

“…In addition, the use of creative words, hypno writing (copywriting) and the use of hashtags (#) that match the product will make it easier for consumers to find products. With this, brand awareness will be formed and can influence consumer decisions to buy the products they are looking for (Tjahjadi et al, 2020).…”

“…several years. (Tjahjadi et al, 2020). Marketing content must be the main focus of MSME actors considering the importance of content on social media, search engines or marketplaces.…”