Improvement of Craft Business: Business Learning and Market Orientation

Abstract

Objectives - This study aims to test and prove empirically about: First, does business learning have a direct effect on market orientation? Second, whether business learning and market orientation have a direct effect on business performance. Third, does business learning have an indirect effect on business performance through market orientation Design / methodology / approach - The population of this study is the population in this study are all handicraft industries in the Special Region of Yogyakarta. The research sample was 61 respondents who were taken by nonprobability sampling method using a purposive sampling technique. Data analysis in this study used PLS-SEM (Partial Least Square - Structural Equation Modeling). Findings - The results of the study show that: business learning affects market orientation. Market orientation affects business performance. Business learning has no direct effect on business performance; however, it indirectly affects business performance through market orientation. Research limitations/implications - This study found no direct contribution of business learning to business performance. Suggestions for future researchers who will take models and concepts of small and medium business performance must pay attention to business sustainability factors in performance measurement. Meanwhile, due to research limitations, this study cannot explain other variables such as innovation. Innovation is considered to strengthen the impact of business learning on business performance. Originality - This research empirically examines the mediating role of market orientation in the model. The findings show that SMEs must strengthen market orientation to improve business performance.