Exploring the Mediating Effect of Responsive Market Orientation between the Relationship of Entrepreneurial Orientation and Firm Performance

Abstract

The purpose of this paper is to investigate the mediating effect of responsive market orientation (RMO) on the relationship between entrepreneurial orientation (EO) and performance in small and medium-size enterprises (SMEs) in Oman. The study specifically investigates whether there is a mediating effect of responsive market orientation in the hypothesized relationships. A field survey was used to collect data from 175 SMEs. Structural equation modelling (SEM) was used to conduct a confirmatory factor analysis and Andrew Hay’s process macro was used to compute the mediating effect of RMO on the relationship between EO and SME’s performance. While the results indicate a significant relationship between entrepreneurial orientation and performance, responsive market orientation was found to be the mediator in the relationship (i.e. between EO and performance). The study underscores the importance of entrepreneurial and responsive market orientation for managers and owners of SMEs in Oman in order to compete and grow in regional market of GCC.