Business environment as an intervening variable of market orientation and business performance of Batik Jambi SMEs

Ade Octavia

doi:10.22437/ppd.v5i3.4605

Abstract

Batik Jambi is a unique product of Jambi Province, but the performance of batik Jambi SMEs business is still low. The purpose of the research is to analyze the role of the business environment on the relationship of market orientation, entrepreneurship orientation, and business performance. The research method used is qualitative and quantitative with interview approach, observation, documentation and sample survey. The sample of this research is Batik Jambi SMEs. Sampling used judgment sampling method. The analysis tools used are FGD and PLS (partial least square). The results show that the business environment is a variable between the relationship of market orientation and business performance, but not the intermediate variables on the relationship of entrepreneurial orientation and business performance.

Highlights

Batik Jambi become one of superior product which is expected to be able to compete in domestic and foreign competition market
There is a decrease in the number of craftsmen each year because of their inability to maintain business performance
The ability of SMEs Jambi batik to innovate, proactive and courage to face the risk is absolutely necessary. Under these circumstances the role of the business environment is expected to be strong for business performance improvement

Summary

Introduction

Batik Jambi become one of superior product which is expected to be able to compete in domestic and foreign competition market. Business performance is an important factor in mapping the competitive position within the market (Whellen et al, 2015). To improve business performance is strongly influenced by several factors. According to Hermann et al (2010) and Ginta (2014) entrepreneurial orientation is an important factor in influencing business performance in addition to other factors. There is a positive relationship between entrepreneurial orientations to business performance. If small and medium entrepreneurs have entrepreneurial spirit plus it has orientation to market and competition, business performance will be positive. This is in accordance with the opinion of Baker and Sinkula (2009) and Felgueira and Rondrigues (2012)

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Conclusion