The Intervening Effect of Market Orientation on Entrepreneurial Orientation, Operations Strategy, and Business Performance

Abstract

— The objective of this study was to examine the influence of entrepreneurial orientation and operations strategy towards business performance through intermediaries which market orientation as an intervening variable or not. This study used a quantitative approach which focused on proving the hypothesis and generating some conclusions. The sample required thirty owners of the SMEs of pottery / ceramics in Kasongan Yogyakarta from the existing population with a minimum provision have been in operation for three years. The result was to provide evidence about the hypothesis that the entrepreneurial orientation and operations strategy significantly influenced business performance. The direct effect of the two independent variables of business performance was greater than if there was market orientation as the intervening variable. The suggestions that can be given to the owners and people involved in management decision-making on SME is to improve their entrepreneurial orientation, because these variables have a significant direct impact on business performance. The entrepreneurship orientation can be enhanced through three components, namely: innovation, risk taking, and proactiveness.