The Effect of Strategic Orientation and Marketing Capabilities on Business Performance: A Capacity Mediation Approach
Abstract
Business performance is an important indicator in assessing the success and sustainability of companies amid increasingly dynamic business competition. Market orientation, entrepreneurial orientation, and marketing capabilities are seen as strategic resources that have the potential to improve business performance, but previous empirical findings still show mixed results. These differences indicate the need for explanatory mechanisms, one of which is through absorptive capacity. This study focuses on how market orientation, entrepreneurial orientation, and marketing capabilities affect business performance, as well as the role of absorptive capacity in mediating this relationship. This study aims to analyze the direct effects of market orientation, entrepreneurial orientation, and marketing capabilities on business performance, as well as to examine the mediating role of absorptive capacity. The research method used is a quantitative approach with a survey design. Primary data were collected through questionnaires administered to business actors and analyzed using Partial Least Square–Structural Equation Modeling (PLS-SEM). The results show that market orientation, entrepreneurial orientation, and marketing capabilities have a positive and significant effect on business performance. In addition, absorptive capacity has a positive effect on business performance and is proven to play a significant mediating role in the relationship between market orientation, entrepreneurial orientation, and marketing capabilities on business performance. These findings confirm that strengthening absorptive capacity as a company's dynamic ability to absorb and utilize external knowledge is key to improving business performance in a sustainable manner
Downloads
References
Al-Henzab, J., Tarhini, A., & Obeidat, B. (2023). Entrepreneurial orientation and firm performance: The moderating role of environmental turbulence. Journal of Business Research, 156, 113–124.
Ali, M., Kan, K. A. S., & Sarstedt, M. (2023). Dynamic capabilities and firm performance: The role of absorptive capacity. Industrial Marketing Management, 108, 102–114.
Chen, Y., & Lin, C. (2023). Market orientation and SME performance. Management Decision, 61(4), 1023–1041.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152.
FAO. (2021). The state of food and agriculture. Rome: Food and Agriculture Organization.
Feng, H., Morgan, N. A., & Rego, L. L. (2023). Marketing capabilities and firm performance. Journal of Marketing, 87(2), 1–19.
Feng, H., Morgan, N. A., & Rego, L. L. (2023). Marketing capabilities and firm performance: The role of market-based assets. Journal of Marketing, 87(2), 1–19.
Ferreira, J. J., Fernandes, C. I., & Ratten, V. (2024). Absorptive capacity and innovation performance. Technological Forecasting and Social Change, 198, 123135.
Hernández-Perlines, F., & Rung-Hoch, N. (2022). Entrepreneurial orientation and performance. International Entrepreneurship and Management Journal, 18(3), 1091–1113.
Hernández-Perlines, F., & Rung-Hoch, N. (2022). Entrepreneurial orientation and performance. International Entrepreneurship and Management Journal, 18(3), 1091–1113.
Juli, R. (2021). Orientasi kewirausahaan dan kinerja usaha UMKM. Jurnal Manajemen dan Kewirausahaan, 23(2), 145–158.
Kementerian Pertanian. (2022). Statistik peternakan dan kesehatan hewan. Jakarta: Kementerian Pertanian RI.
Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135–172.
Morgan, N. A., Feng, H., & Whitler, K. A. (2020). Marketing capabilities and firm performance. Journal of the Academy of Marketing Science, 48(3), 395–421.
Mustari, M., Sari, P. K., & Rahmawati, R. (2020). Entrepreneurial orientation and business performance. Journal of Entrepreneurship Education, 23(5), 1–12.
Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.
Nguyen, T. H., Nguyen, H. T., & Doan, T. N. (2022). Market orientation and firm performance. Asia Pacific Journal of Marketing and Logistics, 34(5), 1097–1115.
Pratono, A. H., Suyanto, M., & Nugroho, A. (2023). Entrepreneurial orientation and SMEs performance. Sustainability, 15(4), 1–15.
Pratono, A. H., Suyanto, M., & Nugroho, A. (2023). Entrepreneurial orientation and SMEs performance: Evidence from Indonesia. Sustainability, 15(4), 1–15.
Rahayu, R., & Day, J. (2022). Digitalization and SME performance. Journal of Small Business Management, 60(4), 832–857.
Raza, A., Saeed, A., & Iqbal, M. (2022). Absorptive capacity and SME performance. Management Decision, 60(4), 1021–1040.
Suryani, T., Hartono, S., & Widodo, S. (2023). Performance challenges of poultry SMEs. Jurnal Agribisnis Indonesia, 11(2), 85–97.
Tajeddini, K., Martin, E., & Altinay, L. (2021). Marketing capabilities and firm performance. International Journal of Hospitality Management, 95, 102–114.
Wahyuni, N. M., & Sara, I. M. (2020). Market orientation and business performance. International Journal of Innovation Management, 24(6), 1–20.
Zahra, S. A., & George, G. (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, 27(2), 185–203.
Copyright (c) 2026 Abdul Halim, Siti Asiyah, Dwiyani Sudaryanti
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
