THE MEDIATING ROLE OF MARKETING CAPABILITY AND INNOVATION CAPABILITY IN THE LINK BETWEEN STRATEGIC ORIENTATION DIMENSIONS AND BUSINESS PERFORMANCE(IN THE CASE OF SELECTED MANUFACTURING COMPANIES OPERATING IN ETHIOPIA)

Getie Andualem Imiru

Abstract


The purpose of this study is to determine the mediating role of Marketing and Innovation Capabilities in the link between Strategic Orientation dimensions and Business Performance. 385 questionnaires were distributed to CEOS, marketing managers & marketing experts, and brand managers, production managers, finance managers, IT specialists, research & development managers of 20 manufacturing firms and only 300 questionnaires were used for final analysis. After confirming that the CFA measurement models fulfill the GOF statistics, the discriminant validity analysis results show that the AVE values exceeded their respective square inter-construct correlations in several cases. Following Exploratory Factor Analysis (EFA) to investigate the underlying theoretical structure of the phenomenon and Confirmatory Factors Analysis (CFA) measurement models that meet the Goodness-of-Fit (GoF) statistics, the discriminant validity analysis results show that the AVE values are more significant than their respective square inter-construct correlations in several cases. The reliability test for all seven constructs is above 0.7, which satisfies the recommended threshold in the literature. The statistical software utilized for data analysis in this study was PROCESS Macro 3.4.1 and SPSS 25. The study's findings revealed that all four dimensions of strategic orientation and marketing and innovation capabilities had a favorable and significant impact on business performance. Both marketing and innovation capabilities have mediated the relationship between strategic orientation components (MO, EO, TO, and KO) and business performance. This study concludes that focusing solely on strategic components is insufficient and that integrated organizational processes are required to attain truly outstanding business performance. The study discovered that greater marketing and innovation capabilities enhance business performance (both financial and marketing). As a result, manufacturing businesses should examine each component of strategic orientation independently - market, entrepreneurial, technological, and knowledge orientations - while assessing fundamental abilities, which include marketing and innovation capabilities.

 

JEL: M31, O31, O32, O36, L25,  L26, L60

 

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Strategic Orientation, Market Orientation, Entrepreneurial Orientation, Technology Orientation, Knowledge Orientation, Marketing and Innovation Capability, Business Performances

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DOI: http://dx.doi.org/10.46827/ejmms.v9i1.1704

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