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Innovation Orientation, Marketing Capability, Dynamic Capability, and Performance

In: Environmental, Social, and Governance Perspectives on Economic Development in Asia

Author

Listed:
  • Bahrun Borahima
  • Noermijati Noermijati
  • Djumilah Hadiwidjojo
  • Ainur Rofiq

Abstract

Regardless of its relevance for economic development, the influence of strategic orientation by innovation orientation, and strategic marketing by marketing capability on firm performance, this interesting study focused on firms with strategic industries (defense and security) in Indonesia. It approached the gap in three ways. Initially, the examination was conducted on the role of innovation orientation, marketing capability, the interaction of innovation orientation and marketing capability on firm performance. The next step was considering the contribution of state-owned enterprise (SOE) and non-SOE. Finally, this relationship was studied in strategic industries of firms in Indonesia. The firm performance in this study, which we chose, was operational performance. The proposed conceptual model would be tested by distributing questionnaires to 41 firms in Indonesia. This study gave insight into the matters, which should be the companies’ focus, to improve their operations’ performance. By using PLS-based structural equation modeling (SEM) analysis, the results of the relationship between innovation orientation, marketing capability, and the interaction between innovation orientation and marketing capability on operational performance were identified. The findings could be clarified via the variations in the characteristics of enterprises (SOE and non-SOE). Moreover, there were clear variations in the findings, which were recognized among the firms’ relatively different characteristics. The main finding was a challenge to generalize the relationship from strategic orientation and strategic marketing to performance. The results of firm characteristics also had considerable managerial relevance. The authors recommend strategic industries (defense and security) in Indonesia in achieving operational performance excellence. Management’s importance is paying attention to the relationship between innovation orientation, marketing capability, and dynamic capability in running a company organization.

Suggested Citation

  • Bahrun Borahima & Noermijati Noermijati & Djumilah Hadiwidjojo & Ainur Rofiq, 2021. "Innovation Orientation, Marketing Capability, Dynamic Capability, and Performance," International Symposia in Economic Theory and Econometrics, in: Environmental, Social, and Governance Perspectives on Economic Development in Asia, volume 29, pages 93-104, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:isetez:s1571-03862021000029b028
    DOI: 10.1108/S1571-03862021000029B028
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    More about this item

    Keywords

    Innovation orientation; marketing capability; dynamic capability; operational performance; economic development; strategic industry (defense and security); L21;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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