Analyzing the Effect of Environmental Turbulence, Market Orientation and Organizational Adaptive Capability on Organizational performance and Market Position of Indonesian eSports Companies

Abstract

This study analyzes the effect of environmental turbulence on strategic orientation and dynamic capabilities and their impacts on organizational performance and market position with the research context of the Indonesian eSports industry. The industry is considered as a nascent industry, which is characterized by ambiguous competitive landscapes, a lack of product standards, and uncertain customer demand. Therefore, strategic skills and adaptability are required in order to gain excellence in the market, and it is interesting to examine how the environmental turbulence influences the strategic orientation (especially market orientation) and organizational adaptability, and how both of them affect the organizational performance and position in the market. Research data was collected by means of surveys, and the questionnaire were distributed to 50 organizations in the eSports industry. Data was analyzed by using Partial Least Square Structural Equation Model (PLS-SEM) with SmartPLS 2.0 software. The results show that environmental turbulence affects organizations’ market orientation and their organizational adaptive capability, while market orientation positively influences organizational adaptive capability. Furthermore, market orientation and organizational adaptive capability have positive influences on organizational performance and position in the market.